Ka Wai Ola - Office of Hawaiian Affairs, Volume 16, Number 7, 1 July 1999 — Ceded lands: A negotiation perspective [ARTICLE+ILLUSTRATION]

Ceded lands: A negotiation perspective

By Kali Watson Misinformation, versus facts, about the issues in the ceded land negotiations breeds unwarranted distrust and opposition. Basically, the negotiations dealt with two entirely separate issues. The first issue concemed money owed the Office of Hawaiian Affairs ffom ceded land revenues. This debt is primarily composed of airport landing fees, proceeds from

the sale of property for a federal prison, and, under Judge Heely's decision, revenues ffom several hospitals, low-ineome housing projects, Waiklkl Duty Free, plus interest. Because the decision could be reversed after review by the Hawai'i Supreme Court, OHA's entitlements deta0ed in Judge Heely's order granting summary judgment are at risk. So, on the advice of Attorney James Duffy, OHA's board approved negotiating a fair and realistic settlement. During negotiations, the settle-

ment amount was assessed at between $251 million and $305 million. Because of the limited cash available, OHA identifīed valuable land parcels

it would accept instead. Examples include: • Sand lsland and Hilo lndustrial Parks, with their lucrative revenue streams;

• HFDC's master-planned eommunities in Leiali'i (Maui), Kapolei and Kealakehe (Kona), areas whose existing intfastracture makes for immediate housing potential; • For cultural and eeonomie purposes, all of Moloka'i's stateowned fishponds; • For possible joint development, parcels located near Bishop Estate, Department of Hawaiian Home Lands, Queen Lili'uokalani Trast and Queen Emma Trust property. The second issue in the negotia-

HI-IUIU: rnUIUrLAINI tions involved transferring a pro rata share of the total surface ceded lands, based on value, to OHA's ownership and management. This reflected both the goveraor's desire to avoid fumre litigation and OHA's desire to control its own destiny. In fact, the framers of our 1978 Hawai'i Constitution anticipated and authorized such transfers. Under Section 6, Article XII, the board ean "exercise control over real property set aside by state See NEGOTIATIONS on page 5

COMMENTARY

Kali Watson, OHA staff attorney

' NEGOTIATIONS NEGOTIATIONS from page 1

sources and transferred to the board for native Hawaiians and Hawaiians." Since 1980, OHA has been legally entitled to 20 percent of the revenue the ceded lands yield, but enforcement has resulted in muhiple lawsuits, with more anticipated. Past government actions clearly show that those who eontrol the source of OHA's revenue ean inflict serious financial losses on the agency. In 1996 and 1997, the govemor illegally and unilaterally suspended airport landing fees. With one devastating act, the 1997 legislature changed the formula for OHA's pro rata share of revenues by "eliminating" future Heely revenue streams. For the last three years, the legislature has reduced OHA's annual ineome with an arbitrary eap. In 1997, the U.S. Congress eliminated the airport revenue fund as a source of payment to OHA even though airports sit on ceded lands. And the legislature has refused to authorize specific replacement payments out of the general fund, an allocation that makes up 43 percent of OHA's remaining revenue base. Recently, the govemor vetoed S.B.

1635 whieh would have provided $16 million to OHA in replacement revenue for 1999, including the estimated $6 million in airport fees. OHA needs to be able to control its asset base. With a land transfer, OHA would be able to control and keep the entire ineome stream generated by the transferred properties, estimated at between 200,000 and 300,000 acres, separate from any Heely settlement. OHA could realize its full potential through such a base. It could get into homestead and eeonomie development. It could leverage its resources and generate new revenues by paitnering with the ah'i trusts, DHHL and the private sector. OHA could also take advantage of stamtes relating to bonds, tax-ffee revenues and exemptions from zoning and subdivision restrictions. For our beneficiaries, this would mean, for example, OHA and DHHL could develop additional housing and communities for our people, including the elderly. Contrary to rumor, the negotiations did not involve the creation of a private corporation to replace OHA. OHA is, however, at a crossroads where it must define and control its destiny for the good of our people. The oppoitunities to move forward are there. Pūpūkahi i holomua. ■