Stake in cemetery offered — with rules

By James Gonser
Advertiser UrbanHonolulu Writer

Honolulu attorney Nils Katahara says his family is willing to give away its 10 percent interest in the financially troubled Honolulu Memorial Park if certain conditions are met, but the volunteer group now in charge of the cemetery says it is creating new management without the Katahara family's involvement.

Katahara said he has seven conditions that need to be met before he will give his family's interest in the cemetery to the Friends of Honolulu Memorial Park. The Richards brothers — Manning, James and Montague — have given their 90 percent share to the nonprofit friends group.

The donation of the final 10 percent interest would ease the transition from the former owners to the new nonprofit set up to run the cemetery, but is not a necessity, according to the friends group.

Katahara said the major stumbling block to finalizing the donation is that he wants all plot and niche owners to automatically become voting members of the nonprofit corporation that would run the park and the friends include only people who applied for membership and were approved by the board of directors.

"The only thing we want to accomplish is returning the control and future of the park to the people that actually have plots and niches in the park," Katahara said. "I've tried over a year to put our position out there. I'm trying to donate it for the benefit of the plot and niche owners."

The cemetery is being operated by the friends using volunteers and donations until reorganization is completed and money is raised. Just last week electricity and water service were restored and liability insurance secured to protect users and visitors.

Honolulu Memorial Park has three entities: Honolulu Memorial Park Inc., a for-profit corporation responsible for the sale of plots and niches; Honolulu Memorial Association, a nonprofit to manage and maintain the cemetery; and Kyoto Gardens, a nonprofit responsible for fund-raising.

City Councilman Rod Tam is a member of the friends group and says Katahara's donation is welcome but not needed with a majority interest in the cemetery already secured. Tam said plot and niche owners automatically become members of the association, which should satisfy Katahara's conditions. Under federal law anyone can become a member of the Kyoto Gardens, he said.

"We don't want to dwell on this issue of who wants control," Tam said. "So we decided to move ahead. When Nils wants to sit down we will, but we cannot wait for him anymore."

In a letter to friends president Vic Hejmadi, Katahara says he wants a new nonprofit group formed with bylaws that include:

• That all niche and plot owners become the only members in the nonprofit and have an equal vote in running the cemetery.
• The members vote annually on a board of directors and officers.
• A financial report be issued annually.
• An annual election be held for directors after the financial report is completed.
• Any group at least of 10 percent of the members are able to call a meeting to make decisions.
• A vote be held to determine the future of the cemetery's deteriorating pagoda.
• Members vote on the following: all expenditures over $5,000; any changes to the bylaws; any unusual action; any merger or sale; and whether to establish a conflict of interest policy.

The Richards brothers filed for bankruptcy at the cemetery on Dec. 28, 2001, but the case was dismissed last month because a reorganization plan was never completed.

When filing for Chapter 11 protection, the owners asserted that the cemetery was bankrupt and estimated that it would take $1 million to repair the 37-year-old pagoda, a replica of the Sanju Pagoda in Nara, Japan.

Tam said the friends plan to raise money through grants and donations to save the pagoda.

Tam said there are nearly 8,000 plots and niches sold at the park and more than 1,000 are available for sale.

Reach James Gonser at jgonser@honoluluadvertiser.com or 535-2431.