Kewalo Basin
company to end lease
GRG seeks termination
By Star-Bulletin Staff
though the state waived $360,000
in rent dueGRG Enterprises has requested termination of its controversial state lease at Kewalo Basin. There are three years remaining on the lease with GRG, a company headed by Kamehameha Schools Vice President Rockne Freitas. The company has been involved in a lengthy dispute with the state over lease rent, which was due to be renegotiated in 1990.
The matter will be on the Dec. 3 agenda of the Hawaii Community Development Authority.
State transportation department officials recently agreed to waive $360,000 of deferred rent due from the company.
The GRG lease involves 2.45 acres.
GRG has paid the state $39,924 annually since 1980, but recent financial statements show it took in a total of $898,407.55 in sublease rents over the past three years.
The property is now assessed by the city for tax purposes at $4.2 million, which would suggest annual rent of $293,286, according to the state's formula, which calls for the state to get a 7 percent return on the market value of the land.
But this July, Transportation Director Kazu Hayashida directed that rent be set at $111,839 per year from the start of 1996, effectively waiving $360,000 of deferred rent for the years 1990-1995.
Jan Yokota, Hawaii Community Development Authority executive director, said the prospects of getting the land back sooner will advance the redevelopment plans for Kewalo Basin. The master plan looks to bring in restaurants and retail shops along the waterfront.
Part of the land next to the John Dominis Restaurant is used by the United Fishing Agency for the fish auction, but the agency is expected to move to the new "fishing village" being developed by the state between piers 36 to 38 in Honolulu Harbor.
Yokota said that the lease termination request just came in and the staff is researching the matter to find out more about the United Fishing Agency's plans.
The GRG request is the second for lease termination in the area. The WRAF Corp. asked that its lease on 3.61 acres be terminated after dropping plans for a large retail center next to Fisherman's Wharf. WRAF is paying $242,000 a year on a lease that extends to Dec. 31, 2026.
Both the GRG and WRAF matters will be on the agenda for the next Hawaii Community Development Authority meeting at 1:30 p.m. Wednesday.
While the requests are unrelated, both properties are located on Ahui Street, which will be widened as part of the Ward Avenue extension project. Construction is slated to start next summer.
The state agency for Kakaako also has been trying to get the city Public Works Department to move off state land across the street from the GRG site. So far, the city has cleared three acres of the 13-acre site.
GRG sells gas, diesel fuel and ice for fishing boats, and subleases space to the United Fishing Agency and a handful of other companies. WRAF also has an ice-making operation on its site.
The Department of Transportation is looking for a new ice vendor to replace WRAF, and the HCDA said that is required before the lease can be terminated.
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