Aloha Federal and State Senators, Representatives, and community leaders,
I am saddened and alarmed at the lack of support offered to the Lahaina business community in the wake of our recent catastrophic fires on Maui and I am writing in the hopes of persuading you to encourage small business recovery in Lahaina via Federal grants for the next 18 months. These would supplement promised State, County, and Hawaii Community Foundation grants for small business owners, whose businesses were destroyed in the fires.
As noted in the White House August 23, 2023 FACT SHEET: Biden-Harris Administration’s Latest Actions to Support Communities Impacted by Maui Wildfires1, only SBA loans are being offered to business victims of the Maui Wildfires. Few small business owners can afford additional loans and thus need grants to start up new businesses in an area completely destroyed by fire.
What remains of the west side of the island of Maui is currently on a downward financial spiral, wherein there are now few tourists, as there is little for tourists to do with Lahaina gone2. Today, they can golf or go to the beach. OR tourists can do those same things elsewhere AND have restaurants, services, and shopping to enjoy nearby. And the physical business spaces do not exist in West Maui today to allow our Lahaina businesses to reopen in their historic formats.
While there is much discussion needed within the community to determine the long-term future of Lahaina, we need to rapidly come up with new ways to reboot the rest of the west side with restaurants, shopping, and compelling cultural experiences in an effort to bridge our local economy to its bright but unknown future. Many of us hope the Lahaina of tomorrow will emphasize traditional Hawaiian agricultural practices and the historical aspects of Lahaina as a seat of the Hawaiian Kingdom, coupled with a modern fire-resistant infrastructure to allow denser living in this highly-desirable area, but that is a different letter.
Today, small business owners need substantial ongoing support as, in many cases, our business collateral and earnings potential burned up in the fire that consumed our city. Food trucks, grocery delivery hubs, mobile repair centers, mobile salons, etc… all require significant investment and our business owners are still reeling from years of COVID and the debt taken on during that time.
Recommending additional SBA loans is not appropriate and shows a profound lack of understanding of the situation Lahaina business owners are facing. This sentiment is echoed by many small business owners3 I have heard from and spoken with.
We need help.
Governor Green has proposed a one-time $25M4 grant to be spread out across the nearly 700-strong Lahaina business community, representing 16% of the businesses and 20% of the payroll jobs on Maui. Given the estimated $13M5 per day tourism dollar loss to the local economy, a one-time $10-20K grant/business is not appropriate. Our small businesses cannot be expected to kick-off a recovery with such a small grant.
At minimum, the Governor and government should be targeting $10K-$20K payments per business per month for the next 18 months - the same interval he is looking at providing “full wrap-around services" to the 12,000 victims of housing loss, which will surely cost more than $2000/mo/victim when considering the full scope of hotel/AirBnB housing, food, health & mental wellness, and childcare/eldercare offerings.
Supporting the 700 lost businesses in Lahaina would entail a total cost of $450M over 18 months. This is about what the businesses of Maui pay in SALES TAX every two years from tourist income alone6 ($13M/day x 4.44% = $577K/day x 365 = $211M). Add our $30M/mo in Transient Accommodations Tax and General Excise Tax and this is well less than a year of our taxes.
Government support for the Lahaina business community is appropriate given that the catastrophic nature of this fire is at least partially the result of a number of now well-documented and validated government actions and inactions, including but not limited to:
These actions and inactions have further eroded local faith in government.26
Government support of the Lahaina business community is appropriate on the grounds that supporting one of our most valuable cultural destinations mirrors rebuilding New Orleans, which was damaged during Katrina in part due to failed levees built by the Army Core of Engineers. The total support needed by New Orleans is estimated to have cost ~2227 times the amount needed to rebuild Lahaina and their tax revenue from all sources is ~5 times Maui business taxes28. By these standards, supporting Lahaina businesses is a very inexpensive way to get tax revenue back on track.
And there is another lens of comparison: strategic government support afforded to foreign governments which, unlike US businesses, do not pay US taxes and only benefit the economy via purchases of goods and services. In 2023 the US pledged Ukraine29 over 12 times the amount needed to entirely rebuild Lahaina30.
So why not help us, too?
Kick-starting business in the rest of West Maui with an infusion of resources will help us provide things for locals and and visitors to do and see and eat and create some sense of normalcy in a sea of loss. Failing to support our small businesses will mean thousands of empty hotel rooms, potentially the loss of even more jobs, and cascading rounds of bankruptcies as ongoing knock-on effect ripple through our economy.
It doesn’t need to. Lahaina small business owners are eager to get back to work. We just need help getting off the ground. Wouldn't it be better to get employers back in business than pay out endless rounds of unemployment?
In light of the above, providing a minimum of 18 months of business support is really a very modest request; it might also be the cheapest possible avenue to recovery given the outsized value small business brings to Maui.
In closing, I would like to highlight that Maui represents over 30%31of the Hawaiian visitor industry and West Maui tourism-derived business tax dollars have been large contributors to Hawaiian state revenue for nearly 60 years. Now, the businesses of Lahaina need support from the government of Hawaii and the greater US.
I hope you will join me in pressing for this minimal level of support,
Christopher Jesse Imbach
Salty Mud Hen LLC, dba Café Café Maui.