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The public-private partnership methodology is being used to develop the new Aloha Stadium and the adjacent mixed-use area, both of which comprise the Aloha Stadium district.

That is worrisome by the United Nations Department of Economic and Social Affairs states: “PPPs have often tended to be more expensive than the alternative of public procurement while in a number of instances they have failed to deliver the envisaged gains in quality of service provision.”

In fact, PPPs are failing around the world. A report titled consolidates studies of 10 PPP projects in different countries and concludes that “all 10 projects came with a high cost for the public purse, an excessive level of risk for the public sector and, therefore, a heavy burden for citizens.”

PPP has even failed in Hawaii. The PPP methodology was employed to build the final segment of the rail project from Middle Street to Ala Moana Center.

But things didn’t turn out the way they were supposed to, and PPP was abandoned. The rail project has subsequently been reduced in size because of insufficient funds.

Also troubling is that the state has no clear vision for the Aloha Stadium district.

In “Stadium Development District – 2021 Annual Report,” the most definitive statement describing the project is that “The Real Estate Project is expected to include retail, residential, commercial, hotels, hospitality, cultural and community facilities. The project also will include horizontal infrastructure, such as roads, parking, public spaces, and various amenities.”

The project is fraught with ambiguity.

Complex Issues

One might think that the state would at least have a good idea about the capacity of the new stadium. However, the report says, “How many seats will be included in the new multi-use stadium? The state is working through the minimum required capacity with stakeholders prior to release of the RFP (request for proposal). Further details will be provided at a later date.”

The PPP process involves two steps. In the first step, which is in progress, a developer is selected. Two developers are in contention, and each is a consortium of local and national firms with a wealth of experience and knowledge in the intricacies of land development.

In the second step, the state negotiates a contract with the selected developer. As proposed, it will be a closed negotiation, and the contract will not be made public until after it is signed. The lack of transparency is disturbing.

The negotiations will involve a multitude of complex issues. Negotiations typically extend for days, and the final contract will likely run into the hundreds of pages.

The contract is binding on both parties. Each party is going to try to get the best deal for themselves, which is often at the expense of the other party.

The state has no clear vision for the Aloha Stadium district.

The state will be at a distinct disadvantage because no state agency has experience in negotiating a project of this magnitude. However, both developers that are being considered have extensive knowledge and experience.

That’s the business they are in.

During the negotiations it is possible that the state commits to a future it doesn’t foresee that would require the expenditure of hundreds of millions of state dollars that have not yet been appropriated.

Is PPP the right method for developing the Aloha Stadium district? It’s your money, after all. You decide.