It is not at all clear why IRONMAN got a rent reduction it says it never asked for.
It is not at all clear why IRONMAN got a rent reduction it says it never asked for.
In response to recent news articles, race director Diana Bertsch on Tuesday told West Hawaii Today the corporation she represents did not ask to have the rent for Kailua Pier dropped from $60,000 to $30,000. It was the first time Bertsch spoke on the subject to the newspaper after repeated attempts to reach her for comment failed last week.
“IRONMAN never requested (the reduction),” Bertsch said. “IRONMAN asked for clarity on what it was being charged, and that it be consistent and fair.”
Nevertheless, the state Board of Land and Natural Resources on Sept. 25 — with Bertsch present at the meeting — signed off on a request drafted by staff of the Division of Boating and Ocean Recreation and signed by DOBOR administrator Ed Underwood, lowering the right-of-entry permit fee from 25 cents per square foot per day to 12.5 cents.
The request stated that full rent could put undue hardship on the race. Bertsch said those words were Underwood’s — not IRONMAN’s.
But Underwood’s perception of the request differs from Bertsch’s.
“I was not comfortable giving such a large commercial company such a reduction in rent, so I asked staff to inform IRONMAN that they could go before the Land Board and justify their request,” Underwood wrote to West Hawaii Today in a text message from Italy, where he was on vacation.
With Underwood claiming skepticism of any reductions and IRONMAN saying it never sought a price break, it’s not yet clear how or why the reduction was crafted and passed in its current form. Or why the Land Board passed a similar reduction from the standard rate structure last year, also apparently unsolicited by IRONMAN.
The newspaper has initiated a comprehensive public records request to delve into the question of how Kailua-Kona’s signature endurance event received those reductions over two years for the four days it uses the 60,000-square-foot pier each October.
In his text, Underwood clarified and iterated: “Staff prepared the right-of-entry permit that included a 50 percent reduction in rent. I told staff that I was not comfortable with that and told them that if IRONMAN wanted to request a reduction in rent we would need to take the matter before the Land Board and IRONMAN could then justify their request. Staff contacted IRONMAN and explained what was happening and IRONMAN said that they would send a representative to the meeting, which they did.”
Bertsch said in a follow-up email that she did not know a rent reduction was being requested until it appeared in West Hawaii Today the day before the meeting. The reduction was denounced in social media, and Kailua-Kona resident Thomas Mann chained himself to a sign near the race start line in protest this week.
Asked about the nature of her testimony at the meeting, Bertsch said: “I clarified the inaccuracies of Mr. Underwood’s statements and communicated that in 2014 and 2015 IRONMAN has requested clarity on the new (right-of-entry) fee that was being imposed for the Kailua-Kona Pier. The document requesting a ‘rent reduction’ was created by Mr. Underwood.”
Asked why she did not stop the rent request before it was approved, Bertsch responded: “We did not perceive this as a reduction request, our request was for clarity, fairness and consistency.”
Land Board member Chris Yuen said this week that he did not clearly remember Bertsch’s testimony at the Sept. 25 meeting in Honolulu.
However, “I definitely got the impression they wanted a reduction,” Yuen said.
Yuen made the motion to approve the request.
In explaining his vote, Yuen said the 25 cent-per-square foot formula is a statewide one that is not based on site specifics. For almost all events on state harbor facilities, the fee amounts to a few hundred dollars a day, he said.
“The bottom line, I feel we should be charging reasonable rates for our facility,” Yuen said. “And I didn’t see $15,000 a day being justified by any market comparison.”
Accompanying the request for the rent reduction were multiple pages detailing the contributions IRONMAN has made to West Hawaii projects over the years. Bertsch submitted the information to Big Island DOBOR staff at their request, she said.
The right-of-entry fee for using the pier was first charged to the IRONMAN World Championship in 2014. A submittal approved last September by the Land Board, signed by Underwood, charged the race a $30,000 fee, with figures detailing how that was a 50 percent reduction from the 25 cent-per-square-foot formula.
“They received half off last year as well,” Underwood said.
IRONMAN did not ask for this rent reduction either, Bertsch said this week. The minutes from the Sept. 12, 2014 meeting show the reduction passed unanimously without amendments, and the minutes contain no discussion by board members.
“Ed Underwood said (at Friday’s meeting) that IRONMAN had asked for a reduction in 2014,” Bertsch said. “I clarified that was inaccurate.”
Bertsch said that, on Aug. 28 of this year, DOBOR staff informed her that the new entry fee would be $60,000.
“We asked for clarity on what the fees are, why it doubled from last year,” Bertsch said. “We were told they made a mistake in 2014.”
Prior to last year, IRONMAN used the pier for free. Bertsch said the race corporation has struggled to understand the reason for the fee.
“If we were given a bill, outlined and understood, and consistent, we would gladly pay it,” Bertsch said.
IRONMAN had requested to know why it was being charged full cost for the first day, when the race installs equipment on the pier, Bertsch said. On that first Wednesday, cruise ship tenders are able to come and go and the race does not have exclusive use of the pier, she said.
IRONMAN, which had done more than $36,000 in pier repairs in 2013, asked last year if the repair cost could be exchanged for the 2014 right-of-entry fee, but was denied, Bertsch said.
The 2015 BLNR submittal online: https://files.hawaii.gov/dlnr/meeting/submittals/150925/J-3.pdf
The 2014 submittal: https://files.hawaii.gov/dlnr/meeting/submittals/140912/J-1.pdf