Felix attempts to pacify A new version of the City Council's condominium lease-to-fee conversion bill would require at least 10 owner-occupants to petition for a condemnation action against a landowner.
conversion foes
The councilman offers a bill that raises
the threshold for smaller condominiumsBy Gordon Y.K. Pang
gpang@starbulletin.comCouncil Executive Matters Chairman John Henry Felix introduced the proposal yesterday to find a compromise in the highly charged debate over condominium leasehold conversion.
The mandatory leasehold conversion process gives qualifying lessees the chance to buy the fee-simple interest in the land under their units by forcing the landowner to sell through a condemnation proceeding. It also is used when lessees and landowners cannot agree on a price.
The city, in recent years, has been processing mandatory conversion applications coming from either 25 owner-occupants or 50 percent of owner-occupants.
But the Hawaii Supreme Court ruled in May that the city had been misinterpreting its own leasehold conversion law and should only have been considering petitions with 25 owner-occupants or 50 percent of all units in a complex, not just owner-occupants.
Bill 53, which will be heard Wednesday by Felix's committee, would change the percentage threshold back to 25 owner-occupants or 50 percent of owner-occupants. The new draft, however, adds the 10-lessee minimum to address concerns of landowners at small condominium complexes, who fear losing their property when a small number of owner-occupants petition for conversion.
Felix said the new draft "relieves the anxiety that some lessors have about less than 10 people applying for a lease-to-fee conversion."
Felix and supporters of Bill 53 say the court upheld the concept of mandatory leasehold conversion through condemnation, and they consider the legislation a housekeeping measure designed to clear up what the court considered ambiguous language.
Opponents of leasehold conversion, however, say the bill would allow the city to continue a process that unfairly favors leaseholders by forcing landowners to sell land and that there is no public purpose as required for condemnation.
Councilman Gary Okino said he asked for the 10-lessee minimum.
"It will eliminate a lot of the small landowners, which takes away one concern, and it still gives a number of leaseholders a chance to protect their property," he said.
Okino said the 10-lessee minimum would disqualify the application brought by eight lessees in the Foster Tower against landowner Queen Liliuokalani Trust.
The Foster Tower application, which has been deferred by the Council, has drawn massive opposition from native Hawaiian groups and trust supporters who say the condemnation will leave the trust without lease-rent income critical for its charitable projects.
The eight petitioners are among 14 owner-occupants in a building that has 141 leasehold units.
Okino is one of five Council members supporting the bill. Two of the four who have opposed the bill, Darrlyn Bunda and Ann Kobayashi, said they want to examine the effect of the new proposal before deciding whether to support it.
Both proponents and opponents of Bill 53 yesterday said the new wrinkle would not change their positions.
"We are opposed to mandatory leasehold conversion and will vigorously oppose any City Council action that promotes the private taking of our land," said Robert Ozaki, administrator for the trust.
Monarch Properties President Michael Pang, who represents the Foster Tower petitioners as well as other lessees in condemnation actions, also is unhappy with the compromise.
It could "render ineligible about 250 of the 363 condo projects on Oahu that have occupant lessees," Pang said. "While the 113 or so projects that may qualify have about 4,500 of the 5,700 total occupant lessees in them, there are still about 1,200 occupant lessees that could lose their chance to convert to fee simple, and eventually their homes."
Phyllis Zerbe, of the Small Landowners Association which has fought leasehold conversion legislation, also said the compromise plan is of no consequence.
"Bill 53 is wrong, and any amendments to it will not make it right," Zerbe said. "There still is no public purpose."
State of Hawaii
