Honolulu To Truncate Rail ... For Now?

by Robert Thomas, Inverse Condemnation, June 16, 2016

In a surprise move, Honolulu Mayor Kirk Caldwell today announced that he supports suspending the Honolulu rail project at Middle Street, at least until there's more money in the coffers. See "Mayor, Council chairman say rail should end at Middle Street for now" from Marcel Honore at the Star-Advertiser.

We think the key words in that headline are "for now," and this is not the end of the project, necessarily. Notwithstanding that, as the story notes, this could be a "seismic shift" for the project, which has been plagued by massive cost overruns and other embarrassments since its inception, such as having its financially-savvy Board chairman resign and be replaced by a career politician, only to see her set her cap for Congress and abandon ship when one of Hawaii's two House seats unexpectedly became available. What started off as a project projected to cost a bit more than $3 billion for 20 miles and 21 stations of steel-on-steel elevated track, has ballooned to more than $8 billion, exclusive of operating costs. The voters of Honolulu approved the project when they voted for the creation of HART, the Honolulu Authority for Rapid Transit. But as of late, the concerned voices expressing their dissatisfaction have grown louder and more strident. Middle Street is approximately half way from the Kapolei start point (pictured above) to the planned terminus at Ala Moana shopping center, and halting the rail there would almost certainly undermine its utility, as it would not include the most densely populated portion of the route.

What could this mean? Is this only election-year politicking by a mayor seeking to co-opt his opponents' issues? A genuine recognition of financial realities? Does this mean rail has derailed, and if so, is this permanent?

We have more questions than answers at this point, but this much we do know:

• What about properties already seized by eminent domain -- does the City need to sell those properties back to their former owners? No, Hawaii law does not have any requirement, unlike some other states, for property taken by eminent domain to be sold back to a prior owner if the public use for which it was taken never comes to pass. Maybe Hawaii law should require that to happen, and perhaps the Hawaii Supreme Court would conclude that the constitution requires it. But for now, there's no decisional law, nor is there any statute which requires it. 
• However, the Hawaii eminent domain code does require that if a taking is abandoned or dismissed prior to final judgment, the condemnor is on the hook for "damages." Meaning at least all attorneys and appraiser fees and costs incurred by the property owner, who is entitled to be made whole by the condemning authority.  The Hawaii Supreme Court so held in a case in which we represented the property owner. 
• Also, should the rail project really stop halfway, the City isn't off the eminent domain hook, necessarily, especially after telling the remaining property owners for years that their parcels were going to be acquired. Inverse condemnation is a potentially available remedy for those owners whose properties were clouded by the project, even if the project is delayed, or even if it is never completed as planned.

For now, we must wait for more definite answers.