Haili Street in Downtown Hilo on a recent afternoon

(BIVN) – A proposal to establish a Downtown Hilo Business Improvement District has failed to gain the support of a majority of the businesses in the affected area.

At last weeks Hawaiʻi County Council meeting, a number of Downtown Hilo business owners – including local mixed martial artist BJ Penn and his family – spoke out in opposition to Bill 230, which would create the Improvement District. The formation of the district would “finance certain supplemental public safety, sanitation, landscaping, and maintenance services and infrastructure improvements in Downtown Hilo,” the legislation says. The effort would be funded “by assessments on 313 commercial properties within the district boundaries at an assessed rate of $1.50 for every $1,000 of ‘Total Net Taxable Value’ of each parcel of land, for a total estimated budget of $367,000 for the first operating year of the proposed Business Improvement District.”

According to the bill, supplemental services and improvements would include:

• Enhancement of public safety, landscaping, maintenance, and sanitation using Clean Sweep Crews”;
• Promotion of Downtown Hilo as a family gathering place through marketing, special events, and other creative means;
• Development of public restrooms, landscaping, lighting, pedestrian pathways and surfaces, kiosks for marketing and special events, and wayfinding and signage to enhance the movement, convenience, and enjoyment of the public, and other improvements recommended in the Downtown Hilo Multi-Modal Master Plan;
• A shuttle system for improved transportation; and
• If authorized by separate ordinance, parking management policies and services

However, a County Clerk report following a February 7th Public Hearing on Bill 230 included “Protest Results” totaling roughly 201, more than half of the 382 parcels subject to assessment in the bill.

From the testimony of BJ Penn:

“I ask our council members to not approve bill number 230, because it is a bill that the majority of business in the downtown area do not support. My name is BJ Penn and I am the member for JBR Enterprises LLC who owns approximately 4.5 acres of commercial space within the proposed BID Bill 230 that consists of 34 residential homes rented to low and very low income families, as stated in section 35-13.

JBR Enterprises LLC and its members, Jay Dee Penn, BJ Penn and Reagan Penn, hereby protest to the proposed approval of Bill number 230. We all agree that we do need changes in the downtown business district. My family has operated businesses in Downtown Hilo for over 30 years, and we cannot approve a bill that creates questionable concerns on costs and liens on our properties, as stated in section 35 of Bill 230.”

“We got to try and figure out what we can do with the homeless that’s kind of killing all their businesses, making everybody scared,” added brother Jay Dee Penn on the current state of the Downtown area. However, the majority of business owners are “saying they don’t want this Bill 230, and it’s not like its close.”

From Nancy Cabral of Day-Lum Rentals & Management, Inc:

“I absolutely agree with everyone that downtown needs a whole lot of help. The concern is that this Bill 230 will create a business improvement district and the power that gives this business improvement district is chapter 35. I’m going to venture to suspect none of you have read that chapter recently. It’s quite long. But my concern is that chapter 35 will place a lien on each property in the business improvement district, immediately when the improvement district is created. Did you know that? Chapter 35 allows the business improvement district to borrow money as they see fit, at any interest rate they choose. That will become a debt placed on each of the properties that could become as much as one-third of the value of that property. This is all in chapter 35. This is a debt that will be a lien, like taxes on the land, that is superior to all other debts, including someone’s mortgage. Will you get a mortgage, then? That it chapter 35 will require that the landowner notify any buyer of this property about this lien. Whether it has any debt on it at that time, because of the possibility of a debt – and clearly if there was to be a debt on it would probably require that that seller then have to pay that off to provide clear title. I’m in real estate, and that’s what happens.

“The business improvement district would be there to pay for services that are generally paid for through taxes by the government, which includes – and they list it in the request for a business improvement district – to provide for cleaning in downtown, to provide for safety in downtown, to provide for lighting, to provide for landscaping. And I agree all of those things need to be done. The problem that everyone has agreed in downtown – one of our biggest problems, of course – is the homeless. And that is a huge problem.”

“I think there’s a big distinction between what is in chapter 35 and what is in Bill 230, and what could be in a Bill 230, that’s amended,” said councilmember Jenn Kagiwada. “We can’t do anything that is not allowable in chapter 35, but we can also put a lot more parameters around things. So if things like liens and bonds are not desirable, we can certainly put that in the bill, saying that that will not be allowed in a Hilo Downtown BID.”

Due to the number of protests, Bill 230 is being postponed for 90 days, until the regular council meeting scheduled for July 6, 2023.