The city’s municipal leasing policies have come under fire recently for a lease the city granted for a concession on beachfront property at the edge of Kapiolani Park.
I know the principals involved in the lease — Sakara Blackwell and Kekoa Ornellas — operators of the Barefoot Beach Cafe at Queen’s Beach in Waikiki.
Blackwell has been at the center of news reports because she was convicted along with Marc Melton and Jennifer McTigue for carrying out illegal real estate mortgage deals involving seven properties on Oahu and Hawaii Island.
She is now serving 30 months in a federal prison in Arizona and must pay a portion (as yet unannounced) of the $881,755 ordered for restitution.
Unbeknownst to me until now was that Blackwell’s boyfriend and business partner, Keoka Ornellas, was indicted 17 years ago by a Hawaii grand jury for drug possession. He pleaded guilty and served time in a California prison.
Blackwell founded Optimum Marketing & Management Corp., which runs the city-lease café. She also has a catering business. She was president of Optimum, but now Ornellas is listed as president and helps run the business.
I used to walk by the place when it was vacant on my early morning walks. I was amazed to see people sprawled out under the concession’s covered lanai, asleep in hammocks and bedding, all settled in like it was their private oceanfront residence.
I am not defending Blackwell’s part in the real estate scam. She pleaded guilty to two counts of conspiracy and is now paying for her crime in prison. It is right to go after her for what she did. But it is wrong to target her for what she did not do.
The Star-Advertiser made much of Blackwell and Ornellas’ criminal backgrounds and cited a couple of people who say the city must be more careful about who gets leases. A Nov. 24 editorial in the newspaper made that same case.
The Star-Advertiser says that all of this “…. has raised concerns about how the city evaluates concessionaires.” Caution was urged because the city is putting out bids for three more concessions in the pavilions along Kuhio Beach.
I agree that it makes sense to check the backgrounds of prospective lessees.
But it makes no sense to criticize the city for its past dealings with Blackwell and her Barefoot Beach Café, when the city followed proper procedures.
And it makes even less sense to criticize Blackwell when she has run a good business, transforming a vacant, rundown city concession that had become a homeless haven into a popular eatery enjoyed by many tourists and local residents.
The city’s lease with Blackwell was signed in June 2011, long before she was charged with any crime, let alone convicted. Ornellas had long ago served his time and has no pending criminal charges. And Ornellas was not a signatory to the lease.
The city says Blackwell has faithfully carried out all terms of the lease, run the cafe to city expectations, and passed all the audits.
Diners flock to the café for its fresh food and weekend entertainment.
“Before they took over the operation, there was quite a lot of vandalism. They have maintained the property and also protected it from future damage.” — Guy Kaulukukui, city Enterprise Services director
In an earlier review, the Star-Advertiser wrote: “One typically doesn’t think about carefully created cuisine coming out of a beach concession stand. Burgers, fries and plate lunches loaded with starch and gravy are what we have come to expect. That’s no longer the case. Barefoot Beach Cafe at San Souci Beach in Waikiki has changed all perception of what concession food can look and taste like.”
In another story in the paper, real estate analyst Stephany Sofos, who lives in a condo near the café, praised the operation, saying, “People in the neighborhood were very pleased by the success of the Barefoot Beach Café. They turned a struggling site around.”
Sofos also noted that Blackwell was the sole responder when the city finally put the site out to bid. She said Optimum’s current contract for the beach eatery is market-priced and fair when taking into consideration that the concession does not sell alcohol.
My friend Janice Marsters says, “If you are going to write about Sakara, make your story about how she was the one who finally was able to turn the concession into a good restaurant everybody enjoys.”
When Blackwell took over, the concession had been vacant for a year after the previous lessor, SSA, decided not to renew its five-year lease. The city asked SSA to stay on for another six months but it declined.
SSA had been running the concession as a no-frills hamburger stand.
After SSA left, the concession remained shut down as the city tried two times to get bidders to take over. Nobody was interested.
About two dozen homeless people had commandeered the front lanai of the concession. It was dirty and in need of many repairs.
Blackwell’s first lease, signed in 2011, was a 12-month revocable permit, which does not require the city to go to bid.
The city says she signed another 12-month revocable permit in 2012.
City Enterprise Services director Guy Kaulukukui told me in an email that the city then put the concession lease out to bid in 2013. Blackwell’s Optimum Corp. was the only bidder.
Blackwell once told me, “I remember the first time I did a site visit. I thought ‘yikes!’ It was a homeless camp with cots and sleeping bags on the floor, hibachis, the full set-up. People were scared to go down there.”
I know what she is talking about because I used to walk by the place when it was vacant on my early morning walks. I was amazed to see people sprawled out under the concession’s covered lanai, asleep in hammocks and bedding, all settled in like it was their private oceanfront residence.
It took Blackwell and Ornellas and both of their fathers about eight months of work with help from the city and the Honolulu Police Department to clean up the concession and make it feel safe.
They cleared out clusters of homeless campers from the restaurant’s lanai and on the park grass beside the lanai. And as part of the lease, Blackwell and Ornellas painted and cleaned the adjacent restrooms, even decorating them with framed pictures and potted palms. In the lease, Blackwell agreed to maintain the restrooms. They are cleaned four or five times a day.
The city has saved taxpayers thousands of dollars by requiring Optimum to keep the restroom facilities attractive and sanitary. Restroom facilities are maintained not just for the restaurant patrons but all park users, including hundreds of athletes who crowd into the bathrooms whenever there is a triathlon or a running race in the park.
“Before they took over the operation, there was quite a lot of vandalism. They have maintained the property and also protected it from future damage,” says Kaulukukui.
However, despite the success of the Barefoot Beach Cafe, critics such as Honolulu City Councilwoman Ann Kobayashi keep sniping at Blackwell’s operation with pointless and silly “what-ifs” — hypothetical concerns ungrounded in reality.
There were many good reasons to have granted Optimum the lease and no reason to take it away unless the city had a morals clause in the lease. The city has no morals clause. Maybe it should. But that is another issue.
Says Kobayashi in a Honolulu Star-Advertiser article, “ If a city audit finds that Blackwell underreported sales or if her legal woes prevent her from operating her businesses or meeting her payment obligations, the city could potentially lose thousands of dollars of monthly income on its assets, and the public could lose access to refreshments at two of Oahu’s most popular beachfront parks.”
Has any of this turned up in city audits? The answer is no.
The next city audit will be March 31, 2016.
In a nutshell, there were many good reasons to have granted Optimum the lease and no reason to take it away unless the city had a morals clause in the lease. The city has no morals clause. Maybe it should. But that is another issue.
At best, the city could deny leases to people who have been convicted (not just charged) of a felony, but it would seem very unfair to deny a lease to previously convicted people who currently are leading good lives.
The newspaper editorial on the issue says, “It’s imperative that city officials at least seek the disclosure and do the due diligence on its contractors. A checkered past may not be a deal-breaker, but neither is it something to take lightly.”
That seems reasonable, as long as the nature of the due diligence is fair and not unnecessarily invasive.
I think the way the news story and editorial were presented intimates that perhaps Blackwell and Ornellas would cheat the city and taxpayers.
Actually, the opposite has been the case. Money has flowed to the city from their restaurant operation.
The city is using Blackwell’s successful operation as a model for other city concessions.
The Star-Advertiser’s editorial itself states, “Barefoot Beach Café at Kapiolani Park seems to be operating without any contractual issues, but that doesn’t mean there is no reason for alarm.”
An alarm usually rings when there is a fire. Where is the fire here?