Officials urge end
to rent breaks

Gov. Cayetano used emergency powers
to aid airport merchants suffering after Sept. 11

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By Pat Omandam
pomandam@starbulletin.com

The state has provided $21 million in rent relief so far to state airport concessionaires under a program established by Gov. Ben Cayetano using temporary emergency powers granted during last November's special session.

Nevertheless, state officials and concessionaires opposed a Senate bill yesterday to extend those emergency powers -- which expire on April 20 -- by one year.

The Senate Transportation and Economic Development committees held the bill on the recommendation of the committee chairpersons, who said senators would look for other ways to help concessionaires.

Opponents said the measure (SB2485) would allow anyone with a state contract to seek economic relief if they can demonstrate hardship or losses that significantly impair their ability to pay their leases.

Brian Minaai, state transportation director, said in written testimony before the joint Senate panel yesterday that the department wants to help concessionaires but is opposed to the bill because it seeks to expand the relief to others with contracts with the state.

"This provision will make the state responsible to provide relief for any type of loss suffered in the aftermath of Sept. 11," Minaai said.

During the third special session of the state Legislature last November, what became known as the "King Ben bill" gave the governor the authority to declare an economic emergency in Hawaii.

Using his new powers, Cayetano established the Airport Concession Relief Program, which allowed concessionaires to pay the state lease rent based on a percentage of their revenue, and not on minimum guaranteed payments as spelled out in their contracts.

So far, 17 airport concessionaires have sought to use the program, and 14 have gotten rent breaks, including Duty Free Shoppers, which received most of the $21 million in rent relief, transportation officials said.

James Nakatani, state agriculture director, testified that the department does not think the extension is necessary and that it would be difficult for his department to make up the lost revenue. For example, he said, the department is reviewing requests for rent relief from a dozen lessees of its agricultural park lands, which could mean a loss of $20,000 for the agency.

"It is important to facilitate the continuation of business activity in these tough economic times, but at least for our lessees, I'm not sure if this extension is warranted," Nakatani said.

Senate Minority Leader Sam Slom (R, Hawaii Kai-Aina Haina) said the governor's emergency powers should not be extended. He said the Legislature is capable of handling the issue.

"It's not needed, not necessary and not good policy," Slom said.

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