Waikiki beachboy concessions must bid again
By James Gonser
Urban Honolulu Writer
After several complaints, disqualified bidders and the threat of a lawsuit, the city is rewriting the qualifications to operate three of four city concession stands on Waikiki Beach.
Three-year contracts were first awarded in 1999, and when bid applications were put out again by the city last month, qualifications included a minimum of three years' experience in owning and operating a concession business handling water sport equipment and earning at least $50,000 a year in revenue from that business.
Other potential vendors felt that the restrictions disqualified all but the present contract holders and that some of the current operators should be disqualified because they were behind in their rent.
Ben Lee, city managing director, said he reviewed the qualifications and decided a revision was needed.
The bid process was canceled, and the city will start anew by advertising this week for bidders, opening the bids during the third week of May and filling new three-year contracts by June 1.
"We reviewed the guidelines and have modified the minimum qualifications, which I believe will qualify more bidders," Lee said.
Three of the city concession stands are on Kuhio Beach near the statue of Duke Kahanamoku and were just this week given new $40,000 concession booths. One concession is at Kapahulu Pier, but does not include a booth. One booth is designated to be operated by a nonprofit group and that operator will be picked by lottery, Lee said.
A special provision was added to this year's contract saying that anyone in arrears with the city for a contract or agreement at the time of a bid opening would be considered a "nonresponsible bidder or applicant."
The current concession holders were given 50 percent discounts on their monthly fee last year to offset a drop in business while the city did construction work at Kuhio Beach.
The discount was only for the 11-month construction period, and only one concession holder, Gilbert Hisatake, has not returned to full payments and is in arrears, Lee said.
"If they are not paid up to date they may be disqualified from bidding," Lee said. "They may have good reasons, such as because of Sept. 11, and want a reduction because they are not making that much money. But the city does not have the flexibility to grant waivers based on financial conditions. We can if impacted by construction, which we did. Otherwise everybody will be coming to us saying their businesses is slow this month and they need a break. Then you really open up a Pandora's box."
Michael Green, attorney for Star Beachboys owned by Tony Rutledge Sr., former head of the Hotel & Restaurant Employees Local 5, said the contracts were intentionally written to keep out new companies.
"If you didn't have a concession before or make $50,000 over the immediately preceding three years you don't qualify," Green said. "No one fits the description but the people that were there, and they weren't paying the rent."
Green expects to file a lawsuit against the city this month.
Hisatake, who holds the most expensive bid from the last contract of $12,500 a month, said he is not sure if he will bid again.
Businesses are also required to pay 10 percent of their gross income on top of their monthly payments.
"This is my living," said Hisatake, who employs 15 people. "I dearly want to work with the city. If a big hotel wins the contract, they'll see there is not that much money here."
Before 1999, the concession operators were on month-to-month leases. Beachboys, including several now employed at the concessions, have taught surfing on Waikiki Beach for decades.
Clyde Aikau, who owns one of the concessions and pays the city $8,500 a month and 10 percent of the gross, said it is important for Hawai'i to keep beachboys in Waikiki.
"To pit beachboys against corporations with big money is not an even playing field," Aikau said. "This is a family operation. It still puts a big smile on our faces when we see people standing up to surf for the first time. We are not just here to make money. We enjoy the sport and sharing our knowledge of the ocean. Hopefully, beachboys will still be enjoying the beach and teaching surfing in 100 years."
Lee said the new minimum qualifications are being finalized.
"We want someone with some experience," Lee said. "We want to be consistent with all our concessions in the city whether it be at Ala Moana, Hanauma Bay or Waikiki. We want to make sure that people that submit bids are qualified, have some experience and are capable of doing the job."
Reach James Gonser at firstname.lastname@example.org or 535-2431.