Hawaii NASED to be delivered as P3 project

Image: NASED

The Hawaii Governor Josh Green confirmed recently the new direction for the New Aloha Stadium Entertainment District (NASED), with both the new Aloha Stadium in Hālawa, Hawaii (US) and the surrounding district to be delivered as one, integrated public-private-partnership (P3) project.

‘WT’ stated that the stadium portion will be a design-build-operate-maintain contract where the developer will design and build a new stadium using State and private funds. The developer will also have the right to develop a portion of the surrounding district into a mixed-use development in line with the State’s vision and to use revenue from this to help subsidize the construction of the new stadium as well as fund ongoing stadium operation and maintenance costs over the life of the operations contract.

The NASED Project in Hālawa, in Central O’ahu, Hawai’i, aims to create an exciting and vibrant new Aloha Stadium and surrounding district. This ambitious endeavor involves designing, constructing, operating, and maintaining the new stadium while also demolishing the existing one and revitalizing that area of the site.

The new Aloha Stadium will have a reduced seating capacity of 25,000 to 30,000, compared to the current 50,000 seats. It will be designed to accommodate various sports and entertainment events, such as football, soccer, rugby, and others played on a rectangular field. The multipurpose stadium will be designed to enhance the fan experience with a comprehensive array of amenities and support spaces to market new events, including various seating options, extensive concessions and efficient facility circulation.

The 50,000-capacity Aloha Stadium is a closed multipurpose stadium located in Hālawa, Hawaii, a Western suburb of Honolulu. It is the largest stadium in the State of Hawaii. As of December 2020, the stadium ceased fan-attended operations indefinitely and placed a moratorium on the scheduling of new events.

‘WT’ further stated that after months of due diligence, Governor Green found that the former two-project approach, while sensible under the previous funding paradigms, required the State to assume an undesirable amount of risk regarding ongoing funding.

Shared Brennon Morioka, Aloha Stadium Authority Chair, “The Stadium Authority fully supports Governor Green in his new direction for NASED. We look forward to issuing the new procurement and being able to provide our community with a much-needed new stadium and a vibrant community district.”

This new approach transfers the responsibility of long-term funding and cost overruns to the private sector, reducing the risk of financial burden on the local taxpayers. Effective risk allocation is a key tenet of P3 projects, which places each risk in the hands of the party best equipped to manage that risk.

In addition, design-build-operate-maintain represents the preferred model after months of analysis. The State plans to issue the new Request for Qualifications in the coming months, however, prior to this, it intends on undertaking a market sounding exercise to obtain valuable feedback from the private sector and the prospective bidders to confirm and optimize the updated approach.

To facilitate this new direction, the existing procurement processes for the stadium and real estate projects have been terminated. The shortlisted proposers for each have been invited to participate in the upcoming market sounding exercise for the new approach.

Subject to the market sounding exercise, the State plans to conduct a two-stage procurement process for the new direction, commencing with a Request for Qualifications being issued in late Fall 2023, a contract with the successful developer being signed in mid-2025 and the new stadium ready for the 2028 football season.

A Request for Qualifications is a step sometimes used in the formal process of procuring a product or service, for example, by a Government agency. It is typically used as a screening step to establish a pool of vendors that are then qualified, and thus eligible to submit responses to a Request for Proposals. While a Request for Qualifications determines a vendor’s qualifications, a Request for Proposal solicits proposals by vendors interested in performing the work.
 

Quick Facts

• Governor Green and his administrative team have reached consensus on a new approach for NASED, where the new Aloha Stadium and the surrounding entertainment district will be delivered via one contract;
• A new RFP process will commence later this year, after the State undertakes market sounding with the industry to refine the new approach;
• The target opening date for the new Aloha Stadium is in time for the 2028 UH football season (University of Hawaii Rainbow Warriors Football team which represents the University of Hawai’i at Mānoa in National Collegiate Athletic Association (NCAA) Division I Football Bowl Subdivision (FBS) college football);
• This new approach uses the current appropriation of ~$400 million and transfers the responsibility of long-term funding and cost overruns to the private sector, reducing the risk of financial burden on the local taxpayers;
• The new Aloha Stadium will be designed, built, operated, and maintained by the successful developer and will have a minimum of 25,000 seats;
• The successful developer will be expected to deliver the project in line with the State’s vision of an entertainment district. This is still expected to be built out over approximately 20 years;
• The existing procurement processes for the stadium and real estate projects have been canceled. The previously shortlisted teams have been invited to participate in the new approach; and
• Much of the previous work to date can be repurposed for the new approach.

 

Market Sounding

A Market Sounding webinar will be held on June 14^th, 2023, to allow for discussion and input from the prospective bidders, the industry and the users on the new approach. More details on this event will be announced in the coming weeks.

A Market Sounding is conducted by organizing a procurement briefing/conference open to any interested private parties. The main purpose of this step is to get some initial feedback from the market on the feasibility of the proposed PPP project.

Indianapolis (US)-based the National Collegiate Athletic Association (NCAA) is a nonprofit organization that regulates student-athletics among about 1,100 schools in the United States, Canada and Puerto Rico.

The NCAA Division I Football Bowl Subdivision, formerly known as Division I-A, is the highest level of college football in the United States. The FBS consists of the largest schools in the National Collegiate Athletic Association. As of the 2023 season, there are 10 Conferences and 133 schools in FBS.

The WT Partnership is one of the fastest growing advisory firms in North America. Founded in Australia back in 1949, WT is known as the oldest startup in the industry and has been a force in North America since 2010. A trusted advisor to Owners, Developers, Government, and the Private sector clients, the WT currently manages billions of dollars of active mega projects across North America.

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