I received this information yesterday about a bill that morphed into something potentially quite dangerous. In the worst case, it would allow the privatization of public lands through perpetual leases.
HB 1469 started out as a way to redevelop the hotels on Banyan Drive – urban lands classified for resort development that do need to be redeveloped.
But somewhere along the way, it morphed into a sweetheart deal for existing tenants on any state land, including UH and TMT.
Under existing law, leases of state lands can’t exceed 65 years. Then they need to go back out for auction. The policy is that any lease longer for 65 years is essentially a sale of land. So to be fair, you put it up for auction to allow new parties to bid.
The conference committee just signed off on a final version of the bill that amends the section of the law that governs all state leases – and eliminates the 65-year limit on any new or existing lease on any state lands. Basically, it’s turning tenants into potential owners of state land.
It also eliminates the Land Board’s rights to access certain information from lessees (making it optional) who sell, assign or sublease state land. Which means an existing tenant can get an extension of a lease, turn around and sell it or sublease it for a profit, and the state can’t necessarily take action.
Then some language that specifically applies to the TMT lease was added:
· Allows the Land Board to extend a lease in perpetuity to any person or entity, including any school, government entity or non profit organization upon approval of a development agreement proposed by the lessee to make substantial improvements or construct new improvements. (pp. 20-21). No auction or separate public process needed.
So the Land Board could extend the UH and/or TMT lease at the same time it approves the construction or agreement to improve the area.
This bill raises all kinds of red flags. While the new authority to expend leases without limits likely wouldn’t be abused routinely, it opens the door to special sweetheart deals that will essentially privatize certain state lands, including ceded lands.
It is scheduled to be up for final floor votes in House and Senate Tuesday, May 2. It will be buried in the long list of bills awaiting final approval.
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This would seem to have all of the procedural defects Donna Kim complained about so bitterly with regard to SB 1183, the “save Rail by taxing tourists” bill. Can we expect her to be similarly outraged about this nasty little scheme?
Ian,
I’m a member of the Hilo community that is concerned with Banyan Drive and the issues that HB1469 addressed. So I’m familiar with this bill. The first part of the bill, Sec 1 and 2 address community redevelopment authorities, similar to HCDA but each having a unique board made up only of people from that community and under DLNR (HRS171) rather than HCDA (HRS206e)
Regarding additional sections addressing statutory reform there were some initial complaints lodged against this bill back in January and Feb by Hawaii’s Thousand Friends. I suspect a cursory reading of the bill led to complaints that it was something other than what it is. Hawaii’s land laws (HRS171) were developed to address a time when 99% of all public lands under lease were pastoral or agriculture. In current times the statutory language fails to allow for the reinvestment or redevelopment of improvements during the term of the lease, i.e. there’s not enough time left to justify financing the necessary improvements. Any visit to the blighted area of Banyan Drive provides the evidence that the statutory language had to be changed or public land leases would continue to lag and be an economic drag, ruining our tourism industry. Act 219, 2011 provided a 5 year window where resort leases statewide could extend their leases, similar to the provisions in this bill. This law sunsetted after 5 years, but it served as a test case. The results were positive, and so we have HB1469. And, by the way, under Act 219 the board extended no lease longer than 37 years. You write;
“…it would allow the privatization of public lands through perpetual leases.”
“…The policy is that any lease longer for 65 years is essentially a sale of land
– and eliminates the 65-year limit on any new or existing lease on any state lands….”
HB1469, CD1 Sec. 5 (1), (a) (1) No lease shall be for a longer term than 65 years….
“…It also eliminates the Land Board’s rights to access certain information”
HRS1469, CD1 Sec 5 (a) Except as otherwise provided the following restrictions shall apply to all leases:
(3) No lease shall be transferable or assignable…
(4) The lessee shall not sublet the whole or any part….
(5) The lease shall be for a specific use…
“…Allows the Land Board to extend a lease in perpetuity”
HRS1469, CD1 Sec 5 (1) (b) (3) Extend the term of the lease, to the extent necessary to qualify the lease for mortgage lending…..the extension being based on the economic life of the improvements as determined by the board or an independent appraiser…
Mahalo
If the impetus behind HB1469 is to allow for moderate extensions on resort and hotel leases, why wouldn’t the measure look more similar to Act219 (2011), which created an entirely new section in Chapter 171, specifically for resorts and hotels. Instead this measure would allow for extensions for intensive agriculture, mariculture, aquaculture, special livestock, commercial, industrial, school, government, and non-profit leases. Also, why wouldn’t HB1469 have a limit on the extension time? Act 219 allowed for extensions for no longer than 55 years and as you said BLNR did not issue extensions longer than 37 years. I find it odd that you do not know why people are concerned. As drafted HB1469 goes far beyond addressing the concerns you mention, it opens the floodgates for limitless/perpetual/indefinite leases of PUBLIC lands, “Ceded” lands, lands that were stolen from the Native Hawaiian people, lands that Native Hawaiians continue to assert claims to.
Ian,
I just received a copy of the Sierra Club email that may have been, or is similar to, your source. It leads with this (which obviously you did not print):
“…Hawai?i’s public lands need your help right now. HB1469, changed at the last minute, removes crucial protections on leases of public lands…”
This “changed at the last minute” is perhaps an “alternative fact”, but I would argue closer to a falsehood. Go on the Capitol website and look up the history of the bill on its Status page. HB1469 finished with the exact same language it started with. “Changed at the last minute” suggests some old school ‘gut and replace’ rather than a bill that went through sustained discussion with lots of testimony.
Interestingly, the Senator who authored the SD1 version of the House bill and the as a co-Chair of the Conference Committee didn’t show up to vote on the Cd1 which countered his SD1 version. Perhaps knowing he had gained his moment in the sun but that the original version of the bill had the sustained support of his colleagues and the public.
Shame on the Sierra Club for attempting to manipulate the trust (and raise the ire) of its readers. Lots of misdirection and misinformation in their email. Their characterizations of the bill don’t stand up to an actual reading of the bill. I find this campaign more of a red herring than a red flag.
Actually the language in the CD1, although very similar, is not identical to the original bill. The language that would essentially allow perpetual leases, which is analogous to the sale of “ceded” lands, only would have applied to “intensive agricultural, aquaculture, commercial, mariculture, special livestock, pasture, hotel, resort, and industrial leases.” The school, government entity, and eleemosynary (non-profits) language was only in HD1 and CD1. This would include leases such as the lands leased out at Pohakuloa and Mauna Kea. And while its true that this language was included in a previous draft, neither the full Senate (other than first reading) or a Senate committee ever voted on that language.
NO!!!! TO HBI1468!!!!!!
Hawaiino, the changes in the bill were brought to my attention too. Read Sections 4 and 5. They change the law for all public land leases managed by DLNR, including ceded lands, and not just commercial and industrial leases. They eliminate the 65-year cap on leases. And Section 5 allows an unlimited extension of any lease upon the approval of a development proposal.
The rest of the bill is limited to the Banyan Drive redevelopment, which certainly is needed.
Sections 4 and 5 were not in the Senate version.
Hawaiino, the bill was substantially changed during conference to include provisions that were never even seen, much less voted on, by the whole Senate. Senator Rhoads fixed the bill by getting rid of the most controversial parts so nobody was worried about it until the Conference Committee chaired by Onishi and Yamane (without Rhoads for whatever reason — he could have just been sick or it might have been strategically scheduled to conflict with another bill) decided to shove back in the stuff that everyone was opposing previously, not just Sierra Club. This is a gut and replace and a last minute end run around the Senate amendments that got rid of the problematic parts. In any case, do you disagree that this bill is dangerous?
Laura
There is still a hard cap on leases;
Sec 5 1 (a) (1) No lease shall be for a longer term than sixty-five years
Sec 5 1 (b) (3) Extend the term of the lease neccessary to qualify the lease for a mortgage…. the extension being based on the economic life of the improvements as determined by the board.
1(a)1 is the controlling subsection (65 years) and within that 65 year period the actual extension period is based on 1(b)3
As you are no doubt aware the previous bill that this was essentially based on was Act 219, 2011 and the board extended no lease longer than 37 years.
The development agreement only pertains to “…the fixed rental period ” which is not the term of the lease but the time period of known rent.
There’s no “perpetuity” anywhere in this bill, only a means to bring archaic statute into the modern era.
All power over every lease still resides with the board, and the proposed changes in the language would allow the board to best manage public lands in the public’s interest.
Just in case you have not read today’s Hawaii Tribune, it was acknowledged that the language in HB1469 was meant to help the University of Hawaii at Hilo extend its master lease for the Mauna Kea Science Reserve, though it didn’t refer to it specifically. http://hawaiitribune-herald.com/news/local-news/banyan-drive-bill-nixed
as you should know section 5 171-36(b) (1) specifically empowers the Board to modify the restrictions in 171-36(a). this means the lease cap of 65 years, can be modified. It specifically allows for extensions or modifications of the lease period, as long as it does “not exceed sixty-five years.” This bill proposes to eliminate that cap, as long as the board approves a development agreement. This empowers the board to give out leases FOREVER, for almost ANY lands, not just for resorts, that supposedly need more than 65 years. This would specifically allow the Board to extend the Mauna Kea lease for another 50, 60, 100 years, binding the hands of Native Hawaiians and the public for multiple generations. Do you know how much can change in that time? The Kingdom was only a constitutional monarch for 50-ish years. The overthrow happened only 120ish years ago – and we saw a Kingdom, a Republic, a Territory, a State – and who knows what in the future. Native Hawaiians continue to have rights to these lands, and we may have a different vision for how these lands are used and better managed.
Hawaiino, did even read the bill? Here’s what it literally says (the part in brackets is being deleted):
SECTION 5. Section 171-36, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (a) and (b) to read:
“(a) Except as otherwise provided, the following restrictions shall apply to *all leases:*
[DELETING: (1) Options for renewal of terms are prohibited;]” <–** this the part that will be deleted, plus they remove all the 65 year restrictions for ALL leases. **
The removal of the prohibition on options for renewal of terms and the removal of all aggregate lease+extension length caps means that leases for ALL state lands can be renewed indefinitely in perpetuity, and at the very lease for 100+ years. No public auction. No revisiting the use of land.
Hawaiino, I don’t think you read the bill. Here’s what it literally says (the part in brackets is being deleted):
SECTION 5. Section 171-36, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (a) and (b) to read:
“(a) Except as otherwise provided, the following restrictions shall apply to *all leases:*
[DELETING: (1) Options for renewal of terms are prohibited;]” <–** this the part that will be deleted, plus they remove all the 65 year restrictions for ALL leases. **
The removal of the prohibition on options for renewal of terms and the removal of all aggregate lease+extension length caps means that leases for ALL state lands can be renewed indefinitely in perpetuity, and at the very lease for 100+ years. No public auction. No revisiting the use of land.