Wednesday, August 25, 2010

Tampa Expressway Spurs Tons of Development

Let me first quickly remind the reader about our Kapiolani Boulevard re-development lesson which I first posted in 2008, and then we will go to the pictorial tour of the 10 mile, $320 Million, 60% elevated on single posts Tampa Expressway.

Does Rail Stimulate Long Term Redevelopment? We do not need rail for development and opportunities to flourish. We need a robust economy, a well-paid populous, low taxes, good quality products and services (tourism, education, local products, etc.), steady and smart leadership, and reliable infrastructure and government operations. Rail is simply a scheme to rob a million people (through taxes) in order to benefit a few hundred insiders and a few thousand workers, most of them temporary.

On to Tampa now... Dr. Martin Stone, Planning Director for the Tampa-Hillsborough County Expressway Authority estimates that about $1 billion in new development at its urban end has occurred since the opening of the Tampa Expressway.

Unlike regular Transit Oriented Development (TOD) which are highly subsidized, no tax incentives were needed for these developments.

2052 Streetscape showing the Grand Central (residential, parking, multiple floors of office and commercial on first floor) development, the Slade (residential and commercial on first floor) development and the Towers of Channelside (residential, parking and commercial on first floor at the far end of photo)

2053 Grand Central and Ventana (3 separate buildings - Madison Street view)

2054 Grand Central and Ventana (3 separate buildings - Kennedy Blvd view)

2055 The Slade on Meridian

2057 The Slade with Grand Central in background

2060 Towers with retail on first floor and Cruise ship parking garage in background

2061 New History Museum (on left) with Towers on right

2062 New History Museum

Wednesday, August 18, 2010

Tourism Industry: Fact, Action, and Possible Destruction

Fact: Tourism is important to all of us on Oahu but the grim reality is that since the 1996-1998 high, tourism has been at a fairly constant slide, as DBEDT monthly statistics since 1990 show.

The graph above of international arrivals shows that 9/11 and SARS and Iraq war had strong negative impacts. Add to this the weak national economy since 2008 and domestic arrivals also have dropped sharply. See below.

Today's visitors observe a congested, aging and increasingly unappealing Oahu with potholed roads, tired looking parks, and hordes of homeless.

Action is needed now. My vision is to restore the postcard image of Oahu as a great tourist destination by focusing on fixing the infrastructure and maintaining our parks, beaches and tourist attractions. That is real value to the tourist industry and all of us.

The more attractive we are as a visitor destination, the more the hotels can get higher rates and higher quality jobs in the hospitality industry can be had.

Destruction. My opponents in the mayor race will significantly harm Oahu's tourist industry in three ways:

(1) Both advocate rail which is a giant project that will involve 10 years of messy construction to deliver a system that very few will use, according to the city's forecasts. The construction mess and the very ugly all-elevated rail line will be tourism killers for Oahu.

(2) The rail is gigantically expensive so other needs such as dilapidated parks and beaches, homelessness and potholed roads will be under-funded. Thus they will get worse and Oahu's tourist appeal will worsen.

(3) The taxes needed to construct and maintain rail and the sewers add up to $10 billion which means heavy extra taxes. How heavy? The typical sewer bill 15 years from now will be about $2,500 per year plus another $1,000 for rail for each taxpayer.

People in the hospitality industry will find it increasingly difficult to afford to live in Hawaii. Hotels may increase wages and will have to pay higher city taxes. So hotels will have to charge much more for their rooms to offset the costs, thus making a visitation to Hawaii more costly and less competitive.

My competitors' model for "rail jobs" is a long term disaster.

Hawaii's Energy Options

Status quo, Part 1: oil and coal -- Coal will remain affordable for decades (excluding made up carbon taxes). Oil prices will reach $150/barrel again in the future and at anything over $200/barrel using 2010 as a base (barrel under $80) will stress transportation budgets on Oahu, cost of goods, and price of flights.

Status quo, Part 2: burn trash is profitable now and probably still doable at $150 per barrel of oil. Oil is essential to mix with trash for the incineration process. The downside is that about 20% of the trash volume is converted into trash so every five years the pile that needs to be land-filled is as big as one year's worth of land-filled trash.

Other energy from trash: Collect methane from decommissioned trash land fills. This is a remote possibility for the Waimanalo Gulch and the power gain will likely be small.

Geothermal is a great option, very clean, but for the Big Island only. With all the volcanic activity, it makes little sense to burn oil on the Big Island for electricity generation or for other renewable energy installations.

Then there is a host of renewable energy technologies some of which have known risks, costs, reliability and effectiveness. Others are heavily dependent on subsidies to make their cost per mega-Watt (MW) competitive when oil costs less than $150/barrel. The mix that is worth investigating for feasibility, planning and costing in producing electric power includes:
  • photovoltaic (PV) or solar,
  • wind, various technologies,
  • wave, various technologies,
  • biomass, various technologies,
  • nuclear, various sizes, configurations and location options,
  • other less known technologies, some of which appropriate for small scale deployments.
The state needs a detailed 20 and 50 year plan for the four main islands completed by 2012.

Wednesday, August 11, 2010

Nuclear Power in Oahu's Future?

My statement at a recent mayoral debate that Hawaii should consider a nuclear plant for electricity stirred up some interest and apprehension.

Nuclear power for electricity in Oahu's future?

The likely answer is yes in order to sustain one million people and six million annual visitors 2,000 miles away from most resources, given that over 90% of the electricity is now fueled by oil. Planning for it, including a senate vote by over 2/3 in the affirmative, will take well over 10 years. So nuclear power is possible perhaps in 20 years, about 20 miles off-shore, for one 1,000 MW power

The fact is that at the present time
Oahu has nuclear reactors totaling over 1,000 MW just 6 miles from Aloha Tower. See picture below.

  • 15 nuclear submarines are home-ported in Pearl Harbor
  • 440 nuclear power plants are on the planet now

Earlier this year,
  1. Bill Gates proposed mini nuclear reactors as the essential means for the future of the human race on the planet.
  2. President Obama released over $8 Billion in loan guarantees for a new nuclear power plant in Georgia.
  3. Hawaii Legislature proposed a bill to study nuclear power for Hawaii.
I wrote this in January...

The scarcity and cost of fossil fuels makes the development of expensive nuclear energy a cost-effective if not essential proposition. France and Japan are leading examples of reliance on nuclear power with minimal ill effects. At the first oil crisis in 1973, only 1% of Japan’s electricity was produced by nuclear energy. By the second oil crisis of 1979, 4% was from nuclear; in 2000 the ratio was up to 12% and the 2010 goal is 15%.

As of 2005, Japan had 52 operating nuclear plants, 3 in construction and 8 in planning and design. France is even more ahead: Its 59 nuclear plants produce 88% of the country’s electric power. There are about 440 nuclear power plants on the globe. France, Japan and the U.S. combined produce over 55% of the nuclear power energy on the globe.

Click link to READ MORE and see the list of our Pearl Harbor nuclear submarines.

Wednesday, August 4, 2010

Managed Road PPP is the Key for Jobs, Low Taxes and Congestion Relief

02 Aug 2010 -- Eight groups eye Puerto Rico’s first toll road deal. A potential concession for two of the island’s toll roads drew interest from a mix of infrastructure funds, including those managed by Morgan Stanley, JPMorgan and Goldman Sachs.

This is five years after the spectacular failure of installing a heavy rail system on the island city of Jan Juan. San Juan rail had a 100% overrun in construction costs and five years after opening achieved far less than 50% of the forecast daily ridership for the opening year.

Roads both bring congestion relief and private money. Managed roadways are a win-win for commuters and taxpayers.

Here is a more eloquent take on solving congestion, providing jobs and keeping taxation in check by Economics Professor William A. Galston of the University of Maryland and fellow with the Brookings Institution.

"The traditional response is to use the federal government's taxing authority to raise infrastructure funds, and appropriations to fund specific projects. This model has hit a wall: not only will it be very difficult to raise taxes in current or foreseeable circumstances, but there's also the problem of how local and special interests influence, even determine, project selection for reasons that have nothing to do with economic efficiency."

"Over the past generation, we have systematically underinvested in the foundation of an efficient economy and society — namely, infrastructure. Anyone who has traveled in recent years knows that our systems of transportation and information are no longer world-class."

Today, we have trillions of dollars of capital sitting on the sidelines earning almost no return, and millions of long-term unemployed workers who would be thrilled to receive a steady paycheck again. The task is to bring these two factors of production together around projects that make sense.

  • To attract private capital, projects must earn a reasonable return, which means increased reliance on user fees (tolls or levies per unit consumed) rather than general taxation.
  • Because most infrastructure projects generate public goods (such as economic growth in the areas it opens up) as well as private goods (such as easier commutes).
  • To promote economic efficiency and growth, projects must be chosen on economic rather than political grounds. The new model requires a shift away from congressional dominance of the selection process toward an empowered board substantially insulated from day-to-day political pressures.

Sunday, August 1, 2010

Freeway Multi-car Collision. Three Apparent Lessons.

Sunday, August 1, 2010, 4:00 PM. A friend sent me three pictures from an accident on H-1 Freeway, Honolulu-bound, near Aiea minutes after it had occurred. Here are a few lessons from the three cell phone pictures received.

(1) This police car is parked at the wrong angle. The police car that blocks and protects the accident scene should be parked in a direction that guides unaffected drivers to the safe way around the scene.

(2) The police officer is talking to involved drivers on the freeway. On a freeway scene all unharmed persons need to be relocated to the shoulders immediately.

(3) This truck appears to be the start of the multi-car "spin outs" on the slick pavement. Notice the old, worn, dirty and off-road style tires. A vehicle with proper highway tires might have not caused this half dozen vehicle collision.

Poverty of Dollars is Largely a Statistical Creation. Poverty of Spirit is Real.

Walter Williams of the Jewish World Review makes a powerful argument that poverty as applicable worldwide is almost absent in the US. He says:

"Material poverty can be measured relatively or absolutely. An absolute measure would consist of some minimum quantity of goods and services deemed adequate for a baseline level of survival. Achieving that level means that poverty has been eliminated. However, if poverty is defined as, say, the lowest one-fifth of the income distribution, it is impossible to eliminate poverty. Everyone's income could double, triple and quadruple, but there will always be the lowest one-fifth."

The real malaise in the U.S. is poverty of the spirit which leads to many ills in our
modern society:

"Yesterday's material poverty is all but gone. In all too many cases, it has been replaced by a more debilitating kind of poverty — behavioral poverty or poverty of the spirit. This kind of poverty refers to conduct and values that prevent the development of healthy families, work ethic and self-sufficiency. The absence of these values virtually guarantees pathological lifestyles that include: drug and alcohol addiction, crime, violence, incarceration, illegitimacy, single-parent households, dependency and erosion of work ethic. Poverty of the spirit is a direct result of the perverse incentives created by some of our efforts to address material poverty."

Read his full article "Where Best to Be Poor" for a fuller argument why material poverty is almost largely absent in the U.S.