The ambitious plan to transform downtown Honolulu through a massive business improvement district expansion is encountering mounting resistance from property owners who say they've been left in the dark about a proposal that could cost them thousands annually.
The measure, introduced as Bill 51, would expand district boundaries to include an area bounded by Nuuanu Avenue, South Beretania Street, Richards Street, and Nimitz Highway, plus an adjacent commercial block bounded by Queen, Mililani, Halekauwila and Richards streets, encompassing 2,088 parcels total. According to Hoodline, the proposed district would operate with a first-year budget of $1.9 million, with more than $1.7 million funded through property assessments.
Opposition Emerges Among Major Property Owners
Kevin Crummy, chief investment officer of California-based Douglas Emmett Management LLC, expressed significant concern regarding the proposed expansion. As reported by Honolulu Star-Advertiser, Crummy argued that "many property owners, ground lessees, and businesses who will be directly impacted by this significant expansion remain unaware of this proposal." The criticism comes as property assessments would be charged at $0.75 for every $1,000 of assessed value, estimated at about $0.02 per square foot per month.
While that may sound modest, for larger commercial properties the annual costs could reach tens of thousands of dollars. Critics see what they describe as a fundamental flaw in the public outreach process, with major stakeholders claiming insufficient notification about the substantial financial commitments involved.
Downtown's Post-Pandemic Struggles Drive Expansion Push
The expansion effort stems from downtown Honolulu's well-documented challenges since the COVID-19 pandemic. Chris Fong, a senior investment associate at Tradewind Capital and one of the district's primary advocates, told officials the district was first proposed following a May 2024 meeting of various downtown landowners. According to Hawaii Public Radio, they agreed that "the future of downtown was in jeopardy" because of increased homelessness, crime, and retail vacancies.
The area has seen major retail closures including Walmart, Longs Drugs, and Ross, leaving behind vacancies that have contributed to the district's struggles. Sandra Pohl, executive director of the Downtown Art Center, testified that people are no longer patronizing downtown businesses because of safety concerns and deteriorating conditions.
Waikiki Model Shows Promise and Costs
Proponents point to the success of Waikiki's Business Improvement District and its approximately 60 Aloha Ambassadors, who are spread across Waikiki in their distinctive neon yellow shirts. According to Hawaii Business Magazine, the program has shown measurable improvements in cleanliness and safety throughout the tourist corridor.
However, the Waikiki model comes with significant costs. As detailed by Aloha State Daily, nearly $4.4 million of WBID's funding in fiscal year 2025 came from landowner assessments, representing 78.3% of the total budget.
Timeline and Next Steps
The Honolulu City Council unanimously passed Bill 51 on its first reading in July, with the measure referred to the Zoning and Planning Committee for further review. A public hearing is expected on September 3rd as part of the legislative process, which could prove pivotal in determining the proposal's future.
The improvement district ordinance includes provisions for landowner objections—if owners of 51% of the land in the proposed area file written protests, proceedings to create the district must cease. This provision could prove crucial as opposition appears to be mounting among major property owners who control substantial square footage in the downtown core.
Developer Support Remains Strong
Despite growing opposition, several major developers continue backing the proposal. Christine Camp, Avalon Group Hawaii's president and CEO, said her firm supports Bill 51, stating that "downtown is too big to fail" and that without focused support for cleanliness and safety, the area may not succeed in its transition.
Camp has been described as a driving force behind the proposed downtown business improvement district, advocating for making the area more enticing to businesses and visitors. The September public hearing will likely determine whether the proposal has sufficient support to move forward, or if growing opposition from major property owners will derail the ambitious revitalization effort.
