State land rental dispute
dogs Big Isle resort

ANAEHOOMALU, Hawaii » The state Board of Land and Natural Resources is considering renting about 1.3 acres of shoreline resort land in West Hawaii to the operators of the Hilton Waikoloa Village for $55,000 a year.

But the Native Hawaiian Legal Corp. is objecting because that is less than the $192,000 per year that a state appraiser said the land is worth, and it is less than the $72,000 per year that the resort owners started paying in January.

"This is outrageous," said attorney Alan Murakami, at the legal corporation.

Before beginning payments in January, the resort companies, Global Resort Partners, which owns the buildings, and Lanpar/HTL Associates, which owns the land, plus their predecessors, had operated the resort without paying for the land since the mid-1980s.

Although the 1.3 acres, plus another half-acre of underwater land in an artificial lagoon, were originally determined to be private land, a federal court ruling in 1997 said the lands belong to the state.

All of the parties have been arguing since then about how much the resort should pay.

A state appraiser said back rent on the 1.3 acres should be $64,000 a year from 1986 to 1996, which should increase to $192,000 from 1996 to the present.

When the resort companies objected, two additional appraisals were obtained. The combined appraisals said the rent should be $82,876 per year to 1997 and then decrease to $55,000 per year to the present.

A Land Board staff report says the resort companies have refused to pay the full amount before 1997 because they believe confusion about ownership of the land was the state's fault. But the companies have agreed to pay the $55,000 per year.

Murakami said that amount indicates that the land is worth less now than in the 1980s and 1990s, despite high values for surrounding resort lands. "We're slipping back. We're befuddled by this logic," he said.

Attorneys for the resort companies were not immediately available for comment.

State Land Division Administrator Deirdre Mamiya said the three appraisers gave no report on how they came up with the numbers. "We have to put our faith in the process," she said.

The Land Board is scheduled to consider the proposal Oct. 8 in Honolulu, but the meeting might be moved to West Hawaii.

Meanwhile, on a separate track, the state will look for a possible land exchange, the staff report says.