Small Business Hawaii | Volume 23 Number 8 | August 1998
By William R. Liggett, CCIM (S) The City is trying to open up intensive and light industrial zones for cabarets, amusements and meeting places. Ignoring incompatibility, safety, economic, environmental and parking concerns, Mayor Harris's administration seems hell-bent to increase competition and risk for the scarce industrial zones of O'ahu. Making its way through the City's legislative process is a Bill that would allow these nonindustrial uses into I-1 and I-2 zoned land on O'ahu. Most businesses are readily aware that the competition and cost of industrial facilities are already too costly. But Mayor Harris's Department of Planning and Permitting (formerly DLU) has drafted a Bill that would, among other things, allow cabarets, amusements and meeting places into I-2 and I-1 zones. That translates to the industrial areas like Kalihi (makai of Nimitz), Sand Island and its Access Road, Mapunapuna, the Airport, Halawa, Aiea, Pearl City, Waiau, Waipio, Waipahu, Kapolei, Kaneohe and Kailua. These are industrial zones that are already tight for vacancy in suitable facilities- which would now be allowed to take in cabarets, amusements and meeting places. Industrial zones have always been set up to serve two primary purposes: one is to provide a place to do dirty and noisy and otherwise unpleasant activities-industrial activities. And number two is to provide a zone for the lower rental rates that industrial businesses require in order to do large tasks that commerce requires. That is, rental space at reasonable cost, so that they can stay in business and so the cost of living isn't so high that we all have to leave this paradise. Testimony against this incursion before the City Planning Commission seemed to fall on deaf ears. If industrial users are to keep out these "not-industrial" uses, industrial users must come forward to testify at the Neighborhood Boards and City Council in the coming days. Here are a few more reasons why cabarets, amusements and meeting places should not be permitted in I-1 and I-2 zones: * such are not industrial uses, they can already go in other, nonindustrial zones where industrial users are not allowed * they can afford to pay higher rents so they are unfair competition to industrial users * They will drive up the rents to levels that are too expensive for industrial users * the high rents will drive up the cost of living for everybody * the high rents will cause many businesses to fail * the high rents will discourage small business formation * the high rents will discourage business expansion * the high rents will discourage mainland business from coming here * they will compete for already scarce parking; arguments that they will not compete ignore the daytime uses of such activities. * industrial zones have been purposely set aside to provide places to do dirty, noisy and big activities. Cabarets, amusements and meeting places will find industrial uses incompatible with their operations and complain- causing trouble for industrial users and law suits when someone is hurt among the big trucks plying the already congested industrial zones * industrial users will curb their operations for fear of injuring the youth and elderly that frequent amusements and meeting places-safety issue * many operators of big trucks and heavy equipment just would not want nonindustrial users nearby to their operation-just too dangerous * industrial users will be driven out to the far reaches of the island-who wants to have to drive 15 miles/45 minutes to get their car repaired or seek some other industrial application. * and forcing "warehousers" to the far reaches of O'ahu, far from the port and their delivery points will raise the cost of everything for everybody because of high travel expenses and times. Interested industrial users and others that see the economic, risk, safety and environmental consequences of the City's plan should contact the author or Small Business Hawaii- many voices will be needed to stop this steamroller. And be sure to speak up at Neighborhood Boards and call or write your City Councilmember and Mayor Harris. Industrial users will be an even more endangered species if the industrial zones are opened to these nonindustrial uses of cabarets, amusements and meeting places.
 Want Less Business? Raise Prices! By Richard O. Rowland, Rowland & Alameida Frank Fasi wrote an article to The Honolulu Advertiser (6/7/98) "Raising hotel room tax would ease many of Hawaii's economic ills." In it he took the newspaper to task because they had earlier suggested that raising these taxes might cause a visitor "backlash." Mr. Fasi doesn't ever address the "backlash" phenomenon (otherwise known as voting with our feet) and instead points out that each of the other destinations like Los Angeles, San Francisco, New York or Japan has taxes higher than ours. His conclusion is that we should raise our room taxes another 4%, making us more like them. When I came to Hawaii in 1971, I was very impressed with the fact that hotel, car rental, and restaurant prices in Hawaii (specifically Waikiki) were below major cities on the mainland USA and there was no hotel room tax at all. Yes, there was a 4% excise tax which I thought was the cause for the high cost of living in other areas of the economy - but no room tax. My thought was, "Gee, this is paradise on earth. Wonderful weather, friendly people, cheap lodging, great scenery. This is a place to return to and a great place for business." What do we have now, after 27 years of government tinkering, much of it orchestrated by Mr. Fasi? Our hotel room costs match or are in excess of the localities Mr. Fasi mentions, our restaurant costs are similarly higher and we now give our visitors the "Aloha" of adding 11.42% to their bill when they check out - and that's just after they have to pay another $2.00 per day in tax on their rental car. Kinda like, "Thanks a lot for visiting us, we hope you enjoyed your stay. Since we are so good and we want you to return, we are adding $114.42 to your $1000.00 hotel bill." And Frank Fasi believes they will then think: "Golly, it's true, this is paradise and I will return. I love paying extra when I check out. This gives me lots of warm and fuzzy thoughts to review on my long flight home." A friend who operates parking lots tells me his simple formula for pricing. When the lot averages 95% occupancy, he raises prices. When it gets down to 90%, he lowers prices. What are the occupancy rates in our Hawaii hotels? Depends on location, you say? Waikiki - 77%? Molokai - 59%? Does that sound like we need to increase the punishment we pass out to our visitors when they leave us? Is it true that 65% of our visitors are repeat visitors? Do we want that percentage to drop? SUMMARY: In 1971 Hawaii offered paradise and low costs to the visitors. Today, we offer paradise and same or higher costs to visitors. Our visitor count is down. The 1998 visitor has several paradise locations to choose from throughout the world. Frank Fasi wants one of the visitors last memories of Hawaii to be an almost 16% addition to his hotel bill in addition to the rent-a-car tax. Mr. Fasi believes that adding 4% to the tax would have no affect on visitor count. This is the same Mr. Fasi who wanted, several years ago, to pass legislation to stop Japanese investment in Hawaii property, the very engine driving our financial prosperity at that time. He also wants us to be more like other major destinations. Why wouldn't he want us to be better and uniquely so? Here's why: He wants to make the tourists pay our costs of operating the government. In true "Aloha Spirit," he wants to abuse the tourist so that we will not have to face the sad music that our government is bloated and out of control. But we have to face the facts. An increase in the picking of tourist's pocketbooks up to 15.42% (from 11.42%) would exacerbate our problems rather than solve them. Hopefully, John Fund of the Wall Street Journal is correct when he repeats his "Fund's Law": "Government will always do the right thing - after they have exhausted all other possibilities." Mr. Fasi's ideas are not the "right thing to do" and I hope we "subjects of government" will not have to learn the hard way before we take back control.
Resolving Conflict in a Family Business By Giuseppe Leone, Business Mediator It doesn't matter how many years or even generations it has taken to create a family business and to make it successful. Internal conflicts can shatter a family business more than all competitors combined. In today's world a business is not likely to be around for long, when family members spend more time fighting and blaming each other than working together and coming out with creative ideas. One typical reason why family members fight is the limited resources. In any business, there are obviously only so many dollars, shares and top management positions available. It is not easy to please all family members when each of them strongly believes s/he is the one who should have that CEO job, those dollars, or those shares. Another typical reason for conflict is change. Some family members believe that change is necessary, arguing that the business will never improve without it. Others seem to have plausible reasons to resist it. If the business is doing fine, there is no need to change; if the business is doing poorly, there is no time or money for it. It looks like the real challenge for a family business is not how to avoid conflict- since that is almost impossible- but how to deal with it, and how to resolve it constructively. The way family members deal with conflict much depends on their individual personalities. Some have a "my-way-or-the-highway" approach; others prefer to compromise; and some try to deny that any problem exists, hoping that time and patience will eventually take care of everything. Depending on the circumstances, any of those approaches may seem to work. Whether the real problem gets resolved is a different story. Conflict in a family business is often more complex and deeper than it looks. It could be that, before any issue around money or shares can be resolved, some other issues- of totally different nature- need to be resolved first, like the family members' difficulty in listening to and understanding each other. It's a big step forward when family members can at least agree that continuing to fight against each other doesn't resolve their business problem. Instead, it would be far more productive to ask the help of a professional business mediator, experienced in conflict resolution. As neutral third party, the mediator doesn't tell family members "what" to do, but "how" they can best decide what to do. During joint and private meetings with all family members and other professionals whom they trust (attorneys, accountants, management consultants), the mediator applies several problem solving strategies and techniques. With the mediator's help, the family members start by defining their problem in a way that everyone understands and agrees on. Their next step is to come up with as many options as possible to resolve the problem. Finally, they negotiate with each other, with the mediator's impartial assistance, until they agree on a solution that they are all willing to accept and make work.
By Ken Schoolland, Schoolland International Partnership Clerk: What can I do for you, ma'am? Joanie: Is this the Capitol Shoppe? C: Sure is. J: I was told that I could buy a politician here. Is that right? C: Yup, buy or lease to own. Step over here and I'll show you a portfolio of our selections. We have rookies at rock bottom prices all the way up to powerful committee chairmen. J: What good is a rookie? C: Any politician can trade votes, ma'am. Trade a dozen votes and get a dozen votes! No issue is too small. J: A committee chairman still has only one vote. So why does he cost so much more? C: They're aged, ma'am. Seniority and skill drives the system. A chairman is worth his weight in gold. "Why bother with mutual funds," I always say. "A well placed politician is the best investment in the world." J: Really? C: Sure, for each dollar down, you get a thousand dollars in government funded goodies, protection, regulatory favors, or tax breaks. J: Is there a limit on the number of politicians I can get? C: No, but we do have a minimum downpayment. J: Do you take credit cards? C: No, but we do accept campaign contributions, consulting fees, legal fees, book advances, stock options, job offers for relatives, club memberships, resort vacations, travel expenses and in-kind payments of publicity and sexual favors. J: Wow! Can I pay on the installment plan? C: Sure, you can defer payments for a couple years-you know, things like job appointments and directorships. Our motto is, "Everything's on sale at Capitol Shoppe!"
 Industrial Zones | Raise Prices! | Family Business | Capitol Shopping
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