Few businesses escape battering by economy


POSTED: Thursday, December 31, 2009

Hawaii's economy was slammed on all fronts this year — from the loss of tourists, jobs, restaurants and agricultural staples to a further downturn in the housing market, more notable bankruptcies and continued troubles for one of the largest banks.

Local television went through major changes, as did the state's airline industry. But, if there was a bright spot, consumers welcomed well-known retailers and lined up at the door to mark their grand openings.

1. Aloha, agriculture: Hawaii's agricultural industry, the lead driver of the state's economy in its glory days before tourism and the military took over, moved further away from its plantation days as sugar, pineapple and old-fashioned farming sustained significant losses in 2009. Gay & Robinson on Kauai ceased its 120-year-old sugar operations in late October, eliminating jobs for 137 workers. The scene was repeated last week as Maui Land & Pineapple Co. completed its final harvest after 97 years in operation. The elimination of pineapple, among other restructuring, resulted in more than 45 percent of the company's overall work force, some 285 employees, losing their jobs.

2. Housing meltdown: Real estate owners who rode the roller coaster to wealth during the last cycle were left open-mouthed as they watched the market's dollar sales volume drop 22.7 percent during the first 11 months of the year. The median prices paid for island properties in the first

11 months of 2009 were $580,000 for single-family homes and $302,750 for condominiums, decreases of

7 percent and 6.8 percent, respectively, from the same period in 2008.

; 3. Vanishing visitors: The global downturn wreaked havoc on tourism, which economists say has ties to about 80 percent of the state's economy. Despite steep hotel room discounting, visitor arrivals through 11 months were down 5.1 percent and visitor spending was off 12.9 percent.

4. TV transition: The shared services agreement announced in August by KHNL/KFVE-TV with higher-rated former rival KGMB-TV was unprecedented in Hawaii, with news departments and other operations being merged and dozens of residents losing their jobs. In another development, the state made the transition to digital from analog broadcasting in January - before the rest of the nation - because wildlife officials were concerned that work to dismantle broadcast towers after the transition would disrupt the nesting season of the Hawaiian dark-rumped petrel, an endangered seabird, which nests atop Haleakala. Many Hawaii residents were left without free, over-the-air television and many live in areas not serviced by cable or satellite TV services.

5. Out of work: While many economists have called an end to the U.S. recession, it could be awhile until job seekers see improvement. Hawaii's unemployment rate improved to 7 percent in November from the previous month's 7.3 percent, but the state suffered job losses last month. The jobless rate was up sharply from 4.9 percent in November 2008.

6. Retail renaissance: Hawaii's retail landscape ushered in several mainland chains that shoppers flooded on opening day, while others closed through consolidation. Among the newcomers were Target, Victoria's Secret, David's Bridal and Babies R Us. Walgreens continued to expand its presence, with plans to compete head-to-head with CVS-owned Longs Drugs. Whole Foods Market, though, was left looking for another site after construction of its planned flagship store at Ward never materialized due to financial woes. Local supermarket chain Star Markets disappeared after its acquisition by Times Supermarket.

7. Air truce: The ever-changing face of the interisland airline market shifted again when Mesa Air Group's go! formed a joint venture in October with rival Mokulele Airlines - its one-time code-share partner - and became go! Mokulele. With Aloha Airlines all but a memory after its sudden shutdown at the end of March 2008, Hawaiian Airlines stands tall as the market's dominant carrier.

8. Bankruptcies galore: Bankruptcies affected many sectors - from the Hawaii Superferry to the Royal Hawaiian Showroom (producers of the failed Waikiki Nei), Hawaii Biotech and the Honolulu Symphony Society. Other companies, including Hawaii Medical Center, Hilo Hattie and Hawaiian Telcom, though they filed in 2008, were embroiled in bankruptcy proceedings this year.

9. Banking bust: Central Pacific Bank went into a tailspin as it lost hundreds of millions of dollars in the California real estate market, canceled a $100 million stock offering, pulled the plug on its West Coast operations, saw its holding company's stock plunge to an all-time closing low of 81 cents and was given 60 days to comply with a consent order from the Federal Deposit Insurance Corp. and the Hawaii Division of Financial Institutions requiring the bank to improve its capital position, asset quality, liquidity and management oversight. The future of the state's third-largest bank is in question as it enters the new year.

10. Closed for lunch: Many Oahu eateries shut down, with February being especially brutal as Brew Moon, Nick's Fishmarket and E&O Trading Co. closed their doors. Zippy's laid off 47 employees at its Maui store in April, less than a year after opening in Kahului. Other closures included Aaron's Atop the Ala Moana, Pasta & Basta at Waterfront Plaza, Chowder House at Ward Warehouse, Sergio's Italian Restaurant and Muddy Waters Cafe in Aikahi Park Shopping Center. Brent's Restaurant & Delicatessen in Kailua is closing today.