Editor’s note: This is the first in a series of profiles of the leading Honolulu mayoral candidates.
The mayor who guided Honolulu through the last economic downturn wants to lead the island’s response to the catastrophe brought on by COVID-19.
Mufi Hannemann, who has spent several years lobbying for the tourism industry, says he’s the candidate best equipped to get Honolulu’s economy up and running again.
“I love taking on a crisis,” he said during a lunch break at the Waikiki headquarters of the Hawaii Lodging & Tourism Association where he is president and CEO.
Hannemann says now is not the time for new blood.
“If these were normal times, if these were good times, I’d say take a chance on someone with fresh, new ideas,” he said. “But these are some of the darkest times we’ve faced in the history of our islands, and it requires someone who doesn’t need on-the-job training.”
Hannemann’s advocacy for the tourism industry may appeal to the thousands of hotel and service workers who want to get back to work. One of his campaign slogans is: “If you put me back in my old job, my mission is to put you back at yours.”
Jeffrey Merz, an urban planner on the Waikiki Neighborhood Board, said he believes Hannemann will strike the right balance between rebuilding the visitor industry while also addressing the overtourism that residents have complained about for years.
“I think he’ll be creative and form the coalitions needed – both economic and cultural – to get us back on board, but different than we were before,” Merz said.
Several unions are supporting Hannemann including those representing Hawaii firefighters, ironworkers, plasterers and cement masons, bricklayers and bus and HandiVan drivers.
While Hannemann once earned an 80% approval rating, as mayor, his popularity appears to have waned over time. After resigning in 2010 during his second term as mayor, he lost three consecutive runs for public office: the governor’s race to Neil Abercrombie in 2010, a congressional seat to Tulsi Gabbard in 2012 and another governor’s race to David Ige in 2014.
A Civil Beat/Hawaii News Now poll in May – before Hannemann announced his candidacy – showed the race was largely up for grabs. Blangiardi ranked as the most popular candidate at that time.
While Hannemann makes a strong economic argument, his critics say he represents the failures of the past on two of the issues most important to voters: rail and homelessness. Cutting through that will be a challenge for his campaign, said Colin Moore, director of the University of Hawaii’s Public Policy Center.
“Voters are mainly going to connect him to rail and some of these big, public lawsuits,” Moore said. “It would take a lot of money and a lot of time to rehabilitate his image in a way that could be effective.”
Hannemann is the only mayoral candidate who has held the job before and has an extensive résumé of government service going back decades.
Hannemann was a Honolulu City Council member and chair in the 1990s. The Iolani School and Harvard University graduate previously served in federal roles during the administrations of U.S. presidents Jimmy Carter, Ronald Reagan, George H.W. Bush and Bill Clinton.
He’s also the founder of Pacific Century Fellows, a nonprofit that offers mid-career professionals the chance to explore business, education, health care, government and other community issues.
Taking the mayor’s office back would mean a pay cut for Hannemann, who made more than $200,000 in 2018, according to HLTA’s public tax filing. The mayor’s job pays $186,000.
Still, Hannemann said he’s motivated by a desire to help people.
“It’s the best public service job,” he said.
Pre-COVID-19, voters might not have been interested in a seasoned politician, but the pandemic has essentially eclipsed all other issues, Moore said.
“That is effectively the only issue right now,” Moore said. “It’s going to benefit the candidates who have experience.”
Last year, when residents continued to lament the impacts of 10 million annual visitors, Hannemann’s experience lobbying for tourism might’ve been a liability. Now that the visitor industry needs to be rebuilt, his experience may be more appealing to voters, Moore said.
“He’ll be able to credibly say: I understand one of our chief industries, and I’m the mayor who can get us started again,” Moore said.
Hannemann says he has the “steady hand” needed to do the work of rebuilding the economy.
To make his case, Hannemann can point to his mayoral performance during the last time the economy tanked in 2008. The self-described “fiscal conservative” said his response to that crisis is what he is most proud of.
“I got us through that,” he said.
He said he cut “nice to have” projects while maintaining essential services, instituted hiring freezes and negotiated furloughs and pay cuts with unions. He was able to do that because the mayor and his cabinet took a 5% cut first, he said. The money from the cuts was directed to the rainy day fund.
While other cities were cutting their workforces, Honolulu was adding staff, Civil Beat reported at the time.
“I did this without raising property taxes,” he said.
Also on Hannemann’s watch, the City and County of Honolulu earned an “AA” bond rating from Standard & Poor’s Rating Services, an improvement from the AA-minus rating Honolulu previously held since 1999, a city news release said at the time. The city under Hannemann also partnered with the private sector on projects like preserving Waimea Valley.
The same skills are needed today, Hannemann said.
“We are facing diminishing revenues,” he said. “We need someone who has fiscal discipline.”
Whether he likes it or not, Hannemann is widely considered the face of the beleaguered rail project.
In 2005, Hannemann convinced the state to give Honolulu the ability to collect a half percent of general excise tax revenues, paving the way for a project that had been discussed for decades but left unfinanced. The cost estimate for the project at the time was $2.6 billion.
By 2008, a slight majority of voters OK’d the concept, which by then was estimated to be a $4.3 billion endeavor. Costs have since ballooned to over $9 billion, and the feds have demanded Honolulu Authority for Rapid Transportation and Honolulu Hale cough up information for a criminal investigation.
Hannemann says he had left office by the time costs got out of control, so it’s not his fault. However, a state audit released last year found Hannemann’s administration responsible for actions that resulted in millions of dollars of cost overruns.
In October 2009, the city signed a $483 million contract with Kiewit Pacific Co. “with no real basis to believe the guideway’s construction schedule was practical or predictable,” the audit says.
Nevertheless, Hannemann said in a speech soon after that the project was “shovel-ready” and would be on time, on budget and on schedule.
The contract was signed without an approved environmental impact statement and without certain Federal Transit Authority approvals, the audit says. And just two weeks prior to Hannemann’s speech, the FTA told the city it was concerned about the project’s financial plan and insufficient revenue.
“That 2009 ‘State of Rail Transit’ speech was only the beginning of a pattern of rail officials pledging the Honolulu Rail Transit Project would be built cheaper and faster than was reasonably foreseeable at the time,” the audit says.
The audit says the city signed the contract in a failed attempt to take advantage of a down economy and prevent the Legislature from spending rail funds for other purposes.
Ultimately, delay-related change orders for that first contract to build the West Oahu Farrington Highway guideway segment would top $108 million as of June 2017 – a 22% increase over the original amount.
“In awarding that construction contract under an artificial timetable and financial plan, which the FTA characterized as too weak to begin construction, City officials neglected their responsibility to spend public money prudently,” the audit says.
Hannemann takes responsibility for none of it.
“They took their eye off the ball,” he said, laying the problems off on those who came after him.
On Hannemann’s campaign website, a page dedicated to his “Mufi’s Record” makes no mention of the rail project. The rail is briefly mentioned on another page titled “Infrastructure.”
But the former mayor can’t evade accountability that easily, says Randy Roth, a retired law professor and longtime rail critic. The “fiasco” of a project was delayed before Hannemann left office in 2010 to pursue his failed run for governor, he says.
“For him to claim that he’d done a great job and everything was positioned well to work out beautifully is beyond ludicrous,” Roth said.
Now, Hannemann says, as mayor he would still intend to build rail to Ala Moana. He said he would “exhaust every federal funding opportunity,” including coronavirus-related aid and $750 million the FTA has pledged but has withheld.
“The project is still a good one to pursue,” he said.
He said he’s not worried about the federal investigation interfering with the delivery of federal funds. If the FTA planned to shut down the project, he said it would’ve done it by now.
Hannemann said he stands by his commitment not to use property tax revenue on the project, with the exception of $214 million in bonds that was approved last year.
If federal money doesn’t come through, he said he would “pause” the project.
“There are projects along that rail line that need to be funded and financed,” Hannemann said. “I’ll look to see which ones are worthy of being suspended for that period, and we’ll suspend it.”
Voters may also question Hannemann’s record on homelessness, which worsened during his time as mayor. The population grew from fewer than 3,300 before he took office to more than 4,100 by the time he left.
Volunteers counted 4,400 homeless people in January of this year, before the coronavirus pandemic sucker-punched the economy and led to devastating unemployment. Experts are predicting that people who were living paycheck to paycheck and are now unemployed could contribute to a wave of evictions and newly homeless people.
As mayor, Hannemann made clear that he felt the problem was the state’s to solve, and he echoed that stance in recent interviews.
“I wanted the state to assist us as we transitioned the homeless out of the parks,” he said. “That didn’t happen.”
He said the city and state collaborate better now, and he would continue that partnership if he’s reelected.
In March 2006, ahead of the Honolulu Centennial Festival on Magic Island, Hannemann ordered the displacement of 200 homeless people, including children, from Ala Moana park during heavy rains, without warning, and without offering them a place to go.
After homeless people and advocates protested at Honolulu Hale, the city invited homeless people to camp on a grassy area near the Honolulu Police Department headquarters. The state later opened Next Step, a shelter that was meant to be temporary but is still in use today.
“We don’t know of any other mayor in the nation who has taken this position that homelessness is not the responsibility of the city,” Lingle spokesman Russell Pang told the Honolulu Advertiser in 2007.
Neither Lingle nor Pang responded to requests for comment. Lingle is backing Blangiardi in the mayor’s race.
The removal of homeless people from island parks is now a routine occurrence under the administration of Mayor Kirk Caldwell who was Hannemann’s former managing director. So-called “compassionate disruption” happens daily.
Hannemann also signed into law bans of shopping carts and tents from public parks – measures that experts say criminalize the behavior of homeless people while doing little to get them into housing.
Caldwell would later kick that approach up a notch as mayor himself by imposing vast sit-lie bans. Unsheltered homelessness has risen steadily since Caldwell took office.
Still, Hannemann said he has compassion for homeless people.
Under his leadership, the Hawaii Lodging & Tourism Association has supported the Honolulu Police Department’s homeless diversion program called LEAD and has funded efforts to fly homeless individuals to the mainland.
When asked about solutions, Hannemann points to state and federal funds as well as private sector efforts like Kahauiki Village, which is led by Duane Kurisu and others.
“I could bring in those types of relationships that I’ve had in the private sector to be able to move the needle because now you have a cooperative state government,” he said. “I did not have that when I was mayor.”
Transit-oriented development around the rail will add to the affordable housing stock, he said. And because the island is “at war” with the pandemic, he suggested planning and permitting requirements for affordable housing and other construction could be “relaxed.”
Hannemann is making an argument for reelection that many voters may find compelling and comforting during this time: He says he has a plan to “guide Honolulu toward a safe, sustainable recovery.”
“Tourism is the key to economic recovery,” he said. “You can’t start the local economy if you don’t have people working, and we bring healthy travelers back to Hawaii.”
Hawaii needs to be rebranded to attract fewer tourists who are willing to spend more per trip and respect the local culture, he said.
He supports charging impact fees to tourists that will be kept in special funds to maintain island amenities. It’s a model he said he championed for Hanauma Bay when he was on the City Council. Visitors should also have to undergo “intense screening” and testing before arrival, he said.
“Tourism is the key to economic recovery.” — Mufi Hannemann
As for hotels that have sat mostly empty during the pandemic and will face reopening costs, Hannemann supports property tax “flexibility.” He didn’t detail a specific plan for tax breaks.
“If they’re facing not only their debts they’ve incurred while they were shuttered, but now you’re demanding full payment of the property taxes, that really puts them in a Catch 22 situation,” he said.
“All those things make for a very dire situation that requires someone who has had that experience, who has been tested, and can go in and hit the ground running and understand the complexities.”
Tax relief would mean less city revenue. Hannemann said he would make cuts to “nice to have” projects, rail employee salaries and elsewhere before considering increasing property tax rates.
If reelected, he said he will commit to serving his full term.
There’s no question Hannemann knows the job of mayor better than any of his competitors, said John Hart, a political observer and professor at Hawaii Pacific University.
But it will be up to voters to decide whether his experience is his greatest asset or liability.
“How much will we still hold him accountable for things he did?” he asked. “How rose-colored are the glasses at this point?”
Watch a special report on the Honolulu mayor’s race as Hawaii News Now and Civil Beat journalists interview the five leading mayoral candidates. Wednesday at 9 p.m. on KGMB.
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