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Friday, August 29, 2014
RAILROADED: Rail construction Could put Small businesses out of business
By Malia Zimmerman @ 5:51 AM :: 5228 Views :: Rail

Photo by HART[1]

RAILROADED: Small businesses along the planned Honolulu rail route are concerned the rail construction will put them out of business.

by Malia Zimmerman,, August 29, 2014

HONOLULU — Cliff Garcia operates Tropical Lamps & Shades on land his family has owned in the Kakaako district near downtown Honolulu for the past 70 years.

The city planned to route a controversial $5.2 billion rail project several yards behind Garcia’s store, but Garcia learned the city changed the route.

The elevated steel rail will now hover just 20 feet above Garcia’s store. Even worse, current plans show workers will install a rail support pillar in his building.

These pillars are about the height of a city bus and half the width, Cliff Slater of [2] explained.

Transportation expert Panos Prevedouros [3] said many small businesses along the planned rail route in Honolulu will lose several feet of their property to the rail project, but the city has no plans to buy the entire property and relocate the business.

Businesses along the rail line will have to suffer through two to three years of construction, blocked store fronts, loss of parking spaces and noise, as well as construction obstacles for their customers and deliveries. Keeping a business open in an active construction zone will be a challenge, Prevedouros said. He fears some owners could go out of business in as little two or three months.

“This is an unbelievable nightmare,” Prevedouros said.

Photo by HART[4]

PUSHING AHEAD: Construction on Oahu’s 20 mile rail route started in the vacant fields in West Oahu but will cross into Oahu’s most populated areas in Honolulu

Honolulu Council Member Ann Kobayashi said she has heard complaints from several business owners with properties along the planned rail route, each with stories similar to Garcia’s. She plans to hold a hearing on the issue.

Honolulu is trying to do what no city has tried since the 1970s — to build an elevated steel rail line through the middle of an existing city. This hasn’t been done since Miami build a rail line between 1973 and 1978, Prevedouros said.

Construction on the 20-mile rail system began in vacant agricultural fields in West Oahu, but the rail will eventually travel from those fields through historic districts in Chinatown and downtown Honolulu, on prime real estate along the waterfront downtown and to the state’s largest shopping center just yards before the entrance to Waikiki.

Dan Grabauskas, head of the city’s rail agency, the Honolulu Authority for Rapid Transportation, told Honolulu City Council members Wednesday the project will be completed within its $5 billion budget and an on time by 2019.

Council members asked Grabauskas about the rail project after he told members of his rail board bids for the first nine stations were $100 million over what the city expected.

Grabauskas said his agency issued a request for new bids to reduce risk and costs.

The rail agency also has a $563.7 million contingency fund that can be used to cover cost overruns, Grabauskas said.

While construction is in its early phases and just some of the rail’s foundation has been laid many miles from Honolulu, some two-thirds of the rail contracts have been signed, and another 35 percent will be signed by the end of the year, Grabauskas said. The last of the contracts, the bid to build the final eight rail stations for the in-town portion of the rail, won’t be released until 2015.

Photo by HART[5]

Honolulu Authority for Rapid Transportation CEO Dan Grabauskas

The rail is funded through a surcharge on Oahu’s general excise tax. Divided by Oahu’s population of 953,207, the rail will cost every resident about $5,450 if it stays within budget. Collections have been down, with the exception of last year, leaving the rail project about $34 million short.

Grabauskas, the city’s highest paid employee with a compensation and bonus package that could reach as high as $988,000 per year, is up for re-appointment for a second three-year contract. He told council members the tax collections continue to fluctuate, and the city can probably make up the difference as it collects the surcharge from all Oahu residents and visitors over the next decade.

But Prevedouros warns the city is approaching the most challenging portion of the project, and it could become much more costly in town as the city must negotiate intersections, infrastructure, utilities, traffic and private property.


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