The final cost to the state is $3.45 million for a controversial tax credit approved in 2003 to help develop a world-class aquarium at Ko Olina Resort & Marina that was never built.

That's the total amount to be reimbursed to Ko Olina master developer Jeff Stone for his efforts to build an aquarium and other facilities allowed under the $75 million credit.

Had the reimbursement been bigger, the final tally for the tax credit payout would have added a more noticeable amount to the state's projected budget shortfall that has stakeholders fighting over every dollar of government spending.

The $3.45 million represents 100 percent repayment of spending between 2003 and 2005, mostly for aquarium planning and design.

Stone said he won't take $322,952 in credits that he is entitled to for 2007 spending, and said any spending from last year until May 31, the program's spending deadline, won't be claimed.

Also, Stone couldn't take $1.34 million in credits for spending in 2006 because he missed an annual deadline for filing a spending report with the state Department of Business, Economic Development and Tourism.

In all, Stone reported spending about $5 million on the project and is recouping $3.45 million through his aquarium development entity, West Honolulu Attractions LLC.

As part of a requirement by Gov. Linda Lingle for approving the tax credit, Stone agreed to award $2.5 million in scholarships aimed at Leeward O'ahu residents. The developer said a year ago he had already spent $2 million awarding roughly 1,000 scholarships and would complete the pledge.

Two years ago, it appeared Stone would pass up cashing in any earned credits when he agreed at the suggestion of Senate President Colleen Hanabusa to allow lawmakers to shift the credits to other projects supporting Leeward Coast residents.

But then last year, Stone registered to cash in $3.45 million in credits because lawmakers failed to pass any bills that sought to redeploy them. Stone later said he would still relinquish any credits if lawmakers redirected the credits for low-income rental housing on the Leeward Coast last year or this year.

"We hoped these funds would be used to support the development of affordable workforce housing, while also focusing on providing a training campus to educate our youth in visitor-related jobs," Stone said in a statement.

No bills to use the aquarium tax credit for affordable housing were passed last year or introduced this year. So it appears the last chapter is complete in the saga of the tax credit that drew no support from economists and heavy criticism from many others for appearing to benefit one landowner who then was looking for ways to revive a struggling resort.

The tax credit plan was introduced in the Legislature in 2002 by Hanabusa, D-21st (Nanakuli, Makaha), and Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai).

The purpose of the tax credit was to build a "world-class" aquarium and other facilities to stimulate growth in real estate development, jobs and visitors at the West O'ahu resort as well as the state's tax base.

Items that qualified for credits included an international sports training complex, travel industry management intern campus, seawater air-conditioning system and marine science and mammal research facilities.

No language in the tax credit law requires Stone to deliver an aquarium or other completed projects to collect credits for qualified spending.

Rules prohibited Stone from cashing in any credits until last year. Credit redemptions also can be no more than $7.5 million a year against tax liabilities, though there is no time limit for using the credits.

Some of the qualified spending was for a saltwater well initially envisioned to supply an aquarium. The seawater supply is being pursued to fuel an air-conditioning system and possibly to produce desalinated bottled water.

About $700,000 was spent on marine science that included relocating the nonprofit Dolphin Institute from Kewalo Basin to Ko Olina. About $200,000 was spent on sports training, or primarily work on a field at Ko Olina for NFL Pro Bowl activities.

Lowell Kalapa, head of the private, nonprofit Tax Foundation of Hawaii, said that given the loose language in the law he believes the state got off lightly on what it had to pay.

"It (could have been) $75 million out the back door," he said.

Kalapa also said that in his view, the law's critics were proven right about the credit not attracting development at the resort, which has boomed with condominium and time-share projects along with other resorts statewide in recent years as the economy and real estate markets thrived.

Stone has previously said that the tax credit produced results even though no aquarium was built, because the promise of the taxpayer-financed project helped attract investment to Ko Olina.