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The Re-education of Hilo

The sleepy Big Island town’s slow, homegrown growth should be the envy of the

UNDER THE VOLCANO: Marlene Hapai stands amid the construction of the $28-million Mauna Kea Astronomy Education Center. Hapai believes that not only will the center be an architectural icon in Hilo but also a scientific and economic engine. Photo: Macario
In 1992, during an overnight stay at the Hapuna Beach Prince Hotel, Marlene Hapai came face to face with the Big Island's troubled economy. Actually, it was a young, underemployed bellhop, who got the University of Hawaii at Hilo professor to contemplate the disturbing future of her home island.

"I vividly remember that the young man carrying our bags had recently graduated from a Mainland college, with a degree in business administration, but he couldn't find a job in his field," says Hapai. "It struck me. Here we are on an island that is so rich in resources, such a natural laboratory, and our kids' only opportunities are in the tourist industry. I have nothing against tourism, but there should be more."

Shortly thereafter, Hapai, who at the time was chair of UH Hilo's Natural Sciences Division, began jotting down ideas for a massive science education center, which would showcase the 13 sciences practiced on the Big Island. She modeled it after the interactive facilities at the Smithsonian Institution's museums, which Hapai had recently visited and admired.

It seemed bold and outlandish, but, with the Big Island's sugar industry in its final death throes, it was also necessary.

Last January, Hapai, along with university, county, state and federal officials, broke ground on the Mauna Kea Astronomy Education Center (MKAEC), a $28-million facility that will showcase the cutting-edge science being performed on the summit of Mauna Kea, while celebrating the Islands' deep connection with astronomy. The 40,000-square-foot center is a scaled-down version of Hapai's original concept, covering just one science, astronomy, but it will be revolutionary nonetheless, featuring a 12,000-square-foot exhibit hall and a 120-seat planetarium, with interactive exhibits, a 4-D video theater and the latest in laser projection technology.

Hapai believes that MKAEC's ultra-sleek exterior, featuring three titanium cones symbolizing the Big Islands' largest volcanoes, Mauna Kea, Mauna Loa and Hualalai, will soon be an icon in Hilo. However, not only will the structure, located in the UH Hilo's University Park on the outskirts of town, be an architectural landmark, it will also be a scientific and economic engine, attracting 200,000 visitors annually and employing 61 skilled, full-time and part-time staff.

"Most people don't have the opportunity to experience what the scientists are doing on Mauna Kea, so with MKAEC we have brought the mountain to the people," says Hapai. "Soon, we'll be able to share the science with millions of people, without disturbing the mountain and its cultural sites."

MKAEC isn't the only egghead in town. Just across the street, the U.S. Department of Agriculture's Agricultural Research Service recently broke ground on its $60-million Pacific Basin Agricultural Research Center (PBARC). The sprawling campus will consolidate the agency's four research labs on three islands and will eventually feature 120,000 square feet of lab and office space. It will more than double the number of center employees, from 85 to nearly 200. In April, the U.S. Forest Service broke ground on a research center of its own, a $12-million facility with a staff of 30. This is in addition to the UH's $11-million, 30,000-square-foot branch of its Institute of Astronomy, also located at University Park.

"Hilo has transformed itself from a plantation town to a university town," says Richard West, executive director of the Hawaii Island Economic Development Board. "It's been estimated that the astronomy park has created between 500 to 600 jobs, most of those here. Now, we have PBARC, a $60-million facility with high-quality jobs and research that will benefit agriculture. This is the kind of clean, economic development that we love."

Hilo's Average Unemployment Rate
Cruise Ship Passengers Visiting Hilo
Source:Colliers Hawaii Consulting

Hilo Rising

Sleepy Hilo is a molasses-slow town in a state that is a few steps behind the rest of the nation. Without a decent beach and with nearly 130 inches of annual rainfall, the town was bypassed by the mighty tourist industry, which has been the primary engine of the Hawaii's economy since statehood. Instead, it clung to its sugar industry with a death grip that nearly suffocated East Hawaii when the last of the plantations shut down in 1994.

Is Hilo quaint or is it backward? It depends on how far you live from Bayfront Drive.

The recent infusion of dollars, research infrastructure and brainpower has helped revitalize the town. Suddenly, Hilo seems poised to leap into the 21st century, armed with a modern, diversified economy that should be the envy of the state.

EDUCATING HILO: Under Dr. Rose Tseng's leadership, the University of Hawaii Hilo has increased its research money five fold. Tseng believes community development is one of the school’s essential missions. Photo: Macario

"Hilo has never, nor will ever be a visitor destination comparable to Kona or other areas in the state," says West. "That was our curse, but now it is turning out to be a blessing in disguise. Since tourism never dominated our economy, Hilo was able to retain its historic character, which today is attracting visitors. In some ways, we're getting the best of both worlds."

Hilo's revival has been slow and steady, mirroring the state's improving economy overall. According to the Hawaii state Department of Labor and Industrial Relations, the area's unemployment rate has improved, from 9.5 percent in 1995 to 7 percent in the first half of 2004. Hilo's office vacancy rate plummeted from an eye-popping 24 percent in 1995 to 4.7 percent in 2002.

However, Hilo, being Hilo, is a few steps behind the west side of the island, which has gone nuclear over the past several years. In 1995, the county's average unemployment rate overall was 10.2 percent and in 2004 it was 5.2 percent. In the first half of 2004, Kona and Kohala accounted for 76 percent of the number of building permits on the Island. Hilo had just 13 percent.

As a result, Hilo's slow-burn economic return hasn't garnered much attention statewide. But its homegrown, balanced growth, much of it fueled by diversified agriculture and research, should be turning heads. The little town has been able to remake itself without replacing its addiction to sugar with an addiction to tourism. But tourism will soon be rediscovering Hilo. In 2003, the town received 219,262 cruise-ship passengers from 116 foreign ship calls. By 2007, the city expects to receive 418,600 visitors from 219 domestic and foreign ship calls. Big-time tourism without the skyline-clogging infrastructure.

College Town, USA

At the center of this furious build out and immigration of brainpower is the University of Hawaii at Hilo, a mid-size, four-year liberal arts institution that has been a conduit for tens of millions in research dollars, along with being an economic engine in its own right.

Hilo Office Vacancy Rate
Source:Colliers Hawaii Consulting

According to a 2003 study by Dr. David Hammes, chair of the UH Hilo Economics Department, the school is the second-largest single employer in East Hawaii with 486 jobs, and accounts for $101 million to $106 million in direct expenditures annually. Indirectly, the school is responsible for approximately 2,800 jobs (7 percent of all jobs in the Hilo area) and an additional $53 million in added economic activity.

The engine is getting bigger. Led by energetic chancellor Dr. Rose Tseng, UH Hilo has increased its research money, from $5 million in 1998 to $15 million in 2002. In the fall of 2003, enrollment reached 3,340, an 8.9 percent increase from 2002 and a 25 percent increase from 1997. In five to six years, Tseng plans to increase enrollment to 5,000, of which 12 percent will be international students. Currently, UH Hilo's international student population is approximately 8 percent.

In addition, the school now offers five master's degrees and has plans to offer two doctoral programs in the next couple of years.

"Industry cannot improve without research and research wouldn't come to Hilo without the university," says Tseng, who, before coming to Hilo six years ago was the system chancellor and chief executive officer of the West Valley Mission Community College District in California's Silicon Valley, an area familiar with the power of scientific research. "We are not only an economic engine ourselves, we are a catalyst for bringing these entities to Hilo. Education can stir up the economy."

People outside of the city limits are starting to take notice. Recently, the Western Association of Schools and Colleges awarded UH Hilo with a 10-year extension of its accreditation, the longest period granted by the organization. Also, in 2003, Outside Magazine ranked UH Hilo No. 19 on its list of the 40 best college towns in America. In its article, the adventure magazine noted the school's proximity to a plethora of outdoor activities and Hilo's small-town appeal.

Hilo Retail Vacancy Rate
Source:Colliers Hawaii Consulting

"There is a new sense of dynamism in Hilo," says Hammes. "For a number of years, we were here attracting our 2,500 students. Sugar was still going on, and we weren't seen as an integral player. Then the plantations closed and people started to look to the school for help."

In addition to MKAEC, UH Hilo's long arm is reaching along the Hamakua Coast with the construction of the North Hawaii Education and Research Center, an educational outreach center servicing the communities of Laupahoehoe, Honokaa, Waimea, Kohala and Waikoloa. The center is housed in the old Honokaa Hospital. In October, the university broke ground on the Pacific Aquaculture and Coastal Resources Center, a $5.7-million marine science center located on the grounds of Hilo's old sewage plant.

Meanwhile on campus, school officials hope to begin construction of the U.S.-China Center, a $60-million conference complex akin to UH Manoa's East-West Center. The center, located on 33 acres adjacent to the school, will also feature 760 dormitory rooms, a shopping mall and a 100-room hotel. The $16-million Student Life Center, a multipurpose sports auditorium with seating for 2,500, is also slated to begin construction in early 2005.

While the recent slew of construction projects on and off campus pumps millions of dollars into Hilo's economy, Dr. Marcia Sakai, director of UH Hilo's College of Business and Economics, is more optimistic about the clustering of related businesses and research facilities in and around Hilo, which could potentially result in longer-term economic benefits to the area. According to Sakai, when critical mass is achieved, catalytic innovation and industry are often the result. It happened in Massachusetts' Tech Corridor, North Carolina's Research Triangle and California's Silicon Valley.

Could it happen in sleepy Hilo?

"What I see today is that the university is attracting major research facilities that are uniquely related to the resources located on the island," says Sakai. "Economic growth occurs because they are co-located together. When you get enough of these people together, one thing leads to another."

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