Honolulu’s crisis-plagued rail project will continue to challenge the city’s next mayor as its costs climb, local funding evaporates and all hopes of completion turn to a daunting new deal with private industry.
The five leading candidates looking to succeed Kirk Caldwell all say they aim to build the full 20-mile, 21-station system to get rail to Ala Moana Center from Kapolei. But key uncertainties lie ahead in the new COVID-19 era.
Most of the frontrunners say they’ll consider halting construction if rail runs out of money — again. Or, they’ll likely hit pause if its long-anticipated public-private partnership falls through. It remains to be seen if the city’s federal partners would go along.
Three of the top candidates — former Mayor Mufi Hannemann, Honolulu City Councilwoman Kymberly Pine and former Congresswoman Colleen Hanabusa — have complex ties to the state’s largest-ever public works project. Yet they’ve aimed to distance themselves from its history of mismanagement and ballooning costs.
“I’ll pause on the project. We don’t have enough money, we’ll pause on the project,” said Hannemann, the city’s former mayor, who was integral to launching the project in the mid-2000s.
“If worse comes to worst, we’d have no choice but to pause,” said Hanabusa, the former chair of the local rail agency’s oversight board.
“But the pause may come naturally, given … what we’re dealing with,” she added during a recent interview.
Hanabusa was alluding to the public-private partnership proposals that are supposed to finally arrive at the Honolulu Authority for Rapid Transportation’s offices this week, after more than six months of delay.
She said she’s not optimistic that those proposals will rescue the project the way HART and the city hope it will. “There’s a lot of unknowns” about how such a “P3” deal would work, she said.
Two of the other mayoral candidates, Pine and former television executive Rick Blangiardi, expressed similar sentiments that rail work should pause if it runs into more trouble. They made the comments during their recent hourlong interviews with Hawaii News Now and Civil Beat.
“I was always an advocate of building rail to completion. COVID-19 is a wake-up call — there’s a ‘pre’ and a ‘post,’” Blangiardi said. “If we can’t build it, we make the call. We stop it.” He then clarified he meant to say “stall” until revenues bounce back.
Meanwhile, nonprofit director Keith Amemiya said via email that it’s “premature to say if cuts are needed and how they would happen” when asked whether he would consider such a pause.
Rail officials say they’ve already made design adjustments for flooding, requiring whoever eventually builds the stations in town to raise the ground-level platforms.
The next mayor will likely see more headaches from the rail project. The pandemic already has its state tax revenues in free-fall, based on HART’s latest estimates.
In the fiscal year that just ended, the project received an average of $86 million in general excise and transient accommodations taxes for each of the first three quarters.
For the final quarter — which is when COVID-19 hit — the project received just $36 million, according to HART officials.
HART’s chief financial officer, Ruth Lohr, projects conservatively that the project will receive about $187 million in state tax revenues this fiscal year — a far cry from the $363 million projected in rail’s recovery plan.
Further, Honolulu voters won’t know whether the city successfully secured a public-private partnership to finish the full project until after they go to the polls in early August.
Moreover, it’s not clear whether rail’s federal partners would agree to a pause. The Federal Transit Administration continues to withhold $744 million for rail construction until the agency’s convinced that the project is back on track.
“FTA’s goal is to ensure that taxpayer dollars are used as intended, and that the project is delivered as agreed upon” under the Full Funding Grant Agreement, agency officials said when asked if they’d accept a pause.
The FTA continues to work with HART “under the terms of the Recovery Plan,” it added. That recovery plan — a road map to finishing rail — doesn’t mention a pause.
It’s worth noting that Caldwell suggested the project stop at Middle Street — “for now” — when it ran over budget in 2016. The Legislature then approved more tax funds to go to rail and help fill the gap.
Hannemann, Hanabusa and Pine all have close ties to the megaproject, whose costs have nearly doubled from more than $5 billion to $9 billion.
As they court a local electorate that’s weary of rail’s ballooning costs and stymied progress, all three have argued that what happened was outside their control.
Hanabusa and Pine point to steps they took aimed at bringing more accountability to HART when things ran into trouble.
Hannemann, as mayor, was able to finally get the rail transit project funded and approved — a feat that Honolulu city leaders had tried and failed to do for decades.
Last year, however, the state auditor blamed his administration for the project’s initial cost overruns when the first major construction contract went out prematurely. Hannemann insists the city followed the process correctly.
Hannemann resigned from office early in 2010 to run for governor. About four years later, rail’s costs started to climb over budget. Recently, he’s bluntly criticized his former managing director — Caldwell — for how he’s handled the project.
“I have been disappointed with Kirk’s leadership on rail,” Hannemann, who’s now the CEO of the Hawaii Lodging and Tourism Association, said in a recent interview. “It’s no secret — I’ve said it to people around him.”
Hannemann has close ties with HART’s current leadership, plus several top officials there.
In May 2019, about three months after HART received subpoenas in a federal criminal investigation into the project, he gave the agency’s employees a pep-talk during an “all-staff” meeting at Aloha Tower.
Hannemann told them they lacked a “champion” to support their work on rail, and that Caldwell had fallen short in that role.
“Who should be the champion? Who knows my answer?” Hannemann reportedly asked the rail staff. In a recent interview, he said he didn’t mean himself and was asking the question sincerely.
Two of the agency’s longest-serving officials, Deputy Executive Director Joyce Oliveira and Senior Advisor for Media Relations Bill Brennan, worked for Hannemann when he was mayor. Hannemann said he has a good relationship with HART’s latest executive director, Andrew Robbins, which is how he wound up addressing the staff last year.
In January, Hannemann attended a HART press conference in Waipahu to announce plans for interim service at the end of 2020. (That goal has since been scrapped due to the pandemic.)
Caldwell, who often participates in such media events, didn’t attend. The mayor had concerns, like the FTA, that HART was rushing the partial opening, according to a spokesman.
“I fully expected the mayor to be there and he wasn’t there,” Hannemann said recently. “Any positive about HART, I want to be there.”
Hanabusa, meanwhile, served on HART’s volunteer Board of Directors for about a year and a half.
She also chaired the board as rail costs soared by an additional $2 billion.
As soon as she became chairwoman, the board began a lengthy, closed-door process that eventually led to the August 2016 resignation of the agency’s embattled executive director, Dan Grabauskas, under mutual agreement.
Hanabusa resigned from the board in 2016 after running a successful bid to return to Congress. In her final days at HART, the board hired an interim executive director, Krishniah Murthy, at a $400,000 annual base salary. Murthy led the project until his permanent replacement, Andrew Robbins, was hired in 2017.
As she left the board, Hanabusa also supported a 2016 city charter amendment that shifted control of rail’s operation and maintenance from HART to the city. The measure further gave the HART board more control over the rail agency’s operations, rather than just hiring and firing the executive director.
Still, those steps weren’t able to contain the surge of rail costs in 2016.
Pine, meanwhile, has steadily supported the project reaching Ala Moana during her eight years on the City Council — and she’s voted accordingly, even as rail’s price has soared.
At key moments, such as when testifying for more funding from the Legislature, Pine would often vividly describe the daily hardships her Leeward Coast constituents face fighting traffic on the H-1 freeway to help sell the transit system.
In 2017, Pine voted to approve a rail recovery plan that would use city property tax dollars to help fund rail — a reversal of what prior elected leaders had promised.
She lashed out at the Legislature for making that requirement. “It was really done just to hurt people,” Pine said at the time. She called it a “conscious effort by the Legislature to stick it to the city taxpayer.”
Recently, she’s also called for federal oversight of HART — even proposing that federal criminal investigators have some sort of permanent presence within the rail agency.
Pine said that in 2016, she and other council members referred the Honolulu city auditor’s findings of rail mismanagement to the FBI and the U.S. Department of Transportation.
“This island, and this town, is too small to do a project this large — and there is corruption at every turn,” Pine said during an interview in June. “How could people be that stupid when they’re supposed to be the smartest people we hired?”
“If it was incompetency, then why are we paying you?” she added.
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