Convention Center Controversy
Price of Paradise · Hawaii Public Radio · aired 1994-08-28
Guests: Ken Kanter (trade show expert); Christina Kemmer (President, Waikiki Improvement Association)
Duration: 1:08:51

[00:00:00] Randall Roth: Good morning. This is Randy Roth, host of the Price of Paradise radio show. Our topic today is the convention center that appears to be a done deal. Well, sort of. We think we know where it's going to be and what it will cost to build, and the design, apparently, will be agreed upon very soon. In fact, there are four models on display. The public can look them over, and until just recently, could even vote for a favorite. Most folks here on Oʻahu seem reasonably pleased about all of this, but continue to be concerned about possible problems, such as increased auto traffic and other byproducts of mass tourism.
[00:00:42] Randall Roth: Neighbor islanders are invited to listen closely, for better or worse, this could happen to you. With me in the studio today are two experts on different aspects of our topic. Christina Kemmer is president of the Waikiki Improvement Association, and as such, works with the public and private sectors to ensure continued renewal of Waikiki. She's been active in the Waikiki master planning process and has worked to balance physical and economic renewal with perpetuation of culture and history, so that quality of life can be enhanced. Ken Canter is on the board of the Hawaii chapter of the International Association of Exposition Management, IAEM for short, and was its chairman for the last three years.
[00:01:26] Randall Roth: IAEM represents nearly 4,000 exposition and trade show managers and suppliers worldwide, many of whom are potential customers for Hawaii's convention center. For the past 12 years, Ken has served Hawaii's convention and exposition industries as an exposition service manager, convention decorator, and trade show marketing consultant. Christina and Ken, welcome to the Price of Paradise radio show.
[00:01:48] Christina Kemmer: Aloha, Randy. Good morning. Thank you for having us.
[00:01:51] Ken Kanter: Good morning, Randy. Thank you very much for having us here.
[00:01:56] Randall Roth: We have an especially friendly setting this morning. Normally we each have a microphone, only because of technical difficulties today, Ken and Mike are going to be sharing a microphone. Listeners are invited to call in their questions or their comments. The number is 955-8821, and neighbor islanders are invited to call collect. Well, Christina, the Honolulu Advertiser, the morning newspaper, has a real big spread on the convention center. Front-page pictures, quotes of all sorts of famous people, including you. And then in the focus section, they have a long article by Ken Canter.
[00:02:31] Randall Roth: In the quote that the Advertiser runs from you, it seems as though you're very much in favor of a convention center. Is that true, and if so, why?
[00:02:42] Christina Kemmer: We are very much in favor of a convention center. It's been an 8 to 10-year process actually, to get to this particular point. We very much need one in the state of Hawaii, especially because, in our marketing and advertising efforts, we are looking at ourselves as the gathering place of the Pacific. Also a place for East and West to meet. And that means we need a world-class convention center. We need economic renewal, economic incentives, we need physical renewal, especially for a mature resort like Waikiki, and also we need cultural and historical renewal.
[00:03:19] Christina Kemmer: So Randy, the convention center is really going to be an access point for very many areas of ensuring that we have a future in Hawaii.
[00:03:29] Randall Roth: Ken, are you basically in agreement with that?
[00:03:32] Ken Kanter: Yes, I am. I think one of the elements to be looked at carefully regarding the development of a convention center is how it assists us in planning the marketing mix of tourism in Hawaii. We have been blessed with a tremendous tourist industry over the last several decades, but now we're finding that the entire world sees tourism as the direction to go to bolster their economies. And it's going to become a very competitive market. It is already. Conventions, meetings, incentives, trade shows, expositions are a major part of the tourist industry.
[00:04:07] Ken Kanter: And in that respect, Hawaii has been somewhat behind the times in moving forward and developing that market. We're going to have to get into it if we want to benefit from it, and if we want to maintain control over our destiny.
[00:04:24] Randall Roth: There's no guarantees. In a sense, the competition creates a situation where we say the game is rigged, but you can't win if you don't play. And so we have to get into the game. Well, world-class is a term that's mentioned quite a lot in conjunction with the convention center. That it has to be world-class. And I assume that relates to competition. We need to be competitive. How do we know, Christina, whether or not it is world-class? What does that translate into? Is it size, or is it design, or what else?
[00:05:00] Christina Kemmer: It's a combination of factors, Randy, which are actually, one does have a menu that one can look at, depending on what type of conventions you wish to attract. So consequently, in this whole process, it was determined that we wanted to be able to attract conventions with a minimum of perhaps 5,000 conventioneers, and hopefully be able to have several conventions a year that hosted 15, maybe 10 to 15,000 conventioneers. Now, when you are looking at those particular markets, what are the requirements of the exhibitors, what are the requirements of those particular size conventions? And Ken, I'm sure, can certainly address that numerically in terms of what are the technical elements.
[00:05:43] Randall Roth: I guess the whole idea rather than just to have a real nice-looking building is to get some people there. Ken, how do you get people there?
[00:05:53] Ken Kanter: Well, speaking from the exposition side, looking at the exposition space, our association and the Hawaii Convention Park Council and the Convention Center Coalition all arrived at a number of elements to compose the criteria for a facility. In the sense of the exposition space, we said 200,000 gross square feet on a single level would be the minimum.
[00:06:15] Randall Roth: Can you give us some sense for how much space that is? 200,000, what does that translate into? Is there any way of describing it to people who aren't real good with numbers?
[00:06:28] Ken Kanter: Well, usually the number of football fields is used, but I think once you get beyond one football field, you lose that perspective, too. We're talking about the potential of 1,000 exhibitors occupying that space. A 1,000 different exhibits, or perhaps even a few more.
[00:06:45] Randall Roth: Is it bigger than one football field?
[00:06:47] Ken Kanter: Oh, absolutely. I'm not going to guess exactly how many you can fit into that. Several. Okay, we're talking about a big space. It's a large space, in a sense of what we have available in Hawaii, but it's not a very big space in comparison to what's available nationally and worldwide. The number 200,000 is is kind of a critical mass. If you're going to give exposition managers, trade show producers an opportunity to produce an event that could become significant on an international scale, you've got to start with enough space, otherwise, the potential return isn't there.
[00:07:25] Ken Kanter: You think of it in terms of essentially a real estate transaction. And even though an event may begin with 25,000 or 50,000 square feet, producers of events are constantly looking to the opportunity to build their event, and so you've got to give them the density they need to make it worthwhile to make the investment to produce the event in the first place.
[00:07:49] Randall Roth: And density is lots of people in one spot at one time?
[00:07:54] Ken Kanter: In the case of an exposition, it may not be a lot of people. It may be a lot of exhibitors, it may be a lot of business materials, technical equipment. The number of attendees may not be as big as immediately anticipated because of the square footage. You could have a 200,000-square-foot trade show going on for as few as 2,000 people. But if you use that space for other purposes, or you have multiple events going on at the same time, yes, 10,000, 15,000, even 20,000 is not out of the question.
[00:08:29] Randall Roth: Well, Christina, it sounds to me like the good news is it's going to attract a lot of people, or it's likely to. The bad news is, I think, it's going to attract a lot of people. Aren't there some concerns about the quality of life in Waikiki, if it attracts as many people as what Ken is describing?
[00:08:52] Christina Kemmer: Well, Randy, let me put this in a different perspective. First of all, let's say that our visitor numbers on a yearly basis total around 6 million people. And if right now the majority of our visitors who are coming are group travelers as well as independent visitors, but we have a concerted marketing effort now to bring conventions and meetings to Honolulu. Of that 6 million people who come, probably 610,000 of those will actually be conventioneers. So it isn't as if we are adding 610,000 to the 6 million that we have, because we've been having fluctuations as you've seen over the past two-three years.
[00:09:32] Christina Kemmer: And that's been one of the reasons there's been an urgency to really move this decision and the process forward. Because markets today aren't just strictly group tours and independent travelers. You know, tourism as the number one industry, you have to include conventions, meetings, and seminars, etc. So, in terms of numbers, at this point in time, we really aren't looking at increasing, the numbers of individuals.
[00:09:58] Randall Roth: So they're simply replacing folks who would otherwise be here doing things other than attending big conventions?
[00:10:04] Ken Kanter: Well, in a, in projecting into the future, you look at it on several, in several ways. First of all, the conventioner, as a spender, what kind of money do they bring in, how long do they stay, what activities do they get involved in, how often do they return? What do they provide the local community? Not only in dollars but in a service. Having conventions in your front door is like having an international university in your front door. It's a privilege to be in a community that is hosting conventions. It's a lot easier for local professionals and tradespeople to get involved in their industry on a national or international basis by having access to conventions.
[00:10:49] Ken Kanter: But also conventions give the the marketing side of our industry the opportunity to plan more carefully and to fill the void during certain times of the year, or during certain economic cycles. I mean we've just gone through that and we've seen what's happened when a prime market, such as Japan, slows down, we all feel it. We're very dependent upon the ebb and flow, and if we have a convention center in which we have long-term bookings established in it, then we can weather the storm much better.
[00:11:23] Randall Roth: Hmm. Christina?
[00:11:24] Christina Kemmer: There is another element as well. If we're very successful in this, then obviously we have to sit down and plan a second convention center, or look at where we can expand some of these facilities. Now whether those facilities are expanded in and around Waikiki, or whether this these particular facilities get expanded on the neighbor islands, that's something that we look at in terms of future projection and planning.
[00:11:51] Randall Roth: Well, Ken mentioned that this, in a way, was like a real estate investment that we're looking to a return if you will. We're spending, I think, 100-and-some million dollars on the land at the site of the Aloha Motors, and I think about 200 million dollars is the anticipated cost of the structure.
[00:12:11] Randall Roth: 300 plus million dollars. How much more business, or how much more do we have to enrich our lives by virtue of having all of these trade shows here, or how much more do we have to spread out the business so that we don't have these these volatile business cycles in order for that 300 million dollar investment to to pay off? How do we go about measuring that?
[00:12:37] Ken Kanter: Well, we're looking towards a a facility that would handle roughly 50 major events a year, now we'll have to build into that. And if if we can reach that capacity at the convention center and and slowly turn the market around in Honolulu and in Waikiki to be more of a business and convention market, then we can begin a marketing strategy or develop a marketing strategy that pushes independent travel to the neighbor islands. So we do have the room to expand and we but we do it by a natural plan.
[00:13:13] Ken Kanter: If the 50 events a year that's anticipated are of the type and style that that would be appropriate for a convention center in the middle of the Pacific, then the investment is going to be well worthwhile. Um, but then that's why a marketing plan is being developed right now, even though the building won't be open for several years.
[00:13:36] Randall Roth: Who's developing that marketing plan, Christina?
[00:13:38] Christina Kemmer: It's a combination of both the Convention Center Authority, which just recently hired a marketing director who's also working in conjunction with the new marketing vice president at the Hawaii Visitors Bureau.
[00:13:50] Randall Roth: Okay. In case you joined us late, you're listening to the Price of Paradise radio show. I'm Randy Roth. The topic is Oʻahu's planned convention center. With me in the studio are Christina Kemmer, president of the Waikiki Improvement Association, and Ken Canter, an expert on expositions and trade shows. We are live. Phone lines are open. Just call 955-8821. Another phrase that one hears over and over in the context of a convention center is Hawaiian sense of place. And it seems as though everyone wants a Hawaiian sense of place.
[00:14:25] Randall Roth: They say, 'Don't just throw up a big structure that's like a giant terminal at the airport or whatever. We want something that well, again, gives us this Hawaiian sense of place.' Christina, just what does that mean? In other words, is that something that you know when you see it, but it's very difficult to really explain in words?
[00:14:48] Christina Kemmer: I suppose they're using the definition for art for that.
[00:14:52] Randall Roth: I was thinking obscenity actually, but you know it when you see it. But go ahead. Or pornography. You know it when you see it.
[00:15:01] Christina Kemmer: The Hawaiian sense of place, we believe, was very, very important as a criterion. Specifically, because there has been much evidence that in our development, especially in the last 10 to 15 years, we've been losing that Hawaiian sense of place. And even though it was something that was very difficult to define, the four design build teams did spend an awful lot of energy, time, and effort in trying to arrive at that decision and using Hawaiian experts in the community as resources. And the reason that I bring this up is because it will now set a standard for hopefully all new development in and around Waikiki, or even at the resort level.
[00:15:45] Christina Kemmer: And any major building, any major development, really, I think in order for us to continue to attract people to want to come to Hawaii, they have to feel like they're in Hawaii. They have to know that they're in Hawaii, and they also have to have experiences that relate to Hawaii. So I think that those particular descriptions I just gave are what need to be incorporated when you're trying to build something architecturally, to help trigger that those particular reactions.
[00:16:16] Randall Roth: Well, you've seen the four models and I'm sure you've looked at the specifications. Um, what do you think? Each one offers us a Hawaiian sense of place?
[00:16:26] Christina Kemmer: Well, it was very interesting going through the process to listen how they came to to their definition of a Hawaiian sense of place. And there were models, for instance, which if one just looked at and not having heard the explanation, would perhaps think, 'Well, where are they in in in terms of defining the Hawaiian sense of place.' But once you got a very complete explanation, all of them really worked very, very hard at trying to fulfill that. Some succeeded more than others, especially in the visual plane.
[00:17:00] Randall Roth: Well Ken, I know in in the article that you wrote in this morning's Advertiser, you suggested also that they had worked very, very hard and, in fact, they they had to work awfully hard because they started with with a bad location. Tell us a little bit more about that.
[00:17:20] Ken Kanter: Well, the Aloha Motors site creates a need for the the designers to make compromises because it's a small space. For facilities the size we're talking about, generally a larger amount of space is made available. The Exposition Management Association had endorsed the Ala Wai Golf Course as the best site, taking into account all the marketing aspects of designing, building, and promoting a convention center. Since the legislature in in its final decision prioritized Aloha Motors as the first site, that is the site that the designers designed for.
[00:17:54] Ken Kanter: The 9 and a half-plus acres is doable, it's workable. We've seen that in their designs, and I think the community has been extremely well served by the efforts of all the designers and planners. But it is a small site and it is a very busy traffic-congested site. So as a result, reality, technology have to impose some limitations on on the creative side. I would like to mention that the concept of a Hawaiian sense of place really is a terribly subjective concept. We all have our own opinions about it and it varies from the philosophical to the environmental.
[00:18:32] Ken Kanter: All four buildings that were presented this past week for consideration have done really have done an excellent job in in attempting to analyze and define in their own perspective what that Hawaiian sense of place is. I think what will really contribute to it as a Hawaiian sense of place is how it functions, how the people in it relate to the visitors. That, ultimately, will will contribute to the definition.
[00:19:00] Randall Roth: a quote from Michael Carr, who's president of the Hawaii Convention Park Council, where he says, we're not out of the woods yet. We've been at the point of having chosen a site, chosen a developer, and chosen a design. But that was at the International marketplace and everybody knows that that's history. I also in this morning's uh advertiser noticed the editorial. There's a very uh long editorial talking about decision time. Convention center moves ahead. But um, it suggests that this isn't the best location and it seems to suggest that maybe we ought to open it up again and consider putting it in a better location like the Ala Wai golf course.
[00:20:12] Randall Roth: And when I was calling people asking their thoughts about this topic, I always do that before a show. Of the seven or eight people I called, all but one or maybe two seemed to think that this thing ought to be at the Ala Wai golf course. I'm wondering, number one, what are your thoughts? But number two, how in the world did it end up at Aloha Motors if the experts, with some exceptions, seem to think it should have been elsewhere, Ken?
[00:21:06] Ken Kanter: Well, the final decision on selecting the site was the legislature's. And as I recall, the um, the bill that came out was, uh, prioritized Aloha Motors as the first choice. And barring any unforeseen circumstances or difficulties, the Ala Wai Golf course was the backup site. And that's the plan that's moving forward now. And I think Michael Carr's statement in the paper is is very true. We have been at a at a very close uh uh position before to to close the the story, so to speak, on the Convention Center just to find that it opened up again, and I wouldn't know what potential elements are out there that could do that.
[00:22:20] Ken Kanter: But right now, everything is on track. We seem to have good designs. Uh, the problems dealing with traffic have been addressed fairly well by the uh designers and planners. There are additional plans underway in considerations at the city and state level in and in in uh Waikiki to deal with traffic. So at the moment, I can't imagine what would derail this. Mhm. The the editorial says, perhaps, if none of the proposals grades out well in review by teams of experts, the location issue can be reopened. We hope so.
[00:23:19] Randall Roth: Um, tell us about this review process so that we can get a sense for whether any of these four proposals will quote grade out well. Either one of you wanted to tell us just how that process worked?
[00:23:43] Christina Kemmer: Well, first of all, um the process that was set up, uh including the design-build method is something that is new, uh especially the design-build approach, uh to the process for the convention center selection here in Hawaii. And I think that this particular process which has been put in place has been the best ever in in the eight to ten year history.
[00:24:24] Christina Kemmer: So, I think that as Ken said, everything has been on track. Once the legislature had made the decision, and yes, there were, you know, great member number of people in the community who would have liked to have seen it at uh the golf course site. But that is not the final decision rested with the legislature, and it now is going to be at the Aloha Motor site.
[00:25:08] Christina Kemmer: So, uh, consequently, I think that because everything is on track, I think that in terms of my car statement, you know, Mike is saying that, uh, let's just, uh keep being supportive and hopefully everything will move forward and we're not going to end up in a situation like we did with the international marketplace. Fortunately, it didn't get built at the international marketplace.
[00:25:50] Randall Roth: I think what I'm hearing is that the location decision was a was a political decision that that many, perhaps most of the people involved in the industry felt was not the best decision, but it's been made and you'd like to see a convention center in the second best spot more than uh than having this thing drag on and on and on.
[00:26:30] Ken Kanter: Well, well, there's there is the part of the concern about the golf course was because it was a controversial site, uh that it may not ever have gotten built there. I mean, selecting the site is one thing and then proceeding uh to actually go through the motions of of clearing it and zoning it and building is another thing. And timing was was a crucial element in the decision making process.
[00:27:16] Randall Roth: You're telling me that the the the business, the the tourism industry um group here in Hawaii is being very practical. It's wanting a convention center.
[00:27:33] Ken Kanter: I think I think timing is a is a practical concern. I mean, there are there are groups that are waiting in the wings right now to sign a contract to bring an event to Hawaii as soon as they know that a convention center in fact is going to be built. Um, but since we've gone through this um charade and I that may be a fairly negative term, but we've gone through it several times and cried wolf, and no one's going to sign a contract till they actually see the building uh in the process of being built.
[00:28:37] Christina Kemmer: Yeah, the global public has been waiting for 10 years on this particular Waiting and waiting and waiting. Yes.
[00:28:49] Randall Roth: You're listening to the Price of Paradise radio show. I'm Randy Roth. The topic is Oahu's planned Convention Center. In the studio with me are Christina Kemmer, president of the Waikiki Improvement Association, and Ken Cantor, immediate past president of the Hawaii chapter of the International Association for Exposition Management and currently a member of the Hawaii Convention Park Advisory Committee. Well, a word has been mentioned several times, and that word is traffic. The editorial in this morning's paper, and I think correctly so, says that the Kapiolani Kakaako intersection already is the state's most congested. Boy, it's not going to get any better with the convention center there.
[00:29:59] Christina Kemmer: Well, first of all, I think let's let's take a a fuller perspective. We in Waikiki and the surrounding communities around Waikiki have had to really sit down and consider how are we going to handle the regional traffic in that particular area. This is with or without the convention center. We're looking at redeveloping and renewing Waikiki. Uh as it stands right now, yes, that's the vet the those corridors, especially Kapiolani and Kakaako are very, very crucial. We have 35,000 employees who need to get in and out of Waikiki. We have 19,000 residents who move in and out of Waikiki. And on a daily basis, we move 60,000 visitors in and out of Waikiki.
[00:31:13] Christina Kemmer: So, just with those figures alone, we need a a regional traffic plan, something to manage traffic.
[00:31:23] Randall Roth: Do do we have it? Are you optimistic that with the convention center there, traffic is not going to be worse than it is already?
[00:31:39] Christina Kemmer: Well, we're there are two answers to that question. One is the convention center helps put all the questions on the table regarding traffic, because now we need to come up with some solutions. So what can we do as a community to arrive at solutions to the traffic?
[00:32:10] Randall Roth: We may think better with a gun at our heads. Is that the theory? Well, I would not like to describe it that way, but you know, unfortunately, maybe human nature, it isn't until you get to that crucial point, and we're at that crucial point. Okay. Right. Okay, we have a caller and I want to come back to traffic in just a bit, but Shell from Oli Oli. Shell, you're on the air.
[00:32:58] Caller: Thanks. Uh, well, I'm I'm going to keep you on traffic. Uh, has the canal been carefully factored into the not only the the transportation of visitors to and from the the uh new facility, if it indeed is going to be there at Aloha Motor sites? And what about the freight aspect using the canal? Uh, I've the plans that I've seen all look wonderful from the canal, but is that great resource not going to be utilized uh for to help this traffic problem?
[00:33:52] Randall Roth: Stay on the line, Shell. We'll ask Christina to answer that.
[00:33:59] Christina Kemmer: Shell, it's a very, very important element. Uh, the Ala Wai Canal is very underutilized. It's not only underutilized from the tourism standpoint, but it is also underutilized from a transportation standpoint. And yes, it will it will play a very big role uh with the convention center in terms of moving people while still preserving the canoeing and kayaking and sporting aspects.
[00:34:39] Christina Kemmer: But it is going to require dredging. It's going to require a continuous maintenance so that the dredging occurs on a regular basis. We are going to have to go in and get funding from different sources. Uh, the other element, too, in the transportation mitigation plan is to look at the at moving people uh from the Ala Wai, also to the Marina areas, and hopefully, we'll be able to include water transportation to and from the airport, from downtown.
[00:35:31] Christina Kemmer: And uh as far as moving freight, some of the consideration that's going to have to be taken into account is the fact that number one, the Ala Wai is considered historical. The bridges that exist right now are historical and are quite low. Uh-oh. That means we can't move them, right? So, uh, that's that's correct. We will have to be we can add pedestrian bridges and, uh, but as far as freight, uh we are really going to have to look at a different kind of dispatch system. Okay, Ken?
[00:36:29] Ken Kanter: Well, um to be to be rather blunt, the the idea of using the Ala Wai Canal for freight movement is probably entirely out of the question because of just simple logistics. Moving the freight uh from aircraft or from freighters to trucks and then transferring to water and then transferring back to ground would be prohibitive cost wise. Of all the things that move in and out of the convention center, the freight is probably the easiest to coordinate because it's the easiest to control. It can be marshaled at a separate location and fed in on a time control basis.
[00:37:34] Ken Kanter: Uh, I don't think we'd want to see uh barges with container trucks floating down the Ala Wai anyway.
[00:37:46] Caller: Uh, I'm very curious about all of it.
[00:37:51] Randall Roth: Okay, thank you for your call.
[00:37:54] Ken Kanter: site. You're going to be at the Aloha
[00:38:00] Christina Kemmer: with the understanding that that money would go to build a convention center. That money was then put into the general fund never dedicated to a convention center, and the industry has been paying that transient accommodation tax for many years now, and never got their convention center.
[00:38:16] Randall Roth: Well, let me interject. First of all, industry doesn't pay the tax, the tourists pay the tax, and second of all, a group can't say, well, we agreed to this tax. The legislature says, you'll pay the tax and and you pay it.
[00:38:31] Christina Kemmer: Well, actually, the industry came and said that because we can, you know, we have an opportunity by charging this particular tax, we would be able then to use that money to pay for the convention center without going to the local taxpayer here in the islands, and I think that was a very fair way to be able to get a convention center. But the other part of your question, I would like to say is that, you know, now there is a dedicated portion of the TAT, there was an agreement to increase it which started in July and that particular portion is dedicated to help build it. Now, yes, the money does come from the visitor, but one has to understand that if the new convention visitor spending is going to result in probably $3.28 billion and there will be convention business-related jobs of around 11 to 12,000, and we're looking at payroll from convention business-related jobs at around 363 million with additional neighbor island spending of 358 million.
[00:39:31] Randall Roth: So as far as new tax revenues, we're looking at 9.1 million in the transit accommodation tax, state income payroll tax of 15 million and a corporate income tax of 88.6 million and a general excise tax of 223. Well, let let me ask you how much is it going to cost to operate and subsidize the the bonds for construction? So what will be the true overall cost for the convention center?
[00:39:56] Ken Kanter: Well, I think probably this is something that has better left to to the legislature to talk about and decide. And I think at least in theory, they've done that. Uh Joe, I think your skepticism reflects, uh you know, a healthy skepticism that's out there in the community. Uh our guests today, I think, really aren't equipped to answer that particular question.
[00:40:18] Randall Roth: Well, she she had all the numbers at at her fingertips. And then when it comes down, what's the true cost of the center? Now, that's for the legislature to decide?
[00:40:28] Christina Kemmer: Joe, I'm not in in I don't have the operational figures in front of me, and I would be happy to get those for you. So if if you would leave the station, um you know, with the contact, I would be happy to get that to you. I'm sorry I can't give you what the operational cost will be. I, of course, would focus on what the revenues are going to be because that's what's really going to help us with our renewal and redevelopment.
[00:40:58] Randall Roth: Well, but the revenues are only half the issue. If if the revenues are exceeded by the cost, then Joe there's no real revenue. You're absolutely right.
[00:41:07] Ken Kanter: Okay. Thanks a lot for that. No, no, no. You're absolutely right. Your points well made. If you will leave your phone number, Christina definitely will get that information to you. Thank you.
[00:41:19] Randall Roth: Okay. Thanks a lot.
[00:41:20] Ken Kanter: You bet. Uh we have several other callers on the line, but before we go to them, I just want to remind listeners that this is the Price of Paradise Radio Show. I'm Randy Roth. The topic is Oahu's plan convention center. In the studio today are Christina Kemmer, president of the Waikiki Improvement Association, and Ken Kanter, an expert on expositions and trade shows. We're live and our phone lines are open. The number is 9558821.
[00:41:47] Randall Roth: Well, we have Andrew from Honolulu. Andrew, you've been waiting patiently. Finally, you're on the air.
[00:41:52] Caller: Thank you, and aloha. Aloha. I have uh uh uh we've just witnessed a major display of high quality architectural design talent for the convention center complex at the Aloha Motors site, and these four proposals are estimated at about $2 million each in terms of free architectural design services, and planning services. And I was just wondering with regard to what we had witnessed here earlier, in terms of the um five proposals by the Queen Emma foundation for a new, uh very innovative type of uh master planning for Waikiki, what sort of correlation work is being done in terms of the coordination of all of that work in conjunction with the master planning work done by the City and County of Honolulu?
[00:42:36] Randall Roth: Oh, that's that's a great question. Great question. Thank you very much. Christina.
[00:42:40] Christina Kemmer: Good morning, Andy. Um Good morning, Christina. Yes, how are you? I um I get the feeling you two want it, no one another? I acknowledge this point. Okay. Um anyway, Andy, uh you're right. The master planning issue is really very crucial. Uh as I had said earlier in the show, um this particular convention center really acts as a as a a domino um for moving the master planning efforts, uh because Waikiki is at a point of of renewal, because it's a mature resort destination. And with the uh efforts that the Queen Emma Foundation brought forward, Vision 2020, and then of course the city's master planning efforts, the community has has been has had to sit down and really take a look at what is doable, because we need a single doable master plan. And so all of the pieces are there that need to all be coordinated and uh incentives created, as well as the implementation plan, and that all has to take place in a very short window, these next four years.
[00:43:42] Randall Roth: Will it take place? Are you confident that it will take place? It will have to take place because we cannot just build a convention center and not expect to be able to have uh the supporting elements as well as renew Waikiki which has been waiting for the last three years to come to some final decisions for uh triggering renewal and redevelopment.
[00:44:04] Caller: I was just very pleased also to hear earlier that there is going to be major consideration and uh factoring in the waterborne transit uh element of land-based transportation.
[00:44:14] Christina Kemmer: Well, it's very important, and thanks for your efforts in helping that. Oh, you're more than welcome. Look forward to continuing. Thank you, Andrew. You're welcome.
[00:44:23] Randall Roth: Our next caller is Bill from Waikiki. Bill, you're on the air.
[00:44:27] Caller: Yes, I'm very concerned about the size of the site and as we know, directly behind it, there is a bunch of housing that was being considered to be uh demolished and a tall high-rise is put in there. Why can't the street be taken and a portion of that land, which I'm sure is owned by uh uh one of the local people here, uh Mr. Kelly. And why can't we increase the size of the site before we make the mistake and in turn, create a facility that would relieve the traffic from that major intersection by putting the site further down uh on Atkinson, for example?
[00:45:05] Randall Roth: Well, again, we're talking about the location, uh Christina, what do you think?
[00:45:09] Christina Kemmer: Okay, Bill, um first of all, uh we were we were just talking about the fact that we're looking at renewal and redevelopment in Waikiki, and we do have some major parcels of which the one you just mentioned is up for consideration for renewal and redevelopment. In terms of integrating that with the transportation, the Alawai um Boulevard does become important in terms of moving traffic, and it is a lot, it's logical that the property on both sides of the Alawai in that particular section, um will be uh under consideration in terms of how do we best uh redesign and and support both Waikiki, the uh and and the convention center development. So it it it's very crucial, it is on the table um for on on many elements. And I'm sorry, I didn't uh I don't I know you said something about Atkinson, but the Atkinson area is primarily residential in that area.
[00:46:04] Caller: The point is the land is there that's going to be used for something different in the future, why don't we incorporate it now so that we don't have the improper sized site. After all, if we're talking about buying a few more acres to enhance this situation now, why should we wait until later? It's not it's not being practical.
[00:46:25] Christina Kemmer: Well, that that is something that is on the table.
[00:46:28] Caller: Well, perhaps it should be looked at before anyone goes with this 9.7 acres or whatever and they ought to look at getting a few more, and as you well know, they could easily put the parking in that site and get it away from the uh the actual facility which would change the size of it in the manner in which that corner is used and it would be very very practical.
[00:46:53] Randall Roth: Bill, you're you're making a lot of sense, which worries me because our guests noted earlier that the location was a a political decision as opposed to a decision made by the folks who are actually going to be uh working with the convention center. Thank you very much for your call. We have we have from uh Kani Ohe Eva. Eva, you're on the air.
[00:47:16] Caller: Uh thank you. If I'd like to make a comment on the word that comes up frequently, it's the word need. It's my understanding that what we need in Hawaii is less population, less traffic, and less resource utilization. Uh I would think that the word that's more proper in this discussion is want. There are certain, as you just mentioned now, it's a political decision. There are people who want this, and it would be much more correct I think to use the word want. Who wants it and who doesn't want it and for what reasons?
[00:47:50] Randall Roth: That's that's an interesting way to frame the issue. Let me see what my guest Uh can do you have any thoughts on that?
[00:47:58] Ken Kanter: I think it's a it's a fair approach. Um need and want is uh uh concept that's debated in practically every situation. Uh I happen to believe that the convention center can provide us uh more leverage to solve the need and want question once we get control of our our travel destiny. The question is whether we'll make the commitment to that as we go down the line.
[00:48:22] Ken Kanter: If we can uh control uh tourism to Hawaii in which we disperse conventions, uh trade shows uh to Waikiki, to Honolulu, the island of Oahu, and then disperse independent travel to the neighbor islands, we gain much more reliability in our market and much more control over our destiny. That, of course, uh is confronted by uh the motivations of continued growth, uh continued um uh effort to increase numbers and and that's what we face in all situations. I don't think uh a convention center, having it or not having it, answers that question because it'll be driven in other directions.
[00:48:58] Caller: Yeah. Thank you. It just occurs to me that Waikiki is already terribly terribly overpopulated, and we're trying to increase the density both in population and in traffic, and and more people would be against that I'm sure. Yeah.
[00:49:11] Christina Kemmer: Eva, that that's that's part of the balancing act here. Um we see an opportunity to be able to um through the master planning process, uh be able to redirect some of that, you know, in terms of we recognize that you know we only have 1.2 square miles to work with in Waikiki. We recognize that we need more open public spaces at the ground level. We we know that our buildings are ready for redevelopment and renewal. What can we do to be able to improve the environment, still have the proper type of infrastructure, and have the proper amount of density and height and still get what the majority of the public wants? And and that is a very important uh crossroads for Waikiki right now.
[00:49:56] Ken Kanter: Good morning. Um I'm really concerned about the uh the cost in uh the form of a transportation issue. We keep talking about the convention center authority just being uh responsible for that one area down there and they're not really, they cannot be responsible for developing uh other issues that tie in with it. My main concern is transportation. We have seen recently major sewer breaks all over the island, and we hear that the sewers are designed to last for 30 years. Most of the sewers, I think, in Waikiki are going on 60 and 70 years, and they're under the streets that we're going to be using for getting the traffic to the convention center. Have we done any uh given any thought to what would happen if we had a sewer break while we're trying to get these conventioneers to the center? And also, does that not have to be factored into the true cost of a convention center?
[00:50:52] Randall Roth: Oh, Duke, that's something I think we'd rather not think about, but it's uh something we better think about, Christina.
[00:50:59] Christina Kemmer: Duke, uh good morning. Good morning. Uh first of all, one has to remember that in terms of the um sewer lines, uh we did have some major work done in Waikiki when we we did Kuhio Avenue. We recently are just putting in new water lines through the along the Mccully Bridge. Uh there is movement and understanding that you know, infrastructure is going to play an important part. And when you look at the redevelopment now and renewal in Waikiki, what incentives are we going to give the landowner and the major lessee to uh help make those kinds of improvements when they do the renewal project. And we know, that's where all of the key players have to come to the table. It is going to take a public-private partnership, and it is going to take incentives that both the council and the legislature are going to have to to give in this in this window of opportunity.
[00:51:55] Randall Roth: What do you think, Duke?
[00:51:57] Caller: Well, I'm I'm I still don't think that answers the question because if we're depending on like the Alawai Boulevard for one of the major feeders into the convention center, can you imagine 90 buses going down that convention or that Alawai Boulevard and all of a sudden we have a sewer break? That's going to totally disrupt trying to get people to that event and at the rate that it takes at the Mccully Bridge to put in the infrastructure they've been working on now for months, I can see a real disruption of the convention center and the surrounding areas.
[00:52:32] Christina Kemmer: Well, Duke, that's why I think it's really important to have the public private partnership in place, because we are going to need to come up with uh management plans for construction and you know, because after all, I mean building of the convention center plus all the renewal, plus infrastructure improvements and the same time we have visitors coming on a daily basis into Waikiki, uh is going to take a major effort and it's unlike anything we've ever experienced in Hawaii. And I think that the design build team of people also worked on trying to address some of those elements.
[00:53:08] Ken Kanter: Can do you have any thoughts on this? Well, I mean, we're faced with uh the problems that have just been described as far as um difficulties caused by um a a failing infrastructure. Uh we're faced with that now, I mean the experiences the last week or so, and we don't have a convention center. The question seemed to be whether the true cost of the facility should be measured by the things that need to be done to reinforce the infrastructure to support it. I don't know what the answer to that question is. We have to deal with our infrastructure with or without a convention center, and we're facing problems right now. I do know that the amount of effort that's been put into to facing the problems surrounding our infrastructure uh and surrounding the convention center site have have been given a great deal of thought because we're looking at building a facility there. Some of the proposals have gone so far as to say, and I think with reasonable justification, that their plans may improve the situation at that intersection based on projections over the next 10 years because of additional lanes that will be added to the streets as well as some of the property on the site itself being dedicated to transportation and traffic mitigation. So the the processes in route. I I feel that we have problems with our infrastructure, we're going to have to pay for that regardless.
[00:54:33] Randall Roth: Duke, thanks very much for your call. Thank you. Sharon from Honolulu, you're on the air.
[00:54:39] Caller: Uh yes, I'm a a teacher here in Honolulu and um I'm very much concerned about the effort and the money that's uh being poured into this project uh when you compare that to what we are doing with our schools here in Honolulu, and I was wondering if uh you folks are familiar with that article in the Atlantic Monthly back in April. I haven't read. Convention centers? Tell us about it real quickly, Sharon. Well, basically the point of the article is is uh cities are building these convention centers and uh projecting all this wonderful uh revenue and rejuvenation of the community that it's going to do, but it's building uh it's leaving behind debt, their unused facilities and I just want to recommend that everyone read this article. It's in the Atlantic Monthly, uh April of 1990 1994 and I think that that's something we should consider before we go uh and do the same thing that other cities are doing.
[00:55:36] Randall Roth: Thank you, Sharon. In this morning's advertiser, Ken writes that the the people who decide whether or not to reimburse us, all of these expenses, are the convention goers. And if they and if they don't like what we come up with, then this isn't going to work. He says a building that we like but sits empty won't do us any good. Ken, is there a chance that it's going to sit empty? Is there a chance that this money is is going to be going down a a hole rather than being a good investment for the future of Hawaii?
[00:56:11] Ken Kanter: No, I don't think so because you have to look at the business we've lost in the last 10 years, primarily to our competition that has built facilities. Uh but [unintelligible — audio glitch] confident that we're going to get enough new business or avoid losing business so that it actually is a winning proposition and we can do more with education by building a convention center than we could not building a convention center? I'm confident. That's the theory that that's what will happen. I mean, we could not build the convention center. We could do nothing to increase our productivity. If we don't increase our productivity, which happens to be the primary source of of economic means, then we can't attack any problems. It's it's one thing to say, it's one thing to say that um
[00:57:00] Randall Roth: we we should be putting the money elsewhere, but we have to get the money to put it there and to get the money that we're talking about from a convention center, we have to provide the customer with a a facility, something they can use that's part of the tourism infrastructure. Then we can tax them for coming and using and take those taxes, use some of it to pay for the convention center, use the remainder to put back into our local community. That's the that's the uh way it works. There's no choice.
[00:57:41] Caller: But basically you're you're saying that we are gambling.
[00:57:45] Randall Roth: Sharon, if I may just interject here, uh just so that you have an understanding uh in terms of your question regarding the need or for it. Right now, when we have major conventions that are booked, our hotels have to share space, for instance, the Sheraton, uh the Hiltons, the Outriggers, etc., and we have to move people in and around. So we know that we do have a market that is necessary, uh that will require that X number of square footage to be able to have people all meet in one place and exhibit all in one place.
[00:58:29] Caller: But to justify the expense, um
[00:58:31] Randall Roth: Hang on just a second, Sharon. Ken wanted to say something here. Why don't you finish your your statement and then I'll respond. Yes.
[00:58:41] Caller: Uh to justify the expense, uh we are I mean you're you're gambling uh to say that there is going to be that uh usage down the road. And what I'm saying, if you look at this article, I think it's very well written, uh and I want the I would like your listeners to read it in the Atlantic Monthly. Again, it's April 94. Uh many cities are are are finding the same thing that uh that these convention centers are costing a lot of money uh and down the road, they are not paying off.
[00:59:23] Randall Roth: Well, and and I guess our our guests are are experts in in the tourism industry, and the question isn't whether or not it's a gamble. The question is, what are the odds? Are the odds real good, real bad, or somewhere in between? Yeah, I think I think if you go and and put a dollar into a slot machine in Las Vegas, you're gambling. I think the amount of effort that's gone into this, it's it's really unfair to use that word. I am familiar with the article you're talking about, and yes, there are probably a number of cities out there that are are taking a greater risk in building a facility.
[01:00:13] Randall Roth: I'm not sure how much Mobile Alabama needs a convention center. I don't want to go there. But, but if you look at the numbers that are that are being worked with in the potential revenues, if we uh build a facility, the amount of business we have lost, American Bankers, American Dental, the internationalization of the Pacific region in the meetings industry, the value of dollars that will come in from increasing the hotel room tax, uh against the projections on what it'll cost to uh manage the convention center, it's a pretty good risk in our favor.
[01:00:56] Christina Kemmer: Christina, what what were you going to add? Sharon, I think that the the I I have I have the disadvantage of not having read the article, but in most convention center locations, they they go to areas that need economic renewal and don't have uh the infrastructure in place such as we do in Waikiki. Waikiki has the entertainment, it has the hotels, it has all the restaurants and it has all the other uh natural uh attributes. And well, we all that's uh you know, that's been a part of Waikiki, but the reality is that it's all in No, we're not really adding people, and that's what I was talking about earlier.
[01:01:46] Christina Kemmer: And I think that that's something that uh uh we need to perhaps uh help explain a lot better to the public because it is something that needs to expand, then uh it'll probably expand elsewhere.
[01:02:01] Caller: Okay, one more question, uh say this is a uh a good investment for the people of Hawaii. Um how much of that uh that comes in through a convention center, are we going to see get poured back into our educational system, which is suffering uh here in Hawaii?
[01:02:23] Randall Roth: I think we're back into the legislature. I think uh this is political. And Sharon, it's a it's a great question. I think our guests today really aren't equipped to answer that one though.
[01:02:37] Caller: Okay.
[01:02:38] Randall Roth: Thank you for your call. You know, since Sharon raises that, Ken, something that that I'm real concerned about uh as I understand it, this is going to be a a a public project run by some sort of of bureaucracy as opposed to a private organization. Is that the norm around the world or is that the exception? Is that good, is that bad? It it certainly strikes me as typical of of how we do things in Hawaii. What are your thoughts on it? Well, actually, as I understand it, when the facility is completed, it will, in most likely be managed on a day to day basis by a private contractor.
[01:03:27] Randall Roth: In other words, we will go out and secure professional convention management uh team or company. So this is an example of what people call privatization. In in in essence, it's it's very common nationally that facilities work that way, that that the people that book it and run it on a day to day basis have an obligation to generate a certain amount of business. um or they're replaced. uh the They're not government workers. That's correct. And and it's based on um uh profit margins that have to be shown in the in the contractual relationship with the operation of the facility.
[01:04:12] Randall Roth: Uh the facility itself, perhaps on a day-to-day basis, uh for rentals and and fees that are paid to use it, may not be profitable in what we understand the term to be, but the community will make a profit in the form of the dollars that will come in in increased tax revenues that are collected from the tourists that come in and the dollars that are spent. The theory then is that the end result will have a uh positive cash flow and that can be used to to support the community in other ways. Okay, well, we just have a couple of minutes left.
[01:04:58] Randall Roth: Are there any issues that we haven't addressed with respect to the Oh, we have one more caller. Bill, mine one. Bill, you're on the air. Are you there? I'm on the air. Yes, you are. Where are you from, Bill? Maui. Hey, finally the neighbor Island checks in. What's on your mind? Uh well the quality of air service has been going downhill the last year or so, and these conventions sort of coming month in a concentrated bunch. So is this integrated with the air access? So the airplane, you think will either be packed or empty, be depending on whether there's a convention in town?
[01:05:45] Randall Roth: Yes, it is going to interfere with the normal tourist travel. I hadn't thought about that. What do you think, Christina?
[01:05:54] Christina Kemmer: Well, first first of all, Bill, uh it's actually going to help us with the regularity of uh airline uh service to Hawaii, because now the demand there's a demand uh for seats uh at very specific times of the year, there's there a little show an increase. So that is going to help us because actually that's something that we have been dealing with, you are correct. I mean we've had a a drop off in in in flights to Hawaii. So that's another reason why we wanted to have the convention center.
[01:06:35] Christina Kemmer: And the other two is that that will also help with the neighbor island because many conventioneers who do come and for a particular program, then take the extra time to want to go and see the rest of the state. So now it also helps him in in terms of flights to the neighbor islands. Ken, was there something you wanted to add to that?
[01:07:03] Randall Roth: Well, no, that's uh the the situation with the airlines, people say that, well, you know, it's the airline's fault or dropping flights, the demand for the seats wasn't there. So I mean, they're in the business of flying airplanes to where people want to go, and as we increase our uh availability of services and experiences in Hawaii, we spend more money in promoting in the right markets, we'll turn that around. And as Christina said, if if the convention industry comes online stronger than it than it has been and and certainly refurbish it, because we have been losing conventions, then we'll give the airlines justification to keep those flights going. Thank you, Bill, for your call.
[01:07:54] Randall Roth: We're all out of time and I want to thank my guests, uh Christina Kimmer, President of the Waikiki Improvement Association, and Ken Cantor, an expert on conventions and trade shows. Today's show is produced by Suzy Ross with technical assistance from Jeff Vardy. We hope you'll tune in next week when Governor John Waihee returns to finish a conversation we started two weeks ago. The few people who were able to listen to that show seemed to think it was a good one. Unfortunately, the KHPR antenna was down that week. So he's going to be back next week, we're going to finish what at least started out as a very interesting and provocative conversation.
[01:08:45] Randall Roth: You've been listening to the Price of Paradise Radio Show. I'm Randy Ross. Aloha.