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Home My WebLink AboutCOM 0100.001 2020-2022 �� / FI RESOR7 ASSOCIATION February 15,2021 Matt Kanea|ii-K|einfo|der,Chair COUNTY CLERK Heather Kimball,Vice Chair COUNTY OF H0WAI"I Hawaii County Finance Committee RECEIVED T� HavvoiiCounty Council ---------- ----_ Via Email—counciltestimonDa te —FFR 1 5 7021 Comments umCommunication 188 Dear Chair Kanea[ii-Kleinfelder,Vice Chair Kimball and Members of the Hawaii County Council, Thank you for the opportunity to provide comments on Communications 100 and mahalo Vice Chair Kimball for bringing the final report from the Real Property Tax Working Group(dated September 20, 2019) back to the attention ofthe Hawaii County Council. I had the privilege of serving as a volunteer on that Real Property Tax Working Group for two years, along with community members from a broad cross section of private industry,government, real estate,agriculture and affordable housing.Our group delved into the nuances of Hawaii County's complicated and challenging real property tax system to try to identify areas that could be adjusted to better meet the needs of all of our island's residents. I would like to publicly thank Real Property Tax Administrator Lisa Miura and Assistant Administrator Keita Jo for their leadership, knowledge, and availability, as they worked to educate and inform everyone serving on that RPT Working Group so that we could provide clear recommendations to the Hawaii County Council and administration. I want to encourage the Finance Committee of the Hawaii County Council to please consider the time and effort that went into that report, and move forward with those recommendations, before creating a new Real Property Tax Committee. The last year has been tremendously challenging for everyone, as we've collectively worked to address the myriad of impactsfrom[0V|D'19tonurhea|th,oureconnmicnuUookandourcommunity. |nthetuurismindustry,the impacts have been especially dire,as we were closed from the end of March until the middle of October 2020.While we were grateful to work with the State of Hawaii and the County of Hawaii in helping safely rollout the Safe Travels program inmid'Ootober,the majority of our member properties along the Kohala Coast did not begin to reopen until late November through the end ofDecember 2O2O. Fortunately,we did not see negative health impacts on our community from visitors who came during the festive season,and for otime wewere hopeful wehad turned the corner. But osvvehead into 2Ol1and wesee[0V|D-19 cases skyrocket across the mainland United States, people are deferring travel until later in the year. In January,our occupancy across the Kohala Coast was in the mid-teens. Please note,although it varies by property, most our members need to reach occupancies in the mid-30s,to lose less money by being open,than they would remaining closed.And many will not begin to break even, nor reach a point where they begin to see profits that would allow them to offset astounding losses in 2020, until they reach occupancy percentages in the high 50s to mid-70s. In discussions with Hawaii economists and industry trade associations,we do not expect to see a return to even half of our normal visitation until the third quarter of 2021.A return to 2019 visitor levels is not projected in the luxury � accommodations market until 2O25. Though vvehad noincome for the majority of2O2U,and are starting off 2021losing mon open,throughout wehave continued tosupport our community by: -omm. Ref.To � Ref. � ) * Covering more than$30 million in health insurance premiums for our furloughed tourism industry employees; w Providing food support in the amount of$2.5 million,to our furloughed families from April through November 2020, in partnership with our resort homeowners associations,generous individual philanthropists, private foundations and a$900,000 CARES Act grant from the County of Hawaii. During the period of September—November 2020 alone,we supported nearly 20,000 households representing nearly 90,000 Hawaii Island residents,with our 6food distributions,sourced from local agricultural providers; * our staff members,including,our chefs and food and beverage leads, have supported other island food programs byproviding:recipes, meal planning and cooking for community drives; m Updating our health and safety protocols and investing in PPE,signage and training for our returning visitor industry workforce, in order to provide a safe environment for them and for the residents and guests who we hope will once again visit our properties. Because of the outsize effects on our industry, and because we are not expecting a full recovery until 2025,we respectfully ask you to consider a reduction in the hotel/resort tax class rate for the next three fiscal years. During the last and current fiscal years,we have truly appreciated the support of Real Property Tax Administrator Lisa Miura and the outstanding professionals in her office.They have been very empathetic, understanding and accommodating, and have structured our property tax payments into multiple smaller payments during each of the collection periods. Unfortunately,those measures alone will not provide effective relief in the upcoming fiscal year, and that's why we're requesting your consideration to either cut the hotel/resort property tax class rates,or provide more long-term deferrals, until our economic situation stabilizes. The Kohala Coast Resort Association is a collection of master-planned resorts,situated north of the Ellison Onizuka Kona International Airport at Keaho|e,which represents approximately 3,5O0 hotel and timeshare accommodations, an equal number of resort residential units,as well as shopping,entertainment,golf,spa and dining opportunities. KCRA members employ more than 5,000 Hawaii Island residents,and we annually pay more than$25 million in TAT and $25 million in GET to the State of Hawaii,and$11 million in property taxes to the County of Hawaii. Thank you for your consideration ofthis request. Sincerely, Pb" Stephanie Donoho Administrative Director Koha|aCoast Resort Association Pat Fitzgerald, [EO, Hua|a|ai Investors President, K[RA Scott Head,VP Resort Operations,Waikoloa Land Company—Vice President, KCRA Craig Anderson,VP Operations, Mauna Kea Resort—Secretary/Treasurer, KCRA Sebastian Hinsch, Resort Manager, Four Seasons Hualalai—Board of Directors Charles Head, General Manager, Fairmont Orchid—Board ofDirectors Simon Amos, Hotel Manager, Hilton VVaiko|oaVillage—Board ofDirectors Rob Gunthner,Area VP Resort Operations, Hilton Grand Vacations—Board of Directors Sanjiv Hulugalle,VP and General Manager, Mauna Lani,Auberge Resorts Collection—Board of Directors Steve Yannarell,General Manager,Waikoloa Beach Marriott—Board of Directors PO Box 0S91' Kamwq�e|a"H]96743°(808)747~5782° =vmww.kohs}acoastmmsmns.com