SB1141 SD2 is one of those old-style special interest bills designed to benefit a small but politically connected constituency. It would require the state to sell the 73-acre Sand Island Industrial Park to its current lessees. The bill hasn’t gotten any public attention, and it has passed the Senate, and cleared its first committee in the House without amendment. On Friday, it passed second reading in the House and now awaits consideration by the House Finance Committee. If approved by Finance unamended, it could easily pass on the floor and be on its way to the governor without much further ado.

The Attorney General says the narrowly crafted bill to benefit this small group would be unconstitutional. The Department of Land and Natural Resources testified that it would “seriously jeopardize” its ongoing programs because lease rents from the Sand Island Industrial Park are a significant source of income to the department, and make it difficult to do further leases of any state land. Only the Sand Island Business Association–an organization made up of the businesses that would directly benefit–showed up to testify in favor of the bill.

You have to know the political background to appreciate what’s going on.

Back in 1988, the legislature passed a bill to authorize creation of an industrial park on Sand Island. Senator Milton Holt, at that point a political power considered a possible future candidate for governor, was credited with pushing the bill through. It was backed by the Sand Island Business Association, made up of business owners already occupying the area under short-term revocable permits.

In order to grease the skids at the capitol, members of SIBA made over $500,000 in campaign contributions in a few years, including $79,000 to then-Gov. Waihee, almost $118,000 to Sen. Holt, and spread another quarter million around the legislature and Honolulu City Council.

It worked. For the first time, the law allowed the state to issue a master lease to SIBA, which was then allowed to administer the subleases and control the new industrial park. There were allegations of favoritism, with the more politically influential businesses ending up with the largest and best lots.

Some state officials said at the time that SIBA got too good a deal. Here’s an excerpt from an article I wrote back in 1993. According to the story, the lease was designed with “heavily discounted” rents during the first 25 years of the 55-year lease. Presumably, this meant that the state would recover the discounted leases during the second half of the lease.

Of course, SB1141 would let SIBA members buy the fee simple interests in their leased lots before the end of the discounted rent period, leaving the state holding the bag in the long run.

There’s a lot more to be said about the players and the politics, but I’ll have to return to that later.

For now, here’s a link to the full Star-Bulletin story which appeared on Sept. 16, 1993.