D-3 BLNR Issuance of a Request for Qualifications/Request for Proposals

Home

BLNR—RFQ/RFP for Uncle Page 6 December 13, 2019 Billy's Lease During the 2019 legislative session, the Department sought capital improvement project (CIP) funds to demolish the hotel,but the legislature declined to appropriate funds. The Department also supported administration bills to increase the amount of a rent credit for major development projects, but the bills did not pass.3 Under current law, rent credits are capped at one year for substantial improvements to commercial property. See HRS §171-6. Although the County of Hawaii established BDHRA in 2016 to master plan the Waiakea Peninsula, BDHRA has no money to pay for an EA/EIS to facilitate a master plan. To compound matters, under the EA/EIS laws, the Board cannot authorize the issuance of a lease to a party for demolition of an obsolete building and construction of a new one without an EA/EIS first being conducted. That puts the Department in a"Catch-22" situation because a developer will typically not be interested in paying for the EA/EIS unless the developer has the certainty of a land lease for the site. Accordingly, in an effort to break the stalemate preventing much needed redevelopment at Banyan Drive, staff has been exploring alternatives for the Uncle Billy's property that would not trigger an EA or EIS. The Erskine Report did contain an alternative recommendation for repair of the hotel: ALTERNATIVE RECOMMENDATION: If the buildings are not demolished, the obvious alternative would be to REPAIR them. The way in which repairs are handled could be extremely challenging, the associated costs could be prohibitive, and the construction schedules could be time consuming. As such, the types of repairs and the order in which the repairs are phased should be highly scrutinized. Repairs should be done proportionately over several years so that the repair cost does not exceed 50% of the taxable value of the property. Prior to starting any repair or improvement project, the architect and/or engineers who will design the repairs should work closely with the [authorities having jurisdiction] to ensure that grandfathering in of non-conformities can remain in place. Repairs to address the health, safety and welfare of the public, as well as repair and maintenance projects to prolong the remaining useful life of the building should be performed first. The Erskine Report goes on to list recommended repairs. See Exhibit D. The Erskine Report was made available to Tower who nevertheless believes that rehabilitation of the property is feasible under the alternative recommendation from the report. Based on the interest expressed by Tower, staff is proposing that the property be put out to lease for renovation, demolition, or partial renovation and partial demolition. The use of the site under any renovation would be limited to hotel and/or apartment use. 3 Although House Bill 1026 and Senate Bill 1252 Senate Draft 1 did not pass in the 2019 legislative session, they are still alive and can be taken up in the 2020 session.