KEN IGE / KIGE@STARBULLETIN.COM Dennis Sambrano, beach captain with C&K Beach Services on Kuhio Beach in Waikiki, scanned the ocean Wednesday as fellow C&K beach boy Justin Kubo brought a surfboard up to the rack.

Vendors protest
bidding on Kuhio
Beach stands

The losing bidders question
qualifications of the city's selections

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By Gordon Y.K. Pang
gpang@starbulletin.com

Three current and former vendors of beach-boy services who lost out in recent bids for stands at Kuhio Beach have filed protests with the city questioning the winning bids.

The highest bidders for the three stands are entities tied to three brothers: Gifford, Hubert and Kelfred Chang.

The protesters say none of the Changs have three years' experience in owning and operating water sports equipment rentals as required by the rules.

"You have people that are in property management," said Clyde Aikau of C&K Beach Services, a current beach-boy service that has filed a protest. "They have no business on the beach."

Those filing protests also believe the various applications filed by the Changs constitute collusion because they have interest in shared companies.

All three brothers, individually, said they were pre-qualified by the city to bid for the stands. Further, they said, their interests in the Waikiki beach-boy stands are separate from each other even if they have mutual interests in other, unrelated companies.

City officials declined comment on the issue, citing the protests that have been filed.

C&K Beach Services has had the contract for stand No. 1 the last three years. Others filing protests were Makani Moku, which is run by the Iaukea family, and Star-Beachboys, headed by Unity House official Tony Rutledge and son Aaron. The Iaukeas currently run stand No. 4, while Star-Beachboys previously ran a concession before losing out in the bidding process in 1998.

The bids opened on May 24 showed as winners:

>> Beach Stand No. 1: Ideal Properties Inc., which lists Gifford Chang as its president and treasurer and Kelfred Chang as its vice president and secretary. State business registration records show the purpose of the company is to "operate a real estate brokerage." The second-top bidder was Waikiki Windriders/Hawaiian Ocean's Waikiki, which lists Hubert Chang as its president. The third-highest bidder was Kelfred Chang as an individual.

>> Beach Stand No. 3: Waikiki Windriders/Hawaiian Ocean's Waikiki, which was incorporated on March 25. The second-top bidder was Kelfred Chang.

>> Beach Stand No. 4: Kelfred K.C. Chang.

"Ideal Properties is in the business of renting real estate and vacation properties," wrote attorney Michael Green in his letter of protest. Green is representing Star-Beachboys.

Gifford Chang said that Ideal rents homes that include ocean activity equipment, he said. "The city checked it. They qualified me."

Hubert Chang said Hawaiian Ocean's Waikiki is a 50-50 partnership with longtime beach boy Fletcher Miranda, who formerly worked for C&K Beach Services. Miranda's years of experience on the beach qualify the company, he said.

Kelfred Chang also said that four city officials, including Deputy Finance Director Ben Dimond and a city attorney, interviewed him before qualifying him.

The protesters also question the relationship between the three firms and believe they violate city policy prohibiting collusion in the bidding process.

While the rules allow for an individual or company to bid on more than one of the stands, they cannot operate more than one stand at any time, nor can they submit more than one bid per stand.

They pointed out that Gifford Chang is listed as the president, treasurer and director of Ideal Properties while Kelfred is listed as vice president, secretary and director.

But according to Gifford Chang, he is the sole owner of Ideal Properties, and Kelfred Chang's titles are in name only.

Kelfred Chang earns sales commission from Ideal Properties for his work in real estate but is not an employee, Gifford Chang said.

The Chang brothers, as well as other siblings and cousins, have dual interests in other companies. But, Gifford Chang said, the beach-boy companies are entirely separate.

He said he also questions how there can be collusion. "Usually, collusion occurs when you collude to have a lower price," he said.

"They had every right to bid higher than me," Gifford Chang said. "They are a little disappointed that they didn't, and now they want to bid more than me."

Kelfred Chang said: "I submitted a proposal that I felt that I could make money and provide work for qualified people. My brothers put in their own bids. I have no idea what they did."

Hubert Chang also acknowledged that while he and his brothers share other business interests, his interest in a beach-boy concession is his own.

The other bidders, however, don't buy it.

Green, in his protest, noted that the three Changs are listed as "managers" under a company that incorporated in March under the name Hawaii Business Ventures.