Two new city bills, which tax commercial property owners in Waikiki to maintain the district’s iconic beaches, are going to public hearing.
The adoption of Bills 81 and 82, which were introduced last year by Honolulu City Council Chairman Ernie Martin and former Councilman Stanley Chang, will be discussed at Honolulu Hale on Feb. 18 at 10 a.m. The bills require Waikiki commercial property owners to fund a nonprofit special improvement district aimed at maintaining and restoring Waikiki’s coastal assets.
Rick Egged, president of the Waikiki Improvement Association, said the new tax would raise about $600,000 annually.
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. There are more than 6,500 such parcels that could be assessed, with costs to their property owners ranging from tens of thousands of dollars per year for owners of large beachfront parcels to under a hundred dollars for smaller off-beach parcels.
Egged said the association worked with the University of Hawaii Sea Grant Program to develop the special improvement district, which is seen as a way to equitably address the urgent need to maintain Waikiki’s beaches. He said creating the special district gives Waikiki’s commercial stakeholders the ability to participate in comprehensive beach management planning.
"Waikiki Beach is our No. 1 project at the moment. Waikiki is our most iconic attraction, yet it’s eroding. We are losing over a foot of sand a year," Egged said. "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."
While some Waikiki commercial owners might object to the proposals, at this point the city bills have received only letters of support.
The new tax has been supported by Waikiki tourism interests like Charles Kelley, chairman of the board of Outrigger Enterprises Group; Ted Bush, owner of Waikiki Beach Services LLC; and Fred Orr, general manager of the Sheraton Princess Kaiulani Hotel. Trade organizations like the Hawaii Lodging and Tourism Association and the Building Industry Association of Hawaii also have supported the measures, which could fund a gamut of beach improvement projects.
The Waikiki Improvement Association’s proposed budget for fiscal year 2015 includes a $325,000 contribution toward the $1.3 million replacement of the century-old Royal Hawaiian groin, which holds Waikiki Beach together. In fiscal year 2016 the nonprofit would contribute another $325,000.
"The groin is in such bad shape that you can put your hand underneath the wall. There’s been a complete loss of the underlying foundation, so it could fail on any given day," Egged said. The Department of Land and Natural Resources "is going through the planning stages to replace it, but they need our money to complete the project."
If the bills become law, Egged expects the city to start collecting the special district tax in the second half of this year.
"I’m envisioning that we would be doing construction in 2016 of a new groin, the design of which still needs to be vetted," he 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.
