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Posted at 1:38 p.m., Friday, April 13, 2007

'Iao Theater sets stage for law change on leases

By MELISSA TANJI
The Maui News

WAILUKU – Gov. Linda Lingle is scheduled to sign a bill into law today that would allow nonprofit organizations to sign long-term property leases with county government with no requirement that they be provided an option to buy the property.

House Bill 1756 was designed specifically to deal with a dilemma faced by Maui County in granting a long-term lease to Maui OnStage to operate and maintain the historic Iao Theater.

Lingle will be at the Iao Theater at noon today to sign the bill, one of several stops she has scheduled on Maui.

Introduced by Maui Reps. Joe Souki and Angus McKelvey, HB 1756 exempts leases to nonprofit corporations from a condition in state law that requires an option to purchase property when county government grants a long-term lease.

The bill approved by the Legislature will allow a 15-year lease to an agency to use a property, with approval of a county council, with no requirement that the lessee be given the option to purchase.

The option-to-purchase law blocked Maui County from issuing a long-term lease to Maui OnStage, which needs such a lease in order to be able to apply for loans and grants to restore the theater.

Darla Palmer, former executive director of Maui OnStage, called the new law "incredible."

"This is a great way for the county to maintain ownership and see the building redeveloped," she told The Maui News.

Palmer, who now works with Maui OnStage as a consultant on building and lease issues, said it was difficult to qualify for grants because the group couldn't show a long-term commitment to its restoration projects. Even private donors were discouraged from pledging money because the county only could provide annual agreements.

"If people are going to donate a significant amount of money, they want to make sure the project is viable," she said.

McKelvey said he was advised of the lease problem by Council Member Jo Anne Johnson after he already had reached the limit on bills he could introduce in the 2007 Legislature. Souki was able to introduce the measure.

McKelvey pointed out the "excellent work" of the nonprofit Lahaina Restoration Foundation in maintaining the old Lahaina Courthouse as an example of a nonprofit group providing for the community.

"Nonprofits do the lion's share of work in cherishing our historic places," he said. "The least we can do is remove the limit on how long they can continue their important work."

For more Maui news, visit The Maui News.