Meanwhile, the Department of Business, Economic Development & Tourism has started work to improve its cavernous Foreign Trade Zone 9 facility on the other end of the pier.

Ultimately, DBEDT wants to add more than 40,000 square feet of office space and 4,000 square feet of warehouse space to the zone, which has served as an incubator for many local import-export firms for more than 35 years.

The two projects, along with a proposed private residential-commercial development in the area, could combine to dramatically raise the public profile of Pier 2, where up to now many small businesses have operated quietly and arriving cruise-ship passengers have sometimes had to dodge stray forklifts and use port-a-potties.

"It's going to spruce up the area, make security tighter and help separate the two uses," said Mark Anderson, the trade zone administrator.

The cruise terminal work will include a new reception concourse, elevator, escalator, restrooms, air conditioning and lighting, security and safety improvements.

The new improvements are designed to give arriving and departing passengers an experience more like the ones their fellow travelers receive at the main cruise-ship terminal at Pier 5 near Aloha Tower.

The $3.3 million first phase of the foreign trade zone expansion project includes construction of an additional 12,400 square feet of office space, 4,000 square feet of warehouse and more storage and maintenance space.

A second $6.8 million phase, planned for completion in 2007, calls for an additional 30,000 square feet of office space specifically focused on establishing an expanded hub for local and international trade organizations that could attract more international businesses.

An underused asset

The trade zone at Pier 2 is an underutilized gem that's been in existence for decades, said Timothy Wrath, president of Hawaiian Cooler Co., which has been there for more than a decade.

Like dozens of other users, the company, which sells portable coolers, rents space in the zone rather than acquiring its own private warehouse and office space, Wrath said.

"We benefit in a number of ways," he said. "First, you are charged only for the warehouse space you use, rather than having to pay for unoccupied warehouse space all time. That's a big saving."

Other advantages include having a centralized facility that offers quick access to government officials, customs brokers and shippers and rules that allow companies to pay duties only when their products leave the zone, instead of when they arrive.

"It's a shame that a lot more people don't know about it," Wrath said.

Patrick Lau, president of Savor Brand, a company that sells food packaging material, said he stumbled on the zone's advantages when he was setting up the business eight months ago.

"It's all about the location and having basically everything together, including warehouse, labor, electricity and office space management. It's pretty much a one-stop shop," he said.

"It's one of the best things the state has done."

Anderson, the trade zone administrator, said that's the kind of support that's drawing the need for expansion.

"There's an unusually high demand for the space among anybody that's involved in international trade," he said. "With the new space, we think we'll be able to attract even more people to the zone."

Other proposals

All of the improvements also come at a time when the Aloha Tower Development Corp. has been working with Dallas developer Ken Hughes, who has proposed a $360 million redevelopment project that would extend from Piers 2 to 6 and include up to 550 new residential rental units in the area.

Hughes has proposed using some of the existing open space at the foreign trade zone for Aloha Tower Marketplace parking and building a streetcar that would connect the entire area to downtown Honolulu.

Creighton Goldsmith, chief customs inspector for the U.S. Customs & Border Protection Office in Honolulu, said all the expansion is actually taking away space from the one of the area's biggest need: cargo storage.

"We've had a tripling of outgoing cargo recently and we're running out of space for it all," Goldsmith said.

He said he'd like to see an expansion of the adjoining Pier 1 facility, the primary shipping point for international cargo, but several other projects, including new car shippers, are competing for the space.

"There's no easy solution, but with all the increasing uses, something is going to have to give," he said.