Big Island lease deal criticized
By Kevin Dayton
Advertiser Big Island Bureau
HILO, Hawai'i — State plans to lease more than an acre of South Kohala oceanfront land to the operators of the Hilton Waikoloa Village for $55,000 a year are drawing criticism, and may trigger new legal challenges.
The lease-rent dispute is the latest chapter in an 18-year legal controversy over nearly two acres of filled and submerged state lands, including land under one of the Hilton Waikoloa's restaurants, and the luxury hotel's swimming lagoon.
Sherry Broder, a lawyer advising the Office of Hawaiian Affairs, said she will urge the OHA trustees to challenge the lease rent that was approved by the state Board of Land and Natural Resources last week.
"I think common sense dictates that a parcel of over an acre right on the beach in Kohala is worth more than they are talking about charging these people," Broder said. OHA has a stake in the matter because the agency receives 20 percent of the revenue from ceded lands.
Alan Murakami, litigation director for the Native Hawaiian Legal Corp., said he also expects to file a court challenge to the proposed lease rent.
"I think it's fair to say that both OHA and my client will have to react," said Murakami, who represents Mervin Napeahi, a Ha-
waiian who in 1986 sued in federal court alleging the state was improperly abandoning the public lands to a private owner.
"This has just fallen outside the bounds of any reasonable standard of what could be considered reasonable value," Murakami said.
The origins of the dispute date back to even before Lanpar/HTL Associates bought the hotel property in 1986, and before the hotel was built.
The lands once were tide pools makai of the shoreline — making them publicly owned submerged lands — but were filled in during hotel construction. The restaurant and other hotel facilities were built on the filled lands.
In 1976 the state had declared the tide pools were public property, but in 1984 the state contradicted that decision by certifying for a new owner that the shoreline was makai of the ponds, meaning the ponds were private property.
Napeahi sued in federal court in 1986, alleging the state had abandoned the public lands to a private landowner, which Napeahi alleged was a breach of the public land trust established by the Admissions Act.
Judge David Ezra agreed that the disputed property was actually ceded lands, and ordered the state in 1997 to seek compensation from the "occupiers" of the land, including back rent.
The issue has stalled since then, with the state and owner Lanpar unable to agree on the terms of a lease, land exchange or any other method of settling the matter.
Last week the land board agreed to a proposal to lease the 1.37 acres of fast lands to Global Resort Partners, which is owned by Hilton subsidiaries. Global Resort leases the rest of the land under the hotel from Lanpar.
Dede Mamiya, land administrator for the state Department of Land and Natural Resources, said the agreement to lease the lands to Global for $55,000 a year was arrived at through an appraisal process set out in state law.
"That's how fair market rent is determined, through that process," Mamiya said "This is the process that even private lessors will follow in determining their rent. We're statutorily mandated to follow that process."
Mamiya also noted that the land board agreed the 65-year lease will not be issued until the long-running dispute over back rent is settled. The land board authorized the state attorney general to pursue the back rent.
The appraisers agreed the back rent should be set at $82,876 a year from 1986 to 1997. However, the parties have disagreed over who is responsible for that rent because the state at one point certified the land was privately owned, suggesting the state may be partly responsible.
The land board also approved a proposal to grant an easement to Global to allow the partnership to use another half-acre of submerged lands for a one-time payment that has yet to be determined.
The board also instructed state staff to pursue a land exchange to permanently resolve the issue with a swap of the 1.37 acres of state-owned fast lands for some other property elsewhere.
That decision was criticized by Jerry Rothstein, president of Public Access Shoreline Hawaii, who said the state would be wrong to trade away a precious strip of coastal property.
Mamiya said there are safeguards in place to ensure the state makes a good trade: The public review process for land swaps requires the land board to vote twice to approve any swap, and the state Legislature also has the right to reject any land exchange.
"That was something that we negotiated that they wanted us to pursue, and we didn't think it was unreasonable given all the hurdles they have to still surpass," Mamiya said. "The public will have much opportunity to comment on any land exchange proposal if one comes before the board."
Peter Starn, a lawyer representing Global Resort Partners, said Hilton "certainly is hoping we're not in for more litigation. We'd like to see this resolved amicably in a win-win for all parties."
"They're trying to find a solution to this. They're trying to be good neighbors," he said.
Reach Kevin Dayton at kdayton@honoluluadvertiser.com or (808) 935-3916.
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