Hilo Harbor expansion stalls as state seeks key land acquisitions

A $62 million plan to remake the Hilo Harbor entrance is still moving on traffic fixes, but the project’s bigger payoff remains trapped by a land deal that has not been closed. Until the state secures five privately owned parcels along Kalanianaole Street, drivers, harbor users and Keaukaha residents will keep living with the same truck congestion that clogs the port entrance every day.

The proposed work centers on traffic flow between Kuhio Street and Kahana Street, where cargo trucks, cruise-ship passengers and school traffic regularly collide in the same narrow corridor. The Hawaii Department of Transportation says the project would add a dedicated turn lane from Kalanianaole Street into Hilo Harbor and stacking lanes for semi-trailers inside the harbor, with the goal of separating cargo traffic from cruise traffic and improving emergency escape routes out of Keaukaha.

The obstacle is not engineering. It is property ownership. State officials still need to acquire five parcels totaling 9.38 acres directly adjacent to the harbor before the work can begin in earnest, and the state has said the project will not move forward until that ownership is resolved. Transportation officials have described the impasse as nearing a tipping point, with eminent domain now a possible fallback if voluntary sales do not happen.

The parcels sit on land that would be used to widen the harbor entrance, and the draft environmental assessment said the project would likely require demolition of buildings on all five. The properties include AirGas Gaspro, Hilo Auto Sales and Rentals, Maika‘i Auto Body and Paint, Keoki’s Auto Repair and Zion’s House of Praise Holiness Church, among others. If the project goes ahead as planned, more than a dozen businesses and a church could be displaced.

That prospect has already stirred resistance. At a July 2023 public meeting at Keaukaha Elementary School, residents and business owners raised concerns about lost livelihoods and said the state had undervalued the land. Greg Gadd, who owns or controls four of the five parcels, has argued publicly that the property was worth more than the state’s offer. The draft environmental assessment pegged the five parcels together at roughly $15 million to $17 million.

The state received $15 million in 2023 to acquire land for the harbor entrance project, but the timetable has slipped more than once. A 2024 update had expected the final draft environmental assessment by the end of 2023, yet the final environmental assessment was not published until October 2024. Even now, the Phase 2 environmental site assessment for the parcels has not been completed, despite the assessment’s expectation that acquisitions would wrap up by the end of 2025.

For now, the harbor plan remains split between what can be built and what cannot. Hilo may still get its new turn lane and stacking lanes, but the larger relief for Kalanianaole Street will not arrive until the state settles the land beneath it.