A loophole in city law is allowing Waikiki businesses to use wheeled kiosks to promote their merchandise and services rent-free on public sidewalks along Kalakaua Avenue, where traditional retailers pay premium rents.

Over the last year, members of the Waikiki community say the number of wheeled kiosks along Kalakaua Avenue has grown from one or two to eight or nine. Complaints from brick-and-mortar businesses that pay high Kalakaua rents and taxes have grown, too. So have complaints from visitors who do not like encountering hawkers while on vacation.

That’s why the Waikiki Improvement Association (WIA) is working with Honolulu City Councilman Trevor Ozawa’s office to introduce a bill that essentially would prohibit rolling kiosks on the district’s sidewalks by removing the exceptions in public nuisance law 29-16.6 for Waikiki.

City spokesman Andrew Pereira said Mayor Kirk Caldwell’s administration is aware of the loophole.

“This is a topic that we are discussing with various stakeholders,” Pereira said. “The administration is very interested in seeing Councilmember Ozawa’s bill and discussing it with him.”

Department of Planning and Permitting spokesman Curtis Lum said that under current law, the department can proceed with enforcement only if a kiosk does not have wheels and isn’t mobile.

Regardless of whether the kiosks have wheels, they are subject to peddling laws and must be less than 43 inches high, said Michelle Yu, a spokeswoman for the Honolulu Police Department, which is the city’s other kiosk enforcement arm.

“HPD has received some complaints about the wheeled kiosks from other businesses,” Yu said. “Officers have not confiscated any kiosks. However, officers have cited businesses for obstructing sidewalks with A-frame signs. Three citations have been issued for this month, and the signs were confiscated.”

Ozawa could not be reached, but WIA President Rick Egged said complaints about wheeled kiosks in Waikiki have risen and closing the gap in the law is warranted.

“We get a lot of complaints about the kiosks from Waikiki businesses and their customers,” Egged said. “Our main objective is to remove the kiosk exceptions for Waikiki. We don’t want the obstruction on our sidewalks and we are concerned about them having a negative impact on the quality of the visitor experience.”

Jim Fulton, chairman of Duke’s OceanFest, which was held Aug. 19-27, said event-goers complained about their encounters with wheeled kiosks.

“Visitors have a right to come here and enjoy Hawaii. They don’t want to come here and get hawked or scammed. It’s not New York, they don’t expect to see that here,” Fulton said.

Still, a few Hawaii-centric reasons are behind the recent proliferation. For starters, brick-and-mortar rents now range from $15 to $35 per square foot on Kalakaua Avenue, which is ranked as the nation’s fifth-most active shopping street in sales volume per square foot, said retail analyst Stephany Sofos. Landlords tend to get between $5,000 and $25,000 a month for kiosk space rented on private Waikiki property, Sofos said.

With such high rents, Waikiki’s signage restrictions have driven owners to consider new ways to market, including wheeled kiosks. Hawaii is one of only four states where billboards are banned. In Hawaii, sign–age violators can face stiff state and county penalties, including criminal charges.

“Hawaii has the most strict sign regulations in the nation, and Waikiki has the most strict in Hawaii,” Egged said.

In 2009, WIA worked with the Outdoor Circle to relax signage guidelines to allow for better visibility in the Waikiki Special District. But given the restrictions, some businesses like Nail Zone, at 334 Seaside Ave., have found it difficult to reach enough customers, said owner John Truong, who advertises from a wheeled kiosk in front of the Waikiki Shopping Plaza.

“The current law is good for business. The signage laws are very strict. I can’t promote my business from the inside of a building,” Truong said. “We probably would lose 20 percent of our business if I didn’t have the ability to stand here. We’ll object to any changes.”

Tanner Brandmeyer, who owns a wheeled kiosk business called Hawaii’s Activities Experts, said he would support bringing more clarity to kiosk, peddling and street-performing laws. However, he said he doesn’t want laws passed that encroach on First Amendment rights.

“What they are proposing would violate my constitutional rights, ” said Brandmeyer, who makes his money by earning commissions from booking about 300 tours for clients.

But Carey Johnson, owner of Custom Island Tours LLC, which doesn’t operate from a wheeled kiosk, said no Waikiki business should have the right to use city loopholes to get a leg up on competitors.

“It’s cutting into my business and for companies like Expedia and every hotel concierge desk,” he said. “They aren’t paying rent or commission, plus they are getting to grab everyone before the other activity desks have a chance.”

Sofos agrees.

“It’s not right, it’s not fair and it’s wrong,” she said. “We all want freedom of speech, but it’s a real shame when you are allowed to make money without paying your fair share.”

Brandmeyer said he’s not buying the parity argument.

“There’s nothing stopping any other business from doing it, too,” he said. “They want to sit at a desk and complain that they aren’t making any money when I’m willing to stay out here in the heat and work harder. I’ve got five-star customer reviews”

Walter Willbanks, an independent contractor for North Shore Hawaii Turtle Tours, said he’ll also oppose closing the loophole, although he thinks the changes would not run him or any other operator with a flexible business model out of Waikiki. He started booking from a wheeled kiosk after police cracked down on permanent kiosks a few years ago. If wheeled kiosks gets banned, he’ll likely move to private land. He expects most other wheeled-kiosk operators would simply switch to the more intrusive process of selling tours from books or clipboards.

“There are already a lot of people walking around Waikiki selling from books and clipboards,” Willbanks said. “This is a multibillion- dollar industry. There’s room for all of us.”

WHAT THE ORDINANCE STATES

Sec. 29-16.3 No person shall erect, establish, place, construct, maintain, keep or operate any sidewalk-nuisance on any sidewalk, except as provided in Section 29-16.6 or as otherwise authorized by law.

Sec. 29-16.6 Exceptions

The prohibitions in this article shall not apply to the following:

(1) An object or collection of objects smaller than 42 inches in length, 25 inches in width, and 43 inches in height, provided that:

(A The object or collection of objects is attended to by an individual at all times;

(B) The object or collection of objects, or any portion thereof, does not extend into the roadway;

(C) The object or collection of objects does not obstruct the use of 36 inches in width of the sidewalk and does not obstruct the free movement of pedestrians;

(D) The object or collection of objects does not obstruct individuals from access to or egress from legally parked vehicles;

(E) The object or collection of objects does not interfere with other lawful activities taking place on the sidewalk and its placement complies with other provisions of this chapter; and

(F) The object or collection of objects does not otherwise threaten public health and safety.

Source: Revised Ordinances of Honolulu