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September 2007 | Small Business News

Hawaii Superferry

Will the political waters of Hawaii be favorable enough to allow the Superferry a smooth sail?

Hawaii Superferry:
Tipping Point for Hawaii's Economic Future


by Sam Slom, President & Executive Director of Small Business Hawaii

The future of Hawaii's Superferry mirrors the future of Hawaii's economic opportunities. Hawaii truly is at an economic-and political-tipping point. And the investment world is watching.

Hawaii has already been reeling from years of national reports and ratings about our poor investment climate and growing divisiveness in our state, especially on the Neighbor Islands, when it comes to new economic proposals. While we have improved parts of our economy and benchmark stats during the past 5 years, we still trail most other states in attracting and holding long term investment. Capital continually overflies the Islands.The recent Milken Institute annual rating of costs to do business put Hawaii at the top (highest cost) for the third consecutive year. But there is more than ratings.

The Hawaii Superferry, a monumental private investment of more than $350 million, employer to over 300 persons, purchaser of local goods and services, and the first truly integrated (passenger and vehicle) interisland transportation alternative ever introduced here is in mortal danger, not by the market and passenger estimates, but by individuals and groups who vowed to stop it before it ever got here in July.

We can talk all we want about how great Hawaii is, our diversity, and, as the Governor said in her 2002 inauguration, "The open for business sign is turned on in Hawaii," but investment and economic opportunity is determined by an actual economic track record. Hawaii's past performance in this regard is telling.

Arguments and debate about local protectionism, provincialism, and even hints of racial discord aside, a quick review (non exhaustive) of key recent private investment attempts reveals a pattern of hostility toward private business and entrepreneurs.

On the short list of private, non-taxpayer funded projects (not to be confused with such protested public projects as Aloha Stadium, the H-3 Freeway -which was held up for more than 30 years while costs skyrocketed- the Barking Sands military facility on Kauai, a Stryker brigade and military structures on Bellows Air Force Station on O'ahu) and industries that would have catapulted Hawaii into greater economic growth, self sufficiency and world wide prominence as a place to do business. Instead, these innovative, leading edge private investments were stopped by a gaggle of professional protesters, disrupters, lawbreakers and willing accomplice lawyers and justices here:

  • the idea, decades ago, to position Hawaii as a private space port launch site on the Big Island
  • a proven, working, alternative energy source from geothermal energy
  • reducing astronomy and space exploration, including construction of the world's largest telescope
  • ending the Hokuli'a residential/commercial project (Big Island)
  • stopping the Nuko'lii residential/commercial project on Kauai
  • Neighbor Island protests against American, NCL and other cruise lines
  • a private hospital on Maui to add choices to residents and to compete with the government hospital
  • private, toll roads and "hot lanes" to alleviate traffic congestion on O'ahu.
  • the Hawaii Superferry

  • Were there serious and legitimate issues raised with most of these projects? Yes, and all were answered to the satisfaction of any rational individual. But therein lies the rub. A lot of the attacks in the past and at present have been emotional, irrational and just plain dumb (e.g., "we need to keep the Superferry out of Kauai to keep out drugs." FYI: the biggest drug bust in Kauai's history took place several weeks ago led by the U.S. Attorney's office.) Lack of information, misinformation and outright lies have marked the debate on Superferry's future.

    Embroiled in legal challenges on Kauai and Maui, years after the state gave the project its blessing and the statute of limitations should have run, the Superferry investors-and the estimated 75%-85% of Hawaii residents who support the ferry service-watch the ship mired in bureaucracy while its costs escalate daily. An original court challenge was adjudicated in favor of the ferry and the state. The state continues to maintain all laws were obeyed. The ferry altered times, schedules, routes and speeds, as well as hiring whale watchers to placate the "environmentalists." But to no avail.

    A vacuum of leadership, evident in the past, is in the forefront of this controversy. The Governor has been slow and indecisive in taking action. She has made decisions for the Superferry (including a September 26 sail date with a totally altered arrival time) and tried to "balance' the economic hardships between protesters and the ferry. The Mayor of Kauai and local law enforcement have been ineffective. The State Legislature has been divided, mostly along political lines, with many in the majority Democrat leadership opposing the ferry and the competition and choices it brings. However, several key lawmakers, notably from Kauai and Maui, have been the cheerleaders actively fighting the Superferry. The Coast Guard was "unprepared" to take on several surfers, kayakers and boaters in Nawiliwili Harbor. And the courts, especially Hawaii's unique Supreme Court, appear dysfunctional. Timing of the most recent 5-0 Supreme Court decision, days before start of scheduled service, saying in effect the state erred in not requiring an Environmental Assessment, is questionable at best.

    What about the economic interests and clout of competitive interisland transportation systems such as Aloha Airlines, Matson, Young Brothers, etc.? Conjecture abounds but it doesn't answer the basic economic issues relating to Superferry.

    The public? Though they say they support Superferry, they are frustrated as to what to do. They rely on their leaders and there is a lack of leadership. Of course when only 36% of eligible voters take time to vote, there should be no surprise as to the type of monopoly, non-competitive leadership that prevails in Hawaii.

    What should be done? Wait for the courts ( a decision is expected Monday as to whether Superferry can proceed while an Environmental Assessment is conducted?) There are other challenges pending. It seems never ending.

    The Governor should call a Special Session of the Legislature, with prepared legislation, not to specifically aid the Superferry, but to make crystal clear Hawaii's laws in regard to EAs, EIS and the like so this could not happen in the future.

    The Coast Guard, and state and local law enforcement must not just rattle sabers, but enforce existing laws and punish those that hold the rest of us hostage.

    Or, everyone could just continue to wait and do nothing. If the EA is required prior to any scheduled sailing, or if protestors continue to block harbors, it will be a moot point. Superferry will be gone, disrupters further emboldened, and with it any hope of future economic revitalization and major private investment as Hawaii approaches its 50th year of statehood. The only thing that could be left might be a lawsuit against the state and Hawaii taxpayers on the hook for $40 million in bonds unable to be paid by Superferry.

    We can make a difference now-and in the 2008 elections- or pay for our indecision later. Its not really about the Superferry; its about economic sovereignty and who gets to make future choices.

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