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Thursday, January 21, 2016
Speaker Souki Proposes Fee Simple Conversion of Commercial Land Leases
By Selected News Articles @ 2:52 AM :: 7807 Views :: Hawaii State Government, Land Use, Small Business

Our Keiki

From Opening Day Remarks, House Speaker Joe Souki, January 20, 2016 (excerpt)

…Finally, you cannot talk about a long-term scenario without talking about the investment we make in our children. We need to repair and modernize our education infrastructure so that we give our keiki the best chance to learn and to prepare themselves for their future.

And we need to give them the best opportunity to secure good paying jobs so that they can support their families and create a better life for themselves. We can do that by ensuring that small businesses, the backbone of our economy, remain vibrant and strong.

Right now small business is having a tough time because of one primary reason: their lease rent have gone through the roof, increasing in some places by more than a thousand percent in a very short span of time.

Consequently, we’ve seen a string of locally owned shops and stores shut down in recent years. And it will not stop any time soon, driving more and more of them out of business. Unless we do something about it. And we can, if we have the determination and will.

We can level the playing field and change for the better the business landscape across the state—if we are willing to reinvent the rules that govern commercial leasehold lands.

Hawaii has done it before with lands supporting single-family and multi-family homes. Those historic actions gave the ordinary working person new opportunities for true homeownership, rejuvenated the local housing market and leveled the playing field for home buyers.

It’s time for us to think about the converting commercial leasehold lands in Hawaii to fee simple….

read … Entire Speech

HB 1635: Text, Status -- Sec 17: “State land. Notwithstanding any other law to the contrary, this chapter shall apply to leases of public land in the same manner as to private land, (except DHHL leases) ….”

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DLNR Lease Renewals Slowly Strangle Hilo Businesses, Prepare Banyan Drive to be Abandoned

HTH Feb 26, 2015: The land leases for Uncle Billy’s Hilo Hotel and the Country Club condominiums will expire next month unless the state Board of Land and Natural Resources approves an extension Friday.

The extensions will allow the Banyan Drive leases to last one more year followed by a month-to-month revocable permit.

The leases are set to expire March 14, and a longer extension is not being considered since the state Department of Land and Natural Resources is assessing whether the lands should be redeveloped.

An engineering report completed last year estimated the buildings had five to 10 years of useful life. That assessment estimated Reed’s Bay Resort Hotel, whose lease also was to expire on the same date, had a useful life of 12 to 15 years.

The board, which declined to provide Reed’s Bay a 15-year extension, approved a one-year extension for the hotel in December.

Aaron Whiting, Uncle Billy’s general manager, said he is hopeful the board will approve the extension but noted it remains unknown if the 51-year-old hotel will be open after another year.

“If that goes as planned, we will be here at least until March 2016,” he said.

Whiting said he could not comment on what the hotel, which employs about 35 people, is considering to do after that date.

Because of the uncertainty, the hotel had stopped taking reservations for dates after Jan. 31. Whiting said it changed that policy last month and is taking reservations for the rest of the year.

Richard Emery, Country Club-Hawaii managing agent, said condo owners have been informed of the situation with their master lease.

“We will have to enter into an extension with them as well,” he said, if the board approves the request.

The 148-unit condo building has faced financial difficulties during the last few years as it fell behind on utility and maintenance payments. Emery said a special assessment on condo owners was issued to deal with the delinquencies.

Meanwhile, the future of the three properties — Uncle Billy’s, Country Club and Reed’s Bay — remains unclear--(all because DLNR can't make simple decisions).

Russell Tsuji, DLNR land administrator, said it likely will be at least another year before recommendations on the future use of the properties will be made to the board.

He said the department will next hire an architecture team to analyze potential uses.

PBN: Should affordable housing initiatives in Honolulu emphasize rentals or fee simple units for purchase?

read ... Idiocy of Leasehold

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News Release from DLNR, January 8, 2016

HILO -- The Department of Land and Natural Resources (DLNR) will hold public meetings this month in Hilo to provide information on studies it has commissioned to assist with the Department’s planning for the future of these areas as current leases expire.

DLNR leases out state-owned lands in Hilo, Hawai‘i at Banyan Drive and in the Kanoelehua Industrial Area. Revenue from these leases supports important DLNR programs, including those conducted by the Division of Forestry and Wildlife, Division of State Parks, Engineering Division, Office of Conservation and Coastal Lands, and Commission on Water Resource Management.

One of the leases at Banyan Drive has expired and has been placed on a month-to-month revocable permit. Other leases at Banyan Drive and in the Kanoelehua Industrial Area will expire in the next several years.

The public meeting will include a brief presentation on the studies and members of the public will be given the opportunity to ask questions and provide comments.  The studies are available on the DLNR Land Division website at http://dlnr.hawaii.gov/ld/kanoelehua-and-banyan-drive-studies/  for public review and comment:

Banyan Drive

Goal: Support the Banyan Drive Working Group’s efforts to address the future of Banyan Drive

Objective: Obtain an understanding of conditions, limitations and opportunities for the formulation of revitalization strategies

  • Tourism Market Study – To analyze the tourism industry and determine market demand for a new hotel in Hilo.
  • Sea Level Rise Assessment – To assess sea level rise effects on Banyan Drive parcels.
  • Master Lease Feasibility Analysis – To investigate the feasibility of placing management of Reed’s Bay Hotel, Country Club Condominium, and Uncle Billy’s Hotel under a single master lease.

Kanoelehua Industrial Area

Goal: Improve management effectiveness of DLNR’s Kanoelehua lands

Objective: Obtain an understanding of conditions, limitations and opportunities for the effective management of DLNR’s Kanoelehua lands

  • Market Study – To determine market demand for industrial-commercial uses in the Hilo region for the near- and long-term.
  • Lot Consolidation Analysis – To identify opportunities for consolidating/resubdividing lots to maximize functionality and value for DLNR.
  • Master Lease Feasibility Analysis – To investigate the feasibility and desirability of placing management of DLNR’s Kanoelehua properties under a single master lease.

Both meetings will be held at:

County of Hawai‘i
Aupuni Center
101 Pauahi Street, Suite 1
Hilo, Hawai‘i 96720

  • Kanoelehua Industrial Area – January 15, 2016 at 9:00 a.m.
  • Banyan Drive – January 15, 2016 at 1:00 p.m.

Anyone who is unable to attend the meeting, may download a comment form from the website and send in written comments to the following address.  Please provide your comments by February 1, 2016.

Mail comments to:

Munekiyo Hiraga
305 High Street, Suite 104
Wailuku, Hawai‘i 96793



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