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A loophole in city rules has Waikiki businesses and residents up in arms about a number of Kalakaua Avenue street-closure permits. Read more

A loophole in city rules has Waikiki businesses and residents up in arms about a number of Kalakaua Avenue street-closure permits.

A city lottery program allows 15 events to close the thoroughfare annually. Events are supposed to benefit the public, but it’s at the city’s discretion to ensure that they do.

The community cried foul in 2016 after David Millwood of Millwood Ohana Productions secured permits for 11 out of 15 events planned for 2017, all selected by lottery. After considerable community push back, some of Millwood’s events were canceled.

The city Department of Transportation Services also changed its rules to limit lottery applicants to two events.

But this year, Millwood secured six of the 15 spots, or 40 percent.

Millwood did not return a call from the Star-Advertiser. But Jon Nouchi, the city’s deputy director of transportation, said Millwood applied for two events and four other organizations hired him to run their events.

Millwood events, which feature food and shopping, include the Lokahi Festival, Living Aloha Festival, Waikiki Ohana Festival, Waikiki Fall Fest, Waikiki Bazaar Festival and Kalakaua Festival. While Millwood has designated six local charities as beneficiaries, he doesn’t specify what percentage of sales they will receive.

“He’s figured out a way to game the system by serving as a middle man for nonprofits,” said Sam Shenkus, Royal Hawaiian Center vice president and director of marketing. “When his events are running, it’s a nightmare for Waikiki access. It’s also hard on businesses, especially the food courts, because his food trucks are in direct competition with them.”

The permits allow Millwood to run events in February and August that will shut down Kalakaua from Seaside to Kapahulu avenues from mid-afternoon to late evening. He’s running similar events for other entities in July, September, October and November.

Rick Egged, Waikiki Improvement Association president, said he’s registered a concern with the city “that other events submitted applications at Millwood’s request.”

The association and the Waikiki Neighborhood Board are pursuing city legislation, which they hope will be introduced in the next few months, to bring greater parity to the process. They say events that close the street under current rules don’t bring enough benefit to residents, who have to contend with Waikiki traffic, and businesses, who pay high rents only to see some of their profits lost to non-rent-paying entities. At more than $400 per square foot, Kala­kaua Avenue rents are among the nation’s highest.

Egged said legislative efforts will attempt to clarify public benefits, limit applicants and reduce the total number of street closures on Kalakaua, which average 32 a year.

In addition to the lottery events, the city allows free speech and “legacy” events — those that have been held for at least 15 consecutive years. The mayor can also allow up to 10 events under a waiver program.

The Waikiki community supports legacy events like Aloha Festivals, which puts on an annual floral parade, and the Waikiki Hoolaulea, because they promote Hawaiian culture and bolster tourism, said Shenkus.

“The Aloha Festivals’ mission is to celebrate Hawaiian culture. We get a lot of public relations and media support on the mainland and in Japan. People vacation in Hawaii in September so they can attend. It provides a direct financial benefit to Hawaii,” she said.

Nouchi said the Department of Transportation Serv­ices has received no complaints about parades and activities since its December 2016 rule update. But Waikiki Neighborhood Board Chairman Bob Finley said more are coming as news of Millwood’s latest event bonanza gets out.

“We backed off legislation because we were assured that the city could take care of this through rules,” Finley said. “What we’ve got here now is a giant loophole that’s not in the spirit of the law. We’ve lost confidence in the city and are pushing for immediate action.”