A future for Kakaako

With the new UH Medical School campus at its core, the underutilized area will

February, 2002

Of all the numbers Ed Cadman has been crunching lately, 16 is the one he’s most concerned with at the moment. Sixteen is the number he’s using as evidence that the University of Hawaii John A. Burns School of Medicine (JABSOM) is not the first organization attempting to use monies from tobacco funds to support biomedical research. Sixteen other states across the country are doing it as well – and they are spending higher percentages of their tobacco funds and millions of dollars more than UH in the process. Cadman, dean of the UH medical school, has taken an aggressive role in getting this information out to the public by way of the media, giving speeches around town and plain old word of mouth. And, if for no other reason, he is doing it primarily because criticism over the use of the tobacco fund has been the opposition’s primary complaint thus far about the new JABSOM campus being built on 10 acres in Kakaako this September.

“There were some concerns about the tobacco settlement money being used to fund the medical school, but those same people said, ‘We’re not against the medical school, we’re just against using these funds,’” says Jan Yokota, executive director of the Hawaii Community Development Authority (HCDA). “The truth is, there aren’t a lot of adversaries, because the school will be such an all-around positive thing for the state.”

Whether you agree or not, the numbers are telling, and do paint a very palpable picture of diversification for the state and, if executed properly, a long overdue economic stimulus for the area.

Research dollars

In two years, the John A. Burns School of Medicine and the Pacific Biomedical Research Center have doubled the amount of research dollars received by the National Institute of Health (NIH). NIH grants awarded through fiscal year 2002 are $21.9 million, up from $12.3 million last year and $2.5 million the year prior, with total research dollars for fiscal year 2002 projected to be $50 million. And that’s all been obtained with the existing antiquated medical school facilities and the current staff.

With the creation of a 10-acre “biomedical research park,” as Cadman likes to call it, housing both the Pacific Biomedical Research Center and the Cancer Research Center of Hawaii, total research funding is expected to top $100 million per year. Funding from the NIH – whose 2002 national budget has been set at $22.3 billion – would cover the costs of salaries, equipment and supplies, as well as indirect costs, such as maintenance and utilities.

In addition, Cadman estimates total revenues, in both the public and private sectors, of more than $240 million being generated by the medical school. The breakdown of economic benefits of the new campus on an annual basis would be as follows: medical school research, $75 million to $80 million; the cancer center, $40 million; and private sector research, $125 million.

Job Creation 

The job listings for the biomedical research park run the gamut from UH staff medical researchers to administrative assistants and maintenance. In exchange for the use of superlative research facilities and resources, the UH will be looking to lure first-rate physician-scientists, who can pull their own weight by way of federal research grants. Cadman is seeking researchers and scientists to match wits with the talented staff he already maintains, including Dr. Ryuzo Yanagimachi (creator of the famous mice-cloning technique), Dr. Martin Rayner of the Pacific Biomedical Research Center and Dr. Carl-Wilhelm Vogel at the Cancer Research Center of Hawaii.

Plans for the biomedical building include 50 new research labs, each of which will house one research team, for a total of 550 new positions. A team consists of one faculty member, five research associates (usually college graduates) and five research technicians. “These are not necessarily college grads, but do have to be high school or community college graduates,” notes Cadman. “This is where we can really begin to train a skilled work force in Hawaii.”

In addition, Cadman expects another 1,100 jobs will be available in the private sector, as well as the creation of approximately 600 indirect jobs as a result of the building of the new campus. Groundbreaking for the project is scheduled for late summer or early fall of 2002, and should create another 600 to 700 jobs for the construction industry, as well.

If it works elsewhere… 

It’ll work here. Or so the theory goes. “Not only is it a lot of money in and of itself that these new researchers are bringing in, but this level of biotech-related funding is what has driven the industry elsewhere,” says David Watumull, president of Pearl City-based Hawaii Biotech Inc., who is anticipating relocating the company to Kakaako once the area becomes established as the biotech hub. “Look at places like San Diego, Boston, Seattle and Austin. The implications are enormous in places like this, which have built entire biotech industries around a research park.”

Cadman points out that 41 states have biotechnology initiatives, while 10 states, including Hawaii, have strategic plans to get a biotech industry going. He says 26 states have research parks, and of those, nine are focused exclusively on bioscience. Recent examples include a 160-acre, $500 million medical school and bioscience park in Colorado and a $400 million campus in Mission Bay, Calif.

As is the case in Hawaii, these medical schools and research parks nationwide are subsidized in part by the state, and in some measure through private-sector funding. University of Hawaii president Evan Dobelle has made ambitious claims that the university will match the state’s $150 million investment with money obtained in a fund-raising effort over the next several years — although no money has been raised thus far, and critics question the ability to raise such a hefty sum at all. State House of Representatives Speaker Calvin Say questions, “I think that’s what he’s expounding to the public, but will he get it? I don’t know.”

Revitalizing Kakaako 

In an unprecedented effort to revive Kakaako, which is currently a mixed-use light industrial, commercial and retail area, UH is working with the HCDA (which oversees development in the area), and both Kamehameha Schools and Victoria Ward Ltd. to devise a joint master plan for the area.

Kamehameha Schools and Victoria Ward Ltd. are No. 1 and No. 16, respectively, on Hawaii Business’ list of the state’s Top 20 wealthiest landowners, and are the two largest private landowners in Kakaako. “Kamehameha Schools is now taking the opportunity to really re-look at all of our properties in the area, both on the ocean and mountain sides, to determine how best to help develop that entire area,” says Hamilton McCubbin, chief executive officer of Kamehameha Schools. “We’ve recently hired two major planning firms to come in and help us: New York-based Cooper, Robertson & Partners, and the Sedway Group out of California.”

While the contract with the Sedway group is a solo one, Kamehameha Schools will split the undisclosed cost of the Cooper Robertson contract with Victoria Ward, whose team is excited about the collective development opportunities. “The building of the medical school may give us the opportunity to move forward with our plans sooner rather than later,” says Victoria Ward Ltd. president and chief executive officer Mitch D’Olier. “Right now we’re discussing our different goals and objectives and how we can work together to create a really cool new community in Kakaako that’s live, work and play.” D’Olier says the biggest contribution Ward has to make is a residential community for employees of the surrounding area. He mentions four or five residential tower sites, each about 80,000 square feet or bigger. “We’ve dreamed about a residential community on the Ewa side of Ward Avenue for a long time, and I think for us, given that most of our properties are a good ways away from the medical school, it’s the one that fits best.”

Kamehameha Schools, on the other hand, will be looking at redeveloping its lots for other uses. Although it is too early to tell, McCubbin says it is likely the estate will look into providing additional research and office space for biotechnology firms and other related companies interested in congregating in the area. Coupled with the medical school and Victoria Ward’s plan for a surrounding residential community, Kamehameha Schools is looking to create the kind of critical mass necessary to grow the area. “If you can imagine the medical school at the core, with other companies wanting to locate here because of the availability of commercial and residential space,” says HCDA’s Yokota, “that synergy would give you a new industry for the state as well as a pretty strong revitalized commercial area.”

Intellectual capital

In November last year, local-born entrepreneur and chief executive officer of Garage Technology Ventures, Guy Kawasaki, spoke with Hawaii Business and said Hawaii has a golden asset far more valuable than our East-West connection or massive bandwidth. And that asset is intellectual capital. “At the primary level, there’ll be biotech research and some government grants, but the more important, longer-term impact could be the intellectual energy, creativity and enthusiasm of these people,” says W. Allen Doane, president and chief executive officer of Alexander & Baldwin Inc. “In effect, they’d be generating new ideas and businesses for the state.”

That may be the case, but Cadman and his team have got their work cut out for them. Results from the 2000 National Assessment of Educational Progress revealed that average science scores of Hawaii fourth- and eighth-graders are among the lowest in the nation. “Yeah, I’m concerned about that,” says Cadman. “We as a medical school are doing our part both from the faculty and student perspective, but it’s dismal. With the new campus, we now have the opportunity to help train the work force for the new biotech industry.”

Fourteen other states are currently developing, or have in place, two-year biotech associate degree work programs through community colleges. Cadman hopes the UH will soon follow suit. The process won’t be swift, but supporters are keen to the idea of growing a self-supporting, high-intellect community less reliant on the Islands’ physical capital. Hawaii Biotech’s Watumull agrees: “This is the one big-bang shot that we have to really do something where we can get a significant portion of the economy moved into a different area, away from tourism.”

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