Settlement in $324M Hitachi suit is coming, HART says

Yahoo

26-04-2025

A more than $324 million lawsuit brought by rail's principal contractor against the Honolulu Authority for Rapid Transportation in 2024 appears on the verge of a final settlement, while condemnation actions will proceed on four downtown area properties.
The HART board of directors oversaw both matters during its monthly meeting Friday.
HART Project Director Vance Tsuda announced the rail agency was close to settling a $324.1 million lawsuit filed in December by Hitachi Rail Honolulu JV, related to work on the over-$10 billion Skyline project.
Hitachi's lawsuit alleges HART's seeming dysfunction to set timely schedules caused cost increases to go off the tracks by tens of millions of dollars—expenses the train company says it was forced to solely absorb.
Famous for Japan's iconic high-speed bullet train, ­Hitachi was hired by HART in 2011 on a $1.4 billion ­contract.
In return the company was to design, build, operate and maintain the city's cutting-edge fleet of fully automated, driverless electric trains, expected to run along the 18.75-mile elevated guideway system to 19 stations, from East Kapolei to Kakaako.
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During the board's project oversight committee meeting, rail staff indicated HART is completing negotiations with Hitachi to settle the claim for alleged project delays incurred on rail segments 1 and 2.
'The claim is in excess of $100 million, ' a HART report on the issue asserts. 'Additionally, the second quarter revenues of fiscal year 2025 (were ) lower than expected based on previous year trends.'
As far as planned eminent domain actions, the panel voted to adopt a request for approval to notify the Honolulu City Council of the rail agency's intent to acquire 'by eminent domain fee simple interest ' portions of three properties in Kakaako. These properties are being sought due to their proximity to the planned Civic Center Guideway and Stations project, which is scheduled to open to the public by 2031.
The board also voted to condemn a fourth property on Dillingham Boulevard, between Puuhale Road and Mokauea Street in Kalihi, to allow easement access for placement of Hawaiian Electric equipment.
The properties include :—560 Halekauwila St., owned by architecture firm Design Partners Properties No. 5 LLC.—609 Keawe St., owned by Bank of Hawaii, trustee for the Katherine McGrew Cooper Trust.—576 Halekauwila St., owned by Goodwill Kakaako Center LLC and Big Brothers Big Sisters Hawaii Properties LLC.—1956 Dillingham Blvd., owned by Gerald Je Chul Kang and Kloe Sookhee Kang.
In a report to the board, HART staff indicated the agency requires the three Kakaako properties 'to accommodate the placement of guideway straddle bent columns along Halekauwila Street.'
The amount of just compensation for each property has been determined according to the 1970 federal law the Uniform Relocation Assistance and Real Property Acquisition Policies Act, the agency's report states.
'HART provided an offer to acquire a fee simple interest in a portion of each of the properties, ' the report reads. 'Two of the owners have rejected HART's offer. The third has not responded to the offer.'
The property owners, according to HART staff, have been given a reasonable time to consider the offers.
'In order to adhere to the CCGS construction schedule, it is necessary to refer the properties to condemnation, ' the staff report states.
However, 'efforts will be made to continue negotiations with each owner with the goal of reaching an amicable and reasonable settlement, ' the report says.
HART will now inform the Council of its intent to acquire each property by eminent domain, the report indicates.
The Council has 45 days to approve or object to condemnation by adoption of a resolution of the notification to acquire the properties.
Upon approval or no action by the Council, the HART board will then be requested to approve each resolution authorizing the acquisition of the property by eminent domain, the agency says.
Before the board's vote, HART's director of transit property acquisition and relocation, Krista Lunzer, said two property owners—Design Partners Properties and Bank of Hawaii—formally rejected offers for their respective properties.
She also noted Goodwill Hawaii has neither accepted nor rejected offers for its property.
However, the nonprofit has publicly stated its objections to HART's intended condemnation due to potential negative impacts on Goodwill's operations and the inconvenience to staff and its disabled clients during construction and operation of the rail project Meanwhile, a co-owner of the 1956 Dillingham Blvd. property appeared before the board to oppose the eminent domain on her family's property.
Kloe Sookhee Kang noted the matter involves easement access to allow placement of a Hawaiian Electric transformer and accompanying protective bollards on a portion of their property.
'Unfortunately, the proposed terms still include ongoing maintenance obligations for us as property owners, including responsibility for bollards that exist solely to protect HECO's equipment, ' she said. 'If those bollards ever fail, and damage occurs to the transformer, we would be held liable. And that kind of risk that's tied to equipment that we do not own or control is simply unreasonable, and we have a hard time accepting.'
Kang requested the HART board 'remove the property owner's obligation to maintain the bollards and landscaping in that easement area, and remove the language that makes the property owner liable if bollards fail as their installation and upkeep should be HECO's responsibility.'
Lunzer would later say HECO's terms related to siting its equipment on private property—and having private property owners be responsible for that equipment as well as the bollards that the rail agency, in this case, installed—was standard practice for the utility.
'That's HECO's requirement. It's their requirement across the board, and they would not change it for the Kangs. We've asked on more than one occasion, ' Lunzer asserted. 'So that is the requirement in the standard easement document.'
Some board members questioned the utility's actions.
'So HECO requires that the property owner maintain the bollards ?' board member Christopher Moylan queried. 'For example, they wouldn't accept HART maintaining the bollards ?'
'It's not our facility, ' Lunzer replied.
Others, like board member Anthony Aalto, said, 'My heart goes out to the Kangs. On the other hand, this easement is on the 'critical path, ' and we have an even higher responsibility to make sure the project stays on track.'
After a closed-door executive session on the matter, the board returned to approve a resolution that requested the eminent domain proceed on the Kang property.