Council members
upset with losses
at City Store

Also bothersome is that one
vendor supplies about 85% of all
the merchandise sold there

By Gordon Y.K. Pang
Star-Bulletin

City Council members aren't happy that the City Store at Ala Moana Center still isn't netting a profit.

They're also worried about an allegation that the Hawaii Police Retirement Association, which runs the City Store, has been favoring one T-shirt vendor over others.

Ethan Park, business manager for the City Store, said the outlet made $376,366 in sales last year, up 18 percent from a year ago. The store opened for business in December 1995.

The nonprofit agency, however, is not required to pay the city until it grosses $507,000 in a year -- the association's break-even point.

Park said the association is selling some of its merchandise to firms in Japan and expects to reach the break-even point this year.

While Park yesterday distributed copies of sales reports to the Council's Executive Matters and Economic Development Committee, Councilman John Henry Felix said he wants to see balance sheets and profit/loss statements.

Councilwoman Donna Mercado Kim said she's particularly disturbed about criticism from vendor Dennis Peterson that the City Store allows a competing merchandiser to take up a bulk of the floor space. Peterson said while he's long done business with the association and its own merchandising store on Young Street, he's had trouble getting his products into the City Store.

Park acknowledged that one vendor is responsible for between 80 percent and 90 percent of the merchandise on sale at the City Store.

Association attorney Brian Sugimoto said an auditor looked at that vendor's books and found nothing inappropriate with its relationship to the association.

Sugimoto said some of Peterson's products are available at the City Store but that other merchandise still needs to obtain approval from the office of Managing Director Ben Lee.

Council members also said they're not happy that the Department of Customer Services pays about $300 a month in maintenance charges for the City Store, while the association pays nothing.

The city also pays $1 a year to lease the City Store space and the adjoining satellite city hall -- 3,400 square feet total.

City Budget Director Malcolm Tom said the city would be paying the same amount in maintenance and lease if the administration had chosen to use the City Store as part of the satellite city hall.

The store sells items with logos connected to city agencies such as the police, fire and water safety departments.