Trends and Thoughts for 2012 “Trends are for infill redevelopment as well as preplanning for residential development such Lance Wilhelm as Kamehameha Schools’ 680 Ala Moana project and A&B’s Waihonua site,” says Colliers Monroe Friedlander’s Mike Hamasu. “I see greater interest in public/ private partnerships,” says Lance Wilhelm. “It’s simple enough to understand the attraction for municipalities badly in need of infrastructure upgrades, but equally badly strapped for cash. If the private sector can fund the improvements and get a reasonable
rate of return on that investment over time through a leaseback or similar instrument, everybody wins. Easy, right? Well the devil, as they say, is in the details and in this case, the details are legion. Despite the many hurdles that must be overcome, we are seeing it used on the mainland and there are even some examples here, in particular at the University of Hawaii with some of the dorm projects. I imagine other agencies might start taking a look at how to leverage their assets while trying to get more creative with their project financing mechanisms.” As to what lies ahead, Wilhelm says, “Tougher to predict this year since there are so many variables. With 2012 being an election year, politics and the uncertainty this can create
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2011 Construction Industry Guide — Hawaii
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may well have a slowing effect on some projects. On the other hand, we sometimes see an uptick in infrastructure projects in this kind of cycle as our elected officials try to create positive momentum in the economy leading up to elections.” “Until banks loosen up credit,” says Stanford Carr, “I believe government work will be the bulk of the projects.” Steven Sofas, always candid, tells us, “The legislature’s anti-business laws have hurt and will continue to hurt the construction industry in Hawaii for the foreseeable future.” He particularly emphasizes the state legislature’s decision “to take away the exemption on the GET (general excise tax) for construction,” feeling it will impact decisions on whether to build in 2012.
Overall, concerns and challenges linger but many sources feel that all things considered, 2012 may be a better year with significant improvement in 2013 and beyond. Much, of course, depends upon national and global conditions. There are definite bright spots in what’s developing in Hawaii, as indicated by the long list of projects progressing or planned. Let’s close on hope and a high note, with the quote from D.R. Horton-Schuler Division’s Bob Bruhl that “2012 will be a good year.”