In a blog post on Wednesday, Bob Jones highlighted another problem that Honolulu’s rail system is likely face, if it is ever actually completed. The problem? Live-in homeless.
Bob cites how homeless have been using train systems as moving hostels, taking over areas as they would take over sidewalk areas or bus stops. It’s not a pretty picture.
Couple it with the decision not to provide restroom facilities at rail stations, and it suggests this is all going to turn into an operation headache.
But for now, I’m concerned about the impact of COVID-19 on the economics of the rail system.
We’ve been living with a .5% general excise tax surcharge to fund construction of the rail system, and that extra half-percent has been extended through 2030. Remember, we were told, that visitors pay as much as 25% of the total raised through the GED.
But that was then. This is now. Visitors are paying virtually none of the GET. And the tax receipts raised through the GET have plummeted since most of Hawaii businesses have been shuttered.
Meanwhile, Honolulu has paid much of the rail’s tab to date by issuing general obligation bonds. The state, up until Covid-19 hit, has been considered a good credit risk. One of the primary considerations of the bond rating agencies has been the strength of Hawaii’s tourism industry.
For example, when the Moody’s rating service evaluated a rail bond issue earlier this year, it cited as Honolulu’s primary “credit strength” its “Credit strength” the “Strong economic conditions that include a healthy and growing tourism industry, extremely low unemployment levels, and an expanding tax base.”
Honolulu’s economy and tax base are key credit strengths. Tourism, a primary economic driver, continues to show strength: visitor counts to Honolulu in 2019 reached 6.2 million, up 5.6% from 2018. Since 2009, visitor counts to Honolulu have increased 53.9%. Visitors to Honolulu, which is coterminous with the island of Oahu, are a mix of both US domestic as well as international travelers, which helps moderate the effects of economic swings in any particular market. While we expect some impact from the coronavirus currently impacting China and East Asia, we expect the effect to be minimal if the outbreak is contained quickly. Visitors from China and Hong Kong represented 1.3% of visitors in 2018, and visitors from other Asian countries, primarily Japan, represented 17.8%. Other metrics of a strong tourism economy, including hotel room occupancy and revenue per available room have had similarly strong trends.
Many of the factors cited among Honolulu’s strengths have suddenly and dramatically changed. The shutdown of tourism along with the rest of non-essential businesses, the almost total halt to air travel, and soaring unemployment, have certainly altered the municipal finance landscape. That’s going to make future bond financing more costly for the city, even as its other sources of rail revenue have been hit.
Without any likely path to a full reopening of the tourism industry anytime soon, and high unemployment likely to be with us for a while, the cash flow dedicated to the rail is certainly going to face significant new shortfalls in the short-to-intermediate term.
Where is the city going to turn to find the money to make up the difference and keep rail construction on track?
The board of the Honolulu Authority for Rapid Transportation (HART) is now under increased pressure to show the public that it has a viable financial plan and budget that takes into account the dramatically changed financial world.
And a postscript: After an exchange with Jones a couple of days ago in which we disagreed over how to assess the social media site Change.org, he sent the following email.
Thanks for the vote of confidence in my blog.
We disagree on the Change.org template (Word Press doesn’t put Word Press and its logo at the head of my blog, so displays no endorsement of my postings) but you are very civil about the disagreement and I in turn fully appreciate your take on the issue. If we all handled disagrements with such civil exchanges it would be a much better American experience.
Agreed. I already consider the Bob Jones Report to be essential reading. Hopefully a growing number of others will also.
Discover more from i L i n d
Subscribe to get the latest posts sent to your email.
The rail advocates in government ‘railroaded’ the city’s taxpayers and voters with a shibai vote on ‘steel wheels or rubber tires,’ concealing the true choices (renegotiate to magleve, and other choices). Their allies in an element of the construction industry admittedly and effectively libeled the next strong but anti-rail mayor candidate. And all in power and influence ignored outgoing Governor Lingle’s clear warnings of the financially unsound plans pending approval. The City (and State government, insofar as they’re on the hook, too) was railroaded. Icing on the cake – major local contractor with felon in charge getting a lot of the work. Homeless sojourning in the cars next, with no bathrooms at the rail stations? I can smell the platforms now.
Platforms? You’re assuming that they will bother to get out of the train cars first? I suppose we can always hope.
“. . . board of the Honolulu Authority for Rapid Transportation (HART) is now under increased pressure to show the public that it has a viable financial plan and budget . . . ” I agree with this, but we cannot count on them to do anything about it.
Council Budget Chair Manahan asked HART what they could cut from their budgets in light of the expected significant decreases in funding. HART’s response on May 4? Less than $1 million in cuts. HART is either in denial or is counting on the city to pony up.
Rail construction should be transferred back to the city under the Department of Transportation Services. The HART board could be made into a commission under DTS that makes recommendations and provides regular reporting to the council and public. This would allow for better oversight and accountability. There’s still time to do this.
From just the last few posts I have read Ian, the chances of Hawaii ever achieving any sort of economic stability that was in play only a few months ago, makes me wonder how any taxpayer would want to “bail out” the Rail,the leveraged Hotels,all the Unions,the ERS mess…I could go on ad nauseam.
My take & Im from a neighbor Island with limited medical resources & an economy structured towards tourists always filling the coffers, Hawaii will no longer be my retirement “paradise”.And if that weren’t enough, if (maybe when) Matson & Young Brothers get into trouble…we will be left holding a very empty bag ! And now that the airlines are also rethinking their inter island flights..even getting to a doctor’s appointment..or to visit family on the Mainland will become a financial hardship of the worst kind! Sorry to say but my future will not be in Hawaii New after a 45yr stay on all islands! This pandemic has I hope shown enough folks how truly “fragile” our 50th state is.
How can you possibly have rail-transit stations without restrooms? Are you sure? That would be a no-no story in itself! People have kids that need bathroom stops. We old people;e need bathroom stops or else a very absorbent pair of Depends! What happens if you accidentally get something all over your hands? Just get on the train and hold onto the strap or bar?
Only a very few of our major bus “transit centers” have restrooms. Most bus stops don’t even have a roof! So what’s your point, again?
Public restrooms of any sort are becoming urban unicorns.
It’s not just that. Now that the plague upon us has everyone paranoid about the person next to them, reports are out that commuting in personal vehicles is going up and up while mass transit usage is dropping. Except for the working poor, as usual.
Would YOU get on Caldwell/Mufi’s Folly every day, packed in, stench from homeless AND next to people with or without face masks and not knowing where they might have been recently??
I for one would not.
“Feel” the economic impactful adjustment in steps. Its distress is going to be much more painful.
And we still are going down Dillingham and through Downtown to Ala Moana? Pau already — at Middle Street! “Declare victory and go home.” It will take us down the Stockton route sooner than later.
We need a Mayor and Council who are honest! That care about the aina for a change. The old boy corruption just doesnt work for Hawaii. Cementing our best farm lands at Ho’opili for rail development was insane and unforgiveable. Those were the best soils in the world!
The “minimalist” design (no area for soft drink vending machines nor water fountains) goes back to cost, but the larger issue is that the train stations are built without being part of a larger development plan: rail stations are ideally part of mixed-use areas (residential, retail, offices). There is the other issue of easy access — with one slow elevator, will it suffice for kupuna, families with baby strollers, and young people with skateboards? An at-grade (street-level) rail station has easy on-off access — with a driver to navigate the train. The Kamehameha School study showed “two” lines — a “suburban” line to Middle Street and a “town” line, with .6 miles between stations — ideally, at-grade.
Teenagers with skateboards need elevators? Really??
Won’t stations also have (at least) one set of escalators going upward (we are lazy, out of shape Americans, after all)?
Yes, look at rail systems in places like Japan and Korea.
Many of the stations are at places like shopping malls, which then provide many of the services like restrooms and eating places.
The developments around the rail stations will have bathrooms.