Honolulu Star-Bulletin from Honolulu, Hawaii • 23

BUSINESS C5 HONOLULU STAR-BULLETIN THURSDAY, JANUARY 29, 2004 Big Isle building permits Riding high Hawaii businesses, as shown in levels ever in the first quarter of gross revenues and profit before for Hawaii's economic future. the performance and optimism indexes, reached their highest 2004. The performance index measures change in employment, taxes. The optimism index reveals a business' general outlook 150 E3 Performance index (PI) 125 100 75 50 25 2nd Qtr. 107 107 1st Qtr.

2000 111 128 2nd Qtr. 2000 Hi) 126 PI 01 Indexes: Starting basis in second quarter of Source: QMark Research Polling 22 last low interest rates. Eliot Merk, owner of JE Merk Associates of Hilo, said he expects demand to continue for a couple more years. Jessie Sanborn, co-owner of G.N. Sanborn General Contractor, said the company has a six-month waiting list for customers wanting to start building new homes.

"1 think it will be steady, busy," she said, calling conditions "extremely good news" for the industry. The most activity has oc Survey: Banker sees firms investing in again blames Boeing for bankruptcy 2nd Qtr. 2003 104 128 1st Qtr. 2U04 128 135 STAR-BULLETIN staff, technology sees a rosy picture both from the bank's and the customers' perspectives. "For the bank, business has been very robust on everything from residential mortgages to commercial real estate, as well as the business loans," said Lee, senior vice president of business banking.

"And it's been due to a combination of the low interest-rate environment, the high resale values and the 1st Qtr. 2003 109 121 noticed is people willing to spend money future." director for Hardware Hawaii Ace jumped Associated Press HILO Hawaii County issued 4,507 building permits in 2003, a 22 percent increase over the previous year. The number of permits represented a combined $655.7 million worth of Big Island projects, setting a new benchmark by more than $160 million, according to county records. One developer attributed the building boom to affordable housing, federal tax cuts and Hawaiian: Parent Continued From CI week I was appointed," he said. "Boeuig acknowledged that the trustee was not a known quantity and that Boeing, as a company, would have to get comfortable with the trustee before coming to any conclusion.

Fortunately, they have decided they are comfortable and we've had discussions. "I'd say, but for the change in Boeing's management (the president of Boeing Capital and the CEO and chief financial officer of its parent company left in November and December), we'd probably already have an agreement. 1 have every confidence we will in March, as planned, have an agreement." Garfinkle said Gotbaum is taking what should be a simple bankruptcy and making it more complicated. In a meeting yesterday at the Star-Bulletin, Garfinkle offered a 33-page document that outlined all the significant U.S. airline bankruptcy filings since the industry's deregulation in 1978.

Of the 24 filings listed, Hawaiian was the only airline not to have sought debtor-in-possession financing. The adviser also dismissed arguments from Gotbaum that the airline had overextended itself by replacing its DC-9s and DC-10s with a more expensive fleet. He displayed graphics showing that Hawaiian Airlines' new aircraft provide an annual net cost benefit of more than $25 million to the airline when compared with the previous fleet. He said the increased efficiency and cost savings enable Hawaiian to fly an additional 4,425 trips per year with the same amount of fuel. Garfinkle also said Gotbaum is taking too much credit for the company's financial success following the bankruptcy filing, including the recent announcement that it was going to launch nonstop service to Sydney, Australia.

Continued From CI focus in growing the kamaaina market has only enhanced that. So it's kind of been good and good again." DeViile said the retail chain's product line and wide selection attracts repeat visitors and the company's advertising and marketing campaigns bring in first-timers. He also said Hilo Hattie has targeted its promotions to kamaaina as well "so they can rediscover the new Hilo Hattie." The survey, sponsored by American Savings Bank, was based on 408 interviews using a company listing purchased from Equifax Polk Business Directory and conducted from Jan. 6 to Jan 16. It divided the businesses into four groups based on size and the data was weighted to reflect the proper proportions of each company based on the number of employees as reported by the state Department of Labor.

In addition, 101 businesses identifying themselves as being directly involved in retail or doing a majority of their business in the retail sector were sampled. The results have a margin of error of plus or minus 5 percent. Panelist Larry Lanning, marketing director for Hardware Hawaii Ace, said the three stores (in Kailua, Kaneohe and Mapunapuna) independently ii Optimism Index (01) 1st Qtr. 2001 2nd Qtr. 2001 1st Qtr.

2002 2nd Qtr. 2002 116 108 102 99 122 114 114 120 1998 was 100. Above are the last 10 surveys owned by David Lundquist have seen a willingness by customers to increase spending. That bodes well for Hawaii's economy since consumer spending accounts for two-thirds of the gross state product. "What we've noticed is people are now willing to spend money on the future," Lanning said.

"They are willing to remodel their homes and to move into new homes. They're probably willing to even finance the improvements that they make." Lanning credits the economy for the uptick in business. "There is optimism," he said. "We're very fortunate in Hawaii to have low employment. In fact, businesses are looking for people to hire.

We're talking about training construction people because of the construction that's scheduled, a lot of which is military construction, as well as our normal housing developers." Another panelist, American Saving Bank's Gabe Lee, said he "We're doing the preparation for the U.S. market. That is becoming a major part of our business," she said. "This is going to be a big market. I'm glad we started early JN Productions has trans-later! a TV Asahi show called "Doraemon" into English for translation into the native tongues of Italy and France where "the show is doing really well," she said.

"To take it a step further, we also time the segments for them so that it's very user-friendly." When the shows arrive in a new country, local translators know they will have four seconds to drop in the phrase in their native tongue, she said. "What we've are now on the Larry Lanning Marketing "The Sydney route, which the trustee took great pains to take credit for, was really forecast, developed and analyzed under (former Hawaiian Airlines consultant) Smith Management, as are half a dozen other routes." Gotbaum disagreed that he was personally taking the credit. "The success or failure of Hawaiian Airlines comes from the individual actions of the 3,000 people who work at the airline," Gotbaum said. "Part of the success of the last year will have to be credited to Sen. (Dan) Inouye, who made it possible for Hawaiian and Aloha to restructure the interisland service.

Part of the success for the year ought to go to the sales and marketing group of Hawaiian, who recognized in the trans-Pacific routes to fill more seats at higher fares. "As to those things which we have done since I became trustee that were talked about before I became trustee, I'll go back to my previous statement that's it a lot easier to talk about things than to do them." Garfinkle also reiterated Adams' previous contention that Boeing Capital was to blame for the airline's bankruptcy. "Hawaiian wasn't the only airline that went to Boeing and asked for concessions," he said. "American, United, US Airways, other airlines they all went to Boeing. They all got concessions, and they all got concessions of a greater magnitude than Hawaiian was asking for.

"They had a legal right to do what they did, but whether it was a smart commercial decision to do that, with the possibility they were going to get 13 717s back that they had no market for, that's something they will have to decide." Boeing Capital spokesman Russ Young expressed bewilderment that Hawaiian Holdings was once again casting blame on Boeing. "It's a fact of life that, at times, year curred in North Kona, while Hamakua, lower Puna and Kau also have experienced plenty of new construction, county Building Division Chief Brian Ka-jikawa said. One offshoot of the building boom is the added work for county inspectors. With no additional employees, it now takes longer to get a building permit in Hilo. The review time for building plans is now between three and four weeks, Kajikawa said.

you have to work with customers in need and you give them short-term relief because it's in your best long-term interests," Young said. "Hawaiian was offered short-term relief but it was contingent on returning the money ($17.1 million) that had been paid out to Mr. Adams and his associates In the ($25 million) tender offer. His refusal to do so certainly is tied to our inability to reach an agreement." Gotbaum told creditors and union leaders in Los Angeles on Tuesday that he's targeting June to submit his reorganization plan with a September confirmation hearing and an emergence from bankruptcy in October. But Garfinkle said Gotbaum has been costing the airline a million dollars a month in legal and consulting fees for not reaching a deal with Boeing.

"This was a simple bankruptcy," he said. "Boeing, Boeing, Boeing is what needed to be done. Maybe Smith Management couldn't fix that, given what happened (Adams' removal for alleged financial irregularities and insider dealings), but that should have been the trustee's first, second and third priorities. "The big difference is that if Smith Management had been in the role of quarterbacking the bankruptcy, they would have been in and out by now so we wouldn't be running a million dollars a month and continuing to run," Garfinkle said. Garfinkle said Hawaiian's stock, which has soared as much as 1,300 percent since its bankruptcy, has "substantial value." Adams' group owns just more than half of the outstanding shares.

Garfinkle said a competing reorganization plan from Hawaiian Holdings is a virtual certainty. "Anybody would be foolish to assume that the majority shareholder wouldn't want to participate in the reorganization of Hawaiian," he said. Ar- Star-tfulletin TheBuzz: JN Productions prepared strong stock market, which has resulted in the wealth factor psychologically." Businesses also have been more selective, he said, to aggressively go after potential consumers. "For the customers, what it comes down to is they're the survivors," Lee said. "They are a lot more savvy in selecting their niches and changing their niches a lot more quickly.

We see them either increasing their inventories or increasing their staff. If they're a service business, especially, we see them investing in technology." for revenue cut JN's local clients include Daiei, Sony Hawaii, Estee Lauder Travel Retailing and Shirokiya. Video production is also a significant part of JN's business. "You know when you go to these conventions or gatherings, people always do some kind of video pfesentation these days." "We'll be okay, and we'll be working really hard to expand on these other areas," she said. Erika Engle is a reporter with the Star-Bulletin.

Call 5294302, fax 529-4750 or write to Erika Engle, Honolulu Star-Bulletin, 500 Ala Moana, No. 7-210, Honolulu 96S13. She can also be reached at: eenglestarbulletin.com. A. 3 3 J0ULL SUNDAY.

i ar 0 mmm 1 11 1 1 (31 as low as REACH FOR THE WALL STREET JOURNAL SUNDAY Continued From CI advertising strength is among adults 35 and older. In the 50-plus category, KIKU ranks second in prime time, between 7 and 10 p.m., while among adults 35 and older, it is ranked No. 4, Kihara said. Long time advertising client Central Pacific Bank now airs a version of its 50th anniversary commercial, featuring Hawaii-bred Hollywood actor James Shigeta speaking Japanese, on KIKU and other Japanese language channels in Hawaii. It is reminiscent of the 1982 "art of service" campaign Shigeta did for the bank, said Wayne Kiri-hara, the bank's senior vice president and marketing director.

"We are very interested to see what the vision and plans are with the management and to see what kind of plans they have for the programming. We hope to continue to support Japanese programming in Hawaii," he said. Former KIKU General Manager Gregg Mueller left the station in October, but echoed Kirihara's sentiments. "I have an understanding of the programming, of the market and so forth and I'm very concerned about it." He and Ni-nomiya worked together at the original KIKU, circa 1980. JN was prepared for the drop in its revenue stream, Ninomiya said.

"We had to venture elsewhere to protect ourselves in case something like this happens," she said. Five years ago JN expanded its translation work and it has paid off. "We've been doing a lot of translations for the major distributors of animation and Japanese pop culture," she said. "We're preparing DVD sales for a company in San Francisco that's owned by a big publishing house (Shogakukan) in Japan. JN's other clientele for translation and other production work include Japan-based TV Asahi and Tokyo Broadcasting Corp.

and San Francisco-based Viz LLC, a leading U.S. publisher of Japanese animation (anime) and comics (manga). Only in the Honolulu Star-Bulletin Sunday edition. 529-4848 to subscribe. Retail value: $150 Aleoke Golf Shop 15 $10 gift certificates redeem at aleoke Golf Shop Mango Marketplace Wahiawa.

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