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The Honolulu Advertiser
Posted on: Friday, January 11, 2002

Condemnation not only route to project

A relatively strong argument has been mounted that city condemnation of private land in Waikiki for Outrigger's massive redevelopment project meets the test of a "public purpose."

But at this point, it is still an argument, not a settled fact. For that reason, the City Council should not rush into its proposed condemnation designed to let Outrigger proceed with its intriguing and clearly important project.

Outrigger has proposed a massive $300 million redevelopment project for its properties around or near Lewers Street in Waikiki. The redevelopment plan fits well with existing city policy for the renewal of Waikiki and, in addition, would breathe new life and allure to this somewhat rundown part of the resort area.

But Outrigger has said it cannot proceed without fee-simple ownership of five parcels within the 7.9-acre project site. These are parcels owned by individuals or private trusts and leased to Outrigger today.

Such "condominium" ownership of the overall project site creates financing problems, Outrigger says, as well as possible design headaches.

For these reasons, plus ongoing reluctance by some of the owners to sell at any price, the City Council has moved ahead on a plan to condemn the parcels and then reselling them to Outrigger at fair-market value.

There are several reasons why the council should use its good offices to first see if there isn't another way around this matter.

One is precedent. If this proposal goes through, it just makes it tougher for the council to say no to the next private developer who wants the city's help in acquiring someone else's property. Waikiki is a special case, clearly, but that won't necessarily stop others from asking for a similar favor.

In addition, while condemnation was seen as a last resort when negotiations fail, it is not completely clear that the negotiation route has run its course. For instance, it now appears that at least one of the reluctant landowners is now willing to sell and has made a tentative agreement with Outrigger.

Creative solutions, including like-for-like land swaps, are also possible. In fact, the mere potential of condemnation makes the possibility of selling appear sweeter because it creates tax advantages.

Finally, if the real problem is not land ownership but rather financing, there may be a way for the city to use its power to get Outrigger the financing it needs even though portions of the project remain on leasehold land.

The bottom line is that even if this project truly fulfills a public purpose and meets the city's planning dream for Waikiki, creativity and continued negotiation might be more appropriate than opening the Pandora's box of private condemnation.