Debt cripples Japanese center
By Walter Wright
Advertiser Staff Writer
The Japanese Cultural Center, recipient of millions of dollars in private donations, is on the brink of losing its land and buildings to bank foreclosure, state Sen. Brian Taniguchi said yesterday.
It was for that reason, Taniguchi said, that he put an $8 million item into the new state budget to help the center by buying the Beretania Street site where the center sits.
But both Taniguchi and a critic of the move, state Sen. Sam Slom, agreed yesterday that a lot more information is needed before any money is spent.
Susan Kodani, director of the center, said yesterday it has to deal this year with a total of $8 million it has owed for years to Bank of Hawaii, First Hawaiian, Central Pacific Bank and City Bank to focus on its cultural mission.
"Right now, our mission has become paying the mortgages," she said.
Kodani said the center had not asked Taniguchi for the legislation, but appreciated it as an indication that the Legislature values the center as an important community resource.
Taniguchi, who is employed part time by City Bank, said he was not aware that City Bank held part of the debt, and that he was not motivated by that fact.
Kodani said state money may not be the only way out. "We are examining tons of options."
The center bought its 1.2-acre site in 1989 from Bishop Estate under a five-year agreement of sale for $2.6 million, after receiving the lease rights in a donation by the Honolulu Japanese Chamber of Commerce.
A first phase office building was completed in 1991, and a second phase building with a museum, dojo, resource center, ballroom and kitchen, was completed in 1994. Total cost of both phases was $18.5 million, according to the center.
Taniguchi, D-11th (Mo'ili'ili, Manoa and McCully) whose district includes the center, said he was also concerned about the possibility that the University of Hawai'i would acquire the building and force the center to relocate to the Bishop Museum in Kapalama.
University spokesman Paul Costello said yesterday the UH Foundation briefly explored the possibility of partnering with the center to use some of its space for an off-campus office for University President Evan Dobelle.
But Costello said that idea is no longer being pursued.
State Sen. Slom, R-8th (Wai'alae-Iki, Hawai'i Kai), said there had been no full discussion in committee of the cultural center item.
He said he was shocked to read recent news accounts of the center's financial difficulties, although many organizations in the community are having problems which have worsened since Sept. 11.
But Slom said tossing an $8 million general obligation bond authorization into the budget for purchase of the center site was "putting the cart before the horse.
"It's a pretty big ticket item, and we've been talking about how we don't have money for this or for that," Slom said. "We need to have more information, and we need to compare this item with other priorities, like text-books."
The budget has yet to be approved by Gov. Ben Cayetano, who was out of town yesterday and not available for comment.
Taniguchi said he hadn't discussed the item with Cayetano, and added that there would have to be a satisfactory arrangement worked out between the center and the state before money is spent.
The senator said he envisions the state paying the center up to $8 million for the land, and allowing it to continue to occupy the site.
He said he would like to assure that the center continues to provide programs for the public, including maintenance of its museum facility. The senator said he understood that the center never recovered from the bursting of the Japanese investment bubble.
The center had counted on donations from individuals and organizations in Japan, but did not receive them, he said.
Reach Walter Wright at wwright@honoluluadvertiser.com or 525-8054.
