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Friday, February 13, 2009
OHA plans to “move” Hilo’s Banyan Drive hotels, demolish apartments
By Andrew Walden @ 6:54 PM :: 4841 Views :: OHA

by Andrew Walden

The Office of Hawaiian Affairs plans to “move the hotels to the other side of the road” along Hilo’s Banyan Drive.  According to Jonathan L. Scheuer, Director of OHA’s Land Management Division, speaking to about 60 Keaukaha residents February 11, the intent is to “open up the shoreline” if OHA gains ownership of Banyan Drive properties through passage of HB 901 and SB 995. The two bills, similar to ones killed in 2008 after angry Hawaiian protests, convey to OHA the Banyan Drive parcel, valued at $34,483,725 and a Kakaako, Oahu parcel valued at $92,719,415.  Under the proposed settlement of all ‘ceded lands’ revenue claims from 1978-2008, the Legislature will also convey real estate worth $72,796,860 to OHA in 2010.

The meeting was called on short notice. The chair of the Keaukaha Community Association, was one of many angry Hawaiians who spoke against the settlement.  He complained he had heard about the hearing only the evening before.  No representatives of Hilo’s business community spoke at the hearing. The OHA trustees present, including Haunani Apoliona, Robert Lindsey, and Colette Machado were joined by Scheuer, OHA attorney Bill Meheula, and OHA Administrator Clyde Namuo.  All the OHA representatives left early claiming they “had to catch a plane”.

Testifying in front of Reps. Mele Carroll (D-Hana, Molokai, Lanai) and Maile Shimabukuro (D-Waianae) of the House Committee on Hawaiian Affairs, Hawaiian activist Mililani Trask questioned OHA’s competence to manage land.  Trask pointed to what she said was a damning, secret “Roulac Group audit” hard copies of which have been kept even from OHA Trustees.  A search of OHA Board minutes shows that Dr Stephen Roulac discussed OHA’s Real Estate Strategy with the Board on May 17, 2007 and again in executive session on August 21, 2007.  Trask said she had given a copy of OHA's invoice for the audit and a power point detailing the audit to Senator Clayton Hee (D-Kaneohe).

Trask also argued that OHA’s policy of creating non-profit corporations to manage its growing property empire was a scheme to personally enrich individual trustees and create a power base for them at the expense of OHA’s Hawaiian beneficiaries.  Her skepticism towards OHA was shared almost unanimously by those testifying at the hearing. (see related article: “Hawaiians denounce OHA settlement”)

The OHA scheme will have a sharp effect on Hilo’s tourism industry, East Hawaii’s economic mainstay and a key source of tax revenue. Eighty percent of East Hawaii’s hotel capacity is located on the 80 acres of proposed OHA property including the leased land under the Hilo Hawaiian, Uncle Billy’s, and the Naniloa Hotel. If the settlement is approved, OHA would also get the land under hundreds of leasehold apartment units at the Hilo Country Club, Reeds Bay, and Bayview Banyan Apartments. Since lease expiration is March, 2015 at the Hilo Country Club and Reed’s Bay, these affordable apartment buildings will likely continue to decay and existing lease owners will increasingly have difficulty selling their units.

Scheuer states that the settlement bills would place OHA's Banyan Drive property outside the jurisdiction of Hawaii County zoning requirements.  Similarly the Kakaako parcel will not fall under the jurisdiction of the Honolulu Community Development Authority (HCDA).  This will give OHA a tremendous competitive advantage.  

In 2005 the lease under the Naniloa Hotel was renewed until 2070. Big Island hotelier Ken Fujiyama won the lease contract in competitive bidding. As part of the same deal, Fujiyama holds the lease under Banyan Drive’s nine-hole golf course which Scheuer described as a future site for hotels and “kupuna housing.” Fujiyama, who raised key questions about the plan in the 2008 meetings, did attend Wednesday’s hearing and did not respond to an email request for comment.

Few Big Island elected officials were present. Puna council member Emily Naeole testified against the proposed settlement. Big Island Democrat mayor Billy Kenoi appeared late at the hearing and did not testify. Mooted as a possible gubernatorial candidate by alleged Pali shooter Ethan Malu Motta, Kenoi ‘accidentally’ turned the lights on and off in the hearing room drawing attention to himself as he entered about half-way through the hearing. He left early.  Ironically Shooters Bar and Grill, site of an ugly April, 2004 incident where Kenoi allegedly assaulted two Puna residents and then fled from police, is located in the Hilo Country Club building.

Hearings have also been held in Kailua-Kona and on Kauai. Only three people testified at the Kona meeting. The last hearing will be held at the State Capitol Room 329 from 10:05AM to 4PM Saturday.

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