Lessees to take issue
of conversion to court

The Council will vote on whether
to repeal the lease-to-fee law

A group of condominium owners plans to go to court so a proposed repeal of the city's mandatory lease-to-fee conversion law will not stop them from buying the land under their buildings.

The planned lawsuits are part of the legal and political maneuvering before the City Council's final vote Wednesday on the repeal measure known as Bill 53.

The ordinance known as Chapter 38 was approved in 1991 to help condominium owner-occupants gain the title to the land under their units. The law allows the city to use its powers of eminent domain to condemn the land and turn over the fee interests to the eligible unit owners.

Last week, the Executive Matters Committee passed the bill with an amendment that prevents pending leasehold conversions from moving forward if those conversions have not received City Council approval.

As a result, Councilman Charles Djou, who is opposed to the repeal, is making a last-ditch effort to amend the bill to allow a handful of the pending leasehold conversions to proceed.

Djou said there are enough votes to approve the repeal, but if the Council does pass it, he wants to see the risk to city taxpayers minimized as much as possible.

"Unfortunately, one way or another, the courts are going to get involved in this," Djou said. "Lawsuits are inevitable. My point being exposure to liability is not inevitable. We should minimize that exposure."

Attorney Martin Anderson, who represents more than two dozen residents at the Kahala Beach condominium, said he is planning to file suit as early as Monday, alleging that the city breached its contract with leasehold conversion applicants by not using its "best efforts" to finish the process.

"We feel that they should protect those people who started the process," Anderson said. "The bill as it's presently amended does not adequately protect those in the process."

Anderson said that with the filing of the lawsuit on Monday or Tuesday, he hopes the City Council will pay attention. "We hope they will do the right thing and protect the people who are pending applications."

David Nakashima, an attorney who represents residents of four condominiums, said his clients are also considering filing a lawsuit next week before the vote. The condominiums are the Maikiki Cliffs, Discovery Bay, Parkside Tower and Admiral Thomas.

Nakashima said the current bill leaves condominium owners who have applied for leasehold conversion with no recourse once Bill 53 is passed.

"It could certainly minimize the city's liability if they would allow these people to go through," Nakashima said, noting that it would eliminate owners' lawsuits.

The Council meets 10 a.m. Wednesday at the Council chambers on the third floor of Honolulu Hale.