Posted on: Thursday, March 14, 2002

City supports condemnation of condo land

By Robbie Dingeman
Advertiser City Hall Writer

The City Council yesterday approved a move to condemn the land under the Kuapa Isle condominium development in Hawai'i Kai so that the owners of the units can purchase the land.

Kuapa Isle has 234 residential units, although some have already gone through voluntary lease-to-fee conversion.

The move is the latest use of the city's version of the state land reform act, which allows the forced conversion of leasehold property to fee simple ownership.

The council in 1991 gave owner-occupants of leasehold condominium units the same right as single-family lessees to buy the land under their homes. Under the act, homeowners petition government to condemn the land on behalf of the homeowners.

The landowner, Kamehameha Schools, yesterday opposed the forced conversion, noting that a voluntary lease-to-fee sales program is under way at the East Honolulu development.

Sydney Keli'ipule'ole, director of Kamehameha's residential asset division, said the trust continues to oppose forced condemnation.

"Our trustees have a fiduciary duty to manage the assets of the trust, and this duty includes opposing governmental efforts to force divestment instead of encouraging voluntary sales between a willing seller and a willing buyer," Keli'ipule'ole said.

One of the homeowners supporting the move yesterday was Richard Elwell, who has lived there for 25 years. Elwell said he and other homeowners have been trying for almost 10 years to reach agreement with Kamehameha Schools on a purchase price. "We've had very little success."

He said it's a big step forward for homeowners because "this will let the court determine the valued of the leased fee."

Elwell said it's likely that it would take another year and a half before the matter gets to court. In the meantime, he said both parties can continue to negotiate.

He said he and other owners are ready to pay a reasonable price, "we just don't want to pay exorbitant prices."

Units in the development sell for between $220,000 leasehold to around $300,000 for those that are fee simple, Elwell said.

In other council news, the city postponed action to consummate a land sale/swap designed to settle a long-simmering legal dispute with Kamehameha Schools over 32 acres across from Sandy Beach known as Golf Course 5 and 6.

Last month, the city announced it had reached agreement to sell 20 acres in Pearl City to Wal-Mart for what would be its third store on O'ahu as part of a settlement with landowner Kamehameha Schools that will give the city title to the property near Sandy Beach.

The trust has agreed to drop its lawsuit over the land and in return receive $5.4 million, as well as the proceeds from the sale of several parcels of city land in Pearl City, including one to Wal-Mart. Part of the proceeds also will go to developer Maunalua Associates.

Council Zoning Committee Chairman Romy Cachola said the city is still working out details of the proposal and that's what prompted the delay.