A former mayor once said, “The county doesn’t build roads, developers build roads.” It disproved that and has done well on the midlevel road. Whether the county through its taxpayers, or the cash and property values covers the cost and
Reed Flickinger | West Hawaii Today
Last week the county had some good news about roads: Good fortune, better management and a contingency fund surplus combined on the Ane Keohokalole Highway project to leave a $3.24 million balance — enough to pave from the West Hawaii Civic Center to Hina Lani Street.
“A lot of it was just good fortune,” Mayor Billy Kenoi said. His comments were echoed by Public Works Director Warren Lee, who ascribed the savings to project management in-house, by the county, saving $1.6 million, as well as funding not expended on contingencies such as lava tubes and archaeological sites that were not uncovered during construction.
This road has been a study in good timing and good fortune from the outset. It was in an area with but a few private landowners, and most importantly, it was being paid for by $35 million in federal stimulus funding. The county moved uncharacteristically swiftly and deftly in having the project “shovel-ready” to comply with stimulus funding conditions, and has proceeded expeditiously to date. Honolulu-based Nan Inc. won the job with a $29.9 million bid and it has been proceeding since.
Yet if the midlevel road is a study in the county’s ability to make nearly all the right moves at the right times, the South Kona bypass road is, so far, an exercise in how not to build a road — by government — or anyone else.
Any discussion of the South Kona bypass becomes a foray into a veritable library of legal briefs and proceedings; you need an interpreter to begin to understand all that is going on and has gone on.
Background: In order to obtain county permitting to build the Hokulia residential resort, 1250 Oceanside entered into various agreements with the county, codified in the first and only “development agreement.” It stipulated many things, including bonding and building the bypass road as a condition of development. Oceanside procured at least eight bonds in 1999 to cover phase one (and its maintenance) and phase two of the bypass, along with well development, and subdivision infrastructure in phase one of the project and another $7.1 million for improvements in phase two.
The development agreement was legally binding — or so the county thought — until a 3rd Circuit Court proceeding threw that into serious doubt. Nearly 12 years ago, the bonds were secured and ostensibly, so was completion of the work.
Oceanside built the first half of the road, but litigation stopped it there. Years were expended in a civil suit that resulted in a separate March 15, 2006, settlement worth more than $200 million in community benefits, most of which remain outstanding, including as many as 168 affordable housing units, water quality monitoring and cultural considerations, including funding for a state Department of Land and Natural Resources position. The outstanding nature of the settlement portends yet more potential litigation — against a company now held by a bank.
The county last year called the bypass bond and went back to court, as the bonding company’s first reaction is to deny payment. The county has since reached a settlement, which has yet to be finalized. In the pending settlement, the county has agreed to dismiss all remaining bonds — including the second phase of subdivision improvements, in exchange for $12.5 million and 118 or more lots (in phase two) with an appraised value of $20 million as surety. 1250 Oceanside, the settlement says, is supposed to build the road.
How, the judge asked in court? Perfect question.
The county has estimates of $27 million and more to complete a bypass, for which the county now has $12.5 million, as well as plenty of lots in a completely undeveloped subdivision, from a bank-owned company with outstanding obligations for nearly $200 million in settlement obligations.
Adding up the balance in the Ane Keohokalole Highway is simple ciphering compared to unraveling the tangled balance sheets in South Kona.
The settlement is not inked, but what is now before the county can be viewed in the context of the county’s failed attempt to sell thousands of acres in Hamakua it obtained in lieu of property taxes from the defunct Hamakua Sugar Co. Having property, despite an appraised fair market value, does not guarantee buyers. Ag land sales — or the lack thereof — in Hamakua proved that.
How then will the road be built? It is a fair question with innumerable potential responses. The settlement clears the way for the road to be built, said county Corporation Counsel Lincoln Ashida, as he unraveled the settlement terms for a reporter.
By whom and at whose expense, however, remain the lingering, operative questions.
The South Kona bypass project is littered with problems, questions and unknowns, as well as potentially questionable funding. It’s a far cry from the Ane Keohokalole Highway, in simplicity and in terms of completion.
A former mayor once said, “The county doesn’t build roads, developers build roads.” It disproved that and has done well on the midlevel road. Whether the county through its taxpayers, or the cash and property values covers the cost and completes the road remains to be seen, as we ultimately will discover who, if anyone, completes the South Kona bypass.
