ANNUAL FORECASTS BUILDING INDUSTRY HAWAII'S - Trade Publishing
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2020 BUILDING INDUSTRY HAWAII’S ANNUAL FORECASTS Federal • State • Public • Private Development • Military • County
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CONSTRUCTION PREVIEW 2020 Positive Forecast for 2020 I t could be said that as Hawaii’s of building permits issued and their EDITOR construction goes, so goes Hawai’s valuation in fiscal year 2019, Kathy DAVID PUTNAM economy. The outlook for the Sokugawa of the state Department of RESEARCH EDITOR industry in 2020, according to Planning and Permitting notes that “the LORRAINE CABANERO experts in this issue of Construction outlook for the construction industry ADVERTISING DIRECTOR Preview, is positive. The rail is nearing the looks very positive for the foreseeable BARRY REDMAYNE finish line, infrastructure projects are solid, future.” residential projects (including affordable In fiscal year 2019, the DPP issued ADVERTISING MANAGERS homes) are continuing across the Islands 15,127 permits with a valuation of $3.49 CHARLENE GRAY DAVID KANYUCK and commercial jobs remain steady. billion, compared to 14,763 permits JENNIFER DORMAN Gov. David Ige points out that valued at $2.45 billion in FY 2018. “construction has been one of the steady Mayor Kirk Caldwell is optimistic for ART DIRECTORS contributors to job growth in Hawaii the construction sector for 2020. JONATHAN TANJI over the past few years.” “Although Honolulu faces many JEFFREY BONSATO The forecasts for the building challenges like any other large city,” LEAD ART DIRECTOR sector through 2020 is heavily due to he writes in Construction Preview, “our URSULA SILVA the state budgeting $2.3 billion for construction industry remains vibrant PRODUCTION MANAGER capital improvement projects. “CIP and strong in the year ahead, and will ABE POPA spending not only provides needed continue to play a critical role in the OPERATIONS MANAGER infrastructure for residents and visitors, strength of the local economy.” PIILANI KAALEKAHI it helps minimize the fluctuations in the economic cycle,” Ige writes. ADMINISTRATIVE ASSISTANT Based on the increase in the number MAPUANA MACDONALD David Putnam, Editor PUBLISHER AMANDA CANADA PRESIDENT FAITH FREITAS UNPARALLELED EXCEEDING QUALITY & ON-TIME EXPECTATIONS DELIVERY 287 Mokauea Street, Honolulu, Hawaii 96819 Phone: (808) 848-0711 • Fax: (808) 841-3053 www.tradepublishing.com Copyright 2020 by Trade Publishing Company, 287 Mokauea St., Honolulu, HI 96819. Phone (808) 848-0711. Statements of fact and opinion made in articles, columns or letter by writers and contributors are the responsibility of the authors alone and do not necessarily reflect the opinion of Trade Publishing Company. METAL STEEL HOT-DIP Materials within this publication are not to be ROOFING SERVICE GALVANIZING construed as professional advice; Trade Publishing Company disclaims any and all responsibility/ CENTER liability for health or financial damages arising from its content. Trusted, Tested, Tough, our Hawaii’s largest inventory Protecting Steel for Generations high-performance, premium of quality steel products. We Hot-Dip Galvanizing provides Metal Roofing Systems have offer reliable on-time delivery, superior long-term protection, a long, successful track and responsive service from ideal in Hawaii’s demanding record in Hawaii, with many our experienced team. environment. design and color options. SERVING ALL ISLANDS SINCE 1959 Oahu (808) 682-3000 | Neighbor Islands (800) 352-3920 | Email HIsales@kloecknermetals.com A Reliable Partner www.kloecknermetalshawaii.com CONSTRUCTION PREVIEW 2020 3
CONTENTS | CONSTRUCTION PREVIEW 2020 A Comprehensive Look at Hawaii’s PUBLIC and PRIVATE Construction Markets in 2020 PREVIEW Department of Environmental Management 28 Hawaii Asphalt Paving Industry (HAPI) 48 STATE AGENCIES Eric Nakagawa, Director Jon M. Young, Executive Director State of Hawaii 6 $28.5M Budgeted for Construction Projects on Is Balanced Mix Design In Our Future? David Ige, Governor Maui in 2020 State Budgets $2.3B in CIP Spending Department of Public Works, County of Maui 29 DEVELOPERS Department of Business, Economic, Rowena Dagdag-Andaya, Director Gentry Homes 49 Development & Tourism (DBEDT) 8 Infrastructure Projects in the Works for 2020 Rick Hobson, VP of Sales & Marketing Eugene Tian, Economic Research Administrator Building with Affordability, Functionality and Design More Additions and Alterations Projects U.S. MILITARY Avalon Group 50 Coming in 2020 Naval Facilities Engineering Command Steve Kothenbeutel, Chief Development Officer Department of Accounting & General Services 10 Hawaii (NAVFAC Hawaii) 30 Residential Leads the Way in Construction Growth Curt Otaguro, Comptroller Capt. Marc R. Delao, Commanding Officer Lendlease Hawaii 50 DAGS Plans 80 Projects in 2020 Hitting ‘Mission Need Dates’ Vital in Era By Rob Smith, General Manager of Great Power Competition Department of Transportation 12 Lendlease to Focus on Renovations in 2020 Jade Butay, Director U.S. Army Corps of Engineers 32 The Howard Hughes Corporation 51 KCT Phase 2 Among HDOT Projects in 2020 By Lt. Col. Kathryn P. Sanborn, Commander, Scott Timcoe, Senior Vice President, Design & Honolulu District Department of Hawaiian Home Lands 14 Construction Management Workload Building in 2020 for Honolulu District William Aila Jr. , Interim Director Howard Hughes Readies for Robust Development DHHL Continues Plans for Home Construction The Economic Research Organization at the Hawaii Housing Finance & Development Corp. 15 ASSOCIATIONS University of Hawaii (UHERO) 51 Craig Hirai, Executive Director Associated Builders & Contractors (ABC) 34 Peter Fuleky, Economist and Associate Professor HHFDC Continues to Assist in Building Jonathan Young, President of Economics Affordable Housing Where is Honolulu Construction Headed in 2020? Planned Projects Support Healthy Construction Outlook American Council of Engineering Companies COUNTY AGENCIES Of Hawaii (ACECH) 36 City And County of Honolulu 18 Ken Kawahara, President UTILITIES Kirk Caldwell, Mayor Business Climate Remains Strong for 2020 Hawaii Gas 52 Many Major Projects on Tap Across Oahu Aaron Kirk, Vice President, Marketing and Business American Institute of Architects Development Department of Planning And Permitting (DPP) 19 (AIA) Honolulu Chapter 37 Reduce Energy Costs with Hawaii Gas Kathy Sokugawa, Acting Director Purnima Mccutcheon, President Rail, Education and Housing Pace Construction in 2020 Environment, Housing Top AIA Honolulu’s Agenda Board of Water Supply (BWS) 20 Building Industry Association of Hawaii (BIA) 38 PUBLIC PROJECTS Ernest Y.W. Lau, Manager And Chief Engineer By Gladys Quinto Marrone, CEO State Agencies BWS Eyes Challenges of an Aging Infrastruture Affordable Housing, Code Reforms Among Key Department of Accounting & General Services 54 Issues for 2020 Department of Transportation 56 County of Hawaii 21 Department of Hawaiian Home Lands 63 Harry Kim, Mayor Cement And Concrete Products Hawaii Housing Finance Development Corp. 63 New Opportunities Ahead for Island of Hawaii Industry of Hawaii (CCPI) 40 Department of Education 64 Kirk Hashimoto, Executive Director Department of Water Supply 22 UH Office of Project Delivery 73 Concrete Industry Offers Sustainability in Building Keith Okamoto, Manager And Chief Engineer UHCC Facilities & Environmental Health Office 74 HDWS Launches $37M in CIP Projects Construction Industry of Maui (CIM) 42 UHWO Office of Planning, Facilities, CIP & Land 75 Joshua Berlien, Board Chair County of Kauai 23 City & County of Honolulu Maui Construction Requires a Streamlined Derek Kawakami, Mayor Department of Design & Construction 75 Permit Process New Opportunities Rise on Kauai Department of Environmental Services 77 General Contractors Association Department of Parks & Recreation 78 Department of Public Works 23 of Hawaii (GCA) 43 Board of Water Supply 79 Lyle Tabata, County Engineer Leslie Isemoto, President Valuation of Construction Permits on Kauai County of Hawaii Hawaii’s Builders Face Obstacles in 2020 Dipped in 2019 Department of Water Supply 79 Hawaii Island Contractors Association (HICA) 44 Department of Water 24 County of Kauai Eleot Kaipo, President Bryan Wienand, Manager And Chief Engineer Department of Public Works 80 It’s Time to Work Together to Sustain Industry Growth KDOW Readies to Reinforce Water System’s Department of Parks & Recreation 81 Capabilities Hawaii Lumber Products Association (HLPA) 44 Department of Water 82 John Heideman, President County of Maui 25 County of Maui Construction in Hawaii to Continue Trend of Modest Michael Victorino, Mayor Department of Public Works 82 Growth Maui Housing Crisis Fuels Need for Residential Department of Environmental Management 83 Construction Hawaii Steel Alliance (HSA) 45 Department of Water Supply 83 Alan Labbe, President Department of Planning 26 Federal Agencies – Statewide & Outer Pacific Shiny Construction Forecast for 2020 Michele McLean, AICP Director NAVFAC Pacific 84 Multiple Construction Projects in Maui’s Pipeline Pacific Resource Partnership (PRP) 46 U.S. Army Corps of Engineers 85 Michael Formby, Executive Director Optimism Prevails for Construction in 2020 4 CONSTRUCTION PREVIEW 2020
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STATE AGENCIES PHOTO COURTESY HAWAII DEPARTMENT OF TRANSPORTATION - HAWAII.GOV State Budgets $2.3B in CIP Spending By David Y. Ige, Governor State of Hawaii Government investment in high- 2019 was the third highest since 1995 for the biggest share of CIP spending in the quality infrastructure is essential to the the six-month period. FY2019 budget at $1.14 billion, or 49.5 economic vitality and quality of life for For fiscal year 2020, the state has percent. That was followed by spending our residents and visitors. This investment budgeted $2.3 billion for CIP spending. for higher and general education totaling also creates jobs and sustains our CIP spending not only provides needed $818.8 million, or 35.6 percent. construction industry. infrastructure for residents and visitors, Some of the large state government In fact, construction has been one of contracts awarded during the first three the steady contributors to job growth in Hawaii over the past few years. In the first Construction quarters of CY2019 include: • Hawai‘i State Hospital, $88.4 million half of 2019, the construction sector added has been one • Solomon Elementary School, 700 jobs for an increase of 2 percent over $77.3 million the same period the previous year. of the steady • East Kapolei Middle School, In addition, the state has improved its bond ratings to the highest level, allowing contributors to $59.8 million • University of Hawaii at Mānoa, the state to borrow at the lowest interest job growth in $54.7 million rates and therefore lowest cost to our • Campbell High School, $34 million residents. Investing in infrastructure when Hawaii over the • Honolulu Community College, interest rates are low is the best way to help accelerate and expand our economy. past few years. $31.3 million • Ewa Makai Middle School, While state spending on capital $23.7 million improvement program (CIP) projects it helps minimize the fluctuations in the • Kauai High School, $19.8 million eased slightly during the first half of economic cycle. During the previous • Honowai Elementary School, 2019 compared to the same period a economic expansion, capital spending $12.2 million year earlier, spending was still robust by averaged $776.2 million per year. During • Hawaii Public Housing Authority historical standards. the great recession and the slow expansion Punchbowl Homes, $11.3 million The $721 million spent from January that followed, CIP spending averaged The state intends to continue moving through June on public infrastructure $1.23 billion a year. In calendar year forward with a strong capital planning represented a 15.6 percent decrease 2018, state CIP spending accounted for and budgeting process that will assist us in from the same six months in 2018 when 17.3 percent of all construction spending making smart investments in infrastructure spending was at record levels. Despite across Hawaii. that will serve our future generations. the decrease, spending for the first half of Transportation projects accounted for 6 CONSTRUCTION PREVIEW 2020
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STATE AGENCIES More Additions and Alterations Projects Coming in 2020 By Eugene Tian, Economic Research Administrator, Research and Economic Analysis Division Department of Business, Economic Development & Tourism (DBEDT), State of Hawaii As expected, the construction in 2020 since government contracts are percent). In Maui County, the largest industry performed well during the usually large projects and take a few construction permit value category was first 10 months of 2019. Construction years to complete. In 2018, government residential construction at 49.8 percent payroll jobs grew by 2.5 percent during awarded $1.9 billion worth of contracts, during the first 10 months of 2019. this period, the highest job growth rate the highest level since 1990, and some Building permit data for Kauai among all the industries in the state. State of those projects will last until 2020 or County are available for residential total payroll job growth was 0.5 percent beyond. construction only and the value of during the first 10 months of 2019. As a permits decreased by 15.9 percent during measure of construction completed, the Oahu will be busiest county the first 10 months of 2019. contracting tax base increased 5.5 percent During the first 10 months of 2019, In all the counties except Kauai (Kauai during the first half of 2019. value of building permits on Oahu data available for residential construction As a leading indicator for the increased 4.7 percent. The increase on only at this time), value of building construction industry, the value of private Oahu was mainly due to the increase permits for additions and alterations building permits issued during the first 10 in value of permits for additions increased during the first 10 months of months of 2019 decreased by 1.7 percent and alterations at 18.2 percent while 2019, indicating that the activities in as compared with the same period a year residential and commercial permit values this category will be busier than the year ago. Value for commercial and industrial were decreased by 12.8 percent and 13.3 before. building permits decreased by 31.1 percent, respectively. On Oahu, the percent, and value of residential building permit value for additions and alterations Real estate market conditions permits decreased by 14.5 percent. accounted for 64 percent of the total Construction is largely related to the demand in the real estate sector. The good news is that the value of permits for Hawaii’s real estate market performance during the first 10 months of 2019 was additions and alterations increased by 20.9 mixed. Single family sales increased on Oahu (1.9 percent) and the Big Island percent during the first 10 months of 2019. (2.3 percent) but decreased in Maui (-2.1 percent) and Kauai (-3.7 percent) The good news is that the value of permit value. counties. Median sale prices for single permits for additions and alterations The value of building permits for family homes increased in Maui County increased by 20.9 percent during the Hawaii County decreased 1.5 percent. (5.7 percent) and Hawaii County (5.6 first 10 months of 2019. This indicates The decreased was caused by the decrease percent) but decreased in Honolulu that the construction activities in 2020 in residential construction permits at County (-0.6 percent), and Kauai County will be more focused on additions and 20.4 percent while values for commercial (-7.2 percent). alterations. The value of building permits and industrial permits and permits for Sales for condominium homes for additions and alterations accounted additions and alterations increased by 9 decreased in all the counties except for more than half of the total building percent and 38 percent, respectively. On Hawaii County; however, median sale permit value at 51.8 percent during the the Big Island, the value of residential prices for condo homes increased in all first 10 months of 2019. The additions construction was the largest category and the counties. and alterations projects include residential accounted for 49.5 percent of the total During the first three quarters of and commercial. For example, the permit value during the first 10 months 2019, homes purchased by local residents renovations of Ala Moana Shopping of 2019. increased by 5.9 percent, while homes Center and the International Market Total building permit value decreased purchased by mainlanders and foreigners Place were in the additions and alterations by 20.3 percent during the first 10 decreased by 5.5 percent and 41.8 category. months of 2019 in Maui County. percent, respectively. Overall, residential Although the government contracts Though the value for additions and home sales increased by 1.4 percent awarded decreased by 70.4 percent during alterations increased by 27.3 percent, during the first three quarters of 2019. the first nine months of 2019, it does it could not offset the decrease in value Residential home sales were flat in 2017 not necessarily mean that government of residential permits (-11 percent) and 2018 with an average annual sale of construction is going to be decreased and commercial and industrial (-56.6 20,442 units during the two years. 8 CONSTRUCTION PREVIEW 2020
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STATE AGENCIES DAGS Plans 80 Projects in 2020 By Curt Otaguro, State Comptroller Department of Accounting and General Services (DAGS), State of Hawaii For 2020, the Department of • Download and print copies of bid on important changes to laws, Accounting and General Services documents, plans and specifications; procedures, and bidding and contracting anticipates starting construction on 80 • Register to receive email requirements; and projects statewide with a total estimated notifications of addendums or bid • View photos and descriptions of construction value of $250 million to clarifications; recently completed projects. $340 million. This list could expand as • View names of plan holders for Bidders may also visit the DAGS funding becomes available for the capital DAGS bids; offices at 1151 Punchbowl St., Room improvement programs for DAGS and • View State Payments on 422, in Honolulu or our District other agencies who look to DAGS to Contractors, Bid Results, Construction Offices on the Neighbor Islands at 1680 implement their priorities. Contract Awards and Completed Haleukana St., Lihue, Kauai; 755 Mua All our current solicitations for Construction Projects; St., Kahului, Maui; and 75 Aupuni St., construction bids and proposals are • Qualify your design and planning Hilo, Hawaii, to pick up bid documents advertised on the State Procurement firm to plan and prepare bid documents on compact discs. Office website (hands.ehawaii.gov/hands/ for our projects; opportunities). Our bid documents are available on the DAGS web page at pwd. • Download forms, specifications masters, and DAGS General Conditions DAGS has refocused hawaii.gov. You will also find links to for Construction; its attention to other helpful information and be able to: • Read up-to-date information customer service and delivering a better experience through a stronger focus on culture and core values. Throughout the 2019 fiscal year, DAGS was actively leading several major projects for the state of Hawaii. One of the more prominent projects was the new Kona Judiciary Complex on the Island of Hawaii, which opened its doors in September 2019. Another is a new state- of-the-art Patient Facility for the Hawaii State Hospital in Kaneohe. This 144-bed secure forensic facility is utilizing the design-build method of project delivery with an expected completion date of January 2021. Planning for relocation of the Oahu Community Correctional Center (OCCC) continued during 2019 with acceptance of the final environmental impact statement, which identified the Animal Quarantine Station in Halawa as the preferred site. Furthermore, efforts 10 CONSTRUCTION PREVIEW 2020
to expand the community correctional during 2019 included entering into constrained ability to pursue new centers on Kauai and Maui advanced, as a unique opportunity to participate construction and facility improvement did those for the Women’s Community in a seawater-cooled air conditioning projects. Correctional Center on Oahu. alternative for up to eight state buildings These initiatives spanned the entire DAGS also continued its ongoing in the Capitol District area. This project delivery process from project inception efforts to maintain existing buildings is pending private company meeting its through final construction completion statewide, including the completion of financing and construction obligations. to help ensure that quality projects are health and safety improvements for Aloha DAGS also continued to support the delivered on time and within budget. Stadium. incorporation of Leadership in Energy Looking to the future, DAGS will Major new projects initiated during and Environmental Design (LEED) continue to explore ways to improve 2019 included a proposed new Hawaii building elements in new and renovated operations through the continuous State Veterans Home in Kapolei, Oahu, public facilities and buildings, when evaluation of our current processes which was expected to bid later in the feasible. and procedures. These performance- year. As part of DAGS’ commitment to improvement efforts are driven by our Planning for the New Aloha Stadium achieve optimal value for our clients goal of delivering the best support to Entertainment District achieved new and taxpayers, process improvement our clients so that they can achieve their milestones as DAGS and its team initiatives were incorporated into our missions to service Hawaii’s communities. progressed through site selection, overall project execution. Year-round DAGS has refocused its attention to publication of the EIS Preparation formal training was provided to keep customer service and delivering a better Notice, community and stakeholder our staff up to date in key areas such as experience through a stronger focus on outreach, master planning and related risk identification and management, and culture and core values. due diligence studies and analysis. This project and construction management. The construction industry is a key multi-year project will be delivered over Staff have also pursued a variety of participant in this process, and it remains multiple phases through a Public Private educational opportunities and research a DAGS priority to strengthen our Partnership initiative, which has received into Public Private Partnership types of effective working relationships with key considerable industry interest. innovative project deliveries, which can strategic construction- and development- DAGS’ energy-related endeavors be used to augment the state’s resource- related partners. CONSTRUCTION PREVIEW 2020 11
STATE AGENCIES KCT Phase 2 Among HDOT Projects in 2020 By Jade Butay, Director Department of Transportation (DOT), State of Hawaii At the Hawaii Department are estimated at $300 million. When photovoltaic panels on the roofs of the of Transportation (HDOT) we complete, the combined KCT phases Terminal 1 and 2 parking lots at HNL. are responsible for operating and will make transfer of cargo bound for the Our Highways Division is currently maintaining the state’s 11 commercial Neighbor Islands more efficient and will testing conversion of its fleet to electric service, four general aviation airports, 10 reduce truck trips on Nimitz Highway by vehicles through a service contract, and commercial harbors and approximately approximately 50,000 annually. put out a request for proposals for EVs 2,500 lane miles of highway and 741 Improving efficiencies on our systems and charging stations in November. We bridges. We are also responsible for is one of our big goals for 2020. This is are looking forward to continuing to planning improvements of these facilities reflected in our continuing energy savings champion sustainable transportation as resources allow. efforts within our Airports and Highways through initiatives like this and through To start off calendar year 2020, we Divisions. innovation in building materials. are anticipating advertisement of the The state’s busiest airport, the Daniel Kapalama Container Terminal (KCT) Phase 2, which will make improvements K. Inouye International Airport (HNL), recently received a Level 2 Airport Improving such as wharves, bulkheads and berths Carbon Accreditation in recognition of efficiencies on to complement the 84-acre cargo yard our achievements in carbon reduction. currently in construction in Phase 1. This reduction was achieved in part our systems is Construction costs for this project by the installation of more than 7,180 one of our big goals for 2020. We have added product specifications for carbon-injected concrete for flat work on our highways. The specifications were determined through testing that culminated in a demonstration pour for a section of an access road for the Kapolei Interchange Phase 2 project. The material performed well and saved 1,500 pounds of carbon dioxide from being released into the environment. The testing and development of the specifications for carbon-injected concrete would not have been possible without the cooperation and support of the Elemental Accelerator, CarbonCure, When your projects call for con- products, count on us. For new Island Ready-Mix and HC&D. crete admixtures, concrete color construction & restoration proj- For 2020 and beyond, HDOT will hardeners, liquid bonding adhe- ects, our large inventory and fifty continue to look toward innovative sives, water-proofing systems years of experience in this and sealants or fire / safety industry are ready to help. materials, designs and partnerships to maintain and improve Hawaii’s transportation systems. We look forward to more successful projects and BONDED MATERIALS COMPANY partnerships in 2020. Kailua Kona (808) 326-2477 / Honolulu (808) 832-1155 / www.BondedMaterials.net 12 CONSTRUCTION PREVIEW 2020
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STATE AGENCIES DHHL Continues Plans for Home Construction By William Aila Jr., Interim Director Department of Hawaiian Home Lands (DHHL) The Department of Hawaiian Home animals. Farm plans are not required, and repair. The department’s older homestead Lands’ ability to fulfill its mission the construction of a house and residence communities have reached an age and and invest in construction and capital on the lot is optional. Subsistence condition where major maintenance and improvement projects on Hawaiian home agricultural subdivisions are being repairs are becoming necessary. lands primarily depends on what the designed in Honomu on Hawaii Island On Molokai, the department is DHHL can afford. and Waimanalo on Oahu. responding to the critical need for For fiscal year 2020, the Hawaii State The newly approved Administrative maintenance and improvements to the Legislature allocated $26 million to Rules for multi-family housing expand Hoolehua Water System. This water DHHL for capital improvement projects, residential lease offerings to include system provides safe and clean drinking which will be used to directly support lot townhouses and apartments. They also water to homesteads located in the development programs and services for allow rental units, rent with option Hoolehua-Palaau and Kalamaula areas. beneficiaries statewide. to purchase and kupuna housing The improvements include replacing aging One of the largest residential projects programs on Hawaiian home lands. asbestos water piping, pressure relief valves, the department is actively working Future multi-family and rental projects gate valves, flow controls, well booster on is the Kauluokahai subdivision in include rent with option to purchase pumps and motors; installing fire hydrants Kapolei. Gentry Kapolei Development single-family houses in Villages of Lai in some areas; installing a photovoltaic LLC completed the construction of 100 Opua in Kealakehe on Hawaii Island; solar field to reduce DHHL’s electrical turnkey homes in the 160-lot subdivision. re-development of the former Stadium operating costs; and replacing over three miles of new roadway in order to gain The department continuously strives access to most of the water facilities in order to maintain the system, etc. to maintain as well as create new The design and construction cost is partnerships to meet the changing wants preliminarily estimated at $25 million, with construction slated to start in the first and needs of our beneficiaries. quarter of 2020 for Phase 1 and Phase 2, which is the bulk of the work. For Phase Some of the remaining 60 lots will be Bowl-O-Drome site at 820 Isenberg St. 3, the photovoltaic system estimated start offered to beneficiaries as self-help or in Honolulu; and Kauluokahai transit- time will be in the third quarter of 2020. owner-builder home construction, which oriented development in East Kapolei. Phase 4 involves the new maintenance is great news for smaller contractors DHHL is investing funding into the equipment for the DHHL Molokai base looking at securing new job opportunities planning, design and construction into its yard so that maintenance crews will be as we head into 2020. Additional turnkey West Maui properties in Honokowai and able to maintain the Hoolehua water homes are also in the works. Villages of Leialii. The Honokowai Water system after the improvements have been A second increment of 130 lots at System is currently under design and made. Work will also start in third quarter Kauluokahai is currently under design. An will provide potable water for affordable of 2020. All work is anticipated to be invitation for bids for the infrastructure housing in the Villages of Leialii area completed before August 2021. work is scheduled to be issued in early 2020, and in future Honokowai homesteads. Another water system in need of with construction to start by the summer. Invitation for bids are tentatively major improvements is the Anahola Recent changes to DHHL’s scheduled for early 2020. Farm Lots Water System on Kauai. These Administrative Rules will allow the In upcountry Maui, the department improvements have been separated into development of new types of products, plans to construct drainage improvements two phases with Request for Proposals including subsistence agricultural lots in the Keokea-Waiohuli area to mitigate slated for 2020. Phase 1 construction and multi-family residential units. The drainage flows affecting existing residential is set to begin in late 2020 and Phase 2 subsistence agricultural homestead lease and agricultural homesteads. Invitations construction is anticipated to start in 2021. is for smaller agricultural lots, not to for bids went out in late 2019. Phase 1 improvements include new exceed three acres. Although DHHL’s primary mission waterlines which replace outdated The Administrative Rules require since 1921 has been to develop homestead asbestos concrete pipes, mitigating high subsistence agricultural homestead lessees lots, with any type of development also and low pressures, improving fire flow, to cultivate their lots with plants and/or comes the responsibility of maintenance and and providing new water meters and 14 CONSTRUCTION PREVIEW 2020
STATE AGENCIES backflow preventers. Phase 2 will involve bid process late next year are road and the process of initializing, DHHL the demolition of a 500,000-gallon steel drainage improvements in Kula on Maui continuously strives to maintain, as tank, construction of a new concrete water and in the Honomu area of Hawaii Island. well as create, new partnerships to meet tank, construction of control building Over $3 million has already been allocated the changing wants and needs of our and equipment enhancements and to these projects, and DHHL is hopeful beneficiaries. What this translates into redundancy, site security improvements to get construction underway prior to the for the construction and trade industries and a Supervisory Control and Data start of 2020. is a broader range of job opportunities Acquisition System. While these are some of the larger from the largest construction firm to the Additional projects slated for the projects that the department is in smallest contractor. HHFDC Continues to Assist in Building Affordable Housing By Craig K. Hirai, Executive Director Hawaii Housing Finance and Development Corp. (HHFDC) The Hawaii Housing Finance and and working collaboratively with public under the Tax Reform Act of 1986. Development Corporation (HHFDC) and private sectors to seek long-term The state has a matching LIHTC was created in 2006 to focus on the sustainable solutions that will benefit program equal to 50 percent of the financing and development of workforce/ future generations in Hawaii. Federal LIHTC amount. Eligible affordable housing and is administratively taxpayers may claim LIHTC on their attached to the Department of Business, FINANCING TOOLS federal tax returns as a dollar-for-dollar Economic Development and Tourism. Rental Housing Revolving Fund offset on their tax liability for 10 years. The HHFDC offers a toolbox of (aka Rental Housing Trust Fund) Act 129, SLH 2016 shortened the State resources to facilitate the development The Rental Housing Revolving Fund LIHTC period from 10 years to five of affordable rental or for-sale housing (RHRF) provides equity gap low-interest years. including financing, expedited land use loans or grants to qualified owners Generally, affordable housing project approvals under Chapter 201H, Hawaii and developers for the development, owners that qualify for LIHTC find Revised Statutes, exemptions from pre-development, construction, investors for these tax credits through general excise taxes, and real property. acquisition or preservation of affordable Syndicators to generate project equity Since its inception, the HHFDC has rental housing. financing for their projects. assisted in the development of 10,140 Preference is given to projects that There are two types of LIHTC: workforce and affordable units statewide meet certain statutory criteria. Included • Volume Cap (or 9 percent) LIHTC: and has a production plan in place to add is a preference for projects that provide Tax credits that the IRS allows the state approximately 8,133 more units over the at least 5 percent of the total number to issue for affordable housing purposes next five years. of units for persons and families with based on an annual per capita factor and In the immediate future, the HHFDC incomes at or below 30 percent of the the state’s population. The annual per is concentrating on projects already in median family income. capita limit for 2019 is $2.75, translating the planning and production pipeline Another preference is projects that to $3,915,228 in LIHTC that the state to accelerate the delivery of homes that provide the maximum number of units can allocate. people can afford. At the same time, for persons or families with incomes at or • Non-Volume Cap (or 4 percent) we are working with other state and below 80 percent of the median family LIHTC: LIHTC exempt from the county agencies to identify lands for income. volume cap limitation. These credits development opportunities. must be accompanied by tax-exempt As we move forward, the HHFDC Low Income Housing Tax financing under the state’s bond volume remains focused on strengthening Credits (LIHTC) cap. The limit under the non-volume cap financing tools, streamlining procedures, The LIHTC program is a major LIHTC is based on the amount of State financing tool for non-profit and bond volume cap used for affordable for-profit developers to construct or multi-family housing. For more information, visit rehabilitate affordable rental housing. the HHFDC website at dbedt. Under the program, HHFDC is the Hula Mae Multi-Family hawaii.gov/hhfdc designated state housing credit agency Revenue Bond Program that may allocate LIHTC established The Hula Mae Multi-Family program CONSTRUCTION PREVIEW 2020 15
STATE AGENCIES provides low interest rate financing Development Program, including to the Counties of Hawaii, Kauai and through the issuance of tax-exempt administrative expenses. Maui. revenue bonds for the construction and/ or acquisition and rehabilitation of rental FEDERAL FUNDS DEVELOPMENT TOOLS housing projects. HOME Investment Partnerships Land Developers can secure 4 percent Program (HOME) A portfolio of real property acquired non-competitive low-income housing tax The HHFDC administers the federal by negotiation, exchange, or purchase, is credits in conjunction with the Hula Mae HOME program which is intended made available to developers through the multi-family financing. The HHFDC, to expand the supply of decent, safe, Request for Proposals (RFP) process. with the approval of the governor, is affordable and sanitary housing. HOME authorized to issue up to $1.5 billion in funds may be used for a variety of Chapter 201H Expedited revenue bonds. activities including tenant-based rental Processing assistance, down payment loans for Pursuant to Chapter 201H, Hawaii Dwelling Unit Revolving Fund first-time homebuyers, rehabilitation Revised Statutes, the HHFDC may (DURF) loans for existing homeowners, develop, on behalf of the state or with DURF was established pursuant to property acquisition, new construction, an eligible developer, or may assist under Act 105, SLH 1970, which authorized reconstruction, moderate or substantial a government assistance program in the issuance of $125 million of general rehabilitation, site improvements, the development of housing projects obligation bonds to carry out the demolition, relocation expenses, which are exempt from all statutes, purposes of the Housing Development loan guarantees and other reasonable ordinances, charter provisions and rules Program. Funds may be used for the and necessary expenses related to of any governmental agency relating acquisition of real property; development development of affordable housing. to planning, zoning, construction and construction of residential, The HHFDC receives approximately standards for subdivisions, development commercial and industrial properties; $3 million in HOME funds from the and improvement of land, and the interim and permanent loans to U.S. Department of Housing and Urban construction of units thereon. developers; and all things necessary to Development (HUD) each year. Funds These Chapter 201H exemptions carry out the purposes of the Housing are allocated on an annual rotating basis provide for greater flexibility in the design of housing projects. The appropriate county councils must approve, approve with modifications, or disapprove projects within 45 days. All 201H projects must comply with the County building permit process, HRS Chapter 104 (Wages and Hours of Employees on Public Works), and HRS Chapter 343 (Environmental Impact Statements). Developers are encouraged to begin the 201H process by first contacting the appropriate county. If the county government does not accept the developer’s 201H application, the HHFDC will consider the developer’s application. The HHFDC requires that the developer conduct at least one public meeting to solicit community input on the proposed project. Exemptions from General Excise Taxes The HHFDC may approve and certify for exemption from GET any qualified person or firm involved with a newly constructed or moderately or substantially rehabilitated project meeting specific income limit and eligibility criteria. 16 CONSTRUCTION PREVIEW 2020
If you have to choose... choose right. What do you get when you choose to hire an IBEW Local 1186 electrician? • unparalleled training in a five-year, 10,000 oJt hours, 900 classroom hours (over and beyond 240 hours required by the state) state and internationally- recognized apprenticeship program • continued education for members in safety, technology and skill upgrades ibew1186.org 808.847.5341 • obtaining and renewal of an electrical Journeyman (eJ) license is held to the highest standards of the law including, Lighting your but not limited to: strict license:unlicensed worker ratios (1:1) path to the future and visible license (must be on your person at all times)* • have peace of mind knowing that the most qualified, well-trained, and safety-focused electrician is working on your next residential, commercial, or industrial job by calling an IBeW Local 1186 contractor today *State fines of up to $500 for each violation. Act 28 (SLH 2010), Hawaii Revised Statutes §444-9.5. Work performed by an unlicensed worker may also be rejected by your homeowner’s insurance policy. Call our Compliance Department at 841-6169 for more information.
Many Major Projects on Tap Across Oahu By Kirk Caldwell, Mayor City and County of Honolulu COUNTY AGENCIES When my administration began in under the agreement with the EPA, and island residents by making our city more January 2013, the mandate to cabinet this includes upgrading the Honouliuli sustainable and resilient. These projects are members was to improve Oahu’s and Sand Island wastewater treatment just a portion of the city’s total CIP budget infrastructure, which unfortunately had plants to full secondary treatment. The of $1.16 billion for fiscal year 2020. been neglected for years. After all, every $267 million contract for Honouliuli was Elsewhere, the city continues to invest world-class city needs good infrastructure awarded in late 2018, and the contract in affordable housing and Housing First to operate efficiently and provide its for the initial phase of the Sand Island units through the Department of Land residents a good quality of life. With a upgrade is expected to be awarded soon. Management, resulting in expenditures year left in my second term, I’m happy to This will lead to more construction of $28.3 million in 2019, and additional report many of our projects and initiatives jobs in the coming years, which helps expenditures in 2020. Since 2017, when have been completed to the benefit of the sustain Oahu’s economy and keeps I announced the goal of creating at least Island’s nearly one million residents, but our unemployment rate among the 800 affordable housing units every year, many other projects remain on tap. lowest in the nation. In fact, the I’m happy to report that with help from the private sector, we’ve exceeded that goal Although Honolulu faces many with the creation 2,401 units across Oahu. Meanwhile, projects like the Punawai Rest challenges like any other large city, our Stop and the Punawai Clinic and Hale Punawai initiatives in Iwilei are providing construction industry remains vibrant hope to those who are homeless, while also and strong in the year ahead, and will helping to bolster construction. Of course, our city’s elevated rail line continue to play a critical role in the continues its march toward the critical strength of the local economy. city center, which we hope can be built in collaboration with a private entity through a P3 partnership. This future agreement capital improvement program (CIP) is expected to total approximately $1.5 Perhaps no infrastructure is more appropriation for the consent decree totals billion in construction costs and will critical to our residents than roads, and after an unprecedented effort, the city more than $136 million in the current go a long way in stabilizing our local has now repaved more than 2,000 lane fiscal year, and is being paid for by sewer economy and delivering this much-needed miles of the 3,517 lane miles under our fees, as opposed to the city’s general fund transportation infrastructure. jurisdiction. This represents nearly 60 Likewise, the Board of Water Supply The finish line for rail is now within percent of all city roads and approximately (BWS) is engaged in a comprehensive sight, and it’s up to HART and its board $674 million in contracts. In current fiscal program to improve our potable water of directors, in partnership with the year 2020, the Department of Design and infrastructure and is spending $166.3 administration and the City Council, Construction (DDC) is expected to issue million in the current fiscal year on CIP to ensure we deliver this project for the another $50 million in repaving contracts improvements, and a total of $2 billion benefit of Oahu’s residents. to improve our roads, especially those in during the 10-year life of the program. Although Honolulu faces many the urban core. These are Oahu’s most However, the city’s effort to improve challenges like any other large city, our heavily used roads, and improving their our Island’s infrastructure is multi- construction industry remains vibrant and condition will go a long way in changing faceted and a total of 40 projects being strong in the year ahead, and will continue the perception that Oahu’s roads are not spearheaded by the DDC in the current to play a critical role in the strength of on par with other cities. fiscal year exceed $5 million. These the local economy. I look forward to the Meanwhile, Honolulu continues to projects range from improvements to support of the BIA, GCA, ABC, NAWIC excel in meeting the mandates of the 2010 parks and erosion control to updating and other organizations as we modernize federal consent decree to improve sewer buildings and getting our award-winning and update our infrastructure to transform and storm water systems by completing bus system ready for electrification. Honolulu into a truly world-class city we 378 of 421 projects on budget. The city In short, these CIP projects will have can all be proud of. has until 2035 to fulfill its obligations a positive impact on the lives of our 18 CONSTRUCTION PREVIEW 2020
Rail, Education and Housing Pace Construction in 2020 By Kathy Sokugawa, Acting Director Department of Planning and Permitting (DPP) COUNTY AGENCIES With the number of building permits construction industry. construction will be allowed while issued and their valuation increasing in Bill 7 (Ordinance 19-8) created building permit applications are being fiscal year 2019, and many major projects a five-year program to accelerate the reviewed, under certain conditions. under way or ready to start, the outlook construction of affordable rental This was a common practice for years for the construction industry looks very apartments on small parcels (20,000 until a couple of years ago when we positive for the foreseeable future. square feet or less) by offering land determined there was no enabling In fiscal year 2019, the Department owners financial incentives to construct ordinance or specific requirements. of Planning and Permitting issued walk-up apartment projects in The construction industry asked that 15,127 building permits with a valuation certain zoning districts. This type of we reinstate the inspections because of of $3.49 billion. In fiscal year 2018, development is ideal for landowners the time and money they saved, and we the DPP issued 14,763 permits with a with smaller lots in the apartment, responded with the SAI bill, with the valuation of $2.45 billion, while 2017 apartment mixed-use, or business support of the City Council. records show 15,738 permits with an mixed-use zoning districts who were accepted value of $2.94 billion. limited in what they can build. Online Permitting, Mālama Mondays The DPP continues to encourage people The DPP continues to encourage to utilize our online permitting system to people to utilize our online permitting system to self-issue 19 types of building self-issue 19 types of building permits. permits. As stated above, we issue more than 15,000 permits annually and we estimate that about a third are done D.R. Horton’s Ho‘opili master- The incentives include: online. Our goal is to increase online planned community is in full swing and is • A waiver of certain plan review permits issued to at least 40 percent as one of many projects that should provide and building permit fees, as well as it saves the applicant and our staff more much-needed construction jobs for years wastewater facilities charges. time to review complex applications. to come. Other major projects that are • A 90-day processing for building A complete list of permit types that under construction or nearing building permit applications once it is accepted can be obtained online is available at permit issuance include the city’s rail by the DPP. our website at honoluludpp.org. project, Honolulu Community College’s • No requirements for off-street We’re also continuing our Mālama advanced technology training center, Lilia parking or elevators. Monday program, where we focus Waikiki, Castle & Cooke’s Koa Ridge and Also in 2019, Mayor Caldwell on closing out a backlog of building several interim planned development- signed Bill 24 (Ordinance 19-21), permits. We also take that time to train transit projects in the Ala Moana area. which will help expedite the new employees so we can better serve construction of certain buildings by the public. No appointments are taken Construction Incentives allowing special assignment inspections on Mondays, but people can come to In 2019, Mayor Kirk Caldwell (SAI), more commonly known as either of our permit centers at the Fasi signed into law two bills that are “courtesy inspections.” Municipal Building or Kapolei Hale to intended to boost the commercial Under Ordinance 19-21, pay for and pick up a permit. CONSTRUCTION PREVIEW 2020 19
BWS Eyes Challenges of an Aging Infrastruture By Ernest Y.W. Lau, Manager and Chief Engineer Board of Water Supply (BWS) COUNTY AGENCIES The City and County of Honolulu Board of Water Supply (BWS) is the state’s largest water utility, serving approximately 145 million gallons of water per day (mgd) of potable water, and approximately 10 mgd of non-potable and recycled water, to roughly one million customers on Oahu. One of our greatest challenges, one faced by utilities throughout the nation, is an aging infrastructure. Much of the work ahead involves replacing and maintaining key components of the water system that are critical to delivering water. These include 2,100 miles of pipe, 386 source and booster pumps, 212 water sources (wells, tunnels, and shafts), and 171 water storage reservoirs. Aging components of the water system are continually identified and Kahaluu, Kailua, Liliha, Makakilo, Waianae areas. replaced to improve system reliability and North Shore, Nuuanu, Pauoa, Waipio In fiscal year 2020, $20.5 million is ensure sufficient pressure during periods and Waikele areas. budgeted for mechanical and electrical of peak demand. Our facility renewal and replacement system renovations at various well sites The BWS’ capital improvement program addresses the appurtenant needs and key booster and pumping stations program budget includes nearly $38.7 of water system components to ensure throughout the Island. These projects are million for the replacement of more than efficient operation. Nearly $11.3 million set to take place in the Mililani, Waianae eight miles of water mains on Oahu. has been appropriated for improvements and Waipahu areas. These projects will take place in various at facilities throughout Oahu, including Approximately $27.3 million is locations around the Island, including projects at the BWS Beretania Complex, allocated for additional projects that major upgrades of water mains in the and in the Aina Haina, Kapolei and will improve system reliability across Oahu. These projects include $8 million to replace roughly 80,000 water meter transponder units, and $10.9 million to construct a 2 million-gallon reservoir and install a 24-inch main along Auwaiolimu Street and Pensacola Street to Kinau Street. More information about BWS programs and projects are available on our website, at boardofwatersupply.com. We are all owners and customers of the municipal water system and will face many challenges in the coming years. We must work together to optimize water system operations and infrastructure integrity to ensure water for life—safe, dependable and affordable water, now and into the future. 20 CONSTRUCTION PREVIEW 2020
New Opportunities Ahead for Island of Hawaii By Harry Kim, Mayor County of Hawaii COUNTY AGENCIES In 2020, Hawaii County will continue past to build a better future. responsibilities and needs to be replaced. to focus on making this Island a good CDBG-DR funds can be used to place for all. support disaster relief, long-term recovery, Housing We will invest in our communities to and restoration of infrastructure, housing Meanwhile, affordable housing increase resilience, particularly in the face and economic revitalization. An Action is a major initiative that the county of natural disasters, to increase public Plan will detail how the county will use is focusing on. Here are some of the safety and take care of our people, who the funds. projects that will either commence make Hawaii Island the most beautiful Under FEMA’s 428 program, funding construction or be complete in 2020: place on Earth. can be used to rebuild infrastructure • Mohouli Senior Housing III: 92 The coming year will present where it was or for other infrastructure affordable housing units for low-income challenges but also many opportunities. projects. As of October 2019, funding senior citizens. was still pending. • Ka Hui Na Koa O Kāwili Senior Eruption Recovery With funds from the Federal Project: Construction of 75 affordable We expect to begin implementing Highway Administration, the county units, with preference to veterans and Recovery Strategic Plan that focuses on commenced with building a temporary spouses. resilient recovery following the 2018 road over inundated portions of • Kaiaulu O Kapiolani: 64 multi- Kīlauea eruption. This is an opportunity Highway 132. The road was expected to family units will be built in Hilo in 2020. to make Puna stronger and learn from past open in November 2019. • Pāpaaloa Elderly Housing mistakes that increased risk to our residents. Road crews have worked hard to grade Renovation Project: The county has initiated plans to replace 10 aging units with 20 larger units. Affordable housing is a major initiative that • Lai Opua Village 9 Homeless and the county is focusing on. Affordable Housing Project: This project will service homeless populations with accommodations, wrap-around services Here’s a quick recap of the damage a path over about three miles of lava rock, and infrastructure improvements. Phase 2 caused by the eruption: In just a few including across the main lava channel. will develop affordable rental housing. months, 716 structures were destroyed, In some areas, rock temperatures • Kaloko Heights Affordable Housing about 13 miles of public roads were reached up to 800 degrees and resulted Project: 111 rental units will be built in covered with lava, water lines were in damage to some grading equipment, phase two, with Phase 1 construction of disrupted and a county park was wiped including breaking of bulldozer shanks. 81 units set to begin in 2020. out in lower Puna. The eruption altered The Hawaii County Department of • Villages of Lai Opua: Construction the landscape and forces us to think Water Supply lost about 14.5 miles of of 60 units of single-family rental differently about how we build in high- pipe as a result of the eruption. Because homes on DHHL property for Native hazard areas. of high ground temperatures, the Hawaiians in Kona. With that in mind, the county department has no plans as of fall 2019 • Kaiaulu O Waikoloa: 60 multi- continues to assess what should be to restore the infrastructure. family units in Waikoloa. restored and where. Recently, the county’s Department As part of the recovery planning Public Safety of Public Works renovated the former process, the county anticipates receiving I’m pleased to announce that contracts Memorial Hospital to provide a 50-bed about $60 million in Community will be put out to bid for two important homeless shelter serving single men, Development Block Grant – Disaster facilities: police/fire dispatch center and known as Kealahou, the Healing Place. Recovery (CDBG-DR) funds from the Civil Defense office. This will also serve as an assessment U.S. Department of Housing and Urban The new dispatch center will be built center, emergency center and provide Development, plus money from the near Mohouli senior housing and will supportive housing and support services. Federal Emergency Management Agency get our dispatchers out of the tsunami Combined, these projects will move to replace lost infrastructure. evacuation zone. the county forward and continue to make When it comes to spending these Additionally, the existing Civil it a good place to live and work. monies, we continue to learn from the Defense’s office is too small for its immense CONSTRUCTION PREVIEW 2020 21
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