Privatization in Future
For Hawaii's Marinas?

Hawaii Ocean Industry and Shipping News - March 1997

By Ray Pendleton

It is difficult, if not impossible to find someone in the recreational boating community who believes all is well with Hawaii's state-run marinas - or "small boat harbors," as the state has designated them.

Rather, criticism from the state's boaters covers a wide range of objections. There is frustration with the lack of new facilities, irritation with the absence of sufficient maintenance and security, impatience with the years-long wait for moorings, concern over fiscal mismanagement, and anger at the obvious hidden transfers of boat ownership that allow boats to be sold and yet remain in the original owner's slips.

Understandably, perhaps the only aspect of the state's marina management not under attack is its uncommonly low slip rental fees. And even then, some could argue that the state's lack of funds to effectively support boating is directly attributable to its artificially capped user fees which are below the real market value.

Hawaii's overall lack of decent boating facilities has even been the prime subject of articles in several mainland boating publications. For the boating industry in general, the state is looked on as something of a backwater, where sales have declined in recent years, rather than increased as in the rest of the U.S.

Even as the state's Division of Boating and Ocean Recreation of the Department of Land and Natural Resources is now considering increasing its mooring fees, another possibility for solving the state's marina malaise is under consideration: Privatization, through a lease agreement with a private sector company such as Westrec Marinas of California.

"Westrec presented us with an unsolicited proposal," state Boating Administrator David Parsons said. "The company would like to take over operations of all of the state's small boat harbors in three phases over a three to five year period. Keehi Lagoon would be a part of the first phase, followed by the Ala Wai."

For those like the Ala Wai Marina Committee who question whether any private company could properly manage all of the state's marinas, it should be pointed out that there are presently only fewer than 4,000 boat moorings in Hawai`i.

"We recently assumed the management of Chicago's city-owned marinas," Westrec Marinas' senior vice president Thomas Hogan said. "That alone is a 5,000-slip operation and we manage many other marinas across the U.S."

"We are also proud of the fact we have received the first-ever Environmental Protection Agency award for maintaining the nation's cleanest marina," Hogan added. "That's what it takes because we consider ourselves in the hospitality business."

As for making a commitment to Hawai`i in return for a initial five-year, renewable contract, Hogan says Westrec has investors willing to put up from $75- to $100-million to improve the marinas and provide additional on-shore facilities such as boat dry storage, outrigger and kayak racks, charter companies, boat dealerships and restaurants.

"Anyone who might take over management of our marinas will need more than slip rentals to succeed," Parsons also pointed out. "They will need income from speciality shops and restaurants to make it work."

"My biggest concern is that we don't loose what is now a statewide program," Parsons added. "For instance, we recently spent $1 million on improvements to Nawiliwili Harbor even though it's individual revenues can't pay for it. Wherever docks need repair or replacement, whoever is managing must have the necessary financing available."

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