This Land is Your Land…

The Alii trusts confront the Honolulu City Council about a controversial bill that threatens their landowners’ rights

November, 2002

In early September, several of Honolulu’s City Council members – a majority of them vacating City Hall in January 2003 – were hastily trying to squeak out a controversial bill that would effectively decrease the number of owner-occupants required to force conversion of leasehold residential condominiums to fee simple properties. The bill was deferred in its third public hearing in early October, although the issue sparked a heated debate and may very well rise again in the future. Technically, it was just a one-word alteration to Bill 53 that council members were seeking, but the miniscule grammatical change would have tangible results of much greater proportions. In addition to the roughly 500 small landowners that would be affected, the bill also threatened lands set aside in trusts – legally bound to perpetuity – for the benefit of Native Hawaiians.

Under the current statutes mandating leasehold conversion (Chapter 38), either a minimum of 25 owner-occupants, or at least 50 percent of all condominium owners (whichever number is less) are required to force the fee-interest sale by a landowner to the lessee. Had Bill 53 been signed into law, a smaller percentage of owners – 50 percent of all owner-occupants as opposed to 50 percent of the total condominium owners – would be required to force lease conversion.

One of the arguments from the opposition is that the bill would open the floodgates for condemnation of properties other than residential condominiums. “If Bill 53 lowers the bar for the criteria to initiate condemnation, that could lead to commercial, agricultural, industrial lessees trying to follow that same pattern,” says Sydney Keliipuleole, director of Kamehameha Schools’ residential assets division. “So there’s the potential for a precedent to be set.”

City Council Vice Chair John Henry Felix, who introduced the bill in June, argues that the precedent has already been set and that Bill 53 is simply an extension of Chapter 38. “With the passage of Chapter 38, all of the courts, from circuit court on up to the U.S. Supreme Court, have ruled that there is a public purpose for [lease-to-fee] conversion,” he argues. “The system of leasehold is archaic. It goes back to the feudal system, and ours is the only state that has perpetuated that cruel system of land ownership.”

Adversaries of the bill are outraged at the brisk pace with which some councilmembers were trying to push the bill through. They came out in numbers (hundreds testified at the Council’s first two public hearings for the bill, and roughly 4,000 marched in a protest at Iolani Palace on Queen Liliuokalani’s birthday) to protest a bill that they said would have profound negative social and economic implications.

Representatives for the Queen Liliuokalani Trust agree that the bill would cause irreparable damage in a number of ways. The trust, which provides for orphan and destitute children of Hawaiian ancestry, owns 16 contiguous acres of prime Waikiki land that not only funds the trust’s outreach services, but, more importantly, is pivotal in carrying out the terms of the trust for perpetuity.

“Council members tell us, ‘If you sell the condo, you’ll get more cash. You can invest for a higher return.’ but we want to control those assets for the long term,” says Robert H. Ozaki, trust administrator for the Queen Liliuokalani Trust. “From a planning standpoint [controlling those lands] is very important, because you have flexibility for doing things long term.

“Who knows what Waikiki will look like in 30 or 50 years from now? ….[Our properties] could be tremendously valuable, so we think in terms of generations. And things aren’t always important just from a monetary standpoint. We believe the aina helps feed the people, and once it’s gone, it’s gone.”

Felix says he finds it regrettable that it has been made a “Hawaiian” issue, and “certain sectors of the opposition are trying to incite people to mutiny and rage.”

However, Hawaiians say it is more than an ethical or monetary issue. “The trust services thousands of beneficiaries, and has for years, and their feeling is that this land continues to be a good and stable asset to ensure that continues,” says H.K. Bruss Keppeler, chairman of the government relations committee of the Native Hawaiian Chamber of Commerce. “Hawaii land has continued to appreciate and is certainly a stable asset for these trusts, which are allowed to last in perpetuity.”

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Jacy L. Youn