Thursday, February 25, 1999

Tourism panel
wary of added duties

The board is
reluctant to take over the
convention center

By Russ Lynch


The Hawaii Tourism Authority is making it clear that it doesn't want to absorb the Convention Center Authority if it means any drain on its hard-won tourism marketing budget.

A state-backed measure in the Legislature calls for transferring oversight of the convention center to the tourism authority when the convention center panel's life runs out June 30.

At its weekly meeting yesterday, the tourism panel expressed strong concerns about the debt-service costs that would come with a transfer.

"We're not going to back down on that issue," said John Reed, tourism authority chairman. His board's position is that if the Legislature wants the tourism panel to take over the convention center it will do so, but only if the change is revenue-neutral.

The state Department of Business, Economic Development & Tourism supports the transfer.

DBEDT Director Seiji Naya, a member of the authority board, told the panel there are estimates the $350 million center can be refinanced to bring the annual debt service down to $5 million a year.

An authority-merger bill in the Senate has already been held back in the Economic Development committee, in favor of a measure that would extent the life of the Convention Center Authority another year.

But a transfer bill is still alive in the House. In recent testimony at the Legislature, the convention center panel has said its share of the hotel room tax about covers the $23 million debt service. That soon changes, however.

In the year ending June 30, 2001, payments of principle and interest on the loans will total $38 million and the hotel-tax income for the center falls some $10 million short of that.

The tourist industry fought for years to get dedicated funding for tourism promotion and finally last year the tourism authority was created with a share of the hotel room tax earmarked for it.

That guarantees some $60 million a year without having to seek the Legislature's approval.

The tourism panel sees that potentially being eroded by the convention center payments.

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