HOUSE OF REPRESENTATIVES	H.C.R. NO.	245
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII		S.D. 1

HOUSE CONCURRENT

RESOLUTION

REQUESTING THE AUDITOR TO CONDUCT AN AUDIT OF THE ALOHA TOWER DEVELOPMENT CORPORATION, particularly with regard to ITS LAWSUITS RELATING TO ITS DEVELOPMENT CONTRACTS, PROJECTS, AND PROCUREMENT PRACTICES, AND THE JUSTIFICATION FOR ITS EXISTENCE.

     WHEREAS, the Aloha Tower Development Corporation was created pursuant to Act 236, Session Laws of Hawaii 1981, codified as chapter 206J, Hawaii Revised Statutes; and

     WHEREAS, section 206J-1, Hawaii Revised Statutes, states the legislative findings and purpose in creating the Aloha Tower Development Corporation, in pertinent part as follows:

     The legislature finds that the area in downtown Honolulu on the waterfront, including the Hale Awa Ku Moku Building and Irwin Memorial Park, hereinafter called the Aloha Tower complex, is one of the most valuable properties in downtown Honolulu and that certain portions of this area should be redeveloped, renovated, or improved to better serve the economic, maritime, and recreational needs of the people of Hawaii; and

     WHEREAS, the Aloha Tower Development Corporation is authorized under section 206J-5(9), Hawaii Revised Statutes, by itself, or in conjunction with qualified persons, to develop, construct, reconstruct, rehabilitate, improve, alter, or repair or provide for the development, construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project, including projects or any portion thereof under the control or jurisdiction of qualified persons; to own, hold, assign, transfer, convey, exchange, lease, sublease, or encumber any project, including projects or any portion thereof under the control or jurisdiction of qualified persons; and

     WHEREAS, the Aloha Tower Development Corporation has been involved in a lawsuit regarding completion of the initial marketplace development; and

     WHEREAS, in 1988, developer Honolulu Waterfront LP sued Aloha Tower Development Corporation for breach of a development agreement executed in 1986, which was apparently settled; and

     WHEREAS, the successor to the developer Aloha Tower LP and Aloha Tower Development Corporation are in mediation in an effort to resolve the respective issues contained in the lawsuit concerning Aloha Tower Marketplace parking, which is still pending; and

     WHEREAS, in 2007, developer Hughes Development LP filed a demand for arbitration with Aloha Tower Development Corporation to resolve issues related to the proposed development of Piers 5 & 6, which case is set for hearing in August of 2008; and

     WHEREAS, the Aloha Tower Development Corporation was last the subject of a state audit in 1987 by the Auditor, whose Report No. 87-13, found in pertinent part:  "The Aloha Tower redevelopment project is a concept that is flawed, and it should be shelved," citing a litany of systemic problems and erroneous assumptions; and

     WHEREAS, a management, performance, and financial audit of the Aloha Tower Development Corporation is appropriate at this time; now, therefore,

     BE IT RESOLVED by the House of Representatives of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2008, the Senate concurring, that the Auditor is requested to conduct an audit of the Aloha Tower Development Corporation; and

     BE IT FURTHER RESOLVED that the audit include, but not be limited to:

     (1)  A study of the aforementioned three litigated cases against the Aloha Tower Development Corporation; and

     (2)  A determination of whether chapter 206J, Hawaii Revised Statutes, relating to the Aloha Tower Development Corporation, should be repealed or amended; and

     BE IT FURTHER RESOLVED that the Auditor report to the Legislature on findings and recommendations no later than twenty days prior to the convening of the Regular Session of 2009; and

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor, Chief Executive Officer of the Aloha Tower Development Corporation, the Director of Business, Economic Development, and Tourism, and the Governor.

Report Title: 

Aloha Tower Development Corporation; Audit