DBEDT director sees role as “the champion for what’s possible in … Hawaii”

Luis Salaveria recalls working on the State of Hawaii Data Book as an intern in 1992 at the state’s Department of Business, Economic Development and Tourism (DBEDT). Nearly a quarter-century later, he’s running the department.

With 11 attached agencies — from the Hawaii Community Development Authority (HCDA) to the Hawaii Tourism Authority — and numerous divisions and branches, the enormity of the department and its functions doesn’t faze Salaveria, who appreciates the fact that the department is non-regulatory.

“DBEDT is the department that goes on the offense creating jobs, attracting capital, helping develop a workforce … It’s my job to be the champion for what’s possible in the state of Hawaii,” said Salaveria, whose department receives less than 1 percent of the state’s general fund budget.

Salaveria, who at 47 is the same age as the Data Book, said he has always been fascinated by data.

“That’s the nerdy side of me. I love looking at the massive amounts of data,” said Salaveria, who from 2011 to 2014 was the state’s deputy director of finance.

Before that he was the finance manager for Kaiser Permanente Hawaii, from 2001 to 2011, and a budget and financial analyst with the state Department of Defense, from 1997 to 2001.

Salaveria believes that Hawaii’s is ground zero for the clean energy revolution.

“Any island nation or any island state is the first in line to the effects of climate change. So if we don’t consider it important, why should anybody else? So our drive to 100 percent renewable energy is very much driven by, not only saving the environment, but also the fact that it makes economic sense for Hawaii,” he said.

A graduate of the University of Hawaii at Manoa, Salaveria holds a bachelor’s degree in economics with a minor in political science. He lives in Hawaii Kai with his wife, Naomi, and their two teen-aged children. His son hopes to study cinematic arts.

The self-proclaimed “data guy” wishes he were more artsy but has tried to convince his kids that finance has a creative element to it.

“And then I thought to myself, normally when people use creative and finance together in the same phrase, somebody is going to jail,” Salaveria joked.

Question: Why don’t we just dive in: Should we talk about business first? Economic development?

Answer: I really do believe that the economics and business side is all-encompassing.

I’m very fortunate enough to be able to transition from my old role, which was in finance, into this role working with Gov. (David) Ige, who is a guy who totally gets the whole innovation thing and really wants to find opportunities for young people to find high-paying, knowledge-based jobs.

There’s a strong push to be really engaged in trying to help develop an innovation economy … so that young people can find good high-paying jobs, jobs that are evolving with the way that the world economy is going. We recognize we are a small market. …

One of the things that can be exported is intellectual knowledge and property and workforce and all of those things that can be born here in Hawaii and finding the things that Hawaii really has a significant amount of competitive advantage at.

That’s why energy has also been a huge driver of helping create this clean energy economy. Hawaii has very much the inside track on being the model for what a clean energy economy can be for the United States and for the rest of the world, for that matter.

Q: What is going on with GEMS (Green Energy Market Securitization)? I know you’re trying to move that program in a different direction.

A: The motivation and the intention is to deploy the capital in such ways that we can continue the advance of our clean energy goals but also drive efficiencies and allow for the entire rate-base, the entire community, to partake in all of these clean energy technologies moving forward. … How do we deploy capital into the market in such a way that can help everybody? Using the commercial market. When businesses can lower the cost of doing business, it results in lower prices for consumers. There’s a long-term, downstream effect of deploying more and more of these low-cost energy technologies to the overall market. … If we continue to deploy this technology, if we can reduce the cost of electricity by 10, 20 percent, that is an immediate increase in discretionary, disposable income to every resident, which in turn goes in and fuels the economy.

Q: Where are we in terms of deploying the capital for commercial projects?

A: We’re waiting for approval for Program Notification No. 9 (by the state Public Utilities Commission). The way that this works is we’ve structured it so that we’re working now with the financial institutions of Hawaii. So that we, the financial institutions and GEMS, are deploying money together to larger commercial projects. What we essentially did was we helped de-risk the market so that more of these projects can come online.

Q: Let’s go back to the innovation economy. Why is it so important?

A: The reason why the innovation economy is so important for the state of Hawaii … is what we do here and create here stays here. If we can grow the workforce that is developing solutions for the world around energy, around sustainability, all of those things, that’s going to happen here because we have the competitive advantage. …

I’m not saying we’re going to become the next Silicon Valley. One of the things Hawaii has to its advantage, is the fact that it is ground zero for a lot of the clean energy revolution that’s happening.

Q: What’s going on with the Innovation Block planned for Kakaako?

A: The Entrepreneur Sandbox … now it’s coming to fruition. We got the money for it. … HCDA is finalizing the contract with the developer in order to start construction on the Phase One, which is the Entrepreneur Sandbox, the DataHouse and ‘ike centers as well as the office building … for health sciences and health services.

It is very exciting and, yes, the Entrepreneur Sandbox is a small piece of it. … It is a state-sponsored co-working space that’s bringing in all the of the different resources from a governmental perspective into one area where people can essentially build their ideas, build their technology, work with the necessary and the right tools and the right people and collaborate with others in order to become successful entrepreneurs. It’s almost the physical manifestation of what it is that we talk about when we say innovation.

Q: What would you say to critics who say that Hawaii is slow to get things rolling — say with GEMS, for instance?

A: … We always say that it’s kind of hard, it’s hard to do business in Hawaii, all of these different things. (But) if that was the case, we wouldn’t have a startup community. We wouldn’t have some of the most vibrant and financially strong banks in the country. We wouldn’t have a robust tourism economy, all of these different things. … There will always be critics. The haters gonna hate.

Q: I’m jumping to the Data Book. Why is the Data Book so important?

A: One of the things that is so important about the Data Book is that we’ve done it for so long and data in and of itself is powerful when you can string it going forward.

When you start looking back at some of the tables that are in there. When you’re tracking distribution of age bands or ethnicities or where people are living by zip codes, all of these different things, it’s important because it’s also a tool for business, understanding the market.

The first bulleted point in our press release talked about 60 percent of the in-migration into the state of Hawaii were for individuals between the age of 20 and 45. … So the whole idea that only old people are coming to Hawaii, not necessarily true. There are young people coming to Hawaii.

What are we doing for that new generation? As policymakers … (we) need to understand the demographics are changing, the trends that are happening. … Data is only good as it becomes an ability to be a decision-support tool.

Q: Speaking of data collection and transmission, what is Hawaii doing with regard to broadband?

A: A few years ago the Legislature was forward-thinking in making an appropriation for key critical infrastructure in the state of Hawaii, and that’s the cable landing stations. … You have cables that can come, land in Hawaii and go. Before, in history, it used to have to land in Hawaii, but now with fiber optics they can bypass Hawaii.

These are our connections to the rest of the world. What we need to do is we need to create the critical infrastructure to make these cables easier to land.

One of the things that has been made obviously clear to us by the private sector is that permitting, regulatory risk is very high in the state of Hawaii, land costs are very high. … So what can we do as government to help the market so that people can land more cables here? Because if they don’t land cables here we’re not going to be able to compete in the global market. … We need to make sure that we’re continuing to be part of … those transactions and create Hawaii as the digital hub of the Pacific, … build the key critical infrastructure so that literally somebody can just come over here and then just plug in. … The more points of connection, the more resilient the network becomes.

Q: How far are we along in creating that critical infrastructure?

A: We are probably two years out from creating that infrastructure. … We’re hoping to do an RFP (request for proposals) probably within the first quarter of 2017 to basically really push for working with the private sector, the state of Hawaii basically saying we’re open for business, bring us your best proposals and we want to work with you.

Q: Are there any other areas you want to highlight?

A: Kalaeloa (the old Barbers Point) is still a huge thing. … When that piece of property was turned over in 1997, I think, when it was turned over from the military to Hawaii, it was in pretty bad shape. Twenty years later, it’s pretty much still in pretty bad shape. And the funny thing is that for 20 years this place has received very little attention.

But what this administration has been able to do is find what it is that we can do in that area and really put our focus in there.

Now all of a sudden we have the U.S. Department of Energy wanting to look at that. There’s a developer trying to put up more affordable housing in that area, there’s still some commercial activity. There’s a functioning airport on that property. The FBI is out there.

It went from being neglected for 20 years to literally being the prettiest girl at the dance, and now everybody wants a piece of what can happen with Kalaeloa moving forward.

Couple that with the plans for the University of Hawaii-West Oahu campus that’s happening down over there — is it going to be the Second City? I wouldn’t go as far as to say that, but what it does, it does have the potential for a significant amount of economic activity and that’s what needs to be driven out to that side of the island.

Q: Is there any overarching message that you want to share with readers?

A: I think what’s really important is that economic development, environmental stewardship, sustainability, all these different things, they are not mutually exclusive; they can all happen in conjunction with one another.

The reason why we do that is to make people’s lives better, to create jobs, increase personal income. …

To me, Hawaii is still the best place in the world to live, and we need to make sure that we continue to do the right things for sustainability, for economic development, to continue to be the best place to live.

Q: But are you trying to make it the best place in the world to do business?

A: Yes. Because if it is the best place in the world to live, it’s also the best place to do business. … We were ranked the 12th strongest economy in the United States of America.

Oftentimes the headlines are always, “Oh we’re the worst place in America to do business.” Yet we have the fourth lowest unemployment rate in the United States of America, we have high personal income; we have all of the good things that are happening. We have huge job growth. Very rarely do we espouse upon the positive things. … That’s what I think really the message is for us, that government … can really lay the foundation for businesses to succeed.