Friday, April 16, 1999

Punaluu condo
owners sue over
1997 land sale

Residents say they were not
given the first opportunity to
purchase the property

By Peter Wagner


Claiming the "right of first refusal" under Hawaii law, condominium owners at Hanohano Hale in Punaluu have sued former landowner Hanohano Enterprises Inc. for selling the land under their building to Unity House.

In a civil suit filed last month, the 131-member Association of Apartment Owners of Hanohano Hale asked that the 1997 transaction with the Hawaii union retirement fund be voided because residents of the property weren't given the first opportunity to buy.

Under Hawaii law, fee-simple land under a condominium must first be offered for sale to its residents.

But in answering action filed in Circuit Court yesterday, Unity House argued that the provision doesn't apply because the condominium property is part of a larger sale.

According to association attorney Thomas Watts, Unity House bought the three-acre shoreline property, along with about 39 acres of open land across the street, for about $3.7 million.

The 1997 transaction is believed to be part of a larger transaction in which nearly all of an ancient ahupua'a -- stretching from the mountains to the sea -- belonging to the Hanohano family was acquired by Unity House in the past 16 months.

Watts said about 75 acres of the ahupua'a -- all but one lot -- was transferred to Unity House in a series of transactions, many of them in the past ten months.

Unity House attorney Roger Moseley said his client had no interest in purchasing the property before being approached in 1997.

The $3.7 million deal was brokered by Kailua businessman Norman Frank, according to recent testimony in the Chapter 11 bankruptcy of Capital Resources International, a company operated by Frank.

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