According to a recent study released by the University of Hawaii, a total of $461 million would be needed to repair and renovated its 10-campus throughout the Hawaiian Islands. The majority of the money, approximately $381 million, is needed for the main University of Hawaii Manoa Campus, which suffers from the most deferred maintenance. State Representative, Isaac Choy, who is the chairman of the House of Representatives Higher Education Committee, expressed his concern that University officials have not made tackling this growing backlog of repairs a priority in recent years. Choy commented, “They really dug themselves a hole. It’s time to say stop, let’s rethink this and let’s get it done. The part I’m upset about is I don’t think it’s the Legislature’s job to shine this light.”
Tom Katsuyoshi, the director of UH-Manoa’s Facilities Management Office, warned that the $381 million estimate for the Manoa Campus was a conservative estimate, and a lot more may be needed to fix the crumbling infrastructure. UH-Manoa Chancellor Tom Apple, added that he was looking forward to working with legislators and others “in trying to figure out how we can get our physical plant and our infrastructure back up to where it needs to be.” Apple stated, “We have buildings that are in need of significant repairs. It’s classrooms, it’s laboratories, it’s the exteriors of the buildings. When a building is not painted, when a classroom smells of mildew, I can’t quantify what that does to our reputation.”
Approximately 20 percent of all Hawaii’s school-age children are taught at private schools. This is nearly double that of the national average. Over the past few years, private schools across the islands have tried to keep their tuition costs lower to help families struggling with the recent recession. However, in a new survey, most of state’s private schools plan to increase their tuition cost for the 2013-2014 school year by between 3 to 6 percent.
Cathy Lee Chong, the spokeswoman for Iolani School, stated, “The cost of running a school is very expensive, with our most important resource being our faculty and people and their professional development. We try very hard to be sensitive to parents and the sacrifices they make to send their children to our school, and the board takes any changes in tuition very seriously.” Iolani will increase their tuition to $18,900 for all grade levels, or a 6 percent increase from the current school year.
Punahou Schools’ vice president and treasurer, John Field, stated, “We tried to limit the increase to the bare minimum with rising health care and insurance costs as well as faculty and staff salaries. We appreciate the belief that our families have in Punahou School’s pledge to do our best to control tuition increases. At the same time, we are very committed to providing a broad and impressive program to all of our students.” Punahou Schools will cost $19,950 for all grade levels, or about a 4 percent increase from the current school year.
At a glance, Mid-Pacific Institute will increase their tuition by 4 percent to $19,050 per year. La Pietra-Hawaii School for Girls will have their tuition increase by $17,600 or a 3 percent increase. Damien Memorial School will raise their tuition by 4.5 percent to $11,375 per year. Saint Francis School will increase their tuition to $10,000 for high school students. Despite these tuition increases, private schools across the state note that they have very high re-enrollment and demand for new admissions continue to remain strong.
A report issued by the state Department of Labor and Industrial Relations noted that the state’s seasonally adjusted unemployment rate 5.2 percent in February 2013, with no change from the month prior. Honolulu County had the lowest unemployment rate at 4.5 percent. Maui posted a 5.6 percent unemployment rate. Kauai and Hawaii (Big Island) Counties had a 6.4 percent and a 7.2 percent unemployment rate respectively. The counties’ unemployment rate are not seasonally adjusted. Nationally, the unemployment rate was 7.7 percent.
Korean Air has announced that they will be offering a new flight from Tokyo, Japan to Honolulu effective immediately. Senior Vice President and American Regional Director for Korean Air, Jinkul Lee stated, “Korean Air has come a long way over the last 40-plus years. I am proud that Korean Air is doing its part in bringing more people to visit the Aloha State year after year, and with this new flight we are confident that tourism from Japan and Korea will continue to grow and strengthen the state’s economy.”
Currently, China Airlines, Delta Air Lines, Japan Airlines, All Nippon Airways and United Airlines already fly nonstop between Narita International Airport (Tokyo, Japan) and Honolulu. There were nearly 1.5 million Japanese visitors who came to the Hawaiian Islands in 2012, which helped to persuade Korean Air to add a route to Narita.
According to a report released by the Hawaii Tourism Authority, 675,517 tourist visited the Hawaiian Islands in February 2013. This was a 7.8 increase from the same month a year prior. Hawaii Tourism Authority’s president and CEO, Mike McCartney, stated, “Through working with our industry partners, we have been able to grow visitor expenditures and arrivals on all Hawaiian Islands, with significant increases on the neighbor islands. While we are making strides in increasing travel and affecting economic recovery on the neighbor islands, we believe there is still potential for growth and continue to work to drive demand across all of the Hawaiian Islands.”
City Councilman Stanley Chang has introduced Bill 3 (2013), which would significantly increase fines for homeowners who repeatedly ignore notices to clear weeds, trash and other waste from their properties. The bill, which is approved and supported by City Council Zoning and Planning Committee and by the Department of Planning and Permitting, would change the maximum fine from $1,000 per day to $5,000 per day. Chang stated, “Stockpiled waste is an issue that affects the entire island. We get complaints about nondisposal of weeds, garbage, trash and waste from all parts of our district, and I hear stories about parts of the entire island that this affects. We believe that by giving DPP (Department of Planning and permitting) a bigger stick to address the most serious, repeat chronic offenders, that our residents will be able to look forward to cleaner and better neighborhoods with higher quality of life and better property values (and) more attractive, safe communities.”
The bill will go before a City Council vote on April 17, 2013
CBS has announced that they have renewed the Hawaii Five-0 television show for a fourth season. According to Walea Constantinau, the Honolulu Film Office Commissioner, this announcement will generate about $55 million in revenue to the state’s economy and add about 250 jobs. This does not include the obvious advertising benefits and free publicity that would help Hawaii’s tourism industry. Constantinau added, “It stands to reason that 44 minutes every week of strong visuals of Hawaii is just an immeasurable impact. We are all about the visual impact to drive and support our No. 1 industry (tourism).”
Approximately 20,000 civilian defense workers in Hawaii will only be required to take 14 unpaid furlough days in 2013 as opposed to the 22 days that was originally expected because of sequestration. Under the Pentagon’s plan, furloughs would begin in the middle of June. Most Hawaii workers that were interviewed were relieved that the number was reduced, but noted that this will still place additional hardships on their families and budgets. Under sequestration, the Pentagon is required to trim $500 billion in its planed spending over the next nine years.
While Walmart representatives have not officially announced that they will be taking over the location of the closed Macy’s Store in downtown Honolulu, all indications point in that direction. A building permit was issued to renovate the space, any while a tenant was not named in the permit, plans indicated that the new store would include, “numerous merchandise racks, several grocery isles, a pharmacy, a photo lab, a jewelry counter, an electronics department, a money center and a McDonald’s McCafe. Furthermore, the plans were drawn up by Raymond Harris & Associates, a Texas based architectural firm that has had a long relationship with Walmart. The city estimates the value of the renovation work for the building permit at $6 million.
The former Macy’s has approximately 85,000 sq ft of retail space spread out on two floors. There is also a five-story parking garage above the store. Hawaii retail analyst Stephany Sofos stated that Walmart would do very well in downtown Honolulu. Sofos added, “It has a bit of everything for every consumer whatever socioeconomic level you’re on. You can buy everything you need.”
The 801 South Street Condominium effectively sold out during their first lottery, with almost 700 interested parties signing up for units. The 3.7 acre property, located next to Kapiolani Boulevard and South street, was previously the home to the Honolulu Advertiser and Star-Bulletin newspapers. The developer, Downtown Capital, had required that all participants in the initial lottery to be of moderate income, which means that they could earn no more an 140 percent of Honolulu’s median annual income. Buyers would be required to be owner occupants for at least 1 year.
Prices ranged from $253,200 for a studio to $501,300 for a two-bedroom unit. The units will be relatively small, ranging from 384 sq ft for a studio to 816 sq ft for a 2 bedroom unit. In an effort to keep monthly maintenance fees low, the building will have very few amenities including no swimming pool and no gym. The building is expected to be completed in 2015.
Workers at the Pearl Harbor Shipyard are currently doing renovation work on the Pride of America cruise ship. The $39 million work would take approximately two weeks to complete and would include adding 24 new luxury sites, four new studio staterooms, a Brazilian-style steakhouse, new carpets, flat panel TVs and other upgrades. Due to recent budget cuts to the United States Navy, the dry-docks at Pearl Harbor have not seen as much work as years past. Federal law allows underused assets like the Pearl Harbor Shipyard to conduct commercial work for private companies.
Island Air has announced that effective May 31, 2013, they will no longer be offering flights to Kapalua Maui on the west coast of that island and will instead be only flying to the main airport in Kahului. Island Air’s president, Les Murashige stated, “We regret that we will no longer serve Kapalua. We are pleased that we can expand service to Kahului with the addition of our new ATR 72 aircraft.” Murashige explained that Island Air would be replacing their planes from Dash 8 aircraft to the larger ATR 72 which were too large to land at Kapalua Airport. This announcement will leave Mokulele Airlines as the only schedule carrier to fly in and out of Kapalua.
After years of deferred maintenance of City and County roads on Oahu, frustrated drivers are demanding that city officials do something to fix the problem. Mayor Kirk Caldwell, who took office in January, promised that repairing Hawaii’s road systems would be one of his top priorities. Caldwell stated, “There’s so much aging infrastructure on this island that people are demanding and screaming (for it) to be fixed. There’s a lot of competing demands for this money.” The Mayor has proposed to spend $150 million to repave more then 300 lane-miles of damaged roads around Oahu in 2014.
There were several problems contributing to the island’s poor roads. First, for over two decades, government agencies raided the road repair fund to help balance the budget for other departments. From 1996 to 2003, over $143 million from the State highways Special Fund was diverted to the state’s general fund. Second, an increased population meant increased traffic, as well as larger and heavier vehicles on the roadways. The roads were simply not designed to handle that type of abuse and the budget was not sufficient to make the necessary changes.
A large boulder came loose above 430 Haleloa Place in Kuliouou and crashed into a Honda Odyssey and a Toyota Corolla parked in the condominium development below. Fortunately, no one was hurt in the incident, though in addition to the damage to the two vehicles, there was some damage to a wooden support pole in the carport. A large 2-foot-by-6-inch crack was also caused on the pavement where the boulder bounced.
Officials of the Honolulu Fire Department who responded to the scene, estimated the damage to the Odyssey at $20,000, the Corolla at $8,000 and the posts and beam in the carport at $2,000. Fire Captain Carlton Yamada stated that the department will investigate whose land the boulder came from. Initially, it appears that the boulder originated from land owned by the association of apartment owners.
The Hawaii Tourism Authority has recognized the importance of creating an authentic cultural visitor experience for the island’s visitors, to help distinguish Hawaii from other sun, sand and surf destinations. In 2006, Keli’ihoalani Wilson was hired by the HTA to become their director of Hawaiian Cultural Affairs. Wilson stated, “In the 1920s or ’30s, music and hula were a natural extension of the Hawaiian culture and were identified with Hawaii. Over time, tourism focused on other things. Now I think that we’ve come full circle. We’re especially trying to get more music back into Waikiki.” Wilson added that the Hawaii Tourism Authority has expanded its role in supporting statewide music and cultural events such as the Mele Mei, Prince Kuhio Day, Aloha Festivals and Merrie Monarch.
Hotels throughout Hawaii are also spending additional resources to hire hula halaus and local entertainers to distinguish themselves from other properties. Laura Van Sciver, the director of marketing communications at the Hyatt Regency Waikiki’s stated after a recent event, “The crowd could not get enough of the musicians, and when the dancers from the halau walked before them in formal dress, it was unbelievable, especially for our male employees. They had made their own grass skirts and headwear, and they looked remarkable. Our guests would not stop taking pictures and asking questions even as Aka (Oclinaria) was playing on the nose flute. The next day the same employees, who were then dressed for their daily duties, continued to answer questions from guests about the show.”
The Polynesian Cultural Center’s Vice President of Sales and Marketing, Ray Magalei, noted, “Concerts enhance the cultural experience for our guests. Throughout the day they are exploring our villages and stepping into the Polynesia of the past, but the concerts allow them to experience contemporary and modern local music. Much like country music, local music tells stories about Hawaii and is one of the best ways for visitors to familiarize themselves with the islands of today.”
In 2011, Jacobs Engineering Group was hired to conduct an independent study on the Honolulu Rail Project. They pointed out that the rail cars would hold 318 passengers, but would only provide 76 seats, requiring up to 242 riders to stand. This was met with public outcry and complaint. The Honolulu Authority for Rapid Transportation has just announced that approval has been given to outfit each of the rail car trains with additional seat. The rail oversight and finance committee authorized HART to take $1.75 million out of the contingency budget for the $5.26 billion project to add 20 flip seats per car, or 800 additional seats in total. Executive Director and CEO for HART, Dan Grabauskas, stated, “We’re building this system for our customers, and they’ve made it clear that they want more seats on our trains. Adding more seating is part of our overall goal of making the transit experience as safe, reliable and comfortable as possible.” The project is expected to be completed in 2019.
The Japanese government has announced that they will spending a total of $395 billion stimulate their economy. Out of this, $106 billion will fund job creation and strengthen domestic demand as well as great global opportunities. $266 billion would be spent to help reconstruction of disaster-affected areas hurt by the Great East Japan Earthquake and tsunami. Finally $23.4 billion would be used to strengthen infrastructure as well as restore public facilities, such as schools, highways and bridges.
Hawaii economic experts firmly believe that this commitment by the Japanese government to stimulate their economy and repair damage created by the earthquake and tsunami that affected them two years ago will have a trickle down effect that will help Hawaii’s tourism grow. President and CEO of PacRim Marketing Group, Dave Erdman, stated, “A stronger Japan economy with hope, vision and confidence in the future will bode well for the Japan outbound tourism to Hawaii. Japan still strives to reach 20 million outbound travelers, and the country’s approach to reach this target will benefit Hawaii.” President and CEO of Hospitality Advisors LLC, Joe Toy, added, “Last year we had projected Japanese visitor arrivals would grow by 8 percent, but they were actually double that.”
Hawaii Tourism Authority’s President and CEO, Mike McCartney, commented, “We have a special relationship with the Japan market and are committed to continue to grow interest and travel from this area. We have seen numerous new flights come out of the region, from Sapporo, Fukuoka and now Sendai, demonstrating their continued interest in travel to Hawaii.”
Kamehameha Schools has broached the idea of building a new shopping center on a vacant 4.5 acre parcel which is bordered by the Hawaii Kai Marina, Kalanianaole Highway and Keahole Street. The land is currently zoned as preservation land, but was once slated to be a commercial development, and Kamehameha Schools believes that they can get the land rezoned. The plan would be to build a Foodland Supermarket, several restaurants, a park, a dog park and a pedestrian promenade along the marina front. Members of the Hawaii Kai community gathered at a local elementary school to debate the proposal. While Hawaii Kai residents did agree that there is a need to open another supermarket in Hawaii Kai (there is currently only one), the majority argued that this 4.5 acre lot is not the place for it. Kamehameha Schools stated that they will consider the public’s input in their decision making process.
The City and County of Honolulu has released a report identifying sites across the island of Oahu which may pose rockfall hazards to city properties. The city then notified approximately 1,000 private property owners in writing that their land is at high risk of rockfall. Private property owners would be responsible to deal with potential hazards on their land. Chris Takashige, director of the Department of Design and Construction, stated in the letter, “This means that your property may present a potential rockfall hazard to a nearby city street, sidewalk or facility and to users of such facilities.” The letter suggested the property owners consult with an engineer or attorney to investigate and mitigate risks.
Mayor Kirk Caldwell stated, “It is not a comprehensive study of every rockfall hazard on the island. We want the general public to know that they can go to the website or the municipal reference library to look at a copy of the report, and then determine whether they want to talk to the upland owner about taking potential mitigation action or they themselves taking action. People who have been notified by the city now proceed at their own risk,” Caldwell said. “There is potential liability, obviously, if they have been told that there is a potential hazard. Just like the city has done on property we own and control, we hope those on private property, once they get this report, will take action. They get the information. It’s up to them to decide whether they want to act.”
The public may find this report online by visiting honolulu.gov and clicking “Rockfall Hazard Report”. The public may also go to the Municipal Reference and Records Center and request a printed copy.
The Honolulu City Council approved Bill 72 (2012), which would ban smoking at Kapiolani Park, Kuhio Beach Park, Duke Kahanamoku Beach Park, Sandy Beach Park and the beach side of Ala Moana Regional Park, with an 8 to 1 vote. The bill was introduced by Councilman Stanley Chang and gained support from the Department of Health, the Sierra Club Oahu Chapter, and several hotels and public organizations throughout Oahu. Violators would be fined up to $100 for a first violation, $200 for a second violation in a one-year period and $500 for subsequent violations. Bill 72 will now go before Mayor Kirk Caldwell, who previously indicated that he would sign it into law if the bill came on his desk. Experts believe that a statewide ban on smoking at all beaches may be implemented based upon the success of Bill 72.
United States Senator Brian Schatz (Hawaii) met with members of the Federal Transit Administration to discuss the effects of sequestration on the Honolulu Rail Project. Peter Rogoff, Federal Transit Administrator, informed Schatz that sequestration could result in a reduction in federal funding in 2013. However, the FTA stated that they still plan to honor their commitment of $1.55 billion over the next six year. Any money lost in 2013 would be made up by the FTA in subsequent years. Schatz stated that the FTA is “fully committed to the project and fully committed to fully funding it. I am more convinced than ever that this project is going to happen. It’s important to remember that there has never been a full funding grant agreement that has never been honored completely by the FTA.”
The City of Honolulu had expected a total of $250 million from the Federal Transit Administration for the rail project in 2013. Senator Schatz added that it is too early to tell even if this year’s funding would be cut or how much those cuts would be. Chief Executive Officer for the Honolulu Authority for Rapid Transportation, Dan Grabauskas, stated, “We could weather a 5 percent cut in this fiscal year and still stay on schedule and on budget. Nobody knows where Congress will be tomorrow. At this critical time we’re fortunate Sen. Schatz was able to meet with Rogoff ahead of some tough decisions from the FTA.”
The Honolulu Department of Planning and Permitting gave conditional approval for the Ritz-Carlton Residences Waikiki Beach with only a couple of minor changes required. The developers were ordered to make changes to “soften the appearance of the tower and reduce its apparent mass” before they are allowed to proceed. However, the 37-story tower will be allowed to be built with its long axis parallel to the mountains and ocean along Kuhio Avenue. Developer PACREP will have up to two years to submit new plans for the exterior of the building.
Last month at the project drew strong community opposition at several public hearings that the Department of Planning and Permitting held. Many residents were unhappy with the appearance of the building and more importantly felt that the orientation of the building violated the Waikiki Special District Design guidelines. Those opposed to the Ritz-Carlton orientation stated that the building’s long axis should be perpendicular to the mountains and ocean to preserve mountain views and natural ventilation. In response to these statements, the Department of Planning and Permitting stated, “Those who have commented about the project that a mauka-makai building tower orientation is virtually required by the (Waikiki Special District) are actually incorrect since it is only and explicitly just a guideline.”
The Hawaiian Electric Company has announced that they will be charging 34.9 cents per kilowatt-hour in March, a slight increase from the 34.5 cents per kilowatt-hour that they charged in February 2013. This is largely due to the fact that a large coal-fired plant was be down for maintenance during early part of the month. This equated to a typical Oahu household spending $218.74 during March for electricity. In comparison, Maui Electric Company customers spends 37.0 cents per kilowatt-hour. Big Island of Hawaii residents spent 39.7 cents per kilowatt-hour. Kauai Island Utility Cooperative charged their customers 44.8 cents per kilowatt-hour.
In December 2012, the statewide average was 36.3 cents per kilowatt-hour, which made Hawaii the state with the highest electrical rate in the country. According to the U.S. Energy Information Administration, the national average for that month was 11.6 cents per kilowatt-hour. Idaho had the lowest average rate at 8.4 cents per kilowatt-hour.
The Hawaii Symphony Orchestra has announced a six-week season at the Blaisdell Concert Hall which would run from October to the beginning of November. This would be only the second season for the new Orchestra, which was created two years after the Honolulu Symphony folded in bankruptcy in 2010. Steve Monder, the president of the symphony, stated, “We have a few bridges to cross, but they’re just over little brooks. We’re over the huge oceans. The board and the musicians have been working very hard to put together a season that shows artistic growth and very prudent financial planning.”
Board members for the Hawaii Symphony Orchestra also noted that there are plans to announce a Spring 2014 season, provided that some additional grant money could be obtained.
The Honolulu Board of Water Supply is considering the option of moving their downtown headquarters building on South Beretania Street and leasing the land to an interested developer. Under this concept, the BWS would offer a developer a 65 year long lease for their 5.75 acre site and then the developer would then pay the BWS rent annually for the property. In addition, the developer would also have to find the Board of Water Supply a replacement headquarters at no costs. The Board of Water Supply would use the revenue to pay for agency expenses and perhaps reduce customer costs. Duane Miyashiro, the chairman of the BWS stated, “We are evaluating the potential for our Beretania property to generate lease revenue to help pay for the operational and capital improvements needs of the water system. However, any proposed development must prove to be economically beneficial to the BWS and the customers we serve before we pursue it.”
Under current zoning laws, the area allows for medium-density apartment use, with a maximum height limit of 100 ft. However, a developer can request for a zoning change from the state. There is additional concern that the State Historic Preservation Divison may not allow for major changes or the demolition of the building, which is eligible to be placed on the National Register of Historic Places. Finally, it is believed that the site may contain Hawaiian burials and cultural artifacts, so a new developer would have to proceed cautiously in observance will all of the new laws and restrictions.
The Board of Water Supply has stated that they will accept bids from various developers until June 12, 2013. They will then review the bids and make a selection in the beginning of 2014.
According to Honolulu City Councilman Stanley Chang, the homeless situation in Waikiki is currently the number one complaint that tourists make to the Waikiki police substation. Chang is proposing that the city should budget $77 million to help reduce and eventually solve the homeless problem on Oahu, and perhaps create a “place of refuge” or a “tent city” for them to reside. Approximately $61 million would come from the sale of public housing projects while another $16 million would be from an Affordable Housing Fund from property taxes. Chang stated, “We’ve got a five-alarm fire right now in Waikiki. Some homeless people have pets, mental issues, drug issues or other challenges that make them poor candidates for the options out there. This is a place where they could be in a safe space and live their lives with dignity. We need enough money for a game-changer. We’ve been involved in incremental solutions like 100,000 Homes, Housing First and similar programs. What I’ve learned through all of this is that the number of calls and complaints have not gone down. They’ve increased. All efforts are great, but they haven’t made the issue go away.”
Bob Finley, the Waikiki Neighborhood Board Chairman, stated, “The numbers of homeless living on the streets, beaches, parks and other public places in Waikiki has reached epidemic proportions. Making this situation worse is the number of children that are a combination of runaway kids and homeless family members that are included in the mix of people living on our streets.” Finley added that visitors are constantly complaining about being harassed by panhandlers or not being certain areas of beach or parks due to homeless.
According to the Institute for Human Services (IHS), on any given night their agency has about 20 vacant beds available at their women’s and families shelter and another 50 vacant beds at their men’s shelter. However, due to nice weather, the shelter’s locations, and strict rules banning drugs, alcohol, pets and a zero-tolerance policy on violence, many homeless people choose to stay out on the streets instead of staying in shelters. The IHS also commented that a homeless person can earn about $40 to $50 per day in Waikiki picking up empty cans and bottles and recycling them for cash. They also receive frequent handouts from tourists, giving them an additional incentive to stay in the area.
According to the U.S. Census Bureau, Hawaii’s population increased by 1 percent from July 2011 to July 2012. The data, which was analyzed by the state of Hawaii’s Department of Business, Economic Development and Tourism, showed that the state had a resident population of 1,392,313 in July 2012 as compared to 1,378,129 a year prior. This meant that the state of Hawaii gained an average of 39 residents per day. Per the report, an average of 50 babies are born in the islands every day, while an average of 28 residents die, giving a net gain of 22 natural residents. There is also a net migration of 17 people daily arriving in Hawaii and staying as permanent residents.
Honolulu County had the most number of residents at 976,372 people, or approximately 70.1 percent of the total population. Hawaii (Big Island) County had the second largest number of residents at 189,191 people. Maui County had 158,316 people followed by Kauai County at 68,434 people. For additional information, you can go to http://hawaii.gov/dbedt/info/economic/census/population-estimate
The Queen Emma Land Company plans to spend approximately $350 million to completely renovate the International Market Place in Waikiki. The plan calls for a new 360,000 sq ft open air retail, dining and entertainment complex with a new five-story parking garage with 750 parking spaces. Per their public report, the center will create 1,000 construction jobs and 2,500 permanent jobs once completed. The city of Honolulu’s Department of Planning and permitting has already given their approval and granted the Queen Emma Land Company a special district permit to proceed with their renovations. The project is scheduled to break ground this year and be completed by 2015.
However, Outrigger Hotels Hawaii and Waikiki Beachcomber LLC have asked the city to withdraw the permit for the project due to the traffic that the would be created by the new complex and the noise disruptions during construction. In their filing, Outrigger noted that the city’s planning director acted in an “arbitrary or capricious manner, manifestly abused his discretion and/or acted based on erroneous findings of fact.” President and CEO of Outrigger Enterprises Group, David Carey, stated, “We filed an appeal on a couple of issues. One of them had to do with loading zones. There are a few near our buildings, and we were concerned about noise. The other aspect was parking. I drive down Kuhio Avenue every day, and I’ve got to tell you, part of their plan would change traffic.”
The Hawaii Tourism Authority’s President and CEO Mike McCartney is in favor of the project and stated, “It’s very important to refresh and revitalize and improve Waikiki, and this is the heart and soul of Waikiki. It’s equally important that this provides an important source of revenue for an alii trust, which was a legacy started by Queen Emma. It keeps The Queen’s Medical Center able to provide health care for the people in our community that don’t have it. Outrigger also is an important asset to the visitor industry and the community. We have a lot of momentum in the market, and we need to get on with improving our product for the long term.”
According to a report issued by the state Department of Labor and Industrial Relations, seasonally adjusted unemployment rates increased to 5.2 percent in January 2013 from 5.1 percent in December 2012. Honolulu County posted a 4.8 percent unemployment, Maui County was at 5.7 percent, Kauai County was at 6.5 percent and Hawaii County (Big Island) was at 7.6 percent. The national unemployment rate for the month of January was 7.9 percent.
Once a month, property owners in Honolulu are allowed to place their bulk trash out on the sidewalk in front of their houses and condominium buildings for scheduled pickup by city refuse workers. However, there has been a problem with some residents placing their items out on the street prior to their scheduled pickup day, creating eyesores of piles of trash. As a result, the city has decided to establish a new law which will fine residents $250 for dumping items prior to their scheduled bulk trash pickup day. According to the new law, starting May 1, 2013 violators will receive a notice of violation and would have seven days to remove the items. On the eighth day, a city Department of Environmental Services inspector will impose a $250 fine. To report an illegal dumping of bulk items, residents may call a city hotline number at 808 768-3203. For additional information, goto www1.Honolulu.gov/env
Mayor Kirk Caldwell is proposing an increase in the fuel tax from 16.5 cents per gallon to 21.5 cents per gallon. This 5 cents increase would generate an estimated $15 million per year which would be used to help repair streets and restore bus routes. According to Caldwell, thus fuel tax would only cost the average motorist $21.45 a year. However, some of the city council members are reluctant to support the fuel tax increase.
Ann Kobayashi, the city council’s budget chairwoman, argued that the tax would also hurt companies that rely on trucks, vans and buses to transport goods and people. Kobayashi stated, “The delivery trucks are going to be taxed, also, and then they’re going to pass on their increased cost to the store and the store is going to pass on their increase to the consumer. The same with all the utility trucks and repair trucks.”
Ikaika Anderson, city councilman, noted, “The owners of electric vehicles don’t pay the gasoline tax, and yet they utilize our roads. That leaves the folks who drive fossil fuel-powered automobiles to face the burden of paying for our roads. As people switch to electric vehicles and as people switch to public transportation with gasoline taxes increasing, I think that we’re unfairly shifting the burden.”
The Kahuku Hauoli Hale is a newly redeveloped 64-unit complex on the North Shore of Oahu for seniors with low incomes. The Vitus Group has spent $3.7 million renovating the property including added energy-efficient appliances and fixtures, new kitchen cabinetry and flooring, granite countertops and upgraded electrical and plumbing systems. In order to qualify to be a tenant, an applicant must be 62 years and older or disabled, who earns no more then 50 percent of Oahu’s median income. The property is required to be affordable for the next 61 years according to the Hawaii Housing Finance and Development Corp.
Hawaiian Airlines had it’s inaugural flight to Auckland, New Zealand, the first flight for that carrier to that country. Currently, there will be three flights per week on board a Airbus A330-200 which can seat 294 passengers. Chief Commercial Officer for Hawaiian Airlines, Peter Ingram, stated, “Today’s flight marks a continuation of a strategy of growing our network and diversifying. It’s something that I don’t think any of us at the company even would have thought possible or likely three years ago.”
Before Hawaiian Airlines decided to offer nonstop flights to New Zealand, Air Zealand was the only carrier providing service. The Hawaii Tourism Authority predicts a significant increase in visitors from New Zealand thanks to this new flight.
The state of Hawaii’s Council on Revenues has increased their forecast predictions and now believe that state tax collections will grow by 6.7 percent during this fiscal year. Previously, when the council met in January, they had predicted that tax collections would increase by 5.1 percent, but new data showing strong economic growth in the private-sector has changed their estimates. During the 2014 fiscal year, revenues are expected to grow another 7.3 percent. The council does warn that federal budget cuts due to sequestration would offset this increase.
Governor Neil Abercombie has set aside a total of $25 million for each of the fiscal two fiscal years to help mitigate the impact of sequestration. Even with the increased forecasts provided by the Council of Revenues, state House and Senate leaders promised the public that they will be cautious when planning their upcoming budget. State Representative Sylvia Luke stated, “The approach that we have taken is a conservative approach, and that has not changed, and that will not change. I think this is still the time for us to look at the budget in a responsible way, for us to look at what the core services of government (are), and for us to re-evaluate what we’re here for.”
One of the most debated issues on the island of Oahu is the need and the location for a new landfill. Currently, the main landfill owned by the City and County of Honolulu and operated by Waste Management Hawaii, is the Waimanalo Gulch Landfill on the Leeward Coast. Experts are concerned that this landfill has actually reached its capacity several years ago and that there is an immediate need to find a new landfill site on the island. However, there is no community on Oahu wishes to have a landfill in their neighborhood, thus creating the debate. Furthermore, the Ko Olina Community Association has been attempting to shut down the Waimanalo Gulch Landfill through the state Land Use Commission and the city Planning Commission.
On Tuesday, March 12, 2013, Honolulu Mayor Kirk Caldwell has announced that he does not believe that a new landfill is necessary on Oahu thanks to new advances in technology. Caldwell hopes that a new HPOWER plant will allow as much as 90 percent of the city’s solid waste to be converted into energy with the remaining 10 percent being recycled. At some point, Caldwell believes that a landfill will only be kept around in the event of natural disasters and other emergencies. Caldwell stated, “This is a slow march to reducing and, I’m hoping, eliminate anything more going into the landfill.”
Matson Inc., Hawaii’s largest ocean cargo transportation company, has announced that they will be decreasing their fuel surcharges by 3.5 percentage points to 40 percent. According to Matson officials, this decrease is due to a drop in bunker fuel prices. Senior Vice President of Ocean Services, Dave Hoppes, stated, “We are pleased to make this downward adjustment to our fuel surcharge. We have been encouraged by the recent moderation in bunker fuel prices, and remain focused on diligently exploring ways in which we can maximize fuel efficiency for our Hawaii and Guam services.”
Horizon Lines Inc. the second largest ocean carrier, has not announced if they will follow Matson’s lead and decrease their fuel surcharges. Pasha Hawaii Transport Lines, which handles inter-island shipping has stated that they will be reducing their fuel charges and will make an official announcement shortly.
Source: Matson Navigation Company
Feb. 26, 2012 45.5% Fuel Surcharge June 17, 2012 42.0% Fuel Surcharge July 15, 2012 39.0% Fuel Surcharge Oct. 7, 2012 43.5% Fuel Surcharge March 17, 2013 40.0% Fuel Surcharge
Jeff Stone, a local real estate developer in Hawaii, had previously received all of the necessary permits from the City and County of Honolulu to build two single-family homes in Aina Hiana. However, after several state officials noted that there may be a historical or cultural site on the development, the city has temporarily suspended these permits.
Chairman of the Board of Land and Natural Resources, William Aila, had requested the city order that work be stopped at the project site until developer Jeff Stone completes an archaeological survey as requested by the State Historic Preservation Division. Aila wrote in an open letter, “The permit was not sent to SHPD prior to the issuance thus putting the division in the difficult position of having no opportunity to request an AIS (archaeological inventory survey) be conducted before the project started. Had SHPD been afforded an opportunity to review the permit, the city could have required that an AIS be done as a permit condition, avoiding the difficult situation we are now in.”
According to George Atta, the director designate of the city Department of Planning and Permitting, the property in Aina Haina was not flagged by State Historic Preservation Division and that no records were found in the Planning Department’s files of historic sites of cultural significance on the property.
Alexander & Baldwin Inc. has announced that they will be purchasing the Clifford Center in downtown Honolulu from Pacific Office Properties Trust for $11.2 million. The 10-story property is located on Richards Street and had 77,665 sq ft of rent-able space. The acquisition, which is expected to be completed on April 17, 2013, falls in line with Alexander & Baldwin’s stated goal to purchase more commercial real estate properties in the state of Hawaii.
According to a report released by the Hospitality Advisors LLC and Smith Travel Research, hotel occupancy rates increased to 80.7 percent statewide in January 2013. This represents a 1.7 percentage point increase as compared to the same month a year prior. Even more importantly, the average daily room rates increased by 11.3 percent to $231.02 as compared to January 2012. In terms of revenue per available room, there was a 13.7 percent gain to $186.43. Overall, hotels had a total revenue of $328 million during the first month of this year.
Hyatt Regency Waikiki Beach Resort & Spa’s General Manager, Jerry Westenhaver, commented, “The train keeps rolling. We came off as an industry one of the best revenue years that we’ve seen, and then the first quarter surpassed last year’s first quarter. We think that the second quarter should follow suit. There is nothing out there in the horizon that indicates that the first half of the year won’t be as good or better than it was in 2012.”
Joe Toy, the president and CEO of Hospitality Advisors LLC, added, “Strong recovery and real growth in Oahu’s visitor market is really driving room revenues. It’s a nice beginning, but I don’t think that we’ll see full recovery across all islands until 2014. The Big Island had a few groups in January, and that helped boost their market, but I still stand by my year-end forecast for them. We’ll have to see Maui’s group market firm up a little more before the overflow goes to the Big Island. While Kauai is mostly a leisure and time-share market, some key resorts like Princeville and Poipu also could benefit.”
The Hawaiian Electric Company is now offering a $1,000 cash rebate to their customers who install an energy-efficient solar water heater. Previously, the rebate was $750 and the administrator of the state’s energy conservation program, Hawaii Energy, did not state for how long the higher rebate will be available. Program Director for Hawaii Energy, H. Ray Starling, commented, “If residents haven’t already done so, now is the time to take advantage of our increased rebate for solar water heating systems.” Starling noted that a households of four or more who switches from an electric to a solar water heater can save up to 40 percent, or about $600 a year, on their electric bill.
Over the last seven years, the Kyo-ya Hotels and Resorts has been working to obtain permission to build a new oceanfront hotel and condominium tower in Waikiki. The property would be located next to the Moana Surf Rider and has recently been approved by the Honolulu’s zoning board of appeals. However, a series of other objections from members of the community has slowed the process tremendously. Greg Dickhens, president of Kyo-ya Hotels and Resort expressed his frustration and stated, “Petitioners have stated that they’ll continue to appeal with their ultimate objective just to delay, delay, delay. We certainly have a capacity issue in Waikiki.”
Executive director of Hawaii’s Thousands Friends, Donna Wong, opposes the Kyo-ya project because the plans encroaches into shoreline setbacks. Wong stated, “We are very mindful that tourism is our mainstay. We just think it’s in everyone’s interest to make it viable. It shouldn’t socially impact the people who live here or destroy our natural environment and cultural resources.”
Paul Brewbaker is the principal of TZ Economics and one of the most respected economists in Hawaii. Brewbaker issued a statement where he warns that despite the gains seen in the tourism market over the past few years, the visitor industry is running out of room to grow unless new accommodations and hotel rooms are added. This is contrary to the state’s plan to maintain the number of hotel rooms and grow the tourism industry by increasing visitor spending instead of visitor arrivals. Paul Brewbaker commented, “The party’s already over, you just don’t know it. The assumption people will come here and we’ll take more of their money hasn’t happened for 20 years. Any reasonable view of economic growth would not be supported by the state’s sustainable tourism strategy.”
According to Hospitality Advisors LLC, there were only 6,225 new visitor units that were added in Hawaii from between 2000 and 2011. Unless more buildings are added, Brewbaker argues that tourism will struggle to grow. Brewbaker stated, “At some point, the people will say I’m buying that one over there (a destination other than Hawaii). Over time, this leads to reputation effects. Then we stop (growing) in 2015. We never get any more people than we are getting and it’s forever. People need to get over the idea that more is worse and less is better. Why would anyone be willing to accept our current carrying capacity. You can’t have more jobs, greater income, a bigger sewer system, better roadways and mass transit if you don’t grow tourism.”
Not everyone in the industry agrees with Paul Brewbaker’s arguments. Other experts note that the “shoulder season” still has not even come close to capacity and neighbor islands have a lot of room to grow in terms of occupancy rates. Hawaii Tourism Authority’s vice president of brand management, David Uchiyama, added, “We actually have growth potential beyond (8.5 million) if you factor in the potential of the cruise lines, which is an area that we are working on now and hope to affect more in the coming year.”
Approximately 260 workers at The Modern Honolulu have voted unanimously to authorize a potential strike at the luxury hotel. As members of the Unite Here Local 5 union, the workers feel that the hotel management is treating them unfairly and not providing them high enough wages and proper health coverage. An actual strike date had not been set, as the Modern Honolulu management and Local 5 are still in negotiations foe the hotel’s first collective bargaining agreement.
Managing Director of The Modern Honolulu, Gerald Glennon, stated, ”If a few employees choose to lose work opportunities and wages to go on strike, we have a contingency plan to ensure that we are fully operational and able to provide guests with the quality of service they have come to expect from The Modern. Despite any potential workplace disruptions, we are committed to negotiating a fair and equitable contract that will provide opportunities for our team members to succeed, while maintaining the highest level of service and luxury experience for our guests.”