When it comes to the unfinished rail line, Kirk Caldwell and Peter Carlisle agree on many things, including how much it will cost to complete the route to Ala Moana Center: $1.5 billion.

They agree as well on where the money might come from, such as through extending a tax surcharge, tapping more federal resources or getting private sources to chip in.

Even the third major candidate for mayor, Charles Djou, is in sync with his opponents that property taxes should not be increased to pay for the route, which was planned as a 20-mile, 21-station line that began construction in the deserted fields of East Kapolei.

Djou, too, is open to the possibility that the feds will pony up more money for the project, which is heavily over-budget and way behind schedule, or that the Hawaii Legislature will free up the 10 percent of the general excise tax surcharge that it skims for its own purposes — another position Carlisle and Caldwell have talked up.

Mayor Kirk Caldwell, Mayoral candidates Charles Djou and Peter Carlisle before the start of the forum held at the Japanese Cultural Center of Hawaii banquet hall. 26 july 2016
Mayor Kirk Caldwell and challengers Charles Djou and Peter Carlisle at the Japanese Cultural Center of Hawaii on July 26. Caldwell and Carlisle have similar views when it comes to rail Cory Lum/Civil Beat

And, like Caldwell and Carlisle, Djou is committed to building the route all the way to Ala Moana and even to the University of Hawaii Manoa, should funding become available.

The big difference for Djou, however, is that he will veto any extension of a surcharge on the general excise tax levied on Oahu taxpayers.

He argues that it would be cheaper instead to build part of the rail line at grade, meaning at ground level, or to use rubber tires for the train or buses on the guideway rather than the current steel-on-steel system, or set up a Bus Rapid Transit system to connect to rail stations — positions that have drawn tremendous fire from Caldwell and Carlisle for lacking financial details and being unrealistic.

What none of the three candidate is absolutely sure of is exactly where the rail money will come from.

There is no guarantee that the federal government, which has already granted $1.55 billion for the Honolulu project, will provide any more money. Legislative leaders have said they feel deceived about the surcharge extension they granted until 2027 and so they appear unlikely to warm to an additional extension or increase. No private developer or landowner has publicly committed to help build or pay for a rail station.

HART Guideway waipahu construction Sugar Mill Farrington Hwy1
HART officials say they no longer have enough money to proceed with rail beyond Middle Street. Cory Lum/Civil Beat

And, given the history of the rail project — initially budgeted for $3.7 billion, raised to $5.2 billion when adjusted for inflation, currently hovering at $6.8 billion, pencilling out at $8.3 billion should it make it to Ala Moana and costing as much as $10.1 billion if one federal estimate is to believed — it is very likely to cost even more.

So, how exactly will Honolulu’s next mayor pay for rail?

Civil Beat took a look at their respective positions, based on interviews with each of the top candidates, their public statements and their campaign materials.

No Stopping At Middle Street

Caldwell has taken a lot of flak for his proposal to the Honolulu Authority for Rapid Transportation board to have the rail line stop at Middle Street in Kalihi until further funding can be secured to go farther.

The mayor’s opponents seized on the statement as an example of flip-flopping or, in Djou’s words, pulling a 180.

Hawaii Elections Guide 2016

In fact, Caldwell has always been committed to building the full route. He’s just come to grips with the reality that there isn’t any more money to pay for anything after the segment from the airport to Middle Street is completed.

UPDATED: In addition to the proposals above, Caldwell, a former state lawmaker, points to the GET “skim” taken by his former colleagues, a figure that he estimates is $440 million. He reminds voters (and reporters) that he has asked for more money from the GET, but that idea was not approved by the Legislature.

Correction: An earlier version of this story said Caldwell had estimated $440 million to be an annual total. 

But do the math, he suggests: If the City and County of Honolulu could have the skim money, the rail budget deficit could be reduced. The challenge, he said, is to make sure the Legislature sees “skin in the game,” meaning that the city also seek out other funding sources.

The mayor also said he has talked with private developers and land owners about helping to pay for some rail stations — they have “not closed the door,” he said.

He uses the same “skin in the game” phrase to illustrate that there must be something in their self interest in contributing to the largest public works project in state history.

HART Board Chair Colleen Hanabusa speaks at Mission Memorial Auditorium. 24 may 2016.
HART Chairwoman Colleen Hanabusa, middle, says the city needs to build what it can afford when it comes to rail. Cory Lum/Civil Beat

Caldwell said the developers and land owners include Kamehameha Schools, Howard Hughes Corporation and General Growth Properties.

“I asked them, ‘What would it take for you to spend $40 million on a rail station?”’ he said.

What he heard back was that they are interested and want to explore the idea, but what’s important is that the city help with infrastructure such as sewers on those particular lands so that the developers can build more affordable housing.

“I told them that we are open to those kinds of things,” he said.

And, the mayor said, there is the possibility of issuing long-term bonds paid for by some of these same revenue sources.

“A vast majority want to go to Ala Moana,” Caldwell said at a recent televised debate, something a recent Civil Beat Poll showed as well.

The mayor believes that the Federal Transit Administration wants to help major cities like Honolulu with mass transit.

“At the end of the day, if we can present a capital stake on how to get there, they want to see us succeed,” said Caldwell.

Pieces Of The Puzzle

Caldwell’s biggest challenge may be that rail’s woes are closely tied to him, as he has been chief executive for the last three-plus years when cost overruns and delays have become pronounced.

Carlisle is perhaps fortunate that the project was “on time and on budget” when he left office in 2012, while Djou claims to have been right all along in warning of rail’s cursed trajectory.

As noted above, Carlisle shares many of the same views as Caldwell in terms of paying for rail. He talks about solving the rail “puzzle” by looking at the various pieces.

He mentions another piece: TIFIA, the federal Transportation Infrastructure Finance and Innovation Act. It provides federal credit assistance  via direct loans, loan guarantees and lines of credit to fund transportation projects of national or regional relevance.

HART Rail power supply tracks. 2 may 2016
Rail power supply tracks. A new concern is that altering utility lines along the rail route in town could add to more delays and cost increases. Cory Lum/Civil Beat

But Carlisle is not yet sure which puzzle pieces he’ll choose.

“I have a feeling it can be a combination of a few of these things,” he said, “and I have to sit down and talk with all players before giving you any legitimate assessment.”

Carlisle did say he would consider going “outside the box” to speak with experienced business leaders like bankers Peter Ho and Don Horner (himself a former HART member until earlier this year) and Hawaiian Electric Industries executive Connie Lau.

“There are people of caliber, very good thinkers,” he explained. “You just don’t leave it with the government. You see what the private sector could do.”

Where Carlisle draws a firm line is when it comes to increasing property taxes.

“Look at what property costs are now — it will skyrocket ever onward as rail is built, and that might actually be beneficial for affordable housing,” he said. “But we’ve got to get people into homes, and that is not going to happen with increased property taxes. You already have people keeling away from that American and Pacific dream of home ownership.”

Consider Technology

In a campaign video released Monday, Djou says his plan for the Honolulu rail project can be boiled down to three things: the route, the cost and the technology.

By route, he means honoring the desire of residents to build the full rail line from Kapolei to Ala Moana Center, and maybe to the University of Hawaii Manoa if funding becomes available.

By contrast, Mayor Kirk Caldwell’s plan, Djou says in the video, is to stop the route at Middle Street “until some future unknown date we can find an unknown funding source.” 

By cost, Djou means that $7 billion is enough to pay for a $5 billion mass transit system, “and I will veto any more taxes increases for more cost overruns for this,” he said.

Mayor Caldwell responds to questions as Charles Djou looks on. 14 july 2016
Recent polls show that rail beats out homelessness, cost of living and ethics when it comes to influencing voters. The candidates are shown at a Hawaii Hotel and Tourism Association forum last month. 

And by technology, Djou means that the city should look at “any reasonable alternative that gets us a mass-transit solution.” They include rubber tires for the train and building it partly at grade. The mayor’s favored approach, an elevated, heavy, steel-on-steel “antiquated” system, could bring Honolulu to its “financial knees,” he says.

The best argument for Djou’s candidacy is that Caldwell has had four years to “build rail better” but has not done so.

“If he campaigned for mayor and was actually honest and said this thing will cost more than projected, then fine,” Djou said. “But he did not. He made clear that he would build rail better, and I think it is perfectly fair to hold Kirk Caldwell to the Kirk Caldwell standard.”

Djou said he has talked to developers and contractors who tell him that most projects typically run between 10 percent and 15 percent over budget.

“If rail had grown from $5.2 billion to $5.4 billion or $5.5 billion, the community would not be happy but they would understand,” he said. “But the challenge is that we know it’s at least $8.1 billion and likely to be $11 billion. That is a more than doubling.”

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