Land Board and Hilton hash out reduced fee for fireworks show

Twenty-five years of weekly fireworks in Waikiki almost came to an indefinite end Friday after a disagreement over how much money the show’s organizer should pay for impeding public use of the beach fronting Hilton Hawaiian Village during the event.

The issue was a $26,000 annual fee that by state rule Hilton Worldwide Holdings should pay as the show’s producer. But the $12 billion hotel company had sought an exemption to the fee because of the show’s frequency and its benefit to tourism and local taxpayers.

At a meeting of the state Board of Land and Natural Resources, Hilton representatives argued with some board members over what the Department of Land and Natural Resources staff recommended as a compromise: a fee amounting to $10,400 a year covering 52 shows fired from Kaha­na­moku Beach on Fridays at 7:45 p.m.

Hilton offered that it shouldn’t pay anything, which led to some figurative fireworks when Ivan Lui-Kwan, a local attorney representing Hilton, suggested that the company might nix its weekly show instead of paying a fee it considered too high.

BLNR member Stanley Roehrig had a testy response to that. “If this is a corporate squeeze, bring it on,” he said.

The fee was created in 2013 as a sort of rent for using public land as a safety zone needed for launching fireworks, and was set at $500 per event as a reduction to normal public land usage fees. Initially this fee was waived for Hilton.

However, the waiver created an issue of fairness for how DLNR treated fireworks display producers that pay the fee.

Suzanne Case, DLNR’s director and BLNR’s chairwoman, acknowledged that Hilton’s weekly show is unique but noted that while the show does have a community benefit, it also benefits Hilton.

Jerry Gibson, Hilton’s vice president in Hawaii, told the board that the fireworks shows cost the company $446,000 a year to put on, excluding permit fees.

“We incur this expense because we truly believe the fireworks production contributes to the community, our guests, the businesses of our community and the well-being of the community so that everyone feels special for just a moment in time,” he said.

Gibson also read a letter from the neighboring Hale Koa Hotel, operated by the military, that called Hilton’s fireworks show an “extraordinary display of corporate generosity.”

DLNR staff recommended a $200 fee per event as a reasonable compromise, though Hilton wasn’t keen on that.

Two board members, Sam ‘Ohu Gon III and Chris Yuen, proposed a $100 fee for Hilton’s shows. But three other members — Roehrig, Case and Keone Downing — opposed that as too low.

Because four votes were needed to grant an approval, Roehrig suggested deferring a decision until another time when all seven BLNR members might be present.

But that would have prevented the most recent fireworks show on Friday and probably for longer, given that Hilton’s annual permit expired this week and BLNR typically meets only twice a month.

There already had been no Hilton fireworks shows on the prior two Fridays because of the exceptionally high ocean tides, according to Gibson.

So the board took a vote on adopting the staff proposal for a $200 fee that will be in effect for a year, and that passed unanimously.

“I think it’s a good compromise,” Roehrig told Gibson. “It’s not perfect. We value your operation. If this doesn’t work, you can come back we’ll revisit it, and maybe we’ll change it. This is a good compromise for now. This is about the best we can do today.”