State gives airport tenants $18 million rent break

By Johnny Brannon
Advertiser Staff Writer

Gov. Ben Cayetano used the emergency powers granted to him after the Sept. 11 attacks and yesterday allowed 10 companies that operate at Hawai'i airports to get out of paying about $18 million they owe the state.

The companies either lease space at the airports or have other concession contracts with the Department of Transportation.

The break allows them to calculate payments owed for the past five months as a percentage of sales, rather than pay the base amounts agreed to in their contracts with the state.

"By helping these businesses obtain some stability, we are continuing our efforts to assist the entire state's recovery from these unfortunate circumstances," Cayetano said in a statement.

As airport traffic plummeted, DFS Hawaii suffered a sharp sales decline and lobbied the state to suspend its contract obligations.

Instead of paying a minimum of $60 million a year for exclusive rights to sell untaxed imported luxury items in Hawai'i, the company pushed to base the payment on a percentage of its sales.

During a special session of the Legislature in October, lawmakers gave Cayetano authority to adjust state contracts in response to the economic slump that followed the attacks. The powers extend until April 30.

Deputy transportation director Jean Oshita said the department would consider requests for further breaks on a month-to-month basis.

The breaks granted so far will save DFS Hawaii more than $16 million it owed the state under four contracts.

Another company, Host International, will save $1.4 million on rent for its food and beverage concession at Honolulu International Airport.

Other companies affected are the APCOA parking concession, Lanai Co. retailers, Thomas Cook currency exchange, Greeters of Hawaii florist, Tiare Enterprises florist and lei stand, H. Cho Enterprises lei stand, Myrna M.K. Chun lei stand, and Jo Ann Sato newsstand.