Dive Brief:
- The state of Hawaii's Department of Accounting and General Services (DAGS) has issued a Request for Qualifications for contractors interested in bidding on the first phase of the New Aloha Stadium Entertainment District in Honolulu. The first five years of work will include a replacement stadium and ancillary commercial mixed-use development and will be delivered through a public-private partnership (P3).
- Phase 1A includes the demolition of the current 50,000-seat stadium; design, construction, financing and maintenance of a new 35,000-seat "world-class" stadium, which should be open by August 2023; necessary infrastructure, including roads, parking, public spaces and utilities; and connections to the HART (Honolulu Authority for Rapid Transportation) system. Phase 1B will include 20,000 square feet of retail and entertainment space; up to 700 residences; 75,000 square feet of office space; and 240 hotel rooms.
- The state has dedicated $350 million toward construction of the stadium and its P3 partner will provide additional financing through either equity or debt financing. In the RFQ, it appears that the state is leaning toward making milestone payments to the P3 developer during Phase 1A and then availability payments, which will be tied to performance, during a 25- to 35-year services phase.
Dive Insight:
The total cost of Phase 1 will be determined after the state receives developer proposals. After the project is built out, the mixed-use district will feature up to 640,000 square feet of retail and entertainment space; more than 1,800 residences; 192,000 square feet of office space; and 620 hotel rooms. Development beyond Phase 1 will be carried out in several phases during a period of 10 to 15 years after the new stadium opens.
After the state receives responses to the RFQ, which are due by April 28, it will select up to three developers by June 10 to submit proposals. Those proposals will be due in October, and DAGS expects financial close on the deal by the first quarter of 2021.
Aloha Stadium is one of the stops for the now-$9.2 billion Honolulu Rail. In fact, service to the stadium from East Kapolei, Hawaii, is scheduled to begin in December. Andrew Robbins, executive director of HART, told the Honolulu Star Advertiser that the COVID-19 pandemic should not impact that timeline. However, its car provider, Hitachi Rail Honolulu Joint Venture, notified HART that the outbreak could delay delivery and has asked for additional time without penalties or liquidated damages as part of a force majeure claim.
Construction on the 20-mile rail project has not been without its share of problems, not the least of which is a six-year delay and a budget that has grown to approximately twice that of the original cost estimate. One way that HART decided to mitigate the risk of further delays and a potential $13 billion price tag was to deliver the final four-mile stretch of the rail as a $1.3 billion P3. The bidders' deadline has been extended to April, according to the Pacific Business News.
