House Concurrent Resolution 100 HD 2 - lrbhawaii.infolrbhawaii.info/reports/legrpts/hcda/2012/hcr100_hd2_11.pdf · We are proposing DHHL lease the parcel known as Parcel 9 within

House Concurrent Resolution 100 HD 2 Encouraging the Department of land and Natural Resources

and the Hawaii Community Development Authority to locate land Suitable to Construct a Motorsports Center on the Island

of Oahu

rt the 012 State legisl t re

a ary 2

Report Objectives

• DlNR and HCDA to

- Collaborate in locating land suitable to construct a motorsports center on the island of Oahu;

- Consider Lot 9 on the island of Oahu as a potential site for the motorsports center; and

- Consider ways in which a motorsports center may be a source of economic development for the State of Hawaii

DlNR and HCDA Collaboration

• Meetings were convened between DLNR and HCDA staff in the summer of 2011

• Staff of both agencies agreed to collaborate

• lead Staff Assigned to the Project

- Keith Chun DLNR Land Division Planning and Development Manager

- Anthony Ching HCDA Executive Director

Critical Path

Interview Stakeholders

• Restore Our Race Track (RORT)

- Thomas Miller - principal and spokesperson

• Save Oahu1s Race Tracks llC (SORT)

- George & Jeanette Grace

• Oahu Pro Gas Association

- Chuck Vowell

• Stakeholder Interviews were conducted by

HCDA staff on a number of occasions

Id Elements of a Motorsports Center • Quarter Mile Asphalt Track (3,900 feet)

- 30 acres with safety area

• Half Mile Paved Oval Track - 20 acres with bleachers and pit area

• Go Kart & Amusement Track - 15 acres

• SCCA/Formula V Racing/Police & Driver Training - Use Areas of Drag Strip and Other Paved Areas for Road

Circuit

• Ancillary Facilities and Green Space - 30 acres for motorsports related tenants

• Parking - 15 acres to accommodate 2,000 cars - With lighting Can Also Be Used for Cruise Nights

Id Potential Sites for Motorsports Center

• Site of Former Hawaii Raceway Park (66 acres) - Landowner: AG/CW Raceway Holdings LLC

• lot 9 of the Kalaeloa Community Development District [(KCDD}(139) acres] - Landowner: Department of Hawaiian Home Lands

(DHHl)

• lot 24 of the KCDD - Kalaeloa Raceway Park (19 acres) - Landowner: DHHL

• Any Other Appropriate State Controlled Oahu Parcel Identified by DLNR staff

Former Hawaii Raceway Park

• Site Acquired by New York based Investors (AG/CW Raceway Holdings LLC) Prior to a Final Foreclosure Action in March 2010 - Purchased Interest of Lender MKA Real Estate

Opportunity Fund 1 LLC and

- Credit Interest of Alexander & Baldwin

• Previous Owner (Iron Gate Capital) Acquired the Parcel from the Campbell Estate in 2006 for $13.2 M - Planned 90 Lot Industrial Subdivision

- C&C Zoning Has Been Secured

• Current Development Plans For the Parcel are Unknown

Kalaeloa Raceway Park

• Parcel 24 Under License Issued by the DHHL • Operated by Save Oahu's Race Tracks LLC

• Tracks - Quarter Mile Dirt Oval

- Sand Drag Track

- Rally Cross Track - Drift Track - Drag Box

• Although Facility Does Not Feature Sufficient length to Support a Quarter Mile Drag Strip (3,900 feet), Operators Have Indicated their Desire to Eventually Feature Additional Tracks

lot 9 of the KCDD

• Parcel 9 Under License Issued by the DHHL - Operated by The PASHA Group

• Vehicle Storage and Related Services

• 350,000 sf facility (23 Fabric Tent-Like Structures) - Built for Army soldiers to store their cars when

they deployed overseas

- Security to safeguard vehicles

- Routine maintenance and other services

Kalaeloa Community Development District Land Ownership Map

NAVY PROPERTY AS OF 20 OEC 10

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KCDD Parcel Map

7

8

fP FE H R & PEERS , . ........ 1100 COUVLTUlI

= IkI lt CQlllns, H3W311, 2Dl 0 e ~,.

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LEGEND 1--_---, T1 NATURAl ZONe - T2 RURAL ZONE - T3 GENERAL URBAN ZONe - T' URBAN CENTER ZONe - T' URBAN CORE ZONE

= SD SPECIAL DISTRICT - PlANNED ROADWAY , ROADWAY CONNECTIVITY ---," TRANSIT CORRIDOR

DISTRICT BOUNDARY

NOTES; 1. PORTIONS OF FRANKLIN D. ROOSEVELT

AVENUEANO WEST PERAYETER ROAD RIGHT .QF-WA YS ARE PROPOSED TO BE EXCHANGED FOR KAMOKI.A EXTENSION.

2. HORNET AVENUE ROAD RIGHT-OF-WAY IS PROPSEO TO BE eXCHANGED FOR WAKEA EXTENSION.

3. ROAD RIGHT-Of-WAY BElWEEN PARCELS , 9AND21 ARE PROPOSED rOBE EXCHANGED FOR KUAl.AKA1 EXTENSION.

INSET SCAlE: 1"=800'

Kal""loa Roitdway Mast,r Plan Sludy

Kalaeloa Parcel Map Figure 1

Identification of Suitable State lands

• DLNR Land Division Staff

• Reviewed Materials Describing Acreage Requirements for Motorsports Center Developed by Oahu Pro Gas Association

• Reported in December 2011

- No Suitable State Controlled Oahu Parcel Exists

Facilitate Discussions Between Landowner & Potential Operators

• No Discussions Held With New Owners of Former Hawaii Raceway Park

- Acquisition of Privately Held Land is Outside of the Scope of HCR 100 and the Jurisdiction of the HCDA and DlNR

• Kalaeloa Raceway Park Operators Indicated their Intention to Continue Their Current Operations

• Proposal by Oahu Pro Gas Association to Lease lot 9 of the KCDD Submitted by HCDA Staff to the DHHl

Proposal for Lot 9 KCOO

• December 19, 2011 Correspondence

- Addressed to R. Charles Vowell, Oahu Pro Gas Association from DHHL Chairperson Albert "Alapaki" Nahale-a

ED Findings

- Section 204(a)(2) Hawaiian Homes Commission Act 1920 & Section 171 Hawaii Revised Statutes Requires Public Auction to General Lease DHHL Lands

- Infrastructure Challenges & No Plans/Funds to Upgrade

- Request for 65 year lease DENIED

Findings

., Motorsports Centers such as Described by the Oahu Pro Gas Association Have a Following on the Mainland

., There is Economic Benefit to Such An Operation

., There is No Equivalent Facility on the Island of Oahu

• For Purposes of HCR 100, the Authors Did Not locate Any Appropriate Facilities

Exhibits

• HeR 100 HD 2

• August 311 2011 Request of Oahu Pro Gas Association for Lease of Land at Lot 9

• Oahu Raceway Park Design

• December 191 2011 Response of DHHL to August 311 2011 Request of Oahu Pro Gas

HOUSE OF REPRESENTATIVES TWENTY-SIXTH LEGISLATURE, 2011 STATE OF HAWAII

H.C.R. NO.

HOUSE CONCURRENT RESOLUTION

100 H.D.2

ENCOURAGING THE DEPARTMENT OF LAND AND NATURAL RESOURCES AND HAWAII COMMUNITY DEVELOPMENT AUTHORITY TO LOCATE LAND SUITABLE TO CONSTRUCT A MOTORS PORTS CENTER ON THE ISLAND OF OAHU.

1 WHEREAS, drag racing on the island of Oahu dates back to 2 the early 1950s; and 3 4 WHEREAS, Hawaii Raceway Park opened for operation in 5 Campbell Industrial Park in 1962; and 6 7 WHEREAS, Hawaii Raceway Park provided a safe and supervised 8 location for people to operate a variety of vehicles, including 9 drag racing cars, motorcycles, go karts, and street cars; and

10 11 WHEREAS, Hawaii Raceway Park was a gathering place for 12 local racers, many of whom first attended the park as children 13 with their families and later became participants; and 14 15 WHEREAS, Hawaii Raceway Park closed in 2006; and 16 17 WHEREAS, small businesses that operated at Hawaii Raceway 18 Park have shut down, and others that derived a portion of their 19 business from racers have cut back or shut down; and 20 21 WHEREAS, a motorsport center supporting all types of racing 22 including but not limited to dirt track and drag racing would be 23 ideal on the island of Oahu; now, therefore, 24 25 BE IT RESOLVED by the House of Representatives of the 26 Twenty-sixth Legislature of the State of Hawaii, Regular Session 27 of 2011, the Senate concurring, that the Department of Land and 28 Natural Resources and Hawaii community Development Authority are 29 encouraged to collaborate in locating land suitable to construct 30 a motorsports center on the island of Oahu; and

HCRIOO HD2 FIN 2011

111~iil~llllllllli~i~111iii~~llllllIi~~~IIII~lili

Page 2

H.C.R. NO.

1 2 BE IT FURTHER RESOLVED that the Department of Land and

100 H.D.2

3 Natural Resources and Hawaii Community Development Authority 4 consider: 5

6 7

8 9

10 11 12 and 13

(1) Lot 9 on the island of Oahu as a potential site for the motorsports center; and

(2) Ways in which a motorsports center may be a source of economic development for the State;

14 BE IT FURTHER RESOLVED that the State shall not be 15 responsible for the planning, designing, or construction of a 16 motorsports center; and 17 18 BE IT FURTHER RESOLVED that certified copies of .this 19 Concurrent Resolution be transmitted to the Executive Director 20 of the Hawaii Community Development Authority, and the 21 Chairperson of the Board of Land and Natural Resources. 22

Office of the Chairman

Department of Hawaiian Home Lands

P.O. Box 1879

Honolulu, Hawaii 96805

Re: HCDA Parcel 9 Motorsports Facility Proposal

Dear Mr Nahale-a,

August 31, 2011

The Oahu Pro Gas Association (OPGA) is a group of motorsports enthusiasts sharing the common

interest of establishing a safe, organized, and sanctioned race facility on the island of Oahu. The OPGA

successfully petitioned the state legislature earlier this year to adopt a resolution to have the Hawaii

Community Development Agency (HCDA) and Department of Hawaiian Home Lands (DHHL) consider

locations on Oahu for such a facility and report its findings to the legislature.

The OPGA acknowledges DHHL's current arrangement with another party on Parcel 24 and submits that

this proposal does not seek to compete head-to-head with that enterprise. Unfortunately, Parcel 24

does not have room for a dragstrip. Safety is an additional concern due to dust blowing onto the paved

surfaces. OPGA would not compete with the off road motorsports available on Parcel 24, but provide a

paved facility for venues that require asphalt.

We are proposing DHHL lease the parcel known as Parcel 9 within the Kalaeloa area ofthe HCDA for use

as a motorsports complex. This arrangement would be similar to Maui and Hawaii counties which allow

race operators/groups access to county land, and in Kauai's case, state land for racing activities at a

reasonable cost.

This proposal assumes the current lessee (PASHA) relocates entirely from the parcel. The OPGA seeks a

long-term, i.e., 65 year, lease with which to initially leverage existing paved areas for racing, and over

time, develop a motorsports facility to accommodate several competition venues on paved surfaces.

We propose an initial lease term of five years at an annual rate of $72,000 per year, payable in 12 equal

monthly installments per year. This would allow OPGA to establish basic operations while developing

capital improvements on the property.

Over the longer term, OPGA envisions developing the property to include a reoriented quarter-mile drag

racing surface, an oval track, as well as drifting and road courses for sports cars, motorcycles, and go­

karts. The OPGA also envisions warehouse/industrial park type buildings on the property to allow

motorsport businesses, and in turn, generate additional revenue. DHHL can expect to see an increase in

capital improvements on the property anticipated to be in the $12,000,000 to $13,000,000 range.

Following the initial five year period, lease terms may revert to a base rent of $6,000 per month or 10%

of the gate entrance fees. In its later years of operation, Hawaii Raceway Park reported an attendance

of 150,000 paid admissions. With a $15 gate entrance fee, that would be $2,250,000, which would be a

monthly remittance to DHHL of $18,750 per month, or $225,000 per year. With the capital

improvements planned, the complex will be able to exceed attendance of the former Hawaii Raceway

Park.

OPGA will seek partnering arrangements to bring about positive changes to the area. For example, road

improvements will be needed over the longer term, but initially, OPGA will seek out engineering

expertise and gUidance on optimizing existing roads to access the property safely.

In closing, OPGA, indeed the entire Oahu motorsports enthusiast community, looks forward to working

with DHHL on establishing a safe motorsports facility to the island of Oahu.

Respectfully,

R. Charles (Chuck) Vowell President, Oahu Pro Gas Association 99-1225 Waiua Place, Bay E Aiea, HI 96701 (808) 479-0359

- .... . ~

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--.----

NEILAUERCROMUIE <;OVEImOR

STATE Of HAWAI"

STATE OF HAWAI'I DEPARTMENT OF HAWAHAN HOME LANDS

P. O. BOX [&79

flONOLUI.U, HAWAf'l %l!.US

December 19, 2011

Mr. R. Charles Vowell President Oahu Pro Gas Association 99-1225 Waiua Place, Bay E Aiea, Hawaii 96701

Aloha Mr. Vowell:

Subject: Proposal for Motorsports Facility Parcel 9, Kalaeloa, Oahu

ALBERT "ALAPAKI'" NAHAU_A CHAIRMAN

HAWAIIAN li.lMES COMMISSION

I'oIICIlELLE K, KAUHANE DloruTV TO THE CHArnMAH

M, WAIAUAI..£ SARSONA EXEC1TnVF. ASSISTANT

This is to acknowledge receipt of 31, 2011 delivered by Mr. Anthony Community Development Authority (HCDA) late response to your letter.

your letter of August Ching of the Hawaii We apologize for this

Your letter asked that the Department of Hawaiian Home Lands (DHHL) relocates its current month-to-month tenants on Parcel 9 and lease the subj ect parcel to you for use as a motorsports facility. You proposed to lease the land for 65 years under a long-term general lease with the initial lease rent at $72,000.00 per year for first 5 years of the lease term.

The DHHL is subject to Section 204 (a) (2) of the Hawaiian amended, and Chapter 171 of

as amended, in the general The statutes provides for a lease our lands.

Homes Commission Act, 1920, as the Hawaii Revised Statutes, leasing of Hawaiian home lands. public auction process to general

Due to the infrastructure challenges at the Kalaeloa District and no immediate plan and resources to upgrade these infrastructures, the DHHL believes that the DHHL Trust is better served now by continuing its agreements with the current tenants. Your request is hereby denied.

Mr. R. Charles Vowell December 19, 2011 Page 2

DHHL appreciates your inquiry and wish you well in your future endeavors. Should you have any questions, please feel free to contact Linda Chinn, our Land Management Division Administrator, at 808.620.9451 or email her at Linda.' [email protected].

Me ke aloha,

1IJ~ ffii.bert "Alapaki" Nahale-a, fHawaiian Homes Commission

c: Mr. Anthony Ching, HCDA Members of the Hawaiian Homes Commission

Chairman