Editorials

[ OUR OPINION ]

Threat was enough
to avoid condemnation

THE ISSUE Agreements have made condemnation unnecessary for renovating Outrigger hotel property in Waikiki.

THE City Council drew criticism earlier this year when it agreed to condemn four Waikiki properties to allow renovation of Outrigger Enterprises' hotels in Waikiki. Fortunately, the hotel chain has reached agreement for purchase of full interest in the properties, avoiding the need for provisions of the condemnation bill to be applied. However, the bill was useful. The threat of condemnation undoubtedly resulted in pressure that led to the settlement, but that course of action should be taken sparingly.

With the completion of negotiations last week, the focus has shifted to Outrigger's renovation plans -- such matters as traffic, parking and building heights. Those issues are likely to be resolved without the acrimony associated with condemnation.

In its desire to renovate or replace old hotels and create a tree-shaded plaza in the Lewers Street area, Outrigger sought to buy land that amounted to 7 percent of the project's area. Owners of that land, which has been leased to Outrigger for decades, had veto power over the redevelopment. Outrigger said it needed to eliminate that obstacle in order to gain financing for the $300 million project.

The land essentially has been investment property that gave the owners rental income from Outrigger. The hotelier's need to acquire full ownership of the project area gave the investors an unfair advantage in negotiations over purchase of the investors' interest. The condemnation process would have aimed at determining the properties' fair market value -- Outrigger said they ranged from $1.2 million to $3.5 million -- but the city refrained from going ahead with the process while negotiations continued.

Meanwhile, the Legislature entertained a bill, supported by Governor Cayetano, that would have blocked the condemnation. It was approved by the Senate but died in the House, where Rep. Joe Souki opposed meddling in county land-use decisions. While not gaining passage, that bill might have given the investors some leverage they lost in the City Council measure.

Proponents of the bill maintained that condemnation should not be used to benefit private companies. The Constitution allows condemnation for public use, and courts have interpreted that provision broadly. For example, the Supreme Court upheld the Hawaii Land Reform Act in 1984 on the basis that the condemnation of land so it could be transferred from large landowners to lessee homeowners was in the public interest.

The Outrigger condemnation bill was unpopular because it seemed to be the big guy benefitting at the expense of the little guy. In fact, these "little guys" were shrewd investors hoping to use Outrigger's expansion plans to their financial benefit.

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Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, Publisher

Frank Bridgewater, Editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, Assistant Editor 529-4768; mrovner@starbulletin.com
Lucy Young-Oda, Assistant Editor 529-4762; lyoungoda@starbulletin.com

Mary Poole, Editorial Page Editor, 529-4790; mpoole@starbulletin.com
John Flanagan, Contributing Editor 294-3533; jflanagan@starbulletin.com

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