City officials did not make an offer to acquire the old Hilo Hattie property on Nimitz Highway that Councilman Joey Manahan said could have housed 500 homeless family members and up to 800 in an emergency. 

"I’m very disappointed," Manahan told the Honolulu Star-Advertiser Tuesday after the city failed to make an offer by Monday’s deadline. "It’s a real missed opportunity." 

City Managing Director Roy Amemiya later told reporters that the project would have required "a significant initial financial commitment of approximately $7.6 million, followed by an estimated $1.8 million annual operating deficit over 24 years totaling approximately $43.2 million for the remaining term of the lease. These operating expenses do not include the cost of providing services to up to 800 residents at a cost of approximately $20,252 per person, per year, or up to $16.2 million annually." 

The City Council has set aside bond funds for such projects, Amemiya said, but by law they "cannot be used to cover operating expenses for the building nor the social services. Making such a substantial, long-term investment in a shelter as proposed at the Hilo Hattie property would take away tens of millions of taxpayer dollars that could otherwise go towards building permanent housing." 

Although Manahan envisioned the homeless families living in separated units, Amemiya said they would be provided "only cot space" that could result in "extreme social ramifications and it is questionable whether homeless will choose to accept such shelter." 

At a rare joint press conference Monday led by Gov. David Ige, Mayor Kirk Caldwell said the effort to remove homeless people from a rapidly expanding encampment in Kakaako will have to proceed slowly because there is no space big enough to accommodate all of the people who have set up tents and tarps around the University of Hawaii medical school, Hawaii Children’s Discovery Museum and Kakaako Waterfront Park. 

Manahan said the 84,678 square-foot Hilo Hattie location could easily have accommodated everyone in Kakaako. 

The Hilo Hattie site also would have included on-site social services to help homeless families with their issues. And it had the benefit of not being near any residential neighbors, Manahan said. 

Only one other bidder met Monday’s deadline to submit an offer to acquire the rights to lease the property for the 24 years remaining on a 25-year lease, Manahan said. 

"We always knew we would have to subsidize this operation," Manahan said. "If we truly had an all-hands approach, a true partnership of city, state and social service providers, we could have made it work." 

On Monday, Ige announced the creation of The Governor’s Leadership Team on Homelessness that will include himself, Caldwell, state Sen. Jill Tokuda, state Rep. Sylvia Luke, state Director of Human Services Rachael Wong, City Council Chairman Ernie Martin and representatives of U.S. Sens. Brian Schatz and Mazie Hirono.