Hawaii Real Estate Daily

Residents soon will find out how much Honolulu’s planned 20-mile elevated commuter train from East Kapolei to Ala Moana could cost to build, operate and maintain.

The question is, will they get that updated information before a Nov. 4 vote on a charter amendment authorizing the establishment of a steel wheel on steel rail transit system. An updated version of the 2006 financial plan for the train will be included in an upcoming draft environmental impact statement. That document is targeted for release late this month and will include updates on the number of potentially affected properties, noise and visual impacts, and potential impacts on archaeological sites, among other things.

According to the city’s 2006 Alternatives Analysis, the first 20-mile segment is expected to cost $3.7 billion to build. Those costs are expected to increase in the draft environmental impact statement to account for recent rises in inflation and construction costs.

However, residents may not have access to those details before a Nov. 4 vote on whether to build the train. That’s because the document, which was originally scheduled to be finished in the spring, is still being vetted by the federal government.

Rounds of discussion

The Federal Transit Administration and the city of Honolulu are in the first of what could be several rounds of back-and-forth discussion over the document’s contents. The city is in the process of responding to the agency’s comments on the first administrative draft of the draft environmental impact statement, said Mark Scheibe, deputy project manager for Parsons Brinckerhoff.

If everything goes well, the updated environmental impact document should be released before the election, he said.

“We’re trying to get our responses to them as quickly as we can,” Scheibe said. “If they’re happy with it, and we can turn it around, then we’ll have it out later (this) month.”

However, “If we have to go through another iteration of comments, this is probably not going to happen” in time for the election, he said.

FTA spokesman Paul Griffo said the agency is aware of Honolulu’s Nov. 4 vote on the rail system. However, that date will not dictate the release of the project’s draft environmental statement. The FTA won’t know when the statement will be released until after it receives and assesses the city’s first round of responses.

Often, the FTA and a local community go through several rounds of comments before releasing a draft environmental impact statement, Griffo said.

“Much of the time, there’s more than just one round of comments,” he said. “There’s a process that needs to take place and that needs to play out regardless of local considerations.”

Delays in release

Despite delays in the release of the draft environmental impact statement, city officials maintain the $3.7 billion project is still on track to break ground in December 2009 and begin partial operations by the end of 2012. The city plans to complete the full 20-mile, 19-station elevated commuter line in about a decade. It will be the largest public works project in state history and will have major environmental, social and economic impacts.

New cost estimates

Among the most anticipated updates contained in the draft environmental impact statement are new capital and operating cost estimates.

According to the city’s 2006 alternatives analysis, the train is expected to cost about $5 billion when adjusted for inflation. That’s the price for a route that passes Honolulu International Airport, but excludes spurs to West Kapolei, Waikiki and the University of Hawai’i-Manoa.

The current route now goes through the Salt Lake area with a shortened 2.1-mile, $350 million airport spur. That spur would bypass Pearl Harbor and Hickam Air Force Base, though service to those areas could be added at a later date.

In addition to those capital costs, the train will cost an inflation-adjusted $1 billion to operate and maintain from 2019 to 2030. What’s still undisclosed is how much the train will cost to operate between 2012 and 2019.

The draft environmental impact statement will include those details as well as updated transit tax revenues forecasts. Those forecasts are expected to take into account the state’s current economic slowdown.

City officials hope to raise an inflation-adjusted $4 billion between 2007 and 2022 to pay for the 20-mile version of the system. That, coupled with $925 million in anticipated federal funds, is expected to pay the $5 billion in capital costs associated with rail, according to the city’s financial plan. That financial plan is based on outdated tax-revenue forecasts generated in September 2006, when more robust economic growth was anticipated.

updated plan

The city and Parsons Brinckerhoff contend the draft environmental impact statement won’t be radically different from information that’s been previously released to the public.

“I don’t think people are going to look at it, perhaps except for the costs, and feel that there’s been a quantum change,” Scheibe said. “It’s not like the (draft environmental impact statement) will contain all of this incredibly new information. We’ll have an updated financial plan. We’ll have costs expressed in later-year dollars.”

But, “the cost isn’t going to be doubled. It’s going to be what you can expect from two years of inflation,” Scheibe said.

Rail project critics contend the draft environmental impact statement contains information voters should have before voting on the train. However, the city has no incentive to release that statement before Nov. 4, said outspoken rail critic Cliff Slater.

“There’s no way that things are going to look better” after the draft environmental impact statement is released, Slater said. “There’s fundamentally no good that can come of it from their standpoint. It’ll give ammunition to us.”

The city and the FTA won’t rush the release of the draft environmental impact statement, Scheibe said.

The “FTA and the city, from a defensive point of view, want to make sure that the (draft environmental impact statement) is as bulletproof as it can be when it goes out,” he said.

“We’re not going to rush something out because the election is coming.”

Meanwhile, the city will not disclose any updated information contained in the draft environmental impact statement without FTA approval.

The FTA said it discourages city government officials from prematurely disclosing details of a draft environmental impact statement.

“It wouldn’t be the most prudent thing to do because it’s a working document,” said FTA spokesman Griffo.

Credits: Honolulu Advertiser

Enactment of a $700-billion bailout for the nation’s financial system has put the emergency brake on what threatened to become an economic crisis throughout society. In the nearly four months before a new Congress and administration are in place, a pathway must be charted to begin a full recovery.

With the support of Sens. Daniel Akaka and Daniel Inouye on Wednesday and — in a reversal of their votes in opposition to an earlier version — Reps. Neil Abercrombie and Mazie Hirono, Congress this week enacted the largest government bailout in history and President Bush signed it into law.

In the four days between House votes, members of Congress recognized that the crisis already had spread beyond Wall Street, creating problems for small businesses wanting to finance their purchasing and for people wanting car loans. Nearly 1,000 independent and used-car dealers reportedly went out of business in September alone.

In written statements, Hirono described the Senate changes as “noticeable improvements” and Abercrombie said the legislation “will provide breathing room to address the underlying challenges to the financial system.” He had said after Monday’s rejection of the bill that the “fundamental mistake is trying to take a bad bill and make it better.”

One provision added by the Senate and finding widespread praise increases the amount of savings insured by the federal government in a single account from $100,000 to $250,000. It also attached $150.5 billion in tax breaks and a plan for eventually recouping losses from the financial industry.

First, Congress should revisit its 1999 repeal of a Depression-era law that prohibited a financial institution from both lending money and investing it. While some banks responded by making responsible investments, others went crazy, urged on by a 2004 Securities and Exchange Commission action exempting them from a rule that limited the debts they could take on and allowing them to monitor themselves.

Meanwhile, lenders were allowed to embrace policies on home loans on the assumption that real estate values would forever grow. As a result, 40 percent of the nation’s borrowers owe more on their mortgages than their homes are worth, according to Deutsche Bank.

The nation’s economy might not rebound until the middle of next year, which is bound to cause a slump of Hawaii’s tourism until then. “It will take some time for this legislation to have its full impact on our economy,” President Bush said. He pledged that the government will “take the time necessary to design an effective program” to implement the package.

Credits: Star Bulletin

For the second time this year, the median sales price of a single family home on Oahu dropped below $600,000. It was down more than 9% this past September compared to last to $590,000.

The median sales price of condos fell almost 12% to $296,000.

The new housing numbers come as some of Hawaii’s savviest minds gathered in a forum put on by Prudential, to shed light on the financial crisis and its impact on real estate.

KGMB9’s Howard Dicus introduced the panelists, including Paul Brewbaker, the chief economist for Bank of Hawaii. Brewbaker predicts Oahu home prices will bottom out in about two years, but the recovery will be gradual depending on the intensity of the credit crisis.

“The workout as you saw in our forecast for home prices takes us into a shallow trough over the next couples years and you have to remember, that’s when the smart people start buying,” Brewbaker said, “well before the 20-teens is when we think the valuations get interesting and we should see the energy get back into the real estate market.”

Dr. Michael Sklarz, a real estate economist, thinks the lack of new construction will help buffer Hawaii from any serious price declines.

“We are totally different in that regard than many markets in the mainland, are really sitting on totally vacant subdivisions that has this contagion effect on, both directly and indirectly, on homes in that area and we don’t have that here fortunately,” Dr. Sklarz said, “and I think that’s going to be our main saving grace.”

It’s a tone of optimism, despite the grim numbers.

This past September compared to last, the number of homes sold on Oahu dropped nearly 16%. Condo sales dropped just over 26%. If the experts are right, smart buyers will soon be competing to help turn those numbers around.

Credits: KGMB9

St. Kitts and Nevis is the only English-speaking Caribbean nation listed in the top five most lucrative second home markets worldwide.

According to the October/November issue of Robb Report Vacation Homes, released in late September, the other four international cities are Abu Dhabi, Belize, Croatia and Curacao.

The top five United States cities are Coeur d’Alene; Aspen, Colo.; Las Vegas; Maui, Hawaii and Miami).

The magazine’s Senior Editor, Samantha Brooks, said in a release the final list “results from extensive research that investigated more than 50 international locations – from the beach and the mountains, to the city and the desert – before narrowing it down to 10 destinations.”

Credits: SKNVibes

Hoku Solar, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. has been selected to design, engineer and install photovoltaic (PV) power systems at airports across the state of Hawaii. Today, Hoku Solar and the Hawaii State Department of Transportation (DOT) entered a series of agreements by which the DOT will purchase solar electricity generated by up to an aggregate of 779 kilowatts of photovoltaic (PV) power from several systems to be installed, owned and operated by Hoku Solar.

Hoku Solar plans to install the PV power systems at multiple DOT properties including Lihue Airport, Kahului Airport, Kona International Airport at Keahole and Hilo International Airport beginning in 2008. Subject to final system design, the projects are expected to total up to 779 kilowatts in aggregate. DOT will buy the electricity generated by Hoku Solar or its affiliate, who will own and operate each system, and who will sell the electricity generated by the PV power systems to DOT at a predetermined rate over a contract period of 20 years.

The projects will contribute directly to the state of Hawaii’s demonstrated focus on energy savings and renewable energy strategies, as outlined in recent legislation. The initiative also advances the state’s continued leadership in reducing greenhouse gas emissions. A project totaling 779 kilowatts of PV could produce enough electricity in 20 years to power nearly 1,900 homes for a year, and is expected to offset up to 15,000 tons of carbon dioxide emissions over the lifetime of the systems.

“Hoku is proud to have been selected to partner with the Hawaii State Department of Transportation on this effort,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. “Through this initiative and many others, the state of Hawaii continues to demonstrate real leadership on issues surrounding renewable energy and climate change.”
“This is an exemplary public-private partnership that will bring clean, solar power to many of our state’s public facilities, with minimal up-front investment,” said Brennon Morioka, director of the Hawaii State Department of Transportation.

“Now, more than ever before, the state must seek every opportunity to integrate renewable power and energy conservation into public operations. Power purchase agreements like these not only represent thoughtful stewardship of taxpayer dollars, but they provide important, incremental relief to the very real dangers of global climate change.”
Hoku Solar plans to complete the installation of the systems in 2008, subject to its ability to obtain third party financing for the procurement and construction of the PV systems.

Forward-Looking Statements

This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to Hoku’s ability to successfully complete the photovoltaic (PV) installation for DOTA in 2008, or at all; Hoku’s ability to successfully identify third party financing for the procurement and construction of the PV systems; the expected power output of Hoku’s PV systems; the expected performance and durability of Hoku’s PV systems; Hoku’s future financial performance; Hoku’s business strategy and plans; and objectives of management for future operations. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Hoku’s actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements.

Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. In evaluating these statements, you should specifically consider the risks described in Hoku’s filings with the Securities and Exchange Commission. Except as required by law, Hoku assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Credits: Market Watch

The Xcel Building, owned by Ed D’Ascoli, founder and president of Xcel International, Inc. (Xcel), has selected Hoku Solar, a wholly-owned subsidiary of Hoku Scientific, Inc.

(HOKU 5.60, -0.43, -7.1%) that designs, engineers and installs turnkey photovoltaic (PV) power systems, to install a PV power system on the Xcel Building.

Located in the historic town of Haleiwa on the North Shore of Oahu (Hawaii), the Xcel Building is Xcel’s headquarters and manufacturing facility. Hoku Solar plans to install a 34-kilowatt PV system, expected to generate more than 53,500 kilowatt hours of clean, renewable solar electricity each year and will contribute directly to Xcel’s ongoing corporate sustainability initiative.

Once installed, Xcel’s PV system is expected to produce enough electricity over its lifetime to power the equivalent of 151 homes for one year, and offset more than 885 tons of carbon dioxide emissions — the equivalent of removing more than 57 cars from Hawaii’s roadways.

“Hoku is pleased to partner with Ed D’Ascoli and the Xcel Building on this exciting project,” said Dustin Shindo, chief executive officer of Hoku Scientific. “Commercial scale PV systems make proven business sense in Hawaii, and we are proud to have been selected to help integrate clean, sustainable power into Xcel’s operations.”
“Xcel is focused on finding meaningful ways to reduce our environmental footprint that make good business sense,” said Ed D’Ascoli, founder and president of Xcel. “Our company was built on a passion for the ocean, so we are mission-compelled to do everything we can — as a company and as individuals — to implement sustainable strategies into our core business. And, like Xcel, Hoku is a global company with deep local roots committed to our community and environment. We saw a natural fit between our companies.”

HOKU 5.60, -0.43, -7.1%) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets, sells, and installs turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells.

About Xcel

Founded in 1982, Xcel International, Inc. (Xcel) is a global wetsuit brand distributed throughout the Americas, Europe, Asia, and the Pacific Rim. Headquartered on the North Shore of Oahu, Hawaii, Xcel’s core wetsuit business focuses on the cutting edge of material and design development. Xcel’s primary markets include surf, dive, wakeboard, paddle, and sun (UV protection).

Xcel was acquired in 2007 by Billabong International Limited (ASX: BBG) and, in addition to its North Shore office, operates retail stores on Oahu and Maui; and a warehouse/repair facility in California. The Xcel Building, owned by Xcel founder and president Ed D’Ascoli, was built in 1990 to house Xcel’s headquarters and domestic manufacturing operations.

Forward-Looking Statements

This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to Hoku’s ability to successfully complete the photovoltaic (PV) installation for Xcel International; the expected performance and durability of Hoku’s PV system; Hoku’s future financial performance; Hoku’s business strategy and plans; and objectives of management for future operations. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions intended to identify forward-looking statements.

These statements involve known and unknown risks, uncertainties and other factors that may cause Hoku’s actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. In evaluating these statements, you should specifically consider the risks described in Hoku’s filings with the Securities and Exchange Commission.

Except as required by law, Hoku assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Credits: Market Watch

The Economic Stimulus package of legislation passed by the House of Representatives on a 264-158 vote is aimed at helping Americans struggling with high prices, providing jobs while simultaneously repairing the country’s crumbling roads, bridges and schools, helping seniors and working families afford groceries and health care, and offering Americans job training to gain new skills and earn higher wages.The measure includes funding in a variety of areas that would help residents of Hawaii:

Fixing Crumbling Schools

Nationally, the bill includes $3 billion to repair crumbling schools, provide students with first class technology, and to improve energy efficiency. One-third of public school buildings need extensive repair or total replacement and two-thirds have environmental problems unhealthy for children.

According to the Department of Education’s annual report to the legislature for repair and maintenance, there is a $409 million backlog. Hawaii would receive about $15.7 million, proportional to the amount of Title IA funds our schools receive.

Public Housing

Nationally, the Economic Stimulus bill targets $1 billion to repair and construction projects, including critical safety repairs.

Based on FY08 numbers, Hawaii should get about $5.8 million for the Hawaii Public Housing Authority’s Capital fund. According to the Hawaii Public Housing Authority, the State has a $200 million backlog of repairs and maintenance in public housing.

Job Training

Nationally, the bill includes $500 million to help Americans find and prepare for good jobs, including $400 million for dislocated worker and youth employment activities, and $100 million to provide customized help to folks receiving unemployment benefits. Unemployment claims have increased by over 38% this year and many people exhaust their benefits before finding work.

Based on past funding, Hawaii would receive about $654,000 for Youth Employment Activities and $145,000 for Dislocated Worker Employment and Training Program.

Food Assistance

The Economic Stimulus legislation contains $2.6 billion to address rising food costs for seniors, people with disabilities and very poor families with children. This year, an average of 27.8 million individuals, and 12.5 million households, received food stamps.

Under the legislation, Hawaii would receive approximately $9 million in additional food stamp benefits to help 98,000 Island residents.

Water and Wastewater Improvements

Nationally, there is an additional $6.5 billion for the Clean Water State Revolving Fund.

Honolulu is in the midst of about 50 projects to repair sewer lines. The cost of that and other sewage system projects amounts to more than $560 million. Last year, the city entered into three CWSRF loan agreements that will save Hawaii residents $130 million in interest over the life of the loans. This investment is critical to saving Hawaii residents’ money and ensuring safe wastewater systems.

Drinking Water

Nationally, there is $1 billion for the Drinking Water State Revolving Fund to repair, rehabilitate and expand water systems in the legislation, providing a source of much-needed loans for water utilities.

Hawaii would get at least $10 million for repairing and replacing our aging drinking water infrastructure, additional treatment capacity to comply with new standards and security-related improvements.

The legislation has gone to the Senate for its consideration, however, there is yet no indication about when or whether the Senate might act on the bill before adjournment.

Credits: Hawaii Reporter

It’s a growing trend in states like California, Florida and Nevada where housing markets there are plundering.

Now Hawaii is jumping on the foreclosure tour bandwagon.

A Central Oahu real estate firm is the first in state to offer people a creative way to take advantage of our tight economy. Some say it eases the confusing process and stream lines the many steps to finding a foreclosure.

To some it may look like an ordinary tour, but to these people it’s a big step in their lives.

“We’re settled here in hawaii and the only real way to make it here in hawaii is to make an investment of that nature,” Tour participant Cristo Basas said.

This do-it-all foreclosure tour has been running for a few months.

“Everybody’s looking for a good deal and this is a great opportunity, unfortunately there’s people that have lost their home, so there’s a sad side to all of this,” Tour coordinator Duke Kimhan said.

These realtors take care of everything for buyers, from start to finish. the tour lets people see up to 10 homes in a three to four hours.

“With foreclosures you can get anywhere from a 10, 30, sometimes 40 percent discount on homes in areas that are in an area that you’ve been wanting to buy back into,” Kimhan said.

That’s what Cristo Basas wants and now has the opportunity right in front of him because of the tours. but they’re also changing the stereotype of foreclosures.

“When you think of a foreclosure home, you sometimes get an impression of that it’s a rundown place or it’s in really bad shape and that’s not the truth at all,” he said.

Hawaii has one of the lowest foreclosure rates in the nation, but realtors keep saying that foreclosure tours are gaining in popularity, with little more than 40 tours two weeks ago and Saturday, there’s a little more than 25 people.

“For beginners it’s a great thing to learn the market and get your questions answered but for experts you pretty much need to know the numbers, how much it is worth and just get the deal done, so i’m more straight to the point, I don’t need to see all the fancy dance stuff,” Real estate investor and tour participant Shelby Brown said.

A tour that links some with homes they never thought they’d get into. Realtors say the amount of foreclosures should continue to grow through next year.

Credits: KHNL

Congress’ dramatic rejection of the Bush administration’s $700 billion economic rescue plan and the largest single-day point decline in the U.S. stock market caps a year-and-a-half long slide in the U.S. mortgage markets that saw the demise of the Hawai’i subprime market and tightening in the local high-end mortgage market.

But whether the nation’s credit turmoil will have an extensive impact on local middle-class homebuyers will depend on how long it takes the federal government to implement its bailout and how far-reaching the reforms are, analysts say.

“If we don’t get some sort of effort to successfully revive the credit markets, things could get worse,” said Greg McBride, senior financial analyst with Florida-based www.Bankrate.com.

Already, local homebuyers are subject to tighter lending standards and have to come up with larger down payments.

Hawai’i buyers who are financing their purchases with jumbo mortgages of $793,750 or more are having to pay higher interest rates and are finding such loans less available.

The zero-down loans and low-teaser rate, subprime loans are all but gone.

“(Lenders) have gone from being incredibly lax to incredibly tight,” said Wendy Burkholder, executive director of Consumer Credit Counseling Service of Hawaii.

“Even with reasonable credit scores, people can’t get financing lined up.”

The latest crises on Wall Street and the financial markets are a big worry for anyone who has invested in the financial markets for their pensions or savings, said Gary Fujitani, executive director of the Hawaii Banker’s Association.

But local consumers haven’t felt the sting as badly as homebuyers on the Mainland.

Local first-time buyers can still find low down-payment loans in the 3 percent to 3.5 percent range,

And while rates on 30-year fixed mortgages may have inched upward to about 6.25 percent, Fujitani believes they’re still attractive compared to historical interest rates.

“The impacts have been more dramatic on the higher end,” said Lisa Tarumoto, president of the Mortgage Bankers Association of Hawaii.

“There’s still financing out there.”

According to Fujitani, local homebuyers and banks tend to be conservative and many shunned the exotic adjustable-rate mortgages and subprime products that got Mainland buyers and financial institutions in trouble.

Hawai’i banks also remain well-capitalized and are considered to be very healthy by the federal regulatory agencies.

“During these trying times, it has served us well. We can take care of our community’s legitimate financing needs,” Fujitani said.

Pearl City resident Luci Dunphy said she bailed out of her adjustable-rate mortgage in April after interest payments on her loan increased from $1,400 a month to about $2,200 a month.

Dunphy said she refinanced her home with an ARM from Ameriquest Mortgage Co. in 2006 that adjusted upward earlier this year. When she complained to the lender, Ameriquest officials told her that they should have expected the increased payments when they signed the loan papers.

Dunphy said she was able to sell the home just days before the bank began foreclosure proceedings.

Dunphy was among thousands of local residents who received a loan from Ameriquest, which paid more than $325 million to settle a lawsuit from state regulators who accused the company of deceptive lending practices.

“We got screwed,” said Dunphy, who now rents a home in Pearl City. “I would like to buy a house but now is not the right time.”

Credits: Honolulu Advertiser