Airport Hotel Bonds Bill Still Alive: Bill Would Provide Up To $ 50 Million In Tax Bonds

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A bill to issue up to $ 50 million in tax bonds for a planned hotel at Ellison Onizuka Kona International Airport in Keahole continues to pass through the Legislature for a final hearing.

On March 24, the State Senate Transportation Committee passed Senate Bill 256 with amendments to help Keahole Hotel & Suites LLC plan, design, build and outfit hotel facilities in the airport.

Lawmakers have found that issuing special purpose tax bonds is in the public interest and for public health, safety and general welfare.

The Leeward Planning Commission adopted the land use designation last August, paving the way for construction of the hotel.

The county-level commission gave its approval after hearing from state airport staff, witnesses opposed to the plan, and developer Melvin Mason, who is listed as an agent for Keahole Hotel and Suites, who already owns a 35 year lease at the airport and wants to build the hotel.

The measure created the primary airport category that will apply to Kona and Hilo International Airport. It is defined as a public airport that has more than 10,000 passengers on board each calendar year, as defined by the Federal Aviation Administration.

Standard ancillary uses for major airports include, but are not limited to, retail establishments including duty free shops, food establishments that can be grouped into food courts, car rentals, businesses services, offices, conference centers and hotels. Incidental uses must be located on public land and support airport operations, according to the resolution.

If passed by the Legislature, approval of the bond would be the first step in a long hotel construction process.

Senator Lorraine Inouye (D-North Hawaii) introduced the bill along with two other senators.

“Anyone can apply for a general low-interest income requirement,” Inouye said, adding that once the bill is sent to the finance committee, a verification process will be carried out.

Construction of the hotel would require at least a special management area permit and an environmental assessment.

The hotel would be used to accommodate flight crews needing sleep between flights, flight cancellations, meeting spaces for day trips, travelers with very early flights and emergency passengers and blocked.

Keahole Enterprises has won a 35-year lease for 239,456 square feet of land at the southeast end of the airport, the tentatively planned location for Keahole Hotel & Suites. Keahole Enterprises pays $ 126,912 per year for the lease that Mason won after approval in late 2016 by the Board of Land and Natural Resources.

At the August Leeward Planning Commission meeting, Chauncey Wong Yuen, Hawaii District Manager for the State Department of Transportation’s Airports Division, said he and Mason have been friends for a long time. date, but that the hotel project will be a competitive project, with the state issuing a request for proposals and evaluating the responses.

“He will be there for all entities to bid on,” said Wong Yuen. “Anyone would be able to do that. It is not limited to him.

However, SB 256 specifically states “for the purpose of assisting Keahole Hotel & Suites LLC, a Hawaiian company, in the planning, design, construction and equipping of hotel facilities at Ellison Onizuka Kona International Airport. by Keahole. The legislator hereby finds and determines that the planning, design, construction and equipment of the facilities of a hotel at Ellison Onizuka Kona International Airport in Keahole constitute a project as defined in Part V, Chapter 39A , Revised Statutes of Hawaii, and its funding is assistance to an industrial enterprise.

“I’m the guy who created the project,” Mason said. “When I proposed this project, there was no other hotel, no other business or no other person pursuing this. They don’t want to deal with the bureaucracy because it hasn’t even been properly zoned.

“The state’s airports will be putting out a tender,” Inouye said. “They will be like any other developer.”

Mason is listed as an agent or member of six LLCs in Hawaii, including House of Aloha Enterprises LLC, which is the subject of a special purpose tax liability proposal in the Senate.

If passed, Senate Bill 579 “would issue special purpose tax bonds in an aggregate amount not to exceed $ 100,000,000, in one or more rounds, for the purpose of assisting House of Aloha Enterprises. LLC, a Hawaii limited liability company, in planning, designing, constructing and equipping facilities for the purpose of establishing businesses in Hawaii for the manufacture, processing and distribution of products such as, but not limited to to limit, the production of value-added agricultural products, advanced, sustainable materials and fine arts. The Legislature hereby finds and determines that the planning, design, construction and equipping of facilities in Hawaii for the manufacture and processing of products such as the production of value-added agricultural products.

The two bills are awaiting a hearing date in the House finance committee.

“The hotel is necessary. I have worked diligently. What I create is to help the greater good, ”said Mason. “It’s David versus Goliath.”


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