Boaters’ suit against state still on appeal

A lawsuit on appeal still stands in the way of the Hawaii Community Development Authority's plans to take over management of Kewalo Basin.

Although HCDA is planning on bringing the rules to a board vote in September, it does not plan to take over management of the basin until the appeal to a lawsuit filed last year is settled.

At dispute is whether state laws would allow HCDA to be the state agency managing a commercial harbor.

HCDA says it has held title to the land at Kewalo Basin since 1990. Also, it says the harbor is an integral part of the 600 acres in Kakaako - bound by Piikoi, King and Punchbowl streets and Ala Moana, including the waterfront area from Kewalo Basin to Forrest Avenue - that the agency oversees.

Both agencies claim to agree that Kewalo Basin as part of Kakaako should be HCDA's responsibility, given that it also owns the land.

But this is where Kewalo Ocean Activities (a group formed by 40 to 45 boaters) and Kahala Catamarans Inc. disagree.

KOA filed suit against the state in Circuit Court in August 2007 seeking a declaratory judgment and injunctive relief, saying the state DOT is supposed to manage all public commercial harbors in Hawaii, and that those rights are not transferable, even if HCDA holds title to Kewalo Basin.

Circuit Judge Karen Ahn dismissed the suit in February. KOA has filed an appeal.

"She made an error," said KOA's attorney Reid Nakamura. "Our reading of the state statute says the DOT is supposed to manage all commercial harbors, period, notwithstanding any other rule."

In addition, the users of Kewalo Basin have been paying user fees all these years for the right to work out of the harbor.

"Those moneys are supposed to be going to maintaining the basin," said Nakamura. "Nobody can tell you where all that money's been going."

At the same time, the state Legislature last year appropriated $4.5 million from its budget for improvements at Kewalo Basin.

That money is to be used in fiscal year 2008, according to Rep. Tom Brower (D, Waikiki-Ala Moana), and is now sitting in the DOT's harbors fund. He said it was up to Gov. Linda Lingle to release the money as well as to designate to which agency it goes.

The small-business regulatory review board in July unanimously recommended that HCDA's proposed rules proceed to the governor for her adoption. Also, the board recommended that she transfer the $4.5 million to HCDA.

The board's memo this year is almost a 180-degree turn from an earlier one last August in which it urged the agency to listen to the concerns of the small businesses in six areas, recommending that the proposed rules not be signed.

"We do know the people using the harbor have been paying fees and not getting good services," said Lynne Woods, chairwoman of the board. "On the other hand, we understand that area is going through an economic development, and that the harbor needs to be fixed. Unfortunately, there's going to be an impact."

She said while the timing is bad, the board felt that the improvements were necessary.

Anthony Ching, HCDA's executive director, said the agency will comply with instructions from the court, but that it needs to move forward on the administrative rules.

"When Judge Ahn entered her ruling, we believe the onus is clearly upon us to assume the operational management of Kewalo Basin," said Ching. "The appeal, of course, has yet to run its course."

However, Ching says his understanding is that DOT only has the authorization to spend $4.5 million from its harbors fund for Kewalo Basin. Thus, HCDA plans to kick-start Kewalo's harbor improvements out of its own revolving fund.

HCDA plans to put together an advisory group that will give input on the design, planning and redevelopment of the harbor.

KOA is aligning itself with groups such as Save Our Surf and Friends of Kewalo Basin - both of which protested and successfully halted the state agency's proposed development of high-rise residential towers in Kakaako Makai two years ago.