Consultants working on plans for the new stadium already have had big paydays. Now those plans may be changing.
Figuring out how to replace Aloha Stadium has been a costly endeavor for state taxpayers.
A contract laying the groundwork for planning for a new stadium grew from $790,000 at the start of 2019 to more than $26 million today, and consultants for the stadium project have billed for nearly $20 million worth of those costs as of November.
The state and its consultants promised to deliver a world-class facility for uses beyond University of Hawaii football games, surrounded by a vibrant entertainment district that boasted housing, hotels, restaurants and stores. Instead, taxpayers were left footing ever-growing bills as the future of the stadium became increasingly unclear.
Money spent includes more than $19 million in fees for mainland consultants that worked on the stadium project as well as more than $400,000 in expenses including first-class flights, stays in Waikiki hotel rooms, dinners at Oahu restaurants, and for a brief time, rent at a Kakaako condo.
That’s according to hundreds of pages of invoices and receipts detailing spending on Aloha Stadium planning so far that Civil Beat obtained through a public records request that covered a period from late 2018 to late 2022.
Meanwhile, Gov. Josh Green has decided to end the pursuit of a public-private partnership that would have formed the basis of the so-called New Aloha Stadium Entertainment District and focus on finding an entity to build and operate a new stadium while delaying decisions on the development of the surrounding real estate.
State officials have said that about 30% of the established plans, about $6 million worth of work, would still be usable if the state abandons P3 model, which refers to a collaboration between a government agency and a private-sector company. But more than $13 million would have been spent in vain.
The future of the $26 million contract with Missouri-based Crawford Architects for planning is not clear. The future of the new stadium is also not certain. The Stadium Authority, a nine-member board that oversees the project, is set to meet Thursday.
“We are in a holding pattern until we get more definitive direction,” Chris Kinimaka, public works administrator for the state Department of Accounting and General Services, told a panel of state senators Tuesday.
DAGS, which has led the procurement arm of the stadium project, did not respond to inquiries for this story.
“Everyone was trying to do too much with it, when it really should just be simplified.”
Mike McCartney, former state economic director
Although much has been spent on the project already, the governor believes the decision will save the state money in the long run. A recently completed financial analysis for the stadium found that pursuing a public-private partnership would cost taxpayers an additional $400 million, due in large part to payments that would have to be made to the entity helping to finance, operate and maintain the new facility.
Stacey Jones, owner and senior principal at Crawford Architects, said in a written statement that work with Crawford and the entire consultant team is still ongoing “and related in large part to an active procurement process about which any discussion as to a different direction that the project may take is not possible and very likely counterproductive to the procurement process.”
Crawford partnered with WT Partnership, another international consulting firm that specializes in public-private partnerships. The two firms came away with the most money from the project – at least $6 million each as of the end of 2022, according to state records.
Bridey Best, WT’s senior vice president based in Honolulu, said in a written statement that state agencies overseeing the project should address questions regarding the stadium and that it would be premature for her to comment.
“The project team continues to work with the administration on a concept to procure a new multi-purpose stadium and develop a vibrant community district,” Best wrote.
The project team included about a dozen other subcontractors, most of them Hawaii-based, that provided various services for stadium planning.
Architects were subcontracted for new stadium designs. Engineering firms performed soil tests, aerial surveys and planning for water infrastructure necessary to sustain the entertainment district. Other sub-consultants were responsible for developing projections on finances.
Lawmakers initially budgeted about $10 million in 2017 for studies and plans for the demolition of the 48-year-old, 50,000-seat Aloha Stadium in Halawa and construction of a new stadium with a mixed-use development in the surrounding area.
The Legislature appropriated another $20 million in 2019, which the state used for “the planning and project management of NASED, including the development of the EIS and the two procurement processes,” according to the project’s website.
When executives at Crawford Architects and other firms first came to Hawaii in August 2018 to work on the Aloha Stadium redevelopment project, they booked first-class seats on United Airlines and Delta to complete the last leg of their journeys from cities across the mainland.
When they landed, they stayed at the Alohilani Resort for three nights and on separate occasions charged breakfast, lunch and dinner to their hotel rooms. On their last afternoon in Hawaii, the team had dinner at a restaurant in the International Marketplace.
On the menu for principals of Crawford and WT Partnership was uni nigiri ($18), an order of shishito peppers ($15), bacon ($22), a New York Strip ($60), a rainbow roll ($19), a Flat Iron steak ($47), an Angus filet ($57), and lobster tail ($25) with bearnaise sauce ($3), broccoli ($14) and banana cream pie ($12) on the side.
Costs for that trip totaled $9,438. And when Crawford and its partners in the consultant team landed what became a multimillion-dollar contract to lead redevelopment of Aloha Stadium, taxpayers footed the bill for all of it.
On top of shouldering the cost of planning for a new Aloha Stadium, taxpayers have also paid for dozens of trips to Hawaii by mainland consultants working on the project, a review of travel-related receipts found.
“Reimbursable expenses” as the charges for flights, hotel rooms and meals are officially known totaled about $424,000 through November. It’s a relatively small number compared to the $26 million value of the stadium redevelopment contract.
Receipts for those expenses show Crawford invoiced the state for first- and business-class tickets over the years. The vast majority of expenses from Crawford Architects and other firms were allowable under state guidelines for consultants, except for some of those airline tickets as the rules only allow reimbursements for coach fare.
Jones said that hotel stays and travel expenses for the consultant team are necessary when in-person meetings are warranted "during periods of intense work effort to meet exacting deadlines and for the sake of efficiency."
Flights to Hawaii are often 10 hours or longer for team members.
"Business class on flights affords the opportunity for us to work during these flights which would otherwise not be effective or even possible," Jones said. "The consultant team does not charge for travel time even though during travel time our client’s project is being worked on."
Jones, three other Crawford employees and two consultants used a rented one-bedroom unit at the Aalii tower in Kakaako between January and May. They stayed a combined 71 nights. The rent was about $4,550 a month.
Jones said renting the apartment was cheaper than staying at a hotel during a period when the consultant team visited Hawaii often while finalizing a proposal for the stadium project. DAGS agreed to the use of the apartment as well, Jones said.
The consultants from Crawford and other companies averaged about $17,000 a month in expenses during the first 12 months of the contract from January 2019 to early 2020.
When it came to meal reimbursements, taxpayers weren't always charged the full cost. For example, when Jones and two other consultants ate at Fish Honolulu in April 2019, they invoiced the state for food but not for drinks including a $64 bottle of Riesling.
Most of the expenses, specifically those for meals and hotels, tapered off dramatically after the start of the coronavirus pandemic in March 2020.
The expenses also included Uber rides to and from various airports, including the Daniel K. Inouye International Airport, as well as around Honolulu. Taxpayers also occasionally paid for airport parking in Kansas City.
What happens with the stadium and contracts associated with its development is ultimately up to the Stadium Authority, which delegated procurement responsibilities to DAGS years ago.
DAGS first contracted with Crawford Architects in January 2019. The Crawford contract has four phases taking the project from conception through construction with no set end date.
Phase 1 was for due diligence and an alternative site analysis that was completed in early 2019. The site analysis recommended that the new stadium be situated next to the current one in Halawa. Those plans cost more than $750,000.
Phase 2 was for master planning, production of an environmental impact statement and feasibility studies.
The phase was initially anticipated to cost $3.9 million, but the final cost of those reports ended up being closer to $4.8 million after the state added other work including geotechnical studies, aerial surveys, an archaeological inventory survey, public relations services, real estate marketing analyses for the stadium property, a transition plan for the stadium and additional duties including requiring consultants to review and comment on legislation related to the project.
The scope was changed again last year to include an environmental assessment for the entire stadium property, not just the stadium site itself, as well as additional utility surveys and planning for a new wastewater system.
Phase 3 has proven to be the most complicated portion of the project, consisting of issuing requests for proposals and requests for qualifications. The cost of this phase quadrupled in price from about $4.4 million in August 2019 to more than $20 million in 2022.
There’s a fourth phase under the contract with Crawford for “professional services during construction.” The cost for that has yet to be determined.
The cost escalations may have been the result of a decision made by the state in February 2021 to pursue development of a new stadium and the surrounding property concurrently as well as actions taken by the Legislature.
A contract extension approved in August 2021 said that work would be expanded from a "single procurement package” to “creating separate and parallel tracks for stadium development and real estate development.”
The contract extension also called for adjustments to procurement documents "as a result of various legislative actions.”
There were some hiccups along the way. In 2020, a bill to transfer authority over the stadium redevelopment to the Stadium Authority stalled. In 2021, the year of the contract extensions, lawmakers transferred that development authority but cut funding for the stadium in half, from $350 million in general obligation bonds to just $170 million.
The Legislature restored funding last year, and also added a $50 million general fund appropriation, but moved the project and the stadium board one more time under the Department of Business, Economic Development and Tourism.
“Everyone was trying to do too much with it, when it really should just be simplified,” former state economic director Mike McCartney said.
McCartney, who headed DBEDT until December, raised concerns over the potential for cost overruns during a stadium board meeting in September, shortly after then-Gov. David Ige first decided to suspend work on pursuing a public-private partnership. McCartney argued that the state budget bill was clear and that lawmakers had only approved funding for the construction of a stadium.
Some board members worried that delays in the project of any kind would add to costs.
"Yeah, but not if the state wasn’t paying consultant fees,” McCartney said in a recent interview.
McCartney said DAGS officials made a good faith effort in pursuing a P3 model, believing that it would ultimately save the state money. The idea was floated by the Stadium Authority in 2017.
At the time, the state was short on funds to rebuild the stadium, which was falling apart after years of neglect. Having a private entity build and operate a new stadium appeared to be the best option, but one that could still bear some risk for the state.
"P3 is not P-free,” Kinimaka, DAGS' public works administrator, told the Stadium Authority at its November meeting. “We cannot put everything on the developers and expect them to pay for it and make their own money back. Instead, the owner has some participation in the cost for the project.”
The developer that won the contract to build, operate and help finance the stadium would manage the structure for for a predetermined number of years under the P3 model. That means the developer would be responsible for funding maintenance and repairs, taking the burden of continued funding off the state.
Abandoning the P3 model means the state would focus solely on construction of a new stadium for now, then begin developing the surrounding real estate at a later date. The state has said it needs the real estate portion to be successful to help pay the debt on the new stadium that would be incurred over the life of the project after the state sells bonds to raise capital to fund construction.
Stephen Wood, chairman of the Aiea Neighborhood Board, said that simply focusing on the stadium alone is shortsighted. In November, the neighborhood board passed a resolution that opposed the plan to abandon the P3 model that Ige proposed last year.
"There's multiple ways to tackle a problem," Woods said. "And if it results in what this community wants to have, integration into this community with businesses, hotels and a stadium that can be mixed use that’s not just there for UH football games ... I don't think the community will be too heart-burned about how we get there, as long as we get there.”
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