Posted on: Thursday, October 14, 2004

Council overturns time-share veto

By Johnny Brannon
Advertiser Staff Writer

The City Council yesterday overturned Mayor Jeremy Harris' veto of a bill that lowers property taxes for some condominium time-share units by classifying them as apartments rather than hotels and resorts.

But it remains unclear whether any tax relief will be granted. City attorneys said the bill, which affects units in 13 Waikiki properties, serves no legitimate government purpose and violates the state and U.S. constitutions by creating unequal, dual tax rate classifications.

Councilwoman Ann Kobayashi, who sponsored the measure, said it's unfair that some time-shares are classified as hotels for tax purposes when they are on land zoned for apartments. Councilman Charles Djou said he believed the bill would withstand a court challenge.

The council voted 6-3 to override Harris' veto, with Mike Gabbard, Barbara Marshall and Gary Okino in opposition. The three had voted against the bill when the council approved it last month.

City budget director Ivan Lui-Kwan estimated the bill would cost $330,000 per year in lost tax revenue. The tax rate for property classified as a hotel or resort is $11.37 per $1,000 of assessed value. The rate for apartments is $3.75 per $1,000.

The council also voted to roll back monthly parking fees at eight city-owned facilities. But Lui-Kwan said that also is illegal and Harris is certain to veto it. Okino voted in opposition.

Kobayashi proposed the increases, and the council approved them this year, but they generated complaints after taking effect Sept. 1. Lui-Kwan said a rollback would leave the city budget illegally unbalanced by $630,000.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.