Honolulu Mayor Kirk Caldwell signed two city ordinances Monday that will tax Waikiki commercial property owners and raise millions of dollars to combat beach erosion and shore up coastal infrastructure in the state’s top tourist destination.
The signing of Bills 81 and 82, which levy the tax and create a special improvement district, paves the way for Waikiki’s commercial stakeholders to assist in the reconstruction of the crumbling Royal Hawaiian groin. The bills also will prepare a comprehensive beach management plan, in conjunction with the University of Hawaii Sea Grant Program.
"Things are pretty good in Waikiki," Caldwell said. "Just look at all the people out there enjoying the beach. But as you know, the unfortunate fact of global warming and the sea level rising is that our beaches on Waikiki continue to erode on a regular basis."
For a long time, Caldwell said, Waikiki beach importments have been piecemeal with plenty of stops and starts. However, the creation of a special district with its own dedicated funding source provides a means for the city, state and private sector to keep Waikiki "looking good all the time," he said.
"Waikiki Beach is one of the most famous beaches in the world," he said. "Without the beach we wouldn’t be where we are today. It brings in billions in revenues, and it’s what keeps tourists coming back year after year. But it’s not just for the tourists. About 30,000 people live in Waikiki, and they enjoy going to the beach, too."
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WAIKIKI BEACH SPECIAL IMPROVEMENT DISTRICT
>> How money is raised: Businesses in the Wai kiki special improvement district will be taxed at a rate of 7.63 cents for every $1,000 of assessed property value.
>> Expected collection: $605,000 for the first fiscal year beginning July 1
>> Designated funds: $650,000 for Royal Hawaiian groin repair over a two-year period
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With the passage of the new ordinances, commercial property owners from Ala Wai Harbor to Kaimana Beach and from the Ala Wai Canal to the submerged lands and coastal waters 150 feet makai of the shoreline will be taxed 7.63 cents per $1,000 of their assessed property value. There are an estimated 6,000 or more such parcels that will be assessed, with costs to their property owners ranging from tens of thousands of dollars per year for owners of large beachfront parcels to less than $100 for smaller, off-beach parcels.
"This is a proven method that was modeled after the Waikiki Business Improvement District, which was formed in 2000 under an ordinance that was virtually identical in approach to Bill 82," said Rick Egged, president of the Waikiki Improvement Association, who worked for years with key members of Waikiki’s visitor industry and politicians to create the ordinance.
Egged said the assessment is expected to raise about $605,000 in the fiscal year that begins July 1, harnessing the resources of the private sector to partner with government in an effort to manage and maintain Waikiki’s most precious resource. Initially, funds raised from the commercial beach tax will augment the $1.3 million that the state already has budgeted for replacement of the Royal Hawaiian groin, which is tentatively slated to begin at the end of 2016 or early 2017.
Egged said the improvement district already has earmarked $650,000 for Royal Hawaiian groin restoration and would fund about 25 percent of the state’s long-range plans.
"It’s important to have an emergency fund to address things that happen quickly," said Ted Bush, president of Waikiki Beach Services, who supported creation of the special improvement district and the new tax. "It’s just critical that we have a plan in place. If we let the Royal Hawaiian groin go too far, we could lose the entire beach Diamond Head of the groin to the Kuhio Beach basins. It could all disappear."
Kyo-ya Hotels & Resorts LP, owner of the Royal Hawaiian Hotel, already has installed sandbags to bolster the stretch of shoreline fronting the public stairs adjacent to the Royal Hawaiian groin. Also, exposed metal on the circa-1927 groin was removed. Such tactics have temporarily improved the far end of Waikiki Beach. This latest work is in addition to a $2.5 million investment that was made in 2012 to move 27,000 cubic yards of sand from offshore onto Kuhio Beach. That replenishment shored up severely eroded sections of Waikiki Beach, much of which was in front of the police substation and Westin Moana Surfrider.
However, continued maintenance of the man-made project is necessary.
"It really is a dicey situation," Bush said. "We’ve also had problems on the other end of the beach where people were injured because erosion caused a jagged beach wall to become exposed."
That’s why Bush said Waikiki stakeholders are eager to work with the state to develop at least a 10-year plan to eliminate erosion hot spots, which include the Royal Hawaiian groin and a stretch of sand adjacent to Kuhio Beach.
Larry Hanson, general manager of the Westin Moana Surfrider, said he supports the tax because it provides for the creation of a sorely needed long-term management strategy.
"Waikiki is the driving engine for this state," Hanson said. "We need a good game plan to maintain it. We need a long-term strategy so that we are proactive instead of reactive."
