Outrigger land acquisition gets boost from Council

By Robbie Dingeman
Advertiser Staff Writer

Outrigger Enterprises has reached an agreement with one of five landowners for property it wants in Waikiki and is negotiating with the others. But members of the Honolulu City Council yesterday still moved a proposal forward that would condemn the privately owned properties and clear the way for the resort's $300 million redevelopment project.

Outrigger Enterprises' plan for a $300 million redevelopment of 7.9 acres in the heart of Waikiki took a step forward yesterday when a City Council committee approved condemnation of privately owned parcels on behalf of the resort company. Advertiser library photo

After debating the issue for several hours, the eight members voted 5-to-3 to approve the condemnation of four properties to allow Outrigger's ambitious plan to redevelop 7.9 acres in the heart of the famous resort.

Council members who opposed were: Duke Bainum, John DeSoto and Steve Holmes. Those in favor: Romy Cachola, John Henry Felix, Rene Mansho, Gary Okino and Council Chairman Jon Yoshimura.

The vote by the Council's Policy Committee moves the issue to a vote by the full Council on Jan. 30, then a Feb. 20 final approval by the Council.

In November, the committee postponed action on a proposal to condemn five properties in the Lewers Street-Saratoga Road area because of concern that the proposal amounts to government's stepping in to take one landowner's property to turn it over to another. Under condemnation, the property owner who loses the land is paid fair market value.

Attorney Crystal Rose said her clients from the Andrade Trust reached an "agreement in principle" for the purchase of their land by Outrigger.

Outrigger senior vice president Mel Kaneshige said he would not discuss details of the Andrade agreement or price until the deal is complete. "We're not there yet."

It will be nearly impossible to get financing for the massive project without the company owning all the land outright, he said.

It became clear at the meeting that the committee was pressing forward with the move to condemn all the properties despite calls from the landowners to delay while negotiations continued.

And that prompted a protest from Rose.

"To come to this meeting — having made an agreement — to tell me you're still going to vote to condemn my property? That doesn't seem fair," Rose said.

When the committee voted, Cachola recommended excluding the Andrade parcel, but warned it would be condemned as well if the deal with Outrigger falls through. The Council went along with his suggestion.

"You're still holding a guillotine over their heads," said DeSoto.

DeSoto said he didn't think it was the right way to move forward even though he supports the redevelopment project.

Former Hawai'i Supreme Court justice Robert Klein, who represents the remaining four landowners, said the Council has given Outrigger the upper hand.

"Now that condemnation gun, not only is it pointed at our head, but the trigger is cocked," he said.

Waikiki councilman Bainum, who is running for mayor, also praised the redevelopment project but would not support the means to get there. "I think it's premature ... premature condemnation," he said.

"We're sending a chilling, chilling message to every landowner," Bainum said. "This is a basic right for the landowner to be protected from the government."

Landowner Jackie Johnson urged the Council to delay action while the landowners try to work out an agreement without "the specter of condemnation hanging over our heads. Outrigger stands to gain, and every landowner in Hawai'i stands to lose. It is not right and it is not necessary."

Okino said he wrestled with the decision before supporting it. But the project provides a unique opportunity for helping the economy and Waikiki that it justifies the taking of the lands, he said.

"I think it's critical that we have this project," Okino said. "Other cities have done worse things and they've done good things, too."

Felix voted to support the project, but said he may change his vote later. "Mark my words, I'll be watching you."

Klein responded: "That and 50 cents gets you a cup of coffee. It doesn't mean anything."

Rather than placing a hammer over their heads, Yoshimura said the Council was helping to provide a deadline.

But DeSoto stuck to his more forceful analogies: "You stepped on people to achieve this."

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