The city is rethinking its policy on Kalakaua Avenue street closures in Waikiki in response to complaints that some past events haven’t merited disruptions to the nation’s fifth-most lucrative retail street.

Each year, the city allows 37 or more parades and events to close the well-trafficked strip.

The traffic snarls that accompany events like the Aloha Festivals Floral Parade, which closed Kalakaua Saturday morning, are mostly tolerated by Waikiki residents and businesses. The 70-year-old floral parade brings Oahu residents to Waikiki to shop and eat, and it’s popular with tourists.

That’s why it is one of up to 20 legacy events that the city renews annually. The city also allows Mayor Kirk Caldwell to grant up to 10 street closures through waivers and provides a process for First Amendment-related closures.

But some Waikiki businesses and residents cried foul early this year when a for-profit company, Millwood ‘Ohana Productions, secured 11 out of 15 lottery spots made available by the city for Waikiki street closures. They complained generic events like the “Hugs and Hearts Festival” and the “Lucky to Be in Hawaii Festival” or the “Waikiki Spring Festival” didn’t justify the ensuing traffic congestion and sidewalk crowding, which blocked access to stores and contributed to lost sales.

They urged the city to consider reforms. The city listened, and this year’s lottery likely will take place Oct. 18 under new traffic code amendments designed to minimize community impact.

Mark Garrity, acting director of the city Department of Transportation Services, said changes have been proposed to Bill 60, which the City Council passed in 2015.

“DTS has received many comments and complaints from neighborhood boards and citizens concerning the number of parades and frequency of road closures,” he said. “DTS’ proposed rules and regulations for Parade and Activities reflect both Bill 60 amendments and received comments.”

A public comment period ended Sept. 15. Comments will be reviewed, and if no significant changes are proposed, Garrity said the rules could go into effect by mid-October. The new regulations would:

>> Limit applicants to two Kalakaua closures a year.

>> Minimize Kalakaua traffic by restricting block parties to between Seaside and Kapahulu avenues.

>> Allow the city DTS director to limit the number of consecutive parades and activities on the same roadway.

>> Cap the number of legacy events and, for each new legacy event, the number of mayor’s waivers would be reduced by one.

The changes will be vital to Waikiki, said Sam Shenkus, director of marketing for the Royal Hawaiian Center. “There were 100,000 people in Waikiki during the Aloha Festivals’ Waikiki Hoolaulea block party. These events only happen once a year,” Shenkus said. “The problem isn’t with the legacy events. It’s guys like (Millwood ‘Ohana Productions) that went in and cherry-picked the busiest Saturdays every month.”

During each Millwood Waikiki event, the company rented stalls to vendors. Millwood’s website showed 104 stalls for rent at each event for prices ranging from $350 to $900 depending on whether vendors sell merchandise or food. If all stalls were rented at the maximum rate, Millwood could take in about $70,000 an event.

The Honolulu Star-Advertiser could not reach production company owner David Millwood for comment. But Millwood told the Waikiki Neighborhood Board in March: “I’m not in it to make big bucks. We’ve donated more than we have made. I take a lot of pride in what we do. Local vendors would take it as an insult if you say they aren’t showing cultural purpose.”

The city does not require lottery applicants to pay rent, application fees or underwrite administrative costs. An applicant’s only major expenses are hiring security and purchasing insurance.

In contrast, businesses along Kalakaua pay an average of $420 per square foot to conduct business from their brick-and-mortar stores, according to 2015 data from commercial real estate firm CBRE. Retail sales on Kalakaua Avenue are among the nation’s strongest, lagging only New York’s Fifth Avenue, Los Angeles’ Rodeo Drive, San Francisco’s Union Square and Chicago’s Michigan Avenue, said Andrew Starn, CBRE first vice president.

“Kalakaua Avenue is the most important street in Hawaii when it comes to retail. Commercial operators expect to have 365 days a year, 10 a.m. to 11 p.m. sales. It’s not good when things get interrupted on the food service or retail side,” Starn said. “A couple of big events a year probably makes sense, but you need major benefits to have commercial operators who are paying rents and creating jobs forgo access, fees and visibility.”

The Waikiki Neighborhood Board, the Hawaii Lodging &Tourism Association and the Waikiki Improvement Association favor the proposed rules. However, they plan to ask the City Council to scale back the number of Kalakaua street closures.

“We welcome discussion at the city level on lessening the shutdowns between Seaside and Kapahulu avenues, as well as easing up on the abundance of events that take place in Waikiki. It would be nice to see the traffic within Waikiki alleviated, so long as we ensure that there is balance with some of the traditional events that Waikiki and the hospitality community puts on are maintained for both locals and visitors to enjoy,” said HLTA President and CEO Mufi Hannemann.

WIA President Rick Egged said concern over Kalakaua street closures heightened when Millwood obtained so many events. In March, Millwood deferred to public criticism and canceled eight events.

“We still believe that if all the allocated spots for events were used that we’d have too many,” Egged said. “The new rules don’t cut back events, they just do a better job of controlling them. To cut back on events, we have to go back to City Council.”

Waikiki Neighborhood Board Chairman Bob Finley wants to eliminate the lottery, but supports allowing legacy events and giving the mayor discretion to add a few waivers. “If a big conference of 20,000 people won’t come to Hawaii without a parade, we don’t want to rule that out,” Finley said.

Waikiki Neighborhood Board Vice Chairman Louis Erteschik said he supports reducing traffic jams and preventing inferior events from taking over Kalakaua. But he cautions against over-regulation and self-interest.

“The businesses are mad when there are block parties because people are out on the street and they want them in their fancy stores and restaurants,” he said. “A certain number of these events are part of the fabric of life in Waikiki. I may be in the minority, but I kind of like them.”