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Wednesday, October 18, 2000

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OHA assumes
lease on Hana
shopping center

The uncompleted Hana
project is a step toward
developing new sources
of revenue for the agency

New investment consultant picked

By Pat Omandam

The Office of Hawaiian Affairs took steps toward developing new sources of revenue when it agreed to assume the lease for an uncompleted shopping center in Hana, Maui, and named trustees to look at the creation of a community-based bank.

Control of the shopping center is OHA's first economic development project in its 20-year history, one OHA chairman Clayton Hee described as "one of the highlights of my tenure here."

The appointed interim board of trustees -- whose terms expire on Nov. 6 -- unanimously agreed yesterday OHA would assume a 40-year lease for the 1.12-acre Hana Village Marketplace, a project intended to allow Hana farmers and residents to sell produce and crafts to tourists visiting Hana.

The lease was awarded in 1989 by Hana's Wananalua Congregational Church, to the nonprofit organization Hina Malailena to manage the commercial complex.

Ground-breaking for the Hana Village Marketplace began in 1995. But the project, which was 95-percent complete, stalled over a disagreement between the church and Hina Malailena over whether alcohol will be served at the project's anchor restaurant -- the Hana Seafood Grill and Market.

OHA provided an initial $90,000 for the center and is a guarantor of the project, which is funded by a $1.7 million federal grant for rural economic development. Trustees decided to take over the lease rather than watch it default.

Last week, Hina Malailena's board passed a resolution that urged OHA to assume the lease.

Trustee Charles Ota said it is absolutely necessary to finish the shopping center first and then resolve the liquor issue. At a previous meeting, Ota suggested OHA walk away from the project but the idea was not supported by other trustees who believe the shopping center can help Hana's 2,000 residents, most of whom are Hawaiian, be more economically self-sufficient.

Trustee Gladys Brandt hopes this project will break the stigma seen by some in the business community who say native-run businesses often fail.

"I think this gives a dream to our young people that certainly we can move in the business industry," Brandt said. "I think this is a wonderful move on our part."

Meanwhile, the OHA board named trustees Hannah Springer, Nani Brandt, Ilei Beniamina and Colette Machado to an ad hoc committee to look into the establishment of a community-based development bank.

Hee said OHA has the opportunity to engage in community-based financing that would have the federal government match dollar-for-dollar any money OHA uses to create the bank.

Ota, who helped start the unsuccessful Bank of Maui years ago, said a bank under OHA's jurisdiction could operate like those in the Western Indies or in Switzerland, both of which attract a lot of foreign capital.

"A bank like that established in Hawaii would draw a hell of lot of money from the Far East," Ota said.

Hee asked the committee to explore whether OHA could contract with one of Hawaii's established banks to use their branch space on the neighbor islands. OHA would save money if it did not have to build, equip and staff its own bank, said Hee, who has long advocated economic development as a key to OHA's future.

"I believe there are the rudiments in place to move forward. ..." Hee said.

"This clearly is a well-spring of additional resources."

 | | |

OHA selects a new
investment consultant

The Office of Hawaiian Affairs interim board has selected a new investment consultant for its $375 million portfolio.

After a four-hour meeting yesterday, the board unanimously awarded Salomon Smith Barney Inc., based in Delaware, a one-year $60,000 contract renewable for up to five years to manage OHA's investments. The contract is effective upon acceptance by the company.

Salomon Smith Barney Inc. will be represented by agents in Hawaii. They are: Larry Goeas, first vice president of investments, and Peter Backus, senior vice president of investments.

The selection replaces investment consultant Morgan Stanley Dean Witter, whose one-year contract expired Sunday.

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