Mamalahoa bypass may cost taxpayers

By ERIN MILLER

Stephens Media

Hawaii County taxpayers may end up footing the bill for the Mamalahoa Highway bypass.

If a 3rd Circuit Court judge rules 1250 Oceanside Partners is no longer obligated to build the road, the developer will either pay $20 million to Hawaii County in two years or the county will need to foreclose on a mortgage for portions of the Hokulia development, Corporation Counsel Lincoln Ashida said Tuesday.

“The taxpayers may be fronting the money,” Ashida said, with the $12.5 million in bond payout from American Motorists Insurance Co. as seed money for the road.

Ashida offered additional explanation following a Monday court hearing in front of 3rd Circuit Judge Ronald Ibarra that seemed to put into question whom the county wanted to complete the road.

While Ibarra is being asked to rule whether the county or Oceanside should build the bypass from Halekii Street to Napoopoo, Ashida said the county’s position remains the same, that the developer should be responsible.

The settlement releases American Motorists Insurance Co. from six bonds, totaling about $68 million, in exchange for $12.5 million in cash, Ashida said.

But, the largest bond, $34.4 million for phase 1 of the project insured work that was already “substantially complete,” he said. Another $15.5 million was for the first bypass phase, which is also mostly complete. Ashida estimated the most it will cost the county to finish the road’s first phase is $2.5 million.

The bond for the road’s second phase was $9.2 million, and the bond for the second development phase was $7.1 million, he added.

Earlier estimates put the cost to complete the bypass at $34 million to $35 million. An independent, forensic estimator lowered that projection to $27 million in December.

While a number of Hawaii County projects have recently been awarded for double the estimated cost, including the contract awarded Jan. 12 to remove asbestos from the Corporation Counsel and Liquor Control offices, Ashida said looking at that forensic estimate with the county’s in-house engineering estimates isn’t a fair comparison.

“These are totally different projects,” Ashida said.

Hawaii County recently had difficulty selling land it acquired in lieu of back tax payments in Hamakua, Ashida said. But that situation isn’t the same as acquiring Hokulia property to help pay for the road, he said.

“We’re talking about different types of land in different parts of the island,” Ashida said.

The Hamakua lands, on some of which a county agricultural park is being created, had access issues that the Hokulia property does not, he said.

The lands also have value “beyond our ability to sell them,” Ashida said, noting that the county now also has a Public Access, Open Space, Natural Resources Preservation program.

Discussions of dismissing the lawsuits during Monday’s hearing didn’t mean the settlement will also be dismissed, Ashida said. Part of the settlement agreement is that all three lawsuits — two state and one federal — will be dismissed once the settlement is adopted, he added.

The settlement guarantees several things, he said. One, the county gets $12.5 million cash in hand from the bonding company.

Two, the county gets a first mortgage on $20 million worth of Hokulia property. And three, it ends litigation, which means the road will be built, Ashida said.

“At the end of the day, it’s going to be done,” he said.