State gives firm use of disputed hotel site

By Kevin Dayton
Advertiser Big Island Bureau

The state Board of Land and Natural Resources yesterday agreed to issue a temporary permit to a company that is occupying state land at the Hilton Waikoloa Village while a long-standing dispute over the site is sorted out.

Under the terms of the revocable permit, Global Resort Partners would pay the state $6,000 a month for 1.3 acres of land under a restaurant and other facilities at the Hilton Waikoloa.

In 1997, U.S. District Judge David Ezra ruled that the property under the hotel operation was actually state land and ordered the state to seek compensation from the "occupiers" of the land, including back rent to 1986.

Until now the state has never been paid rent for the use of the property. An appraiser for the state concluded last year the land is worth $2.5 million, and estimated market rent would be $192,000 a year, but Lanpar rejected that appraisal.

The land board voted in June to use a three-member panel of appraisers to try to reach an agreement with Lanpar/HTL Associates, which owns most of the land under the hotel.

The state is now trying to negotiate a lease or land exchange with Lanpar to settle the dispute, and is seeking back rent.

In the meantime, the board agreed yesterday to issue the revocable permit for use of the land to Global Resort Partners, a Hilton partnership that is leasing the hotel site from Lanpar.

Alan Murakami, litigation director of the Native Hawaiian Legal Corp., said he believed the rent should have been considerably higher.

"There has been progress, but we're still disappointed with the long delays in resolving this issue," Murakami said. "To come up with $6,000 a month in seven years (since Ezra's ruling) is not complying with the court order, so we're anxious to see final resolution as soon as possible at fair market rent."

Reach Kevin Dayton at kdayton@honoluluadvertiser.com or (808) 935-3916.