Firms bid for World Trade franchise
By Andrew Gomes
Advertiser Staff Writer
At least five companies, including Honolulu-based Dawson International, have submitted proposals to the state to establish a World Trade Center in Honolulu.
The state Department of Business, Economic Development & Tourism, which bought a World Trade Center franchise in 1993 and kept it largely inactive, sought bids for the license last month in hopes of making better use of what can be a tool to facilitate international business in Hawai'i.
Bids were opened yesterday but while establishing a so-called "United Nations of commerce" in Honolulu has been a long-dreamed-of idea, it has been a tough sell before.
A World Trade Center typically concentrates providers of global business information and services in one building. The World Trade Centers Association was formed in 1970 based on pioneering centers in New York, Tokyo, New Orleans and Houston. Today there are more than 300 centers in about 100 countries.
Various versions of the idea in Honolulu have been considered over the past 25 years. Sites proposed have included Aloha Tower, downtown office buildings, the airport and Hawai'i Convention Center. Those visions, however, were never seen through.
At least twice in the past several years, the state has sought to assign its World Trade Center license. At one point, electronics giant Uniden Corp. discussed bidding on the license. Ultimately, contract conditions and a depressed business environment have led to no viable proposals.
Business department officials said that under state law, details of who bid, how many bids were received and specifics of the proposals cannot be released until a contract is awarded. One person on the selection committee said at least five submissions were received.
The state wants $200,000 for the license. A buyer would be required to pay an additional $133,000 for a trade center association transfer fee. An operator would still be required to provide the state with access to association services, supply quarterly reports and project milestones, that if not met, would allow the state to terminate the contract.
The state, which paid about $100,000 for the license eight years ago, is alternately offering to sublicense the franchise for a minimum annual payment of $35,000, which includes a $10,000 association annual franchising fee that the state currently pays. Other requirements apply.
Those terms aren't too appealing to Don Dawson, who has submitted a proposal with his own terms. "It's not a very exciting possibility," he said. "A World Trade Center is not an easy thing to operate and make money at."
Dawson, president of the environmental, health services and international trade consulting firm Dawson International, figures it will cost him $300,000 a year to operate the center.
"I'm not willing to pay the state $200,000 and $133,000 — plus another $300,000 a year — without getting anything from the state."
Dawson is proposing to sublease the license, provided the state make a minority investment in return for 5 percent of profits, among other terms.
He proposes to use a floor of the downtown office building Pioneer Plaza and its Plaza Club facilities for the trade center organization. Down the line, Dawson said he would like to build a new building, perhaps in Kaka'ako, to house the center. "That would depend on the success of the venture," he said.
Jim Reis, regional coordinator for North American trade centers, said there are a variety of successful models depending on the needs and opportunities of a business community.
At the World Trade Center Denver, where Reis is president and chief executive officer, the center is operated by a private nonprofit group formed by local business community members who partnered with a state college and a downtown building owner.
The World Trade Center New Orleans is based on leasing office space to member businesses while the state runs various programs. In Cleveland, the center is an arm of the Chamber of Commerce and is funded by other economic development organizations. Baltimore's center operates as an educational organization and gets significant funding from the area's port authority. Some of the World Trade Centers have struggled.
"There is no perfect formula," Reis said. "It's not just the magic of slapping the name on the building and saying, 'Hey, we got a World Trade Center.' That's just one small piece of it."
Stanley Hong, president of the Chamber of Commerce of Honolulu, said he has supported a local World Trade Center for years. "Most big cities have one," he said. "We want Hawai'i to be viewed as a global center where international business is transacted."
Seiji Naya, director of the state Business Department, said he believes the improved local economy and recent international meetings held in the city, such as the Asian Development Bank and Pacific Basin Economic Council, have raised the prominence of the state in world commerce and the likelihood of establishing a World Trade Center here.
"I feel there is a need for a new facility in town," he said. "It's a magnet to draw business. I feel the time is now to transfer use of this to the private sector."
But Naya noted that there has been pressure from some legislators to not "give away" the license or sell it cheaply. At the same time, he acknowledged that there is some question as to the benefit Hawai'i taxpayers have received from the state's ownership of the license over the years.
The department has used its membership to access trade center association information for state-sponsored trade missions, but not much else, Naya said.
"I feel the private sector should take over," he said. "I don't want to hang on to this (license). I have been wanting to use it more effectively."
Still, Naya said the department may find there are no acceptable offers to buy or lease the franchise.
A committee will review the bids. No date has been set for a decision.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
