S U N D AY 7/ 2 2 / 1 2
NEW HORIZONS W H A T ’ S A H E A D F O R B U S I N E S S E S I N H AWA I I
INDEX Tourism
4
6 8
Health care Automobiles
Construction Entertainment/Leisure
Retail Real Estate Grocery Energy Hi-Tech Movies/TV Banking 2
Education
David Butts Marsha McFadden
1218
Agriculture
Airlines
EDITORS
Christie Wilson
DESIGN
Jackie Carberry Michael Rovner
26
32 36 44
50 58
6270
74 80 PROJECT EDITOR
Mary Poole-Burlingame
WRITERS
Gary Chun Kristin Consillio Erika Engle Andrew Gomes Mike Gordon Allison Schaefers David Segal Michael Tsai Mary Vorsino Alan Yonan
ARTIST
Bryant Fukutomi
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HONOLULU STAR-ADVERTISER >> SUNDAY 7/22/12 3
TOURISM INDUSTRY
BY ALLISON SCHAEFERS ASCHAEFERS@STARADVERTISER.COM
TOURISM ON A TEAR Successful strategies have set the visitor industry on track for a record year
7.8M Record number of visitor arrivals expected by the end of this year
4
Hawaii tourism will simultaneously set year-end arrivals and spending records for the first time since 2006 if the state’s visitor industry stays on pace. State tourism officials have forecast that arrivals will grow to a record 7.8 million and visitor spending will hit a record $13.9 million by year’s end. These targets would surpass previous records set in 2006 when the state welcomed 7.628 million visitors, who spent what at that time was a record $12.4 billion. In 2007, visitor spending set another record at $12.8 billion. Diversification and strategies aimed at bolstering neighbor island business have strengthened Hawaii tourism, said David Uchiyama, vice president of brand management for the Hawai‘i Tourism Authority. “We are even healthier than we were during the last boom,” Uchiyama said. “We’ve made great strides in closing the gap left when NCL pulled two ships from the market.” Since the additional ships accounted for some 380,000 arrivals annually, Hawaii’s visitor industry had to vary its market to fill the void, he said. “We’ve diversified a lot more into markets (outside of the U.S. and Japan),” Uchiyama said. “Another huge part of the industry’s progress is the ability to distribute our visitors directly into the neighbor islands.” Arrivals and spending for
the first five months of the year certainly are tracking with anticipated trends. Through May the HTA reported that visitor arrivals were up by 10 percent to 3.3 million, while spending was ahead by 16.8 percent at $5.8 billion. Strong visitor arrivals have continued into summer. The three-week trip that Vincent Ary and his family made to Hawaii is proof that the HTA’s strategies to spread tourism across all islands are paying off. The Ary ohana of Pasadena, Calif., visited Oahu, Kauai and the Kona side of Hawaii island during their lengthy stay in the isles. “We came six years ago, and we’ve been coming back twice a year ever since,” said Ary, who works the lights for the hit TV show “NCIS.” “It was a perfect trip,” Ary
arrivals growth of more than 7 percent and spending of more than 12.7 percent. Still, the state’s overall economy is waiting for the boom to spread, he said. “While we may be raising our visitor forecast next quarter, the rest of the economy is still producing fairly unimpressive growth,” Bonham wrote in his blog. “The last jobs report was decidedly mixed and the latest data from the Bureau of Economic Analysis is nothing to celebrate.” While improved tourism has put Waikiki hotels on track for a record year, reCINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM covery has not spread to all sectors, said Joseph Toy, president and chief execusaid. “In Hawaii you are Hawaii tourism will tive office of Hospitality Adfrozen in time. We like that set arrivals and visors LLC. there’s no real urgency and spending records If Waikiki hotels continue you are able to let hair for the first time their momentum, the resort down.” since 2006 if The family already is plan- district could set records in Hawaii’s visitor occupancy, average daily ning a return trip, he said. industry stays on rate and revenue per avail“We’re coming back this track. Sarah Beth able room, according to the Thanksgiving,” Ary said. Williams from Since tourists like the Ary most recent data from Smith Austin, Texas, ohana are projected to keep Travel Research and Hospisunned herself on tality Advisors. coming to Hawaii, econothe beach in “While Oahu is doing real mists at the University of Waikiki. well in terms of occupancy, Hawaii Economic Research Organization might increase its still behind in room rates in real terms,” Toy said. “We the 2012 year-end tourism are seeing some strength in forecast they released in Maui since Wailea is having a May. good summer, but Kauai and Given the continued boom in scheduled air seats the Big Island are lagging.” Toy said it could be 2013 through the summer and the or 2014 before the hotel infairly aggressive pricing on dustry has recovered across flights this fall, UHERO’s arall islands. rivals forecast will likely in“Still, you can see the crease, said Carl Bonham, strength of where the marUHERO director. ket appears to be heading,” Bonham expects the rehe said. vised forecast will estimate
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HONOLULU STAR-ADVERTISER >> SUNDAY 7/22/12 5
HEALTH CARE INDUSTRY
BY KRISTIN CONSILLIO KCONSILLIO@STARADVERTISER.COM
HEALTHY OUTLOOK New strategies are helping to provide better quality care and value to patients
$8.8B The amount of Hawaii’s health care expenditures in 2009
6
Transformation is the buzzword in health care as the state gears up for sweeping changes across the medical industry intended to improve patient care while decreasing costs. Efforts to reform health care under the federal Affordable Care Act has shaken up the medical field and driven the industry to find a way to control escalating costs. Hawaii’s health expenditures totaled $8.8 billion in 2009, according to the Kaiser Family Foundation. Among the most significant changes is a payment system tied to improved patient outcomes rather than volume, overhauling the way medicine is practiced throughout the islands. The pay-for-performance model that has been adopted by the state’s dominant health insurer, Hawaii Medical Service Association, and its largest hospital systems, the Queen’s Medical Center and Hawaii Pacific Health, is viewed as a solution to rapidly rising medical costs. “The former system was based on volume rather than outcome, and that just drove costs and that was not sustainable,” said George Greene, president and CEO of Healthcare Association of Hawaii. “Because we’re no longer paying for volume and quantity … we have opportunities to improve our reimbursement rates here. Compared to other states we haven’t been a high-volume state. We’re already posi-
COURTESY PHOTO
Dr. Racquel Bueno, left, and Dr. Cedric Lorenzo set up a surgical robot on the operating table and attach the robotic arms to begin an operation to treat severe, debilitating heartburn.
—————
“Our goal is to create a seamless system of health care with the foundation of primary care.” Beth Giesting The state’s health care transformation coordinator —————
tioned to improve reimbursement rates as long as outcomes are good.” Gov. Neil Abercrombie identified health care as a priority of his administration, launching the Hawaii Healthcare Transformation Initiative, a project that explores strategies to improve quality care, value and the overall health of the population through better care coordination. The initiative will also study how to improve the use of health information technology to reduce medical errors and increase efficiency. The state also has established a nonprofit Hawaii Health Connector, an online health insurance exchange designed to provide residents access to affordable coverage as a one-stop shop where individuals and businesses can purchase insurance through a variety of health plans.
“Our goal is to create a seamless system of health care with the foundation of primary care,” said Beth Giesting, the state’s health care transformation coordinator. “We want it to be patient-focused and really looking at quality. This is not just something that government is trying to mandate to get people interested. There is a lot of movement, leadership and enthusiasm throughout the health care sector in working together to transform our health care system.” Separately, the Hawaii Health Information Exchange, a nonprofit organization, is making strides to connect medical providers statewide through electronic health records. The organization, established in 2006 by health care providers, consumers and insurers, recently launched a secure direct messaging and patient referral system in a first step to link the health care industry. The service allows providers to send and receive direct messages and patient referrals including lab results and progress notes on a secure network that will soon connect patient records electronically. The exchange will make it possible for doctors, hospitals, laboratories, health plans and pharmacies statewide to share lab results, radiology reports and discharge summaries to reduce duplicate procedures and medical errors.
Besides administrative progress, Hawaii’s medical community has made significant scientific gains with new minimally invasive procedures for patients ineligible for traditional surgery. The Queen’s Medical Center recently began the state’s first heart valve replacements via catheter through the groin for heart disease patients previously deemed inoperable. The cardiac procedure for aortic stenosis, a severe narrowing of a heart valve, makes it possible for patients too ill to tolerate the standard valve replacement via open-heart surgery. In addition, the hospital recently launched a surgical radiation procedure for liver cancer patients who have stopped responding to chemotherapy. The surgery, which had only been available at large mainland academic medical centers before its launch several months ago at the Queen’s Medical Center, involves tiny incisions in the hip for a catheter — smaller than a spaghetti noodle — to inject radiation particles into an artery that feeds the liver tumor. Queen’s and other hospitals, including Tripler Army Medical Center, have begun using surgical robots for everything from head and neck surgeries to prostate and urological procedures, lung and gastrointestinal operations, heart valve repairs and weight loss surgery.
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toll-free: 1-800-342-8422 centralpacificbank.com HONOLULU STAR-ADVERTISER >> SUNDAY 7/22/12 7
AUTO INDUSTRY
BY ERIKA ENGLE ERIKA@STARADVERTISER.COM
CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM
6.5 %
The Nissan Leaf was one of the top three selling electric vehicles in Hawaii last year. Blake Nakahara, a sales representative at New City Nissan in Kalihi, stands amid Leafs available at the dealership.
Electric and hybrid vehicles make up about 6.5 percent of the market
Recovery is a favorite word of Hawaii’s automotive industry, after four years of increasing decline that may have bottomed out in 2009 with sales of only 33,639 vehicles. Sales rose to 34,019 in 2010 and to 37,086 in 2011, according to the most re-
8
REVVED-UP RECOVERY Electric and hybrid vehicles are a growing part of Hawaii’s automotive industry NEW VEHICLE SALES *2011
Hawaii 1,534 Kauai Maui
*2012
CHANGE
1,822 18.8%
578
755 30.6%
1,529
1,906 24.7%
Oahu 11,743 13,640 16.2% Total
15,384 18,123 17.8%
MARKET SHARE For top 10 selling brands in Hawaii* Dodge 2.8% Lexus 3.3% Mazda 3.4%
*Year to date, through May
Please see Page 10
Source: AutoCount data from Experian Automotive
Toyota/Scion 26.9% All other
NEW VEHICLE REGISTRATIONS 70,268
42,000
(Record year)
(Projection)
33,639 Honda 12.7%
80,000
Nissan 10.2% Kia Hyundai Chevrolet Ford 7.5% 3.4% 4.3% 4.8%
40,000
60,000
(Market low) 37,086 (Up 9% over 2010)
20,000 0
’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 STAR-ADVERTISER
ANNOUNCES NEW FLIGHTS We are proud to introduce convenient new flights on our most popular routes from Kahului to Lihue, Honolulu to Kahului, and from Kona to Honolulu. The new scheduling additions offer more opportunities for business travelers to put in a full day of work and more flexibility for families traveling these segments. EFFECTIVE 8/2/12 Honolulu to Kahului – 6:45 a.m. Kahului to Honolulu – 8:00 p.m. EFFECTIVE 8/4/12 Kona to Honolulu weekend flight – 6:00 p.m. EFFECTIVE 9/5/12 Kahului to Lihue weekend nonstop – 8:00 a.m. No matter which flight you choose, you’ll enjoy the comfort of our all jet fleet and true island-style hospitality. go! is dedicated to the people of Hawai‘i and to being your inter-island air carrier of choice by offering the most convenient routes. To book your tickets visit
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HONOLULU STAR-ADVERTISER >> SUNDAY 7/22/12 9
Loyalty is important in our business. We’ve got 380 years worth.
The key to progress in our business? The dedicated service of the attorneys and professionals in the Watanabe Ing family. All totaled, we’ve worked here for 380 years - and we look forward to serving our equally loyal clients for many years to come.
ASSOCIATED PRESS
The Chevy Volt, above, the Nissan Leaf and the Mitsubishi i-MiEV were Hawaii’s three top-selling electrical vehicles in 2011.
Sales of electric and hybrid vehicles also are rising, hitting about 6.5 percent of cent Hawaii Auto Outlook the market at the end of the report prepared for the Hawaii Automobile Dealers first quarter and projected to continue growing. Association. Servco Automotive reThe record of 70,268 new ported that sales of Toyvehicle registrations was ota hybrid vehicles, set in 2005. including four Prius modJapanese brands collectively have a vise-like grip on els, make up a significant percentage of the commarket share in Hawaii at pany’s sales, up to 15 per61.1 percent year to date, cent or 20 percent, which is down 2.5 percentdepending on the month. age points from a year ago. Hawaii’s plug-in electric Domestic brands’ year-tovehicle adoption, estimated date market share is up 1.9 percentage points, to 20 per- at 10 times the national avercent of the market compared age, is largely due to its leadwith 18.1 percent a year ago. ing standing in development of a network of charging staAmong the top 25 tions. As of mid-May, Hawaii brands, registrations of Acura, Chevrolet, Chrysler, had one charging station for every 5,500 residents. Dodge, Jeep, Mitsubishi Hawaii’s top-three-selling and Volkswagen models EVs in 2011 were the Nissan were up more than 33 percent each through the first Leaf, Mitsubishi i MiEV and five months of the year, the the Chevy Volt. Toyota now has a Prius time frame reflected in the model that “runs pure EV to report. Continued from Page 8
a certain period and once the battery charger runs out, it reverts to hybrid mode,� said Rick Ching, president of Servco Automotive, which operates auto dealerships but also serves as distributor of Toyota vehicles to Hawaii dealers. Toyota and sibling Scion remain Hawaii’s favorites, with nearly 27 percent of the statewide market, according to the report. The brands were on top before the March 2011 Japanese earthquake and tsunami and have remained dominant despite resulting product shortages. Customers are loyal to other brands as well, however. “I think (dealers) have been looking at this road to recovery as right around the corner,� said John Uekawa, president of New City Nissan and member of the Dealer Advisory Board.
10 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
John R. Aube Thomas J. Berger Michael C. Bird Connie Y. Chang Brandon U. Davidson Summer H. Fergerstrom Staci M. Fujikawa J. Douglas Ing Ashley R. Masuoka Emi L.M. Kaimuloa Brian A. Kang Wray H. Kondo Tracey L. Kubota Jan M.L.Y. Kutsunai Jonathan W.Y. Lai
Pamela J. Larson Ronald Y.K. Leong Melvyn M. Miyagi Dustin M. Monroy David Y. Nakashima Lani Narikiyo Ross T. Shinyama David S. Taga Jerey N. Watanabe Retired Founder
Public Aairs & Government Relations Mericia Palma Elmore Dana M. Gusman Lori Ann C. Lum Jeannine A. Souki
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 11
AGRICULTURE INDUSTRY
BY ANDREW GOMES
AGOMES@STARADVERTISER.COM
STUNTED GROWTH A pair of planned big developments are set to displace 2,300 acres of farmland By Andrew Gomes agomes@staradvertiser.com
16,750 Number of homes developers plan to build on farmland in Central Oahu and the Ewa plain.
12
Changes in Hawaii’s agricultural landscape can occur the way plants grow: slowly. A few major decisions affecting large-scale farming operations took place this year — notably state approvals to urbanize 2,300 acres of Oahu farmland so developers can build 16,750 homes. The approvals in June by the state Land Use Commission allow developers to seek City Council zoning approval for two projects, Ho‘opili by D.R. Horton with 11,750 homes in Ewa, and Koa Ridge by Castle & Cooke with 5,000 homes in Central Oahu. But opponents of the controversial plans have vowed to fight the two commission decisions in state court, which could stop or at least delay construction, which the developers hope to begin next year. If Ho‘opili and Koa Ridge do move forward next year, it still would be a slow transition from row crops to residential communities, as the developers anticipate displacing farming on the land gradually over 20 years. Aloun Farms and Larry Jefts Farms (Sugarland Farms) are the biggest tenants on the two project sites. Aloun and Larry Jefts have said they are shifting production to other land in Central Oahu and in the Wahiawa area to continue farming, though some changes in certain crops will
FL MORRIS / FMORRIS@STARADVERTISER.COM
TOP 10 FARM COMMODITIES COMMODITY
2010 VALUE
Seed crops $247M Sugar cane $70M Coffee $33M Cattle $33M Macadamia nuts $30M Algae $17M Papayas $11M Bananas $11M Eggs $9M Milk $9M Crops including pineapples are not ranked because disclosure of revenue would reveal revenues of individual farms. Source: National Agricultural Statistics Service STAR-ADVERTISER
Aloun Farms and Larry Jefts Farms (Sugarland Farms) are the largest tenants that would be displaced from land poised for residential development in Central Oahu and on the Ewa plain, above.
be necessary. Other agriculture operations that will be displaced also include Fat Law’s Farm, some seed corn production and cattle ranching. In the short term, agriculture in Hawaii is expected to remain fairly stable, with one sugar plantation, one big pineapple producer, lots of diversified crop farming and a leveling off of seed corn, which has been the state’s highest-value crop since 2006. Promising endeavors are under way to try to rebuild a shrunken local milk supply and expand locally raised beef by improving grazing
methods for milk cows and cattle. Last month, Parker Ranch announced a trial project with local social investment firm Ulupono Initiative to improve grass pasture management as a way to reduce the cost of raising cattle on the Hawaii island ranch, which annually ships about 5,000 head of cattle to mainland feedlots, where it’s cheaper to fatten the animals for slaughter. Also in the works is a plan by a company from New Zealand to share grazing practices from that country’s thriving dairy industry to rebuild Hawaii’s local
S
milk supply, which was severely diminished in recent years due to high feed costs. An affiliate of Dairy Solutionz (NZ) Ltd. announced in December that it had formed a venture with Ulupono and a dairy consultant to establish an initial 1,000-cow farm by 2013 and assist others in starting similar-size farms in an effort to increase local milk production that is presently at about 10 percent.
It remains to be seen whether those two ambitious plans for dairy cows and cattle will be realized. The biggest crop in Hawaii by “value” is seeds, dominated by seed corn, at $247 million in 2010, according to the most recent assessment by the National Agricultural Statistics Service. Because seed companies don’t sell what they grow in Hawaii (they grow the seeds for research and mass propa-
gation outside the state), the Agricultural Statistics Service measures the industry’s value by the cost of production, which for any profitable crop is lower than sales. A couple of crops more recognized as Hawaii products — macadamia nuts and coffee — continue to be stable parts of local agriculture, with the number of farms and acreage unchanged over the past five years. There were 570 mac nut
farms on 17,000 acres in the 2011-12 season, the same as the previous four seasons, a recent Agricultural Statistics Service report said. Coffee farm numbers also held steady at 830 on 8,000 acres over the same period, the agency reported. Sugar cane, once Hawaii’s top crop, is still rooted on Maui at the Hawaiian Commercial & Sugar Co. Plantation owner Alexander & Baldwin Inc. has been
studying potential alternative crops for renewable energy production for several years, but strong sugar prices in the past few years have helped sustain HC&S. Hawaii’s other one-time top crop, pineapple, is still in production and dominated by Dole Food Co., which produces the fruit on about 2,000 acres on Oahu. A few other smaller companies, including Maui Gold Pineapple Co. and Hawaii
Pineapple Co. LLC, also got into the business in recent years after shutdowns of Maui Pineapple Co. and Del Monte Fresh Produce. One major pressure that Hawaii food farming may face in the years ahead is the push for renewable energy production, especially growing crops to produce fuel and installing photovoltaic solar panels, often referred to as solar farms, on farmland.
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 13
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14 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
Lilo
Hokulani
Thanks to your support, as well as our vendor partners, we celebrated the opening of our 50th store in Hawaii. Thank you for making a part of your day!
Mililani Mauka, July 9, 2012
H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 15
From one kama‘aina company to another, Meadow Gold Dairies salutes Longs Drugs for its long tradition of serving Hawai‘i!
Congratulates
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Congratulates and its employees on the opening of their
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16 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 17
CONSTRUCTION INDUSTRY
BY ALAN YONAN JR. AYONAN@STARADVERTISER.COM
SLOWLY REBUILDING Modest increases are expected this year in construction hiring and activity
5.6% Percentage of Hawaii’s economic output contributed by the construction sector in 2011
18
Hawaii’s construction sector is poised to emerge from an extended slump in 2012 with the number of industry jobs on track to grow for the first time in five years. Even with the expected improvement, however, economists are calling for only modest gains with a relatively weak home resale market continuing to weigh on construction. Hawaii construction jobs, which peaked at 39,100 in 2007 at the end of the last economic boom, fell to 28,500 last year, a drop of 30 percent. By comparison, the broader job market in Hawaii contracted by 6 percent from the peak in 2007 to the trough in 2010. Overall payroll jobs in Hawaii grew by 1 percent in 2011. While construction hiring remained relatively flat during the first five months of this year, it is expected to pick up in the second half of 2012, according to several forecasts. “The U.S. construction industry began to rebound in 2011, but Hawaii is just starting to see a recovery,” said Eugene Tian, acting state economist. “We expect to see positive numbers for the second half of the year.” The health of the construction industry has more of an impact on the overall economy in Hawaii than it does on the mainland. The outside loans that fund a significant share of local con-
JAMM AQUINO / JAQUINO@STARADVERTISER.COM
struction inject new money into the state and have a widespread impact on all business activity. The construction sector accounted for 6.8 percent of Hawaii’s economic output in 2007, compared with 4.7 percent nationally. By 2011 that percentage had fallen to 5.6 percent in Hawaii, but it was still well ahead of the national average of 3.5 percent. The latest forecast from the University of Hawaii Economic Research Organization cautiously projected an increase in Hawaii construction activity this year
Hawaii construction jobs, which peaked at 39,100 in 2007, fell to 28,500 last year, a drop of 30 percent. A construction worker works on a building at the former site of John Dominis restaurant in Kakaako.
after expectations of a recovery in 2011 failed to materialize. “Construction has yet to turn the corner in Hawaii, but a pickup is now more clearly in sight. Single-family home construction languishes, but new high-rise condos, retail and resort-related development will boost nonresidential building,” according to the UH forecast. “And legal challenges aside, rail construction is poised to begin in earnest as this year progresses.” UHERO economists forecast construction jobs will
grow by 2.1 percent this year to 29,100 before climbing by another 8.8 percent in 2013. The slow recovery is partly because the construction sector is having to dig out of a deep hole. The inflation-adjusted value of building permits statewide fell by more than 13 percent in 2011 to its lowest level on record, according to the UHERO report. Local economist Paul Brewbaker cited a glut of housing stock built up in the decade before the last recession as contributing to the
sluggish housing market, particularly on the neighbor islands. “The extent of building on the neighbor islands was disproportionally higher than on Oahu,” Brewbaker wrote in a recent commentary. “And across many dimensions neighbor island economic outcomes during the Great Recession paralleled those of the U.S. averages, while Oahu emerged as — literally — an island of
comparative economic resilience.” Modest increases in residential permitting are forecast this year, laying a foundation for the next cyclical upswing, according to the UHERO report. Still, in 2014 permitting activity will be half of what it was in 2005, the report said. Several condominium
Please see Page 20
Two large-scale housing projects on Oahu — Ho‘opili and Koa Ridge — will eventually have an impact on the island’s construction industry. Construction workers unload tiles and pass them down the line on a rooftop.
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two condominium towers slated for the Kakaako area. Construction on the 43-story Waihonua at Kewalo tower projects either under conis scheduled to start late struction or in the pipeline in Honolulu will help under- this year and finish two pin the residential construc- years later. The project is expected to be followed by a tion market. high-rise on the site of the The sold-out Holomua former CompUSA store, but condominium tower with the timing will be affected 176 units on Kalakaua Avby market demand and enue near Beretania Street other factors, according to has a target completion the UHERO report. date of 2013. Next in the Two large-scale housing queue is a long-awaited lowprojects on Oahu recently rise condominium called approved by the state Land the Cove Waikiki on Kaioo Drive, off Hobron Lane. The Use Commission — Ho‘opili and Koa Ridge — will evenproject will have 117 onetually have an impact on the and two-bedroom units in island’s construction industhree five-story buildings. Groundbreaking is expected try, but groundbreaking isn’t expected for at least this summer. Alexander & Baldwin has another year.
FL MORRIS / FMORRIS@STARADVERTISER.COM
Construction hiring has been flat but is expected to pick up in the second half of the year. Work progresses on the new campus of the University of Hawaii at West Oahu along Kualakai Parkway in Kapolei.
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There has been increased interest in robotics shown by students at all grade levels. Many have participated in competitions at the city, state, and national levels. Engineers at the Autonomous Systems Laboratory (ASL), which is part of the College of Engineering at the University of Hawai'i at Manoa, have been developing real robots to bolster the economy of Hawaii and raise the technical capabilities of Hawaii’s workers and the nation as a whole.
great as 12,000 meters. Specialized submarines to take humans to these depths are few in number and very,very expensive to operate. A surface tender vessel to support these submarines can cost $30,000 to $50,000 per day. Vehicles manned by humans must also have air, water and food which severely limits extended missions in the deep ocean.
ASL has spent 14 years building the Semi-Autonomous Undersea Vehicle for Intervention Missions (SAUVIM) to address extended deep ocean missions. SAUVIM is one of a handful of highly advanced submarine vehicles designed to perform complex tasks while under remote operations and without the benefit of a tether cable for power transmission or command and control input. The project is funded by grants from the U.S. Navy's Office of Naval Research (ONR). According to Song K. Choi, one of the principal investigators at ASL, "ONR wanted a vehicle that would autonomously navigate underwater and only required a single button to be pushed. The vehicle must be able to find a target and perform tasks such as fix a broken valve, retrieve a distinct object, or tag locations of inter-
The majority of the earth's surface is covered with oceans but the oceans beneath the waves remain a mystery. This is due in part to the inability of humans to observe these environs in great detail for extended periods of time. The sea floor of deep oceans lies 6,000 meters beneath waves, with the deep trenches reaching depths as
est for further investigation. This requires not only autonomous navigation but also autonomous manipulation. This is what sets SAUVIM apart from other underwater research projects."
The engineering challenges to building a vehicle like SAUVIM are enormous. Tethered subsea vehicles can receive power from the surface that enable direct digital links and command and gases that could potentially imcontrol capabilities. But tethers plode upon submersion or exexert too much drag to be viable plode upon ascension. for extended deep ocean over Command and control of the large swatches of the sea floor. For this reason, SAUVIM had to vehicle was a similarly difficult be designed without trailing task. Wireless signals cannot wires or cables. But untethered traverse the depths for remote vehicles have limited power sup- control. In general, an untethplies to drive their electric motors ered deep sea vehicle performor operate onboard electronics. ing complex tasks must rely on Further, designing an unpressur- self-directed computer algoized vehicle to operate at such rithms akin to the types of cadepths meant exacting engineer- pabilities seen in the Mars ing detail to eliminate liquids or rover vehicles. THIS MESSAGE WAS MADE POSSIBLE
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The most challenging part of the mission was to create the software algorithms and system intelligence to enable the type of autonomous navigation technologies required by ONR. These types of autonomous navigation technologies have gained prominence in recent years with popular competitions between university engineering teams to build vehicles that can autonomously drive across the country and search engine company Google's revelation that its self-driving vehicles had been navigating Bay Area roads for some time. Driving on land is far less complicated than building the intelligence to navigate a vehicle in the deep ocean. GPS signals are not available in the deep ocean and underwater vehicles' movements are far less affected by gravity and friction.
Thus, compensation for inertia is more difficult and finegrained controls challenging to operate. The vehicle must navigate and perform intelligent actions but also calibrate to ensure that its capabilities remain robust throughout the extended mission. To create these capabilities and this intelligence, the ASL team developed a cluster of relatively low powered computer processors with each linked to different sensors on the SAUVIM such as sonar, optical cameras. "The system architecture was very similar to how we would perform these sort of functions biologically with our own nerve and sensory system. Our sensors only process information they deem to be useful and we needed to recreate that in order to focus SAUVIM on
the appropriate intervention tasks," according to Choi.
The project has brought in more than $14 million in grants and contracts to ASL over SAUVIM's 14 year history. Choi says, "We built everything here in Hawaii except for the pressure vessels. We had as many as 33 people on it at a single point in time. We developed the hardware, programmed the software, and fabricated the vehicle and many of its key parts."
SAUVIM passed its official field trial in Keehi Lagoon last year with flying colors. However, the future of SAUVIM is presently uncertain. The Navy undertook a final site visit last year and is considering how it might use these new types of sub-sea vehicles. Although there are no guarantees that the Navy will support final commercialization of the SAUVIM, Choi says, "We're still very early in the adoption cycle. The U.S. military had unmanned aerial vehicles for ten years before they they began to aggressively deploy them. I would expect the same to happen with smart autonomous submarines as well."
eties present in Hawaii. The Council's objectives are to support the engineering profession in Hawaii and to support engineering education at the University of Hawaii at Manoa to produce qualified engineers. This article was edited from an article that originally appeared in Kauana, the UH research newsletter. Song K. Choi is an assistant Dean
This message was brought to you by the Hawaii Council of Engineering Societies, representing 18 engineering soci-
and Professor at the College of Engineering, UH Manoa, and is a past president of the Council.
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ENTERTAINMENT & LEISURE
INDUSTRY
BY GARY CHUN GCHUN@STARADVERTISER.COM
HOT SPOTS FRESHEN UP Popular visitor destinations are improving their offerings to lure more guests Life Park, for example, debuted in June the Hawaiian Shark Tank, the park’s first new exhibit in 30 years. Seth Casey, marketing coordinator for the Polynesian Cultural Center, spoke of two recent changes — the complete renovation of PCC’s Gateway restaurant and the introduction of new “Go Native” activities. After about a year’s work, “the restaurant has been completely reimagined to
With the number of visitors and subsequent spending surging to double-digit highs as reported by the Hawai‘i Tourism Authority in June, discretionary income is being spread around Oahu’s attractions, restaurants, bars and nightclubs. In anticipation of a continuing upward trend, some popular visitor venues have completed or are in the process of doing needed upgrades and makeovers. Sea
have more of a Polynesian theme, with a menu adapted to include local favorites, as well as two dining options, an island feast buffet and a more high-end prime dining experience,” Casey said. Other renovations in the works or in the planning stages for PCC include a sense-surrounding transformation of the IMAX theater, with a soft launch in November and a grand opening two months later, and construc-
tion at the beginning of 2013 of a Polynesian marketplace that will be akin to a farmers market. The Honolulu Zoo boasts a new elephant exhibit — “a real milestone” according to director Manuel Mollinedo — and a new front entrance to welcome its guests. “Attendance last year, before the new projects, was right around 600,000,” he said, “which made it the fourth-most-visited venue on
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our attendance growing.” Valerie King, Kualoa Ranch’s director of marketing and business development, said current attendance numbers from the just-completed fiscal year “are running at about the same percent increase,” with 2010 attendance around 289,000 and 2011 at 352,000. “As of May, we started a new dinner and show, ‘Legends of Kualoa,’ tied into our afternoon tours, and some-
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thing in the works that our kamaaina should be interested in is a more active adventure tour on horseback and ATVs.” King said also in the works is the opening of the World
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War II bunker that currently houses movie-site memorabilia. “We plan on opening up the full bunker, add some new movie props and restore the other half and fill it with WWII memorabilia. “We’re real pleased with our numbers. On a list of paid Hawaii attractions, we’re No. 3 behind Hanauma Bay and Volcanoes National Park on the Big Island.” Despite the recent closings of popular nightspots
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Apartment3 and The Shack Waikiki, Bill Comerford, spokesman for the Hawaii Bar Owners Association, remains relatively optimistic. “In order for the industry to remain healthy, there needs to be a balance in an understanding from legislators that a multitude of laws, such as the enforcement of smoking bans and noise regulation, sometimes Please see Page 28
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ENTERTAINMENT & LEISURE
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thirds, which is one-third locals, one-third military and one-third tourists. “I try to move with the public tastes and trends in music, alcohol and beer. It’s a great industry, fun to work in, and we try to be responsible.” The health of the economy and changes in taste also play an important role in the viability of Hawaii’s restaurants. According to statistics based on federal government data and National Restaurant Association research,
Continued from Page 27 adversely affects how our places operate. “Our big concern is that our industry continues to cater to our tourists. I figure that 90 percent of our market is made up of couples, so it’s important to keep their business coming. “The trends look good. People still want to have a good time, no matter the economy.” As the president of a business that owns the Irish Rose Saloon, Kelley O’Neil’s, O’Toole’s Irish Pub and Anna O’Brien’s (formerly Anna Bannana’s), Comerford said, “I try to cater to
JAMM AQUINO / JAQUINO@STARADVERTISER.COM
Sea Life Park’s new shark tank is the Waimanalo attraction’s first new exhibit in 30 years.
Hawaii’s restaurants are projected to register $3.5 billion in sales this year, while employing 79,400 people. “We’re one of the biggest employers in Hawaii, next to the state and federal,” said Thomas Jones of Gyotaku and new chairman of the Hawaii Restaurant Association. “With the trend of people eating more outside of the home, the industry continues to grow. With lots of national chains moving into the market in and around resort areas, it certainly raises the bar for small and mid-size restaurants. But demand is steady and the prospects for the business are good.”
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Mahalo to Hawaii’s real estate community and our loyal customers for recognizing our professional achievements and dedication to personal service.
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AIRLINES
INDUSTRY
BY DAVID SEGAL DSEGAL@STARADVERTISER.COM
CINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM
BY THE SEATS A boost in the number of flights and new markets help isle tourism fly higher
7.75M Record amount that visitor arrivals are expected to grow this year
32
Airline seats have been the lifeblood of Hawaii tourism, and this year they’re expected to top the 10 million mark for the first time since 2007 and bring a record number of visitor arrivals. More airlines, new routes, increased direct neighbor island flights and lower fuel prices are all coming together at a time when the economy in Hawaii is emerging from a four-year period of negative to slow growth. “We continue to see momentum for Hawaii as a destination,” Hawaii Tourism Authority CEO Mike McCartney said. “The expansion in
the U.S. East will create further opportunity, and then when you add the expansion in Asia, China, Korea, Japan and Australia, we see strength in all those markets. So I wouldn’t be surprised if we see further expansion because demand for Hawaii is strong.” Visitor arrivals are expected to grow to a record 7.75 million this year, up 6.5 percent from 2011, according to an economic forecast released in May by the state Department of Business, Economic Development & Tourism. Flash back to 2008 and the Hawaii economic outlook wasn’t so bright after
GETTING MORE LIFT Total air seats to Hawaii: 2006 2007 2008 2009 2010 2011 2012
10,593,502 10,403,828 9,295,265 8,786,721 9,299,913 9,392,291 4,057,430 (through May)
Source: Hawaii Tourism Authority
STAR-ADVERTISER
the shutdown of Aloha and ATA airlines in the spring of that year. But HTA funded a promotional blitz by its marketing arm, the Hawaii Visitors & Convention Bureau, and the results are now coming to fruition, Mc-
Cartney said. “The concentrated marketing effort we took back in 2009, 2010 and 2011 is paying off and helped create demand, not just with the consumer but also with travel agents and whole-
Allegiant Air entered the Hawaii market in June, beginning service from Las Vegas and Fresno. Additionally, Allegiant plans to begin service to Honolulu and Maui in November from Bellingham, Wash.; as well as fly to Honolulu that same month from Eugene, Ore.; and the California cities of Monterey, Santa Maria and Stockton.
GAINING ALTITUDE Airline seats to Hawaii hit a trough in 2008 following the shutdown of Aloha and ATA airlines. The seasonally adjusted monthly scheduled seats to Hawaii.
Domestic International
Recession Aloha/ATA shutdowns
680,000 660 640 620 600 580 560 540 520 500 2004
2005
2006
2007
2008
2009
2010
2011
2004
2005
2006
2007
2008
2009
2010
2011
260 240 220 200 180 PHOTOS BY JAMM AQUINO / JAQUINO@STARADVERTISER.COM
Source: Monthly data through April 2012 from Hawaii Tourism Authority and seasonal adjustment by TZ Economics
STAR-ADVERTISER
salers,” he said. “We also had many, many meetings with the airline industry.” Airline seats, which include both scheduled and charter flights, hit a record 10.59 million in 2006 when visitor arrivals reached an all-time high of 7.63 million. But the number of seats coming into the state dipped to 10.40 million in 2007 and hit a low of 8.79 million in 2009 before beginning to increase. In February, HTA projected that scheduled airline capacity for 2012 would reach 9.99 million, up 7.7 percent from 2011. That number, which does not include charter flights, should now be higher this year due to expansion plans announced by several airlines since the forecast was released.
Through the first five months of this year, total air seats were up 4.5 percent to 4.06 million from 3.88 million in the year-earlier period. And earlier this month, HTA forecast that seats would be up 12.6 percent in the third quarter to 2.7 million and top the previous record level for a third quarter of 2.6 million in 2007. Hawaii economist Paul Brewbaker, though, says increased seats rather than the marketing deserves credit for the rebound. “Everybody in Hawaii's so-called visitor industry loves to think how important are our tourism marketing programs. Baloney,” said Brewbaker, principal of TZ Economics. “There isn’t a human on the planet
Passenger Danny Liebertz, wearing a New York Yankees jersey, got a lei from Hawaiian Airlines employee Peka Ah Yek before the airline’s inaugural flight to New York took off from Honolulu Airport on June 4. Top, a member of the Hawaiian Airlines flight crew boards Flight 50 at a gate emblazoned with a huge sign welcoming passengers.
that hasn’t heard about Hawaii, except for those we don’t care about. For a mature destination like Hawaii, it’s mostly about lift: the numbers of carriers and the numbers of seats the carriers commit to Hawaii. When Aloha Airlines shut down, understandably, rival carriers were not highly motivated to replace the lost lift in the early phases of an unfolding recession.” Brewbaker said the decline in tourism in 2008 wasn’t so much a function of travel demand as it was a consequence of a change in travel supply. “The same is true now, as tourism rebounds way faster than anybody would have predicted based on ‘the economy’ and presumed underlying travel dePlease see Page 34
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AIRLINES
INDUSTRY
—————
Continued from Page 33 mand associated with a weak economic recovery,” he said. Hawaiian Airlines, now in its 83rd year and the state’s oldest carrier, has become more than just a regional airline with new flights added this year to Fukuoka and Sapporo, Japan; New York; and Brisbane, Australia. Hawaiian also created a Maui hub to ease connections statewide by increasing service between Maui and other neighbor islands by 25 percent. In addition, the airline increased frequency to Maui from the San Francisco Bay Area, reintro-
“The increase in airlift we’re seeing at the moment is the result of pretty healthy demand, particularly overseas where the value of their local currencies have appreciated against the U.S. dollar over the last few years.” Mark Dunkerley Hawaiian Airlines President and CEO ————— duced nonstop service to Maui from Los Angeles and added new flights from San Jose, Calif., to Maui. “In the medium term, airlift follows the level of demand and the
accommodation capacity in the state so I don’t think that airlift drives the number of visitors,” Hawaiian Airlines President and CEO Mark Dunkerley said. “Airlift fol-
lows demand for the Hawaii vacation and the ability of the state to accommodate it. The increase in airlift we’re seeing at the moment is the result of pretty healthy de-
mand, particularly overseas where the value of their local currencies have appreciated against the U.S. dollar over the last few years.” Jet fuel prices also had
come down by midyear, bringing some relief — possibly temporary — to airlines who have had to turn to such ancillary items such as increased baggage fees to try to offset the high cost of fuel. At the end of June, the average price of jet fuel was trading at about $2.72 a gallon, down about 17 percent from peak levels of about $3.26 in March but still historically high, according to the U.S. Energy Information Administration. In Hawaiian’s case, it says every penny change in the average price of fuel affects its bottom line by $2 million on an annualized basis. Las Vegas-based Allegiant
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Air, which primarily connects secondary markets to leisure destinations, entered the Hawaii market for the first time this year and began service in June from Las Vegas and Fresno. Allegiant plans to begin service to Honolulu and Maui in November from Bellingham, Wash., and to Honolulu that same month from Eugene, Ore.; and the California cities of Monterey, Santa Maria and Stockton. United Airlines, the world’s largest carrier, introduced the only nonstop daily flight from Dulles International Airport near Washington, D.C., to Honolulu in June.
Dunkerley said growth in the Hawaii airline industry and tourism will come from markets that represent developing sources of visitors as opposed to mature sources of visitors. “I would expect to see faster rates of growth out of Asia than the United States,” he said. “As a separate point, I think what’s happening in terms of East Coast service is we’ve always had a lot of visitors from the East Coast because, after all, it’s saying for the past two years the second-largest source of visitors to the state. What that Hawaii is on its radar the new service from Hawaiwith plans to acquire 74 Boeing 737-800s, but the Dal- ian and United have done is give those customers a betlas-based airline hasn’t yet pulled the trigger. ter way of getting here.”
—————
“There isn’t a human on the planet that hasn’t heard about Hawaii. … For a mature destination like Hawaii, it’s mostly about lift: the numbers of carriers and the numbers of seats the carriers commit to Hawaii.” Paul Brewbaker Principal, TZ Economics ————— Seattle-based Alaska Airlines, which flies 20 percent of its schedule to Hawaii, has been focusing on nonstop flights to neighbor islands and this year added
service to Kauai from Portland, Ore.; to Kona from Anchorage; and to Maui from Bellingham, Wash., in addition to service from Oakland and San Jose to Honolulu.
Join Our Local Team
Interisland carriers go!, Island Air and Mokulele Airlines also have been expanding service. And discount carrier Southwest Airlines has been
MDX Hawai‘i is a health care third party administrator offering clients services such as access to our provider network, care coordination, claims processing and customer servicing. Together with our parent company, Medical Data Exchange (MDX) of California, we offer a variety of state-ofthe-art physician-directed products, including Practice Management Solutions. We have over 25 years of experience in serving the people of Hawai‘i. MDX Hawai‘i invites you to grow with us in a company where you will find opportunities to develop new skills and to discover your own potential.
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 35
RETAIL INDUSTRY
BY KRISTIN CONSILLIO KCONSILLIO@STARADVERTISER.COM
CHAIN, CHAIN, CHAINS Large national retail stores are making their way to the islands A flood of national retailers has opened in the islands in recent years, and more chains are eyeing the Aloha State for potential expansion. Hawaii has become an attractive choice for retail giants exploring ways to increase revenue in new lucrative markets. Target Corp., T.J. Maxx and Safeway are just a few of the national chains that have opened new stores here. T.J. Maxx, a discount retailer that left the islands in
1996, even made a decision to re-enter the market this year despite expansion from rival Ross Dress for Less, which has 13 stores in Hawaii, according to the company website, with two more on the way. The retailer, part of the TJX Cos. Inc. based in Framingham, Mass., opened three Hawaii stores within the same month at Ward Centers, Pearl City Gateway and Pearlridge Center after a 16-year absence.
Meanwhile, Victoria’s Secret opened its third Hawaii store at Pearlridge Center in June and Ala Moana Center welcomed the state’s first Bath & Body Works a little more than a year ago. “Overall you’ve got to look at our marketplace. It has limited competition. If you’re only one of two retailers that provide this type of goods, you pretty much have the opportunity to capitalize on (that),” said Mike Hamasu, director of consulting and re-
search at Colliers International. “Generally what you have is an opportunity to capitalize on a captured market because you couldn’t drive to the Big Island or Maui to buy something. You’re stuck on this island.” Retail sales in Hawaii grew to $27.8 billion in 2011 from $24.3 billion the previous year. Other big-name retail chains that have been interested in developing a local presence include Kohl’s,
Bloomingdale’s and H&M, according to local real estate brokers. Hawaii also has seen significant investment by shopping center developers such as General Growth Properties Inc., which is spending an estimated $500 million to buy back the Ala Moana Center lease from Sears, and redevelop the site for a more profitable use, according to New York investment banking and equity research firm Sandler O’Neill & Partners LP.
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Retail sales in Hawaii grew to $27.8 billion in 2011 from $24.3 billion the previous year.
store will occupy. Property Development Centers plans to build a $50 million retail complex on undeveloped land across Kapolei Parkway from the Kapolei Commons shopping center; as well as the proposed Puunene Shopping Center on
The Chicago-based mall owner is planning an expansion of the Sears wing that will extend the retail footprint of the state’s largest mall out to Piikoi Street and up four levels, doubling the retail space at the Ewa end of the mall, according to a General Growth site plan. Meanwhile, Safeway Inc.’s real estate development arm is busy building new shopping centers, some of which the grocery
CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM
Retailer T.J. Maxx opened three stores in Hawaii this year, one of several national chains expanding in the islands.
Maui, where Target has agreed to open its fifth Hawaii store. Other pending projects include a shopping complex in Ewa Beach that is under construction and one on Kauai that is nearing construction. In addition, DeBartolo Development LLC recently announced retailers that will occupy the initial phase of an envisioned $350 million regional shopping center in East Kapolei called Ka Makana Alii.
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H O N O L U L U S TA R - A D V E R T I S E R > > S U N D AY 7/ 2 2 / 1 2 37
WITH MORE LOCAL FAMILIES TURNING TO ALOHA UNITED WAY, WE’RE TURNING TO YOU. Please give through your workplace campaign this year or directly at auw.org.
TO HELP OUR SENIORS RIGHT NOW, SIMPLY TEXT KEYWORD *
“AUW” to 27722
TO DONATE $10 TOWARD CRISIS SERVICES FOR HAWAII SENIORS.
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Kumabe HR is the emerging leader in Staffing and Human Resources Consulting in the state of Hawaii with a focus on Temporary Staffing, Executive Recruitment and Human Resource Consulting Solutions.
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Dollar Rent a Car and Thrifty Car Rental has immediate openings for individuals who don’t mind working hard, like to have fun and enjoy providing helpful and friendly service.
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The Plaza at Moanalua, a brand new assisted living community, is planning to open this fall. We are now accepting resumes for management positions. Interested candidates should send resumes and salary requirements to
jobs@plazaassistedliving.com No phone calls please. Positions available are as follows:
Positions Available at Honolulu Airport
CAR RENTAL SALES AGENTS CAR WASH AGENTS Excellent Benefits
★ Medical, Dental & Vision ★ Employee Incentive Plan ★ Tuition Reimbursement ★ 401(k) Plan & Co. Match
Business Office Manager Marketing/Admissions Director of Nursing (must be RN) Director of Maint. & Housekeeping Activity Director Receptionist Charge Nurse (LPN or RN) Resident Care Aide Housekeepers Cooks Utility Workers Servers Activities Assistants Driver
Interested applicants should apply on-line at www.dtag.com
visit us at www.plazaassistedliving.com
or apply in person between the hours of 11 am & 3 pm at: Dollar Honolulu Car Return Facility
The Plaza Assisted Living is also accepting resumes for our Administrator -in-Training program. For other job opportunities Please send AIT resumes to
An Equal Opportunity Employer
tricia@plazaassistedliving.com.
40 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
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By being green, we’re helping to keep the ocean blue. Long before “green” became fashionable, we began reducing our impact on the environment. With zero-discharge policies. A self-imposed Matson Environmental Protection Zone. New “green” ships. And a “green port” lease that set a new industry standard. We’re also proud to be a recipient of the prestigious Benkert Award for Marine Environmental Excellence, presented by the U.S. Coast Guard. The ocean is our livelihood. Keeping it clean is our passion.
For more information, call our Customer Support Center at (800) 4-MATSON or visit matson.com.
H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 41
Welcome to Waihonua at Kewalo HONOLULU’S HOTTEST NEW CONDOMINIUM
Inspired Design. Gracious Living. Waihonua is home for people who enjoy life. Everything you need is right in the neighborhood - restaurants to satisfy your every craving, sailing from Ala Wai Yacht Harbor, surfing at Ala Moana Beach, and fabulous shopping at places like Ala Moana Center and Ward Centers. Visit our Sales Gallery to learn more about these contemporary condominium homes in Kaka‘ako’s East End.
One, two and three bedroom condominiums available priced from $425,000*
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WAIHONUA SALES GALLERY OPEN DAILY, 10:00 AM - 5:00 PM 1311 KAPI‘OLANI BLVD, STE 104, HONOLULU 808.593.8945 | WAIHONUA.COM
Blvd .
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Hawai‘i Convention Center al i Can la Wa
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Waikīkī Yacht Club Magic Island Beach Park
Breaking Ground in September
Hawaii Yacht Club
Ala Wai Yacht Harbor
Exclusive Project Broker: Heyer & Associates, LLC. Courtesy to qualifying brokers.
*Estimated for completion in 2015. These images are for illustration only and the developer makes no promises about the locations, views, or amenities shown. Photos not taken on site. Unit availability and pricing change and the developer cannot guarantee that all units or prices mentioned in this ad will remain available for purchase. The developer assumes no responsibility for actions taken as a result of reading this ad. No content from this ad may be copied, republished, posted, or distributed in any way. Obtain the Property Report required by Federal law and read it before signing anything. No Federal agency has judged the merits or value, if any, of this property. 42 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 43
REAL ESTATE INDUSTRY
BY ANDREW GOMES AGOMES@STARADVERTISER.COM
POISED FOR A COMEBACK Oahu home prices are up so far this year and are forecast to continue rising By Andrew Gomes agomes@staradvertiser.com
8.7% Increase in the median price of single-family homes in the first six months of 2012 from the same period last year.
44
Local economists and real estate brokers like to say Oahu’s housing market cycle generally moves in the shape of a staircase: up, then across; up, then across. This year so far, a concensus appears to be building that the cycle is moving back toward, or into, the “up” phase. During the first six months of this year, the median price of single-family homes was up 8.7 percent to $619,750 from $570,000 in the same period last year. That’s the biggest rise since 2005. And if forecasts calling for continued gains are correct, the median home price will set a new record next year. Hawaii’s biggest residential real estate market has been in the “across” phase — actually a modest decline — slipping 11 percent over four years after the median home price peaked in 2007 at $643,500. It will be hard for the market to make a big enough gain this year to overcome the 2008-2011 decline, but if the present median price is sustained through December, the market would end the year about 4 percent shy of the peak. The University of Hawaii Economic Research Organization forecast in May that Oahu’s median home price will reach $649,000 next year, breaking the old record, and then keep rising to $700,000 in 2014. Local economist Paul
DENNIS ODA / DODA@STARADVERTISER.COM
Development projects are being proposed for the urban core, including the Ala Moana area, shown here.
Brewbaker of TZ Economics said low inventory, a dearth of new home construction, rock-bottom interest rates and an expanding economy have created a recipe for price appreciation. “We’re getting closer and closer to that moment when eventually home prices will break upward as they always have on Oahu in real estate cycles since the 1960s,” he said. One of the main factors putting upward pressure on prices is supply. The inventory of existing single-family homes and condominiums listed for sale at the end of June was 3,023, compared with 3,486 in the same month last year. Meanwhile, homebuilders
break ground later this year on a site between existing Hawaiki and Ko‘olani towers in Kakaako. The other two are a 210-unit tower called One Ala Moana on top of the Nordstrom parking garage at Ala Moana Center and a 400-unit tower called Symphony just Ewa of Blaisdell Center. At least four other towers from Kakaako to Waikiki are in less advanced planning THERE HAS been somestages and could add to the what of a high-rise condomix. However, building a minium boomlet forming, high-rise takes about two with three planned towers years, so delivery of any getting ready to begin sales new condo tower units or already selling units. won’t happen before 2014. One of the towers is WaiOther long-term housing honua, a 340-unit luxury condo that launched sales in developments include 11,750 single-family homes December and is slated to aren’t particularly busy, which means there isn’t a lot of new construction available for homebuyers. Ricky Cassiday, a local housing market analyst, said the big developers have yet to ramp up production after dramatically scaling back when the economic recession and real estate downturn hit several years ago.
and townhouses at Ho‘opili in Ewa, and another 5,000 homes at Koa Ridge in Central Oahu. But those two master-planned communities still need county zoning approvals and are a few years away from delivering homes if approvals go smoothly. Brewbaker said that last year was incredibly dismal for housing development — so dismal that there were only two other years in the past 70 years with fewer new homes authorized by building permit on Oahu: 1942 and 1943, during World War II. Major subdivisions adding new homes on Oahu include Mehana in Kapolei, Villages of
Kapolei, Kahiwelo at Makakilo, Sea Country in Maili, Ewa by Gentry in Ewa Beach and Ka Makana at Hoakalei in Ewa Beach. According to Cassiday, developers sold 1,584 homes statewide last year — the lowest total in more than 30 years, during which annual volume has ranged from a low of 2,063 in 2010 to a high of 5,857 in 1993. Demand for previously
owned homes also hasn’t been strong. Last year the number of sales was flat at about 7,000. That followed a 15 percent gain in 2010 influenced by a federal tax credit stimulus program that aimed to prop up housing markets. This year through June, sales of existing homes are up 0.4 percent for single-family homes and are down 3.3 percent for condos.
Developer Haseko Homes began sales in July of a new model in its Koa Lifestyle Series of homes with golf course views at Hoakalei Resort in Ewa Beach. This model with 2,612 square feet of living space is priced in the high $700,000s. COURTESY RENDERING
Saint Francis School (PK–12)
Education “ Quality Catholic in the Spirit of Joy.” St. Francis School, in beautiful Manoa valley, offers a liberal arts education that focuses on educating the well-rounded student. These individuals graduate to be confident global citizens who remain active lifelong learners. The year-round, co-ed curriculum begins in August for grades Pre-K to 12. St. Francis’ ethnic and religious diversity coupled with the Triple Crown Accreditation in Western Association of Schools and Colleges (WASC), Hawaii Association Independent Schools (HAIS), and Western Catholic School Association (WCEA) for the maximum period of six years prepares our students in a “college-like” campus and enhances our college preparatory curriculum. Exciting changes to the St. Francis School campus include new middle school classrooms, the construction of a multi-purpose facility, and an updated Elementary playground. For more information please contact: Fayth Paekukui, Admissions Director at 808-988-4111 ext. 712.
Saint Francis School • 2707 Pamoa Road Honolulu, HI 96822 • www.stfrancis-oahu.org H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 45
46 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
Grand Opening. 3 NE W GOL F COURSE MODEL S The gifts of Ka Makana continue to unfold. Introducing three luxurious Koa Series model homes, with authentic, Island-inspired designs and relaxed, indoor/outdoor living spaces that open up to spectacular golf course views. All within easy walking distance of the newly completed swim & tennis club. We invite you to come experience the very latest in year-round resort living at Ka Makana.
Models now open. Come tour the three new Koa model homes, including two Koa Lifestyle two-story plans and one charming Koa Premier single-story with beautiful golf course views. Models open daily from 10am to 5pm. From the high $700,000s (fs).
‘Ewa Beach, O‘ahu. Learn more at 808-689-4438 and at HoakaleiResidences.com. DIRECTIONS From H-1 westbound, take ‘Ewa (5A) exit. From H-1 eastbound, take Waipahu exit. Go south on Fort Weaver Rd. Turn right at Keone‘ula Blvd., and follow the signs to the Ka Makana Sales Pavilion.
3% broker participation. Broker must accompany client on first visit. A MASTER-PLANNED COMMUNITY BY HASEKO DEVELOPMENT, INC. All prices are subject to availability and change without notice. All square footages quoted are approximate. The Hoakalei Resort, including the major project amenities such as the lagoon, is currently in the planning stages and is subject to change without notice. The ownership of a home in Ka Makana shall not include any rights to use the golf course. Any membership and other use rights will be subject to such terms and conditions as may be established by the golf course owner. These materials shall not constitute an offer to sell or solicitation of offers to purchase in any state where prior registration is required. Offered by: Haseko Realty (Hawai‘i), Inc. 91-1001 Kaimälie Street, #205 ‘Ewa Beach, Hawai‘i 96706 Tel: 808-689-7772 ext 281.
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48 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 49
GROCERY INDUSTRY
BY MICHAEL TSAI
MTSAI@STARADVERTISER.COM
GROCERS GO MOBILE Social media is now an essential way for stores to connect with consumers
76 Number of acres in the average Hawaii farm growing produce that is in high demand at local grocery stores and restaurants
50
From the day she took over as marketing and community relations supervisor for Whole Foods Market Kahala, Natalie Aczon has preached the power of social media as a way of meeting the demands of a new generation of tech-savvy, information-driven consumers. So she was thrilled when the head of the seafood department came to her recently with information for a one-day sale on select seafood items. Whole Foods builds its brand and conveys retail information via Facebook and Twitter. And with an overstock of seafood in need of quick purchase, the immediacy of social media was just what Aczon needed. She quickly passed along the information in a tweet to Whole Foods followers. “Within seconds, literally, the seafood manager called me to say that a customer was there asking for suchand-such item for such-andsuch cost,” Aczon recalled. It turned out that Aczon had accidentally posted the store’s cost for the item, not the sale price. Aczon quickly deleted the post and tweeted a quick correction and apology, assuring customers that the store would honor the errantly posted price for anyone who had seen the original message. “The benefit, and the drawback, to this type of technology is that it’s instantaneous,” Aczon said. “The customer was right there in the store when she got the
EIGHT ESSENTIAL FOOD AND GROCERY APPS >> Grocery Pal >> Locavore >> Foursquare >> Savvy Shopper >> Consmr >> Fooducate >> Foodspotting >> Honest Label
CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM
Natalie Aczon, marketing and community relations supervisor at Whole Foods Market Kahala, uses an iPad app to relay information to shoppers. tweet on her smartphone.” Still, Aczon said, the store’s embrace of social media, mobile applications and other technologies has proved worth the occasional awkward moment, as Whole Foods Market Kahala has routinely outperformed the rest of the chain’s Southern Pacific region in one-day
sales and other events. It’s a reality with which local grocers are quickly coming to terms. As an industry, grocery retail has been tentative in exploring the ways mobile technologies can enhance sales and strengthen relationships with customers. But the proliferation of
smartphones, coupled with the desire of more and more consumers to buy local and to trace the farm-to-fork journey of their purchases, has created an adapt-or-die environment. Progressive companies are rewarded for making the practical and philosophical adjustments necessary to use such technologies effectively. Phil Lempert, a recognized industry expert and founder of Supermarketguru.com, said, however, the industry’s attempts to leverage social media, in particular, have been “mediocre at best.” “For now it’s the Wild West and everybody is ‘testing,’ ” he said, “Walmart does a great job, probably the best so far, with Whole Foods a close second. Others have failed miserably.” Lauren Zirbel, executive director of the Hawaii Food Industry Association, said Hawaii grocery retailers are at least on pace with their counterparts on the mainland. “Most everyone has a Facebook and Twitter account,” Zirbel said. “It’s becoming the primary way of
marketing themselves and it’s been effective in gaining customer support. A lot of businesses now have staff dedicated to using these kinds of technologies.” Safeway has invested significant resources in developing its Just For U digital coupon service as well as smartphone applications that allow customers to receive digital coupons and create their own shopping lists. A Safeway spokesperson declined to comment on Safeway’s recent technological forays but said the chain is aggressively trying to leverage various platforms to better serve its customers. Foodland Hawaii maintains a continually updated website and boasts high activity on its Facebook and Twitter accounts, engaging shoppers with sales announcements and reminders, special promotions, polls and foodie chit chat. Times Supermarkets has taken a more conservative approach to emerging technology but does maintain a website with information on sales and promotions as well as online coupons. Its Facebook page is used primarily to post its weekly Monday Morning Hookup specials. Whole Foods Market Kahala uses its Facebook page (to promote greater connection to neighborhood shoppers, each Whole Foods store maintains its own
page) to communicate the store’s organizational values and to foster close ties with its immediate community. It uses Twitter for quick, concise updates of sales and other events. Kokua Market in Moiliili focuses most of its immediate communicative efforts on its Facebook page and relies on its website for branding and general information. “It’s absolutely imperative for us to be able to commu-
nicate quickly with our customers and Facebook allows us to do that,” said Kokua Market general manager Lynette Larson. “It allows us to get the word out fast when we have something special, like we recently did when we got a shipment of fresh lilikoi. It would have taken a lot of time to update the website and there wouldn’t have been time to put it in the newsletter, but I was able to take a picture
—————
“(Social media sites are) becoming the primary way of marketing themselves and it’s been effective in gaining customer support. A lot of businesses now have staff dedicated to using these kinds of technologies.” Lauren Zirbel Executive director, Hawaii Food Industry Association —————
and post it on Facebook in a few minutes. It’s amazing how many responses we get, and how quickly we get them.” And while grocery retailers are learning how best to use the social networking tools available to them, they are also being compelled to recognize and react to the myriad of mobile applications with which their shoppers are now armed, such as Grocery Pal, which allows
users to compare prices and redeem coupons on their phone, or Savvy Shopper, which allows shoppers to scan barcodes to find the best deals. “Shoppers can now compare prices, product attributes, health and nutrition, even get ratings to help decide which products to buy and which stores to shop at,” Lempert said. Please see Page 52
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 51
GROCERY INDUSTRY
Continued from Page 51 Melanie Kosaka, founder of First Daughter Mediaworks and veteran observer of the local food scene, said she has noticed over the past two years a significant shift in attitude from local grocery retailers. “Markets are a lot more open to social media in particular,” she said. “A few years ago there was more pushback from the bigger brands who did not want to be targeted (for criticism). Now, they realize that people will say things even if they are not in the conversation, so they might as well be a part of the conversation.” That shift in attitude is also apparent in the willingness of several markets to work with Kosaka on her soon-to-be-released mobile application Lei Fresh, which allows users to find out where specific locally grown foods are being sold. The application also tracks farmers markets and has interactive features that allow for crowd-sourced updates. “One of the big challenges is that people want to buy local but it’s hard to know what is available at a store near them,” Kosaka said. “Here, the average farm is 76 acres, not 2,000 acres, so there is a variable supply of some produce. We felt that by using geolocation, we could help people to identify where these locally grown foods are right now.” To ensure information is as up to date as possible, Kosaka developed a system that allows grocers to update the availability of items with a single tap on an iPad. While grocers may have been hesitant to acknowledge the impact of mobile 52 H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2
CINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM
Kokua Market relies on Facebook and its website to distribute general information. Times Supermarkets, left, use the company website primarily to feature sales and promotions and offer coupons. —————
“Markets are a lot more open to social media in particular.” Melanie Kosaka Founder of First Daughter Mediaworks and veteran observer of the Hawaii food scene ————— JAMM AQUINO / JAQUINO@STARADVERTISER.COM
technologies on their business, Lempert foresees greater interaction between the industry, inventors and consumers resulting in scenarios straight out of science fiction. “It will move into more cost benefits, using the phone to compare, select and check out, and tying in to the customer’s frequent shopper program and profile,” Lempert said. “Plugging in allergens or ingredients to avoid and notifying you or your family members not to buy certain items. Your phone (will connect) to your fridge and cupboards with built-in scanners to automatically order certain staples that you never want to run out of, like toilet paper, paper towels, bottled water, milk, etc. You’ll just confirm your order on your phone and the store delivers.”
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Deanne August 6700 Kalanianaole Hwy. Ste. 207 Honolulu, HI 96825 (808) 395-5810
Bradley Maruyama Maruyama & Associates 800 S. Beretania St. #260 Honolulu, HI 96813 (808) 591-8016
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Manuel Buenconsejo 95-1249 Meheula Pkwy, Ste. 113 Mililani, HI 96789 (808) 625-7000
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 57
ENERGY
INDUSTRY
BY ALAN YONAN JR.
AYONAN@STARADVERTISER.COM
ALL ABOUT ALTERNATIVES The state’s energy sector embraces wind, solar, garbage and geothermal power
800,000 The tons of garbage HPOWER will burn annually at its expanded garbage-toenergy facility at Campbell Industrial Park in West Oahu
58
The push to generate more of Hawaii’s energy from renewable sources is picking up speed this year with a host of new green projects moving their way through the pipeline. The biggest single factor will be wind power, with the state poised to add more than 100 megawatts of generating capacity from projects on Oahu and Maui in 2012. Rapid growth of residential and commercial photovoltaic installations is continuing, while new wasteto-energy and biofuel projects are also on tap for completion this year. In addition, the electric utilities that service Hawaii island and Maui are seeking proposals from developers to expand the state’s electricity production from geothermal sources. HAWAII’S RELIANCE on high-priced oil for electricity generation has made the development of alternative energy sources attractive here. The additional investment needed to upgrade the state’s electrical grid to incorporate more renewable electricity will increase costs for ratepayers in the near future. But alternative energy proponents say reducing dependence on imported oil will provide more stable, and lower, energy prices over time. While much of Hawaii’s energy policy has been foCOURTESY FIRST WIND cused on developing renewable resources, officials also Kaheawa Wind, a 21-megawatt wind farm in the West Maui mountains, began are looking at bringing in nat- commercial operations this summer.
ural gas as a cheaper alternative to oil to satisfy some of the state’s energy needs. Wind and solar power, however, remain the dominant near-term responses to Hawaii’s dependence on fossil fuel. FIRST WIND LLC’s 69megawatt Kawailoa wind energy project, scheduled to begin operation on Oahu’s North Shore later this year, will be the state’s largest such facility. Boston-based First Wind also will begin operating a 21-megawatt expansion of its Kaheawa wind project this summer on a ridge in the West Maui mountains. And across the Valley Isle on the slopes of Haleakala, work has begun on another 21-megawatt wind energy project which Sempra Generation hopes to have completed by December. Both solar and wind projects present challenges for electric utilities because the energy they generate is intermittent, meaning the output can vary widely depending on uncontrollable events such as cloud cover and fluctuations in wind speed. Developers also are pursuing several renewable energy projects in Hawaii that will deliver a steady flow, socalled firm power, to utilities. The biggest is a 30-megawatt expansion of the HPOWER garbage-to-energy power plant due to be completed this summer at Campbell Industrial Park in West Oahu. The expanded
facility will burn more than 800,000 tons of garbage a year and supply 8 percent of Oahu’s electricity needs. The electric utility on Hawaii island, which already absorbs the highest amount of renewable energy in the state, has agreed to add 21.5 megawatts of firm generating capacity from a company that will produce power by burning locally grown eucalyptus trees. The project being developed by Hu Honua
Bioenergy will produce enough power to supply 10 percent of the island’s energy needs. Hawaii island also is home to the state’s newest and largest biodiesel plant. Pacific Biodiesel, founded on Maui 15 years ago, recently held a grand opening for a plant on Hawaii island that can produce 5.5 million gallons of biodiesel a year from a variety of feedstocks, from restaurant oil waste to seed
crops such as jatropha. The biodiesel can be burned in vehicles or machinery that run on petroleum-based diesel. KELLY KING, Pacific Biodiesel’s director of communications and marketing, said the company has been able to maintain steady growth by keeping focused on what businesses and individuals have demanded in the way of liquid biofuel.
—————
“We call it the triple bottom line: the environment, the economy and social benefits.” Kelly King Pacific Biodiesel spokeswoman on the company’s working philosophy —————
Many of the companies that pursued other petroleum alternatives in the past, such as ethanol, have disappeared, she said. “A lot of people jumped on the bandwagon five or six years ago. People were investing almost blindly, jumping into the fray to make money,” King said. “Now we’re getting back to what makes sense. We call it the triple bottom line: the environment, the economy
and social benefits.” Hawaii island also lays claim to having the state’s only geothermal plant, a facility owned by Puna Geothermal Venture that produces 38 megawatts of firm power. Hawaii Electric Light Co. is preparing to seek bids from developers to supply another 50 megawatts of geothermal generating capacity on the island. Maui Electric Co. also is looking to add geothermal power to its energy portfolio.
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HI-TECH INDUSTRY
BY MICHAEL TSAI MTSAI@STARADVERTISER.COM
NURTURING HIGH-TECH HOPES Young entrepreneurs are taking a chance despite an uncertain business climate
$2M The amount alloted to a venture accelerator funding program approved by Gov. Neil Abercrombie.
62
As the co-founders of Maui-based Flikdate tell it, the most buzzed-about new dating app in Techville was born of one brilliant idea and a bunch of stick figures on a whiteboard. “It truly was just a conversation in front of the board,” Lauren Lin said. “We brainstormed ideas and concepts. We drew stick figures and asked questions like, ‘How will we know if it will work?’ After that it was a lot of nights and weekends over pizza and wine fleshing it out, just building the brand and the application.” Flikdate, a soon-to-belaunched mobile application that promises anywhereany-time “dating” via realtime video, was first conceived by Arben Kryeziu and Nick Bicanic, Lin’s coworkers at Bump Networks. “They brought this idea to us, and we just loved it,” said Kimberly Hunt, another Flikdate principal. “It’s developed into a really nice app.” Industry observers have touted Flikdate’s efforts to keep sexual predators from using the technology to make contact with potential victims, a hazard that has forced similar applications like the teen networking app Skout to suspend operation. But tech trackers in Hawaii are keeping tabs on Flikdate for an entirely different reason. Should the app fulfill its creators’ lofty expectations, it will serve notice to entrepreneurs and investors that
the high-tech industry in Hawaii is still viable more than a year and a half after the expiration of Act 221. “The industry is kapakahi right now,” said Robert Kay, founder of Pac-Tech Communications and longtime chronicler of the local tech industry. “Things have really gone down because there is not the investment there once was. But what is different is that despite the pathetic state of the industry, a lot of startups are coming up and they’re being driven by young entrepreneurs, some of them right out of college.” While securing funding beyond the seed and startup stages remains a significant challenge, Kay said it’s a
Kimberly Hunt of Flikdate says despite the loss of tax credits from Act 221, local startups can still benefit from business incubators and other infrastructure previously created by government investment. “Anything helps when you get started,” she says.
worked in the visitor industry for a time before joining Bump Networks as a project manager. Hunt holds a finearts degree in design but now devotes her time to developing mobile applications. Like most startups, Flikdate was initially funded through the traditional three F’s: friends, family and fools. In their case the “fool,” an affectionate term for an angel investor, was an international sponsor secured through Flikdate’s broad network of connections. Beyond the all-important proof-of-concept stage, the company will need to seek deeper funding, likely from a mix of local and internaCOURTESY PHOTO tional investors. “I think what we are showing is that a good idea can cause for great optimism that a new generation of en- be born anywhere and funded from anywhere,” Lin trepreneurs is rising to the said. “Operating out of Maui challenge of an uncertain can be difficult at times bebusiness landscape. “What’s cool is that these cause we still lack a community of peers. In that sense are normal everyday kids, from families just like yours we’re still maybe a half-step and mine, who are going out behind. But you can be very successful from Maui if you and getting it done,” Kay said. “This is not Silicon Val- have the connections to take you to the next step.” ley — there are not the Hunt said despite the loss same resources here — but of tax credits made possible these young entrepreneurs are sticking their necks out, by Act 221, local startups getting loans and other fund- can still benefit from busiing, and succeeding as pure ness incubators and other infrastructure created durstartups.” ing previous governmental Neither Lin nor Hunt investments in the industry, comes from a tech backand from new investments, ground. Lin was a business such as the $2 million venmajor who got her feet wet ture accelerator funding as a webmaster as a way to earn money for college. She program recently approved
w by Gov. Neil Abercrombie. “Anything helps when you’re getting started,” Hunt said. One offshoot of the new age of networking and collaboration has been a shift in focus from pure commerce to business with a social conscience, according to Kay. “The main difference I see between the new breed of entrepreneurs versus the people I saw in the ’90s is that the newer entrepreneurs share more of an interest in community service,” said Kay, who also serves as an adviser in Chaminade University’s Hogan Entrepreneurial Program. “Thus, the theme of social entrepreneurship is more of a factor. Community service is a bigger part of the equation than it was 10 or 15 years ago. … I think this is a wonderful development.” In the past year, young entrepreneurs have been aided in their networking efforts by the establishment of several so-called co-working spaces, in which a variety of individual professionals and small businesses share office space but work independently. The first and most prominent on Oahu was started by Tony Stanford and Rechung Fujihira, both graduates of the Hogan program. The Box Jelly, on Kamani Street in Kakaako, is home to a diverse mix of young professionals, including wedding planners, photogra-
DENNIS ODA / DODA@STARADVERTISER.COM
phers, a nonprofit company, designers, programmers and hardware engineers. “It was an idea I picked up during my travels, but it was solidified and executed while I was at Hogan,” Stanford said. “We didn’t want to just talk about doing something; we wanted to go out and do it.”
The Box Jelly is a flexible shared workspace that started inside the art gallery/furniture store Fishcake. The concept became so successful that the co-founders, Rechung Fujihira and Anthony Stanford, decided to increase the space. Seated at the table are, clockwise from left, Travis Ryan, Stanford and Fujihira.
Stanford said he drew inspiration from Eric Ries’ book “The Lean Startup,” the new bible for energetic young entrepreneurs willing to sacrifice to bring their ideas to fruition. “It would have been hard to do the traditional route of securing a five-year lease with money upfront and all
of that,” Stanford said. “What we were looking for was a viable, bootstrap way to launch. It’s all about providing core features to those who you think will be your customers. We looked at it from a number of leapof-faith assumptions and Please see Page 64
H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 63
HI-TECH INDUSTRY
level) funding. You need that proof of concept first.” To Stanford the Box Jelly is part of a rapidly developing infrastructure of coworking spaces, workshops, schools, meet-ups and modes of developing ideas. Stanford said sharing
Continued from Page 63
worked to develop what we considered a minimum viable product.” The Box Jelly is celebrating its first birthday this month, a significant milestone for securing future funding, Stanford said. “This last year was about showing stability to banks so we can then pursue loans,” he said. “Some of what we’ve done grew out of economic necessity, but it’s also about showing what we can do before moving on to accelerators and (higher-
Box Jelly co-founders, Rechung Fujihira, left, and Anthony Stanford stand in the small office in which they launched their company, which has now expanded to triple the size.
DENNIS ODA / DODA@STARADVERTISER.COM
space with professionals from other areas has a positive impact on the work that young high-tech entrepreneurs put forth. “We’re bringing together a community from different disciplines and networking with people who are outside our normal circles,” Stanford says. “When we talk and brainstorm with each other, we all get exposed to perspectives from different disciplines. Before, the tech industry in Hawaii relied on two or three golden eggs. Did that model fail? It’s hard to say, but now we’re trying something different.”
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 69
MOVIES & TV INDUSTRY
BY MIKE GORDON MGORDON@STARADVERTISER.COM
HAWAII STARS Hollywood’s love affair with the isles continues with “Five-0” and “Last Resort”
$155M The amount of film and television production spending in the first half of 2012
70
Hawaii’s film and television industry appears to be healthy as production crews prepare — for the third summer in a row — to begin work on a pair of network TV shows that will pour millions of dollars into the state economy. But it could get even better. As the CBS hit “Hawaii Five-0” prepares for a third season and ABC readies its drama “Last Resort” — the network’s third new series here since 2010 — the Hawai‘i Film Office is awaiting final word about a third series. “It would be a major production,” said Donne Dawson, state film commissioner. “It will be difficult for us to land it but we definitely have a third show looking at us.” Dawson declined to elaborate further but hoped to know the fate of the new series by the end of July. Securing a third series would be a good start for Dawson, who was laid off during state cutbacks in 2009 but given back her old job this May. “Things are at that very delicate stage of looking,” she said. Television production has dominated 2012 but as long as viewer ratings hold up, hosting the production of a TV series is like owning the goose that keeps laying golden eggs. In general, a network will spend between $2 million and $2.5 million an episode, with much of that staying in
COURTESY PHOTO
A third television series might begin production in Hawaii, making for an even healthier film and television industry for the state. Grace Park, left, Alex O’Loughlin, Daniel Dae Kim and Scott Caan shoot a scene at the Four Seasons Resort Hualalai on Hawaii island.
the local economy. Last season, 23 episodes of the popular CBS police drama “Hawaii Five-0” were shot. Dawson said that ABC has ordered 12 episodes of its new submarine series “Last Resort” and has contracted with Sony Pictures Television to produce the series at Oahu locations that include the state film studio at Diamond Head. “Last Resort” is ABC’s most recent attempt to find a successful series it can base in Hawaii. After ABC ended the popular series “Lost” in 2010, it tried twice to create successful dramas in Hawaii: “Off the Map,” which aired in 2011, and “The River,” which aired earlier this year. Both were canceled. But consistently hosting a second series is a good measure of industry stability, said Walea Constantinau, Honolulu film commissioner. Although Hawaii briefly hosted three series in 2004, having more than one production in town is a recent phenomenon, she said. “We are part of the discussion and we continue to mine opportunities,” she said. “If you are not able to have those discussions and be on the radar and be part of the dialogue, you are out of the game. This shows we are in the game.” Similarly, statewide production spending in the film and TV industry has continued to show growth, Constantinau said. Prior to
the introduction of tax incentives in 2006, it was unusual to have a year with $100 million in production spending. Now the state annually hovers between $180 million and $200 million. “There is no doubt there will be fluctuations just as there are in other industries but our base level of what we consider to be our annual production spending is
rising and all of that is a great sign of growth,” Constantinau said. State film office figures through the first half of this year show $155 million in production spending, which is about the same as it was this time last year, said Georja Skinner, administrator for the state’s creative services division, which oversees the Hawai‘i Film Office.
—————
“A series is the bread and butter of our landscape. We are fortunate to have two.” Georja Skinner Administrator, Hawai‘i Film Office —————
“With two series coming in July, we should have a pretty solid year,” Skinner said. “A series is the bread and butter of our landscape. We are fortunate to have two.” Hawaii actors also are benefiting from the current production climate and especially from “Last Resort,” said Scott Rogers, a local acting coach who sits on the national board of directors for the actors union, SAG-AFTRA.
The series, whose episodes begin filming July 30, cast Hawaii actors as series regulars, Rogers said. “No one has auditioned for series regulars here,” he said. “That was unheard of.” Rogers regularly teaches acting classes across the country and has not encountered a working environment similar to what Hawaii is experiencing — even in Portland, Ore., which is
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our water a precious resource. July is national Smart Irrigation Month and the beginning of Hawaii’s summer warm season. Now is the perfect time to tune up your home irrigation system and help conserve Hawaii’s precious drinking water. Landscape irrigation uses upwards of fifty percent or more of our
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Tip #6 Mulch plantings a minimum of 2 inches.
5 Replace your irrigation controller with a Smart Controller, which operates by scheduling watering based on weather conditions. 6 Mulch plantings and refresh as necessary to maintain a minimum of 2 inches. 7 Use drip irrigation for individual specimen ground covers, shrubs, and trees. 8 Install sprinklers with check valves in low-lying areas to prevent ponding & run-off. 9 Plant drought tolerant or “less thirsty” plants. Minimize lawn areas. 10 Hire a certified landscape professional to help you. Tip #7 Use drip irrigation for individual specimen plants.
For all 26 irrigation conservation tips, download the new LICH Landscape Irrigation Conservation Best Management Practices at www. LandscapeHawaii.org. Water is a precious resource for our sustainable future. Please do your part to conserve our drinking water.
Chris Dacus is the President of Landscape Industry Council of Hawai’I (LICH). Hawaii’s landscape industry is one of the fastest growing and largest segments of the green industry with an economic impact of over $520 million annually and full time employment of over 11,000 landscape professionals.
H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 73
BANKING INDUSTRY
BY DAVE SEGAL
DSEGAL@STARADVERTISER.COM
BANKING ON RECOVERY Island financial institutions are poised to benefit from a rebound in construction
$40.7B Value of the assets of Hawaii’s top five banks as of March 31
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It’s harder for banks to make money in a low-interest-rate environment, but executives at Hawaii’s two largest financial institutions say an improving state economy and a pickup in construction should keep the momentum going. Low numbers of mortgage delinquencies and foreclosures have created a better credit scenario for local banks, which don’t have to worry as much about defaults as do their mainland counterparts. Construction projects in Kakaako and future Koa Ridge and Ho‘opili developments in Leeward Oahu could provide the tonic to fuel lending. “I think that Hawaii’s economy has fared better than many economies on the mainland,” said Peter Ho, chairman, president and CEO of Bank of Hawaii, the state’s second-largest bank in assets. “This has created a better banking environment for Hawaii banks. As we look forward, we continue to see strong results in tourism in the visitor industry, and hopefully that will help keep the economy moving while we get some of these construction projects off the books and into construction.” Ho said that as long as the economy continues to remain stable in Hawaii, credit quality will remain benign. Still, there are some conFL MORRIS / FMORRIS@STARADVERTISER.COM cerns. Analyst Aaron Deer of San Francisco-based inFirst Hawaiian Bank CEO Bob Harrison says he hasn’t changed lending standards vestment bank Sandler despite the economic slowdown.
O’Neill & Partners LP said the spread between banks’ lending rates and deposit rates is putting considerable pressure on all banks’ net interest margins. “This is by far the biggest challenge facing the banks, and it’s making revenue growth very difficult,” said Deer, who covers Bank of Hawaii, Central Pacific Bank and Territorial Savings Bank for his firm. “However, with the Hawaii economy gaining momentum, the banks are benefiting from slightly improved loan demand from both commercial and retail customers. And, the improving economy means fewer borrowers are falling behind on loan payments, so credit losses continue to decline.” Hawaii economist Paul Brewbaker says local banks may be too cautious about lending despite the low number of mortgage delinquencies and foreclosures compared with the mainland. “Lenders perceive a more risky environment in Hawaii even though we’re better off measurably,” said Brewbaker, principal of TZ Economics. “The perception is that things aren’t that good.” But Ho and First Hawaiian Bank President and CEO Bob Harrison say they haven’t changed their lending standards during the economic slowdown, and Deer disputes a widely held perception that banks are reluctant to lend. “Loan growth is a chal-
L
new car or house. Still, things are improving — slowly — and the banks are eager to lend to good borrowers, so as the economy accelerates I expect loan growth to pick up.” Until then, deposits continue to grow at Hawaii
lenge across the industry, not because the banks are unwilling to lend, as the pundits like to suggest, but rather because loan demand is so weak,” Deer said. “Both businesses and consumers continue to deleverage (pay down debt on) their balance sheets, and with so much uncertainty in the global economy, there’s not much confidence to invest in new equipment or to buy that
BRUCE ASATO / BASATO@STARADVERTISER.COM
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Peter Ho, CEO of Bank of Hawaii, in his office at the Bank of Hawaii tower.
banks as wary customers keep their money in shortterm liquid investments. Harrison said First C Hawaiian, the state’s largest bank, has “quite a bit of money” to lend, and he’s pleased with the bank’s 2 percent loan growth in the current economic environment. He said the outlook is getting Please see Page 76
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BANKING INDUSTRY
MANAGING MONEY The top five Hawaii banks, ranked by assets, as of March 31: BANK
1. First Hawaiian Bank* 2. Bank of Hawaii** 3. American Savings Bank 4. Central Pacific Bank 5. Territorial Savings Bank
BRANCHES
ASSETS
DEPOSITS
63 81 57 34 27
$16.1B $13.8B $5.0B $4.2B $1.6B
$12.4B $10.6B $4.1B $3.5B $1.2B
* Includes five outside the state; ** Includes 11 outside the state Source: Individual banks
residential loans. A ramping up of the rail transit project could breathe life into the weak better with the improveconstruction industry and, ment in tourism and some developments getting close in turn, boost lending at Hawaii banks, said Leroy to beginning construction. Laney, an economic adviser However, he said stricter to First Hawaiian and a profederal documentation refessor of economics at quirements have made it more difficult to underwrite Hawaii Pacific University.
Continued from Page 75
LOANS
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“I don’t think there’s any doubt that something like that would be a shot in the arm for the construction industry,” Laney said. “The neighbor island construction industry is really in the doldrums. There’s not much activity going on there. Most of the construction you see is on Oahu.”
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H O N O L U L U S T A R - A D V E R T I S E R > > S U N D A Y 7 / 2 2 / 1 2 79
EDUCATION INDUSTRY
BY MARY VORSINO MVORSINO@STARADVERTISER.COM
LEARNING TO ADAPT
Systemwide in fall 2011, the University of Hawaii offered 821 online courses, a fourfold increase from 2006. And more than 50 credentials or degrees can now be earned, in whole or in part, through distance education. At KCC alone about 180 online courses and 20 “hybrid” courses, which include a mix of online and face-toface work, are now offered. That’s about 22 percent of all KCC classes. Other Hawaii universities are also expanding their online presence. Hawaii Pacific University will offer 268 online classes DENNIS ODA / DODA@STARADVERTISER.COM in the fall and also has a number of online degrees. Students can take online classes wherever they take BYU-Hawaii is advertising their computers. Kapiolani Community College now more than 50 online courses offers about 180 online courses. for the fall semester. Morton said while instituNUMBER OF UH ONLINE ing initiatives, and now intions need to continue to structors who teach online COURSES OFFERED better prepare students for can earn a special certifica1,000 the unique challenges of tion. About 120 KCC faculty 862 Web-based courses, it’s have already done so. 821 800 clear that online education The considerable growth in online college courses and will continue to grow — and 682 evolve — in the future. programs locally comes as He said more online higher-education institutions 600 classes will undoubtedly insee enrollments rise amid corporate simulations, gamthe economic downturn. ing and other interactive Many people have gone 400 380 elements, and added the disback to school to build on 338 skills or retrain for new pro- cussion in coming years will fessions. And online courses not just be about online in207 200 2007 2009 2011 struction, but about “what are a particularly popular Source: University of Hawaii the online world does to choice for nontraditional STAR-ADVERTISER students who often can’t ateven on-campus education. tend school during the day. It’s going to change the way people learn, period.” For space-strapped instiOver the past decade, KapiMorton and others also tutions, online courses have olani has embraced online edalso proved vital to tackling pointed out that online ucation, in part, because learning is not for everyone. the increased enrollments. administrators see it as a way Students who struggle John Morton, vice presito help more nontraditional dent for UH community col- with time management students access KCC courses. probably aren’t a good fit. leges, said there’s “no way” But early on, Richards Neither are students who community colleges could said, KCC faculty members have accommodated the 36 aren’t self-motivated. were concerned online eduAnd that, KCC student percent increase in students cation could affect the qualKarly Yoshimura says, is over the past four years ity of courses. So the why she has steered clear of without expanding online campus launched new trainonline courses so far. education offerings.
The explosion in online education requires new ways of reaching students, experts say
821 Number of online classes offered systemwide by the University of Hawaii in fall 2011
80
At several Hawaii postsecondary institutions, students can now earn entire degrees without ever setting foot on campus. The number of online courses at University of Hawaii campuses has skyrocketed, and now accounts for more than a fifth of all classes at Kapiolani Community College alone. And K-12 schools are increasingly turning to Webbased programs for supplemental tools, credit recovery or to offer specialized courses that they otherwise couldn’t. Simply, online education is “growing phenomenally,” said Ellen Hoffman, chairwoman of the Educational Technology Department at the University of Hawaii’s College of Education. She added, “You’re definitely going to see more of it.” But amid the growth, experts are urging caution. Online education, they say, calls for new ways of teaching, motivating and interacting with students. It can’t just be about students staring passively at a screen and ticking off assignments. “The idea that a student is going to sit down there by themselves and do a good job just because they have a computer in front of them really is kind of naive,” Hoffman said. KCC Chancellor Leon Richards, whose goal is to see about one-third of all classes at the campus move online, agreed. “It cannot be the same as a face-to-face (course),” he said.
“I’m afraid to take them,” the 30-year-old said. “You’ve got to have the initiative to do it yourself. You have to remember to check the site.” Yumiko Maruyama, a Japanese national who is studying marketing at KCC, said she has taken a few online courses but opted for the in-person variety for those she knows she’ll need extra help in. “It depends on the class,” she said. While online education has become commonplace for many Hawaii college students over the past decade, it has been slower to take at the K-12 level. But there are signs of new growth. The Department of Education plans to expand its e-school program this school year by as many as 1,000 students, to 2,500. And many public schools are using online credit recovery courses to help students who have failed one or more classes. (Hawaii also has two charter schools that are online.) Meanwhile, several Hawaii private schools are planning to expand the use of Web courses as a way of diversifying their offerings. And many are incorporating online learning into face-toface classes or using online courses for enrichment. Hoffman, of the UH College of Education, stressed Webbased learning has the power to transform education, but not if the only change is that instruction happens online instead of in person. “We ought to be talking about what is the potential of technology to help students get where they need to be,” she said. “Simply replacing a teacher with a computer … ignores all the different elements that have to occur for learning.”
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Others have reported a fairly rapid improvement in cholesterol, blood pressure, headaches, fibromyalgia, joint pain, heartburn, asthma, autoimmune disease, and other conditions. Many of the participants Britannica: “Startling Results” in the program reported needing less med4th Leading Cause of Death “The clinical results of the program were startling.” – says the section in the ication for these conditions. Of course, inYou are not alone if being on medicadividual results vary. tion is your concern. A recent article in Encyclopedia Britanica about the Prothe Journal of the Amercan Medical As- gram created by Hawaii’s Dr. Terry Shin- More Than Testimonials tani. They went on to say: “Perhaps sociation suggests that prescription Consumers should be aware that testimomost astonishing, however, was that medication may be the fourth leading nials alone without scientific publications many in the program were able to cause of death in the U.S. In other achieve control of a number of hitherto to back them up may simply be a sales words, in all too many cases, the treatpitch. Unlike most of the doctors who conment is worse than the disease. And giv- intractable health problems. Several duct health programs, Dr. Shintani has scipeople with diabetes no longer needed ing more medication is not always the entific publications to back up his many insulin or oral medication after two best answer. testimonials, and has won numerous weeks.” awards for his work including a national Pills Don’t Cure award from the U.S. Secretary of Health Medications do play an important Newsweek: “Miraculous” and Human role–to mitigate symptoms and the “The results are miraculous.” These Services. damage caused by disease.And you were the surprising words Newsweek should take your medications as preused in describing Dr. Shintani’s proLong-Term Effectiveness scribed by your doctor. But they are rarely gram. They went on to say: “… some A question that always comes up with the “cure” of most disease we suffer today. of Dr. Shintani’s patients sound as In fact, even if you take your medication though they’ve been to Lourdes… ‘On programs such as Dr. Shintani’s is the exactly as prescribed , by definition, you the fifth day of the program, [Dr.Shin- long-term effectiveness. There are a lot of are still sick - because you still need med- tani] called me at work and told me to programs that can demonstrate weight loss or blood sugar control over a short period ication. stop taking insulin. My blood sugar of time. But unlike most programs, Dr. was normal.”
Shintani published the long-term effectiveness of his Program. His 7-year follow up publication shows that the average retained weight loss was nearly 15 lb. This is better than virtually any program in the nation.
Participant’s Comments “I was on 120 units of insulin When I started the program. Now I don’t need any” ~ Jeanette R.
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