Ka Wai Ola - Office of Hawaiian Affairs, Volume 31, Number 2, 1 February 2014 — FULFILLING IT KAKA [ARTICLE+ILLUSTRATION]

FULFILLING IT KAKA

When the state settled a longstanding dispute with the Office of Hawaiian Affairs by transferring 30 acres of land in Kaka'ako Makai to OHA, the move was hailed as something that would bring a revenue stream to fund programs in every corner of the state. Two years later, the land is generating revenue, though not yet as levels that would appear to bring a sea change for Native Hawaiians. The properties bring in about a million dollars a year to OHA, just

a sliver of the agency's overall budget. Trustee Peter Apo, chairman of the Asset and Resource Management Committee, noted the land transfer was the first step, but, "the settlement is several steps removed from actually generating revenue," Apo said. Trustees say OHA has it's own internal infrastructure issues, saying wading into the commercial real estate market is a new specialty for the agency. "Even though we purchased a few properties that are of cultural value, these were not intended to generate revenue and are more of a collection of cultural lands that will be important to the nation when it finally emerges," Apo said. Trustee Oswald Stender, who has extensive land development experience, said, "We don't have anybody on staff who has the experience in pulling off something like this so I think we need to admit we're having difficulty trying to get the project moving forward." Ka Pouhana, Chief Executive Officer Kamana'opono Crabbe said OHA is

Datuing expectations 01 some. Redevelopment of Kaka'ako has been a state priority for almost four decades and over those years, many plans have been floated for various parcels, but given trustees' fiduciary duties, they are obligated to do their own planning. "The planning process for us is mueh more in-depth and I think that causes impatience, as if we're not moving, but what we're doing is what most responsible people do in development and planning so in a way we're fulfilling our fiduciary duty," Crabbe said. He said he does not want to see development in Kaka'ako heeome a political football but rather a sensibly planned project that is in the best interests of Native Hawaiians, the Office of Hawaiian Affairs as well as the state of Hawai'i. Stender said redevelopment in Kaka'ako is a high priority. "It's not that we've done nothing. We hired the consultants to do some work and the work has been done."

Framework Plan In October, OHA's consultants completed a framework plan for the area. They met with key constituents and neighbors of OHA as well as trustees and got their input on plans for the area. The consultants eame up with several recommendations - including a recommendation trustees make a series of decisions to use as a basis for a master plan. Including: • What cultural activities and values should be incorporated into a development, • The proportion of the developed land that should be designated for park use, and • The appropriate development mix for the properties. During the many meetings that occurred with trustees and stakeholders, the report notes, a eommon theme was the development of a cultural marketplace. In this sense, it would be a marketplace of ideas, education and innovation set against a cultural backdrop. The report said, "While the neighboring developers are focused on typical urban developments, OHA has the opportunity to be the light and epicenter (piko) of Kaka'ako complementing the infusion of the culture and arts lifestyle by using land and natural elements while reestablishing the relevance of an ancestral relationship to plaee." The report to the trustees also noted that there could be tradeoffs depending upon what developments are pursued. For instance, if more open or park space is desired, OHA would have to make up for it in higher building heights.

Interim Progress Since OHA took over the management of its ten parcels in Kaka'ako Makai, it has been upgrading its leases and is now commanding market lease rents in the area. The current infrastructure on the land is conducive toward industrial uses such as staging areas for eonstruction and other storage uses, but OHA managers say the market is experiencing strong demand, and they are often able to get rents that are higher than market rates. OHA is also taking stock of the current buildings and facilities to see what needs to be upgraded to command higher lease rents. In addition, OHA is partnering with Hawai'i Community Development Authority, the state agency that oversees Kaka'ako, the city and other landowners in the area to take a more active role in managing the homeless who live on the sidewalks in the area. OHA will be making improvements to the fence line on its properties to discourage homeless from setting up camps as well as working with the agencies to reach out to the homeless in an attempt to get them into homeless shelters and transitional housing programs. The move is designed to make the area more

enticing to businesses that want to move into the area. In late January, OHA's property manager CBRE removed H-5 Hawai'i Helping the Hungry Have Hope, a homeless program that housed people in old buses. OHA and CBRE had provided information on other social service programs to H-5's clients prior to the removal. The program's lease had been terminated effective Aug. 3 1, 20 13, however the program continued to operate on OHA's property. In a letter to H-5 dated June 4, 2013, HCDA Executive Director Anthony Ching wrote, "OHA is compelled at this time to terminate H-5's lease due to H-5's current non-compliant status with the Internal Revenue Service, State of Hawaii Department of Taxation and Department of Labor and Industrial Relations, together with Wm its failure to provide a current Certifi- < cate of Insurance." OHA will soon begin work on the second phase of an environmental study to determine the extent of contamination in the properties. The results of the study could help determine what types of development are feasible on the Kaka'ako lands. 7

j MO'OLELO NUI v > C0VER FEATURE /

www.oha.org/kwo | kwo@OHA.org NATIVE HAWAIIAN » NEWS | FEATURES | EVENTS

One of the OHA properties, a vacant lot being used for parking, sits on the corner of the busy intersection of Ala Moana Blvd. and Forrest Ave.

8 POĪENĪIAL: IKO « * IOSSROADS

lmprovements to OHA properties create a revenue stream, but more needs to be done

Fisherman's Wharf The years have not been kind to the old Fisherman's Wharf Restaurant. While many residents have many fond memories of the restaurant, it has been unoccupied since 2009. Among the needed improvements include upgrades to the 60-year-old plumbing system, work on grease traps and the installation of an elevator. In addition, parts

of the exterior of the building have been steadily deteriorating. Trustees have expressed the desire to tear down the building, though they have left the door open to preserving some of the more recognizable parts of the building such as its sign for re-use later. They have said the cost to repair and upgrade would not be cost effective, and could hamper their ability to bring in needed revenue from the

project. Trustee Carmen Hulu Lindsey believes demolishing the building would show that OHA is serious about the redevelopment of all of its properties. "Let's take down Fisherman's Wharf, and put up signage," Lindsey told fellow trustees during a Jan. 13 Board of Trustees meeting. "Let them know we are doing something r and we are starting to move. "That would generate taik and let developers see that, hey, we're not just sitting around. We're waiting for the rest of our agreement from the state," Lindsey concluded.

Entitlements When OHA accepted to $200 million settlement, the value of the land itself was not worth $200 million. The valuation relied on OHA getting other entitlements including an increase in building height limits. The governor's plan included asking the HCDA board to double the height limit of one lot at the corner of Ala Moana Boulevard and Ward Avenue, the AAFES building from 200 to 400 feet. State senators, two years ago, proposed adding other entitlements including the ability to build residential units on the makai side of Ala Moana Boulevard, something that is currently not permitted by law. However, OHA did not support that bill on the basis that it might have killed the settlement altogether because of opposition in the House of Representatives. Trustees decided it was better to accept the settlement and attempt to get entitlements at a later date rather than to end up with nothing. But this year, trustees are pursuing entitlements that could include lifting the ban on residential development. Trustees feel that would give them the flexibility they need to make the best decisions for the future of Kaka'ako. "We cannot do anything unless we have the entitlements," Lindsey said. Apo said entitlements will "open the door to other proposals" from potential developers. "That's the only thing that's stopping us from moving ahead full speed," Apo said, adding, "We cannot plan without it." ■

For0HA's detailed timeline on Kakaako's development, go to www.oha.org/kakaako

Above and at right, Fisherman's Wharf Restaurant closed in 2009. In 201 4, a site visit of the property reveals railings and siding are greatly deteriorated.

At left and above, 0HA's property at the corner of Ala Moana Blvd. and Forrest Ave. Some of 0HA's parcels are available for lease.