If two new city bills aimed at maintaining iconic Waikiki Beach are adopted, commercial property owners in the area will have to contribute to beach restoration projects.
The adoption of Bills 81 and 82, which were introduced Thursday by Honolulu City Council Chairman Ernie Martin and Councilman Stanley Chang, would require Waikiki commercial property owners to fund a nonprofit aimed at maintaining and restoring Waikiki’s coastal assets.
Commercial property owners from the Ala Wai Harbor to Kaimana Beach and from the Ala Wai Canal to the ocean would be taxed an estimated 7.63 cents per $1,000 of their assessed property value. Assessments would range from tens of thousands of dollars per year for owners of large beachfront parcels to under a hundred dollars for smaller off-beach parcels.
The initiative is expected to raise $600,000 annually.
"It spreads the cost over all stakeholders rather than the few who are willing to come up with the money. It also gives us a seat at the table to make sure that the projects are done properly and that they are in keeping with stakeholder objectives," said Rick Egged, president of the Waikiki Improvement Association. "I think all of our members generally believe that establishing this major public-private partnership is necessary,"
The bills, which would create the tax district, will be given first reading Wednesday. A special notice will be sent to affected property owners giving them the opportunity to provide feedback prior to the second reading, which will be scheduled in the next 30 to 90 days.
"As Waikiki’s councilmember for the last four years, I believe strongly that the only way to preserve Waikiki Beach for today’s and tomorrow’s residents and visitors alike is to develop and implement a coordinated comprehensive plan for all of the beach rather than continue to react to spot crises," Chang said in a prepared statement.
The effort was spearheaded by the Waikiki Improvement Association, whose board of directors unanimously supported the concept at their Sept. 16 meeting. While some Waikiki owners could object to the proposal, it already has fans among Waikiki’s biggest players.
Charles Kelley, chairman of the board of Outrigger Enterprises Group, said the legislative push is modeled after the Waikiki Business Improvement District that was created by city ordinance in 2000.
"That’s working very well. … You see it in action every day as you walk down the streets and sidewalks," said Kelley, who favors the creation of this latest tax district. "We have people from Waipahu to Winnipeg that dream of coming to Waikiki and lying on a white, clean sand beach. If we want to stay in business for the long run, we have to meet or exceed that expectation. What is being done now is good but rather piecemeal. It will be good to be able to take a long-term view and come up with a plan that works for everyone."
Ted Bush, owner of Waikiki Beach Services LLC, said he hopes that Waikiki commercial businesses will support the tax district since it will preserve the beaches for all.
"All businesses, not only those that are on the beach, will benefit," Bush said. "When people are attracted to Waikiki, their money finds its way to all the vendors."
Jerry Gibson, area vice president of Hilton Hawaii, said he supports the concept as long as the money stays focused on the beaches.
"I believe in the public and private aspect of putting it together," Gibson said. "I wouldn’t like to see the money go toward creating a bureaucracy. I want to see it go to maintenance and care of the beaches."
Egged said the association worked with the University of Hawaii Sea Grant Program to develop the ordinance for this latest tax district, which is seen as a way to equitably address the current and future needs of Waikiki Beach. He said passage of the proposal is critical and fulfills a long-standing need.
"In 2008 we did a study with the Hawaii Tourism Authority. We found that if we lost Waikiki Beach, it would cost $2 billion a year, and that was in 2008 dollars. Those needs haven’t gone away," Egged said. "Our intention is to develop a 10-year plan to help us decide on the projects."
Indeed, Dolan Eversole, an extension agent with the University of Hawaii Sea Grant Program, said a comprehensive beach management plan with a funding source is needed to address current and future priorities, including emergencies.
"The nonprofit would engage all stakeholders from community groups to surfers, landowners and commercial users to establish priorities. But clearly, right now, a glaring emergency is the Royal Hawaiian groin, which is about 100 years old and failing," Eversole said. "It’s holding Waikiki Beach together, and the fear is that if it failed the beach would erode to the northwest and most of the sand would end up by the Halekulani Hotel and go out the channel."
Language in Bill 82 allows the nonprofit to establish its own priorities and plan; however, its proposed budget for fiscal year 2015 includes a $325,000 contribution toward the $1.3 million replacement of the Royal Hawaiian groin. In fiscal year 2016 the nonprofit would contribute another $325,000.
"We’re looking at doing a 50-50 match with the state for this first project. After that we would be looking at making 25 percent matches," Egged said.
Eversole said other priorities could include updating the 2-year-old beach replenishment and performing new maintenance on the Kuhio Beach crib wall and swim basin as well as moving sand that has migrated from the southern portion of Fort DeRussy Beach near Trump Tower to the Hilton pier.
It’s also important for the district to serve as a mechanism for rapid response, Gibson said.
"We’ve seen with weather and hurricanes and those kinds of things that the beach can go away quickly," Gibson said. "For the economic viability of Waikiki and the pleasure of the tourists and locals who live here, it’s important to continue to maintain the beach area and continue to make it the best in the world. If everyone does a little bit, we can do a lot together."
