A rail public-private partnership could have resulted in a different Honolulu today.

In the 1980s I was the Hawaii representative for a Japan-based consortium that proposed to design, finance, build, and operate a 20-mile-plus Honolulu rail line — for free.

The consortium lead was Marubeni Corporation, in a unique business niche: a Japanese trading firm (“sogo shosha”) that identifies energy, infrastructure and transportation projects and arranges project loans with banks.

Marubeni completed many rail projects in Asia-Pacific and Latin America. In 2011 Marubeni entered into an 18-year public-private partnership, or P3, contract with the Queensland state government to build and operate a light rail system on the Australian Gold Coast. Recently Marubeni financed rail construction in Dhaka, the Bangladesh capital.

The second partner was Mitsubishi Electric Corporation, which brought electronics, software, and rail line signaling expertise.

The third was Kawasaki Heavy Industries, with a record of safe, reliable trains — including Japan Railway’s first “Bullet Train” and rolling stock equipment used for Taiwan’s high-speed rail line to New York City subways.

In 1987 the Japanese consortium met then-Mayor Frank Fasi. The consortium staff placed a train model atop the mayor’s office table and distributed a brochure with potential Honolulu rail routes.

The Skytrain in Vancouver, British Columbia. Should Honolulu have adopted such a model? 

The consortium’s “pitch” to Mayor Fasi was simple: the entity pays for rail track construction, trains, maintenance and operations. Not one dime would come from Hawaii taxpayers.

Imagine if the following had actually happened:

The city and the consortium partnered to map the “best” route and station sites. The consortium had rail station development monopoly and negotiated with land/business-owners to continue their business in new developments or offer them future compensation, like condominiums or retail rent revenues.

Population And Ridership

The consortium rail line began with the highest Honolulu bus ridership route: Waikiki to Ala Moana Center, a densely populated area with carless visitors (and residents). In the 1960s, Honolulu Mayor Neal Blaisdell described Honolulu as the east-west analog of Manhattan Island’s north-south transit grid; Honolulu urban density is 10 percent less than New York City.

A critical rule highlighted in Jarret Walker’s book “Human Transit: How Clearer Thinking about Public Transit Can Enrich Our Communities and Our Lives” is that population density equals transit ridership potential.

From Ala Moana Center the proposed consortium rail route extended westward to Kakaako, downtown, Kalihi-Palama (the latter census tract has 43,000 residents) — then beyond Red Hill to what was mostly — in 1987 — an agricultural expanse of West Oahu: in hindsight, this fact is very significant.

The consortium’s rail construction loans were “paid off” by train rider fares plus hotel revenues, condominium sales, and office/retail rents (local partners would bring design, marketing and permitting expertise) — over 30 to 35 years.

Daily ridership projections were weighted less in value compared to Waikiki condominium sales or Kakaako retail rents. The bulk of the consortium’s revenues would have been derived from the Waikiki-downtown station real estate development.

Loan costs, construction delays, and ridership were the consortium’s responsibility, not Honolulu’s. Following rail P3 models like Hong Kong (the port-city operates its MTR subway line 85% profit over budget!), the consortium must contractually achieve city construction and transit operation “milestones” or pay fines.

After the P3 rail project contract ends, the consortium transfers the rail line ownership/operations to the City and County of Honolulu.

At the 1987 meeting’s end, Mayor Fasi, puffing on his trademark pipe, said “Thank you.” The rest is history.

A “What If . . .” is that Mayor Fasi signed a rail P3 contract. By the late 1990s the inaugural Waikiki-Ala Moana rail “section” exceeded rider goal numbers. Of course, the existing TheBus route had “proven” high rider numbers, not Excel-conjured projections.

By the early-2000s, a rail-triggered micro-impact occurred in Kakaako. Thousands of Kakaako residents in new residential towers atop rail stations rode trains to jobs in Waikiki or downtown. Instead of reporting on Hawaii’s population decline, especially among young people, today’s media would exult Hawaii’s population growth.

Hawai Business magazine’s top 250 firms relocated workers to new office “campuses” adjacent to rail stations west of Red Hill.

Many firms’ employees moved to apartments near the Waipahu and Pearl City stations and walked to their offices — removing hundreds of cars from daily commute traffic.

Ironically, since housing tract construction did not occur in West Oahu (the core reason for “rush hour” traffic congestion, hence rail as the cure), the sugar and pineapple lands transformed into diversified agriculture; vegetables and fruits were sold at rail station kiosks, supermarkets, and shipped to Asia-Pacific markets.

Tourists mingled with families with children on trains to tour West Oahu flower gardens, dairies, sports fields, pop-up restaurants, and hydroponics farms — dubbed Hawaii’s “Second Economy.”

Honolulu “inner-core” workers boarded trains for an east-west commute, the reverse of today’s Oahu traffic pattern.

So many Honolulu residents — with high-paying jobs and lower taxes — chose a “no-car” lifestyle that Oahu traffic congestion decreased dramatically; Honolulu city staff hosted delegations from Pensacola, Florida, to Pusan, South Korea, seeking insights to Honolulu’s “Best City to Live in World” top ranking.

Rail P3 (real estate investment/financial risk) could have created an “alternative” Honolulu — a “dense” urban corridor linking West Oahu’s green expanse dotted by eco-agro-sports-culinary attractions for residents and visitors.

The Vancouver Model

Since the 1986 Vancouver World’s Fair (which Mayor Fasi attended), the Skytrain’s elevated rail design and financing model — a blend of rider fares, gas taxes, property taxes, and federal government payments — deeply influenced Honolulu rail planning.

By decreasing car congestion and increasing population density Vancouver’s Skytrain is a success. Launched in 1983 as a one-mile light rail experiment (identical to the “starter” Waikiki-Ala Moana route), three years later 15 stations were constructed over 13 miles. Today Skytrain has 53 stations, 50 track miles and 500,000 riders per day.

We can only imagine that half of Oahu would be … a ‘sustainable’ economy and ‘livable’ city.

Achieving train rider numbers is a challenge. Christof Spieler’s Trains, Buses, People — a review of U.S. mass transit — points out that the Honolulu rail projection of 120,000 weekday trips is a “ridership per mile among the highest in the U.S., on par with the Washington, D.C., Metrorail.”

The latter rail system began four decades ago!

Since SkyTrain opened, the rail service area population rose from 400,000 to 1.3 million residents (potential riders). Between 1991 and 2001, the Vancouver population living within 500 yards of the SkyTrain line jumped 37%, compared to the Vancouver overall average of 24%.

Residential, office and retail development along the SkyTrain’s “corridor” created carless “town centers” with young workers anchoring Vancouver’s vibrant economy. A tax-payer-built rail line alone did not attract riders or boost jobs growth. Real estate investment was the key.

Of course, none of this actually happened. Instead, we can only imagine that half of Oahu would be now in jobs-generating/food-producing green space: a “sustainable” economy and “livable” city.

Yet hindsight is always crystal-clear.

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