Three ways to reduce budget strain from the Hawai‘i Convention Center
Part two of a multipart series on the Hawai‘i Convention Center. Read part one >>> HERE.
by Jonathan Helton, Grassroot Institute, November 5, 2026
The Hawai‘i Convention Center has posted operating losses for most of its existence — as detailed in a recent Grassroot Institute article — and currently needs tens of millions of dollars in repairs.
So how could the state curtail the center’s drag on budget resources?
To deal with this white elephant, officials have a few options to consider: Allow a hotel to be constructed on or near the center, change how the center receives state dollars or sell it to a private entity.
First, building a hotel near the center could make the venue more attractive.
For example, in Palm Beach, Florida, the opening of a hotel next door to the city’s convention center in 2016 resulted in the center turning an annual profit for the first time in its 14-year existence.
Additionally, a 2025 report on a possible convention center in Columbia, Missouri, stated that “For a convention center project, proximity to quality hotel inventory is the single most important factor.”
Indeed, a 2023 report from HVS, a global hospitality consultant, pointed out that building a hotel on top of the Hawaii Convention Center would “increase the level of group demand and utilization of HCC function space” and “provide an income producing asset on site.”
Due to maintenance issues with the center’s roof, HVS noted that building a hotel on top of the venue would be “physically feasible, albeit expensive” and that it would not be “feasible without significant public support.”
So while a hotel might boost the center’s profitability, it could also risk becoming another white elephant if not managed and constructed correctly. There are, however, ways the state could partner with private industry to construct a hotel near the property.
The state could task the Hawaiʻi Community Development Authority with administering a community development district around the convention center that would supersede county zoning authority to allow for the construction of a privately-owned hotel nearby.
Already, there has been some progress on this front. In 2017, the city of Honolulu approved a special type of permit to allow a tower to be constructed across the street from the convention center, at the corner of Kapiolani Boulevard and Atkinson Drive, that would feature 125 hotel units and 109 condominium units. But the Manaolana Place project has yet to be built.
Outside of hotel construction, state officials could consider whether to support the convention center with a funding stream from the transient accommodations tax.
To some extent, such a dedicated funding stream already exists, although it has been scaled back in recent years.
In 2021, the Legislature voted to override Gov. David Ige’s veto of legislation to reduce the amount of funding dedicated to the center. As a result, the convention center enterprise special fund now receives $11 million a year, instead of the previous $16.5 million allotment.
That fund exists to “be used by the authority for the payment of expenses arising from any and all use, operation, maintenance, alteration, improvement, or any unforeseen or unplanned repairs of the convention center.”
However, the convention center needs legislative approval to withdraw from the fund. Therefore, according to state data, the fund was estimated to hold about $27.3 million going into the current fiscal year.
Lawmakers could free up more of that funding for convention center repairs, but doing so would not fully address the center’s financial challenges.
Last, the state could consider selling the center to an entity in the private sector.
This would free the state and taxpayers from the obligation to deal with the facility’s continued operating losses and documented structural maintenance backlog.
On top of that, it could create substantial property tax revenues for Honolulu. The city’s real property tax system estimates the building is worth $350.8 million and the land is worth $216.5 million. At the city’s $12.40 per $1,000 rate for commercial property, the convention center could bring in more than $7 million annually if it were privately owned.
If the state were to receive anywhere close to $500 million from selling the center, it could use that money to reduce its pension shortfall or general obligation debts.
State taxpayers would also win, as their money could be put to more productive use. According to the state, the convention center in fiscal year 2026 had an estimated return on investment — its total estimated revenue, $418.9 million, divided by $31.4 million in expenses — of 13.36.
These numbers might sound good on paper. However, the state calculated the center’s revenues by adding up three figures: its estimated economic impact, its estimated tax generation and its revenue from operations.
Factoring out the center’s estimated economic impact, which does not directly benefit taxpayers as a whole, yields a far lower ROI number: only 1.98. That is because the center’s estimated economic impact was pegged at $356.9 million, which dwarfs its estimated tax generation of $41.8 million and operations revenue of $20.3 million.
Using the more conservative ROI estimate, it is clear Hawaii taxpayers would be better served if the state simply invested the money currently going toward the convention center into a long-term financial asset that could produce interest income.
Regardless of how state officials decide to address the convention center’s financial and physical condition, they must do so soon.
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October, 2026: Financial and infrastructure troubles plague Hawaii Convention Center