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The Year Ahead

Maui’s economy finally shows tentative signs of recovery.

January 3, 2013
Susan Halas - Senior Contributing Writer ( , The Maui Weekly

Springtime in paradise? Well perhaps that's overstating it a bit, but after some of the most difficult years in recent memory, Maui's economy is finally showing tentative signs of recovery.

Looking for indicators that new growth is underway? Just watch the lines at the recently completed gas outlet at Costco, not to mention the much-enlarged parking area and the very busy expanded main building.

Over in Maui Lani, the new large LDS Church is finished and the steel frame of a new Ace Hardware and other buildings under construction dot the landscape nearby.

Article Photos

Over in Maui Lani, the new large LDS Church is finished and the steel frame of a new Ace Hardware (above) and other buildings under construction dot the landscape nearby--examples of the signs economic of life starting to emerge around the landscape.
Photo: Susan Halas

Though $200 million in Kihei outlet and retail mall construction is currently stalled in proceedings before the state Land Use Commission (which will resume this month), work seems to be moving ahead to refurbish the Lahaina Center shopping complex on Front Street for similar outlet mall use. In fact, plans for new construction--both public and private--are inching forward in practically every part of the county.

Visitor Numbers Strong

The tourism numbers just released are making the folks in the visitor industry smile, November spending for 2012 came in double-digits higher than the same period a year ago, and there are new routes and increased direct flights between the Mainland and Maui.

The head counts from Hawai'i's traditional markets are rebounding and there are substantial increases in traffic from areas such as Korea. Can it be much longer before the glitches in the visa process are worked out between the U.S. and China, and Hawai'i hosts the next wave of Asia-Pacific visitors yearning to feel sand between their toes?

How good is it? Total expenditures by visitors who came to Maui for the first nine months of 2012 has reached $2.7 billion--19.9 percent more than the same time last year, according statistics released by the Hawai'i Tourism Authority (HTA) earlier in the year.

Statewide, visitors to Hawai'i spent $1.1 billion in November, which is $208 million more than last November, while the number of arrivals was up 14.5 percent to 651,158, the HTA reported on Dec. 27.

According to a Pacific Business News story, "In July, the HTA board of directors approved aggressive targets to reach 7.89 million visitors and $13.9 billion in expenditures," said President and CEO Mike McCartney. "At the current pace, we anticipate reaching, if not exceeding, these targets."

The Maui real estate numbers, while still not robust, are starting to turn upward.

When construction, tourism and real estate improve, can an upturn in the local economy be far behind?

For a look at how 401 state employers see the state's business climate, take a look at the Hawai'i Business BOSS survey (

Is the Economy Really Improving?

If past history is any indication, the answer is "yes" and "no--or a little of both. While the worst seems to be over, local business owners who spoke with the Maui Weekly continue to worry about the regulatory climate and what they perceive to be a new wave of tax and fee increases coming our way from every level of our government.

As we go to press, there is still no resolution to the "fiscal cliff" drama playing out in Washington with its potential to increase the taxes paid by all Americans and frost the first signs of economic life emerging from the struggling private sector.

And then there's Hawai'i's traditional image problem in the business community. Hawai'i is ranked 41st out of 50 in a recent survey of the "Best Places to do Business in the U.S." Looking on the bright side, bad as it was, that's up two notches from its rank of 43rd last year (

Energy Issues

Locally, we think energy will continue to be a top story in 2013.

Coming soon in Maui Weekly will be a series of articles documenting the face-off between local consumers who want to reap the benefits and tax credits that come from installing rooftop photovoltaic (PV) panels and the local utility, which claims that many, if not all parts of the island, have reached their grid limits.

The dispute is made more complicated by a host of technical issues, reams of regulations and credibility gaps on both sides of the issue. However, the scenario as it is now unfolding provides a glimpse of yet another two-tier future set against the background of some of the priciest kilowatts in the U.S.

If you're a local resident who has been turned down for a PV hookup, we'd like to hear from you ( or

But it's not just the small residential energy systems that are in the news. The end of 2012 brought the announcement that the 21 megawatt Auwahi Wind Farm is now operational. The project includes eight new wind turbines located on the southeast ridge of Haleakala. The power from Auwahi Wind has been sold to Maui Electric Company (MECO) under a 20-year contract. The turbines will generate enough electricity to power about 10,000 typical Maui homes (see "'Ulupalakua Wind Farm Completed" on page 3 for more information).

On the Political Side

That great sucking sound you hear is not the wind turbines generating power, it's the power vacuum created by the death of Hawai'i U.S. Sen. Daniel Inouye and the subsequent game of musical chairs that ensued in filling the vacancy.

Named to the spot of senior U.S. Senator was Brian Schatz, who was, until late December, Hawai'i's lieutenant governor. As he winged off to Washington (catching a ride on Air Force 1), his old job went to Maui's Shan Tsutsui, who, until the shuffle, was president of the state Senate. Senate Vice President Donna Mercado Kim (District 14) has been selected as the to replace Tsutsui as president of the Senate and will preside during the 27th Hawai'i State Legislature, which will convene on Jan. 16, 2013. Who will be appointed to represent this district has not yet been announced as we go to press.

Back at the national level, with both Inouye and Sen. Daniel Akaka gone, Hawai'i falls from the lofty perch of high congressional seniority to virtually no seniority at all--all four seats in the state's delegation are filled with rookies or near-rookies. What that will do to the state's formerly healthy share of pork and perks is anyone's guess.

What is clear is that since Gov. Neil Abercrombie did not honor Inouye's dying wish to appoint Colleen Hanabusa to the U.S. Senate vacancy, a nasty in-house battle among various factions of Hawai'i Democrats may not be far off. Rumor has alpha-dog Hanabusa eyeing either the governor's own job or reclaiming the seat from Schatz in the next election--depending which version of the future is more credible as those elections come closer.

However, as the chain reaction plays out, South Maui residents will be following the money, particularly the recently announced $130 million Capital Improvement Project (CIP) request in the governor's budget for the long-awaited--but yet to be funded--Kihei High School.

This appropriation, one of the largest requests in the budget, is likely to be trimmed substantially as the upcoming legislative session moves along. Most insiders seem to think that while some funds will be allocated for the project, getting the whole big-ticket package in one lump sum is highly unlikely and was put there more for a political halo effect than economic reality.

Meanwhile, others in high places are wondering privately if building an ultra-traditional and uber-high-cost 20th century campus makes good economic sense in the more flexible and fast changing 21st century. Either way, this is one project that's sure to be closely watched here at home in 2013.

Meanwhile, Back at the County Building

While the cast of characters at the federal and state level is fluid, on the county side we find that old pols never retire--they go to work for Mayor Alan Arakawa. While some people collect stamps, Arakawa collects matched sets of former County Council members who now serve in paid staff positions in his administration. Joining former Councilmembers Bill Medeiros and Mike Molina (who are already on the county payroll) are Joe Pontanilla and Danny Mateo, both of whom were unable to run for their former seats due to term limits.

Whether you call it stability and making good use of experience or stagnation by retaining a permanent set of old faces, the mayor continues to solidify his base in preparation for the 2014 election.

No Deal Yet for Hawai'i Teachers

Not as fortunate are the 13,000 Hawai'i public school teachers who still are working without a contract and have yet to conclude negotiations with the state on the terms of their employment for 2013-15. In mid-December, the teachers rejected the state's latest offer and the state took the proposal off the table.

Hawai'i State Teachers Association President Wil Okabe said in a recent interview with Civil Beat that he hopes the union and state can start negotiations in January and approach 2013 and the next legislative session with a renewed focus.

January to April will be critical months, he said, noting that the current two-year contract the state unilaterally imposed in July 2011 ends in June. The so-called "last, best, final offer" included pay cuts and higher health premiums, as well as new criteria for teacher evaluations.

What actually will happen in 2013 remains to be seen.



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