 Welcome back to Think Tech. I'm Jay Fidel. We're catching up on Kakaako today. And we have Lee Sichter, a planner and a lecturer in the Urban Planning Department at UH to talk about the planning considerations around Kakaako, Kakaako Makai. Welcome to the show, Lee. It's nice to see you. Thank you, Jay. It's good to see you again. So let's talk about your familiarity. I mean, this may be an understatement of familiarity. You are intimately familiar with Kakaako. You have studied it for decades and decades. Can you talk about your familiarity with this area and with the planning considerations around this area? Before I became a lecturer at the University of Hawaii, I was in a consultant in the field of planning for 39 years. And 23 of those years was with a large planning firm that actually our offices were in Kakaako. And at the time that I was with that planning firm, we did a number of projects in association with the Hawaii Community Development Authority, the authority overseeing Kakaako, including consideration of various amendments to the rules. And then in 2012, after I had left that firm and opened my own consulting practice, I was retained by HCDA awarded a contract to do the transit overlay development plan for Kakaako and the accompanying environmental impact statement. So I have been involved with issues in Kakaako for at least three decades. Wow. So the plan in what 2012, can you talk about that? What did that say? What considerations did it take into account? Well, first of all, when we started the work in 2012, it was restricted to the Maoka area, because the focus was on how should the rules for Kakaako's HCDA, what do they need to take into consideration for the arrival of the rail in Kakaako. So it was a transit-oriented development plan to respond to the anticipated arrival of three rail stations in the Maoka area of Kakaako, meaning the area landward of Ula-Mona Boulevard. Was there a plan at this point that you knew about or Kakaako Makai? Yeah, I believe the HCDA had already established a plan for Kakaako Makai. I only peripherally was involved with the details of that plan. I had a client who did the renovations for the Gold Bond building, which is in the Makai area. So I did the permitting for that and had to peruse the previous plan, but I've not been intimately involved with the plan. Did the previous plan, if you'll knowledge, include any residential or a high-rise condominium project? Well, I don't believe so, but there was a proposal back when we were so years ago to build a couple of high-rise residential towers in the Maoka area. It generated a lot of controversy and ultimately the plan was abandoned. I don't know if you recall, but that was the A&B plan and there were at least two towers, maybe more. A&B took a lot of heat for that plan. One afternoon on a Wednesday, the CEO, Stan Kuriyama, called me up and said, I want to come over to your radio show at KHPR and I have a hot scoop for you. I said, Stan, you're always welcome here. He came over and at five o'clock that afternoon, he announced that A&B was pulling the plug on that plan for lots of considerations, including community sentiment. Right. Right. There was a lot of concern about the impacts on point panic. I remember John Kelly and Savar Surfer were one of the original groups that came out in opposition of that plan. Anyway, okay. Now, in 2012, I think it's the same year that Neil Abercrombie made his deal with OHOP for a perceived debt of $200 million. He exchanged that for land, a number of parcels, in Aka Ako Makai. Do you remember what happened? Do you remember where that fit in all of this? The plan was, as I understand it, to compensate OHOP for the revenue that they're supposed to be paid from seeded land. It was supposed to be a funding mechanism for OHOP. The proposal was that OHOP would be compensated by receiving development rights to the land in the Makai area. That valuation was placed at $200 million, but I don't know how that valuation was arrived at. Some consideration for highest and best use and highest and best use probably would have included residential development. Meaning you make more money with residential development. Right. But there was a statute that prohibited residential construction, residential development in Aka Ako Makai. Where does that fit? Well, I think the legislature waited in as a result of the controversy and enacted legislation that restricted residential development to only the Maoka area. In other words, prohibiting residential development from the Makai area, I believe that was in response to all the controversy. Would you agree with me that that statute was enforced before Abercrombie made his deal with OHOP? I think that's correct. Okay. Well, let's go forward. So that was 11 years ago. What's happened? Well, I understand that there's been a bill introduced this session that proposes to reverse that prohibition, that previous legislative prohibition, and allow residential development in Aka Ako and at the same time, increase the existing height limit to 400 feet. That'd be 40 stories, roughly. Approximately 40 stories. Well, let's talk about the substance of the project from an environmental point of view and I guess the Hawaii Environmental Protection Act. What is remarkable, if anything, about these parcels that is Aka Ako Makai? It differentiates this area from other areas in Aka Ako and, for that matter, in and around the downtown area of Honolulu. Two things come to mind, Jay. One is its location. Both are related to the location. One is that it is shoreline property, immediately adjacent to the shoreline. But the second and larger consideration is the former use of Makai area that dates back probably close to 100 years and that was that the entire Aka Ako Makai area is fill material and it was also the site of basically a dump, a landfill, if you were. It's been since determined that there has been a lot of toxic material dumped into that landfill. In recognition of that, several decades ago, 8CDA, when they developed a portion of the Aka Ako Makai, they remediated the dump site into what we now know as the Waterfront Park. The Waterfront Park is actually a large mound. It's not a flat parcel at all. If you were to look very closely, you can actually see vents that were constructed at the top of the mounds in the park that enabled the venting of methane gas to prevent underground fires. So the park today is the reuse of a former landfill site. And it's since been determined that there's a lot of toxic material that's still buried in that landfill site, which raises a lot of considerations about what's the quality of the underlying soil in the area surrounding the landfill itself. Yeah, a couple of things about that. If I give you a landfill with materials that are toxic, and this was rubbish and who knows what kind of rubbish, but it was the rubbish product of the city for many years, does that go away over time? Is it somehow ameliorated itself, or does the toxicity continue? I'm not a scientist, but my planning experience tells me that the toxicity continues. It doesn't diminish over time. There's been plenty of cases on the mainland with toxic sites having to be entirely remediated before they can be used. And that remediation may be as much as having to remove all the toxic material. If this was, and it was, a rubbish landfill, it's going to be pretty deep, isn't it? For all the years that it was used as a landfill, and the topsoil on top of it will be relatively a small percentage of the material. Would you imagine I'm right about that? Well, I'm not sure how deep it goes. Obviously, it goes 40 or 50 feet above the grade, which is the reason there's a large mound. The whole area, the Makai area, as well as many portions of the short front of downtown Honolulu are fill land. But in this particular instance, this this fill land also included a landfill. And I cannot say with certainty at what point they started filling the Makai area in with material that is in fact toxic. So it's hard to say how deep it it may go and how much that toxic material got compressed over the years and might have gone deeper. It's just very difficult to say. Yeah. So when you say remediate, my understanding is that it may require, although this is not a scientific determination just yet, it may require digging all of that out however deep it is. Well, that would be one way. Right now the remediation was a minimal remediation. That was basically to cover it up and use it as a passive recreational use of park. But if you were extreme remediation would be to actually go in and excavate all the material out and remove it. And that of course is obviously quite expensive and time consuming to do. So if I have, you know, this landfill condition and I want to build a 40 story condo, I would have to go much further than just putting topsoil on it, right? Well, I don't think there's any proposal to build a condominium tower or residential tower on the site of the landfill itself where the park is. I think that the proposal is to build it in an adjacent area. The question is how, what are the actual physical limits of the old landfill? And then secondarily, how much has the toxic material in that landfill leached out horizontally or spread out through the surrounding areas? I think that's very, very difficult to say unless there's really detailed analysis that's done soil testing. You're talking about the toxicity of the material in the landfill leaching out through the water table to other water sources and infrastructure that may service other areas. Am I right? That's right. And also just permeating out laterally as well as vertically, horizontally as well as vertically spreading out, if you will. You just imagine that rainfall goes into the ground and it spreads out. So if it's carrying toxic material, it has the possibility of spreading out. Let me say toxic material, which I mean, just in the common use of the term, that's poison. That could make you sick. That could be carcinogenic. We don't know, but is it possible that if you start doing construction in this area or near this area, you will unleash toxins that will hurt people? Oh, I think it is possible. I have a slightly different concern. And that is, you know, we've seen plenty of buildings in downtown Honolulu built on former fill land. That's not a constraint. The preferred method of construction is a pile drive, piles, driving piles down into the soil to create stability for the foundation. My concern is if you are driving piles through land that is potentially contaminated, are you in fact introducing that contaminated land to a lower depth? In other words, actually driving it down or creating by the piles themselves, creating ways for water to percolate deeper than it normally would. Are you in fact disrupting the soil in such a way that could create cracks or fissures, or just by putting deep piles in, introduce what may be at one layer into a lower layer? Now, I understand there are two aquifers below Makai Kakaako. The upper one is non-potable, non-drinkable water, but the lower one is drinkable water. And I would be concerned about the introduction of any toxic chemicals that reside in the landfill into deeper substratta and bringing it closer to the aquifer. I think that would have to be carefully studied. So you need to know what the construction technique of the proposed tower or towers would be, and then what impact that construction technique might have on the subsurface. If that happened, that would be pretty scary. That would affect the water supply. An aquifer is the water supply, isn't it? Yeah, I think the whole Red Hill concerns over the last several years have heightened everybody's consciousness about the fragility of our aquifer and how easily it is exposed to contamination. So I think we are all in a heightened sense of awareness about the need to protect our aquifers. So what about other environmental considerations here? I mean, for example, we know plenty of evidence and research at UH about the climate change and sea level rise along this very shoreline. What effect does that have on the possibilities for development? Well, there's always, you know, in the literature and when we're dealing with issues about sea level rise, you have three options. You have abandon, meaning don't use the land that's going to be subjected to sea level rise, go somewhere else. Defend, which means put up some kind of a wall to prevent the sea from coming in, or adapt. And that means learn to live with it. Adaptation is the likely outcome. In our coastal areas of Honolulu, we're going to have to learn to live with a higher sea level, which means you might end up with a Venice kind of situation where the water actually is a companion feature of the urban area. That raises a concern about not just the mitigation of how do you deal with a rising sea level with a single structure, but more importantly, pedestrian and vehicular access to that structure. What does the roadway network look like in that kind of consideration? In the Kakako Makai area right now, it's a commercial area, warehouses and some commercial, and there's a degree of traffic, but mostly vehicular, not a lot of pedestrian traffic, except around the medical school. But if you're introducing a significant residential component to that area, you're really changing the transportation character of the area. And you have to take that into account if you are experiencing sea level rise and potential periodic flooding in the area in the future. So it's a consideration that would have to be taken into account with any kind of development proposal. Yeah, aside from the research for the examining the environmental factors in the development proposal, in the specifications for a permit to develop, you would have to make changes from the existing specifications as they now exist. And it would be pretty substantial, I would say, I would imagine, because, for example, the need to raise the building up, the need to raise the soil up, the need to build new infrastructure, that's costly. And that kind of cost would have to be built in either into the budget for the state, as the case may be. The state has spent plenty of money already, years ago, on infrastructure in Kakaako, both Makai and Maka. But then this would have to be paid by the developer, and ultimately by the people who buy the units in the developed project. And that would mean the units are more expensive because the specifications require more substantial, more high-tech, more cutting-edge type infrastructure. Am I right? Yeah, no, that's absolutely correct, Jay. The state hasn't been in the business of building high-rises. But I've been in the business of representing clients that do build high-rises. Let me give you an example. I represented Hilton Hawaiian Village for many years and did the permits and the environmental impact statement for the Grand Waikikiyan Tower at Hilton, as well as the Kalia Tower. And when we did the Waikikiyan Tower, the city commented that the sewer line in the area was inadequate, and Hilton was tagged with having to replace the sewer line under Alamoana Boulevard, extending all the way up to Kalakawa Avenue, which was quite a pretty penny. That's a cost that the developer had to absorb. In the case of Kakaako Makai, there may be a lot of infrastructure improvements that would be required to service new residential development. And that is added on to the price tag of whatever the cost of those buildings are, and ultimately added on to the cost of individual units, which has passed on to the consumer. Yeah, so affordable may be a term that changes in its dollars and cents meaning. True. We are always pushing that affordability is that 80 to 120 percent of the average median income. And we're always pushing that 120 percent side, because it's really expensive to build cheap affordable housing. I know that sounds like an oxymoron. Someone's got to be paying for the development of the cost of building it. And then if you pass that cost on to the future buyers, that price tag is just going to go up. What's interesting, too, is that these parcels are very close to the weather shoreline parcel. They're in a pristine area, an area which would be very valuable, as much or more value than any other shoreline parcels, shoreline projects in the state, right there in this iconic place with the beautiful oceans, sunset, what have you. That allows the developer to set the price to a market that's very high, very, very attractive. And so on the one hand, you have additional costs. On the other hand, you have additional value. And it seems to me, years ago, they were talking about doing residential development on Aloha Tower. And they were talking about units there that would cost $5 million a piece. And that's 20, 30 years ago. These units would be very, very, very expensive. And it takes us still further from affordability, doesn't it? Well, the issue, Jay, is if you're going to build a affordable unit, you basically have to subsidize the cost of those units. Otherwise, the price tag on them is just too high. So someone has got to pay for the cost of those units and then turn around and pass them on as much cheaper units. That's a subsidy, essentially. So the question is, who is going to subsidize those units? And how much is it going to cost to subsidize those units in order to make them available to lower income potential buyers or renters, for that matter? Very complex and unknown at the moment, I'm sure. So that just raises the whole point, Jay, that when I did the transit-oriented development plan for CACACO, because the land in CACACO is owned by the state and because the plan was being proposed by a state agency, we were obligated to do an environmental impact statement for the transit-oriented development plan. So we started the plan in 2012 and finished the first draft of that plan in 2013. And at that point, we had to prepare an environmental impact statement for the plan. And after that whole process was completed, then we could finalize the plan, the TOD plan. The same consideration is going to have to apply for anything that happens in the Makai area of CACACO. Once OHA develops some kind of a plan for the Makai area, then a environmental impact statement evaluating the impacts of that plan is going to have to be conducted before any plan can be implemented and executed. Well, a couple of questions about that. It's the sequence thing. So first you make a plan that people are in general comfortable with. And I guess that would be a lot of people, a lot of constituencies, because this is so iconic for so many people. It's not just the scientific community, the planning community, it's the surfing community, it's the native Hawaiian community, it's so many people. And people like me who walk my dog in the park, and it's a treasure to me. All those people have to be accounted for. But once you talk to them all, let them weigh in on it, then you have a plan. Then you take a plan and you make an EIS with some various environmental factors, maybe a lot of them, because this area is complex. And there may be more environmental factors for this area than a lot of other areas. And then you may wind up changing the plan because of what is determined by the EIS. And then you may need to, as I mentioned before, you may need to change the specifications for construction so that the property is protected from whatever environmental risks are identified. And then you have to have the government agencies involved, whoever is involved, make changes in the specifications. Fair is fair for the issuance of a permit for this construction. So first, do you agree with that sequence? And second is, how long would that sequence take? Well, I agree with the sequence, and it's actually a little more rigid than that. Under the state law or an EIS, you have to consider alternatives. You have to evaluate alternatives to the proposed action. So let's say, for example, the proposed action is two 400 foot residential towers. At the time that you're doing an environmental impact statement, you have to, you are obligated under the law to consider alternatives to that proposed construction project. And that has to be a rigorous evaluation of those alternatives. It can't be superficial. So it took us about two and a half years to do the environmental impact statement for the Maoka area. One to two years is the running average. There are formal rules that you have to follow. It's called administrative rules section 11-200. And it specifies hydrological reports, geological reports, socioeconomic analysis, archaeological analysis, infrastructure analysis, climate change analysis, cultural analysis. These are all requirements for EISs that are specified in the law. And you have to take the time to do all of that work. One of the longest, most detailed processes in all those reports is actually the cultural impact statement that has to be produced, because it requires not only identifying who are people that are culturally affected and what resources are protected, but then actually interviewing, transcribing those interviews, getting their approval of those transcriptions, and then incorporating all that information. A cultural impact assessment alone can take six months to a year to produce. Why am I thinking of Mauna Kea? In that case, the same OHA demanded a cultural component to the EIS. They demanded the EIS. It took a long time. They never accepted it. The same OHA, wasn't it? Am I missing something? I don't know to what extent OHA was involved with the Mauna Kea issue. I believe it was, but I really did not ever take a look at who all the stakeholders were that actually participated. I'm only most aware of the people who were protesting. Okay, so from the time you start making a plan, current plan, to the time you finish that, to the time you start an EIS and finish that, including the cultural component, to the time that you ask the regulatory agencies or building permit agencies to update and improve their specifications for a building permit, how much time would go by before you got to the point where those things were updated and a permit was applied for and could be granted? What are we talking about? Five years? Ten years? What? Well, let me give you an example for the TOD plan that I did. We started in 2012. We finished the draft of the plan in 2013, and then we took two years to do the EIS, got that approval. The finalized plan has still not yet been adopted by the Hawaii Community Development Authority, and we're in 2023, so that's over 10 years. Just the fact that you do a draft plan and then evaluate it through an EIS doesn't necessarily mean that the final plan is going to actually be adopted. There still might be concerns, so this process does tend to take a long time. The going rate for these projects is about eight years, and they could take longer. We have a lot of rules and regulations in Hawaii that make the development process very difficult. Who pays for the EIS? Whoever the applicant is. If I'm the developer, then I have to pay for it, even if it takes a long time. That involves a lot of input. That's correct. So the question before we have to run here, but the question is, all of this considered, everything we've talked about, is this a good time for the legislature to address this issue? It seems to me so much more has to happen before the legislature addresses this issue. It may be that this is just the wrong time, and we have to wait and see. What do you think? I think that the legislative intervention at this point is premature. Dr. 343 says that an EIS shall be, if it's required, and in this case it would be required because it's state land and by a government agency, an EIS shall be conducted at the earliest practicable time. So before there's any legislative intervention about the uses in Kakaako Makai, I think it would be prudent to wait for the Office of Hawaiian Affairs to produce the requisite environmental impact statement. And the law also says that the purpose of our environmental law is to ensure, and I quote, that environmental, economic, and technical concerns are given appropriate consideration by decision makers. So the law says that we need to use the environmental impact statement process in order to inform decision makers. So in my mind it's clearly premature to be discussing particular land uses in Kakaako Makai until a conceptual plan for those land uses has been done and circulated. And then that plan is subjected to a rigorous environmental impact statement. Yeah, no question about the EIS because this is state land and for that matter OHA is a state agency. Correct. Well, thank you, Lee. Great to talk to you. It's nice to catch up with you and indeed that's the end of our show catching up on Kakaako and in some ways that's catching up with Lee Sikter. I'm delighted to spend the time with you and I hope we can get together on other things soon enough. Thank you, Jay. Aloha. 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