Ka Wai Ola - Office of Hawaiian Affairs, Volume 21, Number 9, 1 September 2004 — Why leasehold conversion should be repealed [ARTICLE+ILLUSTRATION]

Why leasehold conversion should be repealed

By Bob Moore Editor's nole: Bob Moore is a retired. electrical engineer who is actively involved in the Hawaiian community. The views expressed in this community discussion eolumn are those of the author and do not necessarily reflect the views of the Office of Hawaiian Affairs. On Aug. 11, the Honolulu City Council heard testimony on a bill that would repeal Chapter 38, the law that allows the city to use its powers of condemnation to force lease-to-fee conversion in condominiums. Representatives from the Queen Lili'uokalani Trust (QLT), Kamehameha Schools and 'īlio'ulaokalani, along with students from Hālau Lōkahi Charter School, marched peacefully from Kawaiaha'o Church to Honolulu Hale to show their support for the repeal measure, Bill 53. More than 40 people testified at the hearing in support of the repeal bill. There were also a handful of testifiers against Bill 53, including several real estate agents and lessees from the Discovery Bay condominium. In the end, the City Council voted in favor of sending Bill 53 forward for a committee action by a vote of 7-2. No date yet has been set for the committee hearing, but a grassroots awareness campaign is underway to help the

public understand the importance of this issue. What is Chapter 38? Adopted in 1991, Chapter 38 allows the City and County of Honolulu to condemn the private land of leasehold condominiums and to transfer its ownership to the lessees of the buildings. Simply put, it allows the government to eondemn land from one private landowner and give it to another. The intent of Chapter 38 was to assist owner occupants to achieve fee simple ownership, but the law is not needed. Of the 104,000 condos on O'ahu today, only 23,000 are leasehold condominiums, and only 1,170 of those owners qualify under Chapter 38. Very few people gain by the existence of this law. So who is Chapter 38 hurting? It's hurting small and large landowners, as well as charitable groups who depend on the lease rents as a regular source of ineome for their families and beneficiaries.

Chapter 38 threatens almost half of QLT's Waikīkī assets. Losing this ineome would have a devastating effect on a program that directly served over 1,500 orphans and 7,500 destitute children in 2003 alone. As for small landowners, they were encouraged by the city decades ago to develop their property in leasehold. Today they face devastating, long-term losses when their property is condemned. Because they tend to be small family trusts, they do not have the money to defend their title in court and are usually forced to sell, with severe tax implications. Another important aspect of Chapter 38 that is often overlooked is the cost to the taxpayers. Not one Chapter 38 condemnation proceeding has been successfully completed by the city. All the completed transfers from leasehold to fee simple have been voluntary. Many eondemnation attempts have been dismissed by the courts as improper, and the courts have mandated that

the city pay all legal costs - its own and those of the landowner. The city's failed condemnation attempts have cost Honolulu taxpayers over $775,000 to date, and the city still owes Kamehameha Schools $459,100 on another failed case. The costs to taxpayers continue to rise. How you ean help repeal Chapter 38 To help repeal Chapter 38, please support the passage of Bill 53 by doing the following: • Call, e-mail or write your City Councilperson and tell him or her you support the passage of Bill 53 to repeal Chapter 38. • Write a letter to the editor of your loeal newspaper to express your support for the repeal of Chapter 38. • Tell family members and friends about this issue and ask for their help, too. • Attend public hearings on Bill 53 as they are scheduled. For hearing dates and times, eheek the City Council's website at www.co.honolulu.hi.us/council/ccl.htm. • Join other supporters of the repeal of Chapter 38 in a demonstration of solidarity to be held Mon. Sept. 6, beginning at 9 a.m. at Saratoga Rd. and Kalākaua Ave. in Waikīkī. For more information on how you ean help, eall 753-9773 or 8454652, or go to www.ilio.org. ■

Chapter 38 threatens almost half of the Queen Lili'uokalani Trust's Waikīkī assets. Losing this ineome woulel have a devastating effect on a program that directly served over 1 ,500 orphans and 7,500 destitute children in 2003 alone.

KnKĀKŪKĀ

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