A community meeting last week hosted by Iolani School drew about 150 people to hear more about the school’s purchase of the land under nine neighboring residential buildings.

A school representative said there will be no extensions offered when the current leases expire in 2012, and owners of apartments in the area will have to pay market rents to the school while future development is planned.

When asked why existing apartment owners or associations were not offered the right of first refusal when the land was put up for sale, the answer was simple:

That is an issue that would have to be answered by the seller.

Senator Carol Fukunaga attended and had this comment in a subsequent email:

This area is not in my senatorial district, but Senate District 11 has one of the largest concentrations of leasehold units with soon-to-expire leases, and what happens at Date-Laau will be important for Ala Moana, Makiki/Punchbowl residents.

Fukunaga forwarded a lengthy description of the meeting written by McCully-Moiliili Neighborhood Board member John Kane Gollner.

———————————————

From: John Kane Gollner
Sent: Thursday, July 30, 2009 8:03 PM

Subject: Date – Laau Meeting 07-30-09

Date – Laau Community Meeting
07-30-09

In attendance:
Approx 150 + residents
Glenn Ching, `Iolani School
Betty Lou Larson, President – Date Laau Community Assn
Sen. Fukunaga
Rep. Saiki
Rep. Nishimoto

Welcome – Glenn Ching, Iolani School

Introduction – Betty Lou Larson, President – Date Laau Community Association
-9 different buildings / projects associations are among the 150 + in attendance

`Iolani School Presentation

Purchase of the property closed on 06-29-09 (indications that purchase negotiations commenced in 2007).

“We made the purchase b/c we are landlocked, and had no more room to grow.

We need more space b/c:
-Equal space is needed for girls athletics
-More space is needed for computers / robotics

We don’t intend to increase our enrollment.

We don’t have any immediate plans for enrollment

When we are ready to develop, we will give you adequate notice.

We anticipate it will be years before development would take place.

Existing tenants will keep their leases until 2012. Rents will continue to be market rates.

Land leases will not be extended beyond 2012, the fees will not be available.

We will work with individual tenants on a one on one basis who want to stay on the property. (This apparently will be the rental unit concept `Iolani School will offer).

514c (right of first refusal for lessee) is not applicable here, b/c the entire block was purchased.

Development will be more likely to begin on the mauka side of the campus.

Q & A:

Q. It was mentioned at the NB Meeting that you may consider extending some land leases on an individual basis. Not the case anymore?

A. We discussed this, and yes, we decided not to extend any of the land lease, but instead offer the buildings as rentals if we do continue to use them in the residential capacity.

Q. Is it in the `Iolani Master Plan to keep these buildings as residential, change them to classrooms, tear them down?

A. We are going to be looking at all options, beginning now with assessments of the conditions of the buildings, our needs, etc.

Q. Do you have a timeline of when you will be building new buildings on the property?

A. It will be years, it takes a “long time” to go through the process of approving new construction for the school.

Q. People who are owners, who are living in the apartments now, would they receive any discount, preferential treatment when the lease runs out?

A. No. Units will be rented at market rate, with no preferential treatment.

Q. Will there be a change in the lease, our renog. was in 2002, set to last until 2012?

A. When each of the buildings signed the renog. in 2002, which lasts until 2012, this lease will remain in effect, no change with us taking ownership.

Q. If you have no immediate plans to develop, and not for several years, why not extend the leases for at least some of the buildings, and let these people maintain the advantages of ownership?

A. We won’t be renewing any of the leases.

Q. Many of are seniors. As owners, we aren’t paying very much to remain in our homes as owner occupants. We will not be able to afford the rent that you will charge us. Where will we go? *Large amount of supportive noise*

A. Glenn posed the questions:

1. How many here are owner occupants? *At least 50 – 60
2. How many here are owner occupants for more than 10 years? *At least 30 – 40
3. How many here were the original owners? *At least 20 – 25

“OK, we’ll have to take a look at that.”

Q. Appliances? If we’ve purchased new appliances, do we have to leave them in the unit? Can we take them?

A. We can take a look at individual situations.

Q. The Date – Laau Community Assn offered to buy the entire block in 2005. Why, if the owner was willing to sell at this point, would they not offer it to us first, before accepting `Iolani School’s offer?

A. That is an issue that would have to be answered by the seller.

Q. What about Kaneohe Ranch? They paid individuals $10,000 each for relocation.

A. I can’t speak to the Kaneohe Ranch situation.

Q. *Person asked a basic question, who did not understand leasehold ownership.

A. Explained the concept of leasehold ownership.

Q. Rep. Nishimoto / Saiki: How will you determine market value for rents?

A. It will be a fair reflection of market rents, the same way other buildings are set.

Q. Will `Iolani be property manager?

A. No. We will be using a property manager.

Q. Will the school consider applying current rents (2009) , to when the residents will have to start paying rent in 2012?

A. “It depends. We will consider.”

Q. Who will make the determination of what the rents will be?

A. The governing board. We have not set who the governing board will be.

*Close Q & A with Reps Saiki & Nishimoto

Q. Why didn’t I hear about any of this from my board / association?

A. You were notified.

Q. *Betty Lou Larson: `Iolani is an institution that is here to develop ethical standards in our young people. Is it ethical for `Iolani to profiteer from these buildings, and “reap the profits” from the rentals, rather than allow for extension of the leases?

A. It is not an option to extend the leases.

Q. Kaneohe Ranch, even though they did not extend leases, they gave payments to people to relocate. What about `Iolani School?

A. *Glenn Ching asked Betty Lou for specific info about the people in charge of the transaction at Kaneohe Ranch. No definitive statement was made, but Glenn seemed to show interest in what had precipitated Kaneohe Ranch to make the payments.

Q. It may be legal to do what you re doing, but it’s not ethical. Why not extend these leases for just 5 years, especially if you are not planning to build right away?

A. There are many legal issues when it comes to extending leases. We don’t intend to make money on these rentals. The purpose is to pay for the loan & expenses. Extending the lease is just something we cannot do.

Q. Since the “market rental” will be based upon the condition of the unit, isn’t it in our interest as owners to let our units fall into disrepair?

A. *From person who will be helping to set the rental rates (Bill Ramsey/Property Management company): The rental rate will not be based upon the individual condition of your unit, but upon comparable prices in the area, and will assume each unit is in good condition. If a unit is not in good repair, the school must bring it up to standard.

Q. *Betty Lou Larson: Why did you have to come after our land? Your master plan, back from 1999, did not include increasing student body. Why did you have to come after our land? *Applause, approval

A. We aren’t increasing students, but facilities. We can’t even fit half our student body in our theater. We are one gym short, and one field short of what we need for our athletic programs. We have to rent facilities to hold events now.

“Also, `Iolani’s role in the community has increased.”

Q. `Iolani School sold a portion of your land years ago (the “twin towers” that’s now a parking structure). Why couldn’t they have thought ahead and known that you would need the land later?

A. We didn’t have endowments then, we needed to make income, and the sale gave us a lot of income at that time.

Q. From the NB meeting a month ago, you haven’t answered any of our questions. You’ve had a month, why haven’t you given answers to all of our questions? *The resident did not specify what questions had not been answered.

A. `Iolani School did not ask the resident what questions had not been answered. “What would you like us to do?”

*Resident, “You arent telling us anything, why did you call this meeting when you have nothing to tell us!?” *Raucous applause

Q. You guys aren’t showing any empathy. Learn to give some empathy in your answers! *Applause

A: “……”

Q. *Resident asked (to the crowd), “How many of your kids go to `Iolani School?”

A. No one raised their hand.

*Resident: “See, you say you serve us here in the community, but you don’t serve us, with your tuition you don’t serve anyone in this community.” *Loud applause

*End of Q & A