Deal to preserve 665 acres at Turtle Bay has money problems

HONOLULU — A deal to preserve more than 665 acres from development in the Turtle Bay area of Oahu has hit money problems.

The $48.5 million deal was announced at the end of last year’s legislative session, and the state had planned to issue revenue bonds to cover its $40 million share. But it was unclear to the budget and finance department that the bonds would have to be issued by June 30. At this point, there isn’t enough time to issue the bonds by the deadline, said Rod Becker, deputy director of the Department of Budget and Finance.

Under the deal, the state is buying a conservation easement, and Turtle Bay Resort will continue to own the land. But the final appraisals and negotiations are ongoing.

“We don’t want to issue the bonds before we know how much money was needed, and before there was a deal,” Becker said.

Lawmakers are trying to solve the problem by giving the state more time to issue the bonds. They also want to switch the funding mechanism to general obligation bonds, which may have a lower interest rate than the revenue bonds originally in the plan, and to make the Department of Budget and Finance issue the bonds instead of Hawaii Tourism Authority.

“For the same amount of money to float the bonds, we actually save taxpayer money,” said Rep. Ryan Yamane, chairman of the House Committee on Water and Land.

Yamane’s committee passed SB 284 Wednesday.

The state is working on the final details of the deal, and expects to have an agreement with Turtle Bay Resort within weeks, said Attorney General Doug Chin.

“The state is just trying to make sure it’s getting a good deal for the money it’s putting out there,” Chin said. “I think everyone agrees it’s a good cause.”

The City and County of Honolulu is chipping in $5 million and the Trust for Public Land is adding $3.5 million.

Some are concerned the deal may fall through if a solution isn’t found quickly.