Friday, February 21, 2003

Council and state tackle
leasehold reform bills

Several proposals aim
to resolve landowner
and lessee disputes

By Crystal Kua

The battle surrounding mandatory leasehold conversion is now being fought on two legislative fronts, at the City Council and the state Legislature.

Councilman Romy Cachola, chairman of the Council's Executive Matters Committee, has put out two proposals aimed at bringing landowners and lessees to the table to resolve disputes over a 12-year-old city ordinance that lets the city condemn land under condominium buildings so that lessees can buy the fee interest in their units.

"I don't have a crystal ball as to how it's going to go, to be honest with you, but we have to come up with a (way) that has a better chance of success," said Cachola, who added that a compromise could help curb costly legal challenges to the city law.

State lawmakers, meanwhile, are looking at several bills that are intended to address contested issues that came about when the City Council took up several controversial condominium lease-to-fee conversion requests last year regarding:

>> Foster Tower, which sits on Waikiki land owned by the Queen Liliuokalani Trust.

>> Kahala Beach condominiums on Kamehameha Schools land.

>> Camelot in Makiki on land partly owned by the Sisters of Sacred Hearts.

>> Admiral Thomas, another Makiki condominium, on land owned by the First United Methodist Church.

Jane Sugimura, president of the Hawaii Council of Association of Apartment Owners, said the bills at the Legislature could whittle away leverage that the ordinance, known as Chapter 38, provides for lessees.

"The state shouldn't be involved at all," Sugimura said.

A key state senator disagrees.

"The argument that they made was that it was a home-rule issue, but I beg to differ because this is an issue really of statewide concern," said Sen. Colleen Hanabusa (D, Waianae), chairwoman of the Senate Judiciary Committee.

Hanabusa's committee heard Senate Bill 633 yesterday, a proposed constitutional amendment that would prevent the state and counties from condemning the land belonging to charitable trusts, including so-called alii trusts like Liliuokalani or Kamehameha, which have Hawaiian beneficiaries.

The hearing was filled with the same kind of emotion as last year's Council's hearings on the leasehold issue.

"Condemning any trust lands is racist and evil," Keoni Bunag told the committee.

But the committee also heard from several Kahala Beach condominium owners who feared losing the homes they have lived in for decades.

Hanabusa said both sides gave compelling testimony yesterday. But she said the bill came about out of concern that the Liliuokalani Trust could suffer the same fate as the Lunalilo Trust, which was forced to sell residential leasehold lots under the mandatory 1980s lease-to-fee conversion laws, leaving it with only the property beneath its Hawaii Kai care home.

Hanabusa said it is the Legislature's prerogative to consider this bill because a condemnation action taken by the city against a charitable trust could be far-reaching.

"I actually have problems with the fact that there's just only one county who's doing it," Hanabusa said. "I don't know if this is something that should be left exclusively to the city, because it has statewide implications."

A decision has not yet been made on the bill. A similar House bill was shelved.

Councilman Cachola, a former state representative, said he does not want to second-guess the Legislature, which may have its own reasons for delving into the issue.

Instead, he said, fairness is key to his proposal to form either an advisory committee, task force or other group that will include lessor and lessee representatives.

The Council will have to decide what form that group will take, settling issues such as number of members, who will sit on the panel and the role of a neutral arbitrator or mediator.

Cachola acknowledged that both sides have hardened positions on the issue, and moving them toward middle ground will not be easy.

Sugimura and lessees say they are willing to sit down and talk. "I'm strongly in favor of any kind of dialogue." she said.

In the meantime some landowners would like to see a moratorium on mandatory leasehold conversions.

"It's really too early to form (a group or committee). We're not against anything. We just would like to get the (independent) facts first," said Phyllis Zerbe, of the Small Landowners Association.

State of Hawaii
City & County of Honolulu

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