Investors appear to be in no rush to buy up land around Honolulu's planned $5.3 billion train.

The city expects the train and its projected 97,000 average weekday riders to spur billions of dollars of investment as 21 stations from East Kapolei to Ala Moana become hubs for housing, business and employment. That in turn could spur land values and real estate development.

So far there's little sign of land speculation around stations planned for Waipahu and Pearl City.

"There have been no overtures at all" from developers, said Saxon Nishioka, part owner of a three-quarter-acre Waipahu parcel immediately adjacent to a planned train station at Farrington Highway and Mokuola Street.

A search of property records within close proximity of two stations planned for Waipahu and another in Pearl City shows little sales activity since the route was disclosed in 2006. The project, which is a major priority for Mayor Mufi Hannemann, was supposed to begin construction in December, but has stalled amid a prolonged federal review.

Additionally, Gov. Linda Lingle has warned that she'll do a comprehensive review of project finances before allowing it to proceed.

"Maybe as the funding becomes a little more clear and the fight between the state and the city stops, then maybe somebody will get excited about it," Nishioka said. "But right now I guess everybody is waiting to see if the governor or the mayor is going to win."

A rise in interest in land around train stations will come, but only after residents are sure the project will be built, said City Councilman Nestor Garcia.

"It's just too early. Once (groundbreaking) occurs then you might see action after that," he said. "Local people are like that -— seeing is believing."

In six Mainland cities, median home prices for residences near train stations increased an average of 6.4 percent compared with homes a half-mile away, according to Honolulu's environmental impact study of the rail project. Property values near train stations increased in value from a high of 18.6 percent in New York City to just 0.4 percent in San Jose, Calif.

In New York, that translated into a $2,300 increase in the average residential property value for every 100 feet closer to a station. The rise was just $60 per 100 feet in San Jose.

The lack of activity around planned rail stations could also be the result of the economic slowdown. Last year saw the lowest level of turnover in commercial property in Hawai'i in a decade with only $627 million changing hands.

LARGEST PROJECT

The rail project, which will be the the state's largest public works project, could affect O'ahu property owners in a variety of ways. Some, including those closest to the stations, could see property values increase. Others with property near the train tracks but far from the stations may face nuisance effects from increased noise and the unsightly elevated structures. That could lower their land values.

Another set of property owners will have no choice but to sell all or a portion of their land to make way for the elevated guideway and stations.

Landowner Continental Investment will be affected in two ways. The company owns five parcels on three acres of property right next to a planned Pearl City station. The city plans to acquire one of those properties to build the station.

Ronald Fujikawa, president of Continental Investment, said he hopes increased values of the remaining parcels will offset the loss. However, he said there's no plan to redevelop the property that's under long-term lease to an auto dealership.

"There is potential definitely," Fujikawa said. "When it occurs, then we will consider, but nothing before anything hatches.

"There's no sense moving when we don't know what kind of action is coming."

Paul Brewbaker, principal of local consulting firm TZ Economics, pegged the lack of speculation on transit properties in part to near-term economic uncertainties and a tight lending environment . Additionally, Hawai'i's history of mishandling projects such as the Hawaii Superferry and the Hōkūli'a development on the Big Island results in skepticism about the future of rail, Brewbaker added.

A court ordered most work at Hōkūli'a to halt in 2003 after ruling that the project was an illegal use of agricultural lands. That injunction was later raised, allowing work to resume as part of a settlement of the lawsuit that stopped the project.

And last year the Superferry service was halted by the courts because the project initially sidestepped the required environmental impact study.

STILL UNCERTAINTY

Honolulu voters supported building rail via referendum in 2008. Still, whether the train is actually built remains uncertain, Brewbaker said.

"In a democracy in Hawai'i you can have a referendum in which a majority of voters say thumbs up to steel wheels on steel rail and it still hasn't been decided," Brewbaker said. "That's what's wrong with Hawai'i, even a decision appears not to be a decision."

Two developers have long-range plans to tie in their projects to the train. However, neither has a definitive timeable. These include plans to develop the former Kam Drive-In property next to Pearlridge Center to include three high-rise residential towers and a retail complex.

The proposed 11,750-home Ho'opili project in 'Ewa planned to link low-rise developments into a proposed station near the University of Hawai'i's planned West O'ahu campus. However, the future of that project is unclear following an unfavorable Land Use Court ruling and opposition by several state agencies.

The city last year passed a land-use ordinance aimed at creating transit-oriented development districts around planned transit stations. The idea is to create special districts with specific community-tailored rules allowing for increased housing density, reduced parking and increased pedestrian and biking amenities.

The city's goal is to foster transit lifestyles and higher-density developments near train stations, which could curb urban sprawl.

"The goal of that, number one, is to maximize development within the quarter mile zone and, secondly, of course, to make the right connections so that it's convenient to use the stations and to play up the no-car kind of things," said City Councilman Gary Okino.