Tax credits could lead to Maui film studio

February 21, 2011 – By ILIMA LOOMIS, Staff Writer
Article from: The Maui News

WAILUKU – A Hollywood production company is proposing to develop film studios on Maui and Oahu – if the state Legislature approves new tax credits for film infrastructure development.

Officials with Relativity Media told lawmakers in Honolulu earlier this month that they hoped to start work on a 31-acre Maui film studio later this year, and an Oahu facility of the same size in 2012. They urged legislators to adopt the proposed tax credits.

Under draft legislation being considered in the House of Representatives, developers could receive a tax credit of 25 percent of their costs for “media infrastructure projects” in Honolulu, or 40 percent for projects in Neighbor Island counties.

“The question is, what is the state getting back? The answer is jobs, jobs and jobs,” said West Maui Rep. Angus McKelvey, who introduced the bill along with Central Maui Rep. Gil Keith-Agaran and Waikiki Rep. Tom Brower.

Lawmakers made changes in the bill to address concerns, including eliminating a proposal to significantly increase tax credits for film production, and adding a provision that would allow the state to reclaim its credits if the film doesn’t go forward, and other taxpayer protections, McKelvey said.

While there was still resistance to approving new tax credits while the state struggles with a budget deficit, he said the proposal had an “excellent” chance of moving forward.

“I’m really going after this, because I see this has a major potential impact to the state of Hawaii,” he said. “But it’s got to be done right.”

House Bill 1551 was passed out of the House Economic Revitalization and Business Committee on Thursday and referred to the House Finance Committee.

A similar proposal is moving forward in the state Senate, although without a specific amount of tax credits attached.

Senate President Shan Tsutsui, who represents Central Maui, said legislators were taking a cautious approach to the proposal.

“I think it’s still early,” he said. “It’s kind of a new concept, and we want to see what the economic impact would be.”

He said he had asked colleagues to allow the bill to move forward to get more information from film studios and from state finance officials about what the tax credits would cost.

“We think this may be a possibility to benefit Maui,” he said. “We’re looking at ways to create jobs, and this might be one of them.”

Senate Bill 1550 has been passed out of the Senate Committee on Economic Development and Technology and the Tourism Committee, and referred to the Ways and Means Committee.

In their presentation to the legislators, Relativity Media officials said they hoped to build a 31-acre film studio on Maui, with an additional 10-acre back lot. (They did not provide a specific location on the island for the project.) The studio would include 10 18,000-square-foot stages, along with production and post-production office space. The entire project would have a $193 million production budget, according to the presentation.

A second, identical facility was proposed for Oahu.

In a handout with the company presentation, Relativity Media says it has released 126 films and earned $15.3 billion in worldwide box-office receipts. Films listed include “The Fighter,” “Mamma Mia!,” “Despicable Me,” “Iron Man” and “Hancock.” The company has film studio, television, music, digital media and talent management divisions.

Company officials said they planned to partner with Shangri-La Business Group on construction of the studios.

McKelvey said the proposal was being driven by people in the film industry who wanted to bring their operations to Hawaii. He said many film professionals already live part time in Hawaii, and many would prefer to work here as well, noting that Relativity Media founder Ryan Kavanaugh owns a home on Maui.

“Once the studio’s done, you can do a film from beginning to end in the state of Hawaii without going back to California,” McKelvey said.

The bills pending before state lawmakers also have the support of the administration of Mayor Alan Arakawa, said county spokesman Rod Antone.

“The film-related measures before the Legislature will benefit the entire state of Hawaii if passed by greatly expanding the film industry here,” he said. “It has the potential to put many people back to work and to train many more for well-paid movie and television production positions.

“We know our representatives and senators understand this,” he said.

Visitors climb from Down Under
Arrivals from Australia and New Zealand increased 26.5 percent last year

By Allison Schaefers
Article from: Star-Advertiser

Down Under has turned it into more of an up-and-over market for Hawaii’s visitor industry.

Arrivals to the islands from Australia and New Zealand jumped 26.5 percent last year and are expected to continue to climb, especially after flights are added in April.

“Last year was a record year for Oceania,” said Helen Williams, country manager of Hawaii Tourism Oceania, a contractor for the Hawaii Tourism Authority. “We had the most travelers that we’ve had since carriers switched to more efficient planes and quit stopping in Hawaii to refuel.”

As many as 172,962 visitors from Oceania came to Hawaii in 2010 and spent $341.7 million. That surpassed the Hawaii Tourism Authority’s arrival target by more than 6 percent and surpassed the spending target by more than 3 percent.

“We were really happy with our results and have good reason to believe that they will continue into 2011,” Williams said. “The global financial crisis didn’t have the same impact on Oceania as it did in other parts of the world. Travelers still have jobs, they haven’t lost wages or been furloughed and travel demand is high.”

This year the region is projected to be the fastest-growing major market to Hawaii outside of Korea and China. HTA expects arrivals this year will increase another 8.7 percent to 188,000 visitors while spending will rise another 9.8 percent to $384.6 million as travelers continue to take advantage of the favorable exchange rate and additional flights.

Tim Hutchinson visited Hawaii in 1993 and returned last fall with his wife and children and two other families to take advantage of bargains in the market.

“It’s much cheaper since our dollar is so good,” Hutchinson said.

In October, demand for commodities and high interest rates helped Australia’s dollar hit par with the U.S. dollar for the first time since it was floated in 1983. The Australian dollar has edged out the U.S. dollar several times since then. On Friday it was worth about 98 cents in the U.S.

Honeymooners Daniel and Maxine Viola of Perth, Australia, said the strong Australian dollar allowed them to stay at the luxury Halekulani Hotel and go on adventures at the Polynesian Cultural Center and Kualoa Ranch. They chose Hawaii in part because of how it looked in movies like “Jurassic Park” and “50 First Dates” and in the TV series “Lost.”

“We had a fantastic time,” Maxine Viola said. “We loved being where the films were shot. We loved the beaches, but we also loved learning to hula and exploring the island.”

Many New Zealanders also fell in love with Hawaii last year, and the growth trend looks to be continuing this year, said Darragh Walshe, New Zealand’s country manager for Hawaii Tourism Oceania.

“Demand is high,” Walshe said.

But with just one carrier, Air New Zealand, providing direct service with two flights a week and three in the winter, the biggest challenge remains a lack of passenger seats, he said.

“Air New Zealand will be putting on some additional flights this year to try to cope with demand, but we are working hard to lobby more flights from the market,” Walshe said.

Aussies have benefited from more flights. Their market should increase even more after Hawaiian Airlines increases its nonstop service between Sydney and Honolulu. The carrier will offer daily flights from April 6 to Aug. 1 to meet customer demand during the peak travel season. Starting Aug. 2, Hawaiian will offer nonstop service five days weekly between Sydney and Honolulu. The carrier’s expansion adds 19,000 seats this year.

“We know how much Australian travelers enjoy their holidays in Hawaii, so we are increasing our flight schedule during their favorite time of year to travel,” said Avi Mannis, Hawaiian’s vice president of revenue management and schedule planning. “This gives them greater flexibility in making their plans, and the timing couldn’t be better as Hawaii is a great value for Australians.”

Brisbane natives Jennie Lilliman and her husband, Kevan, couldn’t agree more. The pair are putting the finishing details on a two-week trip to Hawaii in May.

The couple, who have been to Fiji and Southeast Asia, have wanted to visit Hawaii for at least four years, and in that time six couples whom they know have chosen to vacation here.

“I do believe Hawaii is becoming more popular as a holiday destination, probably because of our strong Australian dollar, and also I have noticed more advertising for holiday specials,” Jennie Lilliman said.

The opportunity to sail around the islands on Norwegian Cruise Line’s home-ported Pride of America and spend extra days ashore in Waikiki won out over a holiday in Canada and Alaska, she said.

“For this trip we have combined the cruise with some ‘land’ time in Waikiki, and we are both getting very excited,” Lilliman said.

While the cruise price was comparable to an earlier Southeast Asia cruise they took, she said the hotel rate was higher than offerings from Australian and Southeast Asian hotels.

“We figured just go for it,” she said. “You only live once.”

Sarah Short, who visited Waikiki in 2009 when the Queen Mary 2 docked here, is returning in September to celebrate her mother’s 70th birthday.

Although Short had considered Bali and Thailand as possible trip destinations, the memory of brief time that she spent in Hawaii called her back.

“I had to come back. It’s stunning,” Short said.

While Hawaii has long been a destination favored by Aussies, demand seems to be growing, she said.

“We like the weather, the relaxed atmosphere and friendly people,” Short said.

Although leisure trips have dominated the reasons that Oceania visitors have come to Hawaii, business and incentive travelers are showing more interest, said Michael Murray, Hawaii Visitor and Convention Bureau vice president of sales and marketing for corporate meetings and incentives.

“There is great optimism in terms of the results from last year and the momentum that is building,” Murray said. “We have great accessibility in terms of lift, and the exchange rate is doing very well. These things provide a great platform to nurture relationships and to cultivate new relationships.”

HVCB kicked off a large marketing blitz on Feb. 11 with an Aloha Friday trade show and reception in Sydney. Its efforts were augmented by marketers from the Kauai Visitors Bureau, Oahu Visitors Bureau, Maui Visitors and Convention Bureau, Big Island Visitors Bureau, Hawaiian Airlines, Hilton Hawaiian Village, Moana Surfrider, Sheraton Maui, Starwood Hotels & Resorts Waikiki, Waikiki Beach Marriott, Waikiki Edition, Kathy Clarke Hawaii and MC&A Hawaii.

Murray also brought a team of 14 salespeople to Australia earlier this week to sell the islands during the country’s largest annual meetings trade show, the Asia-Pacific Incentive and Meetings Expo. The event, which took place Feb. 14 to 16 in Melbourne, attracted some 2,000 meetings and event-buyers from throughout the Asia-Pacific.

Adele Tasaka, HVCB’s senior director of accounts, said she expects expo will bring a strong response in new business opportunities for Hawaii.

“Australia has historically been a reliable market for Hawaii’s meetings industry, and we’re confident our collective sales efforts this year will produce good results in attracting more group business to Hawaii,” Tasaka said.

Williams said Hawaii marketers at the expo have told her that event inquiries are up 400 percent from last year.

Economy will grow 2% this year, state predicts

A Hawaii economist forecasts employment to rebound only after other sectors improve

By Kristen Consillio
STAR-ADVERTISER

The state expects visitor spending to jump 9.2 percent this year. “We are encouraged by the continued improvement in our economy, especially with respect to our construction industry,” DBEDT Director Richard Lim said yesterday in a statement.

Hawaii’s economy will grow slightly faster this year than previously expected, but job recovery won’t be realized until 2014, according to a state economist.

Boosted by a strong rebound in visitor spending and construction jobs, the state revised yesterday growth projections for overall gross domestic product — the broadest measure of economic activity in Hawaii — to 2 percent this year, according to a quarterly report released yesterday by the Department of Business, Economic Development and Tourism. That’s up from the 1.8 percent increase predicted in November.

IMPROVED OUTLOOK
Percentage changes forecast through 2013:
2011 2012 2013
Visitor arrivals 4.0 2.5 2.5
Visitor spending 9.2 5.6 5.4
Honolulu inflation 2.2 2.3 2.3
Wage and salary jobs 1.3 1.5 1.8
Personal income* 1.0 1.7 1.9
Gross domestic product* 2.0 2.1 2.4
* Adjusted for inflation

Source: State Department of Business, Economic Development & Tourism

However, it will take three years for jobs to return to the 2007 peak level of about 631,000, Eugene Tian, acting state economist, said yesterday.

“Employment is still lagging the economic growth,” he said. “The job recovery will be coming later than the other indicators in the economy.”

The biggest upward revision among the various economic indicators was visitor spending, which DBEDT now predicts will grow 9.2 percent to $12.66 billion in 2011, as a result of a boost in tourists from higher-spending markets such as China and South Korea, as well as higher hotel room rates. DBEDT previously forecast an 8.4 percent increase.

Tourism will exceed the 2006 peak level of 7.6 million visitors by 2013, moving the economy from recovery to expansion, according to the report.

The job market also is improving, with the growth in payroll jobs revised upward to 1.3 percent this year from the 1.1 percent rise previously forecast, primarily due to new building projects.

The construction industry reversed 29 months of declines when it began to add jobs in October. The value of commercial and industrial building permits increased 32.5 percent last year, DBEDT Director Richard Lim said yesterday in a statement.

“We are encouraged by the continued improvement in our economy, especially with respect to our construction industry,” he said.

Borders bankruptcy won’t affect Maui stores
Two branches on Big Island, Kauai will be shut down

By MELISSA TANJI, Staff Writer
Article from: The Maui News

KAHULUI – Maui shoppers are pleased that the two Borders bookstores on the island would not be closing despite Borders’ parent company filing for bankruptcy protection Wednesday.

The Borders Books Music Movies & Cafe at Maui Marketplace and the Borders Express store at the Queen Ka’ahumanu Center will remain open and are not affected by the bankruptcy, store officials said Wednesday morning.

Kevin Tanaka, the service manager at the Maui Marketplace store, said it was “business as usual,” and customers were waiting outside the store’s door before it opened, which is a common occurrence.

Only two stores in Hawaii will be closed, one in Kailua-Kona on the Big Island and the other in Lihue on Kauai, according to a bankruptcy filing.

The company said it will close about 200 of its 642 stores in the next few weeks. It cited cautious consumer spending, negotiations with vendors and a lack of liquidity as reasons for its troubles.

Kihei resident Stella Saadnia, who visits the Maui Marketplace Borders about once a week, said she likes the store’s variety of CDs, books and magazines and enjoys its cafe, where she can meet people and hang out.

“I like that it has a lot of different things,” she said outside the store Wednesday morning.

She also said it would be sad if the store were on the chopping block, noting that she still likes to read books despite the trend of people turning to electronics to read stories.

“I like the old-fashioned way,” she said.

Pukalani resident Robert Tomlinson said he feels the same way.

“I have a library at home,” he said outside the Maui Marketplace store. He added that he reads five books at a time and loves to give books away as gifts. Tomlinson said Borders has a good selection of Buddhist books as well as other religious books.

The Borders stores in Kahului and the Barnes & Nobles bookstore in Lahaina are the only two large major bookstore chains on the island.

Borders store officials said the Borders Express store at Piilani Village in Kihei closed about a month ago. Borders Express stores at the Whalers Village in Kaanapali and Lahaina Cannery Mall closed in January 2009.

Some times I get so caught up working I forget to take a moment to slow down and enjoy Hawaii for what it has to offer. So for all of those who are trapped in poor weather and are over worked, take a deep breath and take a mini vacation with me.

In other news, and in an effort to enjoy my dog’s company more, Deagle and I will be blogging pet related information such as pet friendly complex reviews, top picks, and quarantine processes.

Aloha from Maui