Panel reviewing lease-fee bill
By Treena Shapiro
Advertiser Staff Writer
The city's attempt to fix the controversial 1992 lease-to-fee conversion bill could die in a special meeting of the City Council Executive Matters Committee today when at least 75 people are expected to testify, mostly in opposition to the measure.
The measure — called Bill 53 — has drawn strong opposition from the Hawaiian community led by the Queen Lili'uokalani Trust, which fears it would be forced to sell the land under its Foster Towers condominium complex.
City Councilmember Gary Okino, who is considered a swing vote on the measure, approved the measure with reservations at a committee hearing in July and is proposing an amendment that would ban conversions for condominiums built before 1992.
That proposal, if adopted, would preclude conversions for all but 38 condominium projects, said Michael Pang, principal broker for Monarch Properties, which represents condo lessees.
If the proposal to fix the ordinance doesn't pass out of committee today, it would be considered dead. If the committee approves it, the measure would go up for a final vote before the council.
At issue is how many owners of a leasehold condominium project are required to force the sale of land under the 1992 ordinance. Earlier this year, the Hawai'i Supreme Court ruled that the city interpreted the ordinance incorrectly. The city administration believed that 50 percent of the owner-occupants of a condominium or 25 owners were required to force the sale of the land. The high court, however, said the ordinance required 50 percent of all the condo owners or 25 owners.
The Supreme Court ruling meant that lessees would have a harder time forcing the sale, and of 363 condominium projects on the island, only 37 qualified for the lease-to-fee conversion, Pang said.
Bill 53 was introduced to reflect the city's interpretation of the 1992 law.
To appease the opposition, Okino last week introduced a new draft of the bill that would also require at least 10 owner-occupants for the forced sale. While this would still exclude 250 condominium projects, 4,500 of the 5,700 owner-occupants on Oahu would still be eligible.
However, Okino has also proposed — but not yet introduced — another amendment that waters down Bill 53 to the degree that Pang said only one more condominium project will qualify for conversion, in addition to those that would qualify under the high court's ruling.
Under this proposal, the bill would only apply to leasehold condominiums developed after the original ordinance took effect on Jan. 1, 1992, because the landowners were aware of the lease-to-fee conversion possibility.
"That only adds one project to the (Supreme Court) decision," Pang said. "People stopped building leasehold projects when leasehold became a problem in the 1980s."
Of the few that were built, most have already converted to fee, he said, with the exception of 1448 Young St., which is owned by the city.
Pang said he is not generally an advocate of forcing people to sell their land, but "what it boils down to is if you don't have forced conversion, you aren't going to get out of residential leasehold."
Councilman John Henry Felix, the leading proponent of the bill, said the council would continue to explore all options and try to reach an equitable compromise.
"I commend Gary Okino for his efforts to seek various opportunities to resolve various differences but it's an ongoing process and the art of compromise is engaging in meaningful and productive and constructive dialogue. Unless we can explore all options we're not doing our job," he said.
"By the same token we have to analyze the impacts of these options to ensure that they're not counterproductive."
Reach Treena Shapiro at tshapiro@honoluluadvertiser.com or 525-8070.
