Kent calls for more transparency regarding Aloha Stadium project

from Grassroot Institute

A developer has been chosen for the Aloha Stadium project, but the state has yet to reveal contract details or even how much it might cost.

Joe Kent, executive vice president of the Grassroot Institute of Hawaii, talked this past Sunday with H. Hawaii Media radio host Johnny Miro about the lack of transparency surrounding the project.

“I just tried to file an open records request for the final deal, and they denied it, saying that the deal’s not done yet,” Kent said. 

However, money appropriated by the Legislature for the project came with an expiration date, Kent said, which passed last summer, “so there’s a lot of question marks about: Is the money still available for the project? Did the project get signed in time? And is everything moving forward properly?”

Kent credited developer Stanford Carr for taking on the project, but he called for the state to give taxpayers clarity in terms of how the project will be financed, the terms of the public-private deal and how the stadium will be maintained in the future.

“The main thing that we are concerned about is the taxpayers,” he said. “How much are the taxpayers really going to be on the hook for? And when promises are made, are promises going to be kept?”

Kent warned against falling for the “sunk-cost fallacy” as the project proceeds, especially in phases, citing Honolulu’s rail project as an example.

“The argument used to increase spending over time on the rail was the ‘sunk-cost fallacy,’ which is that we’ve already spent all this money on the rail, and that means we need to spend more,” he said.

Also reminiscent of the rail project, Kent expressed concern that the project has already experienced delays and cautioned against raising taxes to fund it.

“Nothing has been stated to that effect,” he said, “but I’m always on guard.”

TRANSCRIPT

9-7-25 Joe Kent with host Johnny Miro on the H. Hawaii Media radio network

Johnny Miro: Great to have you along on this Sunday morning. I’m Johnny Miro. Once again, it’s time for a public access programming on our five O‘ahu radio stations with H. Hawaii Media. Five on Kaua’i. Five on Maui. Hawaiistream.fm. Live365. Facebook page, another way to pick us up.

And another important topic. And boy, this has been in the news lately. A new developer brought into the fold, and talk about moving back the potential demolition and, of course, the opening up of an entertainment venue that would include a brand new stadium. 

Speaking of Aloha Stadiums, it seems to be moving forward very slowly. Stanford Carr has been selected as the major developer. Demolition just around the corner. And for more on this, we’ve got Joe Kent once again, the executive vice president of the Grassroot Institute of Hawaii, and he’s now set to give us an update on the project and whether there are risks ahead. 

All right. So good morning to you, Joe. Thanks for joining me.

Joe Kent: Aloha, Johnny. Thanks for having me.

Miro: All right. A lot of money, once again, poured into a big project. What’s the current state and what’s the current status of the Aloha Stadium project?

Kent: Yeah, well, the current state is a little bit of confusion and a lot of money and a lot of contracts, too. Stanford Carr has been selected as the project developer with Aloha Halawa Development Partners. 

That group, I think, has just been created to build the stadium, and they’re working on dredging now. They want to demolish it. That demolishing timeline has already been pushed back a couple months, by the way. They might start in October or so. 

The swap meet would be relocated in October. And the money we’re talking about is around $350 million. That’s 3-5-0 million dollars of taxpayer monies. But the stadium, the cost to build the whole stadium, is a big question mark. 

There has been a lot of numbers thrown around, anywhere from 450 million to 900 million, or even whispers of a billion dollars. So the big question is: “Where is the money coming from?”

Miro: Yeah, no kidding, huh? Well, you folks over there at the Grassroot Institute have been historically critical of this project, the Aloha Stadium project. So, Joe, what’s your current assessment of where things stand now, besides what you just put forward?

Kent: Well, of course, it just sounds familiar. It reminds us of the rail or of the many other boondoggle projects that have been tried. But the difference here is that they’re trying to do this as a public-private partnership and select a private partner to put up money and put up funds and maintain the project and so on. So maybe that will make things better. 

But the devil’s in the details, though. You know, the main thing that we are concerned about is the taxpayers. How much are the taxpayers really going to be on the hook for? And when promises are made, are promises going to be kept?

Miro: So that pretty much explains where you’re at. For the listeners, what does this entail, and why has it been so controversial?

Kent: Yeah, so the project has been talked about, starts and stops, for years. And there’s a lot of things going on behind the scenes with contracts and signing on dotted lines, but all of that is not transparent. 

Of course, that’s because when you try to select and procure people to build a big project like that, there has to be a lot of secrecy involved because you don’t want one private partner to see what another is doing. 

But the consequence is the taxpayers can’t see what’s going on either. And so, like, for example, I just tried to file an open records request for the final deal, and they denied it, saying that the deal’s not done yet. Now, that’s interesting because it’s September now, as I say this, and September 2025. 

But if the deal isn’t done yet, the deal was supposed to be done by July 1st, because that’s when the money was set to expire that the Legislature provided. So there’s a lot of question marks about: Is the money still available for the project? Did the project get signed in time? And is everything moving forward properly? But so far we can’t see anything. We have to just take their word for it.

Miro: It’s Joe Kent, executive vice president of the Grassroot Institute of Hawaii, just mentioned some concerns. What else would be main concerns for taxpayers? What should they have about this project? What other concerns?

Kent: Well, the big concern is: How much is it going to cost? You know, it started out as a $350-million project. That has now grown to $450 million. But it could be a bigger stadium than that, maybe $600 or $700 million. 

Plus, there’s infrastructure that would cost around $200 million. You know, you have to dig up all that ground, and put in pipes, and so on. And then there is a wraparound real estate portion that could be another 100 million or so. So this could, this is quickly growing to be the size of nearly a billion dollars.

Miro: A billion dollars, from about 300 million or so, and then they scaled back the seating for the stadium, also, I believe, maybe down to 22,000, I believe that was the last estimate. Project backers …

Kent: Yeah, that’s right.

Miro: Yeah. Project backers say that the cost, though, Joe, will be paid for through some special tax mechanisms. Can you talk about that?

Kent: [chuckles] Well, I always get nervous when I hear about special tax mechanisms. But this is a tax mechanism that’s tried commonly on the mainland. It’s called tax increment financing. And basically what it means is there’s no new tax, it’s just that the monies that are collected regularly anyways, that would’ve been collected, would be redirected towards the stadium.

So let’s imagine the stadium is built. You’ve got, you know, a billion dollars of infrastructure and real estate there, and all of that is making money with restaurants and art galleries and, oh, let’s not forget the stadium itself. It’s making, I don’t know, $15 million, $20 million in property taxes every year, and that money would go to the city. But tax increment financing would kick that money back to the Aloha Stadium. And so, basically it would collect all those future tax revenues into the stadium for maintenance and also for the building of it.

I mean, let’s not forget that this is all being funded through debt. The way you build a big project like this is you get a big loan or a bond, and then you pay that with future tax revenues through this tax increment financing model. 

All of this is enough to put, you know, to boggle the mind of any tax-paying voter. But let’s not forget that the money could have been spent in other ways. If it wasn’t for this TIF, then the money could go to things like unfunded liabilities or other infrastructure, and so on. So this project isn’t really going to be a money tree.

Miro: So does it seem to you that it could be truly financially viable without all these extras, maybe this special tax mechanism? Is this a truly viable venture?

Kent: No, no. Even the project backers say that the project is not financially viable. No stadium is, by the way. They always say that these big projects are big losers nationally. This is what they said about the rail too. “Oh, well, the rail’s a big loser.” Every state that builds a rail doesn’t make money on it; they operate at a loss, and then taxpayers have to make up the difference. 

Well, the stadium is no different. Taxpayers are going to have to make up the difference. But in Hawaii, I think that effect is usually amplified. Just because the cost of living is so much higher, that makes the cost of operating so much higher too.

Miro: So, what do you think, the state, right here where we are at this stand, what should they do to move the project forward?

Kent: Well, they need to get clarity on the monies. Now, the backers of the project, the proponents of it, are not the same as legislators. And ask any legislator what they think about the project, and they actually have a very critical view. 

At the state Legislature earlier this year, there were, you know, hearings about the rail and the ― excuse me, did I say rail? I meant stadium. There were all these hearings about the Aloha Stadium, and legislators were highly critical about “Where is the money going? Is this being done in time? Is the contract going to be signed by July 1st?” Otherwise, the money would go back to the general fund, where it could be used on schools or, you know, unfunded liabilities, debts or sewer things, or anything. You know, there’s a lot of things that Hawaii has to pay for. So there is clarity needed in order to move this forward.

Miro: Well, since you mentioned the rail by slip right there [laughs] you stated that the project is similar to the hold of the rail, which ran over budget behind schedule. We’re currently, you know, heading down, you know, Dillingham and the downtown area right now along Nimitz. Do you think the stadium is at risk of something like that? 

I mean, what are some of the positive components of the project, and could it be a good idea? I know it ties into Hawaii football as one of the main components, but start right there since you did make a slip of the tongue, a Freudian slip, and say, Honolulu rail.

Kent: Yeah, that’s right. Well, the rail — the argument used to increase spending over time on the rail was the “sunk-cost fallacy,” which is that we’ve already spent all this money on the rail, and that means we need to spend more. We can’t give up now; otherwise, it would be a sunk cost, you know, the money would be wasted. Look at all these billions of dollars that we spent and would just go down the black hole, and so we need to spend more to make that money worth it. 

Now, this is something that could very easily happen with the Aloha Stadium, of course. There’s already starting with phase one and phase two, and so on. And whenever you hear phases, that’s an opportunity for the “sunk-cost fallacy” to be used.

You know, we’ve already spent $350, $450 million on phase one, but we really need, you know, hundreds of millions more for phase two. Then there’s the timeline, of course. We all know that the rail has been delayed by decades, and the Aloha Stadium is already way behind schedule. 

But, you know, that timeline is still already being pushed. They were supposed to open in 2028, now that’s 2029. But I would bet that it might even be longer than that. So football fans are going to have to wait.

Miro: We’re speaking with Joe Kent, executive vice president of the Grassroot Institute of Hawaii. Many people are saying that this new Aloha Stadium could help save Hawaii football with a new landscape of college football. The big money. You have to have stadiums that can be filled by the fan base to support the programs. Now, what do you think they mean by this new stadium helping to save Hawaii football?

Kent: Well, there’s the double — or excuse me, the NCAA football. [The University of Hawaii] is in Division I right now, but that status requires a minimum attendance of 15,000 fans, I believe. And Ching Field, which is currently used there at UH Manoa, has 17,000 seats. So, OK, that could work if the stadium is completely full, or nearly completely full, on average. But if the attendance is low, then that could jeopardize the status.

Now, some think that the Aloha Stadium could help with this. So if you’ve got 20,000 or 30,000 seats, then it would be much easier to maintain an average of 15,000 fans. But I think that’s more dependent on the fans, though. You know, if the fans really want to keep that, then they’ll pack in. 

Now, of course, the bigger the stadium — so they say — then the easier this will become. It’s just easier to park and get there, and it’s a nice, comfortable experience, so I understand that too. But that doesn’t mean I think that taxpayers should be charged to accomplish this. 

You know, this is a lot of money — almost a billion dollars, perhaps — just to keep this status. So, in any case, it’s definitely at the center of this conversation.

Miro: And Stanford Carr is the main person running the project, so what challenges does he have ahead of him, in your opinion? Some have said that the project hasn’t been very transparent. I know you mentioned that at the top. But for right now, what are his main challenges ahead of Stanford Carr, the main person running the project?

Kent: Well, Stanford Carr deserves a lot of credit, actually. He is sticking his neck out. He’s taking a lot of risk to do this government project, basically, public-private partnership. And he’s trying to find the monies and get all the contracts signed, so — just like any private partner would, by the way. 

But the problem is with the state. They could be more transparent in the process, and they could really make taxpayers feel comfortable, and even legislators are wondering what’s going on, by the way. 

So the challenge is going to be communication, transparency, but the number one challenge is finding the extra money. What they’re trying to do — so they say — is talk to wealthy people. You know, does anyone have $100 million lying around that they could give to the Aloha Stadium? Are they passing a hat somewhere amongst Hawaii’s wealthiest people? 

And, you know, maybe they would try to sell naming rights or something to the stadium. Now, all of that, I don’t have a problem with. You know, if somebody wants to pay for that, great. But what I do have a problem with is if there’s some sort of deal made where taxes go up in the future. Nothing has been stated to that effect, but I’m always on guard.

Miro: And then we have the maintenance issue. Of course, that was the main problem — one of the main problems — that Aloha Stadium ran into was all that sea salt, the wind blowing it over there. Safeguards and also ensuring that the stadium is maintained in the long term — what are those safeguards?

Kent: Yeah, the Aloha Stadium, called what, the Rust Palace? And it was maintained by Legislature monies over, you know, decades and decades. This new setup, the new stadium, would have tasked the developer with maintaining and operating it. So the developer would pay for it, not taxpayers. That sounds good. That sounds very good. The developer would be on the hook to maintain that stadium for 30 years. 

But the devil’s in the details again, because what is to incentivize that developer to maintain the stadium? I mean, the developer or any private partner or person, would have incentive to reduce its expenditures on the maintenance of the stadium so that it could make more profits, of course.

But I believe in the contract they’re talking about requiring the maintenance of the stadium at a certain level, an operating level. Otherwise, the rights, you know, the development rights surrounding the stadium would be taken away. But my question, though, is if the surrounding portion of the stadium had already been developed, then who cares if the rights are taken away? It’s already built. So, anyways, I want to make sure that whatever is set up, that there’s — that the incentives are aligned properly.

Miro: All right. I know the current timeline pushback. So we heard about that. And what comes next if that current timeline isn’t met?

Kent: Well, there’s a few timelines here. First is that money timeline. Did the money expire or not? And if it did expire, then the money is just supposed to go back to the state coffers. 

Then there’s the timeline for dredging — and, excuse me, Hawaiian Dredging has been selected as the demolition partner. And so demolition is supposed to take 10 months. But if it takes longer than that, that could push things out. 

Then there’s, of course, the building. And there’s all kinds of things. But 2029 is the basically stated completion date. But that could easily go out to 2030, or let’s hope it isn’t 2040, by the way. And the further that’s pushed out, then the further that puts at risk this NCAA Division I factor. So football fans are waiting on pins and needles.

Miro: And the legislators you mentioned, some of them a little wary about this project. Any other risk that could make this project go south, in your opinion, Joe?

Kent: Yeah, if there’s a lawsuit, of course, that could stall things as well as it has with the rail. And, you know, if legislators turn sour on the project, this could also have an effect. So there’s risks all over the place. 

Of course, there’s interest-rate risks, you know, this is all being done with debt. And of course, if there’s some other crisis in Hawaii that needs hundreds of millions of dollars, then it would be basically politically — you know — it would not be politically astute to give money to a big project like this when it should really go to some other needs.

Miro: Well, you mentioned public-private partnership. That model has been touted as helping to bring down those costs to the state. Is it a good thing? Is it actually working?

Kent: Yeah, public-private partnerships can actually work great if they’re set up properly. If most of the rights, property rights and otherwise, are given to the private partner, and responsibilities too — the private partner is supposed to pay for it and find the monies — then it can be a good thing. Then the government, all it has to do is find the right private partner. \

So, the more — in general, the more responsibilities and rights you push onto the private sector, the better. Because the government doesn’t really know anything about how to build a stadium or anything like that.

So, the trick and the risk is when the government assumes more of its rights. Like the government owns the land for 99 years, for example, as a lease. This is what’s being done right now with the Aloha Stadium. The developer doesn’t own that land. He’s leasing it from the state. And so that limits what the developer can actually do and build, and they always have to beg for permission, and they can’t change their mind and do something else. 

So really, I hope that the private partnership is set up in a way that allows more flexibility for the private sector, which ultimately is the best judge of this type of activity.

Miro: Final remaining moments with Joe Kent, executive vice president of the Grassroot Institute of Hawaii. And what would you folks recommend the state do differently at this point?

Kent: Well, the state could, if it wanted to, just give or sell the lands to a private partner. And then there would be plenty of development there, just the same. There would be housing there, you’d have shops and economic activity. This is supposedly what they want already. 

And so — and there might not be an Aloha Stadium, though, if they did that, because the math doesn’t pencil out. That’s OK, by the way. So I think really what’s built there should be driven by what consumers want, not by what politicians want, and that should be the main factor.

Miro: And the scenario where you’d support this project moving forward?

Kent: Well, if the project just stops right now with the $350 million, I mean, you know, that’s given to the private developer and nothing more, then OK. You know, so the money’s been given away and we just, you know, wipe our hands clean and that’s it. And then if a modest stadium is built from that, then of course there’s no problem. 

But the trick is, if there’s more that’s needed from taxpayers and so on. So we’ll be keeping an eye on this project and, of course, offering friendly critiques. But ultimately, if the developer makes money, if taxpayers get to keep their money, and if it results in what the people want, then OK.

Miro: Yeah, it sounds like taxpayers should be very leery and be asking the legislators about the monies and transparency. Anything else that taxpayers should be asking legislators about this project?

Kent: Yeah. Where’s the contract? Where’s the deal? What are the terms? How long are the terms? And so on. So far, that’s been all information that’s denied both to the public, like me, and it’s also been denied to legislators, surprisingly, who really know as much as you and I do about this project.

Miro: Wow, that’s surprising. All right, Joe, thanks for updating folks on the Aloha Stadium project, and you’re executive vice president of Grassroot Institute of Hawaii, and tell folks where they can go and find your fantastic work, along with the other staff and personnel at Grassroot Institute of Hawaii.

Kent: Yeah, so, you can find our work at grassrootinstitute.org, and you can get on our newsletter, where there’s around 40,000 people right now who read our stuff every week. So, grassrootinstitute.org.

Miro: Informed people go there and learn about everything that’s going on within the state and the City and County of Honolulu. Thank you so much, Joe, for joining us this morning. Enjoy the rest of your Sunday. We’ll speak again soon.

Kent: OK, thanks, Johnny.