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Next phase of Lahaina bypass sidelined after dip in rental car funds

DOT cites lack of funding, other projects like realignment of highway taking priority

Plans to extend the Lahaina bypass from Keawe Street to Kaanapali are on hold due to a decline in rental car surcharge funds during the pandemic and the state’s decision to prioritize other projects instead. — The Maui News / MATTHEW THAYER photo

The next phase of the Lahaina bypass — which will take the highway all the way to Kaanapali — is being pushed back as a funding source took a “huge hit” after tourism halted during the pandemic.

The Lahaina Bypass 1C project was scheduled for construction in federal fiscal year 2023 using $70 million of state funds from the rental car surcharge, which was reduced by the pandemic, said Lauren Armstrong, executive director of the Maui Metropolitan Planning Organization, the transportation planning agency for Maui island.

And the state Department of Transportation, which proposed the removal of the project from a priority list, said it is unsure when the next phase could get off the ground next.

“The rental car surcharge fund took a huge hit from COVID and we are moving forward with what we can afford statewide,” said Ed Sniffen, deputy director for highways at the state Department of Transportation.

“The state does not have the funding to prioritize Phase 1C at this time, and does not have a time frame for its delivery,” he added.

The Lahaina Bypass 1C project to extend Keawe Street to Kaanapali in hopes of alleviating traffic in West Maui was scheduled for construction in fiscal year 2023. Now it’s been sidelined after funds from rental car surcharges dipped in the pandemic. — The Maui News / MATTHEW THAYER photo

Currently the bypass diverts from Honoapiilani Highway near “cut mountain” in Olowalu and runs all the way to Keawe Street.

According to data from the state Department of Transportation, rental car surcharge fees received statewide in fiscal 2020 totaled nearly $73 million, while funds received in fiscal 2021 were around $32 million statewide. Officials said funds are spent in the county where they were generated.

A breakdown of the rental car funds by county was not immediately available.

With the funding that DOT does have, Sniffen said the department will look to other projects such as completing the widening of Puunene Avenue and protecting the “vulnerable portions” of Honoapiilani Highway from sea level rise, coastal erosion and storm surge.

It will also continue preservation and safety projects throughout Maui County, he said.

The next phase of the bypass, from Keawe Street to the Kaanapali connector, was one of the projects listed on the Maui Transportation Improvement Program list.

The MPO develops and maintains the list with input from its members, which come from the state Department of Transportation, various Maui County departments, three Maui County Council members and a Maui state representative and senator.

The list details all transportation projects on Maui that use federal highway or transit money or are regionally significant. By identifying projects in the program list, Maui can receive funding for roads, bridges, bus transit, trails, paths and sidewalks.

But early this year, the DOT proposed deleting funds for the Lahaina Bypass Phase 1C project from the list because limited rental car surcharge funds are being prioritized elsewhere.

The Maui MPO Policy Board approved the deletion of funds in March. While members considered public concerns about any delays in completing the project, they also noted the priority of completing the Honoapiilani Highway realignment, said Armstrong.

The MPO is now proposing to remove the project from the Transportation Improvement Program list because it’s not expected to happen within the plan’s four-year time frame. But she added that Phase 1C “will be considered in future years for federal and state funding.”

As for trying to keep the bypass project on the list now, Armstrong said, “there is currently no policy to reserve rental surcharge funds for a project.”

When the rental car surcharge funding levels recover, “more consideration for the timing of the construction of Phase 1C can be made and the Rental Surcharge plan and the Maui TIP can be adjusted,” Armstrong said.

But the moves do not sit well with some in West Maui.

“I’m opposed to taking anything off (the TIP). Once you take something off it can get lost somewhere,” said Joe Pluta, director of the West Maui Taxpayers Association. “It doesn’t need to be taken off, it can be notated that there was a delay in maybe income.”

He pointed out that tourism over the last six months “has exceeded all expectations.”

The West Maui Taxpayers Association originally lobbied for the creation of the Lahaina bypass project, with the state DOT and the support of Maui County, Pluta said.

West Maui state Rep. Angus McKelvey said being disappointed with the project being moved off the list “is putting it mildly.”

But he understands why the funding is no longer there and the need to realign Honoapiilani Highway.

“Maslow’s hierarchy of needs dictates that the money be used to move the (Honoapiilani) highway now, because we are one surge away from getting cut off,” he said. “But that doesn’t obviate the need, the pressing over need to get the bypass going past Keawe Street.”

McKelvey said that before the legislative session ended this month, he had already been trying to get support for using general obligation reimbursable bonds for the next phase of the bypass.

By using this type of bond, the state will be paid back when the rental car surcharge levels returns, he said, explaining that the project is currently relying on “direct revenue” bonds.

McKelvey, who is vacating his House seat to run for the state Senate seat for West and South Maui, said if he is elected this will be his “number one priority” to seek the general obligation reimbursable bonds.

Both Pluta and McKelvey also stressed that getting the next phase of the bypass completed is critical for the safety along Keawe Street, where the bypass currently ends.

“Keawe Street was never, ever, designed to be a terminus,” Pluta said. “It was just a connector roadway.”

“Everything they’ve done there to try to make it so you can live and take that road without getting killed, has been great,” he added. “But there are near misses and accidents there every day, I see it all the time.”

The Maui MPO is accepting comments now through June 2 on the Federal Fiscal Year 2022-2025 Transportation Improvement Program. For a list of draft amendments and instructions on submitting comments, visit mauimpo.org.

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

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