Pau Hana Place, a popular neighborhood eatery on a parcel at the Ala Wai Small Boat Harbor, has closed following a battle over the terms of its revocable permit, and come December the state says it plans to temporarily turn the parcel into a parking lot until it can pursue a request for proposals to complete the community’s vision for the site.

Blue Water Shrimp International LLC, doing business as Pau Hana Place, permanently ceased its Ala Wai harbor operations Tuesday after the state Board of Land and Natural Resources approved a request from the state Department of Land and Natural Resources’ Division of Boating and Ocean Recreation to end its next revocable permit Nov. 30.

The decision was made after DOBOR brought concerns to the Land Board about permit violations by BWSI including allegations of lack of adequate security, encroachment into lands not covered by the permit, environmental issues and improper use of alcohol on state land. BLNR previously granted BWSI a 90-day revocable permit extension in June.

DOBOR Administrator Meghan Statts told BLNR during an Oct. 11 meeting that DOBOR could have canceled the permit, but instead recommended providing BWSI with another short extension to allow it to “to wind down their operations, in lieu of cancelling the permit.”

“Although we don’t think that they are the right tenant for this particular property, we definitely did not want to affect their ability to pursue any other state leases or revocable permits,” she said.

Land Board Chair Dawn Chang said during the BLNR meeting that “we have a responsibility to ensure that public lands are being managed in a responsible way — both public health and safety — so I am going to support the motion that’s been made.”

BLNR voted 6-1 to follow DOBOR’s recommendation, with board member Karen Ono casting the sole dissenting vote in favor of extending the permit though year’s end.

Some community members waited hours to testify in favor of continuing BWSI’s revocable permit long enough to allow the company adequate time to address alleged deficiencies. Some shed tears and even pleaded with the board not to take away their community gathering place. They said BWSI activated an area once overrun with homeless people, provided clean bathrooms, offered delicious food at an affordable price, and local-style entertainment including Hawaiian music that moved people to dance.

Waikiki Improvement Association President Rick Egged testified in support of DOBOR’s recommendation, saying, “There are a lot of problems with the the way that this property has been maintained, and so that’s one of the reasons we support staff’s proposal.”

State Sen. Sharon Moriwaki (D, Waikiki, Kakaako) also offered testimony supporting DOBOR’s recommendations on behalf of herself and state Rep. Adrian Tam (D, Waikiki).

“Waikiki is our jewel, and we really need to be taking care of it,” she said.

DOBOR property manager Richard Howard said the agency is now preparing a request for proposals, and the timing will depend on whether the scope covers just the site vacated by BWSI or the entire harbor. Statts said the state’s parking concession Secure-P will begin using the site for additional harbor parking in December and will continue through the interim.

Chang cautioned, “I don’t think we want to have it as parking forever. Sen. Moriwaki and the rest of the community will not be happy with us.”

Statts replied, “We agree. We’ve got an RFP that we’ve been working on that was put on hold that we’re going to continue working on; so, it wouldn’t take much, I think, just to get to the point where we can put it out.”

Howard said DOBOR’s vision for an RFP could include a stage, food trucks, sustainable landscaping with native Hawaiian plants and concrete walkways, comfortable seating areas and shaded areas covered by sail shades — preferences closely aligned in a community visioning plan prepared for DOBOR by the University of Hawaii Community Design Center and UH’s Department of Urban and Regional Planning.

The UH visioning team identified a $251 million redevelopment option that included a maritime welcome center, market plaza, education and community center, watercraft park and surf community center. A pricier option, which costs over $100 million more, adds a parking garage to the watercraft park and a canoe storage and landing area to the surf community center, as well as greater boardwalk improvements, among other amenities.

Bonnie Flemon, part of BSWI’s management team, said in a news release that the state’s revocable permit with BWSI began after Robert Masuda, former deputy director of DLNR, approached BWSI’s cultural adviser Peter Apo several years ago to inquire whether BWSI’s Gilbert Sakaguchi Sr. was interested in developing a venue at the old boat repair yard.

Flemon said Sakaguchi, who has been involved in successful projects at Pearlridge, Kuhio and Fisherman’s Wharf, was hesitant at first because “developing a nice venue using portable mobile food trucks, in a high-profile location, without electricity, plumbing or sewer hookup, is very challenging.”

She said Sakaguchi also had concerns about making a large investment in a short-term month-to-month annual renewal revocable permit, pending a lease auction. But after assurances from the state, Flemon said Sakaguchi took on the permit and invested more than $700,000 on tents, trailers, a stage, utilities and more.

“(Mr.) Sakaguchi went out of his way and at great expense to incorporate many of the Ala Wai community’s concerns mentioned in the ‘Stakeholder Engagement’ (pages 54-58) of the 2022 UH Vision Report2, ” she said in a statement. “The Ala Wai community has been very happy with how Pau Hana Place has reinvigorated this area. The lot now has security, additional clean restrooms, a shaded seating area, food vending, and Hawaiian music.”

To be sure, when DOBOR issued BWSI a revocable permit on Jan. 1, 2023, the lot had been vacant since the state’s first failed attempt at a public-private partnership at the Ala Wai harbor. Honey Bee USA — a company that planned to add a wedding chapel and entertainment complex to the harbor — went bankrupt in 2016, leaving a wake of creditors, including the state, which is still owed hundreds of thousands of dollars. Ala Wai harbor users lost their fuel dock and boat repair yard when Honey Bee demolished them to make way for plans that never materialized.

Boaters pushed back in 2018 when a developer floated building a giant Ferris wheel and movie theater ride at the old boatyard facility. Then in 2019 a committee reviewed development proposals submitted as part of the state’s second attempt at moving forward on a public-­private partnership for the harbor, but that too went nowhere.

Waikiki Neighborhood Board member Kathryn Henski, whose first home in Waikiki was on 30-foot sailboat in the Ala Wai harbor, expressed disappointment that BLNR cut ties with Pau Hana Place, which she described as “reminiscent of the old Tahitian Lanai, which is sorely missed.”

Henski said she sees this latest development as “another failure,” and asked, “How many years have we sat through request for proposal after request for proposal?”

Waikiki Neighborhood Board member Jeff Merz agreed and said the state now must make haste to finally execute the community’s longer-term vision for the Ala Wai harbor.

“It just amazes me that there was finally one successful and welcomed development there and they didn’t continue it. It’s almost like they don’t want success at that location,” he said. “This is prime waterfront land, and it shouldn’t be used to park cars, which cannot enjoy those beautiful sunset views.”