Pier tenants sink about rising fees

The state says the Kewalo rates will pay for enhancements

Kewalo Basin charter boat operators are angry about a doubling of slip fees in store this summer when a different state agency takes over with an eye toward upgrading the harbor.

Kewalo Basin facing changes Public Hearing When: March 7 Where: HCDA, 677 Ala Moana Blvd., Suite 1000 More information: www.hcdaweb.org KEWALO basin facts Slips: 127 Old management: Department of Transportation New management: Hawaii Community Development Authority Proposed fees: Double current rate, to about $20 per foot or 5 percent of gross receipts Effective: July 1 Source: HCDA, DOT

"It's going to put all of us, the smaller people, out of business," said Bob McCowan, owner of Blue Nun Sport Fishing, which has operated from Kewalo basin for 30 years. "There's no way we're going to be able to incur that kind of immediate increase."

Come July, the state Department of Transportation Harbors Division will hand over management of the harbor to the Hawaii Community Development Authority, the state agency overseeing the redevelopment of Kakaako.

HCDA handed the boat slip tenants a schedule of the new fees, which are effective July 1.

The state seeks double the current mooring fee, to about $20 per lineal foot for larger vessels or 5 percent of the vessel's monthly gross receipts, whichever is greater. There would also be higher insurance requirements and more expensive parking rates, plus maintenance fees.

The state held informational meeting for tenants on Tuesday, and a public hearing is scheduled for March 7.

Daniel Dinell, the HCDA's executive director, said the state agency intends to improve services and amenities at the harbor.

"We want to bring additional slips online," said Dinell. "By investing in upgrading the harbor, we'll be able to offer more amenities and opportunities for the boaters."

However, said Dinell, no redevelopment of the basin is planned until a waterfront advisory group -- which is still being put together -- weighs in on the plans.

"The fishing fleet continues to be a priority, and will continue to be a welcome part of Kewalo Basin," he said.

HCDA actually has had jurisdiction over the 55-acre Kewalo Basin since 1990, when the Legislature transferred state-owned lands and facilities to HCDA, although the DOT Harbors Division continued to operate it.

The DOT had planned to transfer management to A&B Properties, the winning bidder of the master plan development for 36.5 waterfront acres makai of Kewalo Basin last July.

When that plan was canceled amid public opposition, the division agreed to operate the basin until this July, when it will transfer it to HCDA.

The authority, which has only $5.5 million budgeted to make repairs to the harbor, has issued a request for proposals for a manager.

HCDA's vision is to include a convenience store, bait shop, fuel station and restaurants as well as renovation of the Fisherman's Wharf building.

The slip tenants, which include sports fishing boats, charter tour operators, parasailing operators and line fishermen, say their livelihoods are at stake.

"It's just unfounded," said Mike DeRego, owner of Inter Island Sportfishing, which does business as Maggie Joe Sportfishing. "I don't believe any of us can survive with double the rent, the CAM costs and insurance requirements."

DeRego, who owns four boats, said a 10 to 15 percent rent increase would be more reasonable. But he also feels the state has not justified the new fees.

He said rental rates at Haleiwa and Waianae boat harbors are only at about $7 per foot.

"A number of people at this harbor have been working here as a career," he said. "It's not a big moneymaking business, but something we do because we really enjoy fishing. We could lose everything here. I don't honestly see how the numbers could make sense."

Steve Bunch, owner of Big Fish Hawaii, which offers chartered tours on the Tsubasa, sees himself in the same situation. He is not sure where he will go if the fees double.

"A lot of us are really hurting," said Bunch.

Tenants will not see the improvements for several years, he said, even though they will be paying for them starting this year.

The basin, built in the 1920s, has about 127 slips.

Much of the basin is run down, with several slips out of commission. Theft and vandalism are a problem, say the tenants. The electrical system is deteriorating and some pier beams are termite-ridden.

Hawaii Parasail, which rents an office in addition to two boat slips, will also see its costs go up considerably.

Parking rates are tripling, said business manager Shantel Keuma.

A fee schedule lists reserved parking at $200 a month, up from $143, while unreserved parking would increase to $100 from $55 per month.

"It seems like they're trying to drive the long-term businesses out and bring the multimillion boats in," said McCowan. "Everything's designed to make it impossible for us to do business at the current rates."