Hawaii Tourism Authority criticized for hasty $250,000 appropriation to LPGA Lotte event

The Hawaii Tourism Authority voted Thursday to move funding from its website budget so it could award a $250,000 sole-source contract to the 2022 Lotte Championship golf tournament — a controversial move that required the organization to seek an exemption from state procurement rules.

Several HTA board members said the decision was in the interest of forging future relationships with the Ladies Professional Golf Association and the Lotte Corp., a South Korean multinational conglomerate — brands it believes will be good partners in their efforts to grow “regenerative tourism.”

They also praised HTA staff for negotiating the price down to $250,000 from $500,000, the original sponsorship request.

The sponsorship gives HTA commercial marketing rights and provides the community with benefits such as a golf clinic for up to 40 women and free tournament attendance for locals.

Fred Atkins, chairman of the HTA Branding Committee, told the full HTA board on Thursday that “Lotte wants to come to the table. They see a board that wants not just to give money, but to be a partner.”

The tourism board likely would have tied this year’s Lotte funding to future commitments; however, it was unable to pursue a multiyear contract while using a state procurement exemption.

Some tourism leaders and lawmakers are questioning the hasty request, which came after the LPGA and Lotte had already announced that the event would be held April 13-16 at the Hoakalei Country Club in Ewa.

The tournament will feature a field of 144 players competing for a $2 million purse, with $300,000 awarded to the winner.

The LPGA and Lotte announcement came less than a month before the tournament’s slot on the LPGA Tour calendar. The 2020 tournament was canceled due to the COVID-19 pandemic, but the event has spent the past decade in Hawaii. The tournament was held at Ko Olina Golf Club from 2012 to 2019 and at Kapolei Golf Club in 2021.

Some critics say HTA’s decision to provide eleventh- hour funding to the Lotte comes across as somewhat tone-deaf. HTA is adjusting to its first year under state procurement rules while battling the Legislature to keep its $60 million budget.

Legislators in 2021 took out their frustrations about over-tourism by overriding Gov. David Ige’s veto of House Bill 862.

When HB 862 became law last year, the measure took away HTA’s dedicated funding source and cut its annual budget to $60 million from $79 million. The bill also removed the agency’s procurement exemption and made the HTA funding subject entirely to the whims of state lawmakers.

This year the state House of Representatives allotted HTA $1 to pay for its operations and eliminated all money for staffing in the version of the state budget that it transmitted to the Senate. The House’s version also allocated $1 for the Hawai‘i Convention Center and $1,000 to fix its roof.

The Senate Committee on Ways and Means has the measure and is expected to make a decision on it Tuesday.

HTA also could face pushback from the chairs of the Senate Committee on Energy, Economic Development and Tourism and the Committee on Government Operations, which recently amended House Bill 1785 to allow them to reorganize HTA and exert more control over the agency’s spending.

State Sen. Glenn Wakai (D, Kalihi-Salt Lake-Aliamanu), who chairs the Committee on Energy, Economic Development and Tourism, and Sen. Sharon Moriwaki (D, Kakaako-McCully- Waikiki), who chairs the Committee on Government Operations, said HTA needs more accountability.

HB 1785 has been referred to the Senate Committee on Labor, Culture and the Arts and the Senate Committee on Ways and Means.

Wakai said it’s problematic that HTA decided to fund the Lotte, even though the LPGA event was already coming to Hawaii this year.

“The request came very late, and the event is going to happen anyway,” he said. “We are going to get the free visibility anyway. We don’t have to put public funds into this tournament.”

Moriwaki said HTA’s decision to move funding from their GoHawaii.com budget for a last-minute golf request is an example of why lawmakers need to put controls on the agency’s spending.

“It’s ridiculous. (Their budget) is not a slush fund,” she said.

Former HTA board member Keith Vieira said he supports golf marketing to bring higher-spending visitors to Hawaii. Still, Vieira said he understands why people are questioning HTA’s support for this year’s Lotte.

“You have to look really deeply at it because of the money situation, the lack of future funding, the scrutiny from the Legislature and the need for multiyear partnerships,” he said. “This is a one-off.”