Gov. Josh Green’s revamped effort to replace Aloha Stadium is betting that a private developer will help pay for more than an economy-class venue.
A state assessment in 2022 estimated that it would cost $430 million to develop a new stadium with bleacher seating for 25,000 spectators and no roof on a “less desirable” location within the 98-acre site in Halawa.
That’s more than the $399.5 million taxpayer spending cap Green has agreed to with leaders in the Legislature as part of his effort to alter the already long-delayed redevelopment project.
What had been the preferred plan in 2021 — a 30,000-seat “mid-range collegiate” stadium with a partial roof and compromised sight lines — has an estimated $470 million price tag and is a big step down from a 2019 original “premium” stadium plan featuring 35,000 covered seats and an adjacent amphitheater costing an estimated $670 million, according to state Department of Accounting and General Services assessments.
One new stadium concept assessed by DAGS earlier this year has an estimated cost within the state’s budget, at $320 million, and features some of the seating for 27,500 spectators on a tiered grassy embankment along one side of the facility.
Luis Salaveria, director of the state Department of Budget and Finance, said in a Thursday interview that $400 million won’t be enough to produce a stadium that is appropriate for the University of Hawaii’s Division I football program or anchoring envisioned retail, entertainment, housing and other new uses on the property largely occupied today by surface parking.
So to get an acceptable stadium worth more than $400 million, Salaveria said a development partner is expected to put its own money into the product under a deal where the partner would design, build, operate and maintain a new stadium for 30 years under a land lease.
The incentive for a developer to shoulder some of the cost, Salaveria said, is earning higher revenue from operations, including concerts and other entertainment, and possibly profiting from developing the surrounding mixed-use community.
“The intention is to get the best deal for the public,” he said.
No one will know what a best deal looks like until a request for proposals is published and bids are opened.
There is concern that the longer it takes to seek and receive bids will mean higher costs and a more scaled-back product, which is something the project has already suffered from — much like the city’s rail project where delays, escalating costs and a limited budget forced truncating the mass-transit line by one mile and two stations, including the one that was supposed to engage the most riders.
In 2022, David Harris of Crawford Architects, a consultant on the project, said each month of delay saps about $2 million in purchasing power.
Sen. Glenn Wakai (D, Kalihi-Salt Lake-Pearl Harbor) expressed concern during an April 20 appearance on the PBS Hawaii “Insights” show that the extra time to accommodate Green’s plan will lead to increased costs and a reduced product.
“As we delay, we’re getting a smaller and smaller stadium,” he said.
Salaveria said the goal is to produce a request for proposals by the end of this year and have a new stadium open in 2028, representing a setback from a 2027 opening goal held earlier this year and an initial 2023 opening plan.
The RFP, he said, might include rights to develop surrounding land, or some other arrangement such as a first option for such work.
Green, who took office in December, is the second governor to stop and deviate from a prior plan for redeveloping the 47-year-old stadium that was largely condemned at the end of 2020 after years of deferred maintenance and soaring costs to maintain the 50,000-seat “Rust Palace.”
The effort to redevelop Aloha Stadium surrounded by a new mixed-use community dates back more than a decade with work on land-use approvals, an environmental study, conceptual plans, feasibility studies and selecting qualified development partners.
Much of this work was led by DAGS and private consultants on behalf of the Stadium Authority, an independent board-led agency that owns the Halawa site. Around $25 million has been spent to date on the effort.
Initially, state leaders intended to have a private partner design, build, maintain and help finance a new stadium that the state would continue to own and operate. A $350 million taxpayer contribution was appropriated in 2019 to help pay for the new stadium and perhaps some work producing the surrounding community.
Under the original public- private partnership, or P3 arrangement, the state expected to earn revenue from leasing land for residential and commercial uses around the stadium. The ground lease revenue in turn would be used to pay off the long-term taxpayer costs for the project.
Three development teams were deemed qualified to bid in 2020, and opening a new stadium was anticipated for this year. But delays ensued, including the coronavirus pandemic and the Legislature changing funding and agency roles.
While work to replace Aloha Stadium wavered, government officials in San Diego delivered a new 35,000-seat stadium for $310 million in 2022, replacing an old 70,000-seat facility that closed in 2019.
Meanwhile, UH has been forced since 2021 to play home football games on campus in Manoa at its Clarence T.C. Ching Complex, where an emergency retrofit accommodated 9,000 spectators and an expansion to 15,000 seats is slated to be finished later this year as a temporary accommodation.
In 2022, after lawmakers added $49.5 million to supplement their earlier $350 million appropriation, then-Gov. David Ige soured on the plan and ordered officials to instead seek a contractor to design and build a new facility for the state.
Earlier this year Green ditched Ige’s plan but cited long-term cost concerns with the original plan and opted to pursue a simpler P3 deal for a private partner to design, build, operate and maintain a new stadium.
A study commissioned by Green’s administration concluded that the 30-year cost to the state for a new stadium under the original plan, including financing and maintenance obligations, would be $1.49 billion, or $457 million more than a state-delivered stadium.
Although Green is committed to surrounding a new stadium with a mixed-use community, his view is that it would be better not to risk trying to cover a $1.49 billion stadium expense with uncertain future ground lease revenue.
Salaveria said the only debt the state will have on a new stadium is the $350 million appropriation for general obligation bonds. The supplemental $49.5 million appropriation is cash from the state’s general fund.
ALOHA STADIUM OPTIONS
$670 million
>> Preferred 2019 “premium” option — 35,000 seats, roof, adjacent amphitheater
$470 million
>> Preferred 2021 option — 30,000 seats, partial roof, compromised sight lines
$430 million
>> Value engineered 2022 option — bleachers for 25,000 spectators, no roof, less desirable orientation
$320 million
>> Under-budget option — room for 27,500 spectators including tiered grass seating, no roof
Source: State Department of Accounting and General Services
