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State legislators gave the Hawai‘i Convention Center less than a quarter of its $64 million request to fix a leaky rooftop terrace deck, which is creating hundreds of thousands of dollars of damage and potentially costing the center new bookings.
For many years, water has been penetrating the rooftop deck, causing water intrusion into other parts of the building where there are now cracks, rust and calcium leaching from the concrete. The Hawaii Tourism Authority had asked for $54 million to repair the rooftop deck, which would include fixing two stairways and repairing the deck by adding pedestrian pavers and possibly a concrete overlay to increase loading capacity and resist future cracking.
HTA wanted another $10 million or so to install shades to cover 50% of the rooftop terrace. The shades would have allowed the center more utilization of the popular deck by cooling the space as well as eliminating the need for tents and providing more options for clients in inclement weather.
HTA Chief Administrative Officer Keith Regan said the $15 million affords a temporary repair, which consists of removing the rooftop terrace plastic square flooring and planters and painting on a barrier. Regan said a negative of this plan is that the temporary repair will render the popular rooftop terrace deck unusable as a venue space. However, he said the barrier is expected to last three to five years, and would during that time end the current cycle of costly outlays for Band-Aid fixes after major rain events.
Hawai‘i Convention Center General Manager Teri Orton told the Hawaii Tourism Authority Finance committee in April that the center already has spent $396,000 this year to repair leaks created by flash floods in December and January. Orton estimated about 10 meeting rooms under the roof were damaged in those events.
“We had 20-foot sections of meeting rooms with ceiling tiles that fell out. You could take a shower in the meeting rooms,” Orton said.
Orton told HTA finance committee members that delaying roof repairs will result in additional costs. She estimates that the center spends an average of $200,000 to fix damage caused after each flash flood.
Rise in costs
Regan said costs to provide a permanent fix to the rooftop terrace deck are expected to escalate 7% annually, as is deferment of other repairs that also are needed. The rooftop terrace deck repair is the largest out of the 56 repairs in its $136 million six-year repair and maintenance plan. Regan said there is enough funding to cover the other repairs on the list if the Legislature continues to fund HTA at current levels.
Regan said in addition to supporting the visitor industry, the center serves as a venue for community sporting events and graduations and as an emergency shelter in times of crisis.
”We’ve got some deferred maintenance that needs to be completed, and we’ll continue to push forward on that,” he said. “We’ve got to keep this facility open — there are a lot of residents that rely on this facility being functional.”
Ultimately, the rooftop terrace deck and other repairs might be addressed as part of a broader convention center retooling. Senate Bill 3334, which passed this legislative session and is pending action from Gov. David Ige, hints of greater plans for the Hawai‘i Convention Center, which opened in 1998, the same year the Hawaii Tourism Authority was founded.
The bill says, “The Hawaii Tourism Authority is also administratively attached to the Department of Business, Economic Development and Tourism and is considering redeveloping all or a part of the Hawai‘i Convention Center.”
HTA President and CEO John De Fries said legislators have appropriated $500,000 to DBEDT to take a comprehensive look at the center’s future, which could consider creating a Hawai‘i Convention Center district plan, which would include the potential development of surrounding real estate, perhaps even through privatization or public-private partnerships.
“The question now is, What should it now become over the next 20 years?” De Fries said. “Part of that is to look at the surrounding real estate that is yet undeveloped or underdeveloped to look at whether or not there should be a convention center district plan that may include a convention hotel or added commercial and retail facilities that could support the convention center.”
De Fries said DBEDT Director Mike McCartney is spearheading the convention center redevelopment process, and he envisions that the request for a proposal process could start fairly quickly.
“At the moment, I would describe it as really a clean white paper. I don’t think anybody’s got a preconceived notion about what that should be,” he said. “The appropriation to DBEDT will allow experts in the field to be engaged in helping to guide this.”
In the meantime, HTA officials say the rooftop fix needs to start soon so that that construction does not cause the center to miss its chance for recovery after the devastating pandemic- inspired downturn of the past couple of years. There are also concerns about costly Band-Aid repairs.
Damage to reputation
Orton told HTA’s finance committee that publicity about the leaks also has led to reputational damage for the center since meeting planners don’t want their events to be affected by damage or room changes.
“Meeting planners are asking about it,” she said. “We are trying to assure them that we are going to fix these leaks before we have a meeting.”
De Fries said meeting planners, who can book a nywhere in the world, want assurances that the state is committed to ensuring that their convention is placed in a setting that is of the highest quality.
“At 24 years old and with a consistent pattern of deferred maintenance, this building is showing its age. This is the gem of our meetings and convention marketing effort, and if the gem is less than highly polished, it doesn’t show well, and that in turn has an adverse effect on our reputation,” De Fries said.
HTA Chief Brand Officer Kalani Ka‘ana‘ana said, “I don’t think we are at that point yet. But if we don’t address this in the short term, we will be.”
To be sure, some of the flash flood events have left the center scrambling to fix problems promptly while keeping customers satisfied.
“After the Thanksgiving flash flood, we had to fix rooms quickly for the International Dairy Queen,” Orton said. “We repaired the rooms and kept their program as is. And literally the day before, we had a second flash flood and had to rearrange their entire program because roughly nine to 10 rooms had to be taken out of inventory.”
Orton said convention center losses have a negative trickle-down impact.
“If you get a group wanting to relocate to another city because our convention center is not able to host their event, you are talking about thousands of room nights for hotel partners that will lose out as well,” she said. “We are the host to bringing the heads on beds for the state to generate the (transient accommodations tax). It impacts everyone.”
Orton said some of the groups that opted to postpone gatherings over the past two years are expected to come back in 2024 and 2025.
“Next year is the best year to do (the rooftop terrace deck repair),” said HTA board member Fred Atkins. “If you wait to 2026, you don’t really have a working convention center. You do, but not to the capacity that you want to bring.”
Decline in visitors
More than 290,000 visitors came to Hawaii in 2019 to attend a meeting, convention or take an incentive trip, but in 2021 the number was still less than 100,000.
Their absence has been felt, as visitors who come to Hawaii for meetings, conventions, incentives and events are an important segment of Hawaii’s overall tourism performance.
HTA Public Affairs Officer Ilihia Gionson said convention center visitors are increasingly under corporate requirements to give back.
“What we see with a lot of groups is that they’ll go do a malama activity, they’ll volunteer, they’ll go give back,” he said.
Ka‘ana‘ana said convention center travelers typically generate higher visitor spending than leisure travelers. They also bolster the industry by creating a base for future business that helps spread recovery further out and builds demand to fetch higher prices.
Other funding issues
Even so, this is not the first time that there have been legislative funding shortfalls when it comes to the convention center. Repairing the rooftop, which was designed to allow the center to expand, has been a complicated process filled with expensive studies and mired by changing construction codes and political whims.
The rooftop deck repairs previously had been postponed so that funding could be tied to a legislative mandate to create a Center for Hawaiian Music and Dance.
In 2014, HTA awarded an $850,000 contract for a business plan and design study to establish the music and dance facility; however, officials decided that it couldn’t afford the $98 million price tag to bring the project to fruition.
That put everything in limbo since a state statute had required that the cultural center be built on the convention center’s rooftop terrace. The state Legislature has since changed the requirement that the Center for Hawaiian Music and Dance be put at the convention center, which has paved the way for repairs to move forward.
Officials at the center requested about $27 million from the Legislature in 2017 to fix the rooftop deck, which was a problem even before the facility opened. However, legislators did not approve the improvements, which consultant Allana Buick & Bers Inc. said in 2012 were needed by 2017.
Delaying the repairs already has proved costly. HTA’s $64 million legislative request this year was more than double what the agency had last anticipated it would cost to complete the circa- 1998 center’s largest deferred maintenance project. It was a substantial reinvestment in a center that cost $200 million to construct.
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