Island businesses rally against rising rates - Hawaii News Now - KGMB and KHNL

Island businesses rally against rising rates

Connie Smales Connie Smales

By Paul Drewes - bio | email

MAPUNAPUNA (KHNL) - Many businesses in Hawaii are feeling the financial strain from our slowing economy. But for nearly 200 businesses, it could get worse. That's because they're facing increasing rates for their leases. Something many say, they can't afford.

During these increasingly difficult economic times, workers not only keep an eye on the wood at Plywood Hawaii, they also closely watch the bottom line.

"We're doing what we can to look at expenses, improve sales and increase customer service. To try and go thru a survival mode for a while," said Connie Smales, the CEO of Plywood Hawaii.

The Mapunapuna business has been here for over a dozen years and survived floods and other financial crisis in the past. But rising lease rates are threatening to chop down this wood supplier and over 180 other businesses.

"We're talking an excess of 100 percent increase, doubling more than doubling, tripling what some people are currently paying," said Smales.

The Plywood Hawaii warehouse now costs less than $4 a square foot to lease but that could go up to $8 or $10 a square foot in just a short time.

The higher costs to do business could force some to move or shutdown, and leave workers without jobs.

"If you can't make a profit than what do you do? You start cutting jobs," added Smales.

Nearly two dozen businesses have joined together to seek what they call "fair and reasonable" lease rates from the mainland landowner HRPT, which is the state's largest owner of industrial property.

"The landlord should expect to make a profit but it should be fair on both sides," said Smales.

Many island businesses admit, they don't have many options. If they can't stop the landowner from doubling rates, moving or arbitration would be costly. And many small businesses just wouldn't be able to survive.

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