Honolulu Mayor Rick Blangiardi suggested Monday that the hefty budget shortfall for the Honolulu rail line may force the city to halt the project short of Ala Moana Center — if the Federal Transit Administration will allow it.

Rail construction will continue past Middle Street, but Blangiardi suggested the entire project with its 20 miles of elevated track and 21 stations may not be built as originally planned.

“My target personally is to get to the civic center, which is … right on the doorstep of Kakaako, which would leave us two stops short,” Blangiardi said during an interview with the Honolulu Star-Advertiser’s “Spotlight” program. “That’s what we’re trying to determine, based on the amount of monies that are available to us, can we do that?”

Mayor Rick Blangiardi said his personal goal is to get the rail line built to the Honolulu civic center, which would be two stops short of Ala Moana. Cory Lum/Civil Beat/2021

Blangiardi stressed he is deeply engaged in the rail project and holds 90-minute meetings each week with the leading players, including City Council Chairman Tommy Waters and rail authority Chairwoman Colleen Hanabusa, board chairwoman of the Honolulu Authority for Rapid Transportation.

“Clearly, as has been said, we don’t have enough money to go to Ala Moana,” he said. “And that’s what’s hanging in the balance right now.”

“We’re not going to stop at Middle Street. We know we have enough money to get us — we hope — down to downtown. Beyond that is where the problem lies and the deficit, which I think was reported as $1.97 billion, lies.”

Blangiardi said he has had “several conversations” with officials at the FTA, which pledged $1.55 billion for the rail project after the city agreed in 2012 to build the rail line from East Kapolei to Ala Moana Center. At the time, the project was expected to cost about $5.2 billion.

Almost a decade later, the rail project has received two financial bailouts, and the latest city estimates put the total cost of the 20-mile project at about $11.4 billion.

The Full Funding Grant Agreement with the FTA requires the city to build the rail line all the way to Ala Moana, and the city may be required to forfeit funds if it fails to do so, Blangiardi said.

Mayor Rick Blangiardi announces at a press conference today that he is canceling large gatherings and is still allowing the gathering of 10 people indoors and 25 people outdoors during a surge in Covid-19 cases. August 23, 2021
Mayor Rick Blangiardi. Cory Lum/Civil Beat/2021

“We’re trying to argue, you know, with them,” he said. “And we’re going to try to see how far we could possibly build it.”

“All of this lends itself to say, what are the numbers, and what makes sense? What’s our strategy? What can we actually deliver without raising property taxes? And what’s acceptable to the FTA? And that’s the part that I can’t really speak about, because I don’t know yet,” Blangiardi said.

He added that city officials believe an “interim opening” of the initial segment of the rail line can take place next July or August. Construction toward the urban core should reach Middle Street by the spring of 2024, where Blangiardi said there will be a “natural pause.”

From there it will be “about a five-year window” to get to downtown, he said.

The city council earlier this month approved a new 3% hotel room tax for Oahu and agreed to commit one-third to one-half of the revenue from that tax to the rail project. Meanwhile, HART is looking for ways to further reduce the rail budget shortfall.

HART Interim Executive Director Lori Kahikina announced last month the project faced a budget shortfall of nearly $2 billion, but that figure does not include the roughly $50 million a year the project will eventually receive in revenue from the new 3% hotel tax.

In the meantime, a consultant hired by the city to validate the latest cost estimates has concluded that shifting the alignment of the rail line slightly mauka along Dillingham Boulevard can save HART nearly $166 million.

The HART board is scheduled to discuss that report, by Triunity Management and Engineering Inc., on Thursday.

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