Kahala group calls on
lease-to-fee law

City proceeds on a second application
to force a Bishop Estate land sale

By Mary Adamski
Star-Bulletin

Apartment owners at a Kahala complex say they fear losing their homes if the city doesn't intervene in lease negotiations with Bishop Estate.

They expressed their concerns at a hearing last night, the beginning step toward city condemnation of the property for forced lease-to-fee conversion.

"Unless I can purchase the fee, the rent and taxes I must pay will destitute me," H. Paul Weber testified. "It will be 28 years of equity lost. Unless I can purchase the land under my condominium, a considerable part of (his children's) inheritance will be lost forever."

Weber is one of 25 apartment owners in the Kahala Beach who applied for the city to proceed on their behalf against landowner Bishop Estate.

There are 194 apartments in the beachfront complex across from Waialae Country Club.

It is the second application to move through the bureaucratic pipeline since passage of the 1991 condominium conversion ordinance, based on a 1967 state law providing for mandatory sale of lease land under single-family housing units.

Thousands of houses have been sold to residents under the Hawaii Land Reform Act.

Attorney C. Michael Hare, representing Bishop Estate, said the city Department of Housing and Community Development is moving too quickly, going ahead with the hearing even though there are not enough applicants to meet the legal requirement.

The first petition, from a group of Kuapa Isle condominium residents in Hawaii Kai, was stalled by the City Council in March 1996 to await the outcome of a Bishop Estate appeal.

In September, the 9th Circuit Court of Appeals affirmed a Honolulu federal court decision upholding the law.

Realtor Michael Pang said that the island system of leasing land for residences is a bad one, "misapplied on the basis of commercial land leasehold. All we can do is get out of the system as painless as possible."

Pang, who represents 120 condominium lessee associations on Oahu, said "the social good is a higher priority" than landowners' property rights.

But Phyllis Zerbe, a Makiki landowner, said: "Mandatory conversion is a serious criminal act. It forces one person to lose their property right for the personal benefit of others."

She said to use the government's "land condemnation power in such a way is not for the public good as the law requires."

Hundreds of small landowners are threatened by the law, which was aimed at the large land trusts, she said.

Hare said the hearing was "improper and unauthorized" and likely to be invalidated in a future court challenge.

The ordinance requires that not less than 25 owner-occupants or 50 percent of qualified owner-occupants join in the petition for conversion.

Hare said there are fewer than 25 qualified applicants. But Hearing Officer Sally Cravalho, the city's director of the leasehold conversion program, said there are 25 qualified applicants.

Said Hare: "This hearing is part of a continuing government effort to take lands from Kamehameha Schools Bishop Estate for the private benefit of a select group of lessees. Taking from one private interest to give to other private interests is unconstitutional."

In written testimony, Hare said that of the 194 apartments at the Kahala Beach, 71 are owned by corporations or partnerships, half of which are foreign companies. About 20 apartments are owned by lessees who listed a foreign address when they bought their units.

"The use of the Kahala Beach now and after a condemnation will remain private and exclusive. The public will have no access to nor use of the land," he said.

City Councilman Duke Bainum told the crowd that "the Council has been remiss" by not implementing the conversion law.