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Maui Beach Hotel copes with liquor license problems

Employees’ hours cut back, ’80s dance night moves to another location

WAILUKU — Maui Beach Hotel has cut back employee hours and lost its trademark ’80s dance night after losing its liquor license for the first time in July.

The company has since obtained a temporary hotel license allowing it to sell alcohol, but the hotel has been without an entertainment permit since October. That permit allows dancing. Hotel representatives went before the county Liquor Control Commission Wednesday to seek a general license and an entertainment permit in the near future.

“We want to continue serving liquor at the hotel that’s been there for 50 years, and we’ve never had any problems with the liquor or anything,” said Kyko Kimura, director of owner relations for the hotel’s management company, Aqua Aston Hospitality. “There’s no downside of granting that license or continuing this operation.”

The hotel has been dry twice — once for about six weeks and again for about a week. Kimura said the hotel has lost out on revenue from a number of weddings and the popular ’80s night, an event that has moved to The King Kamehameha Golf Club. The hotel employees’ Christmas party also had to be canceled.

She added that the hotel’s liquor application was rejected over minor errors, including an original signature from owner Peter Savio.

“So many employees are losing hours and not gaining tips,” she said. “Somebody who’s a good member of the community for 50 years punished this way is unreasonable.”

Wailuku attorney Craig Nakamura, who represents the hotel, said its issue is a bit unusual for hotels. Historically, owners ran the hotels and owned the liquor licenses, but now owners hire outside management companies.

Savio owns the license and is seeking to transfer it to his management companies, which include food-and-beverage operator D.H. Investment Inc. Nakamura said this was the fourth hearing with the commission since the hotel lost its license, and it has not been able to have a preliminary hearing on its application.

Commissioners asked the hotel to have the food-and-beverage operator submit an application for a dispensary general license and told officials their temporary hotel license would suffice. The hotel will need to return for an extension of its temporary license in March.

The commission’s monthly meeting introduced a number of liquor rule amendments, which were unanimously approved by members Wednesday. Department officials said most of the changes were “simple housekeeping,” but a few testifiers questioned the interpretation of existing rules.

One rule involves the vetting of management agreements, which had been ignored for the past five years by previous department Director Frank Silva, testifiers said. Under new Director Glenn Mukai, the rule is back in place and being enforced on Maui Beach Hotel.

With its liquor license, the hotel is required to submit all personal history information, fingerprinting, ID cards, etc., for all of the officers, directors and shareholders owning 25 percent or more of stock in D.H. Investment, Nakamura said. All Maui business would have to do the same for any company that shares a management agreement.

“The director (Silva) basically didn’t care about management agreements — he told me that directly,” Nakamura said. “The director felt the licensee was going to be responsible for all operations. So if anything happened in that premises, even if there was a manager, it was still the licensee that was going to be held responsible.

“Also the number of management agreements, he didn’t want to deal with it.”

Wailuku attorney Dave Jorgensen, who represents many liquor licensees, said he understands “there’s a new sheriff in town,” but he said it was a waste of the commission’s time to review every management agreement. He said there are no limitations or distinctions to the rule.

When asked what percentage of Maui hotels would have management agreements, he replied “almost 100 percent probably.”

“As far as restaurants, particularly chain restaurants, probably all of them,” he said. “That’s an overstatement, but a lot of them because that’s the way the business works. You have someone responsible, but you got somebody on the ground running the business. It’s one of those things where you have to be careful what you ask for because you might get it. The department is working real hard, but they’re understaffed and overworked and this is an avalanche waiting to happen.

“I also believe it’s unfair to the licensees. They go through the process and the head of the beast gets approved and they’re responsible for whatever happens on their premises and under their license.”

Attorney Peter Horovitz also asked commissioners to clarify a rule on transferring a restaurant license to another person or business. Under current rules, an incoming restaurant licensee must show it makes 30 percent of sales on food over the course of a year.

A new licensee cannot do that, though, because it has no history at the newly acquired restaurant and would have to wait an entire year before getting a liquor license. Horovitz suggested the rule be clarified so that only the premises, not the licensee, has to show food sales and the licensee has to show it has continued to sell food.

“I have clients who do wish to retire and pass on what they built and this significantly impacts their ability to do that,” he said.

One rule change that was passed Wednesday allows nonprofits, including veterans groups, to apply for special liquor licenses for no more than three consecutive days.

Richard Moss, quartermaster of the Veterans of Foreign Wars Post 3850, was with a handful of veterans in support of the amendment. He testified that his group sponsors three events every year — two luaus and a steak fry — for fundraisers and veterans would like to legally serve alcohol.

* Chris Sugidono can be reached at csugidono@mauinews.com.

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