First Foundation VP & Commercial Loan Officer Ann Tanouye, OHA Native Hawaiian Revolving Loan Program Fund Manager Timmy Wailehua, Michael Ching owner of Hawaii Gourmet Cookies, OHA Ka Pouhana Kamanaʻopono Crabbe, Technical Assistance Provider Rebecca Soon and OHA Technical Assistance Specialist Robert Crowell at loan signing and check presentation ceremony. (OHA news release Dec 29, 2016)
OHA’s $500K Cookie Crumbles
by Andrew Walden
“Hawaii Gourmet Cookies has ceased operations.” That’s the word from Oahu Auctions and Liquidations and it means more trouble for OHA’s troubled loan programs.
The news seemed more upbeat just two years ago. A December 29, 2016 news release from the Office of Hawaiian Affairs featuring Kamanaopono Crabbe, all-around-crony Rebecca Soon and others exclaims:
Before 2016 comes to a close, the OHA Native Hawaiian Revolving Loan Fund Program finalized a Hua Kanu business loan that provides $500,000 to Native Hawaiian business owner Michael Ching to expand his business, Hawaii Gourmet Cookies. This is the largest business loan that OHA has disbursed this year to support Native Hawaiian entrepreneurs. A signing ceremony was held at First Foundation, OHA’s financial lending partner, at it’s offices in Restaurant Row in Kakaʻako.
Ching says he will use the loan to improve business efficiency and update machinery used to bake his popular products lines such as Island Lava cookie brittle available in lilikoi, coconut, chocolate and coffee flavors. Funds will also be used to build up his product inventory and market his products to new vendors….
Through low-interest business loans from OHA, Ching has gotten access to capital that will allow him to take his products, like Island Lava cookies, from three stores (CostCo, Sam’s Club, and NEX) to over 500 stores in 2017.
But that’s not what happened. Photos from the November 11 auction include a 14-year old van, a used oven and mixing machine, and dozens of beat-up cookie sheets. The IslandLava.net website informs viewers, “Island Lava will be temporarily unavailable as we work to serve you better.”
IslandLava.net also reveals the company’s past difficulties with bank loans:
…First year in business an airline had us improve its snacks for first class passengers. Contract for tropical dried fruit trail mix was solid enough that a bank loaned $100,000 for machines and materials. New machines were humming, a container load of pineapple, mango and coconut were chopped and things were right on schedule September 2001. But we never made delivery. The tragedy of 911 canceled that order.
Bank loan, payroll, rent, aging fruits and zero income to pay the bills… in the ashes of failure are embers of new inspiration. That setback sparked our first tropical fruit macadamia shortbread cookies.
Took things to the next level by dressing our gourmet cookies in sophistication and style. Neiman Marcus became our client. Sales grew enough to warrant opening a boutique in the grandest hotel in Waikiki…. But once more setbacks struck - the economy soured and the hotel closed for renovations. This time my loan was $300,000 and once again no way to pay it….
OHA’s Hua Kanu Business loans and smaller Malama Loans have a troubled history. The Star-Advertiser, April 16, 2012 explains:
Robert Crowell, technical assistance specialist for OHA’s Native Hawaiian Revolving Loan Fund. "The idea behind the Malama Loan is to help provide economic self-sufficiency to Native Hawaiians," Crowell said.
While Crowell does not know why more Native Hawaiian-owned businesses in Waikiki do not participate in the program, he said that since its November 2007 start, the program has supplied nearly $6.4 million to 277 businesses statewide….
"The approval rate is about 46 percent," Crowell said, adding that OHA works with applicants…to help them get funded. The default rate on OHA loans is about 13 percent, Crowell said.
Ray and Rebecca Soon’s for-profit ‘Solutions Pacific, LLC’ has pulled in $650,810.25 from OHA since 2012—the year Kamana’opono Crabbe became OHA’s CEO. According to the Solutions Pacific Facebook page, Rebecca Soon often participates alongside Crowell in business fairs to promote OHA’s loan programs.
Here’s the breakdown:
In June, 2018 Honolulu Mayor Kirk Caldwell appointed Rebecca Soon deputy director of Honolulu’s Department of Community Services--the department responsible for giving money to community groups countywide. Caldwell’s office told the Star-Advertiser: “She is a small business owner who has worked with social service providers that have been a partner to the DCS.”
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