Ceded Waikoloa
land value up

The property under the Hilton
is appraised at $2.7 million,
much higher than expected

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By Craig Gima
cgima@starbulletin.com

State ceded lands under part of the Hilton Waikoloa Village on the Big Island are valued at $2.7 million, according to a recent independent appraisal for the state.

The appraisal is more than six times what the state Department of Land & Natural Resources estimated the land was worth three years ago.

At that time the state valued the land at $403,626 and was negotiating with the resort landowner, Lanpar/HTL Associates, an affiliate of the Waikoloa Land Co., for a possible land swap.

The resort's owner also should pay the state nearly $2 million in back rent since 1986 for the use of the 1.86 acres, based on market rates, according to the appraisal.

The land includes the Waters Edge Ballroom, the wedding chapel, a section of tram and water taxi tracks, and part of the lagoons at the resort. Ceded lands are lands that once belonged to the monarchy and are held in trust by the state. A portion of the revenue from ceded lands must go to the betterment of native Hawaiians.

"We've got a value, and now we're trying to figure out what we're going to do next," said Deputy Attorney General Bill Wynhoff, who has been working with the DLNR on the issue.

The state and Lanpar are scheduled to meet today to discuss the new appraisal. Wynhoff says what happens at the meeting is key to the dispute, which stretches back to the 1980s, when the state allowed developer Chris Hemmeter to build the hotel at Waiulua Bay.

"If the landowner says, 'We don't want it at that price,' then that's going to make it a little more difficult for us," Wynhoff said.

In October the state Land Board asked staff to have the land appraised and to look into the possibility of swapping the land under the hotel for another parcel.

But the Native Hawaiian Legal Corp., which represents native Hawaiian fisherman Mervin Napeahi, and the Office of Hawaiian Affairs oppose a sale or land swap.

"Our position is that ceded lands are always ceded lands, and they should never be sold," said Alan Murakami, of the Native Hawaiian Legal Corp. "We would oppose any exchange."

Murakami would rather see the landowner pay an annual lease rent to the state.

Napeahi and the Native Hawaiian Legal Corp. filed a lawsuit when Hemmeter had the tide pools bulldozed and filled in to make room for the resort. In 1997 federal Judge David Ezra ruled the former tide pools were on ceded land, and ordered the state to seek compensation.

After meeting with Lanpar and with Napeahi, DLNR staff will make a presentation to the Land Board within the next several months, possibly at a meeting in Kona yet to be scheduled.

It will be up to the Land Board to decide whether to seek a long-term lease, negotiate a land swap or sale, or to evict the hotel. Three years ago the Land Board considered evicting the hotel from the property when negotiations with Lanpar stalled.

If Lanpar does not agree to a state lease, Murakami said, the state should evict the hotel from the lands.

"Isn't that what happens to Hawaiians when they occupy beaches?" Murakami asked. "Why are the ... Hilton Waikoloas of the world treated differently?"

Myron Yamasato, vice president for finance for the Waikoloa Land Co., had no comment on the new appraisal.