Another Side
of the Story
Another Side
of the Story
Ala Wai lease plan
will sink efforts to
fix other harborsThe state plan to privatize the Ala Wai Harbor is an ill-conceived scheme that will leave Hawaii's small-boat owners in the lurch.
What is the purpose of leasing the Ala Wai Harbor?
Confronted by growing concern over the wide-spread deterioration of state boating facilities, the administration chose harbor privatization as a means to solve the problem.
The premise has been that a privately developed "world-class" Ala Wai Harbor could provide the economic engine that would generate revenue for the Boating Special Fund (BSF). This money would be used to upgrade the state's severely deteriorated boating facilities, a job estimated to cost $150 million to $250 million.
What is wrong with the Ala Wai Harbor lease plan?
Its purpose has shifted to improvement of the Ala Wai Harbor as the "end" unto itself, rather than the "means" to increase funds to fix other boating facilities.
The plan's purpose has shifted from serving the public interest to serving special interests representing Waikiki businesses, which would benefit from additional business development and an aesthetically improved Ala Wai Harbor, and promoting the dealings between prospective lessees and the administration.
It is strongly felt throughout boating communities statewide that an important public purpose -- renovation of other neglected harbors -- is a necessity to justify giving up the state's most valuable, largest and most profitable public recreational harbor to a private developer.
Without it, there is no legitimate public interest in leasing the Ala Wai Harbor. The boaters certainly don't want it, especially in the form now being proposed. The state's privatization plan does not even address this public purpose and is designed to keep the money generated by the lease from flowing out of the Ala Wai/Waikiki project, and thus kept away from other state harbors that need improvement.
Here is how the lease plan undermines the public purpose of privatization:
>> The Ala Wai lease requires that a contract to provide the operations and management of the Ala Wai Harbor Marina be instituted with the Ala Wai lessee in accordance with Act 90. This Ala Wai Harbor operation has generated an average of $1.6 million per year of excess revenue during the past three years (the highest in the state). This excess revenue is used by the BSF for the upkeep of the many smaller, low-revenue harbors and boating facilities in mostly rural Oahu and on the neighbor islands.
However, under the conditions of the privatization lease, it appears that there will be increased interest in spending all of the Ala Wai excess revenue on Ala Wai Harbor projects, thereby reducing or eliminating the excess revenue that in the past has been used for other boating facilities.
Reducing the BSF revenue by $1.6 million per year would seriously set back the renovation of our harbors and decrease the capabilities of many smaller state harbors and facilities to provide their boaters with safe public access to the ocean.
>> The state administration has led the public to believe that the BSF would receive a fat lease rent from the Ala Wai lease, when in fact the written lease contains provisions that would reduce or eliminate that revenue, leaving the other harbors and boaters holding the bag.
The Ala Wai lease rent is the only increased revenue that the BSF would receive from the privatization of the harbor. All other revenue increases would result from the developments themselves -- construction, employment, permit fees, general economic multiplier effects and taxes.
These additional fees and revenues, with the exception of any increased boaters fees, would go to the state general fund, not the BSF, and would not be available to the boating division. If the Ala Wai lease rent is reduced or eliminated, the BSF gets little or nothing from the Ala Wai lease and the primary purpose of the lease (to fix the other state harbor facilities) cannot be fulfilled.
The privatization lease plan may improve the Ala Wai Harbor to world-class status -- but it would be done at the expense of all the other state boating facilities and the boaters who use them. The facilities' deterioration and accompanying safety problems at nearly all of our harbors are not going to improve, and may even get worse under the current Ala Wai Harbor privatization lease plan. This must be corrected.
Bill Mossman is a member of the Ocean Users Coalition of Hawaii, a coalition of boaters.