New law gives Kakaako businesses a break from skyrocketing property tax

It’s an all too common story of small businesses getting pushed out by the large corporations, and Kakaako is a prime example of it.

Now those small businesses are getting help with a 50-percent reduction on their property taxes.

The city council approved the bill to make it happen and the mayor let it become law without his signature.

So why is Kakaako getting this help and what does it mean for other city taxpayers?

We asked councilwoman Carol Fukunaga who introduced the bill, and she says Kakaako small business owners have been suffering long enough, and this is a way to help keep them afloat.

Frank Young owns K&Y Auto Service on Kawaiahao Street. He says his property taxes have been skyrocketing over the last few years.

“I’m paying $33,000 a year for a repair shop property. It was just getting insane,” he said. “No matter how I try to cut my expenses and create efficiencies and fix more cars, I cannot keep up the pace from which the city was raising my property taxes.”

Young just turned in his paperwork to apply for that 50-percent reduction and he says that will go a long way in keeping him in business.

Fukunaga says Kakaako businesses are getting hit hard and it’s not just from luxury condominiums raising the property values.

“It only applies in those areas where you really are undergoing the worst of the worst, but you really don’t receive much in the way of benefits by virtue of roadways and sewer lines and water lines that are up to snuff,” she explained.

The law could mean as much as a million dollars in tax breaks per year, but Fukunaga says luxury buildings can offset that loss “because they will be paying new property taxes in areas that didn’t have those kinds of residential properties before.”

Fukunaga says the law is a trial project that will be in effect for 10 years. If it works well then they can apply it in other parts of the island.

“This would help many of the areas in which you have small businesses, whether in Waipahu or in Aiea or places like Mapunapuna, where they have been suffering from poor drainage kinds of conditions,” she said.

Business owners in Kakaako have to act fast though.

They need to apply with the Hawaii Community Development Authority by the end of the month to get an exemption that will allow them to get that 50-percent tax break.

If approved, they will have to renew it every two years.

Click here for more information.

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