City contract being challenged by longtime providers of services in Waikiki

The two longtime operators of separate Waikiki beachboys stands say they intend to continue offering surf lessons, canoe rides, beach umbrellas and other services despite orders from the city to vacate their concessions today.

Dive Oahu won the rights for a five-year concession operating the two Kuhio Beach beachboy stands last month. But the owners of Star Beachboys and Hawaiian Oceans’ Waikiki are disputing the way the contract was issued by the city and say they want to be able to stay until their legal appeals are exhausted.

Old-timers are warning that a switch could spell the end of the iconic Waikiki beachboy lifestyle that’s been around for more than a century. But a spokesman for the vendor said the company is not proposing any radical changes.

Aaron Rutledge of Star Beachboys said he wants the city to hold off at least until his company’s request for a temporary restraining order is heard by Circuit Judge Dean Ochiai on Thursday morning. Ochiai is also slated to hear arguments July 6 on a permanent injunction, he said.

Rutledge said he’s confident the judge will overturn the issuance of the contracts. “So it wouldn’t make sense for us to come off, for the new guys to come on, and then in July we come back on and they gotta get off,” he said.

Star Beachboys has from 15 to 20 employees at the beach — including desk people, cashiers and board boys — and about 20 other licensed beachboys classified as independent contractors.

Rutledge said he expects the beachboys will make significantly less as hourly employees and get no benefits if they sign up with the new vendor, which he predicts also will raise prices for the tourists.

An online petition supporting the beachboys won support from 2,300 people in its first 24 hours.

Rutledge said he will not stop operations today, adding that he doesn’t think police will get involved.

Hubert Chang, who operates the Hawaiian Oceans’ operation, said he also was intending to open for business today.

“I hope cooler heads prevail,” Chang said when asked what will happen today.

When Star Beachboys and Dive Oahu won concession contracts early last year, leaving his company out, Chang appealed the awards in court. When the process was then nullified, the city redrew its requirements to give Dive Oahu the advantage, and it ultimately won a contract for both concessions, Chang said.

“The city determined Dive Oahu was qualified to bid due to its ‘ocean recreation sales revenues,’ which don’t reflect experience in operating a Waikiki beach concession stand,” he said.

Chang said he has about 30 to 40 employees, about 10 to 15 of whom are contracted beachboys.

Shelly Rofrits, Dive Oahu manager, said she and her company are “planning for a peaceful transition of management” today.

Dive Oahu is not planning to move any beachboys out of the area and is, in fact, “actively seeking accredited beachboys,” Rofrits said. About a dozen have signed up so far, but the company estimates it will need between 30 and 40, Rofrits said. The company has three days to set up and begin operations, she said.

A major difference is that the beachboys will be paid employees, not independent contractors, she said. “That comes with all of the benefits,” she said, including health care, base pay with per-person commission and overtime pay. That should come out to about $30 to $55 an hour while teaching, she said.

The city asked of its applicants that employees be required to undergo drug testing and a tuberculosis clearance, and have valid lifeguard and CPR certification and a valid “blue” card issued by the state for surf instructors and canoe captains, and uniforms with name tags, Rofrits said.

Guy Kaulukukui, city enterprise services director, said Dive Oahu was the high bidder and was issued five-year concessions March 16 for both stands. Those submitting offers were required to provide the city with information showing “three years of operating an ocean recreation business or a business that generated a minimum of $850,000 in annual revenue,” he said.

“The Department of Enterprise Services will be working with the previous vendors and the new vendor to ensure a cooperative transition,” he said.