With rail-related construction underway along Dillingham Boulevard heading into downtown, the Honolulu City Council is backing a plan to give financial assistance to eligible small businesses struggling to stay open.
To that end, the council this week adopted Measure 40, 7-2, to provide $10,000 in grants to eligible businesses that open before January 1, 2022. Eligible businesses will receive the subsidy annually, but only if they opened before January 1, 2022. There is ongoing construction work in the area.
Still, the measure, which takes effect on July 1, only applies to small and medium-sized businesses that are majority-owned by residents. He has no more than 15 employees. Income of less than $750,000 per year. We began operations in the same city block as our business before construction on the rail project began in earnest.
Bill 40 would also include a community service component under city agencies not yet designated by the mayor's office.
After Wednesday's City Council vote, Anthony Hung, owner of Soul Chicken and Bliss Lounge for three years, will apply for the city's $10,000 annual grant program as business remains depressed. He said he was interested in that. Han told the Honolulu Star-Advertiser by phone that some of the money will be used to pay rent for the business. “It’s already past the deadline,” he said.
In early 2023, Jin Lee, manager of two karaoke bars and a Korean fried chicken restaurant in the 1000 block of Dillingham, told the Star-Advertiser that a nearly $10 billion rail project was under construction right near his home. He said it was having a negative impact on society. his conclusion.
“Business is down 50%,” Lee said of the weak performance of Soul Chicken and Bliss Lounge, which has fewer than 10 employees. “People are starting to come here little by little now. … It's slow even at the bar.”
Lee said the problem was so bad that the chicken and brisket store across the parking lot from Lee's store had just closed. A sign posted on the front door of the vacant store said it had moved to Pearl Highland Center in Pearl City.
This new measure would effectively activate the city's existing but dormant Transportation Construction Mitigation Fund.
Established by city law in 2018 under then-Mayor Kirk Caldwell, the fund receives and disburses funds to alleviate the negative economic impacts of construction of the Honolulu mass transit project, now known as Skyline. I was planning on doing it.
That same year, the Council allocated $2 million to provide real estate tax relief to eligible businesses. And the following year, the council added $750,000 to the mitigation fund.
In 2019, Mr. Caldwell issued a message saying that from then on, the Honolulu Rapid Transit Authority should be “responsible for transit construction mitigation measures” and pay for associated costs.
But in early 2023, HART's board of directors voted unanimously to remove the railroad authority from any mention of stewardship of that fund.
And a program to distribute funds to the mitigation fund has never been established, leaving affected businesses empty-handed. And city officials say the fund itself is now completely inactive.
Under the 2018 law, spending from that fund was supposed to include subsidies for businesses forced to relocate due to rail construction. Business interruption subsidy to compensate roadside residents for loss of income due to construction impacts. Working Capital Advance – A loan to cover the operating costs necessary to keep a railway open during the construction phase.
Before Wednesday's vote, City Council members Tyler dos Santos Tam and Radiant Cordero said their bill would target businesses as HART rail construction continues on Dillingham Boulevard toward Kakaako. He said it would help prevent closures.
“It's going to last a long time,” he said. “We've seen what happened to Aiea and Waipahu businesses, and we need to provide them with support. … Now they're suffering.”
Dos Santos Tam said small businesses eligible for city aid are “limited in number simply because they have to be within a block of Dillingham.” …Not the whole island. It's not an entire (transit-oriented development) zone. ”
“In fact, there are a number of businesses in Dillingham that would not qualify on this basis. But we target the smallest family-owned businesses, many of which are just surviving,” he said. said.
Other members of the public also spoke at the meeting.
“I think it's great that they are expressing their concerns and providing some token monetary compensation to alleviate the severe loss that many people have suffered along the way with the Honolulu Skyline project,” resident Chun James said. said. “But it is also deeply disappointing to me that this financial black hole continues to have such a profound impact on Oahu residents.”
She added: “While many businesses are losing business and others are just trying to hang on, what will happen next for property owners and business owners is that the city council and mayor provide more educational support. “I think it's essential to warn people about this,” he added. And the workers. “I think there is a huge need for transparency in order for residents to be prepared for what’s to come and what the future holds,” she said. “We all know that small businesses and even large corporations expend sweat and capital to support the future of themselves, their families, and their children.”
However, Councilman Calvin Say opposed implementing Measure 40, especially using the city's general fund to subsidize affected businesses.
“You're just signing a blank check,” Say said. “And you open up a can of worms for other city and county projects that could impact small businesses as well. That's my concern. If you open up a can of worms. , we have to live with it.”
He also pointed out that the government does not have the “resources to create a balanced budget for next year.”
“I’ve always had a very conservative approach to the budget, and that’s a concern,” he said. And everyone should know that the only source of funding is property taxes. …Because I’m worried about my wallet, I’m also worried about what the taxpayers are doing – paying their bills. ”
City Council member Val Okimoto agreed.
“I've always supported small businesses…but I'm concerned about what we're doing, especially as we head into fiscal year 2025 and (the city) says we don't know if the finances are going to get even tighter.” “They may have some difficulties,'' she said. “(And) I'm worried that this will set a precedent.”
In the end, the council voted to adopt Bill 40, despite objections from Mr. Say and Mr. Okimoto.
In 2022, HART signed a $496 million contract with Nunn to carry out utility relocation work along Dillingham Boulevard as the rail line heads into downtown.
The work, called the “City Center Utilities Relocation Project,” will, among other things, include installing one of two 138-kilovolt power lines underground.
Construction along the Dillingham Corridor in Nan is expected to continue until 2026, but the rail line is not expected to be completed until 2031.
