Posted on: Tuesday, November 13, 2001

Waikiki condemnation for Outrigger opposed

By Robbie Dingeman
Advertiser City Hall Writer

Joan Brown, along with her sister Pam Anderson, are beneficiaries of a trust that owns one of the parcels Outrigger is trying to acquire. Deborah Booker • The Honolulu Advertiser

The proposal to use city government's power to condemn five properties in Waikiki to pave the way for Outrigger Enterprises' $300 million redevelopment project is opposed by owners of at least three of the parcels.

Yesterday, owners and their representatives said they support the revitalization project but don't think it's necessary or appropriate for the city to condemn the properties, then turn around and sell them to Outrigger.

The landowners say they are prepared to fight for their land in a legal battle if they have to, but hope that they can persuade City Council members to consider their view this week. If the condemnation plan gets committee approval this week, the move could be up for final approval in January.

Outrigger Enterprises' CEO Mel Kaneshige said the company wants to own the properties as part of the $300 million Waikiki Beach Walk project, a massive renovation of part of the famous resort that has become rundown over the years.

The Joseph B. Andrade trust is a one-third owner of the land beneath the Ohana Reef Towers Hotel, a 480-room hotel slated for renovation under the project.

Two granddaughters of Joseph Andrade, who are beneficiaries of the trust, said yesterday they are baffled by Outrigger's push to own the property rather than continue the lease.

Sisters Pam Anderson and Joan Brown, both Punahou School graduates who live in California, said they hope to keep the land in their family.

The sisters wrote a letter summing up their position: "The way we see it, the city is forcing a small, private landowner to sell to a big developer, so the developer can make a bigger profit."

Anderson said her family has strong ties to the property, which has been in the family for three generations. "This is our little piece of the rock."

Both sisters object to the government taking their property and point to the Outrigger lease which lasts until 2019, with an option for extension until 2069.

They will oppose the move at tomorrow's City Council Policy Committee meeting

Kaneshige said the company will need to seek some of the financing for the project on the Mainland and would like to simplify the ownership as much as possible. Even with leases on the properties, he said that the company must seek permission from the landlords for the redevelopment. "It injects somebody else's approval or consent," he said.

Former Hawai'i Supreme Court Justice Robert Klein said that he represents owners of two of the other parcels, a parcel at 2194 Helumoa and 226 Lewers Street that is the site of a Carl's Jr. restaurant; and a parcel on Saratoga Road, which houses part of the Ohana Reef Lanai Hotel.

According to property records, the first parcel is owned by Jacqueline Johnson of Honolulu, and others.

The second is owned by the Jabron Mango Company, which is owned by Johnson and her sister Bronwen Welch.

"Our position is that we will be testifying against the resolution," Klein said, but he wants to emphasize their strong support of the redevelopment.

Condemnation involves government using the power of eminent domain to take private property for public use after compensating owners for the fair market value of their property.

It's more commonly used for highways, civic centers, airports or other projects with a broad public use.

But Kaneshige said it's clear from various city planning documents that the city considers keeping Waikiki vibrant as a vital public purpose. "This is really a part of following through on the city's plan to revitalize Waikiki."

Klein said that Outrigger just renegotiated its lease with his clients, extending it to 2080. "We're baffled as to why they need to condemn our fee interest for the purpose of financing this project. We don't get that."

Klein said that the company can complete it's plans without owning the land. "I think that remains to be seen as to whether the primary goal of the condemnation is to benefit Outrigger or the public."

Kaneshige said the company may not go forward with the ambitious and expensive project without owning all the properties.

Klein doesn't see the compelling reason for the city action. "Now, all of a sudden Outrigger wants to pick up its marbles and go home if it doesn't get the fee interest? It's not fair."

But Kaneshige said the company is striving to go forward with the project even with the downturn in tourism.

"It's hard enough as it is especially now given the skittishness of lenders and investors to be putting money into hotel projects mainly because of the aftermath of September 11th."

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 525-8070.