HOUSE OF REPRESENTATIVES             H.R. NO.              
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE  RESOLUTION

RELATING TO THE ALOHA STADIUM AUTHORITY. 


 1       WHEREAS, flea market revenues are crucial to keeping
 2   stadium operations in the black; and
 3   
 4       WHEREAS, IN 1997, Aloha Flea Market, Inc. paid the State
 5   $2.5 million dollars for the privilege of operating the swap
 6   meet and this amount was nearly twice the $1.3 million dollars
 7   the State received from sporting events, including University
 8   of Hawaii football games; and
 9    
10       WHEREAS, by 1998, Aloha Flea Market, Inc. grossed $4.5
11   million and paid the State $3.8 million dollars for the
12   privilege of operating the flea market and had paid over $40
13   million dollars over the span of twenty years for that
14   privilege, representing the cost of the construction of Aloha
15   Stadium; and
16   
17       WHEREAS, history shows the relationship between Aloha Flea
18   Market, Inc. and the State had been a profitable one for both
19   parties; and
20   
21       WHEREAS, the Stadium Authority put in writing that they
22   felt confident that the authority could make more money by
23   putting the swap meet operations out for bid; and
24   
25       WHEREAS, the Stadium Authority stated the entire swap meet
26   operation was the subject of wide ranging criminal
27   investigations, including federal criminal investigations and
28   that the State had an obligation to create a management
29   structure to assure such investigations do not occur in the
30   future even if the allegations against the entire swap meet
31   were untrue; and
32   
33       WHEREAS, the State told bidders to assume the State would
34   make $4 million dollars from the swap meet and the winning bid
35   was submitted by Consolidated Amusement Co.; and
36   
37       WHEREAS, Consolidated Amusement Co.'s bid called for the
38   State to pay Consolidated a minimum of $15,000 a month or 12
39   percent of the gross annual receipts generated by the flea
40   market, whichever was greater; and

 
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 1   
 2       WHEREAS, given the State's estimate of making $4 million a
 3   year on the flea market, it would have to pay Consolidated
 4   $480,000, allowing the State to net close to $3.5 million,
 5   which is less than it would have made if the receipts from 1998
 6   held constant in 1999; now, therefore,
 7   
 8       BE IT RESOLVED by the House of Representatives of the
 9   Twentieth Legislature of the State of Hawaii, Regular Session
10   of 2000, that this body requests the Legislative Auditor to
11   examine the operations of the Stadium Authority; and  
12   
13       BE IT FURTHER RESOLVED, that the examination of the Stadium
14   Authority should focus specifically on the cancellation of the
15   mutually profitable Aloha Flea Market, Inc. contract to operate
16   the swap meet and the issuance of a new contract to operate the
17   swap meet; and
18   
19       BE IT FURTHER RESOLVED, that the examination should also
20   address the implications of the new contract on the income of
21   the Stadium Authority and the Stadium Authority's current
22   budget request for additional general funds.
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26                         OFFERED BY:  ____________________________