A 78-year-old business could shut down due to problems after a homeless encampment moved into the neighborhood. 

A yellow line on the sidewalk at Kaumuali'i Street and Waiakamilo Road, separates where people walk and where people live.  

"We've been in this area for over 30 years and we've never had these kind of problems until this encampment started popping up," said Neal Arakaki, owner of Menehune Mac.  

The homeless encampment is just outside of Menehune Mac's factory in Kalihi. 

"It's gotten to the point where, we feel unsafe," said Arakaki.  

Arakaki said along with homelessness comes a spike in crime, his business has suffered thousands of dollars in losses due to vandalism. He said business at his store is down by 60%.

"We need some regulation out here," said Arakaki. 

He supports expanding the sit-lie ban to Kalihi and Iwilei. 

"This measure does nothing to alleviate the underlying causes of homelessness," said Mandy Finlay, of ACLU Hawaii.  

ACLU spoke out against the bill at a city council meeting Wednesday. A spokesperson emphasized stopping a homeless person from sitting or lying down on the sidewalk does little to help the bigger issue. 

"Imposing these hefty fines on them, and sending them to jail for up to 30 days for simply sitting or lying down on the sidewalk, when they have nowhere else to go, does nothing to help them to get out of their situation," said Finlay.  

With less customers coming through the doors for chocolate, cookies, and other island treats, Arakaki said the encampment is costing his family their livelihood. 

"This is one problem that may force us to close our business and this is not an exaggeration," said Arakaki.  

The sit-lie ban passed its second reading at the Honolulu City Council meeting. The bill will go back to a committee before a third and final reading.