Conflicts arise over harbor contract

A legislator as well as a member of the Board of Land and Natural Resources have ties to the public relations firm hired by the state to help determine redevelopment of the Ala Wai Small Boat Harbor.

DTL Hawaii, a self-billed “Hawaiian strategy studio,” where state Sen. Donovan Dela Cruz (D, Wahiawa-Whitmore-Mililani Mauka) is vice president for communications and a 10 percent owner, received $99,885 from the state Department of Land and Natural Resources’ (DLNR) Division of Boating and Ocean Recreation (DOBOR) for outreach services on the Ala Wai Small Boat Harbor redevelopment.

Kirra Downing, daughter of Board of Land and Natural Resources (BLNR) member Keone Downing, joined DTL’s payroll in September 2015 and serves as communications director.

DTL Hawaii is an offshoot of Rob Iopa’s firm WCIT Architecture, where Dela Cruz began working as communications director in July 2011, midway through his first year as a state senator and just after his nearly eight-year stint on the Honolulu City Council, which ended in November 2010.

WCIT’s portfolio, which is listed on its website, includes several large government projects including the Kewalo Harbor redevelopment, Blaisdell redevelopment, the Ala Moana Beach Park master plan and the Honolulu rail project. Some of its other major commercial projects include Kakaako Makai, Salt at Our Kakaako, Turtle Bay Resort, Sheraton Waikiki, the Royal Hawaiian hotel, Hilton Grand Vacations Club and Top of Waikiki.

Senator’s second job

Dela Cruz transitioned from WCIT to DTL in January 2015. According to his financial disclosures to the state Ethics Commission, Dela Cruz is paid between $50,000 and $100,000 annually for his work as DTL’s vice president for communications. He also is compensated between $10,000 and $25,000 annually for his minority ownership stake in DTL, the form said.

Despite his compensation, Dela Cruz described his role at DTL as part time and denied being involved in the company’s day-to-day operations.

“Did you not hear? I’m now the Ways and Means chair. I’m busy at the Capitol,” he told the Honolulu Star-Advertiser on Dec. 19.

Kirra Downing, who is associated with the DTL’s Ala Wai Small Boat Harbor outreach, declined to comment. Her father, Keone Downing, who as a BLNR member has oversight over DOBOR, also declined to comment.

Dela Cruz denied working on DTL’s Ala Wai Small Boat Harbor project and said he was only informed of its existence when DTL President Malia Ka‘aihue called to tell him that his connections to the firm had been raised as an issue during a recent community “envisioning meeting.”

Dela Cruz is a minority shareholder for DTL but said he doesn’t “dictate what accounts they chase.”

Dela Cruz said he thinks it’s “healthy” for legislators to hold outside jobs so they “understand the plights of making a living wage in Hawaii.” He said his outside job is in public relations because he studied the field in college and was employed by McNeil Wilson Communications and Stryker Weiner & Yokota Public Relations prior to getting elected to the Honolulu City Council and the state Senate.

“I don’t know any public relations firm that doesn’t have a government program,” he said. “I believe DTL gets work because they are a good company and they produce quality work.”

He said he has been transparent about his ties to DTL and that he doesn’t view them as conflicting with his Senate duties.

“The Legislature’s role is to pass legislation and to pass a balanced budget. We aren’t in charge of contracts or releasing funds. We don’t dictate to the departments who they hire,” Dela Cruz said.

Rising influence

Rick Egged, Waikiki Improvement Association president, said he’s unaware of any improprieties concerning DTL and the DOBOR contract.

“As far as I could tell, the company was doing a good job assisting with the envisioning process,” Egged said. “I have no reason to question their competence.”

But several members of Hawaii’s planning, engineering and development industries who spoke on condition of anonymity said DTL has enjoyed a swift growth trajectory. At the same time, they point out that Dela Cruz’s influence also has steadily grown at the Senate. He became chairman of the powerful Ways and Means Committee in the spring after the ouster of Sen. Jill Tokuda (D, Kailua-Kaneohe). There Dela Cruz has a pivotal say in all measures dealing with appropriations and taxes.

Also, DOBOR Administrator Ed Underwood said Tuesday that DLNR and DOBOR did not know at the time of selection “that there were any alleged ties to Senator Dela Cruz or Board Member Downing.”

Underwood said the selection committee considered three firms, and DTL Hawaii was chosen “because of their experience with working with HCDA (Hawaii Community Development Authority) on their Kakaako development plans that included the Kewalo Small Boat Harbor.”

DOBOR would not immediately release the contract, which was awarded April 4. But DTL advertises that it “helps businesses, governments, organizations, and communities navigate change” and “moves clients from where they are to where they need to be.”

Community concerned

DTL’s ties to WCIT and that company’s involvement in the Kewalo Harbor redevelopment has exacerbated fear from some community members about DOBOR’s latest attempt at a public-private partnership.

“Frankly, I find this appalling,” said Waikiki Neighborhood Board Chairman Bob Finley. “For the community’s sake, this deserves a deeper look.”

Community skepticism about the future of the public recreational area already had been heightened since the state broadened the harbor’s redevelopment options through Act 197 and HRS 171-6(19), making it possible for a public-private partnership to build virtually anything that is allowed in densely populated Waikiki.

“Way back then I couldn’t figure out why Donovan Dela Cruz, a senator from Wahiawa, would be so interested in our harbor,” said Ili­kai resident Nancy Mueting. “Just recently I learned that he’s involved with DTL. It certainly looks like he’s using the bill to promote his own company.”

Similar frustration caused some attendees to walk out of DTL’s Dec. 7 community meeting. Some left without leaving feedback on what redevelopment they’d like to see for the Ala Wai Small Boat Harbor, including on a 112,580-square-foot tract where the harbor office and a triangular paid parking lot now sit; a 38,369-square-foot tract that fronts Ala Moana Boulevard near the Waikiki Prince Hotel; and on a 15,199-square-foot tract where a fuel dock once stood.

A few skeptical attendees said they still had lingering distrust over the passage of Act 197, which was supported by Dela Cruz and passed despite a plethora of largely negative public testimony. Others pointed to dissatisfaction with the state’s first attempt at a public-private partnership with Honey Bee USA, which fell apart last year. The developer went bankrupt and shorted the state at least $500,000 in uncollected rent and fees, leaving the community without harbor services.

Sam Monet, who has lived in the Ala Wai Small Boat Harbor for more than 20 years, said he didn’t support the Honey Bee USA project and has grown increasingly disenchanted as new revelations about potential conflicts of interest with DTL employees and the tie-in to Kakaako developers have surfaced.

“Every place you look, you see all these ties. Basically, DTL got paid nearly $100,000 of our money to sell us a bill of goods,” Monet said. “Everything about this just stinks.”