Blood Bank Paying A High Price In Its Dispute With Honolulu Rail Officials
The nonprofit wants to abandon its headquarters long before trains start rumbling nearby. But the city is offering to buy only a strip of landscaping.
Rail construction hasn’t started yet along Dillingham Boulevard’s narrow corridor, and it won’t for a long time.
But looming plans for the large, elevated concrete pathway, which will usher steel-wheeled trains right outside headquarters, have already taken their toll on the state’s lone, fragile blood supply.
So far, the blood bank’s leaders say they’ve been fortunate. They’ve mostly weathered rail’s earlier adverse impacts, which left them critically short of local volunteer blood donors.
More uncertainties lie ahead.
A condemnation lawsuit brought by the city against the blood bank has yet to go to trial. And however that dispute ends, the nonprofit says it will need to raise money to move to a new headquarters if it’s to continue distributing life-saving red blood cells, plasma and platelets to 18 hospitals across the islands.
“We’ve gone through some real challenges to ensure that the public has enough blood,” Kim-Anh Nguyen, Blood Bank of Hawaii’s president and CEO, told Civil Beat. “This is a response to disaster, basically.”
The “disaster” that Nguyen describes began about four years ago with an ordinary, 10- to 12-foot-wide strip of grass and landscaping outside the blood bank’s Dillingham headquarters.
The city needs that strip so it can widen the street for the rail guideway. In years past, the  offered to pay about for the strip, totaling 2,861 square feet, plus a temporary construction easement.
But blood bank officials say their operation simply won’t work — and likely would lose its federal accreditation — if the driverless train cars run so close to their building.
Sensitive machinery that tests platelet samples for bacteria rests on shelves on the Dillingham building’s second floor, just inside from where the trains will eventually run. Any vibrations or dust could render false positives, Nguyen said. Rearranging the building’s equipment to adjust for rail would be more expensive than moving, she added.
And the rail guideway will eliminate the left turn that delivery vehicles and bloodmobiles need to park properly in the blood bank’s small parking lot, officials say.
Further, erasing the strip of land just outside the headquarters will hinder visibility for delivery drivers as they leave with emergency blood shipments, according to Maura Dolormente, the blood bank’s public relations director.
As they see it, they have no choice but to ditch the building entirely. In 2016, they  from the city to take the entire building and cover “severance damages.”
A Small Strip With Big Consequences
HART — and the city’s elected leaders — see things differently.
The rail agency has argued that acquiring the land outside the building will have “absolutely no effect” on Blood Bank of Hawaii’s facility or its operations. It’s offered to provide dust screening for the doors and windows. It contends that the blood bank’s delivery vehicles will still have the access they need to get on site without the left turn.
Furthermore, even if the city wanted to take extra steps to protect a vital community service, it can’t give the blood bank special treatment under federal property-acquisition laws, HART leaders have argued publicly.
“I’m going to be honest. We’ve been on our own so far. There was damage to our operation.” — Kim-Anh Nguyen, Blood Bank of Hawaii president and CEO
The rail agency, already plagued by several years of budget woes, faces tremendous public pressure to keep costs in check. It’s remained firm that it won’t pay for the whole building.
Honolulu City Council members initially balked at targeting the nonprofit with the same condemnation actions they’ve launched against dozens of other property owners.
But in 2016, the council quietly reversed course and approved a to take action. The following year, the city formally filed suit against Hawaii’s lone blood supplier, looking to purchase its exterior landscaping but nothing more.
Ernie Martin, the council’s chairman, said the city has some $55 million in its capital improvement budget that could be tapped to purchase the blood bank’s Dillingham property — if Honolulu Mayor Kirk Caldwell’s office opts to do so.
Those funds don’t lapse until June 2019, Martin said.
“I’m going to be honest. We’ve been on our own so far,” Nguyen said last week of her organization’s struggles with rail. “There was damage to our operation. We actually had to bear quite a heavy cost to mitigate that damage, and we’re still climbing out of that.”
‘Critically’ Short Of Blood Donors
To date, HART and the city have filed condemnation suits against eight property owners along the rail route, including the Blood Bank of Hawaii.
Only one of those cases has , against the former Honolulu Hardwoods property in Kakaako. That trial ended in a settlement. Nonetheless, Honolulu Hardwoods is technically considered the only property taken so far via eminent domain for rail.
Overall, the city requires some 122 full or partial properties along the rail project’s final four miles into town, including the Dillingham corridor, according to HART. It has so far acquired 49 of those properties.
A HART spokesman said Tuesday that the agency has nothing substantive to report on the blood bank situation.
Back in 2015, the transit project was already over-budget but its construction still appeared to be on schedule. To avoid those impacts, the blood bank says it spent $1.5 million in reserve funds to move its blood donation center to Young Street in early 2016. (Soon afterward, rail construction started to slip years behind schedule.)
The blood bank’s sensitive laboratory, testing and storage operation remain at Dillingham. Now it’s spending an additional $500,000 to move its emergency blood depot to Young Street as well.
Once the donation center moved, the blood bank lost about a third of its donations, according to Nguyen. Many donors who used to visit the Dillingham location simply didn’t follow it to Young Street.
“We were critically short,” she said. The nonprofit took the unusual step of reaching out through the to try and rebuild its donor base.
Even if the city wanted to take extra steps to protect a vital community service, it can’t give the blood bank special treatment under federal property-acquisition laws, HART leaders have argued publicly.
Meanwhile, Nguyen said, the blood bank spent an additional $1 million to import blood from the mainland to help make up the shortfall.
But that strategy proved tricky. Boxes of blood destined for Honolulu often rested outside on airport tarmacs, risking damage and delay. Fragile plasma shipments are kept frozen with dry ice, but some didn’t survive the long flights across the ocean, Nguyen said.
Hawaii also had to compete with blood shortages elsewhere. As the blood bank saw its own donor base shrink, Puerto Rico was coping with the Zika virus. Mainland blood banks to that Caribbean island as it shut down its own collections amid the epidemic.
That drove up the costs for the Blood Bank of Hawaii to import. “It was way more expensive,” Nguyen said.
Despite those challenges, no Hawaii hospital ever lacked the blood it needed, Nguyen said. But the lesson was clear: “It’s too much of a risk to not have a local supply.”
Costly Push To Rebuild
To rebuild its donor base, blood bank officials said they boosted their mobile blood drives. The events used to bring in half of all blood donations, but now they comprise about 70 percent, Nguyen said.
The drives often involve interisland flights and hotel stays, and they’re a much costlier way to collect donations, she said.
The blood bank didn’t provide dollar amounts for how much its total costs have climbed, but Nguyen did say her organization originally anticipated spending an extra $1 million to $1.5 million annually to operate with the added blood drives and to seek out more donors.
“It’s adding up,” Nguyen said.
The blood bank also bought two more bloodmobiles for Oahu, costing about $300,000 each, according to Dolormente.
Now the nonprofit group says it’s preparing for a third and most costly phase of its move: to relocate out of its Dillingham headquarters altogether and find a new building.
To do this, the nonprofit group says it will mount a capital campaign — drawing on funding from state, county and private sources.
Selling the Dillingham building will help but won’t cover all of the costs, Nguyen said.
“You can imagine the distraction,” Nguyen said. “We’re a small organization.”
The blood bank has considered about 30 sites in the last three years and is close to identifying a new headquarters location, Nguyen said. Once that happens, it will take about three years of design work, permitting and construction to make the move, she said.
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