A $27.4 million cargo facility built by the state at Hilo Airport has been standing empty since it was completed in March because the state was unable to finalize lease agreements with tenants, including Hawaiian Airlines and Aloha Air Cargo, according to Department of Transportation officials.

The state was supposed to be collecting more than $50,000 in monthly lease rent from the private tenants but lost out on almost all of that money because of drawn-out lease negotiations and disputes over lighting and other amenities.

“I’ve already spoken to them verbally and told them that come June 30 they need to be in the new facility, because I need to generate revenue from this,” said Ross Higashi, deputy director of transportation for the Airports Division.

Higashi said the dilapidated old Hilo facility where the cargo companies are operating is structurally unsafe and needed to be replaced, which prompted the state to build the new 60,000-square-foot cargo warehouse. The state intends to demolish the old cargo area in 2017.

Transportation officials awarded the contract to build the new cargo facility to Isemoto Contracting Co. Ltd. in 2009, including a first phase for $14.4 million that involved site improvements and the ramp to serve the facility, and a second phase for an additional $13 million to erect the warehouse itself.

The plan is to move Aloha Air Cargo, Hawaiian and Transair Cargo from the old cargo area into the new facility. The state was issued a certificate of occupancy for the new warehouse in March, but the structure remains empty.

DOT said in a written statement that “due to the increase in the new and higher lease rents and the related costs associated with respective improvements at the new cargo facility at (Hilo), execution of the leases that were provided to the interested parties was prolonged.”

Higashi later amended that statement to add that the state was partly to blame for some of the delays.

Airports officials issued proposed leases to Hawaiian Airlines and Aloha Air in March and issued proposed new leases to Transair and the state Department of Agriculture in June, Higashi said. State agriculture officials will also occupy a portion of the facility.

However, Higashi said the airlines questioned some language in the state leases, and Hawaiian raised questions recently about the way the state calculated the fair market rental for the facility. At one point Hawaiian and Transair told the state they were considering moving to an entirely different site off the airport property, Higashi said.

Rep. Richard Onishi (D, South Hilo-Keaau-Honuapo) said he met with the carriers and potential lessees, and they pointed to a number of problems with the new facility that state officials needed to address.

“Those are the issues that are holding up these guys from wanting to move into the facility,” Onishi said.

Among the problems cited by the prospective tenants were floodlights that had been installed under the eaves of the building and therefore did not properly illuminate the areas where planes will be parked for loading and unloading.

Another problem was that gateposts on loading docks had been installed near the roll-up doors of the facility, restricting access in those areas, Onishi said.

Higashi said state procurement law did not allow the state to make changes in the specifications for the building because the project had already been competitively bid and a contract was awarded. He said the airlines were consulted about the design of the new facility before it was built, but airports officials are now using state workers to make the necessary fixes in-house.

Ann Botticelli, Hawaiian Airlines’ senior vice president for corporate communications and public affairs, said in a written statement that the airline is not resisting moving, and “in fact, we’d like to move.” She said the proposed lease rent is acceptable to the airline, but airports officials “have some small punch list items that remain to be completed.”

“The bottom line is: we are anxious to move into the facility and are working diligently to finalize the lease,” she said in the statement. Aloha and Transair did not respond to requests for comment.

Higashi said the state was unable to begin negotiations with the cargo companies earlier because the building was not complete. “Until you get the certificate of occupancy, nobody wants to do anything, because if you can’t get the occupancy, why would they work on any lease with you?” he said.

State officials point out they continue to collect more modest rents from Hawaiian, Aloha Cargo and Transair at the old Hilo airport facility, which offsets some of the losses from the delays. Still, the net loss to the state because of the delayed move works out to about $40,000 per month, according to the DOT spokesman.

By mid-January the only lease that had been finalized was with the state Agriculture Department. Scott Enright, chairman of the state Board of Agriculture, said his department took control of a portion of the warehouse late last year, but staff from his department’s Plant Quarantine Branch have not yet moved in because connections to provide electrical and data services are not yet complete.

Higashi said the state finally issued an ultimatum giving the cargo companies until the end of January to sign the leases. He said yet another cargo carrier approached the state in December to say it was interested in taking over most of the new cargo warehouse, a development that gave the state additional leverage to finally resolve the lease negotiations.

Once the leases are signed, Higashi said, Hawaiian and the other tenants will need to make additional improvements to the cargo facility to suit their specific needs, which is why the state gave them until June 30 to actually move in.