Now comes the hard part.

With construction of the city’s rail project working its way from West Oahu into urban Honolulu, rail officials say they may need to condemn portions of more than two dozen private properties from Iwilei through Kakaako to make way for the elevated transit system.

The Honolulu Authority for Rapid Transportation board took an initial step in that direction Thursday. The board authorized HART to seek approval from the City Council to acquire parts of 26 privately owned urban parcels by eminent domain if needed. Eminent domain is the power of the government to take private property for public use after paying fair compensation to the owner.

Sixteen of the 26 parcels are owned by Ward Village developer Howard Hughes Corp., which is opposed to the eminent domain action. HART has offered the Hughes Corp. $10 million for easements on the 16 parcels.

That offer is more than two years old and based on an appraisal that’s nearly three years old, said Mark Murakami, attorney for Hughes Corp. “We’re entitled to be compensated for the value of what’s being taken,” Murakami said.

HART board member Ember Shinn said, “We would hope Howard Hughes, who is a very big player in Kakaako and very well respected, would cooperate with us in this process rather than being an impediment.”

HART says the various land pieces are needed for permanent and temporary easements to create buffers between the guideway and adjacent properties, to stage construction equipment, to access utilities, and for actual construction of rail stations, guideway and columns.

Just compensation

Under the Fifth Amendment of the Constitution, private property cannot be taken for public use “without just compensation.”

Rail officials emphasized they are continuing negotiations with all of the landowners on possible purchase offers, and that any condemnation action would be a last resort.

“While HART is committed to continuing these negotiations, HART believes it’s in the best interest of this project to proceed on a dual track of seeking eminent domain approvals,” said Andrew Robbins, HART’s executive director and CEO.

Robbins said to date HART has received City Council approval to proceed with eminent domain actions on 60 parcels along the rail route. Of those, only eight condemnation cases were filed in court to seek possession.

“These statistics highlight the primary goal of HART’s right-of-way program, which is to balance our respect for property owners with the need to stay on schedule and to minimize risk in an ever-changing real estate market,” Robbins said. “The eminent domain process gives HART the most reliable time schedule for gaining access to properties needed for construction.”

HART is seeking easements amounting to more than 90,000 square feet, or just over 2 acres, on parcels in Kakaako owned by Hughes Corp. along Halekauwila Street, Ward Avenue and Queen Street. The largest is for the planned Kakaako rail station, which would sit on a portion of a lot on Ward Avenue that used to house a Sports Authority.

Hughes not on board

When asked by HART board member Shinn if Hughes Corp. objects to any particular lands being sought for acquisition, Murakami, the Hughes Corp. attorney, said, “I think my client opposes all of these.”

“An easement taking on all of these parcels (does) lower the value,” he said. “Are there workarounds? Sure. Are there trade-offs? Sure. But these plans have changed dynamically several times and we have big buildings going up, and operating shopping centers with impacts.”

Shinn pointed out that she’s seen ads from the developer touting the benefits of rail’s proximity to its condominium projects.

“You need to make sure that you take it back to your client, the (rail) board’s firm commitment that this rail is going to be built, it is going to be built through Kakaako, and that we would hope that you would cooperate with this endeavor,” Shinn said.

Surprising action

Casey Ching, vice president of corporate properties with Servco Pacific, another impacted Kakaako landowner, said the company was “surprised and confused” by the eminent domain discussions and asked the board to defer action.

HART says it needs a 5,383-square-foot easement on Servco’s property at 609 South St., where its Motor Imports servicing center is located, to make way for the planned Civic Center rail station on Halekauwila Street.

Ching said Servco believed it was very close to a deal with HART before learning that the project would be seeking eminent domain authority at Thursday’s meeting.

“This notice took us by surprise,” Ching said. “It seems like this eminent domain action may just kind of be pressure behind the scenes for an agreement not to be reached, and eminent domain to take place.”

HART also says it needs portions of two parcels owned by Hawaiian Electric Co. in Iwilei and near Aloha Tower Marketplace. A HECO spokesman said the proposed action would not disrupt the utility’s operations.