OHA goes to bat Office of Hawaiian Affairs trustees are opposing the city's leasehold conversion of Waikiki property owned by an alii trust.
for landowner
The agency opposes city plans
to convert leasehold property
held in trust in WaikikiBy Pat Omandam
pomandam@starbulletin.comThey agreed with Queen Liliuokalani Trust officials that the conversion to fee from lease of the Foster Tower condominium property at 2500 Kalakaua Ave. would diminish revenues to orphaned and destitute children, especially those of native Hawaiian ancestry. The trust owns the land under the building.
"For the Queen Liliuokalani Trust, the residential condominium issue is very important because, as most of you are well aware, most of our income is out of Waikiki," Bob Ozaki, trust administrator, told the OHA Legislative and Government Committee yesterday.
"I think something like 41 percent of our Waikiki assets are out of residential condos. But the income that we derive from our condominiums is very significant to the trust," Ozaki said.
The OHA panel opposed a City Council resolution that condemns the fee interest on the property after eight of the 142 residential lessees at Foster Towers petitioned the city to use its eminent-domain powers to convert long-term leaseholds into fee-simple interests that lessees can buy.
The OHA board is scheduled to take up the issue at a meeting this afternoon.
James Mee, an attorney for the Queen Liliuokalani Trust/Queen Liliuokalani Children's Center, told OHA trustees at issue is the city's interpretation of the leasehold conversion law.
The city, through its administrative rules, believes lease-to-fee conversion is possible if 50 percent of owner-occupants of a building agree.
But under a May 30 Supreme Court decision, the city now says, at minimum, 25 owner-occupants or 50 percent of all condo units in a project must agree, a much higher threshold than what the city had been using.
He said the city initially qualified the 142-unit Foster Towers for leasehold conversion because there are only 16 owner-occupants there, and eight of them want to buy their fee.
In response to the Hawaii Supreme Court ruling that supports the higher threshold, City Councilman John Henry Felix has introduced a bill that clarifies the City Council's intent and would amend the ordinance requiring the 50 percent minimum threshold of owner-occupants needed to qualified a condo for leasehold conversion.
Six of the nine Council members have signed Bill 53-02, which is expected to be up for the first of three hearings next week before the full Council.
"One of the real concerns that the trust has is, this essentially is going to take away completely what they would be able to do with the land in the future because they would have to get agreements with all these other new owners before they could do anything," Mee said.
"And for the trust ... given how valuable property is in Waikiki and the options that are going to be there at the end of those leases, that's a big problem," Mee said.
Oz Stender, an OHA trustee and former Kamehameha Schools/Bishop Estate trustee, said his experience with leasehold conversion with alii trusts makes him believe it economically does not make sense for these trusts to hold residential leases.
But in this particular case, he opposes the condemnation and supports the Queen Liliuokalani Trust's efforts.
"It inherently violates our right to hold property," Stender said.
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