FOR IMMEDIATE RELEASE

UPDATED: May 13, 2018

Contact:
Hubert Chang
808-306-4586
hawaiianoceanswaikiki@gmail.com

HAWAIIAN OCEAN’S WAIKIKI COMMENTS ON CONCESSION CONTRACTS

HONOLULU, HI – On Tuesday May 15, 2018 the City plans to illegally evict Hawaiian
Ocean’s Waikiki from the Kuhio Beach concession stand that it operates. After awarding
Dive Oahu both concession stand contracts, the City is proceeding with its flawed and
illegal process to replace two long-time concessionaires (Star Beachboys and Hawaiian
Ocean’s Waikiki) despite several legal challenges pending.

Hawaiian Ocean’s has been a concessionaire on Kuhio Beach for over 13 years.

Hawaiian Ocean’s is closely monitoring legal proceedings with Star Beachboys and the
City. Star Beachboys is scheduled to appear in court for an injunction hearing with the
City in July.

In 2017, the City erred on a decision to award Dive Oahu one concession stand on
Kuhio Beach. After Hawaiian Ocean’s disputed the award in court, the process was
nullified. Immediately after this decision, the City hastily re-categorized the process and
re-worded parts of it. Dive Oahu was then awarded a contract for both concession
stands. There were no public hearings to correct the process’ initial errors. Hawaiian
Ocean’s is concerned by the City’s lack of transparency and due process. No company
has ever held two long-term contracts for the Kuhio Beach concession stands
simultaneously.

Dive Oahu has agreed to pay 52.5% of its monthly gross revenues relating to beach
activities on Kuhio Beach. The City determined Dive Oahu was qualified to bid due to its
“Ocean Recreation Sales Revenue.” These sales do not reflect experience required to
responsibly offer surf lessons, outrigger canoe-rides, and operate a beach concession
stand in Waikiki. Previous contracts qualified bidders based upon experience with surf
lessons, canoe rides, and other activities specific to Waikiki and its traditions.
In a meeting with prospective employees, Dive Oahu stated their plans to sell tour
packages, such as luaus, dives, and all other activities listed on its website. They plan
to do so with employees walking around the beach in khakis, polo shirts, and tennis
shoes using iPads and offering a 3% commission on these sales. Prices on their
website are all listed in excess of $159 to $99, except for a “Fireworks Cruise” listed at
$75. These sales are permitted due to a change in language in the contract that permits
vaguely categorized “Ocean Recreation Activities.” Previous contracts specified that
revenues must be generated through surf lessons, photos, canoe rides, and surf board,
boogie board, umbrella, and chair rentals. In the past, Hawaiian Ocean’s Waikiki and
Star Beachboys have been prohibited from selling anything – attempts to sell sunscreen
and rash guards were immediately halted.

Hawaiian Ocean’s believes in a fair and legal bid process.

About Hawaiian Ocean’s Waikiki

Hawaiian Ocean’s Waikiki, Inc. was founded in 2002. It has always been locally owned
and operated. Its president is Hubert Chang.

Timeline

March 2002
Hawaiian Ocean’s Waikiki founded.

August 2004
Hawaiian Ocean’s Waikiki begins operations on Kuhio Beach.

November 20, 2010

City issues Request for Bid Proposal for Kuhio Beach Services Concession Stands.

March 8, 2011
City issues concession contracts for Kuhio Beach Services Stand to Star Beachboys
and Hawaiian Ocean’s.

May 2016
City issues Request for Proposals based on procurement statutes.

April 20, 2017

Dive Oahu and Star Beachboys each awarded one concession stand based on
procurement statutes.

April 23, 2017

Hawaiian Ocean’s Waikiki disputes bidding process.

May 18, 2017

Debrief meeting with Hawaiian Ocean’s and City and County of Honolulu Department of
Enterprise Services.

September 1, 2017
Administrative hearing with Hawaiian Ocean’s Waikiki and State Department of
Commerce and Consumer Affairs.

September 25, 2017

Preliminary Injunction Hearing with First Circuit Court.

October 3, 2017
Administrative hearing rules that City erred in solicitation process [Hearing Officer’s
Findings of Fact attached].

November 2017
City issues Solicitation Document No. RQN-DES-1800053 for Kuhio Beach Services
Stands. No public notification of bid proposal.

November 30, 2017

City conducts non-mandatory pre-submittal meeting. No public notification of bid
proposal of bid prior to meeting.

December 27, 2017

Deadline for Sealed Offer Submittals.

March 16, 2018

Dive Oahu awarded contract for Kuhio Beach Services Stands.

April 30, 2018

Hawaiian Ocean’s receives letter from City returning concession fee for May 2018.
City’s first formal thirty-day written notice to vacate.

May 15, 2018

City plans to evict Hawaiian Ocean’s Waikiki and Star Beachboys.

July 6, 2018
Star Beachboys injunction hearing in court with City scheduled.