The City and County of Honolulu Office of Revitalization announced Aug. 7 that it will close on Friday, Aug. 14, after the Honolulu City Council cut the office’s budget by $2 million.
In a statement to Aloha State Daily on Monday, Honolulu Mayor Rick Blangiardi stated, “The next time a small business owner asks why the City no longer offers the support they once depended on, the answer is simple: the City Council eliminated the office that provided it. The next time farmers recovering from the Kona Low storms ask why economic recovery assistance is no longer available, the answer is the same. Council votes have consequences. Beginning Friday, our community will experience the consequences of this one.”
The Honolulu City Council established the Office of Economic Revitalization in October 2020 to coordinate the city’s Covid-19 economic response and recovery efforts, accelerate economic expansion and disburse state and federal funding through grants and loans. The office managed approximately $408 million in federal pandemic relief funds and other grants for programs supporting local businesses, agriculture and Covid-19 relief funds over the last five years, according to a news release from OER.
An audit released in January 2026 noted issues with accountability and transparency related to OER’s staffing and funding and found that OER did not meet five of its eight responsibilities outlined in the resolution.
“Specifically, OER has demonstrated activity in economic response and recovery, identifying and management of funds for economic revitalization, and small business support. However, the office has not fully established or implemented the remaining five required functions including economic development and investment, economic improvement projects, a business resource hub, sector-specific economic support, and economic revitalization commission,” Acting City Auditor Troy Shimasaki wrote in the report.
The audit encouraged the office to establish a long-term sustainability plan, provide annual performance reports, evaluate program and services that are shared with other city departments and the state and ensure it meets all eight responsibilities.
The Honolulu City Council cut $1.62 million in salaries and $412,000 in expenses for OER in the budget for the 2026 fiscal year, leaving approximately $56,000 in operating funds. Blangiardi vetoed the cuts in June, calling the cuts “misguided and indefensible,” and the council voted 6-2 to override the mayor’s veto in July.
Councilmembers Radiant Cordero, Esther Kiaʻāina, Scott Nishimoto, Val Aquino Okimoto, Andria Tupola and Tommy Waters voted to override the mayor’s veto and Councilmembers Tyler Dos Santos-Tam and Matt Weyer voted to sustain the veto.
Blangiardi wrote, “Let me be clear: this was not my decision. This was the decision of Council Chair Tommy Waters, Budget Chair Val Okimoto, and the City Council members who voted to override my veto. They own this decision, and they own its consequences.”
ASD reached out to Waters for comment Monday.
Blangiardi also stated that the City Council rejected his request to allow the administration to address the audit findings and improve the department.
“I believed then, and I believe now, that good government identifies problems, corrects them, holds people accountable and continues delivering services. Eliminating an entire operation rather than improving it was the wrong decision," he said.
While the $2 million in cuts effectively shutters OER, only Oʻahu voters can end its operations, according to the Honolulu Revised Charter.
Councilmember Matt Weyer, who voted against the cuts in July, told ASD by email Monday that he was deeply disappointed that the OER will close and thanked the OER team for their service.
“I opposed the budget cuts that led us here because I saw firsthand how critical OER was to our residents, including helping our District 2 community recover from the Kona Low storms,” he stated. “As affordability and cost-of-living challenges worsen, our local families, small businesses, and farmers are fighting to survive. Our work is not done until every ʻohana can afford a home, our small businesses can thrive, and our communities are safe.”
The Honolulu Film Office retains three employees. Three community equity liaisons will go to the Department of Community Services, the sustainable agriculture and food systems program manager will move to the Office of Climate Change, Sustainability and Resiliency and the small business and finance program manager will transition to the Managing Director’s Office. According to minutes from a July Economic Revitalization Commission meeting, repurposed American Rescue Plan Act funds will pay the 15 remaining staff members through the end of September.
According to a news release issued Friday, Kona Low business recovery grants, small business support, workforce development programs and funding, tourism support and innovation and tech support will be suspended indefinitely at the city level. DCS will continue community outreach and equity work, CCSR will continue food systems and sustainable agriculture initiatives, and the Department of Housing and Land Management will continue two months of a federally funded fellowship to activate vacant City properties for development. The Oʻahu Business Connector, the Oʻahu Small Business Loan Fund, Stay Open Oʻahu and other small business support will continue in the Managing Director’s Office and an effort to expand the Wahi Pana art installation project will continue in the Mayor’s Office of Culture and Arts.
Joseph Burns, director of the Hawaiʻi Small Business Development Center, said that SBDC provides comprehensive no-cost statewide business advisory services as a program of UH Hilo under a cooperative agreement with U.S. Small Business Administration.
“If the closure of the OER results in additional strong demand on our capacity, we are positioned to respond, although there may be a somewhat longer than usual wait time,” he stated.
Economic Revitalization Commission Chair Eliza Talbot told ASD Monday that she is disappointed at the closure of OER, saying that she anticipates small businesses and farmers who benefitted from OER services and programs will see long term impacts because of the closure.
OER positioned the City more competitively for federal grants and worked with the state to establish Hawaiʻi as a statewide economic development district, she said.
Talbot said that the state Department of Business, Economic Development & Tourism works great on a macro level, but that OER was tuned into the Oʻahu community on a micro level with the ability to respond to crises. Without OER, Talbot said that small businesses will fall through the cracks.
Community members, organizations voice support for OER
The Honolulu City Council received dozens of letters this spring from residents, business owners and organizations in support of funding OER, including the International Economic Development Council, North Shore Chamber of Commerce, Kapolei Chamber of Commerce, Hawaiʻi Farm Bureau, Hawaiʻi Farmers Union and Hawaiian Council.
Chamber of Commerce Hawaiʻi President and CEO Sherry Menor urged the Council in June to sustain funding for OER.
“As Oʻahu continues to navigate economic uncertainty, strong alignment between government and the business community is essential to recovery,” she wrote. “Scaling back key economic functions risks slowing progress and weakening the foundation needed for long-term stability, diversification, and growth. Maintaining dedicated capacity in economic resilience remains vital to both near-term recovery and long-term growth for the City.”
Josh Wisch, executive director of Holomua Collaborative, advocated to the City Council to work with OER to find ways to implement the auditor’s recommendations in July.
“Audits find areas for improvement. That is what they do. But when an audit finds TheBus can be improved, the answer is not to eliminate TheBus and shut down all of its routes,” he said.
Selena Costa, owner of Leather & Lei, wrote to the City Council in April advocating for continued funding for OER. Costa participated in the first Idea2Biz cohort in 2025 and said that it showed her “that everyday people like me can turn their dreams into reality.”
Chu Lan Shubert Kwock, of the Chinatown Business Community Association, pointed to recovery efforts during and after the Covid-19 pandemic, Kona low storms in March 2026 and power outages in the area as reasons to sustain funding to OER.
“Nobody else came to help the small business people but OER,” she said.
Amy Asselbaye, executive director of OER, told the City Council in June that the principle that “government should listen to the people it serves,” has guided the office since it was established in 2020.
According to Asselbaye, OER reached 46,595 households through outreach efforts, access to local produce, rent and utility relief, and employee retention and workforce programs, and 12,200 beneficiaries through capital investments and programs.
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Haley Lehman can be reached at haley@alohastatedaily.com.
