State buys
Ka Iwi Coast

Kamehameha Schools will
get $12.8 million for Queen's
Beach, Makapuu Lighthouse land

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By Debra Barayuga
dbarayuga@starbulletin.com

The state has agreed to pay $12.8 million to Hawaii's largest private landowner, Kamehameha Schools, over a controversial piece of property in Hawaii Kai once proposed as the site of a resort and golf course.

The stipulated judgment, filed May 21 in Circuit Court, was the result of mediation by the parties and ends the state's condemnation proceedings, which began over three years ago against landowner Kamehameha Schools and lessee Kaiser Aluminum and Chemical Corp.

It also ends fears by groups that have fought to preserve the coastline for over two decades from unwanted development.

The state sought to condemn the property in February 1998 to preserve the open space and scenic vistas. At the time, Kamehameha Schools, formerly known as Bishop Estate, said it had no interest in selling the land and that the estate and Kaiser could do a better job of preserving the views without costing taxpayers. Since then the dispute has been over the price tag.

The judgment requires Kamehameha Schools to turn over to the state 300 acres of Ka Iwi coastline on the makai side of Hawaii Kai Golf Course, known as Queen's Beach, as well as land around Makapuu Lighthouse.

The settlement required an initial deposit of $11.6 million as estimated compensation at the time the state filed the complaint. The funds were placed into four separate interest-bearing accounts.

The state paid $1.25 million last week, said Deputy Attorney General Lane Ishida. Kamehameha Schools and Kaiser will divide that amount equally.

According to the settlement, Kamehameha Schools will receive $8,120,000 plus 70 percent of the total interest accrued on the initial $11.6 million deposit.

Kaiser will receive $3,480,000, plus the remaining 30 percent of the total interest accrued.

If the state decides in the future to put the property up for sale, Kamehameha Schools has the first right to purchase the property at fair market value, according to the settlement.

The state feels the settlement was "fair," Ishida said.

Kamehameha Schools officials could not be reached for immediate comment, but a spokeswoman confirmed the judgment had been agreed to.

The news of the settlement stunned David Matthews, who called the deal "a steal."

The 76-year-old Queen's Gate resident has been fighting to preserve the Ka Iwi coastline, considered Oahu's last remaining strip of undeveloped coastline, since he arrived here 16 years ago. "I cannot think of a greater gift the Bishop Estate could have given to the state of Hawaii. Now, how the state will handle that gift is the question."

That Kamehameha Schools has turned over the land to the state shows it has seen the rationale of giving the land to the people of Hawaii, he said.

"It takes my breath away because it could have gone on for years," said Matthews, who founded the Save Sandy Beach Coalition and the Ka Iwi Action Council, organizations that have actively fought to preserve the coastline. "For them to settle like this at such a reasonable figure is gratifying and exciting."

In the '70s, developers proposed building several resorts on the shoreline property. Their plans were subsequently defeated largely because of opposition by Friends of Queen's Beach, Matthews said.

When developers turned their sights to city land on the opposite side of Sandy Beach, the area that came to be known as Golf Course 5 and 6, for a proposed housing development, resistance came in the form of the Save Sandy Beach Coalition.

When voters approved a referendum to keep the area open space, it was considered one of the most important grass-roots victories in Hawaii at the time, Matthews said.

When the Hawaii Supreme Court said it was not allowed under the Charter, the City Council rezoned the land preservation and halted the development, he said.

Kaiser proposed building an 18-hole golf course in 1997 on a 166-acre site between Sandy Beach and Makapuu Point, a plan opponents said would be a "sacrilege." Kaiser had a 55-year lease on the land.

Kaiser attorneys said at the time that the property's value was in the $80 million range when it had been designated resort/residential.

The golf course issue became moot when the state filed a condemnation action 10 days after Bishop Estate rejected its $11.6 million out-of-court offer.

The Ka Iwi Action Council and the Waimanalo and Hawaii Kai neighborhood boards are currently pressuring the state over its proposals for a shoreline park that includes two large parking lots with space for buses at Makapuu Lookout and Makapuu Lighthouse, underground utilities and a partial restoration of "King's Highway," a trail built by ancient Hawaiians. Federal funds of $4.9 million have already been appropriated for the project.

The state Department of Land and Natural Resources is expected to present a revised proposal at a public hearing July 18 at Koko Head Elementary School. The city will then decide whether to issue the state a special management area use permit to develop the first phase of the park.