Some members of a Maui County Council committee expressed reluctance to part with the old Wailuku Post Office site as part of a proposed lease exchange for a new Maui Bus hub on state land in Kahului.

The council’s Housing, Human Services and Transportation Committee on Wednesday deferred action on a bill that would authorize Mayor Alan Arakawa to enter into an agreement with the Hawaii Housing Finance and Development Corp. and the state Department of Accounting and General Services for the lease exchange.

A current memorandum of understanding calls for the county obtaining a 65 year lease at $1 a year for a half acre of state property at the corner of Kaahumanu Avenue and Kane Street for the Maui Bus Transit Hub. In exchange, the county would provide the state Department of Accounting and General Services the same lease terms for the county’s 0.43 acre property in Wailuku at the corner of Wells and High streets in Wailuku for possible office space.

The state has committed $2.5 million for construction of the hub, according to the council bill. The county has budgeted $650,000 in the current fiscal year for the design of the new hub.

The county needs to find a new site for the bus hub because Queen Ka’ahumanu Center, the site of the current hub, will not renew a lease after it expires Jan. 31, 2020.

County Deputy Transportation Director John Buck told the committee that the department has looked for other sites for the hub, but the proposed location across the shopping center has many advantages. Being so close to the current hub, the site will mean fewer impacts to current bus schedules.

He also noted that the hub will provide residents of a soon-to-be-built senior affordable rental project Kahului Lani nearby on Vevau Street easy access to public transportation.

But some council members questioned if the exchange would be an even one based on property values and development potential.

“I’m not OK in giving up our space in Wailuku,” said Council Member Alika Atay, noting a need for more space for county offices in Wailuku.

“We have been talking about expansion of our Maui County campus right here,” he said. “I look at that as valuable property, and we going trade ’em even for even? It doesn’t compute here.”

Council Member Don Guzman asked Hawaii Housing and Finance Development Corp. Executive Director Craig Hirai if receiving the capital improvement money for the hub was contingent on the state leasing the Wailuku property.

Hirai said the selection of the site was more of a planning issue. The lease of the county’s Wailuku property would assist the state Department of Accounting and General services in its master planning for state facilities. The old Wailuku Post Office site is next to the State Building and the courthouse.

Hirai said the state has land in Kahului but little in Wailuku.

Guzman said it is his assessment that the lease for the old Wailuku Post Office site was more of a “request” and not tied to the state CIP funds.

The site currently is used for county employee parking.

The overall proposed agreement involves several factors and players. The housing corporation is involved as the lead agency for the Kahului Civic Center Mixed-use Project, which involves building multifamily affordable rental housing units. This would go up around the bus hub.

The memorandum of agreement includes the state Department of Accounting and General Services, which controls the Kahului parcel through a 1993 executive order; the Housing Finance and Development Corp., which will be the lead agency in building the affordable housing project; and the county, which needs the bus hub.

The housing corporation board approved the memorandum of agreement in June. The state Legislature provided $2.5 million in capital improvement money for the housing project and bus hub and called for $1.5 million of the $10 million Dwelling Unit Revolving Fund to go to improvements for a portion of the Kahului Civic Center site.

Council Member Kelly King and Atay raised concerns about the bus hub being impacted by sea-level rise, but Council Services staff pulled up a study on sea-level rise showing the hub outside of the threat zone.

The old Wailuku Post Office was demolished in 2013 and was one of the early flashpoints between Mayor Alan Arakawa and the County Council. The council had approved a rehabilitation of the building and questioned whether the mayor overstepped his authority by leveling the structure.

Prior to recommending a deferral, committee Chairwoman Stacy Crivello noted the time constraints with the end of the Queen Ka’ahumanu Center lease looming.

“I hear you from the fact we need office space, so does the state,” she said regarding the reluctance of releasing the county’s Wailuku property. But she pointed out that the state was putting in several million dollars for the county bus hub.

“I think most important we have come up with a very collaborative approach trying to provide for our people of both sides, from the state level as well as our local county level,” she said.

* Melissa Tanji can be reached at mtanji@mauinews.com.