Friday, December 31, 1999



Rebounding economy
tops local stories

By Ed Lynch


HAWAII'S economy ends its dimmest decade since statehood with some bright signs pointing the way to a much-anticipated recovery.

After spending much of the 1990s dealing with layoffs, bankruptcies, foreclosures and the so-called brain drain, Hawaii's businesses and workers enjoyed plenty of good news this year.

While economists aren't predicting a return to past boom years, they still liked what they saw. Here's a look at 1999's top 10 local business stories, as chosen by the staff of Hawaii Inc.:

1. Welcome back: The signs of life in Hawaii's economy were widespread. Home and condo sales through November climbed 21 percent over the same period last year; bankruptcies fell for the first time since 1990; state tax revenues and retail sales were both higher. Most important, Hawaii's No. 1 industry, tourism, was projected to end 1999 with a 2 percent increase in the annual visitor count over 1998. Last year, the visitor count was down 2 percent, but the booming mainland economy and the Asian economic recovery has helped bring tourists back.

2. On the downsize: Bank of Hawaii's parent company announced a massive restructuring that would cut 1,015 positions, or 20 percent of its work force, including 266 layoffs. Pacific Century Financial Corp., hoping to improve its efficiency, revenues and stock performance, said the changes were critical to stay competitive.

3. It takes a village: Hilton Hotels Corp. began construction on the $95 million Kalia Tower at the Hilton Hawaiian Village. The 24-story, 435-room high-rise was especially noteworthy because it is the first commercial hotel to be built in Waikiki in nearly 10 years.

4. Flying higher: Hawaii's two major airlines announced big changes. Aloha Airlines plans to expand its interisland service to include mainland service, starting in February with Oakland. Hawaiian Airlines said it will spend $30 million on 13 new Boeing 717-200 jets as it replaces its interisland fleet by 2001.

5. Really big sale: Japan-based Daiei Inc., the financially ailing owner of Ala Moana Center, sold Hawaii's largest shopping mall to the center's manager, Chicago-based General Growth Properties Inc., for $810 million.

6. More stores: One economic bright spot in Hawaii during the '90s has been retail as major retailers tapped local consumers' hunger for competitive pricing. The trend continued this year, including the opening of Home Depot in Iwilei, Costco's announced plans to open a third Oahu outlet in Waipio-Gentry, and Kmart's plans to build a 135,000-square-foot store in Kapolei.

7. Interested investors: Hawaii attracted interest from commercial investors this year. Some of the deals included the sales of the Ihilani, Colony Surf, Outrigger Prince Kuhio and Aston Kauai Beachboy hotels. Also, Fletcher Pacific Construction Co. was sold to Pittsburgh-based Dick Corp.

8. At the pump: The state, alleging price fixing, continued its $2 billion suit against the major oil companies. However, two defendants, BHP Hawaii Inc. and Tesoro Petroleum Corp., settled by agreeing to pay $15 million and help gather evidence against the other defendants. Meanwhile, local gas prices fell slightly.

9. Close calls: A dockworkers strike in October was averted but the threat still sent residents flocking to stores as they stocked up on rice, toilet paper, canned goods and other necessities. Nurses at the state's five biggest hospitals also settled after warning of imminent strikes this month.

10. Favorite son: Former isle resident Steve Case, the chairman and CEO of America Online Inc., bought a 41.2 percent stake in Maui Land & Pineapple Inc. for $39.2 million.

Ed Lynch is business editor of the Honolulu Star-Bulletin.

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