Sunday, February 11, 2001
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Posted on: Sunday, February 11, 2001

Revitalizing Waikiki business

Map outlining the tax districts of the Waikiki business improvement district

Waikiki remains among the world’s most famous tourist destinations, but business leaders fear years of neglect may have tarnished the state’s center of tourism.

Advertiser library photo

By John Duchemin
Advertiser Staff Writer

In downtown San Diego, litter patrols are so effective that residents and shopowners can dial an "emergency hot line" to have unwanted trash removed within seven minutes.

In New York’s Times Square, once notorious as a center for vice, community courts and security patrols have helped reduce street crime by 60 percent since 1992.

In Portland, Ore., teams of public health specialists comb the urban core for victims of homelessness, mental illness and drug addiction, and help move them into shelters, wards and detox centers.

In all of these cases, the public-spirited changes have been affected not by government, but by private businesses banding together to form nonprofit "business improvement districts," or BIDs. The results in many instances have been dramatically improved economic revitalization of once struggling areas.

Business leaders in Waikiki want their fledgling BID — Hawaii’s first, which officially launches March 1 — to follow this model. Hopes are that it will help to rejuvenate what visitor industry officials have long complained is a tired destination losing marketshare. That Waikiki retain its interest for visitors is crucial: The 1-square-mile area provides nearly 40,000 jobs and $4.9 billion in revenue, 18 percent of the gross state product.

But the goal is not without its challenges: Waikiki property owners will pay between 11.25 cents and 45 cents per $1,000 of assessed land value to pay for the $1.8 million-per-year district.

And the district association is expected to soon hire contractors for the area’s street cleaning and security efforts — both activities that will have to be monitored in the first real test of the district’s self-sufficiency.

Still, while the district will cost some Waikiki property owners hundreds of thousands of dollars per year, it’s still a popular measure. Fewer than 10 percent of landowners objected when the Waikiki Improvement Association, a trade group representing area hotels and retailers, proposed the idea in the late 1990s, said Rick Egged, the association’s president. The City Council approved the BID last year.

"When it came down to figuring out who was going to pay how much, there of course was some controversy, but that got solved with some shuttle diplomacy," Egged said. "Most people are in favor of the basic concept. They realize this is not a silver bullet, not the revitalization of Waikiki in and of itself, but it is an important tool. A BID lets us actually get out and do some of the basic things that need to be done."

Urban planning

Such improvement districts have become a wildly popular form of urban planning on the Mainland. More than 1,200 have been formed as cities nationwide attempt to emulate the success of veteran BIDs, including those in Portland, Times Square, Denver and New Orleans.

The districts have proven versatile and effective, say administrators of several urban BIDs. Because they’re intimately local — usually consisting of a few blocks of contiguous land — district employees can micromanage their areas, picking up bits of flotsam that could escape the attention of city workers often tasked with miles of coverage.

"Downtown businesses want accountability, meaning that the assessment dollars stay in that area and provide direct services," said Max Zaker, chief operating officer for the Downtown San Diego Partnership, which runs an eight-month-old BID covering 272 blocks of commercial, residential and public property.

BIDs can also be tailored to local needs. Some, including the Golden Triangle BID in downtown Washington, D.C., act as lobbying organizations. Some attempt to market an area, recruit new businesses and attract tourists. Others concentrate solely on parking issues.

"When communities start a BID, it’s probably going to be a carbon copy of dozens of others, but eventually no BID will resemble any other," said Rob DeGraff, vice president of the Association for Portland Progress, which runs the city’s 13-year-old Clean & Safe District of 212 downtown blocks.

In Waikiki’s case, business leaders don’t expect much call for the BID to engage in lobbying, marketing or tourist attraction.

"We don’t want to be marketing, because that’s already done by many other organizations. Cleanliness and security are the most important considerations," said Ernest Nishizaki, general manager of support services for Sheraton Hotels in Waikiki.

Economic impact

Business improvement districts are often linked with an area’s economic recovery — higher land values, increased visitor traffic, lower crime rates, increased hotel occupancy. But it’s hard to quantify the specific effectiveness of a BID — especially since communities that start them often enact lots of other economic revitalization measures at the same time.

"Yes, we can say that crime has dropped and land values are up since our BID started, but we can’t say how much of it is because of us," said DeGraff of the Association for Portland Progress. "The things that we do, do send a clear message, but it’s hard to translate that into dollars."

Instead, BID managers point to concrete facts, and let observers draw their own conclusions.

In Times Square, BID public safety officers had given directions 2,831,802 times as of Dec. 31, 1998.

In Portland, BID employees removed 73,337 pieces of graffiti and 15,674 bags of trash, cleaned 10,340 public restrooms, pressure-washed 1,746 blocks, and weeded 1,619 blocks in 1999.

In Washington, D.C., "Hospitality Ambassadors" respond to 7,000 information requests, 42 emergency calls and provide 130 escorts in the average month. "Maintenance Ambassadors" collect 3,000 bags of trash, respond to 1,300 requests for direction and repaint 60 square feet of public space every month.

In San Diego, BID workers in January responded to 2,800 service calls, removed 42 tons of trash, and helped more than 500 homeless people.

Such statistics are more than anecdotes — they help the districts convince their constituents to keep voting for special tax assessments.

And like most taxes, these rarely drop, DeGraff said. Portland has raised its assessments by about the cost of inflation every year, sometimes bumping up by 10 percent or 15 percent when new services are added.

In Waikiki, the BID is capped at a maximum 10 percent increase per year. Current rates should stay stable unless new services are added, Egged said.

Despite the costs, a successful BID shouldn’t have much problem convincing district residents of its worth, said Sheraton’s Nishizaki.

Sheraton manages four hotels in Waikiki for owner Kyo-ya Ltd., which according to Egged faces an annual BID assessment above $250,000. Kyo-ya, however, is unflinching from its support of the BID, Nishizaki said.

"The idea is to improve Waikiki," Nishizaki said, "and to do that, you’ve sometimes got to put up some money."

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