HOUSE OF REPRESENTATIVES
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The State has a unique opportunity to address economic diversification and affordable housing shortages through transit-oriented development. However, despite being one of the largest landowners alongside the rail transit stations, the State has yet to formulate a master plan to develop these parcels so they are transit-ready.
Prior to any redevelopment effort, there is a need to increase all infrastructure capacity along the transit corridor, especially around each of the twenty transit stations. In preparation for the completion of the Honolulu rail transit project, the State must maximize the opportunities for development of land around rail stations, thereby supporting the local economy, improving access to transportation, and increasing rail ridership.
Recognizing the need for a focused effort on infrastructure capacity building to support redevelopment efforts at each of the transit stations, and avoiding the need to create another government entity, the purpose of this Act is to have the Hawaii community development authority use its development authority to designate transit-oriented development community districts, to support planned growth and density, pursuant to section 206E-6, Hawaii Revised Statutes, at four of the transit stations.
This Act will enable the Hawaii community development authority to:
(1) Plan and develop infrastructure to service lands within a one-half mile radius from certain proposed transit stations; and
(2) Enter into public-private partnerships and to establish a "lease back" arrangement.
SECTION 2. Chapter 206E, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . Transit-oriented development community districts
§206E-A Definitions. As used in this part:
"District" means a transit-oriented development community district.
§206E-B Transit-oriented development community district; purpose. The legislature finds that:
(1) Among the twenty rail stations proposed along the Honolulu rail transit project corridor, the State has significant interests in four of the transit station locations. The planned transit station development will increase density within the urban core and the State should take appropriate steps to ensure that the land along the transit corridor can be used efficiently and economically to support the best interests of the State;
(2) Certain districts are relatively underdeveloped and underutilized due to their low density function, especially in view of their proximity to the proposed rail transit system. The urban core is expected to receive pressure from multiple sources and development can alleviate community needs such as workforce and affordable housing, parks and open space, public facilities, and commercial and industrial facilities;
(3) If not redeveloped or renewed, these districts have the potential to become a blighted and deteriorated area. Due to their present economic importance to the State there is a need to preserve and enhance their value and potential; and
(4) The transit-oriented development districts have the potential, if properly developed and improved, to become planned new communities in consonance with surrounding urban areas.
In coordinating community development in each of the transit-oriented development districts, the authority shall plan a mixed-use district whereby industrial, commercial, residential, and public uses may coexist compatibly within the same area.
The authority shall plan for the above uses, but shall also respect and support the present function of each of the transit stations as major economic centers, providing significant employment in such areas as light industrial, wholesaling, service, and commercial activity.
§206E-C Prohibitions. Notwithstanding any law to the contrary, the authority is prohibited from selling or otherwise assigning the fee simple interest in any lands in the transit-oriented development community districts to which the authority in its corporate capacity holds title, except with respect to:
(1) Utility easements;
(2) Remnants as defined in section 171-52;
(3) Grants to any state or county department or agency;
(4) Private entities for purposes of any easement, roadway, or infrastructure improvements; or
(5) Reserved housing as defined in section 206E-101.
§206E-D Lease of projects. (a) Notwithstanding any law to the contrary, including section 206E-14, except as prohibited by section 206E-C, the authority may, without recourse to public auction or public notice for sealed bids, lease for a term not exceeding ninety-nine years, all or any portion of the real or personal property constituting a project to any person, upon terms and conditions as may be approved by the authority, if the authority finds that the lease is in conformity with the community development plan.
(b) In the case of any sale of the leasehold interest in the project, the terms of the sale shall provide for the repurchase of the leasehold property by the authority at its option, in the event that the purchaser, if other than a state agency, desires to sell the property within ten years; provided that this requirement may be waived by the authority if the authority determines that a waiver will not be contrary to the community development plan. The authority shall establish at the time of original sale a formula setting forth a basis for a repurchase price based on market considerations including but not limited to interest rates, land values, construction costs, and federal tax laws.
If the purchaser in a residential project is a state agency, the authority may include as a term of the sale a provision for the repurchase of the property in conformance with this section.
§206E-E Transit-oriented development community districts established; boundaries. (a) The transit-oriented development community districts are established. Each district shall include the area that is within a one-half mile radius of each of the following boundaries of transit stations where there are significant state-owned land interests:
(1) Iwilei transit station;
(2) Kapalama transit station;
(3) Aloha Stadium transit station; and
(4) Leeward Community College transit station.
§206E-F Transit-oriented development community district; development guidance policies. The following shall be the development guidance policies generally governing the authority's action in the transit-oriented development community districts:
(1) Development shall result in a community which permits an appropriate land mixture of residential, commercial, industrial, and other uses. In view of the innovative nature of the mixed use approach, urban design policies should be established to provide guidelines for the public and private sectors in the proper development of the district. While the authority's development responsibilities apply only to the area within the district, the authority may engage in any studies or coordinative activities permitted in this chapter which affect areas lying outside the district, where the authority in its discretion decides that those activities are necessary to implement the intent of this chapter; provided that the studies or coordinative activities shall be limited to facility systems, resident and industrial relocation, and other activities with the counties and appropriate state agencies. The authority may engage in construction activities outside of the district; provided that such construction relates to infrastructure development or residential or business relocation activities; provided further, notwithstanding section 206E-7, that such construction shall comply with the general plan, development plan, ordinances, and rules of the county in which the district is located;
(2) Existing and future industrial uses shall be permitted and encouraged in appropriate locations within the district. No plan or implementation strategy shall prevent continued activity or redevelopment of industrial and commercial uses that meet reasonable performance standards;
(3) Activities shall be located so as to provide primary reliance on public transportation and pedestrian facilities for internal circulation within the district or designated subareas;
(4) Major view planes, view corridors, and other environmental elements such as natural light and prevailing winds, shall be preserved through necessary regulation and design review;
(5) Redevelopment of the district shall be compatible with plans and special districts established for the Hawaii Capital District;
(6) Historic sites and culturally significant facilities, settings, or locations shall be preserved;
(7) Land use activities within the district, where compatible, shall to the greatest possible extent be mixed horizontally, that is, within blocks or other land areas, and vertically, as integral units of multi-purpose structures;
(8) Residential development may require a mixture of densities, building types, and configurations in accordance with appropriate urban design guidelines; integration both vertically and horizontally of residents of varying incomes, ages, and family groups; and an increased supply of housing for residents of low- or moderate-income may be required as a condition of redevelopment in residential use. Residential development shall provide necessary community facilities, such as open space, parks, community meeting places, child care centers, and other services, within and adjacent to residential development; and
(9) Public facilities within the district shall be planned, located, and developed so as to support the redevelopment policies for the district established by this chapter and plans and rules adopted pursuant to it.
§206E-G Rules; adoption. The authority shall adopt rules in accordance with chapter 91 to carry out the purposes of this part."
SECTION 3. Section 206E-6, Hawaii Revised Statutes, is amended to read as follows:
"§206E-6 District-wide improvement program. (a) The authority shall develop a district-wide improvement program to identify necessary district-wide public facilities within a community development district.
(b) Whenever the authority shall determine to undertake, or cause to be undertaken, any public facility as part of the district-wide improvement program, the cost of providing the public facilities shall be assessed against the real property in the community development district specially benefiting from such public facilities. The authority shall determine the areas of the community development district which will benefit from the public facilities to be undertaken and, if less than the entire community development district benefits, the authority may establish assessment areas within the community development district. The authority may issue and sell bonds in such amounts as may be authorized by the legislature to provide funds to finance such public facilities. The authority shall fix the assessments against real property specially benefited. All assessments made pursuant to this section shall be a statutory lien against each lot or parcel of land assessed from the date of the notice declaring the assessment until paid and such lien shall have priority over all other liens except the lien of property taxes. As between liens of assessments, the earlier lien shall be superior to the later lien.
(c) Bonds issued to provide funds to finance public facilities shall be secured solely by the real properties benefited or improved, the assessments thereon, or by the revenues derived from the program for which the bonds are issued, including reserve accounts and earnings thereon, insurance proceeds, and other revenues, or any combination thereof. The bonds may be additionally secured by the pledge or assignment of loans and other agreements or any note or other undertaking, obligation, or property held by the authority. Bonds issued pursuant to this section and the income therefrom shall be exempt from all state and county taxation, except transfer and estate taxes. The bonds shall be issued according and subject to the provisions of the rules adopted pursuant to this section.
(d) Any other law to the contrary notwithstanding, in assessing real property for public facilities, the authority shall assess the real property within an assessment area according to the special benefits conferred upon the real property by the public facilities. These methods may include assessment on a frontage basis or according to the area of real property within an assessment area or any other assessment method which assesses the real property according to the special benefit conferred, or any combination thereof. No such assessment levied against real property specially benefited as provided by this chapter shall constitute a tax on real property within the meanings of any constitutional or statutory provisions.
(e) The authority shall adopt rules pursuant to chapter 91, and may amend the rules from time to time, providing for the method of undertaking and financing public facilities in an assessment area or an entire community development district. The rules adopted pursuant to this section shall include, but are not limited to, the following: methods by which the authority shall establish assessment areas; the method of assessment of real properties specially benefited; the costs to be borne by the authority, the county in which the public facilities are situated, and the property owners; the procedures before the authority relating to the creation of the assessment areas by the owners of real property therein, including provisions for petitions, bids, contracts, bonds, and notices; provisions relating to assessments; provisions relating to financing, such as bonds, revolving funds, advances from available funds, special funds for payment of bonds, payment of principal and interest, and sale and use of bonds; provisions relating to funds and refunding of outstanding debts; and provisions relating to limitations on time to sue, and other related provisions.
(f) Any provisions to the contrary notwithstanding, the authority may, in its discretion, enter into any agreement with the county in which the public facilities are located, to implement all or part of the purposes of this section.
(g) All sums collected under this section shall be deposited in the Hawaii community development revolving fund established by section 206E-16; except that notwithstanding section 206E-16, all moneys collected on account of assessments and interest thereon for any specific public facilities financed by the issuance of bonds shall be set apart in a separate special fund and applied solely to the payment of the principal and interest on these bonds, the cost of administering, operating, and maintaining the program, the establishment of reserves, and other purposes as may be authorized in the proceedings providing for the issuance of the bonds. If any surplus remains in any special fund after the payment of the bonds chargeable against such fund, it shall be credited to and become a part of the Hawaii community development revolving fund. Moneys in the Hawaii community development revolving fund may be used to make up any deficiencies in the special fund.
(h) If the public facilities to be financed through bonds issued by the authority may be dedicated to the county in which the public facilities are to be located, the authority shall ensure that the public facilities are designed and constructed to meet county requirements.
(i) Notwithstanding any law to the contrary, whenever as part of a district-wide improvement program it becomes necessary to remove, relocate, replace, or reconstruct public utility facilities, the authority shall establish by rule the allocation of cost between the authority, the affected public utilities, and properties that may specially benefit from such improvement, if any. In determining the allocation of cost, the authority shall consider the cost allocation policies for improvement districts established by the county in which the removal, relocation, replacement, or reconstruction is to take place.
(j) Notwithstanding any law to the contrary, the authority may enter into a partnership agreement with any private investor for the leasing of public infrastructure to the private investor; provided that the partnership agreement contains the following requirements:
(1) The authority shall lease the infrastructure facility to the private investor, who shall:
(A) Renovate, improve, or construct for the authority public infrastructure, pursuant to a ground lease or easement, and may maintain the facility; and
(B) Lease back the public infrastructure to the authority, pursuant to a lease or easement;
(2) The land upon which the public infrastructure rests shall not be sold to the private investor; provided that the land may be leased at a nominal rate to the private investor for a term that would, at a minimum, allow the private investor to recover the capital investment that has been made to the public infrastructure, including depreciation; and
(3) The authority shall have the option of purchasing the public infrastructure from the private investor for the remaining balance of the debt service costs incurred by the private investor at any time; provided that the lease shall terminate concurrently."
SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval.
Transit-Oriented Development Community Districts
Establishes Transit-Oriented Development Community Districts within the Hawaii Community Development Authority (HCDA) to develop districts along certain rail stations in the Honolulu rail station transit corridor. Allows the HCDA to enter into public-private partnerships for a lease-back arrangement of lands.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.