Sometimes, before an actual problem arises, warning signs flash. When it concerns the use of public property, the city should stay on top of potential vulnerabilities and keep closer tabs on elevated risk.
Case in point: Barefoot Beach Cafe at Kapiolani Park seems to be operating without any contractual issues, but that doesn’t mean there’s no reason for alarm.
Sakara Blackwell is president of Optimum Marketing and Management Corp., which contracted with the city to run the cafe through 2018. On Sept. 22, Blackwell was sentenced in U.S. District Court to prison for 30 months in connection with a real-estate scheme, and to pay up to $881,755 restitution.
She pleaded guilty to two conspiracy charges for her part in misrepresenting encumbrances on properties that she sold as free and clear and is now in a Phoenix federal prison.
Additionally, Kekoa Ornellas, Optimum’s registered agent, served time in prison in California for drug possession.
It’s hard to be sure that any of this would impinge on Optimum’s fulfillment of its concessionaire contract, but even if it doesn’t, alarm bells are sounding, and city officials should be heeding them.
The reason is that the Caldwell administration is about to embark on striking three more concession deals at Waikiki pavilions. The city ought to at least know with whom it is signing contracts and especially to be aware of any pending legal issues.
Critics have raised that concern and are correct in their instincts that more thorough vetting of those who seek city concessions is necessary.
One of them is Mark Howard. The principal broker and president of Hawaii Americana Realty has urged further probing of the city’s contract with Optimum before more contracts are signed for the Kuhio Beach pavilions. He and another experienced realty agent, Stephany Sofos, argue that the city needs better protections, implemented proactively.
For example, Howard suggested that the city adopt a disclosure policy; something similar is already in place on the state license application form used by the Department of Commerce and Consumer Affairs’ real estate branch.
Applicants must disclose on the form whether they have had a criminal conviction in the past 20 years; any complaints or charges filed against them; any pending disciplinary actions, unpaid judgments, outstanding tax obligations or other involuntary lien against them.
This seems a reasonable precaution; the city needs to avoid contracts with parties who have pending criminal entanglements, and should proceed cautiously with those that have put a criminal record behind them.
Going forward, the city should adopt a policy governing oversight of the contracts, possibly instituting additional reporting requirements for contractors for whom a criminal check raises concerns.
City officials have defended their administration of the contract in the Barefoot Beach Cafe case. Tracy Kubota, deputy director at the city Department of Enterprise Services, said Optimum is in compliance. Guy Kaulukukui, the department’s director, added that there have been good results from the operation of the cafe and that further gains can be made by replicating the successful model.
Of course, bringing public concessions to what had been sites for homeless encampments represents an improvement to the area. And individual contracts can be evaluated on a case-by-case basis, rather than categorically rejecting a contractor based on a criminal history.
However, it’s imperative that city officials at least seek the disclosure and do the due diligence on its contractors. A checkered past may not be a deal-breaker, but neither is it something to take lightly.