HomeMy WebLinkAboutCOM 0183.013 2006-2008
Sent by 6/1 /2807 8:51:17 AM Page 1 of 3
6/1/07 L~J7 J~~ii i f~{fn n
To: Hawaii Connty Council ,
Re: Bill No. 55, Kailua Village Business Improvement District (BID)
I applaud the effort to establish a BID for Kailua Village and can appr;cin'u: all he hard
work and long hours the committee has spent in developing this propcsa' E o~,v,ver, I
urge you not to approve the proposed SID for Kailua Village in its cuj r:;nt fi a m.
I initiated and helped establish a successful BID in the tourist district ~ d' 1~9~.n r en:~
California, (Cannery Row) before moving to Kona. Among the many br~zel'1s c~f a 13ID
are the communication and cooperation it generates among the busine sr.:. ~s, ~ i ii r th
district and gives government agencies one organization to deal with trar =pnd~a arr the
interests of the entire district. A BID could be very effective in Kaifu; 'r I',t; z:;.
The proposed district for Kailua Village however has several flaws. I' :ri a i c ~s icernprs:
much too large an area, the funding mechanism is grossly unfair, anr. the r:1-r~so:rtation
of the businesses within it is inequitable. I ask the Council to direct the c; irr ~ r it e: to
restructure the proposed BID, including changes to Chapter 35, ifrequira::I.
I own a home and live in Kailua Kona and I am a business owner in Z in: ] rf C ra
proposed Business Improvement District. I have a business license; [ ~a i p- ~cir: rly laxas;
General Excise taxes, Transient Accommodation Tax, state and federal is^cornf: aa;es on
my business income. I am very willing to contribute my fair share to n P C) s:: I o il; as iI
fairly represents me and provides benefit.
Chapter 35, the enabling document for the county providing for the es al is L r: n rt :d.' a
BID states:
Seekan 35-20. Assessment apportionment.
An assessment levied pursuant to thas chapter may be based on benefit reeei'. e:' i;,~~ t s.: r-ai cf
land, the cost of malnng a supplemental service available to a parcel of land, !i' a e ~ r. ~
supplemental services and improvements bene~ting a parcel of land, the sta~~e cr t, t z ~ 1
development or use of a parcel ofland, the happening of one or more specs;
r zd r.~=s; i r e afsd io
the development or Improvement ofadl or- certain parcels ofland, or any otii-'r ; e~.u: ; r, tie l: cc,s
or formula as determined by the council.
[ have looked at the property tax assessments for several of the parcel in Ihn: p:~opo::ed
district and feel that they do not in any way meet the requirements stated f:.r
"reasonable basis or formula".
The size of the parcel and the tax assessment(s) are not necessarily ref red 'o I ~r ;ize of
the busines(s) on that parcel, the impact on the District, or the services naau i'er.. !~:[rrny
of the largest businesses in the district in terms of revenues, physical sdzr; cr i Yrl •act on
the services and potential benefits received would pay only a fraction of thi: i • is r share.
/8s. ~3
R.f. To: ~?~:e:h7
Ref. Date 5 ~
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Others are being asked to contribute far more than their fair share wi;l, lira, r a. ~ s;z~ ices
provided.
As currently proposed, over 30% of the funding for the BID would c o ru>; i t f n n
condominium owners. Those owners represent over 1200 sepazate pav~s:rs ;~i i _e s r^an a
dozen parcels. Much lazger businesses on the other 340 parcels will pay 'ar 6: s;. ,hest
one condominium pazcel, Kona Reef, with 130 owners would be cone i':ua;:ic , zl n ost 10° ~
of the BID's entire budget. 'T'hat one parcel would be the single largest coritil?utor,
paying at least 50% MORE than ANY other hotel, restaurant, shoppin; ~ m : o r r:::aile~.
As an example my small business, a one bedroom vacation rental, has gross -;c~:i its of
approximately $100 per day, (36,000/yr). I serve less than 100 customers pe- ii li,>,]?,not
per day, per year. My assessment is about equal to almost 2% or one fill - w;::Ic cf my
gross revenue ($668). That amount is more than ?J3 of the total amoc.nt ,;i c u r, y ar
restaurant in Zone 1 will pay ($1195) and about 25% MORE than ano`hca''~. resta~rrant
($534) also in Zone 1. Those restaurants do millions of dollars a year in L , s s and
serve hundreds or even thousands of customers every week. When co;n pare 1 tc the
Royal Kona Resort Hotel right next door, some vacation rental owners v~~<ni: I l:ne rv?ing
over 20 times as much on a per room basis without even considering all ~.hc; >;hc r
businesses at the hotel.
In addition to the unjust funding formula, I believe the voting strucri'n~~: i a : 11 n n~_d
because only one vote is assigned to a parcel regardless ofthe numbrr e f'I>m ices:es or
condo owners on that parcel being assessed. Every business owner payius~ : r t to
district should have a say on a par with others within the same zone and c f tl o' ue
relative size. Further, those inZ,one 2 who contribute less and recei~ e Ica:; b : u :fit i:har-
the primary zone should have proportionately less say in the activities of 'Pe di s rect.
Shopping centers and buildings with multiple businesses would also I. u:"~; rl' e .r sos iu
District matters. For example, Longs Drugs, KTA or Bubba Gump's wcnAd 1 ~::;t the
mercy of their landlord's vote even though they maybe the major conyri br m r fi nn (heir
respective parcels. Smaller businesses in those same centers may not ha ~ e a , o c ~ at all!
The boundaries of the District appear to have been arbitrarily set withuu.l l; ~p.i;1: input
from the landowners affected. Chapter 35, Section 20 requires the b:;t.e:fil ; : rul services
provided to each parcel be considered by the Council. By including such ,r I t rgo ttea
with the diverse interests and service needs (i.e. the `Old Industrial Arta- rr. ~jin te:<ulers
mauka of the highway and many residential areas) the drafters of the propo~::.'I i nrict
have attempted to increase their funding but do not address the benefits z.ra a; p tlzmert:rl
services according to use or location as required by Chapter 35. The }.:I; : h r i.tl 1 u•~ n']c
within an area with common needs and business goals. In this case th.~r 3n.t. s •it cold be;
the core tourist destination area along Ali'i Drive from Palani Rd. to the R.rr, ; 1 Gomt
Resort.
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What COULD be done to more appropriately address these issues.
1. Make the necessary changes to the enabling ordinance as requi rd.
Some possible funding formulas could he based on:
1. A percentage of GET paid to the State.
2. Square feet of business space.
3. Linear feet of street frontage.
4. Number of employees.
5. Separate rates by type of business (hotel, restaurant, retail, pro.cs~i~.~i .d, condo
units, etc.)
6. Al] of these are veritiable and are based on a `per business' bans rnt~ cr i hau `p.r
parcel'.
Possible representation and voting structures for election of Board Me~nb::rs ;.c< list~-i~t
decisions could be based on:
1. Dollars contributed.
2. Zone placement (different zones get different votes).
3. One Vote per payee.
4. One vote per Business license held.
Other possible considerations:
1. Star[ with a much smaller district, focusing on the core area of brsi n. -ses wit ~
common needs and goals.
2. Add new zones or even new BIDs as you gain experience and a.u:;:c! s.
3. Increaseldecrease the number of zones to more accurately rellec t tk; e ~ e r ri cE;a a~,i
benefits to be provided.
4. Neither the district nor the zones within the district have to be ::nr;i a~:a;s an:as,
there can be holes.
The BID is needed in Kailua Village and it can achieve great things. I ;isle t: e cr~.cil 'to
consider continuing the public comments on this proposal since it is >t.c:h u ] tr;r
undertaking which affects so many businesses and people iu the Dish-ict.:?'I : tam; dir:~t
the BID organizing committee to wait, go back and take another look s: ilae l;,na. nlarias
and how the funding and representation are achieved. They can then crirr r. P s cap ~~itb
proposal that is more appropriate and avoids the possibility of the BID :;ei ;:h dbatged
in court.
Bruce Brooks
76-6386 Pualani St.
bruce(a~bbkona.com
756-6566 (cell )