Maui businesses struggle amid signs of hope

LAHAINA >> Kim Ball, a member of Maui Mayor Richard Bissen’s advisory board focused on economic recovery, is trying to celebrate “some victories,” but wildfires have caused widespread damage in Lahaina, Kula, We know that six months after the devastating blow to West Maui’s economy, businesses continue to struggle.

Mr. Ball owns five high-tech surf sports stores on Maui, where “we had a high season around Christmas, but by January business was down to the end of the world,” he said. Told. “It’s quite late. You should get ready to buckle up.”

The situation is similarly complicated, as Ball has spoken with business leaders around Maui and sees some hopeful indicators of economic recovery.

Signs show off a new Bank of Hawaii branch and Fork and Salad restaurant opening at Lahaina Cannery Mall.

Mara Ocean Tavern, where one of Ball’s sons just returned to work, reopened in a new location near the Lahaina Safeway, which also survived the Aug. 8 wildfire.

“Our restaurants are doing well because people have to eat,” Ball said. “For West Maui, unless you’re in the food business, things are pretty tough. They’re either scraping by or barely scraping by.”

Outside the business world, Mr. Ball’s sympathy for the plight of Maui businesses is rarely heard.

“The goal for me is economic recovery, but I feel like I’m between a rock and a hard place,” he said. “West Maui doesn’t want to hear about economic recovery. They want to hear about housing.”

Governor Josh Green told the Honolulu Star-Advertiser: I think it will take a long time for the business of single-parent families to recover. I spoke to many people who were still paying off their loans. ”

Several business owners told the Star-Advertiser that financial support for fire survivors and new incentives for short-term vacation rental owners to convert units to move evacuees from hotels into more permanent housing He said he was grateful for the money. But business owners, many of whom have been denied financial assistance from the Federal Emergency Management Agency and the Small Business Administration, are left wondering when they will receive further government aid to stabilize or restart their businesses. I’m thinking.

start over

Danny White is paying $900 a month through the SBA on his $150,000 COVID-19 loan.

Her 1,600-square-foot Maui Memories store went up in flames inside the old Pioneer Inn on Wharf Street in Lahaina.

“I applied to FEMA and of course, like every other business, it was rejected and sent to the SBA, but I already have a $150,000 loan due to the coronavirus.” Mr. White said.

Because White was both the owner and employee of Maui Memories, he was eligible for unemployment benefits.

“Right now, I’m paying rent due to unemployment, so I’m living mostly on savings,” White said. “So I can’t wait to start making money again.”

She also used $85,000 in savings to purchase a small existing store and inventory and opened the new Maui Memories on March 1st on Hana Highway in Paia.

Mr White last week signed papers to take over the old Pineapple Beachwear store in Paia’s central business district.

“This is a clothing store that sells women’s dresses,” White said. “I’m going to include some shirts and use local art and jewelry to make it more similar to what I previously owned.

“This is a lot of money on top of my SBA loan,” she said. “It’s very scary. But I love retail, so I haven’t given up yet. I hope I made the right decision.”

Carlos Montano, who owns Sun Spot Boutique Gallery in Kihei’s Azeka Shopping Center, has been waiting several weeks to see if his application for Maui County’s Bridge Grant will be approved. There is.

Even if the grant does arrive, Montano has no idea how much it will cost.

“I’m still waiting for that bridging grant,” he said. “I called and I don’t know who it was, but they said it would take about two weeks. Two weeks later, I called again and they said it would take another two weeks, and that was two and a half weeks ago. ”

Montano said he was first told the county’s grant amount was between $10,000 and $20,000, then “was told it was between $1,000 and $10,000.”

As a result, Montano has no idea whether his county grant application and pending SBA loan application will help keep his business afloat, let alone the two employees he had to lay off due to decreased sales and increased expenses. Needless to say, we will rehire them.

“Unfortunately, there was no point in just sitting in the store wasting air conditioning, so we had to let them go and drastically reduce our hours,” Montano said. “Business is down. We’re way behind on rent. Business used to be going from $250 a day to $1,200 a day. Now we’re doing $33 to $250 a day.” .”

Montano moonlights as a hairstylist, and once earned as much as $75,000 a year, which is now down to $25,000. “Because I had to reduce my income. It was just a series of disasters.”

Maui County received 689 applications for the Bridge Grant program and awarded 127 to businesses with revenue of up to $300,000 as of Jan. 24.

Maui Economic Opportunities CEO Debbie Kabebe said in an email to the Star-Advertiser. struggling to survive.

“Some of these small and medium-sized enterprises are our customers, and we have helped them with business plans, microloans, or getting started with business and tax regulatory compliance,” Kabebe wrote. “We have heard the stories of their and others’ struggles.

“More can be done to prioritize and support these small businesses in our communities.

“The subsidy will be used for a variety of needs, including supplies, equipment, and marketing. We hope that this subsidy will help provide peace of mind to business owners who are heading toward recovery.

“While our Business Development Center strives to award grants as quickly as possible, the high volume of applications and the customized review required for each application takes time and delays processing.”

Then, on Friday, Montano said, “I got a call from someone from MEO saying, “I don’t just run a store, I do hair and makeup, so there’s something wrong with my paperwork, and there’s something wrong with my tax return.” ” So now we are waiting for further documents to resolve the issue. My level of frustration is such that I think I’m going to lose the store at this point. ”

SBA Administrator Isabel Casillas Guzman told the Star-Advertiser on Friday that more than 600 Maui small businesses have been approved for SBA loans worth more than $103 million. She said interest rates on SBA loans have been as low as 4% in her 30 years.

Guzman encouraged businesses that have been denied loans to “seek a reconsideration. Whether it’s with tax documents or working to improve your credit score, we strive to be creative.” We want to work with you.”

Applications will be accepted until May 10th.

“This is a loan, not a grant,” Guzman said. “So obviously there are challenges. I feel for small businesses.”

make it work

A week ago, Coco Nene founder and president Kent Unterman opened his seventh store in Kihei Kalama Village. This is the fourth new Coco Nene store since a wildfire destroyed the Coco Nene flagship store on Front Street.

Koko Nene focuses on locally made products on Oahu for “everything you have at home,” and sells items created exclusively by Hawaiian artists, Unterman said. .

Unterman said “resort tourists” account for 80 percent of the company’s business, and Kokonene has been able to continue paying its 60 employees thanks to “business interruption insurance.” “We always had it, but we never needed to use it. You don’t realize how valuable it is until you need it.”

Unterman decided to expand the Kokonene store to keep employees working and make up for the loss of revenue from the “burnt down” Front Street store.

The Front Street store alone generated $250,000 in sales a month, Unterman said.

The one-story, 3,000-square-foot, $12 million store is more expensive than a new upper-floor, 500-square-foot store in Karama Village that cost Coco Nene $150,000 to renovate using a “creative loan.” It’s small, Unterman said.

Karama Village sales alone will not make up for the loss of revenue from Front Street Koko Nene.

Unterman said no other mile-long road in Hawaii generates as much revenue for small businesses as Front Street.

“We were just a small part of it,” he said. “It was our most profitable store. What small businesses need is cash. If you don’t have cash, you die.”

Unterman encouraged fellow Maui business owners to take out business interruption loans.

So far, he said, the post-fire experience of Maui businesses is “spread all over the map, from people who are recovering to people who are really struggling.” I hear everything from them going out of business to finding a way to make it work and everything in between. ”

individual donation

Ululani’s Hawaiian Shave Ice lost two stores and a warehouse on Front Street to the fire.

One of the stores was Urulani’s most profitable store.

Then, on January 31st, Ululani co-founder and CEO David Yamashiro closed the Paia store due to various economic factors, leaving three survivors.

“When the coronavirus hit, we couldn’t catch a break, and then the fires broke out,” Yamashiro said. “We were paying full rent and business was sparse. Immediately after the fire, many stores’ performance was down 60% to 70% and that continued for several months.”

A GoFundMe campaign has raised $190,000 in addition to $80,000 in direct donations to Ululani.

The money was donated to help the employee and three other families on Maui who are waiting for FEMA assistance.

Mr. Yamashiro said, “We distributed the entire amount to our employees and three family members.” “For the people we helped, the impact was significant.”

This donation helped fill the gap that Yamashiro and other Maui business owners believe is missing for Maui businesses and their employees to survive.

Six months after the Lahaina fire destroyed his Front Street store and warehouse, Yamashiro said he still hasn’t received “a dollar’s worth of insurance.”

Regarding those who have donated, Mr. Yamashiro said, “They are a gift from heaven, and their compassion and willingness to donate is greatly appreciated by everyone.” Our capabilities would have been severely limited.”

Star-Advertiser reporter Allison Schaefers contributed to this report.