PLDC Seeking ‘Chinese Bubble’ to Match 1980s ‘Japanese Bubble’

by Laura Theilen, Former DLNR Chair

(Posted in SA comments section in response to “PLDC is genuine opportunity for Hawaii” by DLNR Chair William Aila.)

I have a lot of aloha for William Aila. However, I learned awhile ago that when you talk about a state law, it’s important to read the law, and not just listen to what people tell you it says. Many of the statements he raises may be what people are saying about the PLDC, but they’re not in the law.

He says Board members are chosen for their expertise in land, improvement and finance issues. That’s not in the law. The law states that three Board members are the heads of state agencies; two are appointed by Speaker of the House and Senate President with no Senate confirmation and no specific qualifications.

He says the exemptions from all state and county land use laws are not a threat because projects may be subject to conditions imposed by staff within a government agency. The fact that back room deals may be cut inside government agencies with no public input does not mean the project will comply with state or county laws or community plans.

Act 55 created the Public Land Development Corporation. In the very first section it lays out two primary missions for the PLDC. Generate revenue for the state through the development of state lands; and Create leisure destination areas for residents and visitors to our islands, including hotels and timeshares. Then the Act directs the PLDC to exploit the emerging tourism market, including entering into developments for tourism, providing grants to support tourism research, conducting surveys to determine emerging tourism demands.

The fact that the PLDC is eager to catch the wave of Chinese investment in Hawaii is not conjecture. One of the first items on the PLDC agenda was to seek control over the state land under the Olomana golf course. The Star Advertiser recently reported that a Chinese investment company bought that golf course, along with three other courses on Oahu. In that report the company stated it plans to run golf tours to Hawaii. It doesn’t matter what people tell you the intent of the law is. The law itself authorizes the PLDC to enter into back-room negotiations with this developer to extend the Olomana golf course lease without public bid and allow them to build timeshares along the golf course to house the people on the tours.

The combination of the ability to conduct back-room negotiations, the exemption from all state and county land use laws, and the mandate to provide accommodations for emerging international tourism markets are unique to the PLDC. This law gives the state the ability to ramrod projects through that will increase tourism at a pace we haven’t seen since the wave of Japanese investment in the 1980-90s.

William implies that the PLDC is the same as the Recreational Renaissance we proposed when I was at DLNR. This is flatly wrong. Our proposal was to fix park bathrooms and boat docks. We provided a complete list of improvements that had to be approved by the Land Board and the State Legislature. Every repair required public bidding; every construction met all state and county land use laws. No hotels, timeshares or other accommodations were considered. All revenues from park entry fees and other sources went directly to these repairs.

In contrast, Act 55 authorizes the PLDC to use revenues to make speculative investment, provide grants, conduct research surveys, and develop land. Under law, the PLDC retains control over determining when it makes a “profit,” and then distributes 85% to DLNR, keeping a 15% administrative fee for itself.

Unlike Recreational Renaissance, Act 55 allows the PLDC to cherry pick properties for commercial development and siphon potential revenue away from DLNR, further impoverishing the agency.

As I testified before William, this law applies not just to the people in office today, but to all future office holders. The intent of the people today is irrelevant. What is important is the power and authority conferred to these offices under the law. If the intent really is to limit that power, then the law needs to be drastically revised. The law is fatally flawed, and it would be best to abolish it and start from the beginning. 

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Related: PLDC is genuine opportunity for Hawaii

Sept 12: Abolish PLDC before it has chance to do damage

Sept 16: Chinese Bubble? Hawaii projects to be Financed by Selling EB-5 Green Cards