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The settlement transfers roughly 30 acres of prime waterfront real estate in Kakaako Makai to OHA. In return, OHA will waive all claims to past due ceded lands payments. By law, OHA should receive a share of the revenue generated on lands formerly owned by the Hawaiian monarchy.—Star-Advertiser, Abercrombie to sign state's $200 million settlement with OHA, 4/5/2012
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When OHA agreed to the settlement, it understood that commercial use would be the extent of any future development of the Kakaako Makai lands. It wholeheartedly accepted those lands with that understanding, and everyone was happy because peace was restored. Yet in just two years, OHA changed its mind and now wants to build residential units in Kakaako Makai. It says the only way these lands will generate sufficient revenue to fulfill OHA's fiduciary duty to its beneficiaries will be if they are allowed the "highest and best" use. But if that is the case now, wasn't that the case two years ago? If that was so, why did OHA agree to the settlement?—representative Marcus Oshiro, Star-Advertiser, 4/20/2014
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by Larry Geller
So it appears that OHA knew the land it accepted in lieu of $200 million payment it was owed was not worth $200 million at all.
So then, if OHA's fiduciary duty to its beneficiaries depended on building residential condos on the land and that wasn’t possible, then isn’t it fair to say that the OHA trustees actually failed to fulfill their fiduciary duties?
Now the issue has gone quiet, at least in the media. It shouldn’t remain quiet. After all, this deal was made entirely within the state government—OHA is part of the state government. So without the ability to build condos on the land, OHA effectively let the state get away with at least $150 million of its obligation.
Hocus-pocus, look, it just disappeared.
Why condos? A building is a machine for turning land into money. If OHA can’t build, they can’t realize the value claimed in the exchange agreement.
A side issue is what the land is really worth in these times of climate havoc. So far, Hawaii has lost only a bit of sand, but the future is clear—waterfront property, particularly in a tsunami evacuation zone, is going to be very wet and perhaps not habitable at some time in the future.
Is it morally acceptable to let the state wipe out the $200 million debt it owes for the use of Kingdom land?
The more reasonable explanation is that the Kakaako land is worth $200M as it sits and OHA is now lying in order to grub for more money. Of course that means that OHA is claiming that it is totally incompetent and all of its trustees should logically therefore be fired.
ReplyDeleteThere was a report in the Honolulu Weekly asserting that the value of the land, without residential development, was closer to $50 million.
ReplyDeleteOHA originally opposed the residential development it later claimed was necessary to realize the $200 million.
There's been nothing recently, though you'd think someone would demand that the true value of the land be assessed, to see, among other things, whether or not the OHA trustees are or are not incompetent.
Or maybe something else is going on. The one thing that the deal, done between the state and a state agency, did accomplish was to wipe out the state's obligation to pay $200 million. If that was the objective, it was totally successful.