In implementing the plan for the Mauka Area, public and private capital resources will be committed and expended. The Legislature granted the Authority a wide range of powers, including the power to prepare plans, specifications and designs; acquire real and personal property, construct, reconstruct, rehabilitate, or repair any project; own, manage, or convey projects; and contract for and accept gifts or grants from any public agency or other sources.

Costs include expenses to carry out all undertakings which the Authority deems reasonable and necessary for the development of a project. These include costs for studies, surveys, plans and specifications; architectural, engineering or other related services; acquisition of property; site preparation and development; construction, reconstruction and rehabilitation; administration and operations; financing; and relocation.

During the preparation of twelve plan variations and the process of narrowing them down to one final plan, total capital costs and investment required for district-wide redevelopment were estimated and evaluated. These estimates included costs directly attributable to land and land improvements, but not costs for business inventory, equipment, furniture and operational expenses. Costs for relocating households and business establishments were estimated based on the Relocation Plan section herein.

Costs were categorized as: Private and Public. Private costs include pro rata share for transportation facilities, utilities, urban design, public facilities and housing support facilities. Public costs include pro rata share for transportation facilities and utilities, public housing and relocation assistance (See Figure 28).

The allocation of costs is based on a preliminary assignment of benefits accruing to properties in the Mauka Area. As an Improvement District Program is developed for each phase, these costs may vary.

The pace of the Mauka Area's revitalization and economic growth hinges upon the availability of funds for the implementation of public and private development activities. The availability of funds is affected by various factors which include economic conditions such as inflation and interest rates, feasibility and risk associated with project types, demand for and supply of long-term capital, and the prevailing tendencies of the money market. Generally, there is no single source of funds readily available to finance the development and construction of improvements identified in this plan. Public sources, such as revenue bonds, grants, low interest loans and the like, are limited to the extent of participation in the project and governmental debt limit ceilings. Federal, State and County participation in the financing of public improvements will be based largely on the type of public facility and the availability of funds among the various levels of government for specific projects at the time financing assistance is requested. Private sources, on the other hand, are generally reluctant to undertake the revitalization of a distressed area without some assurance of active public sector assistance.

The financing strategy is based on the integration of public and private financial resources, coupled with development and investment incentives. The specific means of obtaining such funding for plan implementation will be identified in the capital improvement and operating budgets of the Authority that are submitted to the Legislature.

The revitalization of the Mauka Area will involve both private and public sector actions in the implementation of the plan over the next 25 to 30 years. Due to the Mauka Area's size and the many existing viable activities which will continue to operate in response to market conditions throughout this period of improvement, redevelopment will likely occur in different areas. However, individual development activity is likely to follow in those sections where infrastructure has been improved.

The Legislature, in creating the Authority, recognized the limits of existing laws and public and private mechanisms to facilitate timely and orderly redevelopment. Responding to that need, this plan sets forth methods by which private development initiative and performance of the various public improvement activities of government will be coordinated and integrated in a rational progression and phasing of development units over time.

As used in this plan, phasing means to plan and carry out systematically a sequence of development units of public facility and utility improvements. Each development unit may involve one or more increments of a public facility development. A development increment may involve portions or parts of various infrastructure improvements. An increment would be determined according to the design, engineering and functional aspects of the public facility, as well as the availability of funds.

A development increment may involve portions or parts of various public facility improvements. For example, a development increment may include the construction of a roadway segment, including the pavement, curbs, sidewalks, and utilities which go into the right-of-way. A development increment may also include the construction of an independent improvement such as an elevated pedestrianway. Phasing thus involves the sequencing of infrastructure improvements which have mutual as well as independent construction requirements.

The Development Unit Map (Figure 29) indicates the general sequence and areas of infrastructure and public facility improvements. Seven (7) major development units are identified. Each development unit will be composed of a number of increments of public improvement projects. The specific amount, scope and timing of development increments will be determined by such factors as the type of public facilities needed, their functional requirements, detailed planning and design studies, and the availability of funds for planning, design, land acquisition, and construction. Accordingly, the development units shown in Figure 29 may be modified or refined as such details are determined.

The phasing of district-wide public improvements will ensure that the necessary services provided by public facilities and utilities are adequate to support private developments at the time they occur. Therefore, phasing affects the direction, location and sequencing of private development. It is also the primary means whereby optimum benefits from limited public funds for facilities and utilities can be obtained. Properly phased construction of adequate public support facilities is a cost-effective way to spur private development.

In determining the location (or area) and sequence of development in a manner that adheres to a phased approach to redevelopment, the following was considered:

1. Whether the area is ready for redevelopment. Such readiness is determined by such factors as remaining life of existing structures, change in activities, lot size, remaining lease terms, market and economic conditions, interest rates, proposed joint ventures, and interest of landowner or developer to redevelop.
2. Improvement of gravity utility lines for sewerage and drainage facilities should start at the makai section of the District. Improvement of gravity utility lines upstream without any improvement downstream will create problems downstream.
3. Whether infrastructure improvements within and outside the Mauka Area are coordinated. This includes off-site regional facilities as well as connections to systems adjacent to the Mauka Area.
4. Utilities and facilities which will be installed within a road right-of-way are coordinated with the roadway improvement to avoid duplication of construction and disruption to adjacent activities and public inconveniences.

The bulk of the Mauka Area's infrastructure systems will be financed mainly through the Improvement District method. Under this method of financing, capital requirements for the needed infrastructure would be shared according to the benefits which each sector receives or gains. Over time, flexibility needs to be available to base Improvement District cost assessments according to lot area, frontage or value. Properties specifically benefiting from improvements will generally be assessed following existing methods.

So that necessary public support services will become available in a timely manner, phasing must be flexible to accommodate private development. Therefore, it shall be a policy of this plan that the construction of public facilities and utilities be phased to the extent practicable and to coincide with private development. This will facilitate redevelopment of the Mauka Area. Further, new development shall be allowed only in areas with adequate infrastructure or where the infrastructure is upgraded to accommodate the new development. In any event, no occupancy of a new development should occur before full installation of the required infrastructure which is adequate to meet the anticipated usage from such new development.

Cost of Public Facilities and Utilities for Each Phase

Estimated costs for each development unit are shown in Figure 30. The cost for each of the development units varies from one to another based on the improvements required in each unit. The units with the larger costs contain the most significant roadway construction projects and the larger park developments. The park development costs are included in these calculations since dedication requirements for new development will be a major source for funding these facilities. It should be noted that these costs are preliminary estimates and are subject to modification and refinement as detailed engineering analyses and designs are performed.

Cost-Benefit Analysis

A cost-benefit analysis was conducted to evaluate the costs and benefits of redevelopment to the public sector. The purpose of the cost-benefit analysis was to determine the costs and benefits for the most probable amount of development which could be achieved in the Mauka Area.

The analysis compared the public costs of infrastructure construction to the public benefits of additional revenues generated by new developments through general excise taxes and real property taxes. In economic terms, the marginal costs of redevelopment were compared to the marginal benefits of redevelopment.

The analysis evaluated the costs and benefits for various rates of development which may occur depending upon economic conditions and the decisions of landowners and developers in implementing development projects. Therefore, if economic conditions improve and the rate of redevelopment increases, the tax revenues will increase and the phasing of the improvement program schedule may be modified to accelerate the infrastructure construction.

For example, the public costs of infrastructure for the District-Wide Improvement Program is estimated to be $75 million. The construction of the infrastructure will allow for more business activities and will increase the property values in the Mauka Area. The public benefits are the additional tax revenues generated by the new development. The additional tax revenues include the general excise taxes derived from the infrastructure construction, the construction of new buildings, the additional business activities which move into the new buildings, and the real property taxes derived from the additional values which result from the new development. The amount of additional tax revenues will vary depending upon the intensity of development. The probable intensity of development described below is estimated to generate approximately $l billion in additional revenues in 25- to 30-year development period.

Given the probable development of 50 percent of development potential achieved in the initial development units and subsequent development increases to attain 70 percent of development potential, the cost-benefit analysis showed that public benefits can be expected to be between ten to fifteen times the public costs for the 25- to 30-year development period.