Building a new stadium in Hala­wa was difficult and delayed in 1975, so perhaps the same can be expected with the state effort to build a new stadium there now.

Yet one extra challenge exists today because of the way replacing Aloha Stadium is being pursued: a public-­private partnership.

Many state leaders view so-called P3 arrangements as attractive for having the private sector bear the risk and expense of major real estate projects with public purposes in return for rights to develop public land for an expected profit.

The reality, however, is that this strategy has a hit-or-miss record locally.

P3s in Hawaii have been successful largely for affordable-housing projects, though even some of these were plagued by difficulty and extreme delay before being realized.

On the other hand, there have been colossal failures with more ambitious P3 plans involving prime but underutilized state land, including sites at the University of Hawaii West Oahu, Honolulu Harbor, a peninsula in Kakaako and the Ala Wai Small Boat Harbor.

More recently, Honolulu had its own contentious brush with the P3 process in connection with the city’s $11 billion rail project. In December, after receiving bids that were more than $1 billion higher than anticipated, the Honolulu Authority for Rapid Transportation dropped its years-long effort to secure a P3 to build the last pieces of the system and run it for 30 years.

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Local economist Paul Brewbaker calls P3s “true unicorns” of economic development strategy because credible commitments to such efforts by government leaders are inhibited or preempted by governance conditions.

“The incentive environments are so, so disparate (between) public and private that, jointly, they are dysfunctional,” he said. “Being well-intentioned is insufficient. It’s almost impossible to merge cultures, incentive structures, governance institutions and the like.”

Curt Otaguro, a 37-year veteran First Hawaiian Bank executive who in 2019 became state comptroller and head of the state Department of Accounting and General Services, believes his agency, in conjunction with two others and paid private consultants, can pull off what would be one of the biggest P3 projects in Hawaii’s history.

Under the plan, the state would make much of Aloha Stadium’s 98-acre site available under a 99-year lease to a developer that would produce development such as housing, retail, restaurants and hotels in what would be called the New Aloha Stadium Entertainment District.

“We have every confidence we will be able to leverage the expertise of all state agencies and apply the proper energy to get NASED started and developed,” Otaguro said. “The team has done its due diligence over the past several years, partnering with world-class consultants to carefully structure a project plan which will include a master plan for the overall district. This is a major undertaking that will take years to unfold, but we are confident that a strong foundation has been established, and the expertise we currently have will enable successful public-­private partnerships.”

A private partner would build, and maintain for 30 to 40 years, Hawaii’s largest outdoor event venue, which hosts about 300 events annually, including high school and University of Hawaii football games.

State officials expect taxpayers would pay for some of the development using a $350 million appropriation,  and that a private partner would cover some expense as a trade-off for income from the neighboring residential and commercial development near a city rail station.

Yet P3s in Hawaii have often failed to fulfill intentions.

Local developer Stanford Carr has experienced the good and bad of P3 initiatives.

“I’ve got fond memories and I’ve had some good experiences,” he said. “And I also have scars on my back and nightmares of why did I even pursue this.”

A few of Carr’s P3 experiences involved the Hawaii Community Development Authority, a state agency being tapped for a key role in the stadium district project.

Some HCDA proponents praise the agency’s P3 “expertise” in Kakaako, though its success rate isn’t good.

In 2005, Carr was among several developers competing for rights to develop 37 acres of industrial state land on the Ewa side of Kewalo Harbor made available by HCDA for residential and commercial use.

Carr’s $866 million plan was ranked third-best of six proposals, and HCDA selected a $650 million proposal from local development firm Alexander & Baldwin Inc. for three condominium towers, restaurants, stores, a hula amphitheater, a waterfront promenade and a pedestrian bridge over the harbor channel.

A&B offered to pay the state $50 million for the condo site plus a share of unit sale proceeds, along with $600,000 in annual lease rent for other areas.

The plan triggered community opposition over using public land near the waterfront for housing.

HCDA pushed ahead with support from then-Gov. Linda Lingle, but state lawmakers moved to kill the project by passing a bill in 2006 to prohibit residential use in the area, after which A&B walked away.

This debacle came eight years after another suitor was scorned in a P3 deal for some of the same land.

In 1998, HCDA’s board unanimously selected a $138 million plan by local businessman and former politician D.G. “Andy” Anderson for an entertainment complex with a Ferris wheel, laser-light tower, concert shell, restaurants, shops, art galleries, carousel ride and miniature golf course.

Anderson’s plan wasn’t supported by HCDA staff or then-Gov. Ben Cayetano, and after Anderson tried to negotiate development agreement details, the agency’s board voted 7-2 to kill the project over perceived risky financial projections.

Anderson, a longtime Republican leader in Hawaii, where Democrats dominate, said his plan was solid and suggested it was sacked for political reasons.

Win some, lose some

The Hawaii Community Development Authority has had P3 successes, too.

One example is Nohona Hale, a 111-unit low-income rental apartment tower in Kakaako that opened last year, six years after HCDA asked for proposals.

The agency also leased the Kewalo small-boat harbor to Howard Hughes Corp. for a $23 million renovation and expansion, though that effort, completed in 2019, took about a decade and resulted in 65% fewer additional boat slips than intended.

HCDA had less success turning a Kakaako parking lot into a technology park as part of an effort to create 80,000 tech industry jobs paying at least $80,000 annually by 2030.

The agency sought proposals in 2015 for an initial phase with a 13,500-square-foot entrepreneur collaboration center and a 153,279-square-foot building for tech businesses.

Carr submitted the only bid and built the collaboration center known as the Entrepreneur’s Sandbox, though not really as a P3 project. This $7 million facility, which opened in 2019, was funded through the state and is owned and operated by the state.

The bigger $72.6 million piece of the tech park’s first phase is for Carr to finance and has not been built.

Perhaps HCDA’s most trying P3 effort has been redeveloping a former public school site next to historic Mother Waldron Park.

HCDA made an initial attempt in 1992 to produce affordable housing on the site and selected a plan by a subsidiary of Korean firm Daewoo Corp. for 600 rental apartments.

A slowing Hawaii economy derailed the project.

After balking on an effort to seek new proposals, HCDA in 2006 let a state agency that helps developers produce affordable housing solicit proposals for part of the site. This effort resulted in Carr producing Halekauwila Place, a 204-unit affordable rental tower that opened in 2014.

Meanwhile, HCDA had made a new P3 run to develop the remainder of the site in 2012, selecting a plan by Ohio-based Forest City Enterprises to build a pair of towers with 804 largely market-rate rental apartments dubbed 690 Pohukaina.

Forest City’s deal fell apart after a negotiation impasse at least partly related to a state Department of Education push to include a school in the project.

The Hawaii Housing Finance and Development Corp., which helped Carr develop Halekauwila Place, stepped in and produced a new P3 agreement in 2017 with the Hawaii principals of Forest City, doing business as Alaka‘i Development. Yet this deal, which includes an elementary school, is stalled.

Stadium bills pending

For the stadium project, state lawmakers need to pass a bill that would establish HCDA’s role with the Department of Accounting and General Services and the agency that manages the existing stadium. Two bills to do this are pending. Senate Bill 1423 has passed Senate committees and still needs to be heard in the House, while the reverse is true for House Bill 1348.

Without HCDA, DAGS would only be able to auction the stadium site to a high bidder for use.

DAGS has been working on the stadium district P3 for several years and said it is applying lessons from past public-private partnership efforts.

To date, DAGS has spent about $10 million, mainly on consultants, to produce feasibility studies, an environmental report and conceptual plans.

Lawmakers previously authorized spending up to $350 million to facilitate redevelopment, including the need for costly infrastructure.

DAGS has yet to publish a request for proposals, and recently decided to break the P3 plan in two pieces: one for the stadium and a separate arrangement for adjacent areas.

“This is a critical project for the state,” Otaguro said. “The project will redevelop a parking lot into an energetic and vibrant contributor to our economy and achieve the state’s desire to monetize state lands as appropriate. We believe this is a win-win-win for the community, businesses and the state.”