Hawaii Community Development Authority

Building Better Communities

ANNUALREPORT

2007

HCDA

The Honorable Linda LingleGovernorState of Hawaii

Dear Governor Lingle:

Letter to the GovernorHCDA

It is with great pleasure that we present the Hawaii Community Development Authority’s (HCDA)Annual Report for the 2006-2007 Fiscal Year. This report chronicles the Authority’s visions andefforts to bring about exemplary communities that will serve the needs and desires of the people ofthis State.

What can clearly be seen in this report are the essential contributions and participation efforts thatthe community-at-large and stakeholders of the Kaka‘ako and Kalaeloa Districts have made asHCDA carries out its mandate for building better communities on Oahu. As we continue to pursuethe planning, regulation and development of the Kaka‘ako and Kalaeloa Districts, the public’ssupport has had a profound and direct positive influence on the Authority’s success in meetingpeople’s needs and aspirations.

The Kalaeloa Master Plan, adopted in 2006, was the result of an incredible level of communityparticipation and assistance. Individuals and groups who have volunteered their time have beensuccessful in beautifying the entrance to Kalaeloa and made significant strides in dealing withunsafe environmental and illegal conditions in the area’s beaches and camping areas in 2007. AKalaeloa Advisory Team was also established to help ensure timely and accurate community inputon the many issues that will arise.

HCDA’s efforts in the Kaka‘ako District have garnered a phenomenal level of public participationover the years, no less so over the past 12 months. Input from community meetings as well asindividual meetings with Kaka‘ako District stakeholders helped the HCDA to prepare an excitingnew draft plan for Kaka‘ako’s Mauka Area. This plan will foster the development of a pedestrian-friendly mixed-use district where people are able to work, live, shop and play in a neighborhoodcommunity. We are counting on continued community participation as this draft plan goes throughthe Supplemental Environmental Impact Statement process. For Kaka‘ako’s waterfront lands, adiverse group of individuals interested in the future of the Kaka‘ako Makai have organized as theKaka‘ako Makai Community Planning Advisory Council (CPAC). CPAC will be making recommenda-tions to the Authority on plans for the future of Kaka‘ako Makai. It is our hope that the work of CPACwill embrace and reflect the wishes of a broad cross section of interests in a fashion that will movethe State forward in using the public lands in the most feasible and fulfilling manner.

We extend our thanks and appreciation to all that have supported HCDA, and we humbly ask forcontinued support.

Respectfully yours,

Jonathan W.Y. LaiChairpersonHawaii Community Development Authority

HAWAII COMMUNITYDEVELOPMENT AUTHORITY2007 ANNUAL REPORTA report covering the period ofJuly 1, 2006 - June 30, 2007

Table of Contents

Introduction: ....................................................................................Page 1

The Kaka ako Community Development District....................Page 3

The Kalaeloa Community Development District......................Page 14

Financial Information......................................................................Page 21

Authority Members..........................................................................Page 26

Table of ContentsHCDA

On the front and back covers of this report:Captured in pictures are the many individuals and groupswho have generously contributed their time and expertisein helping the HCDA to build better communities in Kaka ako and Kalaeloa.

1

Introduction: The Hawaii Community Development Authority

...HCDA is able togo beyond

traditional urbanrenewal methodsby faciliating andparticipating incollaborativecommunity

developmentefforts betweenthe public andprivate sectors.

HCDA

he Hawaii Community Development Authority (HCDA) was established tosupplement traditional community renewalmethods by promoting and coordinating publicand private sector community development.The 1976 State Legislature created HCDA toplan for and to revitalize areas in the Statewhich lawmakers find to be in need of timelyredevelopment. Its legislative mandate empow-ers HCDA with comprehensive planning,regulation and development responsibilities.HCDA is able to go beyond traditional urbanrenewal methods by facilitating and participat-ing in collaborative community developmentefforts between the public and private sectors.

In creating HCDA, the Legislature also desig-nated the Kaka‘ako area of Honolulu as theAuthority’s first Community DevelopmentDistrict, recognizing its potential for increasedgrowth and development and its inherenteconomic importance to Honolulu as well as tothe State. Lawmakers found that Kaka‘ako wassignificantly underdeveloped and underutilizedrelative to its central location in urban Honolulu.The Legislature foresaw that the redevelop-ment of Kaka‘ako would offer tremendousopportunities to address the need for morehousing, parks, and public facilities, as well asfacilitating the establishment of new industriesand new commercial and industrial space neardowntown Honolulu.

In 2002, the State Legislature, citing HCDA’sproven track record, assigned redevelopmentresponsibility for the Kalaeloa CommunityDevelopment District to the Authority. Recogniz-ing Kalaeloa’s development potential, HCDAadopted a Master Plan to transform the Districtinto a model community that will create newjobs, nurture new businesses, and providemuch-needed housing and public facilities forthe people of Hawaii. Lawmakers added fivenew members to the Authority to represent theKalaeloa District; these members vote only onKalaeloa issues.

Organization of HCDAHCDA is a public instrumentality and bodycorporate attached to the Department ofBusiness, Economic Development & Tourismfor administrative purposes. The Authority iscomposed of 18 voting members from theprivate and public sectors who oversee HCDAoperations and establish policies to implementits legislative objectives. Four of these elevenmembers are ex officio voting members fromthe following State departments: Accountingand General Services; Budget and Finance;Business, Economic Development & Tourism;

and Transportation. In addition, the Governorappoints three members from a list of namessubmitted by the Honolulu City Council, twomembers from lists submitted by the SenatePresident and the Speaker of the House, aswell as four members at-large. The fiveKalaeloa members include: the Chairperson ofthe Hawaiian Homes Commission; the Directorof the City Department of Planning and Permit-ting; two community representatives (one eachappointed by the Governor and the Mayor ofHonolulu); and a Hawaiian cultural resourcesspecialist appointed by the Governor. TheExecutive Director serves as the chief executiveofficer and is appointed by the Authority mem-bers. The staff includes personnel fromprofessional fields including planning, engi-neering, architecture, development, finance,public information and administrative services.

Regulatory FunctionsSince the adoption of the Kaka‘ako Plan in1982, HCDA has performed land use andzoning regulatory functions to ensure that anydevelopment occurring in the District meets theprovisions of the Kaka‘ako Plan. The Planincludes specific requirements and restrictionsrelating to height,density, buildingsetbacks, open space,view corridors,streetscapes, land-scapes and towerfootprints. Additionally,the Plan containsschemes for transporta-tion, open space andrecreation areas, publicfacilities, and infrastruc-ture.

A 20-year horizonKalaeloa Master Planwas approved in August2006 and now must beimplemented. Amongthe next steps includethe promulgation ofHawaii AdministrativeRules. Community/stakeholder input isbeing sought to delin-eate goals, objectives,and guidelines for theseRules, which will thenbe followed by detailedlanguage governing theDistrict and encouragingdesirable economic,social/cultural, andenvironmental outcomes.

T

2

...HCDA isdedicated to

creatingcommunities

that willenhance the

quality of lifefor the people

of Hawaii.

The Hawaii Community Development Authority(HCDA) is dedicated to creating better commu-nities for tomorrow, communities that willenhance the quality of life for the people ofHawaii. Authority members and staff areworking to establish the most desirable andsustainable urban neighborhoods wherepeople can pursue their interests whileremaining respectful of the past, cognizant ofthe present, and looking to the future.

State lawmakers have entrusted HCDA to guideand direct the futures ofboth the Kaka‘ako andKalaeloa Districts ofOahu with specificlegislative directivesintended to “result incommunities whichserve the highest needsand aspirations ofHawaii’s people”.

In creating a bettertomorrow, HCDA isintent in makingefficient, focused, andintelligent use of theState’s resources, andto wisely managegrowth to achieve thedesired future. HCDAenvisions communitiesthat are walkable, withhousing, shopping,jobs and entertainmentintermixed and in closeproximity. Following theprinciples of ‘SmartGrowth’, HCDA alsoencourages communi-ties that offer peoplechoices: a wide rangeof housing opportuni-ties for residents, withpark and outdoor

recreation areas and connections that willmake life more convenient and comfortable, allthe while recognizing that we must meet theneeds of today without compromising the abilityof future generations to meet their needs.

In Kaka‘ako, HCDA is following a vision thatpromotes positive economic development,preserves our diverse cultural heritage, andincorporates best practices in energy andenvironmental sustainability. This visionfosters live, work, visit, learn, and play mixed-use neighborhoods that, at their full potential,will contribute to making Honolulu a great city.Although the work to achieve this vision inKaka‘ako is far from done, HCDA has made

significant progress to date. In 1980, therewere some 1,100 residences in Kaka‘ako,none of them were reserved for either afford-able rental or sale. Today, HCDA has permittedan additional 2,089 market-priced homes anddirected the development of 1,388 affordableunits, with another 63 reserved units releasedto the buyers in 2006, and more are on the way.While Kaka‘ako’s residential population hasgrown from 2,798 to over 8,000 over the past 31years, HCDA has expanded the 1.65 acres ofparkland available in 1976 with an additional45 attractive acres, with several more acres inthe works. The $155 million invested by theState, along with the $48 million spent by utilitycompanies and private landowners, forKaka‘ako’s infrastructure improvements hasresulted in over $2 billion in private sectorinvestment in the District—$304 million in thepast year alone.

In Kalaeloa, the former Barbers Point Naval AirStation, HCDA is poised to make a profoundcontribution to the future of West Oahu. Therehave been many changes in the region sincethe former base was closed in 1999 and thereis much that needs to happen before Kalaeloacan realize its full potential. HCDA’s missionfor Kalaeloa is to create economic, cultural,social and environmental value for the region,to lead a sustained, long-term public/privatecommitment to establish the District as a WahiHo‘okela (Center for Excellence) throughplanning, partnership, advocacy, and steward-ship. A significant milestone was achieved in2006 when, with the input and participation ofKalaeloa and regional landowners, busi-nesses, and community groups, HCDAadopted a master plan for Kalaeloa. Approvedby the Governor, this Plan has set the coursefor the exciting future envisioned for the District.In Kalaeloa, HCDA’s focus is to set the stagefor the economic engine to take hold. TheAuthority’s aim is to reconnect the former baseto the surrounding communities and to encour-age people- and transit-oriented development,while leveraging the assets of the District.Kalaeloa presents a tremendous opportunity tocapitalize on creating higher density, mixed-useneighborhoods, with the public and privatesectors working closely together to achieve thisend.

In both Kaka‘ako and Kalaeloa, HCDA isworking to achieve better communities thatincorporate the principles of sound growthpolicies to serve the needs and desires ofpeople for today and tomorrow.

HCDA Creating Better Communities for Tomorrow

3

The Kaka ako District

...HCDA smission forKaka ako isto ensure the

transformationof the District

into adynamic

urbanneighborhood

thataccommodates

a mix ofpeople with awide spectrumof social and

businessactivities.

HCDA

The Kaka ako District omposed of 600 acres of land, the Kaka‘ako Commu nity Development Districtincludes the area bounded byPiikoi, King, and Punchbowl Streetsand Ala Moana Boulevard, as wellas the stretch of waterfront fromKewalo Basin to Forrest Avenue,and the Hawaiian Electric powerplant site in downtown Honolulu.

In 1982, following an intensive five-year planning process, the Authorityadopted the Kaka‘ako CommunityDevelopment District Plan. ThisPlan and associated rules serve asthe basis for guiding both publicand private development activities inKaka‘ako. The Plan was subse-quently amended to include theKaka‘ako waterfront area and iscurrently comprised of two docu-ments: the Mauka Area Plan(covering the area on themountainside of Ala Moana Boule-vard) and the Makai Area Plan(covering the lands on the oceanside of Ala Moana Boulevard). In an effort tostay in concert with changing market and socialconditions, and to facilitate new development,HCDA periodically reexamines and revises itsplans for Kaka‘ako to meet these needs.

Vision and Mission for Kaka akoHCDA’s vision for Kaka‘ako is to establish theDistrict as the most desirable urban place inHawaii in which people can work, live, visit,learn and play. This direction supports thelegislative intent of a mixed-use district whereresidential, commercial, industrial, and publicuses complement each other.

The mission of HCDA for Kaka‘ako is to ensurethe transformation of the District into a dynamicurban neighborhood that accommodates a mixof people with a wide spectrum of social andbusiness activities. HCDA serves as aninfrastructure developer, landowner, cityplanner, regulator, and property manager toexpeditiously implement Kaka‘ako’s masterplan. In doing so, HCDA contributes toHawaii’s economic development, educationand exposure to the culture and the arts; issensitive to and supports existing businessesand residents; and in the process, provides themost livable community and raises standardsfor new communities throughout the State ofHawaii.

A Thriving Residential CommunityThe need for affordable housing in Hawaii is aserious concern and Kaka‘ako presents themeans to provide residential opportunities forpeople of varying incomes, ages and familygroups. To date 1,451 affordable rental andcondominium units have been developed inKaka‘ako, with 124 units to be delivered in thenear future. The Hawaii Community Develop-ment Authority (HCDA) provides for the deliveryof housing by undertaking projects with theparticipation and resources of the private sectorand other governmental agencies. The MaukaArea Plan’s “reserved housing” provisionrequires developers to provide below market-priced units as a condition for development. Adeveloper must “reserve” 20 percent of the totalnumber of residential units in the developmentfor families earning 140 percent of medianincome or less. Under certain conditions, theAuthority may allow a developer to meet thereserved housing requirement through variousalternatives such as providing the requirednumber of units elsewhere, selling the units ata negotiated price to the Authority, or providing acash payment in lieu of providing the reservedunits. In lieu funds collected thus far have beenused in part by HCDA to construct its ownaffordable housing projects. In an effort toensure the delivery of the greatest amountpossible of reserved housing in Kaka‘ako,

C

4

...the MaukaArea Plan s

reservedhousingprovisionrequires

developers toprovide belowmarket-priced

units as acondition fordevelopment.

HCDA HCDA is in the process of making revisions toits reserved housing rules. A housing subcom-mittee was formed and it preliminarily recom-mended that HCDA should focus on “gapgroup” or “workforce” rather than affordablehousing.

Under HCDA’s regulatory guidelines, a total of1,984 residential units were completed, underconstruction, and permitted in 2007. These pri-vate sector projects represent millions of dollarsin construction activity, validating HCDA’s ap-proach of setting the stage for positive economicand social outcomes through long-range infra-structure planning and investment. Projectscompleted include: Moana Pacific (706 units);909 Kapiolani Boulevard (225 units); and KeolaLa‘i (352 units, including 63 reserved units).Projects under construction in 2007 include: 720Kapiolani Boulevard (NCR renovation of 35 loftunits), Moana Vista (492 units and at least 124reserved rental units), and Ward Village Shops(170 rental units).

New and planned projects containing reservedhousing units in Kaka‘ako include:

Keola La iA & B Kakaako LLC’s Keola La‘i residential/commercial development was substantiallycompleted in late 2007. Located on land atSouth and Queen Streets, this complexprovides 352 condominiums, and 63 unitswere sold at below-market prices. Thedeveloper contributed to HCDA $1.3 million tohelp pay for public facilities and $1.2 million toHCDA’s Reserved Housing Program. Thedeveloper conducted a public lottery to sell the63 reserved units. The average price of thereserved one-bedroom units was $290,643and $358,317 for the reserved two-bedrooms.Purchase of reserved units was restricted byincome and other criteria. The project alsoincludes: 10,000 square feet of street-levelcommercial storefront space; an open spaceplaza; and 687 parking spaces. Constructionwill be completed in early 2008.

Moana VistaConstruction began in 2007 on the MoanaVista project, a mixed-use residential/commer-cial/ industrial high-rise complex on two sitesat 1015 Kapiolani Boulevard and 1025Waimanu Street. KC Rainbow 2 DevelopmentCo. LLC is the project’s developer. The projectincludes approximately 552,000 square feet offloor area, 492 residential units, 5,500 squarefeet of commercial area, and 22,000 squarefeet of industrial space. The developer willalso deliver not less than 124 two-bedroomreserved rental housing units.

Halekauwila PlaceThe Hawaii Housing Finance and DevelopmentCorporation has chosen Stanford Carr Devel-opment to build an 18-story complex with 196units for low- to moderate-income renters onState land once occupied by the formerPohukaina School in Kaka‘ako. The $76million project will be located on the Makai-Diamond Head corner of Keawe andHalekauwila Streets and will be designed tointegrate a mix of families and young profes-sionals with a range of incomes. Unit sizes willrange from about 540-square-foot studios to1,310-square-foot three-bedroom units.Monthly rental rates in 2010, when the complexis targeted to open, are estimated to be $900 to$2,500 and meet affordability guidelines fortenants earning 80 percent to 140 percent ofHonolulu’s median income. The complexwould include 32 studios, 58 one-bedrooms,86 two-bedrooms and 20 three-bedroom townhomes. The project would also have a parkinggarage and ground-floor retail space.

At right (from top to bottom):Keola La i, Moana Vista, and

Halekauwila Place

5

...The role ofinfrastructure indeveloping bettercommunities has

been an invaluableone in the

Kaka ako District.

The role of infrastructure in developing bettercommunities has been an invaluable one inthe Kaka‘ako District. The use of improvementdistricts (IDs), or the systematic upgrading ofinfrastructure, is the backbone of any effort todevelop functional and attractive communitiesfor the present and future. New and upgradedroadways and utility systems work to providebetter services and safety for the area’s existingresidents, businesses and visitors. As thecapacity of infrastructure is enhanced, land-owners are better able to improve and developtheir properties.

When the Hawaii Community DevelopmentAuthority (HCDA) was created in 1976,Kaka‘ako was hampered with a deterioratingand inadequate infrastructure system, much ofwhich was put in place more than 75 years ago.Many streets were unimproved, narrow and hadthe tendency to flood when it rained. Somestreets lacked safe pedestrian walkways andcontained haphazardly and illegally parkedvehicles. And the existing overhead utilitypoles, cables and equipment cluttered theKaka‘ako streetscape. Many landowners couldnot afford to make the infrastructure improve-ments required for development of theirproperties.

HCDA’s solution was the undertaking of its IDProgram. This has proven to be a very effectiveand successful method of financing andconstructing the massive infrastructureimprovements that are necessary to provide forthe revitalization of Kaka‘ako. To date, $203million has been invested into improvingKaka‘ako’s infrastructure and priming theDistrict for its role as an urban community. Theresult has been over $2 billion in private sectorinvestment in Kaka‘ako. ID projects thus farhave greatly allowed those who live, work, visitand play in Kaka‘ako to better travel through thearea and to be more comfortable in theirresidences and places of business. Thereplacement of aging infrastructure has workedto avoid situations where utilities break down,causing inconveniences, hardships and delaysfor people. Areas that have been treated toimproved infrastructure are safer, less likely tobe flooded in times of heavy rainfall, and betterable to accommodate new developments andneighbors.

Part of the challenge in doing projects of suchmagnitude is to ensure that HCDA carries outconstruction activities in an expeditious andcost-effective manner, while ensuring publicsafety and minimizing the disruptions andinconveniences to the businesses and public.The Authority uses flyers, press releases, theHCDA newsletter and website, and informa-

HCDAEnhanced Infrastructure Needed to Develop Better Communities

tional meetings to keep merchants, residents,landowners and the public-at-large informed ofconstruction activities.

Three major infrastructure projects werecompleted over the past four years to prepareKaka‘ako’s waterfront lands for development.Ilalo Street was improved to serve as abeautifully landscaped boulevard that nowserves as the principal collector street andmain thoroughfare for Kaka‘ako Makai. ForrestAvenue was improved and realigned with SouthStreet to create a straight roadway across AlaMoana Boulevard and to reconfigure thesurrounding land into parcels ready fordevelopment. Improvements to Ahui, Ohe andOlomehani Streets completed in 2007 in theKaka‘ako waterfront area is typical of pastprojects in the benefits and improvements thatit will bring. The area’s infrastructure andaesthetic appearance was greatly improved.The area has become a much safer and morepedestrian friendly environment. As a result ofthis project, a new ½-acre passive park and 90parking stalls were created adjacent to theKaka‘ako Waterfront and Makai Gateway Parks.

Top: Ohe Street was realigned.Below: Ilalo Street now serves as a major waterfront roadway.

6

HCDA In Kaka‘ako Mauka, the Queen StreetExtension project completed in 2004, created anew urban roadway that has enhanced trafficcirculation in a very dynamic and growingsector of the Kaka‘ako District. The newthoroughfare extends Queen Street fromKamakee Street to Waimanu Street andallocates land for public park spaces on bothsides of the street. Because of an increase inthe project’s cost and lack of funding, and inresponse to the majority consensus of thestakeholders along Queen Street, the Authorityin early 2007 cancelled the Queen StreetImprovements project, or Improvement District11 (ID-11). ID-11 would have consisted ofroadway and infrastructure improvements onQueen Street between Ward Avenue andKamakee Street. Construction on the projectwas to start in January 2007, but theconstruction cost of the project increasedsubstantially, due in large part to revisions thatwere made to the construction plans asrequired by the City and County of Honolulu.Due to the increase in project costs, and afterconsultation with the Attorney General’s Office,staff recommended canceling the existingconstruction contract and to solicit community’sinput on how HCDA should proceed with ID-11or another alternative. HCDA staff met with thestakeholders in an “open-house” format andsurvey forms were also mailed to landowners,who were assessed a portion of the ID-11 cost,and their lessees and also to properties

fronting Queen Street between Ward Avenueand Cooke Street. Generally, the consensus ofstakeholders was that the project should becanceled, although there was acknowledge-ment that improvements are necessary onQueen Street. The majority, however, felt thatindividual property owners should not beassessed because they believe that theimprovements benefit the general public as awhole and not only the tenants and landownerswithin the ID-11 assessment area. The Authoritywill continue to look at the best ways toaddress safety concerns on Queen Street withthe input, participation, and support of thecommunity.

Future Kaka ako Waterfront ImprovementsPlanned for Forrest AvenueForrest Avenue today provides a vital traffic linkto the Kaka‘ako waterfront out of Ilalo Street inall directions. From its connection to Ala MoanaBoulevard at the Ward Avenue intersection, IlaloStreet serves as a relief street for peak hourtraffic from Ala Moana Boulevard. ForrestAvenue provides the connection to Ala MoanaBoulevard at the Ewa end of Ilalo Street, makingit essential that Forrest Avenue be improved tohandle the excess traffic and to ensure safepassage for pedestrians and vehicles. TheAuthority is planning infrastructure improve-ments to Forrest Avenue to improve safety andaccommodate increases in both pedestrianand vehicular traffic and to provide improvedtraffic links to the John A. Burns School ofMedicine (JABSOM), the proposed CancerResearch Center of Hawaii, the proposed AsiaPacific Research Center, and the Office ofHawaiian Affairs headquarters. The projectwould also prevent flooding and rainwaterponding in the roadway and surrounding areasbecause of the lack of proper drainage systemand allow a left turn from the Ewa bound laneon Ala Moana Boulevard and create a safer andmore convenient pedestrian crossing at theintersection of Ala Moana Boulevard and ForrestAvenue. Planned improvements would alsoaccommodate passengers disembarkingcruise ships and tour buses and allow betteraccess to/from the container yard from ForrestAvenue

At this point in time, the major infrastructuresystems of Kaka‘ako have now been enhancedthrough HCDA’s ID Program. Yet to be com-pleted are projects that will upgrade localizedlines and roadways fronting smaller lots in thecentral area of Kaka‘ako. To successfullycontinue the improvement of Kaka‘ako’sinfrastructure, HCDA is looking at ways todesign infrastructure improvement projects inthe Central Kaka‘ako District only with commu-nity and stakeholders agreement and participa-tion. The intent is that future ID’s in the areawill be driven by the community and allow onlyareas that have upgraded infrastructure todevelop at higher densities.

Top: Theimproved AhuiStreet.Below: TheQueen StreetExtension.

7

...developing apedestrian-

friendly mixed-use district wherepeople are able towork, live, shop

and play in aneighborhoodcommunity.

Over the past year, the HawaiiCommunity Development Authority(HCDA) completed a comprehen-sive review and revision of the planand rules governing the Maukaportion of the Kaka‘ako District.With the participation and input fromKaka‘ako stakeholders, govern-ment agencies and the generalpublic, HCDA has completed a draftPlan. Developed with the principlesof “Smart Growth”, the draft Planenvisions the development ofpedestrian-friendly urban villageneighborhoods in Kaka‘ako. TheDraft Mauka Area Plan is now beingcirculated for public review andcomment through a SupplementalEnvironmental Impact Statement(SEIS) process.

The draft plan would revise thecurrent Mauka Area Plan by:

nDeveloping a pedestrian-friendly mixed-use district where people are able to work,live, shop and play in a neighborhoodcommunity. New developments would bemixed horizontally as well as vertically, whileachieving the highest use of prime urbanland.

nCreating great places, including anetwork of green streets and pedestrian-friendly environment.

nEncouraging a mix of housing opportuni-ties, including reserved housing units forgap group residents.

nAllowing easy connections (pedestrian,bicycle, automobile and public transporta-tion) and providing strong physical andvisual Mauka-Makai connections.

nSupporting the small lot, mixed-usepattern of Central Kaka‘ako.

The Draft Mauka Area Plan proposes a mixed-use district where development projects are tobe mixed horizontally as well as vertically, andinclude residential, commercial, industrial,community service and public uses. A strongneighborhood identity creates a sense ofbelonging and identity to the community. Sevenneighborhoods are identified within theKaka‘ako District.

Draft Mauka Area Plan Envisions Pedestrian-FriendlyUrban Village Neighborhood in Kaka ako Mauka

HCDA

Above, Kaka ako District stakeholders and thecommunity participated in the formulation of the

Draft Mauka Area Plan.

8

Parks, Open Space and ViewsThe Draft Mauka Area Plan’s strategies formeeting projected needs for parks, open spaceand maintaining views include: use of vacantpublic land; shared use of public facilities;enhancing pedestrian connections to nearbyparks and campuses; and private investment inopen space and recreational facilities. Viewplanes to the mountains would be preserved byreducing allowable tower footprints and aMauka-Makai tower orientation.

TransportationThe Draft Plan proposes a hierarchy of streetsthat supports the full range of transportationmodes: pedestrian, bicycle, transit and vehicu-lar. The objective is to enhance connectivitythroughout the District and add connectingstreets where possible to improve accesswithin large development lots.

Reserved HousingUnder the Draft Mauka Area Plan, HCDA’shousing program would be more effective if it isgeared toward a specific housing product typethat targets the workforce or the gap-group.

HCDA

The revised Reserved Housing program isproposing that all new residential projects inKaka‘ako on lots of 20,000 square feet or morecontribute to the development of reservedhousing either by producing the units or bypaying fees to construct these units. By linkingthe production of reserved housing to privatedevelopment, the program can more efficientlyexpand the supply of moderately pricedhousing and dispersing these units throughoutthe District.

Further revisions and adjustments to the draftPlan are being made through the SEIS andpublic review process. The SEIS will assessthe proposed amendments to the currentMauka Area Plan and Rules, particularly theproposed transportation and urban designelements. An updated master plan will ensureadequate roadways and utility systems capacityfor all development lots based on the proposedstreet plan and densities.

HCDA

9

... the Kaka akoMakai CommunityPlanning Advisory

Council iscomposed of a

broad constituencyof community

members who willdevelop a strategic

plan that willinclude a vision forKaka ako Makai.

The Hawaii Community Development Authority(HCDA) is conducting a new comprehensivecommunity based planning process fordevelopment of the Kaka‘ako Makai Area andState-owned waterfront lands. The first phaseof this planning process involved the formationof an advisory working group (called theKaka‘ako Makai Community Planning AdvisoryCouncil or CPAC) composed of a broadconstituency of community members, includingKaka‘ako Makai stakeholder organizations andindividuals. During the ongoing second phase,CPAC will develop a strategic plan that willinclude a vision for Kaka‘ako Makai, guidingprinciples, and an action plan.

During the formation of CPAC, HCDA hasemphasized that this community participatoryplanning process be open, transparent, andinclusive; a process that reaches out to a broadconstituency and allows multiple ways toprovide input. Further, HCDA is committing to along-term effort in which CPAC will work withHCDA on detailed planning, design anddevelopment of Kaka‘ako Makai. The role ofCPAC is that of an advisory, not a decision-making group, which, like an effective neighbor-hood board, can be a powerful voice but will nothave the final say on decisions regarding thedevelopment of Kaka‘ako Makai. After carefullyconsidering the CPAC recommendations, itwould be up to the HCDA Board of Directors toultimately decide what improvements will bemade to the area.

During a five-month period, HCDA’s first phaseconsultant conducted meetings with some 50individuals and organizations to hear theirviews on Kaka‘ako Makai. The stakeholdergroups contacted include environmental andcommunity groups, professional organizations,businesses in the area, public agencies,educational and cultural groups, and electedofficials.

Those participating in the outreach effortagreed that the vision for the area should havea focus on the ocean; that is, enjoying the waterand the waterfront. Participants also mentionedthey would like improvements to the area toconnect the various parts of the coastline andprovide an active and lively space where peoplecould come, as seen in vibrant waterfront areasin other cities. The outreach initiative alsoindicated that most stakeholders were nothappy with the status quo and said the guidingprinciples for improvement should follow thegoals most mentioned in their vision for thewaterfront. With regard to the protocol for

creating a formal vision and recommendationsfor HCDA to follow in improving the area,interviewed stakeholders said it was essentialfor the process to be open, inclusive, transpar-ent, and led by the public.

To date, eight organizational meetings, as wellas numerous subcommittee meetings havebeen held for CPAC to set its own membershippolicies, establish by laws and to select afacilitator to help enable the process to moveforward. CPAC will decide how it wants tohandle membership, organizational and otherissues. HCDA has assisted the working groupsecure facilities and provide the resourcesnecessary to conduct meetings in an environ-ment that supports productive work.

Kaka ako Makai Community Planning Advisory Council (CPAC):Community Outreach is the Key to Planning for Kaka ako Makai

10

...Kaka ako...promises to

become the heartof new

technologies andthe life sciences

industry.

HCDA

The life sciences industry — with a potentialglobal market value of $200 billion — isundoubtedly a very promising sector of eco-nomic growth for the State of Hawaii. Lifesciences, also called biosciences, include allsciences that study plants, animals and humanbeings. It’s a multibillion- dollar industry thatinvolves research, development and commer-cialization of myriad drugs and medicaldevices. It is a clean industry that creates well-paying jobs that can keep kama‘aina in theislands and bring back our children who havegraduated from top mainland schools but arenow unable to find suitable work in Hawaii.Kaka‘ako, with its dynamic location linkingdowntown Honolulu with Waikiki and minutesfrom the Honolulu International Airport and themain University of Hawaii campus, promises tobecome the heart of new technologies and thelife sciences industry. The movement for theestablishment of the life sciences industry inKaka‘ako was jump started with the develop-ment of the John A. Burns School of Medicineon Kaka‘ako waterfront lands. Other busi-nesses and planned projects will act as amagnet to attract other life sciences-relatedbusinesses and services to the area, bringingnew jobs and other opportunities to Kaka‘akothat currently do not exist in the District, and, insome cases, even in Hawaii.

John A. Burns School of Medicine

Opened in 2005, the John A. Burns School ofMedicine (JABSOM) in Kaka‘ako is a world-class educational and research facility that isanchoring the growth of a strong life sciencesindustry in Hawaii. The UH medical school is

the catalyst and a tangible symbol of themovement to diversify Hawaii’s economythrough newly emerging science-basedindustries. The academic environment, whichthe medical school provides, will enhance thevitality and contribute to the success of biotechcompanies in Kaka‘ako. The facility features: abiosafety level lab, genomics/protemis,broadband internet, a supercomputer, seminarrooms, auditorium and library.

Tissue Genesis Inc.

Tissue Genesis Inc. (TGI) is a Kaka‘ako-basedtissue engineering company located inKaka‘ako Makai. TGI’s core product is anautomated instrument for culturing cells, calledthe Bio Optimization System or BOS. Using theBOS, TGI can produce cell-lined grafts thatreplace natural veins and synthetic graftscurrently used in vascular procedures such asheart-bypass operations and renal dialysis.These implantable tissue grafts are lined withthe patient’s own cells, which enable a longer-lasting graft that resists blockage and reducesrejection and complications.

Cancer Research Center of Hawaii

Cancer research is increasingly important tothe community because the number of cancercases is expected to double from 5,500 newcases per year currently to 11,000 per year bythe year 2030. To help meet the demand, theUniversity of Hawaii is planning to construct anew Cancer Research Center in Kaka‘ako.HCDA is engaged in ongoing negotiations withthe University of Hawaii to allow the develop-ment of the center adjacent to JABSOM. Thenew Research Center, planned for a vacant 5.5acre lot next to JABSOM, will enable the centerto provide the best and most comprehensivecancer care to the people in Hawaii. The centerwill give Hawaii residents access to innovativenew drugs and devices as those emerge fromthe research pipeline. The center currentlybrings in $45 million per year and this figure isexpected to grow significantly as opportunitiesfor research expand.

Life Sciences Industry in Kaka ako MakaiPromises Economic Growth for the State

John A. Burns School of Medicine

11

Kamehameha SchoolsAsia Pacific Research CenterKamehameha Schools is planning the devel-opment of a life sciences research complex onabout 4.9 acres of land adjacent to JABSOM.The nonprofit trust plans to develop the totalproject site in an L-shaped parcel immediatelyDiamond Head and Makai of the Gold Bondbuilding. The initial phase would consist ofapproximately 150,000 square feet of researchspace, with another 250,000 square feet tofollow in a subsequent phase. The complex isexpected to cost at least $200 million and isanticipated to support more than 1,000 jobs. It

is envisioned to complement the UH medicalschool and the planned Cancer ResearchCenter, and help attract other bioscience-related businesses to the area. The complexwill be the only facility in Hawaii with class A wetlaboratory space available to the non-institu-tional market and is positioned to be a catalystspawning new international life sciencecollaborations in the Pacific Rim for both publicand private sectors.

High Technology Incubation CenterThe 2007 State Legislature appropriated fundsto the High Technology Development Corpora-tion (HTDC) to negotiate a ten-year lease tohouse a technology incubator and innovationcenter in Kamehameha Schools’ planned lifesciences research complex in Kaka‘ako.HTDC plans to lease 66,000 square feet oflaboratory and office space in the complex tooperate a technology incubator and innovationcenter, which will support the efforts ofJABSOM, the planned Cancer Research Centerof Hawaii, and many related bioscienceresearch institutions.

The Hawaii Community DevelopmentAuthority’s (HCDA) is working to wisely use itsassets in Kaka‘ako for revenue generationtoday and to prepare them for future develop-ment. HCDA’s noteworthy assets include: thehistoric Kaka‘ako Pumping Station on AlaMoana Boulevard; Kewalo Basin harbor; 44acres of passive park space; affordablehousing complexes; warehouse facilities andopen yard areas. As a rule, for propertiesslated for future development, HCDA tries to putthem into productive use today to providefunding for other projects and to protect these

HCDA

Managing the State s Assets in Kaka akoassets from deterioration. For assets that arenot currently slated for development, such asthe Kaka‘ako Pumping Station, Kewalo Basin,Parks and HCDA housing complexes, improv-ing the property’s condition, efficiency andcomfort for users and tenants are a primaryfocus.

Kaka ako District ParksHCDA strives to adequately maintain the beauty,utility and safety of the 44 acres of public parkspace and facilities in Kaka‘ako in a fiscallyresponsible manner. HCDA currently provides

12

...HCDA strives tomaintain the

beauty, utility andsafety of the 44acres of publicpark space in

Kaka ako.

HCDA management of passive parklands in threefacilities (Kaka‘ako Waterfront Park, Kaka‘akoMakai Gateway Park, and Kewalo Basin Park)in the urban core of Honolulu. These parks areenjoyed daily by thousands for picnics, gather-ings, weddings, concerts, hill sliding, surfingand body surfing, soccer practice, jogging,relaxation and meditation. As experienced inother Hawaii park facilities, deterioration,vandalism and crime are problems to be dealtwith. Over the years,HCDA has continuallyensured the maintenance and improvement ofthe hardscape and amenities of the Kaka‘akoparks at a program cost of approximately $9million. In April 2007, another 20,000 squarefeet of passive park space and 90 parkingstalls were opened along the realigned OheStreet, adjacent to the Kaka‘ako Waterfront andMakai Gateway Parks. With the anticipated

clearing of the vacant Kewalo Basin MarineMammal Lab facility and former gas station siteon the Diamond Head edge of Kewalo Basin inearly 2008, a new promenade, lookout site andconcession area will be developed, furtherstrengthening the “Lei of Green” concept alongthe Kaka‘ako waterfront.

HCDA in 2007 adopted new rules to updateregulations, charges and fees to govern theuse public parks in the Kaka‘ako District and toassure that all users are treated fairly and haveknowledge of what constitutes permissibleactivities. The new rules will maximize thepublic’s enjoyment and use of the parks bymaking the facilities safe and pleasantenvironments for all patrons. In an effort tobroaden usage and enjoyment of the publicState parks in the Kaka‘ako District, HCDA in2007 began providing the option of user-friendly “Web Forms” in the website. The WebForms allow users to go online, fill out andsend in their permit applications for generalpark use and sports events.

To address security concerns in Kaka‘akoparks, HCDA has proactively ventured in severalareas including the hiring of private parksecurity services for overnight patrols, request-ing more frequent patrols by the HonoluluPolice Department’s Crime Reduction Unit, andformed a neighborhood safety network programwith the participation of Makai Area businessesand stakeholders.

Kewalo Basin HarborOver the past eight decades, the evolution ofKewalo Basin—the hub of Oahu’s commercialfishing, charter sport fishing, and oceanexcursion industries—has contributed to therichness and vibrancy of the State’s economy.The 142-slip Kewalo Basin has also served asan outstanding recreational resource forresidents and visitors. It is a popular site forsurfing and fishing, and the park groundsdeveloped by HCDA have become a beautiful,scenic retreat.

In 1990, the State Legislature expressed itsintent that Kewalo be part of the overallKaka‘ako redevelopment. The Legislaturereasoned that HCDA was equipped with theplanning and regulatory tools to redevelop andoversee the vision for the area. On July 1,2007, as mandated by the State Legislature,jurisdictional and management responsibilitiesfor Kewalo Basin was to have been transferredfrom the Department of Transportation-HarborsDivision to HCDA. To prepare for the transition,HCDA completed a Transition and OperatingPlan and continued to meet each month withthe Kewalo Basin Task Force, composed ofKewalo Basin stakeholders and users. HCDAissued a Request for Proposal for manage-

13

HCDAment of the Kewalo Basin harbor and con-ducted a public hearing and informationalmeetings on administrative rules for KewaloBasin. These rules, which were drafted withextensive stakeholder input, are considerednecessary and desirable to facilitate andbroaden the public’s use and enjoyment ofKewalo Basin. The proposed rules definedpermissible activities regulate operationswithin the harbor and set forth procedures forobtaining permits and related fees.

During 2006-2007, HCDA worked with individu-als and organizations representing KewaloBasin stakeholders during which time multiplerevisions were made to the draft rules. Duringthe process, tenant input was considered andHCDA made appropriate changes to the draftrules with the intent of balancing the competing

interests and to best protect the public healthand safety, as well as the value of KewaloBasin. Although most of the stakeholderconcerns were resolved, a small group ofKewalo Basin tenants in August 2007 filed alawsuit contesting HCDA assuming jurisdictionof Kewalo Basin. As a result, the State AttorneyGeneral’s office filed a standstill agreement. Itis anticipated that the jurisdiction question onKewalo Basin Harbor will be decided during the2008 State legislative session.

Because the HCDA is operating under amandate that transferred jurisdiction andresponsibility of Kewalo Basin to HCDA theAuthority has an obligation and is committed tooperating the facilities in a safe manner thatbenefits the general public. Despite the legalchallenge, the HCDA will continue to work withthe boating community to establish rules forKewalo Basin that are in the best long-terminterests of all. HCDA’s plan is to makeimprovements to and replace deteriorating andunsafe pier slips at Kewalo Basin. HCDA’sdraft Administrative Rules give preference toKewalo Basin’s commercial and fishing

tenants but also make the state asset availablefor a greater cross section of the public byallowing pleasure craft. The construction costswill be paid from HCDA’s revolving funds andrecovered through higher fees charged for thenew improved slips under a two-tier feestructure. HCDA will continue to work withKewalo Basin tenants and the Kaka‘ako MakaiCommunity Planning Advisory Council inaccordance with the Makai Area Plan to improveamenities requested by users such as im-proved ingress/egress, new restroom facilities,addition of convenience store, gray water pumpout facility, more office and storage space fortenants and possibly fueling and boat launch-ing facilities. Kewalo Basin tenants haveindicated that their business was 60% greaterwhen the harbor had additional activity genera-tors. It is HCDA’s belief that once additional

business and activity generators are restored;business volume and revenues will improveand provide greater cash flow to the harborwhich will, in turn, allow further improvementsto enhance the public’s use and enjoyment ofthis asset. HCDA believes that Kewalo Basinwill prove to be a model of public/privatepartnership that can be duplicated at otherState harbors to enhance services and commu-nity appreciation at less cost to the State than isexpended for the status quo.

14

The Kalaeloa DistrictHCDA

ollowing the milestone adoption of the Kalaeloa Master Plan in 2006, theHawaii Community Development Authority(HCDA)—with the tremendous support andparticipation of Kalaeloa stakeholders and thecommunity at large—has been at work ensur-ing the safety and function of the District andlaying the groundwork for implementation of themaster plan. This plan reflects thecommunity’s vision that Kalaeloa represent a“Wahi Ho‘okela,” a Center for Excellence, in theLeeward/ ‘Ewa region. This vision is at theforefront of all HCDA activities and actions forthe Kalaeloa District.

In 2007, the U.S. Navy announced its decisionthat a Nimitz-class aircraft carrier would not belocated at Pearl Harbor. This decision allowedHCDA to focus on the preparation of Administra-tive Rules the formation of the KalaeloaAdvisory Team, planning for infrastructure andpublic safety improvements in Kalaeloa andcontinuing HCDA’s community outreach effortsand enlisting community participation in theDistrict’s redevelopment.

Making Significant Strides in EstablishingA Center for Excellence in Kalaeloa

The Kalaeloa District

The Kalaeloa Community Development Districtencompasses approximately 3,700 acres ofland within the former Barbers Point Naval AirStation (BPNAS) in West Oahu. Kalaeloa isbounded by the Pacific Ocean and the landswithin Roosevelt, West Perimeter, EastHansen, and Essex Roads as well as fourparcels within Campbell Industrial Park.

In 1993, the U.S. Department of Defense,through the Base Realignment and Closure(BRAC) process, designated the BPNAS forclosure. In response, then Governor JohnWaihee and Mayor Frank Fasi signed a jointletter establishing the BPNAS Reuse Commit-tee in September 1993. In April 1997, the StateLegislature redesignated the Committee as theBPNAS Redevelopment Commission (BPNAS-RC).

Kalaeloaencompasses

about 3,700 acresof land within theformer BarbersPoint Naval AirStation in West

Oahu.

F

30-Acre Kaka akoWaterfront Park is Opened

Kaka ako WaterfrontBusiness Plan Adopted

andHCDA Given Responsibility

for Kalaeloa District

15

HCDAThe BPNAS-RC served as the local reuseauthority responsible for coordinating with theDepartment of Defense on the identification ofland uses for the surplus properties withinKalaeloa. In December 1996, Governor BenCayetano formally approved the BPNASCommunity Redevelopment Plan identifyingvarious State and county government agenciesas receiving entities for the surplus land. TheCommunity Redevelopment Plan, with itssubsequent amendments in 1998 and 2000,has served as the principal guidance documentfor the Federal government in the conveyance ofsurplus lands.

In June 2002, then Governor Ben Cayetanosigned into law legislation that transferredresponsibility for Kalaeloa from the BPNAS-RCto the HCDA. On July 1, 2002, HCDA assumedthe responsibility for implementation of theCommunity Redevelopment Plan, overseeingremaining conveyances, contract administra-tion, promulgation of administrative rules, andother responsibilities relating to the formerBPNAS-RC. This Act also:

• expanded the designation of theKalaeloa Community DevelopmentDistrict to encompass all of the landwithin the former BPNAS, includingland retained by the Navy and landconveyed to other Federal agencies;

• transferred the Kalaeloa CommunityDevelopment Revolving Fund to HCDA;and

• authorized HCDA to assess non-federal land users for a proportionateshare of its staff and operating costsfor Kalaeloa.

During FY 2006, three of the four rental housingareas in Kalaeloa (Makai, Orion, and OrionPark) underwent renovation by California-baseddeveloper, Carmel Partners. The remainder of

...Kalaeloa is a Wahi Ho okela(Center for Excellence) where

Hawaii s people come together toshare knowledge, develop

expertise, and advance themselveswhile remaining respectful of past

and place.

16

HCDA the land in Kalaeloa has remained virtuallyunchanged from previous years with landown-ership divided amongst various Federal, Stateand county agencies. Development activity ongovernment-owned land in Kalaeloa haslargely been limited to improvements of theKalaeloa Airport, several transitional homelessshelters, Barbers Point Golf Course and HawaiiArmy National Guard properties.

The State Department of Hawaiian HomeLands has approximately 30 tenants with short-term leases for commercial- and industrial-related activities. The Navy also started short-term leases for vacant buildings and lands inKalaeloa. Revenue generated from the Navy’sshort-term leasing program helps to maintainNavy-owned buildings, roads and land parcels.Besides providing presence in the District, theshort-term leases are important because theyprovide space for businesses to operate andjobs. Other Kalaeloa landowners, such as theU.S. Veterans Administration and the HawaiiPublic Housing Authority, had pre-existingagreements with various organizations toassist in homeless and social support servicesfor their respective constituents, the scope ofwhich has expanded over the past year. As partof Governor Lingle’s emergency proclamationto help Hawaii’s homeless, a new transitionalshelter was established in Kalaeloa. Thisshelter houses approximately 230 people, halfof whom are children.

Nearly 1,120 acres (30% of Kalaeloa) remainseither pending conveyance to a specific state orcounty agency or unallocated. Additionally,some 500 acres of land are to be disposed ofpursuant to legislation passed by the U.S.Congress. The relative absence of develop-ment and conveyances during FY 2006 wasdue, in large part, to discussion regarding theaforementioned home porting of an aircraftcarrier strike group at Pearl Harbor and thepossibility of stationing the aircraft carrier’s airwing at Kalaeloa. Despite this issue, othermajor landowners and users in Kalaeloa suchas the Barbers Point Elementary School, theU.S. Coast Guard Air Station Barbers Point(USCG), Kalaeloa Airport, and Hawaii ArmyNational Guard Youth Challenge Programcontinued their activities in FY 2006. In addi-tion, the public access to Kalaeloa’s beachesand use of the baseball/football park facilitiesunder license to the City & County of Honoluluwas maintained during FY 2006.

KALAELOA MASTER PLAN

The Kalaeloa Master Plan, a communitydevelopment plan for the Kalaeloa CommunityDevelopment District, was adopted by HCDA onMarch 1, 2006. The Master Plan was subse-quently approved by Governor Linda Lingle inAugust 2006 and will serve as an amendmentto the existing Kalaeloa Community Redevelop-ment Plan, which was prepared as part of theBRAC process.

With a 20-year build out period, the Master Planenvisions mixed-use development and preser-vation of open spaces in Kalaeloa. Compo-nents of the Plan include:

• improving connectivity within the regionthrough a series of new regional north-south and east-west roadways;

• providing for the integration of aregional mass transportation system;creating business opportunities withover 3,000,000 square feet of mixed-use commercial/office and lightindustrial land use designations;

• 6,350 residential units (with a mini-mum of 30 percent of affordable units);

• accommodating two new publicschools to support new residentialcommunities;

• eco-industrial and alternative energydevelopment;

• the protection of cultural and naturalresources;

• creation of 7,000 new job opportuni-ties; and

• the preservation of hundreds of acresof open space for recreation, beachaccess, and parks.

Throughout the entire planning process, HCDAsolicited and received the participation of thepublic; Kalaeloa stakeholders, Federal, Stateand county agencies and elected officials. Inthis planning period, the community andstakeholders engaged, through focus groupand informational meetings and a publichearing, in meaningful dialogue and contrib-uted towards the articulation of a viable landuse framework that embraces the vision forKalaeloa and addresses the community’sneeds in a manner that is financially realistic.

17

HCDAK

alae

loa

Mas

ter P

lan

Pref

erre

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nd U

ses

18

HCDA The Past Twelve Months in Focus

HCDA formed three community-based groupsthat strive to improve current conditions inKalaeloa and help to move the District forward.The three groups are the Kalaeloa Public Safetygroup (KPS), the Kalaeloa Community Network(KCN) and the Kalaeloa Advisory Team (KAT).With three current workgroups meeting monthlyon Kalaeloa Community Development Districtmatters, HCDA has access to the expertise,experience, and commitment from over 60volunteers.

The Kalaeloa Public Safety (KPS)WorkgroupIn order to address decaying and unsafeconditions in Kalaeloa, HCDA established theKPS Workgroup. The KPS, which is committedto improving and maintaining the health andpublic safety of Kalaeloa, consists of the Cityand County of Honolulu Departments of Designand Construction/Facility Maintenance/Parksand Recreation/Transportation Services,Honolulu Police Department (HPD), HonoluluFire Department, Federal Fire Department,Navy Security, Navy Region Hawaii, Departmentof Transportation, USCG, Hawaii Army NationalGuard (HIARNG) and the Hawaii PublicHousing Authority. KPS meets every month toallow participating agencies to clarify jurisdic-tion, collaborate, and focus on addressing allsafety and illegal conditions within the District.

In FY 2006 the KPS made significant strides indealing with unsafe environmental and illegalconditions in the area’s beaches and campingareas. A coordinated effort by the City andCounty Department of Parks and Recreation,Department of Land and Natural Resources,Navy Security, Hawaiian Humane Society andState Sheriff’s office, revitalized the Kalaeloacampgrounds so the general public could onceagain utilize the area for camping and outdoorrecreation. The effort resulted in the issuanceof 95 citations for expired camping permits and58 citations for illegal activities. Sixteenwarrants were served and five tons of trash andillegal structures were removed from Kalaeloacampgrounds and beach area. Illegally parkedvehicles were towed and stray animals werealso removed from the area. In order tomaintain public access to this valued commu-nity recreation area, HPD and Navy Securityadded the Kalaeloa campgrounds to its regularpatrol routes.

Another focus of the KPS has been the mainte-nance and reconditioning of roadways andpedestrian walk paths. The State DOT and theCity and County of Honolulu conducted majormaintenance projects on Kalaeloa roadways.The scope of work included installation of newsignage, restriping of crosswalks, lanes and

In the top two photos, the Kalaeloa Public Safety Workgroupsuccessfully relieved the area s beaches and campingareas of unsafe and illegal conditions. Below, roadwayssuch as this will receive life safety improvements.

19

HCDAroad shoulders and removal of overgrownvegetation. The new speed limit and pedes-trian signage helps night time vision in the areaand improves public safety. The KPS monthlymeetings and communications established inthe past fiscal year proved to be valuable in2007 as the Hawaii State Legislature appropri-ated $250,000 for life safety projects to addressdecaying and unsafe conditions in Kalaeloa. InNovember of 2007, the Governor released thefunds and HCDA staff is moving forward onhiring contractors to address lighting, walk-ways, and other life safety improvementprojects. HCDA’s continued building andstrengthening collaboration between agenciesresulting in added state street maintenance,increased Navy security and HPD presence,crime reduction along the beaches, consistentmaintenance of overgrown areas, and in-creased focus on agency budgeting for theDistrict.

Kalaeloa Community Network (KCN)HCDA also engages Kalaeloa landowners,businesses, residents and elected officialsthrough its monthly meetings of the KCN.HCDA started the KCN in October 2006 tocreate an information exchange, addressissues that affect those that work, live and playin Kalaeloa and to engage elected officials forguidance and assistance. In FY 2006 the KCNmembership more than doubled in size andnow includes participation from AmericanRenaissance Academy, Councilmember ToddApo, Barbers Point Commissary, Barbers PointElementary School, Bauske Environmental,Containers Hawaii, Department of Transporta-tion – Kalaeloa Airport, Senator Mike Gabbard,Representative Sharon Har, Department ofHawaiian Homes Lands, Hawaii NationalGuard Youth Challenge Academy, Hawaii PublicHousing Authority, HIARNG, Hope ChapelKapolei, Hunt Building Company, KalaeloaRental Homes, Mercy Vineyard West Oahu,Naval Air Museum Barbers Point, Navy RegionHawaii, Onelau‘ena Transitional Shelter,Onemalu Transitional Shelter, ResponsiveCaregivers of Hawaii, Subway Barbers Point,USCG, U.S. Vets and West O‘ahu CommunityFederal Credit Union.

In FY 2006, the KCN identified the beautificationof the main entrance to Kalaeloa as a priority.HCDA members approved $20,000 for projectexpenses and the KCN provided projectdesign/management for a complete makeoverof the Ft. Barrette entrance. The improvementsincluded removal of rusted equipment, paintingof curbs and surrounding structures, landscap-ing, lighting, irrigation, flag replacement, andnew signage. Approximately 80+ volunteersrepresenting 24 agencies and businessescontributed manpower, heavy equipment andoperators, materials and other donations. It is

Under the Kalaeloa Community Network ssupervision, community volunteersbeautified the Ft. Barrette entrance, andadded new signage and flag.

...collaborationbetween agencieshas resulted in

added state streetmaintenance,

increased Navysecurity and HPDpresence, crimereduction along

the beaches,consistent

maintenance ofovergrown areas,

and increasedfocus on agencybudgeting for the

District.

20

...Through thepursuit of

Excellence,Kalaeloa is a

model forachievement tosurrounding

communities, theisland of Hawaii,

and the world.

HCDA estimated that these donations added $25,000in value to the project’s completion.

The Kalaeloa Advisory Team (KAT)Administrative Rules for Kalaeloa is integral tothe implementation of the Master Plan. Theserules are being prepared in accordance withState requirements and involve communitycoordination, consultation with the City &County of Honolulu, a formal public hearing,and final approval by the Governor. Onceadopted, the Administrative Rules will establishthe land use and zoning codes for Kalaeloa.

The KAT was established to provide sugges-tions and feedback to the HCDA staff onplanning and development matters in theKalaeloa District which will include the formula-tion of the Administrative Rules, the develop-ment of infrastructure, and marketing. Thevoluntary team includes members from theWaianae, Kapolei, and Ewa Neighborhoodboards, area developers, area legislators,district non-profit organizations and the HCDAtask force. A KAT subcommittee was as-sembled to work specifically on the Administra-tive Rules. In early 2006, the planning firm ofTownscape Inc. was hired as the consultant toassist HCDA and its stakeholders to developthe rules. Due to staff changes and delays inbeginning the process, the Townscape contractwas extended. The first draft of the Administra-tive Rules is targeted for completion in June2008.

Government Agency CoordinationGiven the multiple landownership in Kalaeloaof Federal, State, City, and private, it is vital forHCDA to continue coordination with all Kalaeloastakeholders to address a variety of issuesaffecting the District. In the summer of 2007,

“all-hands” meetings were organized to moveBRAC lands and the 499-plus acres of Navyretained land (or commonly referred to as“Brokered Land”) conveyances forward. Theparticipating members and agencies includedCongressman Neil Abercrombie, HCDAMember Micah Kane (Chairman of the Hawai-ian Homes Commission of Department ofHawaiian Home Lands [DHHL]), GeneralRobert Lee, Parks and Recreation DirectorLester Chang, Executive Assistant TimHoughton, City and County Department ofEnvironmental Services and Navy RegionHawaii. Both the BRAC and brokered lands areon target to be conveyed or in binding agree-ments by September 30, 2008.

Infrastructure PlanningThe infrastructure conditions in Kalaeloa aresub-standard and local agencies will notaccept conveyance until it is brought up tominimal standards. Though it may be sufficientfor current users, the Kalaeloa Master Planrequires upgrading or construction of newinfrastructure for sewer, drainage, roadway,water, electric, and telecommunications. HCDAwill explore all opportunities and will continueto work with all agencies, stakeholders, and allinterested developers to address infrastructureneeds. In FY 2007, preliminary talks onalternative energy opportunities for the Districtand HCDA will increase the focus on this matteras the KAT sub-committee will be focusing onthis issue.

Continued Community Outreach

HCDA has expanded the level of communityoutreach by providing quarterly updates at theWaianae and Ewa Neighborhood Boards inaddition to the monthly updates for KapoleiNeighborhood Board.

The Coming YearsIn the coming year, the HCDA will focus oncontinuing the promulgation of AdministrativeRules for the Kalaeloa District and neededinfrastructure planning. HCDA intends tocontinue and expand its community outreachefforts by increasing opportunities for facilita-tion of community and business relations.HCDA will pursue legislative support for aSupplemental Environmental Impact Statementfor the Kalaeloa District Master Plan.

The next several years will be a very dynamictime for HCDA and the Kalaeloa District.Decisions and plans for surrounding areas willall have a profound impact on life within theLeeward/Ewa region and Kalaeloa. In order tocreate a better tomorrow, it is important thatHCDA proactively interfaces with neighboringdevelopers, engage the support of the commu-nity and elected officials, and breathe life intothe redevelopment of this special District.HCDA members held a meeting and toured

the Kalaeloa District in March 2007.

21

FY 2006-07 Financial Information HCDA

Hawaii Community Development AuthorityFinancial HighlightsFor Fiscal Year Ended June 30, 2007

Improvement DistrictsInvested in infrastructure upgrades 6,345,887

ParksPark operating maintenance and security 650,901New park development and art work 1,250

Staff & OfficePersonnel expenditure 1,749,191Administrative expenditure 342,771

PlanningPermit approved 136Worth of projects in million $ 85

KalaeloaCommunity development rules 17,000Personnel expenditure 117,886Administrative expenditure 21,155

22

Financial InformationHCDA

STATE OF HAWAIIHAWAII COMMUNITY DEVELOPMENT AUTHORITY

STATEMENT OF NET ASSETS, UNAUDITEDJune 30, 2006 and 2007

A S S E T S 6/30/2006 6/30/2007

CURRENT ASSETSCash and cash equivalents 53,742,850 52,029,521Cash held in escrow - -Accounts receivable 460,856 54,080Prepaid expenses 14,471 14,582

TOTAL CURRENT ASSETS 54,218,177 52,098,183

LONG-TERM ASSETSInvestment in limited partnerships 164,000 159,221Water source allocation credits 257,000 257,000Due from other funds 6,026,384 6,067,685

TOTAL LONG-TERM ASSETS 6,447,384 6,483,906

CAPITAL ASSETSLand, improvements & construction in progress 180,218,278 144,933,427Other capital assets, net of depreciation 66,439,082 61,572,619

TOTAL CAPITAL ASSETS 246,657,360 206,506,045TOTAL ASSETS 307,322,922 265,088,134

L I A B I L I T I E S

CURRENT LIABILITIESAccounts payable 577,625 999,613Accrued payroll 72,227 113,386Deferred revenues - -Rental security deposit 128,318 204,494

TOTAL CURRENT LIABILITIES 778,170 1,317,493

LONG-TERM LIABILITIESDue within one year 72,871 84,464Due in more than one year 31,999,812 32,107,323

TOTAL LONG-TERM LIABILITIES 32,072,683 32,191,787

TOTAL LIABILITIES 32,850,853 33,509,280

N E T A S S E T SINVESTED IN CAPITAL ASSETS 246,657,360 206,506,045RESTRICTED FOR:

Capital projects 24,813,383 15,865,325Community redevelopment 21,639,233 25,076,693Debt Service - -Other purposes 7,205,818 10,064,108

UNRESTRICTED (DEFICIT) (25,843,727) (25,933,317)

TOTAL NET ASSETS 274,472,069 231,578,854

TOTAL LIABILITIES AND NET ASSETS 307,322,922 265,088,134

23

Financial Information HCDA

STATE OF HAWAII

HAWAII COMMUNITY DEVELOPMENT AUTHORITY

STATEMENT OF ACTIVITIES, UNAUDITED

For the Year Ended June 30, 2007

Net (Expense) Revenue and

Functions/Programs Expenses Program Revenues Change in Net Assets

GOVERNMENT ACTIVITIES

General government 330,314 - (330,314)

Leasing and managing 1,417,709 2,888,979 1,471,270

Community redevelopment (5,553,885) 4,388,722 9,942,607

Capital improvement project 56,363,843 - (56,363,843)

Debt service - - -

TOTAL GOVERNMENT

ACTIVITIES 52,557,981 7,277,701 (45,280,280)

GENERAL REVENUES

State allotments 813,605

Investment earnings 1,540,640

Miscellaneous 32,821

OTHER USES - Transfer, net -

CHANGE IN NET ASSETS (42,893,215)

NET ASSETS, beginning of year 274,472,069

NET ASSETS, end of year 231,578,854

24

Financial InformationHCDASTATE OF HAWAIIHAWAII COMMUNITY DEVELOPMENT AUTHORITYBALANCE SHEET - GOVERNMENTAL FUNDS, UNAUDITED

June 30, 2007

Leasing Capital Other Total General and Community Projects Gov tl. Gov tl.Description Fund Managing Redevelopment Funds Funds FundsASSETS

Cash and cash equivalent 4,000 8,759,718 33,080,211 10,157,527 - 52,001,457

Cash held in escrow - - - - 28,064 28,064

Note receivable, net of allowance - - - - - -

Accounts receivable - 52,000 2,080 - - 54,080

Prepaid expenses 14,582 - 257,000 - - 271,582

Due from other funds - - - 6,067,685 - 6,067,685

TOTAL ASSETS 18,582 8,811,718 33,339,291 16,225,212 28,064 58,422,868

LIABILITIES AND FUND BALANCES

Accounts payable - 41,925 416,610 268,705 - 727,241

Accrued payroll 22,204 - - 91,182 - 113,386

Unearned revenue - - - - - -

Deferred rent - - - - - -

Deferred revenues - 240,480 31,892 - - 272,372

Rental security deposit - 204,494 - - - 204,494

Due to bond trustee - - - - - -

Due to other funds - - 6,067,685 - - 6,067,685

Due to State General Fund 3,500 - - - 28,064 31,564

TOTAL LIABILITIES 25,704 486,900 6,516,187 359,88 28,064 7,416,742

FUND BALANCES

Reserved for: -

Encumbrances (7,122) 204,355 6,872,091 15,034,628 - 22,103,952

Public facilities - - 16,182,928 - - 16,182,928

Housing program - - 1,768,975 - - 1,768,975

Future debit service - - - - - -

Continuing appropriations - - - 830,697 - 830,697

Unreserved - 8,120,463 1,999,110 - - 10,119,574

TOTAL FUND BALANCES (7,122) 8,324,819 26,823,104 15,865,325 - 51,006,126

TOTAL LIABILITIES AND FUND BALANCES 18,582 8,811,718 33,339,291 16,225,212 28,064 58,422,868

25

Financial Information HCDASTATE OF HAWAIIHAWAII COMMUNITY DEVELOPMENT AUTHORITYSTATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS, UNAUDITED

For the Year Ended June 30, 2007

Leasing Capital Other Total General and Community Projects Gov tl. Gov tl.Description Fund Managing Redevelopment Funds Funds Funds

REVENUES

State allotted appropriations 294,600 - - 1,210,139 - 1,504,739

Contributions from property owners - - 1,031,335 - - 1,031,335

Reimbursements for capital outlays - - - - - -

Dedication and reserve housing fees - - 3,357,387 - - 3,357,387

Investment earnings - 325,716 1,214,924 - - 1,540,640

Leasing and management - 2,888,979 - - - 2,888,979

Grant - - - - - -

Proceeds from land sale - - - - - -

Other - 377,348 37,600 - - 414,947

TOTAL REVENUES 294,600 3,592,042 5,641,246 1,210,139 - 10,738,027

EXPENDITURESGeneral government 301,722 - - - - 301,722

Debt service - - - - - -

Capital outlays - 1,776,965 (4,914,233) 15,534,748 - 12,397,480

TOTAL EXPENDITURES 301,722 1,776,965 (4,914,233) 15,534,748 - 12,699,202

EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES (7,122) 1,815,077 10,555,479 (14,324,609) - (1,961,175)

OTHER FINANCING SOURCES (USES)

Transfer in (out) - (189,730) (5,877,954) 6,067,685 - -

Transfer to General Fund - - - - - -

Lapsed appropriation - - - (691,134) - (691,134)

NET CHANGE IN FUND

BALANCES (7,122) 1,625,347 4,677,525 (8,948,059) - (2,652,309)

FUND BALANCE, Beginning of year - 6,699,472 22,145,580 24,813,383 - 53,658,435

FUND BALANCE,

End of year (7,122) 8,324,819 26,823,104 15,865,325 - 51,006,126

(7,122) 8,324,819 26,823,104 15,865,325 - 51,006,126

26

Authority MembersHCDA

ChairpersonJONATHAN LAIPartnerWatanabe Ing & Komeiji LLP

Vice ChairpersonPAUL KIMURAPresidentCity Fender & Body Service Ltd.

SecretaryAMANDA S. CHANGAttorney At LawLaw Offices of Amanda S. Chang

WILLIAM J. AILA, JR.*Harbor Agent IIIWaianae Boat Harbor(served until June 2007)

C. SCOTT BRADLEYManaging DirectorColdwell Banker Pacific Properties

GRADY CHUNFinancial ConsultantLinsco/Private Ledger

JOSEPH DWIGHT, IVPresident & State Manager,First American Title Company, Inc.(served from October 2007)

STANTON ENOMOTO*Special Assistant to the AdministratorOffice of Hawaiian Affairs(served from July 2007)

HENRY ENG, FAICP*DirectorDepartment of Planning and PermittingCity and County of Honolulu

BARRY FUKUNAGADirectorDepartment of Transportation(served until December 2007)

MICHAEL GOSHI, NCARB, AIAPrincipalDesign Partners Incorporated(served until October 2007)

MICAH KANE*ChairmanHawaiian Homes CommissionDepartment of Hawaiian Home Lands

GEORGINA K. KAWAMURADirectorDepartment of Budget and Finance

CHRISTOPHER KOBAYASHIPartnerKobayashi Sugita & Goda(served from July 2007)

GARY I. KONDO, D.D.S.CEO and PresidentHawaii Dental Group(served until 6/30/06)

THEODORE E. LIUDirectorDepartment of Business, EconomicDevelopment& Tourism

BRENNON MORIOKAActing DirectorDepartment of Transportation(served from December 2007)

KAY MUKAIGAWAPrincipal BrokerPrimary Properties, Inc.

DEXTER OKADAPresidentU. Okada & Co., Ltd.(served from July 2007)

RUSS SAITOComptrollerDepartment of Accounting and GeneralServices

EVELYN SOUZA*Parent Community Network CenterCoordinatorMakakilo Elementary School

MAEDA C. TIMSON*Assistant Vice President, RetirementSavings PlanFirst Hawaiian Bank

*Kalaeloa Member

Executive DirectorANTHONY J. H. CHING

Special thanks to:DANIEL DINELL who served asHCDA Executive Director until August 2007.

State of HawaiiHAWAII COMMUNITY

DEVELOPMENT AUTHORITY

677 Ala Moana Blvd., Suite 1001Honolulu, Hawaii 96813

Telephone: (808) 587-2870Fax: (808) 587-8150

e-mail: contact@HCDAweb.orghttp://www.HCDAweb.org

HCDA