Thursday, November 15, 2001

City & County of Honolulu

Condemnation of
Waikiki land deferred

It tells Outrigger to seek a
compromise with landowners first

By Gordon Y.K. Pang

Honolulu City Council members told Outrigger Enterprises to try harder to reach agreements with five Waikiki landowners whom the hotel chain says are standing in the way of its $300 million Waikiki Beach Walk project.

The council's Policy Committee deferred yesterday a resolution that would have the city initiate condemnation action against the five parcels with the intent of then selling the properties to Outrigger.

The five properties are in the Lewers Street area, makai of Kalakaua Avenue.

The hotelier is the lessee or sublessee on all five parcels but insists it needs fee ownership to obtain viable financing. Condemnation would force the landowners to sell their fee interests based on fair market values to be determined by an independent appraiser or at trial.

Policy Chairman Romy Cachola said he wants the parties to talk before the committee's next meeting on Jan. 9 and come up with a compromise to avoid condemnation, a step some of Cachola's colleagues clearly want to avoid.

Waikiki Councilman Duke Bainum suggested alternative dispute resolution or a joint development agreement as possible remedies.

"I'm just not comfortable condemning private property and giving it to another owner," he said.

Councilman John DeSoto said, "If you cannot negotiate the fee with the property owners, don't come and put it on us."

Representatives for four of the landowners said they support Outrigger's long-term plans but do not think the hotelier needs to own the properties to develop them.

Jackie Johnson, whose family owns two of the five parcels, said no public purpose is achieved by forcing it to sell its interests.

"It is not right and it is not necessary," she said.

"I would hate to see public purpose defined as Outrigger's need to get easier financing," said Robert Klein, Johnson's attorney. Klein also warned that if the condemnation went forward but the project did not, there would be no guarantee his clients would be able to regain the fee interest at the same cost.

"The government's power of eminent domain should not be used to force a small landowner to bend to the will of big business," said Pam Anderson, a beneficiary of the Andrade Trust, which owns a one-third interest in one of the parcels.

Mel Kaneshige, Outrigger chief operating officer, said the kamaaina-owned hotel chain is not getting favorable treatment from the city, noting that the area proposed for development has long been targeted for redevelopment that would enhance the economic viability of Waikiki.

City Corporation Counsel David Arakawa said the project appears to meet the definition of public purpose because it would "provide public facilities and infrastructure that are not there now."

Kaneshige said that the five parcels, which represent about 10 percent of the eight acres under consideration, are integral parts of the project and cannot be built around.

City & County of Honolulu

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