Fund for convention center questioned

By Dan Nakaso
Advertiser Staff Writer

Hawai'i Convention Center officials told the state Senate Committee on Tourism yesterday that they need more money to fix the 5-year-old center and then faced pointed questions about a $2 million flexibility fund set up by their predecessors to entice conventions.

Yesterday's appearance by officials from Philadelphia-based SMG was the first before the committee since they took over the responsibility for marketing the convention center on Jan. 1.

The committee chairwoman, Sen. Donna Mercado Kim, D-14, (Halawa, Moanalua, Kamehameha Heights), has been concerned about the $2 million flexibility fund in the past and asked SMG officials to return on Tuesday with more details about how it was used by the Hawai'i Visitors & Convention Bureau and how it may work in the future. HVCB previously held the marketing contract for the convention center.

Kim, a constant critic of the way HVCB promoted the center and spent its money, had several questions that SMG officials were unable to answer about the fund. Overall, though, she said she was pleased by what she heard.

During the hearing, Kim referred to the flexibility account as a "slush fund" and detailed thousands of dollars that had been spent on gifts, receptions, lunches and "lavish dinners" to attract conventions to Honolulu.

SMG and other tourism officials flinched in their seats at the term "slush fund."

"There was a flexibility fund," Rex Johnson, the Hawai'i Tourism Authority's executive director, said in response. "It's not as flexible anymore."

There also isn't much of the $2 million left for this fiscal year, SMG officials said, because HVCB officials spent or committed $1.9 million, leaving only $100,000 for the remaining six months.

Kim also said after the hearing that SMG's request to raise the $31 million state spending cap on the center for repairs and maintenance seems reasonable.