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The Honolulu Advertiser
Posted on: Wednesday, June 2, 2010

Union fears loss of jobs in hotel plan

by Andrew Gomes
Advertiser Staff Writer

The city Department of Planning and Permitting held a public hearing yesterday on redevelopment plans for the Princess Kaiulani and Moana Surfrider hotels in Waikīkī, and the turnout was largely a mix of officials connected to the project and hotel employees concerned about job security.

Unionized employees of the two hotels and other supporters of Unite Here Local 5 wearing red union T-shirts packed the hearing at Ala Moana Beach Park's McCoy Pavilion to express fears that jobs could be lost without commitments from property owner Kyo-ya Hotels & Resorts.

Union supporters accounted for close to half of the roughly 200 estimated people at the hearing, and some held signs that read "No job guarantees? No condos." and "Jobs yes, Condos no."

The city permitting agency heard testimony from 25 people, and most of the comments came from construction and hotel industry officials who supported the estimated $700 million project without conditions.

Local 5 last month filed a lawsuit in Circuit Court against Kyo-ya, alleging that the company's environmental impact statement presents misleading information as to how many people the hotels will employ after redevelopment.

The project calls for replacing an eight-story beachfront hotel wing at the Moana with a 26-story tower. At the Kaiulani, two hotel buildings would be replaced by one larger tower, and a third tower would be renovated.

Between the two properties, the total number of hotel rooms would decline by 119, from 1,954 to 1,835. Added to the properties would be 101 residential condominiums and 210 condo-hotel units sold to individual investors.

Kyo-ya has said it expects the number of employees at the two hotels to increase from 878 to 1,287, for a total of 409, largely because luxury upgrades will require better service and more workers.

But Local 5 officials, who say they support redevelopment of the two hotels, question the projection because Kyo-ya in the EIS reserves a right to change the number of hotel rooms in its plan.

Daniel Irwin, a Local 5 staffer, told the agency's hearings officer that the ability to add more condos is a "back door" that would allow Kyo-ya to increase condo sales and reduce hotel jobs.

Other Local 5 members asked the agency to require a minimum hotel room count.

"Please preserve our hotel rooms that preserve our jobs," said Anne Towey Joyer, a 30-year employee at Kyo-ya hotels. "We need something we can count on."

Kyo-ya Executive Vice President and Chief Operating Officer Ernest Nishizaki said the company is confident in its projections that call for more jobs, but ultimately financing terms for the project and hotel occupancy will dictate how many condos are included and how many hotel jobs are needed.

"We value our employees," he said. "We're going to do everything we can to meet their needs."

Condos have become an attractive source for hotel companies to finance development by providing a large return from unit sales that help pay for hotel construction. Kyo-ya said condos are needed to help finance its project, and that the exact number won't be certain until construction and financing costs are known.

Kyo-ya needs a Special Management Area permit from the county to replace the Moana's eight-story Diamond Head Tower with a high-rise with 185 hotel rooms and 40 residences. Part of the proposed project, including an infinity pool, would extend into shoreline setback areas, but would also result in new views of the ocean from Kalākaua Avenue, about 100 public surfboard racks and $500,000 toward a state beach replenishment project.

The Planning and Permitting agency will consider the impacts of the project as well as the public testimony in forming a recommendation it will present to the City Council by June 24.

Kyo-ya has previously said that construction could begin in 2012 if approvals are granted without delay.