The City and County of Honolulu are preparing a $100 million initiative to support mixed-use developments, including the transformation of the Iwilei Center. This type of development combines residential and commercial spaces, promoting urban efficiency and sustainability. However, current state legislation enabling such financing is set to expire in 2028, coinciding with the projected start date for the Iwilei Center project. To address this issue, Kevin Auger, the city’s Housing Director, has called for the elimination of the expiration date. His argument centers on the necessity of stable funding mechanisms and equal rights between local governments and the state housing corporation.

Kevin Auger emphasized that without removing the sunset provision, issuing bonds becomes challenging, potentially hindering the city's ability to finance significant projects. He expressed confusion over why the state Legislature might hesitate to approve this extension, especially when both parties recognize its importance. Furthermore, Auger highlighted discrepancies in development rights between counties and the Hawaiʻi Housing Finance and Development Corporation, advocating for uniformity. The existing deadline complicates long-term financial planning, as projects often require years of preparation before execution.

A legislative proposal aims to eliminate the 2028 deadline but ties it to an unfavorable land exchange agreement. Under this arrangement, the state would acquire the Aliʻi Tower site, currently housing the city prosecutor's office downtown, in return for several properties like ʻAʻala Park and the Liliha Civic Center. Mike Formby, the City Managing Director, opposed this deal, arguing that it does not align with the best interests of city taxpayers. The city benefits significantly from rental income generated by the building, parking facilities, and free office space provided for the prosecutor and staff.

As the bill awaits review by the Senate Ways and Means Committee, stakeholders continue to weigh its implications carefully. Removing the sunset clause could provide much-needed stability for future mixed-use projects, ensuring that vital urban developments proceed without unnecessary financial obstacles. Conversely, rejecting the land exchange may require legislators to reconsider alternative approaches to achieve the same goal while respecting municipal interests.