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The Money Train

How public projects shape our economic future.

(page 5 of 6)

To get as many different contractors involved as possible, separate contracts will be awarded for yard stations, all 19 transit stations and equipment procurement. Construction of the transit segments has also been broken up into five different segments. Contracts will range from $20 million to $350 million.

Transit supporters also believe it will spur private development near or around transit stations, creating chances for redevelopment in some areas and opportunities for a new kind of development. The city Department of Planning and Permitting and urban design firm Van Meter Williams Pollack began meeting with Waipahu residents in 2007. The designers received input from the community to determine what it wanted to see for its future. The firm has come up with plans that will make Waipahu look radically different but will uphold key elements the community wanted to keep. Federal subsidies are available as incentives for private developers, depending on what is being built.

Other Top Public Projects

Project

Cost ($Mil)

Project Administrator

Status

Aloha Stadium Renovations
$185
State DAGS
Begins March 2009
Kapolei Judiciary Complex
$109
State Judiciary
Under construction
Ewa North-South Rd., Phase 1B
$63
State DOT, Highways division
Under construction
Ewa North-South Rd., Phase 1C
$57
State DOT, Highways division
Under construction
Honolulu International Airport, explosive detection systems integration improvements, Phase 2
$39
State DOT, Airports division
Process of being awarded
West Hawaii Civic Center
$50
County of Hawaii
Begins late 2008
Honolulu International Airport, parking structure
$39
State DOT, Airports division
Under construction
University of Hawaii West Oahu, infrastructure engineering and design
$35
University of Hawaii
Under construction
Hawaii County Building Renovations
$22
County of Hawaii
Began August 2008
Pacific Warfighting Center, Ford Island
$20
U.S. Navy, NAVFAC
Under construction

 

Rising Costs

Public projects that need to be done, from school repairs to roadwork, are nearly limitless. The tax base to fund them, however, is not.

“When the economy slows, it slows for everybody, including the government. They need the tax revenues to drive some of their programs,” says Lance Wilhelm, senior vice president for Kiewit Building Group-Hawaii. “You gotta wonder if they’re going to be able to do all the things that need to be done.”

Although UHWO planned a groundbreaking for August 2008, additional infrastructure requirements have slowed down the deal. Costs associated with the transit station and a 10-acre park-and-ride facility were not considered in the initial proposal, but one party needs to commit to it before the City Council votes on the zoning approval, finalizing the agreement. The state’s harbor upgrades were originally estimated at $842 million, but have since dropped to $618 million. Many of the projects projected for Kahului Harbor were scrapped.

In these economic times, it is the goal of the government to provide economic stimulus. “That’s the role of government,” HIPA’s Kaneko says. “To be able to, at the appropriate time, stimulate the economy and when it has the wherewithal to do it.”

With large local companies laying off employees and overall spending down, the state’s GET tax base will shrink. Experts argue, however, that is no reason to stop spending on public projects. Any construction project will put money back into the general fund. For example, the government awards a construction project to one contractor, but a project will need consultants, subcontractors and suppliers, each one paying the GET along the way. Also, all the companies pay their employees, who are spending their money in Hawaii.

 

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