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HomeMy WebLinkAboutCOM 0855.088 2018-2020 CLU 1YCLE # COUNTY TY CF HAWAII April 6, 2020 Aaron Chung 2070 APR -6 PM ,' 57 Chairman Hawaii County Council 25 Aupani Street Hilo,Hawaii 96720 Counciltestimony@hawaiicounty.gov Dear Mr.Chung, I support your addressing the County overhead costs in light of the economic downturn, which the United States and the world are experiencing. Mainland economists estimate the downturn will be worse than the 2008-2011 drop and some expect the downturn to approach the depression days. Congress is injecting Trillions of dollars into the economy over the next few months. The County may receive some Federal assistance,but it is up to the Citizens of our County to set a coarse of action,which can effectively sustain our required public services. With the downturn in the mainland economy our basic economic driver,tourism,will take time to recover. Tourism,therefore,will be a smaller contributor to the immediate State and County budgets. The downturn will affect the industries related to tourism such as restaurants,tour operators,rental car companies,grocery and retail stores. As the governor has stated new construction is the only immediate re-bounce,which can be predicted with immediate benefits received by both government and private citizens. To achieve construction benefits the County Planning Department must become more responsive to the needs of the Community. One project,Lulana Gardens'affordable housing project,continues to have a 4-year delay while the Planning Department determines whether the environmental impact statement approved and published by the OEQC November 8, 2010 can still apply to the project. This 4-year Planning Department Stop Work has delayed construction expenditures committed over the next 18 years of$2 billion dollars. Over the 18 years the total project is projected to provide 2,242 jobs each year,an average of$34 million payroll per year and during the 18 years provide $239,603,000 for State tax receipts and$46,774,000 for Hawaii County taxes. The Lulana Gardens affordable housing project,which has its permits and HUD financing, will provide 477 jobs in 2020. In 2020 the construction of Lulana Gardens will provide $40,430,000 in local purchases,$11,415,000 in payroll earnings,$4,561,000 in tax revenue to the State and$336,000 in direct tax payments to the County. The quoted documentation is provided in the attached report prepared by SMS, Honolulu,Hawaii. Our County administration must become more progressive in order to fund our current and future budgets. Best regards, y an Nona a Kelly %alenzuela Broker in Charge Realtor(S) eXp Realty eXp Realty Comm. No. �SS '1546 Ref. To: Pt Ref. Date �1PR ft 2020 Ca Beyond Information. Intelligence. Established 1960 Database Marketing Economic&Social Impact Studies Evaluations Research ModelingfForecasting THE, VILLAGES OF `AINA LEA SMS 1042 Fort Street Mall Section I. Social Impact Assessment Suite 200 Honoluku, HI 96813 Section II. Economic Impact Assessment Pka (808)537-3356 p Toil Free(877)535-5767 E-mail info@smshawaii coin Website www.smshawaii.corn Prepared for Aina Lea, Inc. January, 2020 CONTENTS SECTION I. SOCIAL IMPACT ASSESSMENT OF THE VILLAGES OF 'AINA LEA 1 INTRODUCTION 1 THE VILLAGES OF `AINA LEA 2 AREAS OF INTEREST 3 COUNTY OF HAWAII 3 SOUTH KOHALA 4 WAIKOLOA VILLAGE 4 WAIMEA 5 ECONOMIC CONTEXT 5 COUNTY OF HAWAII 5 SOUTH KOHALA 8 WAIKOLOA VILLAGE 9 WAIMEA 9 POPULATION CONTEXT 10 COUNTY OF HAWAII 10 SOUTH KOHALA 11 WAIKOLOA 13 WAIMEA 13 HOUSING CONTEXT 13 COUNTY OF HAWAII 13 SOUTH KOHALA 14 WAIKOLOA 15 WAIMEA 15 SOCIAL CONTEXT 16 COUNTY OF HAWAII 16 SOCIAL IMPACTS 16 REGIONAL SOCIAL IMPACTS 16 COMMUNITY PERCEPTIONS AND ATTITUDES 17 PUBLIC SERVICE IMPACTS 19 MITIGATION MEASURES 21 APPENDIX 22 SECTION II. ECONOMIC IMPACT ASSESSMENT FOR THE TOWN OF `AINA LEA 26 APPROACH AND TERMINOLOGY 26 JOBS 28 CONSTRUCTION 28 OPERATIONS AND MAINTENANCE (O&M) 29 EARNINGS 30 CONSTRUCTION 30 OPERATIONS AND MAINTENANCE (O&M) 31 FISCAL IMPACT 33 CONSTRUCTION AND VALUES OF UNITS 33 OPERATIONS AND MAINTENANCE (O&M) 34 SUMMARY 35 SECTION I. SOCIAL IMPACT ASSESSMENT OF THE VILLAGES OF `AINA LEA INTRODUCTION `Aina Lea, Inc. is planning the development of The Villages of `Aina Lea. This is a proposed master- I planned community located east of Queen Ka`ahumanu Highway directly across from Mauna Lani Resort on Hawai`i's Big Island. Located in the Waikoloa region of the County of Hawaii, The Villages of 'Aina Lea current plan is to develop approximately 1,923 units with plans for a mix of residential products including, affordable low income housing, market priced single-family homes, townhomes, and condominiums on 1,099 acres of land. The plan also includes commercial/retail space, parks and open space. and other community services. Following is a site plan of The Villages of`Aina Lea. Exhibit 1. The Villages at `Aina Lea Site Plan •,.if i "QUlEN AAKH4PlAN),I H -,.e � r 1 • .. M a '� i . ,.'1 4'rk::lk..4'''' 114.10.0u ..,,,, t l � la k%', ,7.,1 p �r.Y Yr x64'• te� ! dky�w y� 1'�Y r Xw,u• Cf' 1�,.; YVY r.r �/ ar: . ...!_ f/ ~ • , r� !60,X.;.1 J ,,FA .ip 1 CBI " 1 �. ° *' 'f. � ':•"''' Y' Yq . ... .:. ..r.... . ,i �, y 4,. .. .rp '.•, ;r,,�1X Sn .. rr.... .. r; , (a • r • ? , 4 ' } '4- + J✓ r • eiii `x7 %aun' ,,z , RA , I t:'`' " n ., fil ur u ./ "�91J;y.? m - `� V—4449- �41s , , / ,, ftlit _ ; fi��ll � � �Y f• 4 t aY S Lam. � f dio r w � +`i 41.14.14, +�, Y 4 'i. k.l. 'VI) tI)r o• .1.14 ' '' '.',:**. „ ► T 1" .. NI ki.114-.1,111 til.-, IK IK. ....�..,, "'i4iWYYYWrX o.ry..u. ...�....„„...,...... .1.t 7[IWf1(1f'FiVna Lea i .X, .. mu v^.n.a ke 'Aina Lea Report Page 1 ©SMS January,2020 This report describes the social and economic context for the development, namely the South Kohala region and Hawai`i Island as a whole. The socio-economic impact assessment for The Villages of`Aina Lea has been designed to fulfill the following objectives: 1. Toroduce social and economic impact assessments suitable for inclusion in the Draft and Final p p Environmental Impact Assessment under HRS 343 2. To identify social and economic impacts and mitigations in support of the EIS 3. To provide other assistance as needed to `Aina Lea, Inc. in the preparation and review of the Draft Environmental Impact Study (DEIS) Potential social and economic impacts the project may have on the residents of nearby communities are evaluated. Those impacts were determined by our experience on Hawaii Island, an extensive literature search, a review of the `Aina Lea development plans, and numerous interviews with community representatives and public officials in the area. The report concludes with a discussion of measures that might be taken to mitigate any adverse impacts of the development. THE VILLAGES OF 'AINA LEA The Villages of`Aina Lea is bordered on its makai (seaward) side by the Queen Ka`ahumanu Highway and on the mauka (upland) side by Waikoloa Village. Between those two borders it extends from the entrance to the Mauna Lani Resort north to the Village of Puako. Along the beach, the Mauna Lani Resort consists predominantly of time-share and vacation rental units. Waikoloa Village is a middle- class residential community developed over the course of the last decade. Aina Lea will be a complex community linking these two existing areas. This project will be one of the County's largest single developments, eventually housing as many as 12,000 people and serving them with commercial centers, a civic center, a community center, and substantial recreational amenities. There is little doubt this development will have major impacts on the people who currently live in the area and those who will eventually work and reside there. Exhibit 2 shows The Villages of `Aina Lea project map, including the location of the proposed project and surrounding developments, existing and planned. 'Aina Lea Report Page 2 ©SMS January,2020 Exhibit 2. `Aina Lea Development Project N ii w+kMinirk.eAnal p, g s 7 muw north 1^„'711'F 0 0.29 a5 I 4. v'Ailsa ,„W1,110411, Source-Tcpgyepho Nep.2004US09 `'i. i . n�qm Restart c'inke �aRa a im di� - , 1Uchen Lend Use DNS cl'- ` HAWAII ISLAND , - AINA LEA TM IN WI 36 ' r.T na(0)aae/r ........................r 41 ThSt Itt)&4411 • 'iiiii.„ , ,,, ,‘ 04,;-x,.., • , ..i. , , • . ."?''. 1 . Minns l ,, r �',/.y- Reeart Resort T6kgnu Lead °" al 1 VYalkof0e ',., ,4 , r:^1.1' .1 K'4i. -._ L O , ,e Homes/tog. V9nIurB ''° ". 1 4f t TII(P)6a01 NI 1 A :.,,, a"Jx'k..,as �'ax f:., e,, n .. Wena Ge. ,8 C'&Cart o Mi. 'n Fh ,1� Wmkolas VYapeAssn, A. d 714([5')14-01:21....../ It is clear that'Aina Lea's position between the Waikoloa and Mauna Lani Resort areas (the"gold coast") on one side and Waikoloa Village on the other will affect the character of the Waikoloa region. The development of the gold coast brought the first era of rapid development in South Kohala. Since then, the visitor plant inventory along the coast has expanded continuously and has enjoyed a record business in this decade. The local economy, fueled by the success of the resort areas, has resulted in record low unemployment and residential vacancy rates, as well as record high housing costs throughout South Kohala. AREAS OF INTEREST County of Hawaii The island of Hawaii is the largest of the islands in the chain that makes up the State of Hawaii. Located at the southeastern tip of the archipelago, Hawaii Island accounts for 63 percent of the State's landmass. The island was formed by five separate shield volcanoes. Because two of these, Mauna Loa and Kilauea, are still active the island continues to grow. Hawai`i Island was the home of Kamehameha the Great, who united the islands under his rule in 1795. The island also boasts the world's tallest mountain, Mauna Kea, and to the southernmost point in the United States, Ka Lae. 'Aina Lea Report Pape 3 ©SMS January,2020 South Kohala Renowned for its pristine beaches, unique landscape, clear weather and luxury resorts, South Kohala is considered the Gold Coast of the island of Hawai`i. South Kohala is made up of two larger villages, Waimea and Waikoloa, the port town of Kawaihae, and the rural areas in between. The social make- up of the areas is therefore mixed, including newer residents concentrated in along the coast, younger families in Waikoloa, and more traditional residents in the rural areas. Exhibit 3. South Kohala, Waimea, and Waikoloa Areas Legend 4- \ Streets I .....Places /)\ e,J -r/1/' 7" ®South Kohala District ri South Kohala wr WaikoJaa i y r. \ Walkoloa Village In the early 1970's, the Waikoloa Village Golf Course was opened and development of the surrounding community, Waikoloa Village, commenced. The resort town of Waikoloa is situated on the west coast of the Island of Hawaii. With minimal rainfall and plenty of sunshine, this popular tourist destination is home to petroglyph fields, ancient fishponds, and historical temples. Ala Kahakai, a national historical trail once used to join communities, fishing spots, and other significant sites along the Kona coast, runs along the coastline in Waikoloa. 'Aina Lea Report Page 4 ©SMS January,2020 The Waikoloa Village community offers commercial and recreational amenities in addition to its golf course. Within the Waikoloa community, there is a shopping center with a gas station, grocery store, and other retail and service businesses. The Village has a community park, tennis courts, and other recreational facilities to serve its growing population. Unlike the more recently completed homes along the coast that cater to second homeowners and tourists, Waikoloa homes are primarily built for local residents. Those who live in this area are somewhat younger and more likely to have children than other areas in South Kohala. Their interests tend to center around children and family life, recreation and schools, and transportation as it affects those issues. 4 3 it I''r ea Waimea is home to the Parker Ranch, the largest privately owned cattle ranch in the United States, and is the center for ranching activities and paniolo culture. Unlike plantation towns, which cluster around mills and nearby commercial areas, Waimea spreads along its major roadways. The town has maintained much of its traditional character and residents might be somewhat more conservative in their reactions to growth, development, and cultural change. Waimea does serve as a center of retail, health, and government facilities for the surrounding region. In the center of town are the Isaacs Art Center,the Wishard Gallery, Paniolo Heritage Center at Pukalani Stables, and the Gallery of Great Things, all featuring Hawaiian art. Waimea is also home to the headquarters of two astronomical observatories located on Mauna Kea, the W. M. Keck Observatory and the Canada—France—Hawaii Telescope. It is also the headquarters of the International Lunar Observatory Association. ECONOMIC CONTEXT Cs s.irm ,, of i a' .w°i Sugarcane was the backbone of the Island's economy for more than a century. In the mid-20th century, sugarcane plantations began to downsize and the last plantation closed in 1995. Since that time, most of the island's economy has been based on tourism, centered primarily in resort areas on the western coast of the island in the North Kona and South Kohala districts. The visitor industry has been the key element in Hawai`i County's economic growth. Annual increases in visitor arrivals by air peaked in 2005 (+18.8%), then dropped dramatically with the beginning of the Great Recession in 2008 (-18.6%). From 2010 through 2017, however, Hawaii County has experienced consistent increases in visitor arrivals by air ranging from +0.1 percent (2013) to +14 percent (2017). While a slight decline was evident in 2018 (-3.4%), it is not expected to mark the beginning of a downward trend. The County of Hawaii consistently accounts for roughly 18 percent of the visitor arrivals for the state (Exhibit 4). The most recent economic indicators have been somewhat mixed. As of the second quarter of 2019, the value of private building permits was up $6.3 million (+5.5%) from the same period in 2018. However, visitor arrivals were down 0.2 percent and visitor expenditures decreased by 9.1 percent. 'Aina Lea Report Page 5 ©STNS January,2020 The 2017 median household income for the County of Hawaii was $56,365, while the mean household income was $73,391. Close to 13 percent of households across the island were classified as below the poverty level. Exhibit 4. Total Visitor Arrivals by Air, County of Hawai`i, 1990-2018 25% mom Hawai'i County Share of State Visitors Hawaii County Visitor Arrivals 2,000,000 Un > 1,800,000 20% Q Q j I 1 1,600,000 70 as 15% I o 0 I I I '1 1 400 000 I t Ta 10/a s c 1 I , ,1 H I 1,200,000 o ; 1 I 1 5% ' I 1 r I = 1 11,000,000 11 I' I 1 1 0% I , ' 1 800,000 Source. Hawai'i Tourism Authority. As shown in Exhibit 5, Hawaii County experienced an upward trend in job growth from the mid-1990s through 2007. Growth plummeted during the Great Recession (2008 through 2010), before rebounding through 2016. In the past two years the County has continued to add jobs, but at a much slower rate. Job growth in the second quarter of 2019 was down slightly when Hawaii County lost 1,200 non- agricultural wage and salary jobs (-1.7%) over the same quarter of 2018. These losses were concentrated in the Accommodation sector (-600 jobs), Food Services and Drinking Places (-400 jobs), and Retail Trade (-400 jobs). The County's growth rate generally exceeds that of the State, as a whole (Exhibit 6). In 2017, 57.9 percent of the population age 16 or older was in the labor force. The unemployment rate for Hawaii County, shown in Exhibit 5, has been in steady decline since 2009, falling from 10.2 percent to just 2.9 percent in 2018. Government jobs account for the largest proportion of non-agriculture wage and salary jobs in the County of Hawaii (19 percent). Approximately 14 percent of jobs are in Retail Trade, followed by jobs in Health Care and Social Assistance (11%), Professional and Business Services (10%), and Food Services and Drinking Places (10%). County officials believe that diversifying the economy is crucial to the economic health of the county and have been working at accomplishing that objective. In fact, since the early 1990's, Hawaii County has witnessed annual job growth in virtually every industry. They have not yet, however, achieved the economic diversification they seek. 'Aina Lea Report Page 6 ©SMS January,2020 Exhibit 5. Job Growth, State and County of Hawaii, 1991-2018 7% 5% `'d 3% - uo 1% co O 0 '-i N c'r'1 I!) to N. 01 • N rfl V Ln up N. 00 0) malam 0 0 0 0 0 0 0 0 0 .-i r1 r r1 -1% o1 a -1 -+ N o1 o1 of of of of of o O 0 O O O O o O • O O O O O O O O c-1 i-i c-1 .-I ci •-i 1--1 •--I ci N N N N N N N N N N N N N N N N N 3 6 -3% 5% Hawai'i County -State of Hawai'i -7% Source: Hawaii State Department of Labor& Industrial Relations. Exhibit 6. Unemployment Rate, State and County of Hawai`i, 1990-2018 12 10 0 co cc 8 •I✓ O 6 jP\ 0.4 2 --Hawai'i County -State of Hawai'i 0 o .-1 N m vt In LO N 00 a, 0 .--1 N m ctin N 00 C o r-i N m - rn u, r` 00 cn al al al al a1 al al al al 0 0 0 0 0 0 0 0 0 0 .-1 a, ala, Q O ma, rnrna, 00a0000000000000000 ci ci c-I c-I .--i r-1 1-1 1--1 ci c-I N N N N N N (N N N (N N (N N N N N N N N Source: Hawaii State Department of Labor&Industrial Relations. 'Aina Lea Report Page 7 ©SMS January.2020 Table 1: Job Count, State and County of Hawaii, 2018 County of Hawai`i State of Hawaii Count Percent Count Percent Total non agriculture wage &salary jobs 69,400 100% 656,550 100% Natural resources, mining&construction 3,800 5% 36,050 5% Manufacturing 1,400 2% 14,200 2% Wholesale trade 1,750 3% 17,850 3% Retail trade 9,650 14% 71,400 11% Transportation, warehousing&utilities 3,450 5% 33,350 5% Information 650 1% 9,100 1% Financial activities 2,650 4% 28,800 4% Professional & business services 6,950 10% 82,500 13% Educational services 1,350 2% 14,400 2% Health care &social assistance 7,650 11% 71,450 11% Arts, entertainment& recreation 1,500 2% 12,900 2% Accommodation 6,250 9% 41,850 6% Food services &drinking places 6,800 10% 69,150 11% Other services 2,150 3% 28,000 4% Government 13,450 19% 125,600 19% Source: Hawai'i State Department of Labor& Industrial Relations. South Kohala South Kohala's economy has seen dramatic changes since the completion of Queen Ka`ahumanu Highway in the late 1970's. The two-lane highway made the South Kohala area accessible to visitors and residents alike. The roadway improvement resulted in increased resident population, visitors, and jobs. Numerous resorts, such as the Hilton Waikoloa Village and Marriott Waikoloa Beach Resort, have been added to the visitor plant inventory along South Kohala's coastline. Recent trends suggest that the South Kohala region will soon surpass other areas in West Hawaii in terms of its economic contribution. Economic indicators for South Kohala are somewhat better than for Hawaii County as a whole. In 2017, the median household income among South Kohala residents was$73,720 and the mean was $97,310 (Exhibit 7). This was 30 percent higher than the median for households County-wide ($56,395). Similarly,the 2017 per capita income for South Kohala was $33,161 versus$26,959 for Hawaii County. Of the nearly 10,000 South Kohala residents in the labor force, approximately 95 percent were employed in 2017. Over 21 percent worked in the Arts, Entertainment, Recreation, Accommodation, and Food Services industry, while an additional 18 percent were in jobs related to Educational Services, Health Care and Social Assistance. Compared to the 7.7 percent of households in the County of Hawaii that were below the poverty level, only 6.5 percent of households in the South Kohala region were impoverished in 2017. 'Aina Lea Report Page 8 ©SMS January,2020 Exhibit 7. Household and Per Capita Income, County of Hawaii and South Kohala District, 2017 $80,000 $73,720 South Kohala oi County of Hawai'i $70,000 II $ � ul1,lll"9VW�iii $60,000 $56,395 $50,000 $40,000 $33,161 I I $30,000 $26,959 $20,000 $10,000 $0 it Median Household Income Per Capita Income Source. American Community Survey, 2017, 5-year estimates. Waikoloa Village Over 68 percent of Waikoloa Village's population age 16 or older is in the labor force, and 95 percent of those in the labor force were employed in 2017. Waikoloa residents were most often employed in the Arts, Entertainment, Recreation, Accommodation, and Food Services (24.9%); Professional, Scientific, and Management, and Administrative and Waste Management Services (13.9%); and Educational Services, Health Care, and Social Assistance (12.8%) industries. At $73,453, the 2017 median household income for Waikoloa Village was almost identical to that of the South Kohala district. The mean household income was $83,020 for the same period. Wa mmea Close to 6,000 of the Waimea residents age 16 or older were in the civilian labor force in 2017. As was true for the other areas, about 95 percent of these were employed. Like Waikoloa residents, these workers typically held positions in the Educational Services, Health Care and Social Assistance industry (21.8%), Arts, Entertainment, Recreation, Accommodation, and Food Services industry (19.1%), or Professional, Scientific, and Management, and Administrative and Waste Management Services industry (17.2%). At $72,759, the 2017 median household income among Waimea residents was consistent with South Kohala and Waikoloa residents. The mean household income for that year was slightly higher than Waikoloa's mean at $96,927. 'Aina Lea Report Page 9 ®SMS January,2020 I J POPULATION CONTEXT County of Hawaii Hawai`i Island is the largest of the Hawaiian Islands with approximately 4,028 square miles of land area. Despite its size, it is only the second most populous county with a population of nearly 201,000 residents in 2018. The County accounts for 14.3 percent of the State's total resident population, up from 13.6 percent just a few years ago. Exhibit 8 details the total resident population and annual growth rate for Hawai`i County. While the total population continues its upward trend, it has grown at a much slower rate since 2010 than was evident between 2000 and 2010. Based on the latest population projections, Hawaii County's population is expected to continue climbing at a rate above that of the other counties. By 2045, the county is projected to be home to over 273,000 residents. The average annual growth rate, as shown in Exhibit 9, is predicted to slow from 1.3 percent between 2020 and 2030 to 0.9 percent by 2045. The projected population increases will increase the demand for housing and public services across the island. Exhibit 8. Total Resident Population, County of Hawaii, 1990-2018 250,000 5.0% mem Annual Growth Rate Total Population 4.5% c 200,000 4.0% 0 -5 3.5% a o v a Y rn 150,000 3.0% cx ✓ s cu 2.5% 2 To c7 Y (� 2 100,000 2.0% _ Q 1.5% 11111111111 50,000 1.0% 0.5% 0.0% 01 01 001 001 0011 01 001 011 0011 001 O O O O 0 O O O O OCO,-1 W 01 Cr) 01 01 01 01 01 01 01 01 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O 0 .-1 c-1 1-1 1-1 c-1 .-1 rl c-4 ci r-I N N N N N N N N N N N N N N N N N N N Source: DBEDT Data Book Time Series. 'Aina Lea Report Page 10 ©SMS January,2020 Exhibit 9. Projected Population Growth, County of Hawai`i, 1990-2045 300,000 3.5% 4oaitv::vta Average Annual Growth Rate --Total Resident Population ,,r,1 dy ..-.0' 3.0% 250,000 I 9I *�' 1 s� i' l ...0°°. ar a. co 1 �� Z.5% mi � m g 200,000 s a. I 2 a 1 2.0% .D C m -6 150,000c Q CC s 100,000 1iIiiiiiiii i' > 1.0% 50,000 0.5% 0.0% Q 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 Source: DBEDT Data Book Time Series. S Old tfh 'KochaIII a South Kohala is one of twelve districts that make up Hawai`i County. As seen in Exhibit 10, South Kohala is the fourth most populous district in Hawaii County, accounting for ten percent of the County's population. With the exception of 2012, the resident population of South Kohala has increased every year since 2010 (Exhibit 11). The total population growth for the seven-year period was 11 percent, for an average annual growth rate of 1.5 percent. The major resident areas in South Kohala include Waimea, Puako, and Waikoloa. Census figures for 2017 show South Kohala with a total resident population of 19,657. Of those residents, one-quarter (5,038; 25.6%) are school-age children under the age of 17. Approximately 17.7 percent of South Kohala residents are age 65 and older (3,488). The median age among South Kohala residents is 41.5 years, which is slightly less than the County median of 42.1 years. Residents are almost evenly divided between male (48%) and female (52%). Nearly three-quarters (74%) of these residents are a single race, most often White (51.7%), Asian (25.4%), or Native Hawaiian or Other Pacific Islander (20%). In South Kohala, there are in 6,366 households with an average household size of 3.05 persons. Seven out of ten households are families (69.7%; 4,436 households) 'Aina Lea Report Page 11 ©SMS January,2020 Exhibit 10. Total Population, Districts of Hawai`i, 2017 Hilo t11111111111111111NIIINIIIIt➢VIII INII0IIII1IINIIIIIIININI'1111111 11111IIIHIIIIdIIIII11IIIIId11111IItdIIII IVIIht IIII11H111118111At3NII111111IIN111l llt'11111IIIItIIIli11111NVVl4lllllllllllt'NNIIIIIIkllllllllllllallllMEP11111NIII JNIII1III111111t11111111 North Kona kWIINI(111@WIII IIIIII'IN1111N11NN1111k11IN111111111111NIN 111 Dt11tIV1111111111 N1'IINII11111 III1IIINHIIIIIRtIIIlIt1111111111111111111111111101111111111111tc'IIIIIININi1IIIIINIl111111111111t111111NN1tt111111'tII111111111i111111111111111V1111111 Keaau-Mountain View Rill'VIII IIIIN111HIIIt11111t1111111111N1lllllHlllllp11111t111Hlllll ltllllt1111111N1111111111'11HIINI 11111111111111NNlt1tII111111111111111111111111t111111tIIIV1111111N1111111 South Kohala Pahoa—Kalapana Vf111NIV11111NIIIt111111NC1111111 IN111111111 IINI N11tilt South Kona KI111111911111111111111111N1111NIIt1111N 1111I1LIIIII Il111tIIIIIII11111 U Kau INIIIVIIIII111111111111111111111111111111111111 North Kohala i1I111111111111110"'IINIIN111'111111ttlllllt = Papaikou-Wailea 1111111111111111111111 Honokaa-Kukuihaele IN111N1H11111111111 Paauhau-Paauilo MSS North Hilo gt1111111 0 10,000 20,000 30,000 40,000 50,000 Total Population Source. American Community Survey,2017, 5-year estimates. Exhibit 11. Total Population, South Kohala, Waikoloa, and Waimea, 2000-2017 20,500 12 000 rT.3 `" 18,500 11,000 ......., ..7.7.7.7!"*"4 :.,„„,,„' ' '''''''' ro 0 10,000 ....... ... 0 16,500 Y 9,000 ....... a 14,500 Fs .2 (D @ a e 8,000 0 o 12,500 a To 7,000 ........••" 10,500 6,000 Waikoloa Waimea w,%^---South Kohala 5,000 8,500 2010 2011 2012 2013 2014 2015 2016 2017 Source. American Community Survey, 2000-2017, 5-year estimates. 'Aina Lea Report Page 12 ©SMS January,2020 In 2017, there were 6,014 residents in 2,383 households living in Waikoloa. While the population of the South Kohala district was steadily increasing between 2010 and 2017, the number of residents that call Waikoloa home has fluctuated somewhat(Exhibit 11). The largest gains in population occurred in 2013 (+7.2%) and 2014 (+3.7%), while the largest losses can be seen in 2012 and 2017 (-4.4%). The average annual change between 2010 and 2017 was just -0.4 percent, which indicates that the population has remained essentially unchanged. As is true for the County of Hawai'i and the South Kohala district, residents of Waikoloa are nearly evenly split between males (48.8%) and females (51.2%). The median age of 44.1 years is the oldest among the areas examined. One-quarter of the people living in this area are minors under the age of 18 (24.5%) and 18.3 percent are age 65 or older. The overwhelming majority of Waikoloa residents identify themselves as being of a single race (83.8%). They are most often White (60.2%), Asian (20.3%), or Native Hawaiian or Other Pacific Islander (14.5%). As a ranch town, Waimea was relatively small until the 1980s when the population swelled from 1,179 in 1980 to 5,972 just ten years later. Despite minor fluctuations, the population of Waimea has grown by 23.4 percent since 2010. This represents an average annual increase of 3.3 percent, the largest among all the areas of interest. The most dramatic gains occurred in 2015 (+12.2%) and 2017 (+12%). Waimea has a notably higher percentage of females (53.1%) than males (46.9%). At just 36.7 years, residents of this area are among the youngest on the island. This is due, in part to the 28.4 percent of residents who are under the age of 18 and the relatively small number of residents age 65 or older (15.8%). A greater degree of racial diversity is found among Waimea residents than is found in Waikoloa. Only 68 percent of people living in Waimea are of a single race. Single-race residents most often reported being White (41%), Asian (31.1%), or Native Hawaiian or Other Pacific Islander (17.7%). HOUSING CONTEXT County of Hawaii The County of Hawai`i had 86,348 total housing units in 2017. This was up 8.3 percent from 2010, for an average annual growth rate of 1.2 percent. More than three-quarters of the Island's housing units were occupied (77.7%; 67,054 units), leaving 19,294 units vacant. Two-thirds of the occupied units were owner-occupied and the remaining one-third were rented. Most of the housing units in Hawaii County were single-family dwellings (81.4%). Thirteen percent were multi-family housing units and 5.2 percent were duplexes or quadplexes. The median age of housing units on the island was 33 years. 'Ana Lea Report Page 13 ©SMS January,2020 Due, in part, to housing units that are larger than in other parts of the State, crowding' was not an issue for 93.6 percent of households on Hawaii Island. Nearly 47 percent of the housing units on the Island of Hawaii have three bedrooms (46.6%) and 15.1 percent have four or more bedrooms. Close to one- quarter of the units are two-bedroom dwellings (24%). Owner-occupied units had a median value of$316,000 in 2017. Roughly six out of ten owner-occupants has a mortgage for their home and pays a median monthly mortgage payment of$1,605. This monthly payment requires more than 30 percent of the monthly household income for four out of ten households. The median monthly housing payment for the occupants of the 19,146 rental units countywide was $1,131 in 2017. The high cost of housing is a significant burden for many renter households. Over half of renter households (53.7%) dedicated more than 30 percent of their household income to shelter payments each month. The 2017 homeowner occupancy rate was 2.5 percent and the rental vacancy rate was 10.3 percent. Approximately half of all vacant units on the Island were for seasonal, recreational, or occasional use (50.3%). Another 21.9 percent were classified as Other Vacant. Only 3,764 of the 19,294 vacant units were for rent or for sale to County residents (19.5%). South Kohala In 2017, there were a total of 10,100 housing units in the South Kohala district. The total housing units in this area increased by 11.9 percent between 2010 and 2017. Of the 10,100 units, 63 percent (6,366 units) were occupied. Two-thirds of the occupied units are owner-occupied dwellings. Most of the homes in South Kohala are single-family dwellings (61.8%). About 28 percent of multi-family housing units and an additional 10.3 percent are duplexes or quadplexes. Among the 3,734 vacant units in South Kohala, the vast majority (67.6%) were for seasonal, recreational, or occasional use. About 16 percent of the vacant units were for rent (16.6%) and 3.4 percent were for sale. The homeowner vacancy rate for this area was 2.9 percent in 2017, slightly higher than the County's homeowner vacancy rate. At 21.4 percent, the rental vacancy rate was notably higher than the County's rate. Housing units in South Kohala tend to be slightly larger than in other parts of the County. Nearly 45 percent of all units have three bedrooms (44.4%), while one-third of the units have two bedrooms (33.1%), and 13.5 percent are four-bedroom units. The average age of housing units in the district is 27 years. More spacious units likely explain why only 9 percent of all households in South Kohala are crowded. The median value for owner-occupied housing units in this area was $422,400 in 2017. Three-quarters of homeowners had a mortgage on their current residence(73.9%)and made a median monthly housing payment of $2,058. More than 43 percent of these homeowners with a mortgage are sheltered- burdened, paying more than 30 percent of their household income for housing each month. For the 30 percent of South Kohala's occupied housing units that are rentals, the median monthly rent payment was $1,393 in 2017. While fewer renters than owners had a shelter to income ratio of greater than 30 percent, there were still 38 percent of renters who were shelter-burdened. ' Based on more than one occupant per room. 'Aina Lea Report Page 14 ©SMS January,2020 Waikoloa Almost one-third of the housing units in the South Kohala region were located in Waikoloa. The 3,302 housing units in this area in 2017 represented a 16.4 percent increase over 2010. Just over seven out of ten housing units were occupied (2,383 units; 72.2%), leaving 919 vacant units (27.8%). Waikoloa housing units are similar in size to those in South Kohala. Forty-six percent had three bedrooms, 38.8 percent had two bedrooms, and 11.6 percent included four or more bedrooms. Of the 2,383 occupied housing units in this area, 74.1 percent were owner-occupied. The average household size for owned units was 2.41 persons. The median value of these units was $401,700 slightly lower than the median for South Kohala. Most homeowners had a mortgage on their home (81.2%) and made a median monthly mortgage payment of$1,965. Over 40 percent of homeowners in Waikoloa were cost-burdened, paying more than 30 percent of their household income for shelter. For Waikoloa's rental units, the average household size in 2017 was 2.82 persons. The median payment for a rental unit in 2017 was consistent with South Kohala rentals at $1,374 per month. As with homeowners, a significant proportion of renters (46.3%) had a shelter to income ratio of greater than 30 percent. Of the four areas examined, Waikoloa had the greatest proportion of multi-family units (33.4%). Single- family dwellings accounted for 57.1 percent of their total housing units and 9.5 percent of all units were duplex or quadplex dwellings. Like the South Kohala District, units in Waikoloa had a median age of 27 years. Seven of every ten vacant housing units was classified as for seasonal, recreational, or occasional use. Only 14.7 percent of vacant housing units in Waikoloa were for sale or for rent. The homeowner vacancy rate of 2.7 percent and rental vacancy rate of 10.9 percent in 2017 were in line with County's rates. Waimea Waimea had 3,701 housing units in 2017, which accounted for nearly 37 percent of the housing units in the South Kohala district. About 300 new units were built in this area between 2010 and 2017 (+8.7%). At 87.6 percent, Waimea had the greatest percentage of occupied housing units among the four areas (3,243 units). It follows that this area also had the lowest vacancy rates,just two percent for owned units and zero percent for rental units. Nine out of ten units in Waimea were single-family dwellings, while only four percent were multi-family dwellings. Duplex and quadplex units made up the rest of the housing stock. Like the County of Hawaii, these housing units had a median age of 33 years. Roughly 61 percent of occupied housing units were owner-occupied. The average household size for these units was the highest among the areas, 3.83 person per household, and crowding was slightly more prevalent (12.2%). The median value for owner-occupied units was slightly lower than for Waikoloa($392,300), yet the median monthly mortgage payment of$2,002 was slightly higher. Waimea had the highest percentage of homeowners who paid more than 30 percent of their monthly household income for shelter (46%). At $1,389, the median monthly rent payment for Waimea residents was also slightly higher than for Waikoloa residents. Interestingly, among the 1,076 households who rented their unit, Waimea's renters were least likely to be cost-burdened. Only 28 percent of renters dedicated more than 30 percent of their monthly household income to shelter payments. 'Aina Lea Report Page 15 ©SMS January,2020 With only 458 vacant housing units, Waimea's housing market is extremely tight. This is especially true since over half of the vacant units (50.9%; 233 units)were for seasonal, recreational, or occasional use in 2017. There were no vacant units for rent and only 41 units for sale. The remaining vacant units were classified as Other Vacant. SOCIAL CONTEXT People in the County of Hawaii are concerned about the pace of development in their communities and its effect on local infrastructure. This opinion was expressed repeatedly in our interviews with community leaders and public officials. It has been voiced in community meetings throughout the island2. It shows up in numerous public opinion surveys completed over the last 12 months. County of Hwal'l The fact that the Island of Hawaii is twice the size of the other Hawaiian Islands combined creates a host of unique challenges. For example, while there are enough schools on the Island to serve the 31,000 school-age children (ages 5 through 17), it may require hours to transport children living in more rural areas to school each day. Many of the smaller communities simply lack sufficient population to warrant a new facility in closer proximity. Similar geographic challenges impact health care, police, emergency medical facilities, and other public services. This is especially true in West Hawaii. With the notable exceptions of Hilo, Kailua-Kona and Kamuela, Hawaii Island is characterized by small towns built around rural, agrarian communities. In the past, there has been an evolving balance between the economies and populations of those communities, such that there was a sufficient population to provide workers for businesses in the area. That is no longer the case. Especially on the west side of the island, visitor industry growth now exceeds the capacity of the local population to fill the job slots. Long commutes from other areas of the island replace unemployment with turnover problems, increase traffic, and damage roadways. Development intended to provide homes for workers are commonly filled with long-term visitors and second home owners. South Kohala residents still have to travel significant distances for health care, shopping, schools, and other basic services. Local infrastructure, including roads and medical services, are sorely taxed. SOCIAL IMPACTS ��,, Inw���t�,t ,off Social Impacts The `Aina Lea project, with its 3,269 units on 3,000 acres is large enough to have an impact on the social character of the region. Almost certainly, nearby Waikoloa Village will be affected. In addition, it is likely that Puako in the west and Kawaihae and Waimea in the north will feel the effects of this large- scale development project. South Kohala The `Aina Lea project will significantly impact the community fabric of South Kohala. If all the proposed units were to have the same average household size as the rest of the County (2.88 persons), `Aina Lea will increase the population of South Kohala by 47.9 percent (+9,415 persons). 2 Community meetings minutes, plans, and additional information can be found on various websites dedicated to South Kohala,such as: http://www.waimeaplan.org/or http://www.waikoloa.orq. 'Aina Lea Report Page 16 ©SMS January,2020 Considering the other development plans for South Kohala (See Tables A-1 and A-2 in the Appendix), there is little doubt that life in South Kohala will undergo tremendous changes over the next 10 to 15 years. However, the growth and its associated changes are not directly attributable to the 'Aina Lea project itself. Development of South Kohala has been a central element of the County of Hawai'i's development plans for decades. It has been incorporated in the area's community plans and has been communicated to local residents for many years. According to the most recent community plan, this project will be consistent with the regional pattern of growth. The type of units to be added will be less disruptive than their number. The lots of'Aina Lea are not a unique product in the region. Similar lots have been and are available in various parts of Kamuela and along the coast. `Aina Lea As a community significantly off the coastline, it is unlikely that `Aina Lea will develop into a community dominated by tourism. The commercial and recreational amenities may be used by some visitors, and some of its high-end residences may be purchased by second home owners. Mid-range housing units and `Aina Lea's affordable housing and agricultural residences will serve to expand housing opportunities for South Kohala's burgeoning population. In all likelihood, 'Aina Lea will develop into a diverse community whose members work throughout the region, from Kamuela to Kailua-Kona, both in and out of the visitor industry. They will be the new residents of the Waikoloa region as perceived by Hawaii County planners two decades ago. As such, 'Aina Lea will likely develop a character somewhere between that of Mauna Lani and Waikoloa Village. The community will have a more defined town center and will offer a wider array of commercial, recreational, and public services. The major social impact of `Aina Lea will be felt by the people of Waikoloa, its nearest neighbor. Waikoloa was developed in open fields just as is planned for `Aina Lea. The development of a social character from nothing, as it were, may provide a model for the proposed development on its makai- side. Regardless, the social life in the area may be negatively affected if the new development is not accompanied by increased public services like safety and security, education, health services. If those improvements accompany new development, the people of Waikoloa will benefit greatly. Waikoloa and the rest of South Kohala can benefit from `Aina Lea's plan to connect the development with Waikoloa. The long-anticipated second town exit could be built through `Aina Lea to Queen Ka'ahumanu Highway. The proposed Community Center can serve both communities. The commercial and civic centers will be large and provide many more services and amenities than could be expected in Waikoloa Village alone. Community Perceptions and Attitudes Between November 18, 2019 and December 28, 2019, SMS executives interviewed 11 community leaders in the Waikoloa and South Kohala areas. The interviewees were identified by project team members, community leaders, and key government agency executives. Community leaders are very aware of the `Aina Lea development and showed substantial support for the project. They were pleased at the opportunity to have commercial and public services at closer reach to their communities and generally positive about new housing the project would bring. 'Aina Lea Report Page 17 ©SMS January,2020 The input obtained from the interviews with community leaders is summarized below.3 The greatest need identified by respondents was for a community center. All respondents indicated that a community center is a significant need in the existing community and imperative for the combined communities as `Aina Lea is developed. Community leaders have worked with a number of developers and the County to find a suitable location and resources to fund a community center. So far, while some progress has been made, many feel they are not much closer to starting construction. Nearly all of our informants expect that the `Aina Lea project will be the most appropriate champion of a Waikoloa Community Center. The pressing need for affordable housing in this area was voiced by a majority of the interviewees. Many felt that the affordable housing component of the proposed project was essential and a large part of the reason they support the development. Because the need for affordable housing for local residents is so great, several respondents noted their desire for off-island investors to be limited in order to maximize the number of units available to residents. A few of the housing and community development professionals suggested that the community plan might be somewhat dated. Generally, new communities are designed as walking and biking communities, rather than being dependent on vehicular transportation. They suggested that some of the "SMART streets" concepts be incorporated into the detailed plans. Further, they recommended including more walking paths, in addition to the current parks and green spaces already present in the design. Very few of interviewees mentioned minor traffic congestion and safety concerns related to the proposed project. The group as a whole exhibited great confidence that the developers and the County would mitigate and traffic issues. There was also little concern among the participants with regard to potential impacts on the medical or education services provided to `Aina Lea Village residents. One interviewee mentioned a concern about the dry nature of the fields surrounding the development and any fire risk that might pose. The Hawaii Fire Department is confident that the community will have ample fire hydrants and adequate roadways to effectively minimize this risk. To further reduce any fire risk, a partnership with Hawaii Wild Fire Management Group was recommended to provide education and field maintenance. While participants were quite supportive of the proposed development, a great deal of skepticism was present during the conversations. A majority of the people we spoke with felt the project has been talked about for so many years that they were beginning to doubt it would ever come to fruition. Finally, South Kohala community leaders would like the development to be undertaken with a "sense of community". For some, that meant adopting design and architectural elements that reflect the Hawaii Island way of life. For others it meant that `Aina Lea should be a place where everyone could feel that they belonged. 3 Community needs are not listed in order of importance. 'Aina Lea Report Page 18 ©SMS January,2020 Public Service Impacts Education There are three public schools serving students in the Waikoloa region: Waikoloa Elementary and Middle School (833 students in grades K-8) located in Waikoloa Village, Waimea Elementary School (547 students in grades K-5) located in Kamuela, and Kealakehe Intermediate School (695 students in grades 6-8) and Kealakehe High School (1,390 students in grades 9-12) located just north of Kailua- Kona. The Department of Education class size policy states that for grades K-3, schools must maintain a 20:1 ratio with a maximum of 25:1. The optimum class size for grades 4-12 is 26:1. According to DOE's School Status and Improvement Report for 2018-19, Waikoloa public schools have an average of 14 students per classroom, well in line with DOE standards. In addition to the three public schools, there are six private schools in the region ranging from church daycare to private high schools. The number of students in the region will rise dramatically as new residents move in. Data from the November, 2008 South Kohala Community Development Plan show that Waikoloa Elementary and Middle School is nearing maximum capacity with 833 students enrolled. The estimated 2,100 students4 that `Aina Lea will potentially add to the area cannot be accommodated by local schools without exceeding the maximum optimal class sizes. The project must provide for additional schools. DOE policy requires that all new developments contribute to a school expansion fund and negotiations are underway at present to determine `Aina Lea's fair share. `Aina Lea, Inc. has set aside 32 acres outside the Urban Land Use District for a school to be developed by the Department of Education. The area is large enough to develop a middle or high school. Without extensive grading, the terrain throughout the entire development will not support the large athletic fields usually required by a high school. It would be notably less expensive to locate the area's new high school on lands to the north of`Aina Lea that have less acute slopes. Police South Kohala's Police Main Station is in Waimea. From that station, a staff of 32 officers covers an area of 688 square miles -- an area larger than the Island of Oahu. The Main Station is currently 4-to- 5 officers short of a full complement. They believe that with appropriate overtime, the staff can adequately handle the service area. There are two substations in the service area, one at the Mauna Lani Resort and one at the Waikoloa Golf Club. The Waikoloa substation is typically unmanned. All indications are that the Waikoloa region will continue to be served from the South Kohala Main Station. Responses from the Police Department indicate that with some additional staff, `Aina Lea can be adequately served. The need for additional staff was estimated to be about six full-time police officers for every 3,000 residents in the area. Community leaders we interviewed are nevertheless hopeful that the development at `Aina Lea will lead to full staffing of the Waikoloa substation on a permanent basis. `Aina Lea, Inc. proposed to designate 25 acres of land adjacent to the commercial center for a proposed civic center. The civic center would accommodate several public services identified by the community. Services might include a police substation, a fire station, or an EMS unit. Other services such as license and car registration could be included in the civic center as well. ° The estimate assumes that the population of the new development will have a demographic profile similar to the population that currently resides there. We might also consider a profile with fewer children that would result from larger percentages of the units being used by second homeowners. In either case,it is likely that'Aina Lea's new residents will place enough pressure on the school system to require substantial contributions to education. 'Aina Lea Report Page 19 ©SMS January,2020 Fire There is currently a Fire Station located on Waikoloa Road near the entrance to Waikoloa Village and the South Kohala Fire Station is located just across Queen Ka`ahumanu Highway in Mauna Lani. According to the Regular Meeting Minutes of the Fire Commission for June 14, 2006, the Waikoloa Fire Station, which opened as a one-man station, recently became a two-man station. With the added support of the volunteer firemen in the region, the area is currently adequately serviced. The current station will not be able to handle the additional 1,764 new homes in `Aina Lea and local fire stations may have to be expanded. If needed, a new fire station could be located in the proposed civic center. Emergency Medical Services Emergency Medical Services are currently located at the Waikoloa Fire Station and an emergency service helicopter is located on Queen Ka`ahumanu Highway about one mile from its intersection with Waikoloa Road. These services are more than adequate to meet current requirements for the Waikoloa region. EMS Services and the emergency service helicopter may not be sufficient to meet the needs of the area when `Aina Lea and other developments are completed. No fixed standards are available that would suggest a requirement that The Villages of`Aina Lea supply additional EMS services. If they are needed in the area, EMS might be located in the proposed civic-center. Parks There is one County maintained park and one undeveloped park located in Waikoloa Village. The larger park is maintained by the County. It is more than two acres in size and is used primarily for baseball and soccer, with a small jungle gym for tots. There are numerous beach park locations within five miles of the intersection of Queen Ka`ahumanu Highway and Waikoloa Road. There is also considerable open space surrounding the Village. Given the County of Hawaii standard of five acres of park area per 1,000 residents, Waikoloa Village is short of park space now. The Village received its zoning before park dedications were required and it will be difficult to add major park space within its boundaries. According to the present `Aina Lea development plan, two parks are planned, one 10-acre active park and one 16-acre passive park. Together with the five-to-seven mile hiking and biking paths, and 225 acres of buffer zone between the highway and the developed area, there will be adequate park area at Aina Lea. Depending on the population profile of new residents, `Aina Lea will have as many as 9,000 plus new residents at build-out. County standards would therefore require about 45 acres of park space. Negotiations with the County may require the additional developed park space be delivered. Hospitals There are no hospitals or community clinics located in Waikoloa Village or the area immediately surrounding. The nearest emergency medical facility, North Hawaii Community Hospital, is located 18 miles away in Kamuela. Three other hospitals within 40 miles of the Waikoloa region offer emergency and urgent care services, acute care, and long term care. Those are the Kona Community Hospital (40 miles), Kohala Hospital (35 miles) and Hale Ho`ola Hamakua (32 miles). 'Aina Lea Report Page 20 ©SMS January,2020 Across the County, critical care hospitalization decreased 17 percent between 1995 and 2005. Long- term care admissions more than doubled between 1993 and 2005. In 2005, there was an average of 1.5 beds per 1,000 population. Given current occupancy rates at the four hospitals serving South Kohala, 2005 State Health Planning and Development Agency (SHPDA) statistics (the latest available) indicate that there is sufficient space for more patients. No new facilities are planned, but zoning has been approved for the North Hawaii Community Hospital in Waimea to expand their medical facilities. South Kohala community leaders and their fellow residents are not concerned with the number of acute and long-term care beds in the County. They are worried about access to hospitals. On one hand that shifts their interest to emergency medical services. On the other there is interest in an urgent care clinic and basic health care services within the Waikoloa region. `Aina Lea, Inc. has recently proposed that a privately operated urgent care medical services be located in the commercial center. That would serve the important medical needs of local residents and alleviate some of the burden on hospitals in the area. Road Network South Kohala's road network consists of two main north-south highways; Queen Ka`ahumanu Highway in the west and Mamalahoa Highway in the east. The highways are connected by Kawaihae Road in the north and Waikoloa Road in the south. Most communities in South Kohala are located along those roads or use connector roads to access the main roadways. The most serious issue affecting the road network is the need for a second road between Waikoloa Village and Queen Ka'ahumanu Highway. This long-awaited second access road will improve community safety and reduce traffic congestion in the area. If the roadway passes through the 'Aina Lea development, it will also serve to unite the two communities socially and economically; provide access to 'Aina Lea's planned community, commercial, and civic centers; and remove inter-community traffic from the main roadways. Negotiations involving 'Aina Lea, Inc., Waikoloa community representatives, and the County have been going on for some time. Technical and design problems are significant, and there is as yet to decide on the location of the second access road. All parties share a strong interest in having the second access road run through the subject development, and three possible alignments have been identified. When the negotiations are completed, the design plan for `Aina Lea can be finalized and the developer can begin work on this important piece of infrastructure. The improvement of South Kohala's road network by adding the second access road will then stand as one of the most significant positive social impacts of the 'Aina Lea development. MITIGATION MEASURES As part of this social impact assessment, SMS met with `Aina Lea, Inc. to review project impacts and discuss mitigations. The developer has considered and acted upon virtually all of the issues we discovered during our assessment. Many of those social impacts and associated mitigating actions have been presented throughout the report. Local community leaders understand the social impacts of the `Aina Lea residential development in South Kohala. Very few of those impacts cause them serious concern. The community seems to support the proposed development; to accept it as part of planned growth for South Kohala; and to welcome the added housing, commercial, and recreational benefits it will bring. Their support is based on their expectation that the development will be phased over several years, will be consistent with the North Hawaii lifestyle and design, and will bring the promised benefits. 'Aina Lea Report Page 21 ©sri.s January,2020 APPENDIX Appe,Ai', A Table A-1. Potential and Planed Development in Waikoloa, Hawaii , I Development County Planned Potential 'MK Nanve Owner(sr Acreage Z0114! Buildout Buildout Status ! 1-rank Or Ln III family !' ! ••• IL...1.66114)110(76 j l Lira&Par1ners±2L100Jr A -5a t 7 units 1 ' If ilKohatri Dewloprniyit via Coinuanyl{1110 Puako 1 1 1660010241 •.. !! LLC 1 661 A-5a ".- 112 units 1,406 residential 1 , units11 , Bridge'Aina Lea LLC and A-Sa; ' planned Completed I mi.of 168001037 Banter lni.• ! 1,507 RA-1 a S!golf 4 e Hulu St. 0:11/1101; emer4I gency CCVSS 1 A-Sai; 40-unit gravel rd;completed 1 1114-4; , 1 1 Villages of lodge; grading of 25 acre Aim Lea R14-7; 234 acres shopping center; I Bridge"Aina Le'a ILC and RM. of open awaiting approval of 368001038 I Banter Inc. ---- 621 145; - space;26 — Projes.1 District 1 1 A-Sa; acres for Zoning and UK. 1 , , j 1 IltM-4; part5- i RM-7; acre red permit , J Bridge'Aina Lea LIC and RM.. ilima 368001039 I Banter Inc. 1 444 14.52 _preserve .,.,. iKch a I a 1).-,elope-lent CT•rorripany;Brilhante 100 A-Sa *** 17 ismis TriK4:41146 Diodeloperent 1 ... Company,1010 Nalco ' 16800 1 OW •°'4 LLC 150 A-Sa *** 25 units ........_ . ,- — ..1 .-- i6800200 I '"" Warkoloa Mauka LLC 1,170 A-20a ...• 49 units , •.. 303002002 ''" Waikoloa MauLl LI( 652 A.20.1 27 units 368002004 ... Walkoic.a Proi2 652 A-20a27 units 1 -------.----- . -...-----. .,. 368002005 •.., Wa i koloa Inv.[Mid I r. 7.50 A-20a ... 10 units .., TriKohala Development 368002006 '''' Company/Globe Corp. 669 A-20a 28 units 368002007 ••• 1 Pu uiwaiwa LLC 4 to A-20a 17 units Kilauea Trust I,IMP,RCP, IBP,KI3P Education Trust(s),Waimea L TO 33,80132q30313 """ Partnership 141 A-20a •.. 14 units . . Kilauea Trust 1, IMP,RCP, MP,IS It P If lur at ion .- Trusi6s.W.donea LTD 3633002010 , '"• Part rienliAr 741 A. -20a •••• it units ! . — ----.— .—- Kilauea t r u.4 3:\:5',33urnm-a 1 '"• 168002011 '"• tut.Pali riur dm 9L.. ..... 18 units, Source. South Kohala Community Development Plan, November 2008. 'Aina Lea Report Page 22 ©SMS January,2020 Table A-1. Potential and Planed Development in Waikoloa, Hawaii (cont.) Oevelapment County Planned Potential 1`M11 Name Osvnerts)" , Acreage Zone (Buildout 8wildout Status »"» 368002012 "•' Pu uiwaiwa LIC 1,076 A-20a '"' 45 units • 368002013 •"" Pu uiwaiwa LLC 803 A-20a "• 34 units •"• Walkotoa Village ••• 368002015 "• Association 1,690 6'n •" Final£15 Completed May 2007;Awaiting Slate LUC action on Waikoloadistrict amendment 368002016 Highlands Waikoloa Mauka LLC 744 RA-la 398 Units 632 units from Ag to Rural 368002016 ""` Waikoloa Mauka 11.C. 2,444 A-Sa 415 units •• """ 368(X)2017 "• Waikoloa Mauka LLC` 2,153 A-Sa ''• 366 units Waikoloa Village "•• 368002019 "`• Association 4,908 Open ••• ••. Phase 1 increment Waikoloa Waikoloa Heights Land 2,400 3,210 One Subdivision 368002022 Heights Investors LP 1167 RS-10 units. units Approved Waikoloa Workforce Hawaii Island Housing Tr. 1,200 Construction start Housing &Waikoloa Workforce units 1,200 June 2008 368002026 Project. Housing LLC 268 8.5-10 planned. Units Wchil.ani: 1,1'15 Under Construction 368002027 Makane Kai Castle 3 Cook 256 RS-10 756 units. units ,•" 044002028 "• Waikoloa Inv.Land Tr. 33.3 A-20a •'• 14 units ... 168002029 ••• Waikoloa Inv.Land Tr. 154 A-20a •"• 6 units 368(X)2030 W'aikolna Inv.Land Tr. 155 A-20a `"• 6 units ••• ••" 368002032 '"" 49 "" 181 units Waikoloa Village 114 368002033 „" Association 268 Open "r 368(02010 "• Waikoloa 13ev, 180 RS-10 ••• 666 units Open& Planned Shopping 368(03032 "• !h'aikoloa Mauka LLC _ 57 km-1.5 ,»' ? Center TOTALS: 25,776 7160 8094 Source. South Kohala Community Development Plan,November 2008. 'Aina Lea Report Page 23 ©SMS January,2020 Table A-2. Potential and Planed Development in Waimea, Hawaii No, Name of Land Owner/ Description Development Development Developer Status house lois on Lalamilo [)I tl t! include acommunity� i center,parks,general agriculture, c0011CW Willi also k � � construction Homesteads preservation area(19.1 acres),open space areas(44.5 began in 2005 acres) Phase 1 includes 34 in-fill house lots. The remaining planned house lots will be built in Phases 2 &3. 2 DHHL t_yi It IL t Unspecified numbers of: house lots on 88 acres, farm Master Plan Pu'ukapu lots on 598 acres,pasture lots on 4,797 acres; completed Homesteads Community Pasture(529 acres),Pasture& Farm Lease 2006 (5,573 acres), Public Service Facilities(40 acres),Water /Forest Reserve/Conservation(165 acres) :3 DHHL Lei !I i!_ The project is actually located in the neighboring Preliminary Honoka'ia Harnakua district, but is within close proximity to planning and Homelots Waimea. The minimum lot sizes are designed to be 10 research acres. The entire project area is about 2,500 acres completed 4 HPA campus Hawai'i The school is considering relocating the lower and T131) consolidation Preparatory middle schools from their current sites to a site on the Academy Kohala side of the existing solid waste transfer station. Access to the proposed campus relocation would be from Kawaihae Road. S Okada Farm � Okada Farms The farm is planned to be subdivided into one acre ?BC) Subdivision agriculture parcels. Currently,the farm is the largest contiguous farm in Waimea. 6 Waimea Kaloko 40-lot subdivision on a 9.18 parcel near Lindsey Road Under Parkside Developmerrt construction Inc. 7 Parker Ranch Parker Ranch Overall Plan calls for 750 homes and 250,0001?)square 80 homes 2020 feet of commercial space. have been (Waimea constructed Town Center Plan) 9 Luala'i at Kaomalo *322 residential units,parks,and open space on 75 acres Phase! Parker Ranch LLC, Schuler of land. This project is part of the"Parker Ranch 2020" completed in Homes Inc., plan. 2002 Parker Ranch 10 Magoon Magoon Property across from Waimea school is under In planning Property Estate Ltd. consideration for a possible mixed-use commercial and stage residential development Source. South Kohala Community Development Plan,November 2008. 'Aina Lea Report Page 24 ©SMS January,2020 Table A-2. Potential and Planed Development in Waimea, Hawaii (cont.) �,�/�� -....�,��>j� 1;:, v''',rl%� 7/7//// r ' /i' /D �/� .m� ��� � ;_. a��r r�� �� ... �rii k „ AnI4e� m/4 u i 0/ 07// /4/ �/�,///�//� rz ,x G p ���� j /�r' - ,,,,,,w-v,,t � ;' a !. I� Ali ' // /4 rp/,/,7,i f / �� � a r/i O '1 in fij it 4' 7 ' irpi / //lca r rir i�ii� /)Y r r r ���� . �, `,'.. , />': /l, i %; ray ; /,/7,,,� rti �� ,,,,.., n r H.. �� r/,,,, /.1,iir,6.,ee �i's'a...� . . /i,r,//i.r�/ .,. .6,y/�i/i�,r�,,.< 11 Waimea hIas ii°i As part of the Parker Ranch 2020 Plan, Parker Ranch is TBD District Park County required to allocate 21.5 acres of its land for a County regional park facility. Currently the land adjacent to and south of the Lalamilo farmlots is the leading candidate for the site of the future regional park. 12 L ildirnilo State DLNR DLNR entered a 35-year lease agreement with FR Cattle TBD State Land Company for 9,000 acres of ranch land. The area has several archeological sites and unexploded ordnance from previous military training exercises. Cooking 13 Parker Parker I The school is looking at plans for expansion. A site north TBC) S pool School 1, of the IOTA shopping center is being considered, Expansion Trust 1 Coyoration j 14 North North1 A 2( B master plan calls for the development of multi. TESL Hawaii ai''i Hawaii story office buildings behind the hospital, a large Community Community auditorium, classrooms, and kitchen. Parker Ranch has I3ospital Hospital donated lands for the hospital's expansion plans. 15 Waimea t1awai"i The greenway system will provide alternative modes of Phase I Grails and County circulation. The greenway system is intended for construction Greenways i pedestrian and bicycle uses. Currently, the project is completed managed by the County of Hawaii Department of Parks and Recreation and a citizen advisory group known as the Waimea Trails and Greenway Committee. 16 Anna Ranch Anna Ranch Trustees of the ranch are engaged in strategic planning to In Progress Trust preserve the ranches historic sites and possibly establish a historic museum. 17 Waaiulaaula MK.SWCD The Mauna Kea Soil and Water Conservation District TBD Watershed I (MKSWCD) in collaboration with NRCS are planning to preserve and increase water quality in the Waiuluulu Watershed. This watershed area includes flood prone areas in Waimea Town and L2ilarnilo. 18 Kauhale Kanu o ka The project is a series of small scale building complexes Phase I ' iwtiri 'Aina New I meant to house the programs and services of Kanu o ka construction Pu'u.rkaapu Century 'Aina. The project is located on 15 acres on DHFIL has begun Public Pu'ukapu Homestead land. Cl Sclacac.al Source. South Kohala Community Development Plan,November 2008. 'Aina Lea Report Page 25 ©SiVIS January,2020 SECTION II. ECONOMIC IMPACT ASSESSMENT FOR THE TOWN OF `LINA LEA An Economic Impact Assessment was reared to estimate the economic effects on short- and long- termp prepared employment, employment income, and contribution to the local tax base brought by the Town of `Aina Lea development. These effects will be expressed in terms of direct, indirect, and induced economic outputs. APPROACH AND TERMINOLOGY This section reviews the impacts that this project will have on Hawaii County's economy. Economic analysis is applied to estimate the impacts of new economic output resulting from activity at the project site. The most frequently treated outputs are construction and operating expenditures that would not have occurred in the local economy without the proposed project. In the case of the Town of `Aina Lea development, construction expenditures are expected to be substantial and to occur for approximately 19 years. Furthermore, all aspects of the development will have recurring annual operating expenditures which will last for the lifetime of the development. Technical terms are used to distinguish impacts of several sorts. First, the economic impacts of construction and operating expenditures is considered in terms of the effects on jobs, earnings, and taxes. Second, a distinction is made between impacts of construction expenditures and the effects of project- related spending throughout the local economy. Specifically, in discussions of jobs, earnings, and taxes, three broad types of impacts are distinguished: Direct jobs/earnings/taxes are created in the industries that immediately involved with the new construction project. Indirect jobs/earnings/taxes are created as businesses directly involved with a project purchase goods and services in the local economy. r Induced jobs/earnings/taxes are created as workers re-spend a portion of their income on goods and services as a result of the change in jobs and earnings induced by the direct and indirect effects of the new construction project. The direct, indirect, and induced economic impacts in Hawaii can be estimated using multipliers from an economic input-output(1-0) model. In this study, model parameters were taken from the 2012 Inter- County Input-Output Model developed by the Department of Business, Economic Development & Tourism (DBEDT). The Inter-County 1-0 model allows us to estimate impacts not explicit in the state- level or single-county models. According to the Inter-County model, if a project increases any industry's final demand (output) in Hawaii County, the increased demand for that industry's services in Hawaii County will generate increased output in the county. It will also create new flows of goods and services from Oahu, Maui, and Kauai Counties, resulting in increased demand on Hawaii County. These effects are referred to as spillover effects. In order to meet Hawaii County's new demand for goods and services, industries in other counties will need to expand production. This may, in turn, create new demand for goods and services produced on Hawaii County. Output from Hawaii County may increase again because of increased activity. These additional effects are known as feedback effects. 'Aina Lea Report Page 26 ©SMS January,2020 Compared to the statewide model or individual county models, the Inter-County 1-0 Model allows us to more accurately assess impacts of county-specific economic activity, and the spread of economic wellbeing over all counties. It also provides a more appropriate modeling framework for long-range economic and population forecasting'. Third,the construction will take place from 2020 through 2038. While the standard method of estimating economic impacts using 1-0 modeling can be applied to construction and operating costs over such a period, the 2012 Inter-County 1-0 Model provides multipliers through 2022 only. The multipliers for 2022 will be used as surrogates for the years beyond 2022. Inflation rates are rarely projected more than two or three years ahead and are not considered in this scenario. Estimating job counts for the project is difficult not only because it will be hard to estimate future wage rates but also because the 1-0 Model multipliers for jobs consider short-term productivity increases. The same construction expenditure ten years from now will require fewer jobs because of increased worker productivity and mechanization. In a few years, the multipliers will produce negative jobs. Using a constant multiplier beyond 2022 will likely overestimate job counts, but it is a reasonable assumption because productivity increase and mechanization cannot completely replace workers. Fourth, project phasing is based on information provided by the developers and was used to estimate economic impacts during each year. While the soft costs and construction costs are available, the annual operating costs of the golf course/lodge, medical center, commercial center and community center had to be estimated. Specifically, they were estimated based on known operating costs of entities that are similar in scale and services in Hawaii or elsewhere in the U.S. Considering the above assumptions, our model estimates are based on current dollars and a 19-year construction project with only the operating expenditures remain upon completion. Type II multipliers6 for jobs, earnings, and state taxes were taken from the 1-0 model and used to estimate economic impacts from the project expenditures. The total project expenditure, which includes all the necessary soft costs, construction costs, and operations and maintenance costs for residential, amounts to approximately $2.3 billion'. The phases of this project are shown in Exhibit 1. Exhibit 1. Town of Atna Lea Project Phases �6irlwA �) iv iY y+ r w p�✓` ( i 1 G i � if, z iv n i Pre-construction work 11. 2020 to 2023 Lulana Gardens J 2020 to 2024 Phase I 2022 to 2026 Phase II 2020 to 2028 Phase III 2028 to 2032 Phase IV 2029 to 2033 Phase V - 2032 to 2038 Commercial Center 2023 to 2027 O8M(Lulana Gardens,Phase I II, r — ------p20 to 2038 — ------- II iii IV V,Community facilMles)t .:.. .__...._.... .. . .-.._.._._ Note.' The Operations and maintenance for the residential, community facilities, and commercial center will be lifelong upon completion in practice. This report will consider O&M only through the end of construction as a cutoff year. Hawaii Department of Business, Economic Development and Tourism,2012 Inter-County Input-Output Study, P.1. 6 Type II multipliers are the ratio of the sum of Direct effect, Indirect effect,and Induced effect divided by the Direct effect. The$2 3 billion here only includes the operations and maintenance expenditures for residential. It does not include the operations and maintenance expenditures for the rest of the community facilities. 'Aina Lea Report Page 27 ©SMS January,2020 JOBS Construction Exhibit 2 shows the total (direct, indirect, and induced) jobs created as a result of the construction expenditures. The total number of jobs created each year were estimated through multiplying the expenditures by the associated Type II job multipliers. The construction expenditures were distributed according to the phasing of the project and continue through 2038. On average, the total construction expenditure will create 1,167 person-year jobs$ per year. The expenditures will create a maximum of 2,288 person-year jobs in 2032, and a minimum of 460 person- i year jobs in 2021. The substantial difference is due to the different amount of construction expenditures that will be spent in those two years. It should be noted that the jobs created here are only available during the construction phase. They are assumed to disappear at the end of year and so are not cumulative. Exhibit 2. Economic Impact on Jobs for Construction 11;10140,4;i1,kk//%�j j �� r r. k r ri � i%rf rr rirr ,� , � � r rr rr � r rr a/ ��/%/ i�jt i ' rrrrr // rlkklir o �/� iiir�y r i r / r �i ,._A �fx , r ri ri rr r r /" i rr / �rri o rrrrr -,�� �� , r�r i// van r rr / r r r r r r ;'coll� E ,laba 5ef rr Construr9tion Jobs per Construction , ^i r x�//rr'r/ /r .1 fr it r v2 rr/r; rrrr i, ifear expen'clitufea *oaf kt;r,,,, ' tp0r1d141.F ,, r r year I xpenditures Jobs per year 2020 $ 1,250,000 19 $ 39,180,000 458 $ 40,430,000 477 2021 $ 1,250,000 18 $ 39,180,000 442 $ 40,430,000 460 2022 $ 1,250,000 17 $ 84,161,615 914 $ 85,411,615 932 2023 $ 1,250,000 17 $ 112,161,615 1,218 $ 113,411,615 1,236 2024 $ - 0 $ 112,161,615 1,218 $ 112,161,615 1,218 2025 $ - 0 $ 127,042,865 1,380 $ 127,042,865 1,380 2026 $ - 0 $ 127,042,865 1,380 $ 127,042,865 1,380 2027 $ - 0 $ 82,061,250 891 $ 82,061,250 891 2028 $ - 0 $ 104,501,750 1,135 $ 104,501,750 1,135 2029 $ - 0 $ 191,689,150 2,082 $ 191,689,150 2,082 2030 $ - 0 $ 137,627,900 1,495 $ 137,627,900 1,495 2031 $ - 0 $ 137,627,900 1,495 $ 137,627,900 1,495 2032 $ - 0 $ 210,603,328 2,288 $ 210,603,328 2,288 2033 $ - 0 $ 160,162,828 1,740 $ 160,162,828 1,740 2034 $ - 0 $ 72,975,429 793 $ 72,975,429 793 2035 $ - 0 $ 72,975,429 793 $ 72,975,429 793 2036 $ - 0 $ 72,975,429 793 $ 72,975,429 793 2037 $ - 0 $ 72,975,429 793 $ 72,975,429 793 2038 $ - 0 $ 72,975,429 793 $ 72,975,429 793 Total $ 5,000,000 $2,030,081,825 $2,035,081,825 Note:The numbers might not sum to total due to rounding errors 8 Person-year is the number of full-time equivalent jobs required to complete the work in a period. 'Aina Lea Report Page 28 ©SMS January,2020 Jobs resulting from the construction expenditures are new jobs that would not exist in the absence of this project. The direct jobs for the pre-construction phase are expected to be created both on- and off- site that include substantial amount of legal work, design, on-site visiting and surveying. For the construction, it is expected that majority of the direct jobs will be created at the project site. As a rule of thumb, approximately 20 percent of them are expected to be located off-site. These off-site locations could be offices, warehouses, and/or base yards, etc. The indirect and induced jobs, on the other hand, are mostly new jobs that provide goods and services to support this project or to consumers. They will likely be located off the project site and mainly concentrated in the commercial and/or industrial centers in Hawai`i County. Operations and Maintenance (O&M) Exhibit 3. Economic Impact on Jobs for Operations and Maintenance Golf Course and Residential Lodge Medical Center Community Center Commercial Center Overall O&M O&M Jobs O&M Jobs O&M Jobs Expenditure Jobs O&M Jobs O&M Jobs Year]Expenditures /year,Expenditure_s f year Expenditures /year. s /year Expenditures 1 year Expenditures /year 2020 2272 450 46 $ - 0 $ - 0 $ - 0 $ - 0 $ 2,272,450 46 2021' $ 2,272,450 45 $ 0 $ - 0 $ - 0 $ - 0 $ 2,272,450 45 2022 $ 4,881,395 92 $ - 0 $ 57,000,000 809 $ 500,000 11 $ - 0 $ 62,381,395 913 2023 $ 6,505,402 123 $ - 0 $ 114,000,000 1,618 $ 1,000,000 23 $ 2,016,260 25 $ 123,521,663 1,789 2024 $ 6,505,402 123 $ - 0 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 125,537,923 1,814 2025 $ 9,640,969 182 $ - 0 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 128,673,490 1,873 2026 $ 9,640,969 182 $ - 0 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 128,673,490 1,873 2027 $ 9,640,969 182 $ 3,680,955 84 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 132,354,445 1,957 2028 $ 10,942,524 207 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 137,336,954 2,066 2029 $ 15,999,415 303 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 142,393,846 2,162 2030 $ 15,999,415 303 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 142,393,846 2,162 2031 $ 15,999,415 303 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 142,393,846 2,162 2032 $ 20,232,009 383 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 146,626,440 2,242 2033 $ 20,232,009 383 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 146,626,440 2,242 2034 $ 20,232,009 383 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 146,626,440 2,242 2035 $ 20,232,009 383 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 146,626,440 2,242 2036 $ 20,232,009 383 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 146,626,440 2,242 2037 $ 20,232,009 383 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 146,626,440 2,242 2038 $ 20,232,009 383 $ 7,361,910 168 $ 114,000,000 1,618 $ 1,000,000 23 $ 4,032,521 49 $ 146,626,440 2,242 Total $251,924,838 $ 84,661,963 $1,881,000,000 $16,500,000 $62,504,075 $2,296,590,876 Note:The numbers might not sum to total due to rounding errors. Exhibit 3 shows the number of total (direct, indirect, and induced) new jobs created as a result of the long-term operations and maintenance expenditures of the project. Unlike the jobs created by the construction expenditures, these new jobs will be long-lasting and will continue to exist post- construction. The new jobs, however, are not cumulative across years as in Exhibit 2. We consider 2038 as the ending year only to estimate the economic impacts effectively. The number of new jobs resulting from the O&M expenditures were estimated in five segments, (1) residential, (2) golf course and lodge, (3) medical center, (4) community center, and (5) commercial center. The total O&M expenditure is expected to create an addition of 1,818 person-year jobs on average. It will create a maximum of 2,242 per-year jobs between 2032 to 2038 and a minimum of 45 jobs in 2021. 'Aina Lea Report Page 29 ©SMS January,2020 The new jobs created were estimated based on the known O&M expenditures of entities similar in scale and services. For the golf course and lodge, the O&M expenditures were estimated using the 2015 budgeted operating expenses of a private Golf Club at Florida and adjusted for 2020. It is expected that the golf course and lodge at the Town of'Aina Lea is a course with 18 holes. The O&M expenditures will create 168 person-year jobs per year. For the medical center, the O&M expenditures were obtained from the Hawaii State Legislature Report 20189 published by the Hawaii Health System Corporation. The medical center is assumed to be similar to the Kona Community Hospital located in Hawaii County in terms of number of beds and services. According to the report, the O&M expenditures could be as high as $114 million per year. It will create a high of 1,618 person-year jobs per year. The O&M expenditures of the community center were estimated to be similar to the Madison Community Center located in South Dakota in terms of scale and types of facilities. It is assumed that the 'Aina Lea community center will have general facilities such as a swimming pool, training studio and a fitness center. A community center study10 conducted by the City of Vermillion of South Dakota for 2018 suggested that the O&M expenditures of a community center of this scale may cost $1 million per year. It will create 23 person-year jobs per year. The O&M expenditures of the commercial center were estimated based on the reported values from the International Council of Shopping Centers (ICSC) in 2017. According to ICSC's definition, the commercial center at the Town of 'Aina Lea is under the classification of regional mall. While the O&M expenditures for regional malls were not available, they could be estimated by using the ratio of net operating income to total operating expenditures of all shopping centers and applying it to regional malls. The expenditures will create 49 person-year jobs per year. The residential O&M expenditures were provided by developers. They are expected to increase gradually as more housing units are built. The O&M expenditures for the rest of the development were distributed equally across years, except for first year of construction. They are assumed to be partially operational during the construction phase. It is expected to create 383 person-year jobs per year. EARNINGS Construction Exhibit 4 shows the total (direct, indirect, and induced) workforce earnings generated by the construction expenditures of this project will amount to $552.5 million. The earnings were estimated using the Type II earnings multiplier and multiplying it by the associated construction payroll. For the pre-construction, payroll was estimated at 100 percent of labor cost as majority of the work are labor- intensive. The construction payroll for the major construction, on the other hand, was estimated at 40 percent of the construction expenditures. It is expected that almost all the construction materials will be purchased through local suppliers. The developers suggested that the project will likely not require specialized skills or labor imported from elsewhere except for professional service such as legal consulting. Therefore, it is expected that the construction workers will likely come from the local labor market. 9 The Hawaii Health System Corporation, Report to the thirtieth Hawaii State Legislature for fiscal year 2018, P.46. 10 City of Vermillion of South Dakota,2017-2018 Community Center Study. 'Aina Lea Report Page 30 SMS January,2020 Unlike the impact on jobs in Exhibits 2 and 3, the earnings generated by the project expenditures are cumulative. This is because the same workers can stay at the new positions and make earnings across multiple years. Similar to jobs, the earnings generated here are only available during the construction phase. Exhibit 4. Economic Impact on Earnings for Construction Pre- Total construction Earnings/ Construction Earnings/ Construction Earnings I Year Expendituresyear Expenditures year Expenditures year 2020 $ 1,250,000 $ 814,845 $ 15,672,000 $ 10,599,979 $ 16,922,000 $ 11,414,824 2021 $ 1,250,000 $ 814,845 $ 15,672,000 $ 10,599,979 $ 16,922,000 $ 11,414,824 2022 $ 1,250,000 $ 814,845 $ 33,664,646 $ 22,769,560 $ 34,914,646 $ 23,584,405 2023 $ 1,250,000 $ 814,845 $ 44,864,646 $ 30,344,838 $ 46,114,646 $ 31,159,683 2024 $ - $ - $ 44,864,646 $ 30,344,838 $ 44,864,646 $ 30,344,838 2025 $ - $ - $ 50,817,146 $ 34,370,896 $ 50,817,146 $ 34,370,896 2026 $ - $ - $ 50,817,146 $ 34,370,896 $ 50,817,146 $ 34,370,896 2027 $ - $ - $ 32,824,500 $ 22,201,315 $ 32,824,500 $ 22,201,315 2028 $ - $ - $ 41,800,700 $ 28,272,495 $ 41,800,700 $ 28,272,495 2029 $ - $ - $ 76,675,660 $ 51,860,667 $ 76,675,660 $ 51,860,667 2030 $ - $ - $ 55,051,160 $ 37,234,631 $ 55,051,160 $ 37,234,631 2031 $ - $ - $ 55,051,160 $ 37,234,631 $ 55,051,160 $ 37,234,631 2032 $ - $ - $ 84,241,331 $ 56,977,816 $ 84,241,331 $ 56,977,816 2033 $ - $ - $ 64,065,131 $ 43,331,358 $ 64,065,131 $ 43,331,358 2034 $ - $ - $ 29,190,171 $ 19,743,185 $ 29,190,171 $ 19,743,185 2035 $ - $ - $ 29,190,171 $ 19,743,185 $ 29,190,171 $ 19,743,185 2036 $ - $ - $ 29,190,171 $ 19,743,185 $ 29,190,171 $ 19,743,185 2037 $ - $ - $ 29,190,171 $ 19,743,185 $ 29,190,171 $ 19,743,185 2038 $ - $ - $ 29,190,171 $ 19,743,185 $ 29,190,171 $ 19,743,185 Total $ 5,000,000 $3,259,381 $812,032,730 $549,229,825 $ 817,032,730 $552,489,206 Note:The numbers might not sum to total due to rounding errors Operations and Maintenance (O&M) The total (direct, indirect, and induced) work force earnings generated by the long-term O&M are presented in Exhibit 5. The total O&M expenditure is estimated at about 1.2 billion and the associated earnings impact will amount to $840.9 million. The O&M for the residential will begin as early as 2020 and the O&M for the rest of the development will gradually begin in 2022. It is assumed that the golf course and lodge, medical center, community center, and commercial center will be partially operational during the first year of their construction. The payroll of residential O&M was estimated at 40 percent of the total residential O&M expenditures. It will amount to approximately $100.8 million and will generate $82.1 million of work force earnings. The payroll of golf course and lodge O&M was estimated at 35 percent of the estimated golf course and lodge O&M expenditures. The $29.6 million of O&M payroll is expected to generate $20 million of work force earnings. 'Aina Lea Report Page 31 ©SrS January,2020 I i The payroll of medical center O&M was estimated at 56 percent of the medical center O&M expenditures, according to Trendwatch Chartbook 201811 published by the American Hospital Association. It takes up a higher ratio of O&M expenditures mostly likely because the salaries and wages of the medical professionals and administration are higher. The amount of payroll is estimated at$1.1 billion, which will generate $726.1 million of work force earnings. For the community center and commercial center, the payroll ratios were estimated at 45 percent and 25 percent, respectively. The payroll of community center O&M will amount to $7.2 million and it is expected to generate $4.9 million of workforce earnings. The payroll of commercial center O&M, on the other hand, will amount to $15.6 million. The associated earnings generated by the commercial center O&M expenditure will total to $7.8 million. Exhibit 5. Economic Impact on Earnings for Operations and Maintenance Residential Golf Course"and Lodge Medical Center � % Earnings! O&M Earnings! O&M Earnings! " xr e`nditur� ;` ,;ye, ,r,,,;,,;,Expe iditures , ;:year Expenditures year 2020 $ 908,980 $ 740,623 $ - $ - $ - $ - 2021 $ 908,980 $ 740,623 $ - $ - $ - $ - 2022 $ 1,952,558 $ 1,590,915 $ - $ - $ 31,920,000 $ 22,001,830 2023 $ 2,602,161 $ 2,120,202 $ - $ - $ 63,840,000 $ 44,003,660 2024 $ 2,602,161 $ 2,120,202 $ - $ - $ 63,840,000 $ 44,003,660 2025 $ 3,856,388 $ 3,142,127 $ - $ - $ 63,840,000 $ 44,003,660 2026 $ 3,856,388 $ 3,142,127 $ - $ - $ 63,840,000 $ 44,003,660 2027 $ 3,856,388 $ 3,142,127 $ 1,288,334 $ 869,610 $ 63,840,000 $ 44,003,660 2028 $ 4,377,009 $ 3,566,322 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2029 $ 6,399,766 $ 5,214,435 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2030 $ 6,399,766 $ 5,214,435 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2031 $ 6,399,766 $ 5,214,435 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2032 $ 8,092,804 $ 6,593,896 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2033 $ 8,092,804 $ 6,593,896 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2034 $ 8,092,804 $ 6,593,896 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2035 $ 8,092,804 $ 6,593,896 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2036 $ 8,092,804 $ 6,593,896 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2037 $ 8,092,804 $ 6,593,896 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 2038 $ 8,092,804 $ 6,593,896 $ 2,576,668 $ 1,739,220 $ 63,840,000 $ 44,003,660 Total $100,769,935 $82,105,851 $ 29,631,687 $20,001,025 $1,053,360,000 $726,060,389 " The American Hospital Association,Trendwatch Chartbook 2018, P.59. 'Aina Lea Report Page 32 ©SMS January,2020 Community Center Commercial Center Overall O&M Earnings/ O&M Earnings/ O&M j Earnings/ Year Expenditures year Expenditures year Expenditures ! _year 2020 $ - $ - S - $ - $ 908,980 $ 740,623 2021 $ - $ $ - $ - $ 908,980 $ 740,623 2022 $ - $ - $ - $ - $ 33,872,558 $ 23,592,745 2023 $ 450,000 $ 303,744 $ 504,065 $ 252,441 $ 67,396,226 $ 46,680,047 2024 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 67,900,291 $ 46,932,488 2025 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 69,154,518 $ 47,954,413 2026 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 69,154,518 $ 47,954,413 2027 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 70,442,852 $ 48,824,023 2028 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 72,251,808 $ 50,117,828 2029 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 74,274,565 $ 51,765,940 2030 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 74,274,565 $ 51,765,940 2031 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 74,274,565 $ 51,765,940 2032 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 75,967,602 $ 53,145,402 2033 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 75,967,602 $ 53,145,402 2034 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 75,967,602 $ 53,145,402 2035 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 75,967,602 $ 53,145,402 2036 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 75,967,602 $ 53,145,402 2037 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 75,967,602 $ 53,145,402 2038 $ 450,000 $ 303,744 $ 1,008,130 $ 504,881 $ 75,967,602 $ 53,145,402 Total $ 7,200,000 $ 4,859,912 $ 15,626,019 $7,825,661 $1,206,587,641 $840,852,839 Note:The numbers might not sum to total due to rounding errors FISCAL IMPACT Construction and values of units Exhibit 6. Economic Impact on State/County/Property Tax Total I County Tax Construction State Tax I County Tax/ Total Value of and Property Year Expenditures year year Units to be Sold Property Tax Tax 2020 $ 40,430,000 $ 4,561,336 $ 246,768 $ 33,500,000 $ - $ 246,768 2021 $ 40,430,000 $ 4,561,336 $ 246,768 $ 67,000,000 $ 206,025 $ 452,793 2022 $ 85,411,615 $ 9,636,289 $ 521,323 $ 107,965,470 $ 412,050 $ 933,373 2023 $ 113,411,615 $ 12,795,329 $ 692,227 $ 74,465,470 $ 863,489 $ 1,555,717 2024 $ 112,161,615 $ 12,654,392 $ 684,603 $ 207,754,000 $ 657,464 $ 1,342,067 2025 $ 127,042,865 $ 14,333,337 $ 775,434 $ 224,388,550 $ 1,980,934 $ 2,756,368 2026 $ 127,042,865 $ 14,333,337 $ 775,434 $ 224,388,550 $ 2,139,545 $ 2,914,978 2027 $ 82,061,250 $ 9,258,384 $ 500,879 $ 104,930,000 $ 2,139,545 $ 2,640,423 2028 $ 104,501,750 $ 11,790,185 $ 637,849 $ 272,359,390 $ 1,000,508 $ 1,638,357 2029 $ 191,689,150 $ 21,626,915 $ 1,170,016 $ 277,525,990 $ 2,596,947 $ 3,766,963 2030 $ 137,627,900 $ 15,527,571 $ 840,042 $ 333,191,200 $ 2,646,210 $ 3,486,252 2031 $ 137,627,900 $ 15,527,571 $ 840,042 $ 383,113,200 $ 3,176,978 $ 4,017,020 2032 $ 210,603,328 $ 23,760,866 $ 1,285,463 $ 366,166,425 $ 3,652,984 $ 4,938,447 2033 $ 160,162,828 $ 18,070,026 $ 977,588 $ 197,103,065 $ 3,491,397 $ 4,468,985 2034 $ 72,975,429 $ 8,233,295 $ 445,421 $ 100,241,305 $ 1,879,378 $ 2,324,799 2035 $ 72,975,429 $ 8,233,295 $ 445,421 $ 100,241,305 $ 955,801 $ 1,401,222 2036 $ 72,975,429 $ 8,233,295 $ 445,421 $ 85,260,000 $ 955,801 $ 1,401,222 2037 $ 72,975,429 $ 8,233,295 $ 445,421 $ 293,535,000 $ 812,954 $ 1,258,375 2038 $ 72,975,429 $ 8,233,295 $ 445,421 $ 208,275,000 $ 2,798,856 $ 3,244,278 2039 $ 1,985,902 $ 1,985,902 Total $2,035,081,825 $229,603,351 $12,421,541 $3,661,403,920 $ 34,352,769 $ 46,774,310 Note: Property tax impact is realized one year after the property is sold. 'Aina Lea Report Page 33 ©SMS January,2020 The construction expenditures and the property sales will have a positive impact on State and County tax revenues. Exhibit 6 shows that the total construction expenditures will add $229.6 million to State taxes and $12.4 million to County taxes over the course of the project. An addition of $34.4 million of property tax will be added on top of the $12.4 million County taxes after the properties are sold. The total County and property tax impacts will amount to $46.8 million. The property tax impact is realized one year after the property is sold. The 1-0 model provides only the State tax multipliers and not County tax multipliers. The County tax revenues were estimated by taking an average ratio of Hawaii County tax revenues over State tax revenues from 2007 to 201712 and applying it to the State tax revenues. The ratio was estimated at 5.4 percent. The 2019 to 2020 property tax rates were obtained from the Hawaii County Real Property Tax Office. The tax rate per $1,000 net taxable building are as follows: Property Class Rate (a)Affordable rental housing $6.15 (b) Homeowner $6.15 (c) Residential $11.10 (d) Commercial $10.70 The property tax impacts were estimated based on (1) the ratio of permanent residents and off-island buyers, (2)the rates at which those buyers are paying, (3)the estimated sales price, and(4)the tentative sales period. It is expected that 30 percent of the buyers will be permanent residents and 70 percent will be off-island buyers. We assumed that those 30 percent of buyers are homeowners and will be paying a property tax rate at $6.15. Fifty percent (50%) percent of the off-island buyers are assumed to treat their homes as residential but use them for less than 25 percent of the time. Those buyers will be paying a property tax rate at $11.1. The remaining 20 percent are assumed to use their homes as vacation rentals and will be paying a property tax rate at$10.7. Operations and Maintenance (O&M) Exhibit 7. Economic Impact on State/County/Property Tax Residential Golf Course and Lodge Medical Center O&M State tax l- County tax/ O&M State tax l County tax O&M State tax l County tax Year Expenditures year year Expenditures year /year Expenditures year ; year 2020 $ 2,272,450 $ 228,371 $ 12,355 S - S - S - $ - $ - 5 - 2021 $ 2,272,450 $ 228,371 $ 12,355 $ - $ - $ - $ - $ - $ - 2022 $ 4,881,395 $ 490,557 $ 26,539 $ - $ - $ - $ 57,000,000 $ 6,542,089 $ 353,927 2023 $ 6,505,402 $ 653,762 $ 35,369 $ - $ - $ - $ 114,000,000 $ 13,084.178 $ 707,854 2024 $ 6,505,402 $ 653,762 $ 35,369 $ - 5 - $ - S 114,000,000 $ 13,084,178 5 707,854 2025 $ 9,640,969 $ 968,872 $ 52,416 $ - S - $ - 5 114,000,000 $ 13,084,178 5 707,854 2026 $ 9,640,969 $ 968,872 $ 52,416 $ - $ - $ - $ 114,000,000 $ 13,084,178 $ 707,854 2027 $ 9,640,969 $ 968,872 $ 52,416 $ 3,680,955 $ 340,705 $ 18,432 $ 114,000,000 $ 13,084.178 $ 707,854 2028 $ 10,942,524 $ 1,099,672 $ 59,492 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13.084,178 S 707,854 2029 $ 15,999,415 $ 1,607,866 $ 86,986 $ 7,361,910 5 681,409 $ 36,864 5 114,000,000 $ 13,084.178 $ 707,854 2030 $ 15,999,415 $ 1,607,866 $ 86,986 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13,084,178 $ 707,854 2031 $ 15,999,415 $ 1,607,866 $ 86,986 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13,084,178 $ 707,854 2032 $ 20,232,009 $ 2,033,222 $ 109,997 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13,084.178 5 707,854 2033 $ 20,232,009 $ 2,033,222 $ 109,997 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13,084,178 $ 707,854 2034 $ 20,232,009 $ 2,033,222 $ 109,997 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13,084,178 $ 707,854 2035 $ 20,232,009 $ 2,033,222 $ 109,997 $ 7,361,910 5 681,409 $ 36,864 $ 114,000,000 $ 13,084.178 $ 707,854 2036 $ 20,232,009 $ 2,033,222 S 109,997 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13,084.178 $ 707,854 2037 $ 20,232,009 $ 2,033,222 $ 109,997 $ 7,361,910 $ 681,409 $ 36,864 S 114,000,000 $ 13,084,178 $ 707,854 2038 $ 20,232,009 $ 2,033,222 $ 109,997 $ 7,361,910 $ 681,409 $ 36,864 $ 114,000,000 $ 13.084,178 $ 707,854 Total $251,924,838 $25,317,263 $1,369,664 $ 84,661,963 $7,836,206 $423,939 $1,881,000,000 $215,888,929 $11,679,591 12 2018 is also available but it was reported only at the State level. 'Aina Lea Report Page 34 ©SMS January,2020 Community Center Commercial Center Overall, O&M State tax/ County tax/ O&M State tax/ County tax O&M State tax/ County tax/ Year Expenditures year year Expenditures year /year Expenditures year year 2020 $ $ - $ - $ - $ - $ - $ 2,272,450 $ 228,371 $ 12,355 2021 $ - $ - $ - $ - $ - $ - $ 2,272,450 $ 228,371 $ 12,355 2022 $ 500,000 $ 46,279 $ 2,504 $ - $ - $ - $ 62,381,395 $ 7,078,925 $ 382,970 2023 $ 1,000,000 $ 92,559 $ 5,007 $ 2,016,260 $ 200,313 $ 10,837 $ 123,521,663 $ 14,030,812 $ 759,067 2024 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 125,537,923 $ 14,231,124 $ 769,904 2025 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 128,673,490 $ 14,546,234 $ 786,951 2026 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 128,673,490 $ 14,546,234 $ 786,951 2027 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 132,354,445 $ 14,886,939 $ 805,383 2028 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 137,336,954 $ 15,358,444 $ 830,892 2029 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 142,393,846 $ 15,866,637 $ 858,385 2030 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 142,393,846 $ 15,866,637 $ 858,385 2031 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 142,393,846 $ 15,866,637 $ 858,385 2032 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 146,626,440 $ 16,291,993 $ 881,397 2033 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 146,626,440 $ 16,291,993 $ 881,397 2034 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 146,626,440 $ 16,291,993 $ 881,397 2035 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 146,626,440 $ 16,291,993 $ 881,397 2036 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 146,626,440 $ 16,291,993 $ 881,397 2037 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 146,626,440 $ 16,291,993 $ 881,397 2038 $ 1,000,000 $ 92,559 $ 5,007 $ 4,032,521 $ 400,626 $ 21,674 $ 146,626,440 $ 16,291,993 $ 881,397 Total $ 16,500,000 $ 1,527,219 $ 82,623 $ 62,504,075 $6,209,700 $335,945 $2,296,590,876 $256,779,317 $13,891,761 Note: The numbers might not sum to total due to rounding errors. The long-term O&M expenditures of residential and community facilities will also have a positive impact on State and County tax revenues. As with the economic impact on earnings, the State and County tax revenues generated by the long-term O&M expenditures are cumulative across years. Overall, the$2.3 billion of O&M expenditures will add $256.8 million to the State tax revenues and $13.9 million to the County tax revenues over the course of the project. Of the $13.9 million of County tax revenues, close to 84.1 percent ($11.7 million) will be generated by the O&M expenditures of the medical center, followed by 9.9 percent ($1.4 million) from the residential O&M expenditures. The O&M expenditures of golf course and lodge, community center, and commercial center will add $423,939, $82,623, and $335,945 to the County tax revenues, respectively. SUMMARY In sum, the Town of `Aina Lea development project will create positive economic impacts on jobs, earnings, and State and County taxes through construction and long-term O&M expenditures. The project will, on average, create 1,167 person-year jobs during the construction phase and 1,818 person- year jobs during the O&M phase. Combining the two phases together, the project will create a high of 4,530 person-year jobs in 2032 and a low of 505 person-year jobs in 2021. On the other hand, the construction payroll will generate $552.4 million of earnings. Together with the $840.9 million of earnings generated by the O&M payroll, the total earnings impact amounts to $1.4 billion over the course of the project. On the fiscal side, the construction and the sales of properties will add $229.7 million and $46.7 million to the State and County tax revenues, respectively. The O&M will add another $256.8 million to the State tax revenues and $13.9 million to the County tax revenues. The total State tax impact will amount to $486.4 million and the total County tax impact will amount to $60.7 million. 'Aina Lea Report Page 35 ©SMS January,2020