(Star Advertiser) Editorial: Blaisdell P3 plan needs hard look

(Source: Honolulu Star-Advertiser)

By this time next year, the city hopes to have a private-sector partner in place for its envisioned $772 million redevelopments of Neal S. Blaisdell Center. Last week, Honolulu Hale issued a call for candidates interested in teaming up to shoulder design and construction as well as operation and maintenance responsibilities.

There are some compelling potential benefits to financing through a public-private partnership for all involved. Such collaboration can prime a large-scale government project for more front-end cost efficiency and a quicker construction pace — or make a pipe-dream makeover a possibility in the first place.

Potential drawbacks include risks for both partners. For private enterprise: construction cost overruns, technical defects and an inability to meet quality standards.

For the public partner, agreed-upon usage fees it pays to the private enterprise for site operation and maintenance may not be supported by community demand for facility use. In Blaisdell’s case, proceeds from ticket sales and vendor fees would be among the obvious funding sources.

Mayor Kirk Caldwell appears to be convinced that the plan for Blaisdell’s overhaul is worthy of a public-private gamble. What’s more, he recently warned that in the absence of an upgrade: “Honolulu will no longer be able to attract the kinds of arts, culture, entertainment and sporting events that our citizens enjoy.”

While that sentiment seems a tad overblown, it’s clear that the 22-acre Blaisdell complex, which opened in 1964, is looking dated. In response, rather than opting for a frugal sprucing, the city has spent years mapping out a master plan, with community input, that envisions a gathering place on par with the great civic centers of the world.

Under the latest timeline, Blaisdell would close in November 2020 for about three years. Among the facilities on the demolition-and-replacement list: the exhibition hall, parking garage, shops along with sidewalks and landscaping. The new design folds in roomier public spaces and hundreds of additional parking stalls.

The concert hall and arena would undergo major renovations, with arena seating increasing. Add to that a new performance hall and sports pavilion as well as garden walkways, water features and five restaurants or bars.

While the proposed expansions in seating and the addition of venues looks enticing on paper, it’s unclear whether there’s a community demand for them. If the master plan yields a complex that exceeds demand, upkeep of empty seats and underused venues could result in higher ticket prices and vendor fees, and, possibly, force the city to routinely dig into its coffers to cover the private-sector partner’s set usage fees.

So far, the City Council has allocated slightly more than $12 million for Blaisdell demolition work, which will complete about half of the proposed work. Future budgeting will serve as opportunity for city leaders and the public to continue to weigh in on the scope of redevelopment. Also, before a deal is sealed with a private- sector partner, the city’s Department of Land Management will hold a public hearing on the proposal.

Observers of the private-public trend say some 37 states are now embracing these partnerships. In California, they’re in place for a civic center slated for Long Beach as well as new academic buildings, recreational facilities and student housing at University of California, Merced, among other pursuits.

They hold potential to serve as viable economic drivers. In Honolulu’s case, as the city grapples with other financial questions, including uncertainty tied to the price tag for future rail operations and maintenance, the City Council and others should proceed with extreme caution in shaping Blaisdell’s “next-generation” profile.

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