LUCY PEMONI / STAR-BULLETIN Mayor Mufi Hannemann and Thomas Kaulukukui, chairman of the board of the Queen Liliuokalani Trust, hugged yesterday after Hannemann repealed the leasehold conversion law.

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Mayor repeals
leasehold law

Charitable trusts and other
groups laud Chapter 38's demise

Six-year-old Chris-Jordan Ulufale stood next to Mufi Hannemann as the mayor erased the controversial 14-year-old lease-to-fee conversion law from the books.

"Eh, this is part of history, you know," Hannemann said as he handed an official document to Chris-Jordan -- a beneficiary of the Queen Liliuokalani Trust.

During a ceremony yesterday filled with pageantry, chanting, singing, speeches, laughter and tears, Hannemann, with a stroke of his pen, approved repealing the ordinance known as Chapter 38. The ordinance used the city's powers to condemn the land beneath condominium buildings to help leasehold owner-occupants buy the land.

"I go back to my fundamental belief that property owners should not be dictated by government when they should sell. That was the thing I could never get past," Hannemann told reporters afterward.

Mandatory leasehold conversion pitted lessees against lessors, landowners against homeowners and became a rallying cry for native Hawaiian groups who saw the law as a tool for the unjust taking of ancestral lands.

And it was one of the few issues that mayoral candidates Hannemann and Duke Bainum took opposite positions on during last year's campaign -- Hannemann said he would sign a repeal bill, and Bainum said he would not.

"I purposely said that I wanted this to be the first bill that I would sign as the mayor of Honolulu, and you made that happen ... by going to the polls and electing a mayor who certainly saw that this was the right thing to do, that we needed to repeal Chapter 38," Hannemann said.

LUCY PEMONI / STAR-BULLETIN Surrounded by students from the Kamehameha Schools and other supporters, Mayor Mufi Hannemann signed a bill yesterday repealing the lease-to-fee conversion law known as Chapter 38. Landowners such as the Kamehameha Schools and Queen Liliuokalani Trust gain revenues from leasehold properties, but Chapter 38 had forced them to sell the fee interest in leased land to qualified condominium owners.

"There will still be fee conversions -- the pace will slow, prices will go higher," real estate agent Michael Pang said. "There's not going to be any control of when it will happen; it will be at the whim of the fee owner. Chapter 38 balanced the playing field, and without it, it's on the side of the landowner again."

"We're elated, absolutely elated that finally a corrupt law has been abolished," said Phyllis Zerbe, who has led a coalition of small landowners over the years to repeal the law.

Dozens of representatives of small landowners, native Hawaiian organizations, and beneficiaries and officials of two so-called alii trusts -- the Kamehameha Schools and Queen Liliuokalani Trust -- congregated in the Mission Memorial Auditorium next to City Hall to watch Hannemann sign the bill after the Council voted 6-3 last month for a repeal.

One of those beneficiaries is Chris-Jordan Ulufale, who has been receiving assistance from the Queen Liliuokalani Trust since his father, football standout Semeri Ulufale, died last year. The trust helps children of Hawaiian ancestry.

"He benefits from the agency by financial and rental support," his mother, Francine Paaluhi, said.

The trusts supported the repeal of mandatory leasehold conversions because they said their organizations could lose income for needed services to native Hawaiian children.

Also on hand were two former councilmen, John DeSoto and Mike Gabbard. DeSoto was the lone "no" vote against leasehold conversions during his years on the Council, while Gabbard introduced the bill that Hannemann signed.

The repeal makes it impossible for leasehold applicants not already approved by the City Council to move forward with their conversions.

Two lawsuits have already been filed by condominium owners at the Kahala Beach and Admiral Thomas buildings.

"We're disappointed that we were weren't able to protect the rights of lessees under contract with the city to convert their property," said attorney Joachim Cox, who represents Kahala Beach residents and who expressed confidence they will prevail in court.