Governor's bill would block the city's Outrigger deal

By Bruce Dunford
Associated Press

Gov. Ben Cayetano is moving to block the city's attempt to condemn private property to clear the way for the Outrigger hotel chain's $300 million plan to redevelop and expand its Waikiki properties.

The City Council's Policy Committee voted 5-3 Jan. 9 to condemn and acquire four private parcels to be leased to Outrigger Enterprises, allowing it to redevelop nearly eight acres in the resort area.

Cayetano has submitted a bill to the Legislature that would limit the counties' condemnation powers to acquire private property for public purposes and uses defined specifically in state law.

Although the city's proposed condemnation on behalf of Outrigger "arguably may provide some public benefits, it appears that Outrigger would reap tremendous private benefits," said the governor's message to lawmakers.

Cayetano noted that under the state's Land Reform Act, which was upheld by the U.S. Supreme Court, condemnations resulting in the transfer of property from one private individual to another are not necessarily invalid. "However, if the claimed public purpose is merely a cloak for an ulterior private use, there is no public use and such an acquisition would likely be deemed an improper exercise of eminent domain power," he said.

The condemnation measure is scheduled for a vote by the full council tomorrow with a move for final approval scheduled for Feb. 20.

Council Chairman Jon Yoshimura, who voted for the measure, said last night he would not comment on the specifics of Cayetano's bill until he has met with the governor.

But Yoshimura said the bill, if approved, could have an impact on other projects.

"You pass a bill like this and you end up tying the hands of all county governments in the entire state from moving on private property," Yoshimura said. "Communities nationwide have used this power to renovate urban areas that are in need of redevelopment."

Yoshimura said he believes the landowners will reach an agreement with Outrigger and that the city will not have to condemn the property.

"This issue is not about an emotional attachment to land. It's about money and who can get the most leverage to get the best deal possible," he said.

The original proposal was to condemn five parcels in the Lewers Street-Saratoga Road area, but one landowner agreed to sell the land to Outrigger.

The four other landowners asked the council to delay action while the parties work out an agreement. Condemnation, they said, would hurt their ability to negotiate with Outrigger.

Staff writer Curtis Lum contributed to this report.