City's Share Of $772M Blaisdell Redevelopment Cost Still Unclear

Sep 25, 2019

The city is planning a major $772 million redevelopment of the landmark Neal S. Blaisdell Center in partnership with the private sector but the city's share of the cost remains unclear. 

 

Yesterday, members of the City Council's economic development committee received an update on the project from the city administration.

Eleven potential partners have expressed interest in submitting formal proposals -- or RFPs -- to redevelop the Blaisdell. Selection of the private partner or partners is expected by August 2020.

Council members asked Enterprise Services Director Guy Kaulukukui how much the city can expect to pay of the projected cost and how much the private partner will bear.

"Well, two things -- one is that I think until we run the course, the RFP process, we really don't know what kind of share in the overall construction cost will fall on the city and what will fall on the partner. So the true cost for the city is not revealed at the moment," he said.

Council Chair Ikaika Anderson urged Kaulukukui to inform the council members as soon as the city's share, likely to be financed by general obligation bonds, is established.

"Being that the council's going to have to appropriate those dollars, it would help us greatly if you could let us know the figure the administration is comfortable with as soon as possible so you can gauge the comfort level of the council," Anderson. "We may be in agreement on that, we may have a slight disagreement or we could be world aparts on that figure."

The city expects to close the Blaisdell in January 2021 when work on the project is expected to begin and officials have taken no bookings after December 2020.

It's not clear yet where popular events like the Honolulu Symphony Orchestra concerts and the Made In Hawaii Festival will be held during construction.

Council member Carol Fukunaga said the city should be coordinating with the state Hawaiʻi Convention Center on accommodating the users of the Blaisdell. 

Kaulukukui said he hasnʻt reached out to the convention center leaders, but said he will talk to them.

Kaulukukui was also asked about an operating deficit of about $6 million that the Blaisdell is running. Council member Heidi Tsuneyoshi asked if the private partner would be responsible for that shortfall.
 

"We will establish metrics, performance metrics, against which the partner has to satisfy in order to receive their payments and weʻll establish those metrics at a level that allow the recovery and the recuperation of some of the revenue that we seem not able to tap into," Kaulukukui said.

In talking with his counterparts in Los Angeles and San Diego, he learned private partners were able to tap into revenues that the city hasn't been able to get. He said, as an example, the Blaisdell holds about 24 large events per year and the city expects there would be increased use at a redeveloped facility.