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Mandatory Lease-to-Fee Conversion; Haunani-Kay Trask Racial Demagoguery


Below is an amazing speech delivered by Professor Haunani-Kay Trask of the Center for Hawaiian Studies on September 2, 2002. The speech is interesting because it shows how a specific dispute over the sale or leasing of land can be viewed in the context of general land issues spanning more than two centuries of Hawaiian history. It is also interesting because it shows how a specific dispute that should be resolved on the basis of general principles can become a focus for racial demagoguery.

This speech was delivered at an ethnic Hawaiian political rally on the grounds of 'Iolani Palace. September 2 is the birthdate of ex-queen Lili'uokalani, which this year coincided with the Monday holiday for Labor Day. The rally at 'Iolani Palace followed a march from Mauna Ala (the Royal Mausoleum), where ho'okupu [offerings] were left at Lili'uokalani's grave.

Ethnic Hawaiian activists like to hold marches and political rallies as often as possible in order to build internal solidarity and grab public attention. In recent years they have aggressively used state and federal holidays for such rallies, both because larger crowds can attend when people are not at work, and because of a conscious attempt to hijack the non-ethnic general holidays for ethnic purposes. See
http://www.angelfire.com/hi2/hawaiiansovereignty/holidaysethniccleansing.html

Before providing a transcript of the speech, two sets of explanations are needed to help readers outside Hawai'i, or those new to Hawai'i, to understand what the speech was all about. After the transcript of the speech, there's a suggestion for a law to handle irreconcilable differences between landowners and residential lessees during the period approaching the end of a long-term lease; followed by newspaper articles illustrating some problems with residential leasehold. Scroll down to find the topic that interests you.

(1) some Hawaiian history as related to the specific controversy of mandatory lease-to-fee conversion of leasehold residential property

(2) some background regarding the underlying viewpoint and linguistic usages of Haunani-Kay Trask as contained in her speech

(3) transcript of speech by Haunani-Kay Trask at 'Iolani Palace on September 2, 2002

(4) a suggestion for a law on how to handle irreconcilable differences between landowners and residential lessees when negotiations fail during the period of time approaching the end of a long-term lease

(5) some newspaper articles about this issue published since 2002.


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(1) Background -- Ancient and recent Hawaiian history as related to the specific controversy over mandatory lease to fee conversion

In 2002, bill # 53 in the Honolulu city council had generated great controversy. It was a bill to make it easier for leasehold owners of condominium apartments to force the owner of the land under thair building to sell the land to the apartment owners.

The leasehold system is a dying relic of a feudal system of land ownership. In the Mahele of 1848 King Kauikeaouli Kamehameha III made a decision to divest himself of most of the land in Hawai'i by creating a system of private ownership. He did so at the suggestion of whites and natives who persuaded him that investors would not make large capital investments in land that could be taken from them by the King at his whim, and that natives would be more productive if they owned the land where they lived and worked. Most of the land to be made private was given in very large tracts (even entire valleys) to high-ranking chiefs. Some of the chiefs subsequently sold land outright, while some of the private land was kept under the ownership of chiefs who sold leases to use their land for periods of several decades. In modern times the largest landowners have been individual descendants of those chiefs; or charitable trusts founded by those chiefs, such as Kamehameha Schools (Bishop Estate), and the Queen Lili'uokalani Trust (supporting the Queen Lili'uokalani Children's Center that helps ethnic Hawaiian families and children who are orphans or indigents).

For many years, people bought or built expensive homes sitting on leased land and paid low lease rents until the rental rate came up for "re-negotiation," at which time the lease rental rates were raised enormously. Homeowners tried to buy the fee-simple ownerhsip of the land under their houses, only to be told it was not for sale or else the landowner would offer to sell the land at an exorbitant price. As some older homes approached the end of a decades-long lease period for the land under them, homeowners had visions of losing their homes to the owners of the land under them, with no compensation. Entire large residential neighborhoods were affected. There was great political controversy. On one side were landowners who had never intended to sell their land, which some regarded as a family legacy passed down to them through several generations and which they felt obligated to hold in the family forever. They argued that leaseholders knew what they were doing when they signed the leases; and that contracts and the rights of property owners are at the core of the legal system. On the other side were owners of homes or apartments who felt they were being gouged by greedy landlords, and who felt they had a right to keep the homes they had bought and paid for, where they and their parents (and perhaps grandparents) had established themselves. The argument was also made that the leasehold system in Hawai'i was feudalistic, contrary to growth and development, and comparable to similar systems in underdeveloped countries where great public outcry and even violent revolution had forced governments to confiscate land and redistribute it to poor people through land-reform.

Finally the State of Hawai'i passed legislation in the public interest (subsequently upheld by the United States Supreme Court) forcing the landowners to sell the land to those homeowners who actually lived in the homes. Disputes over the price could be settled through arbitration or through lawsuits. The State of Hawai'i never passed similar legislation for condominium apartment buildings; but the City of Honolulu, where most such condominium apartments were located, did pass such legislation.

The struggle between landowners and leaseholders has been compounded by race. Because of the origins of private property in Hawai'i, most of the landowners are ethnic Hawaiians, while most of the leaseholders are whites and Asians. And the charitable trusts who are the largest landowners are racially exclusionary, giving benefits only (or almost entirely) to ethnic Hawaiians. The racial situation regarding land tenure is further compounded by the history of the ceded lands. Today's Hawaiian sovereignty activists claim that the government and crown lands from the Kingdom were illegally "stolen" during the "illegal" overthrow of the monarchy in 1893 and were then "stolen" by the United States as a result of the "illegal" annexation of 1898. The activists say the Mahele of 1848, and the overthrow and annexation, were racial events in which greedy white businessmen and landowners robbed ethnic Hawaiians of their birthright in their sacred homeland. Thus, the modern controversy over mandatory lease-to-fee conversion is merely the latest chapter in a long story of "foreigners" stealing land from ethnic Hawaiians.

The specific focus of the march and rally on September 2, 2002 concerned a bill in the Honolulu city council which would make it easier for condominium apartment owners to force a landowner to sell his land. The bill would have reduced the number or percentage of apartment units in a building that would be needed to petition the city to condemn the land to sell it to the apartment owners. The controversy concerned a particular condominium apartment building on the beach in Waikiki, on land that beonged to the Queen Lili'uokalani Trust. And this particular parcel of land had previously been where the Queen herself had a home.

Thus, all the normal disputes between landlords and tenants, and between landowners and leaseholders, were magnified because of the pedigree of the particular parcel of land at issue. This parcel of land was one of the major holdings of a charitable trust which provides help to poor and downtrodden Native Hawaiian orphans and indigents. By contrast, the apartment owners were alleged to be wealthy whites and Asians, most of whom did not even live in the apartments which they used merely as investment rental properties. The forced sale of the "Queen's" land to "forreigners" was portrated as a modern replay of the overthrow of the native Queen in 1893 by greedy foreign businessmen.


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(2) Professor Haunani-Kay Trask's underlying viewpoint, and some explanations of linguistic usages found in her speech at 'Iolani Palace

The speech by Professor Trask on September 2, 2002 was a little longer than 11 minutes. It was an impassioned speech delivered without any notes. which might account for some (but not all) of its disjointedness and non-sequiturs. It was delivered outdoors, on a raised platform near the bandstand (coronation pavillion) on the grounds of 'Iolani Palace, generally regarded by Hawaiian sovereignty activists as the the capitol of a still-living Kingdom of Hawai'i, where the spirit of Queen Lili'uokalani continues to rule. Hundreds of ardent supporters were present, having marched from Mauna Ala, the Royal Mausoleum where Lili'uokalani is buried. Numerous speakers had come before her, and more were to follow. She was introduced to the crowd before her speech, and lionized to the crowd afterward, as a proud fighter for Native Hawaiian rights, and "how fortunate we are to have her teaching new generations of Native Hawaiians at the University of Hawai'i." Following her speech, one of the emcees read the names of the 5 city council members who were supporting the controversial bill, citing Professor Trask's advice to "name your enemies."

The explanation above in part (1) provides some of Professor Trask's viewpoint. Greedy racist white missionaries and businessmen corrupted the monarchy into creating private property, then overthrew "our" Queen, then stole "our" land and outlawed our language, and forcibly made us a state of the United States. [This website contains both informal and scholarly articles dealing at length with every one of those claims.] Now racist "foreigners" are attacking the few "entitlements" we have left, trying to steal Hawaiian lands yet again. America is the enemy. Racist white people are the enemy. We Hawaiians are justified in being angry. It is not racism when we speak out and fight against racists who are attacking us. I, Professor Trask, proudly teach these truths in my classes at the University of Hawai'i.

Before looking at Professor Trask's speech, we might consider some of her topics in her slim volume of essays: "From a Native Daughter" (Honolulu: University of Hawai'i Press, 1993 second printing somewhat revised in 1999). Four of the essays are especially interesting: (1) "What Do You Mean 'We', White Man?" (2) "Racism Against Native Hawaiians at the University of Hawai'i: A Personal and Political View" (3) "The Politics of Academic Freedom as the Politics of White Racism," (4) "Native Student Organizing: the Case of the University of Hawaii." In these four essays Professor Trask says there can never be full partnership between whites and Hawaiians; there is severe white racism against ethnic Hawaiians at the University of Hawai'i; the concept of academic freedom is is a bourgeoisie white intellectual construct designed to allow whites to analyze and criticize natives and native culture and thereby to continue to oppress natives; and it's entirely appropriate for ethnic Hawaiian students to engage in identity politics by supporting only ethnic Hawaiian candidates for student government offices.

Professor Trask's definition of "racism" is found in a sort of glossary near the end of the book: "A historically created system of power in which one racial/ethnic group dominates another racial/ethnic group for the benefit of the dominating group; economic and cultural domination as well as political power are included in this systematic dominance of the exploiting group ... " Readers should consider that definition while pondering the kind of future envisioned for Hawai'i under the proposals of the sovereignty independence activists, who see a two-tier system of citizenship where only ethnic Hawaiians have full voting rights and property rights while all others are second-class citizens. These proposals for an ethnic nationalist independent nation of Hawai'i are clearly racist according to Professor Trask's own definition of that word. For analysis, see:
http://www.angelfire.com/hi2/hawaiiansovereignty/racistdemands.html

Professor Trask also offers a definition of "righteous anger" which helps explain why she and her supporters at the Center for Hawaiian Studies feel perfectly justified in intimidating UH professors, staff, and students who disagree with the CHS party line: righteous anger is "the emotional/psychological response of victims of racism/discrimination to the system of power that dominates/exploits/oppresses them. Righteous anger is not racism; rather, it is a defensible response to racism." Some of that "righteous anger" is contained in the speech below.

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(3) Transcript of speech by Haunani-Kay Trask at 'Iolani Palace on September 2, 2002

Editor's note by Ken Conklin: Occasonal Hawaiian words used by the speaker have been translated in [square brackets]. When a particular word was spoken LOUDLY or with special EMPHASIS, it has been printed as all capitals. Paragraphs and quote marks are, of course, entirely my own invention. The word "haole" originally was a neutral term meaning "foreigner" or "outsider", and was not specifically racial. Today it has come to mean "white person" and is used as a self-description by many local people who are white. But as used by Professor Trask and some others, the word is highly perjorative and directed specifically at white people, spoken with bitter sarcasm and prolonged intonation, carrying some of the burning hostility of the modern use of the word "nigger."

This transcript was made by videotaping the speech as broadcast over cable television a few weeks after it was delivered; and then playing the tape and replaying it many times sentence by sentence to ensure accuracy of transcription.

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Aloha, my people, aloha.

I want to talk today about the causes, both historical and contemporary, for the situation that we, the native people of Hawai'i, now find ourselves in.

If we go back in time to contact with the syphilitic Captain Cook, what we realize is that the first thing that was a gift of Western civilization was disease. The second thing that was a gift of Western civilization was violence -- they tried to take our chief hostage, and as a result of that we killed him. That was called Justice. Death to the conqueror is justice, that's what it is.

In 1848 the missionaries -- the disease-laden racists -- that's a very good word. Racism. Racist. Race. Very very good words. These were racist people. They came here to colonize us because we didn't have the right gods. Who were they to say we didn't have the right gods? Who were they to say that? And what are their descendants doing today -- Mr. Freddy Rice, taking away our entitlements. That is the geneology of racism. They came with racism in their hearts, they lived here with racism in their hearts, and they are still racists today.

And Hawaiians, do not be afraid to name the enemy. The enemy is racism. Your own people can practice racism. Your own people can tell you, as they always tell me, "Don't be so angry!" Why not? Why not? Do we think Kamehameha was a peacemaker? Only when he defeated his enemies.

Don't let anybody tell you not to be angry. We have every right to be angry. We have every reason to be angry. And we ARE angry. And the reason that we're angry -- the reason we are angry -- is because this is OUR country, and they took our government and imprisoned our queen -- right here she was imprisoned in her palace. And they banned our language. And then they forcibly made us a state of the racist, colonialist United States of colonial America. Do you have a right to be angry? Of course you do. Of course you do!

Never, never forget your own history. We don't need to know what the haole is telling us. What we need to know is what really happened to our people. Who brought the disease? Who created private property? Who overthrew our queen? You won't find any Hawaiians there. There were FOREIGNERS who overthrew our queen. There were FOREIGNERS who made us a state. There were FOREIGNERS. And they are still FOREIGNERS today. Rice. Conklin. Burgess. They are FOREIGNERS. This is OUR country Hawaiians.

And you have to stand up and tell the truth. That is our job. That is what the great black American leader said. [chanting] "Tell the truth. Tell the truth." His name was Malcolm X. We must tell the truth. And that is the truth.

Foreigners came. They conquered. They took our lands. They imprisoned our queen. And THEY divided us by blood quantum. THEY did. Isn't it ironic that a HAOLE -- Freddy Rice -- Mr. missionary, whose illustrious ancestor overthrew Kalakaua and created the bayonet constitution that that racist man, who received so much of our land, now says that we are racists. IMPOSSIBLE! That is impossible!

You have to have power to be a racist. Number one. Do we have power? No. But Freddy Rice does. Ken Conklin does. Burgess does. They all have power. The power of white supremacy. The power of white courts. The power of a white country called the United States of white America.

I don't understand why Hawaiians aren't angry. I don't understand it. Every time somebody tells me I'm so angry at 5 ft. 4, 120 pounds my answer to them is "And why aren't you?" What is the matter with our people that they are not angry! It's not enough to pray to the kupuna, to pray to gods. It's not enough to participate in culture. Those things are important, but they are not important as politics.

Politics has to do with power. Who has it and who doesn't. Do WE have power? No! If we have power, what are we doing here? They took away the queen's land. They did. Who is "they?"

The city council. Hawaiians didn't have city council. That was created during after the overthrow, during the Territory. That's not OUR political form. Why do we have to be subjugated to them? Why do we have to be subjugated to the state? To the federal government? The racist Bush "bomb every dark person" federal government.

Why are WE, as native people, subjugated in our own land? Why are we made to be afraid? Because we are colonized. We live in a colony. The United States of America. All that military theft of our lands, our homelands, our ceded lands, all of that, all of that was done by the United States of America.

All you Hawaiians who think the United States is good think again. Take my class. Hawaiian Studies 390. Read the Blount Report. Read the report that shows what the haoles [white people] thought of us. They think the same thing today. That's where we get Rice and Conklin and Burgess. These are your ENEMIES Hawaiians, your ENEMIES. When Kamehameha was getting ready to go to war, he didn't sit there and think, "Oh gee I wonder if we should make nice. I wonder if I should go over to Kahekili and say hey, let's have a little pa'ina [party]." No.

When you gonna make war, you get your facts down and you make war. The opposition knows that. Aren't they making war against us? You bet they are. Who do you think is funding that war? The guy who owns the Advertiser that's who. Whose illustrious ancestor overthrew the queen, created the Mahele. Learn your history, and then you will know which side of history you belong on.

And you do not belong on the American side. You do not belong on the Hawai'i state side. You belong on the side of your people --lahui Hawai'i [racially defined Hawaiians] -- that's the side you belong on.

And if people are upset, so what? So what? I'm so tired of people telling me I make them feel bad. Good! Ten flights a day. United Airlines. Beat it!

If this is our country then we have to ACT like it is our country. I don't want to see people walking around at the University of Hawai'i walking like this [shuffling, downcast]. I never walk like that. And I'm only five feet four and a half inches. I never walk like that. If this is your country then BEHAVE like it's your country. You tell those racist haoles "You're a racist haole." That's the word we need to use. RACIST!

Racism. That is what is going on right here and right now in Hawai'i. The same thing that's going on against black Americans. The same thing that's going on by Bush. Bush wants to bomb Islamic countries. Why? Because he's a racist. Because Islamic people don't believe in Christianity. Because they have their own region of the world, called the Middle East. Who bombed us? Wasn't Hawaiians.

We need to think very, very clearly about who the enemy is. The enemy is the United States of America, and everybody who supports it. Rice. Conklin. Burgess.

You have to know which side of history you're on, and who is there with you. They are not there with you, Hawaiians. They want to take every single thing away from you.

And now, let us go to the city council. Where is the position on the city council? They want the land. The queen's land. Every time somebody says the queen was racist, I laugh. If she was a racist, why did she leave her entitlements to orphan Hawaiian children? Why did Bernice leave her moneys and lands to the Kamehameha Schools? Not because they were racists. But because they understood as ali'i their job was to care for their people -- for lahui Hawai'i. And right now, right now what we have is another foreign entity named the city council, filled with FOREIGNERS, named city council persons, who want to take away our land. When your children say to you, "Auntie, why are they doing that?" "Mom and Dad, why are they doing that?" Your answer is "Because they are racists. Because they want to take every last entitlement that Hawaiians have, and replace our own people with FOREIGNERS."

We have the largest diaspora in Hawai'i, which means people out-migrated. And who are those people? The native people of Hawai'i, that's who they are. The native people. This is what is affecting us today is RACISM. And we have to tell it like it is. As black people say, it's not [inaudible], it's racism. That's what it is. You are not a racist because you fight racism. You're a warrior, like I am. You are a warrior.

You name it. You name -- you name the enemy. You name the enemy so your people know who the enemy is. The enemy is anybody who takes anything from Hawaiian people. I don't care who they are. I don't care what their position is. That is your enemy. And we need Hawaiians to understand that.

We need to have an analysis of the current situation and understand that. And once we understand that we will not be afraid to speak the truth. Malcolm X used to always say "Speak the truth brother, speak the truth." What's wrong with the truth? It's the truth. That's why nobody wants us to speak the truth. And that's what we need to do. And that's what the purpose of this rally is today. To speak the truth.

And the truth is, that racists are taking everything away from Hawaiians, and they will not be content until Hawai'i has no Hawaiians left. That IS the truth. And I don't care what their names are. That is their intent. Ku'e! [resist] Ku'e! Ku'e! Mahalo nui. [thanks very much]

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(4) Editorial comment by Ken Conklin on the general issue of lease-to-fee conversion -- a suggestion for a law on how to handle irreconcilable differences between landowners and residential lessees when negotiations fail during the period of time approaching the end of a long-term lease

I opposed the city council bill #53 that was the focus of controversy here. But although I am on the same side of this issue as the Hawaiian activists, I deplore the way they turned it into a racial confrontation. In my view, the race of the owner of land should have no bearing whatever on whether a property can be condemned or a leae-to-fee conversion can be forced. The fact that a parcel is owned by QLCC is completely irrelevant. I opposed bill #53 on general principles, because it seemed unfair to landowners to force them to divide or sell their land under a condominium apartment building based on a demand from such a small number or percentage of apartment owner-occupants as was contemplated in the bill. In my view, the issue should have been decided on general principles, not racial demagoguery.

It is not fair to an owner to force him to sell his land. It is not fair to a leaseholder to force him to abandon a valuable house or building at the end of a lease period. The unfairnesses must somehow be reconciled. The leasehold system is a very bad arrangement. It is unfortunate that it has survived so long into the modern period; and some way should be found to slowly but surely phase it out. However, landowners and leaseholders who freely and voluntarily entered into a contract should expect that contract to be upheld. Here is a process that might be helpful if enacted into law.

During the term of a lease, the lessee should have no right to invoke a forced lease-to-fee conversion. However, at any time during the pendency of a lease, the parties may, of course, modify the lease in any way they can agree upon. As the end of the lease period draws near, both parties should have some incentive to reach a reasonable settlement. The incentive would be that if they fail to reach a mutually agreeable settlement by two years before the lease ends, then there shall be a mandatory binding arbitration procedure to include the following features. In writing these features I am thinking about how some union-management contracts call for binding arbitration of "final offers," especially in the public sector. I am also taking inspiration from the commonsense procedure mothers use to settle a dispute between two children about cutting the cake -- one child gets to cut the cake, and the other child gets to choose which piece he wants.

The landowner (through the arbitrator) makes a final offer to the lessee consisting of a choice for the lessee: either I will sell you the land for a price of X, or I will keep my land and pay you Y for the house and all improvements. But at the same deadline for filing offers, the lessee (through the arbitrator) makes a final offer to the landowner consisting of a choice for the landowner: either I will buy your land for a price of L, or you will keep your land and pay me H for the house and all improvements. The arbitrator weighs all the factors, including fair market values of land and house and perhaps also somehow weighing the public interest in having a charitable trust retain ownership or breaking up the landholdings of a mammoth owner in the interest of facilitating individual ownership. The arbitrator chooses either the landowner's package or the lessee's package. The package selected by the arbitrator is then implemented by the end of the lease period, with the "loser" choosing one of the alternatives offered in the "winner's" package. After the arbitrator has made his decision, and before the end of the lease period, there is a window of opportunity to engage in non-binding mediation to draw up a new lease with new terms for a new lease period. However, neither the winner of the arbitration nor the loser has any right to demand or obligation to settle a new lease. Hopefully the two parties can agree on a new lease, perhaps with the help of a mediator, before the binding arbitration process begins. Even after the arbitrator has made a decision, and the winner has a right to force his choices upon the loser, there is still time for negotiation on a new lease, although the winner from the arbitration has the advantage of being able to refuse further negotiations and simply wait for the loser to make the loser's choice. When a condominium apartment building is nearing the expiration of its master lease, the AOAO (association of apartment owners) should be required to negotiate as a single entity with the landowner, so that the landowner has the possibility of keeping all the land as a single unit and can maintain a single time-period for simultaneous dates of rent renegotiation and lease termination.

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(5) Newspaper articles beginning in 2004 that illustrate the problems associated with long-term residential leases, and the impact of the law passed in 1990 regarding mandatory lease-to-fee conversion for residential condominium apartnemts on O'ahu.

** Here is a newspaper article from April 22, 2004 describing what happens when a homeowner has his home on leased land and refuses efforts by the landowner to kick him out. In the end, when the lease expires, the homeowner loses his home and receives no compensation.

http://the.honoluluadvertiser.com/article/2004/Apr/22/bz/bz01a.html
The Honolulu Advertiser, Thursday, April 22, 2004

Holdout fighting lonely battle against museum

By Andrew Gomes
Advertiser Staff Writer

John Silva looks over his lease agreement with Bishop Estate. He was once offered a new lot if he agreed to move. Trouble was, the land would be forfeited when Silva and his wife Isabel died. His answer? "I said up your wrinkles. I'm comfortable here."

Silva says he plans to stay put until his lease expires in 2007. He's not sure where he and Isabel will go after that. John Silva's decades-long feud with Bishop Museum over ownership of his home has become a lonely one, and, with no resolution in sight, he's resigned to giving up his home in three years.

Silva's house on the corner of Bishop Museum's front lawn is known by many for its elaborate Halloween and Christmas decorations.

Silva, 85, was once part of a large group of Kapalama homeowners who in 1969 became some of the first residents to test Hawai'i's Land Reform Act of 1967 by trying acquire the land under their leasehold homes from Bishop Estate.

Today, Silva is the sole holdout — the only one of 132 Museum Park Tract homeowners who never settled with the estate or the museum, which acquired the land under Silva's house and 18 others in a 1973 trade with the estate now known as Kamehameha Schools. "He's going to be the last," said departing neighbor Ed Yamamoto, who is giving up his lease and home after recently moving to his sister's house in Kane'ohe.

Hawai'i, unlike other states, used to have vast concentrations of homes on leased land, because much of the private real estate in the Islands was owned by a few large landowners unwilling to sell property.

Silva and other Museum Park Tract homeowners tested the landmark 1967 law that allowed the leasehold owners to force landowners to sell them the properties under their homes in certain circumstances.

The law was vehemently challenged by Bishop Estate and other landowners, but was upheld by a 1984 U.S. Supreme Court decision that led to thousands of voluntary property sales. A city ordinance in 1991 provided for lease-to-fee conversion of residential condominiums. Local real estate attorneys estimated that of 50,000 or so leasehold single-family residences, probably 90 percent of homeowners bought their leased fees over the last several decades. Bishop Estate owns the bulk of the remaining residential leased fees, about 5,000 properties, and they are available for sale.

But Silva's case is a reminder that for a few, acquiring the land under their homes hasn't been possible. In Silva's neighborhood, all but 19 of the 132 leased fees were voluntarily sold by the estate in the early 1970s. The 19 were excluded because the museum wanted the land for future expansion, and because the property, fronting the museum along Kapalama Avenue and Bernice Street, didn't meet a 5-acre minimum for conversion under the law.

Over the years, Silva's house has become more isolated as most of the 18 neighboring homes were acquired and torn down. "You had Ushiroda, Criston, Mamac, Ogata, Lum, Horvat ... " said Silva, naming his former neighbors who participated in the unsuccessful fight to buy the land under their homes. Eventually they were bought out by the museum. But not Silva. "They want me out," he said. "I turned them down."

For its part, the museum has tried to reasonably treat its tenants over the years. In 1976 the museum agreed to freeze lease rent at $500 a year after residents feared they wouldn't be able to afford increases. The museum also made buyout offers to the 19 homeowners in 1993 after a group of residents petitioned the state in 1989 to condemn the lots. In that deal, homeowners received different proposals depending on their age. The offers were generally for about $200,000 with conditions for residents to leave, stay until 2007 when leases expire, or live in the home until they die.

Eleven residents accepted in 1993, but Silva and other neighbors refused the buyout, declaring they should be able to buy their land like they sought in 1969. "What they're doing is they've had us in a financial real estate straitjacket for 24 years," museum lessee George Horvat said in a 1993 Advertiser interview. "Most of us are old and tired of this whole thing," Silva said at the time.

A museum spokeswoman said four more homeowners accepted offers in 1994. The museum later acquired homes of two more residents, including Horvat, who died in 1997. Yamamoto is arranging to transfer title of his house to the museum.

"I was comfortable over here," Yamamoto said of his faded and peeling green house with a severely leaning carport on Bernice Street not far from Silva's house. "It's maybe for the better." Silva, however, remains passionate about the lasting injustice as he sees it, but he added: "I got no fight already."

Local real estate attorneys said it is prohibitively expensive for a single homeowner to condemn the leased-fee in a single-family property, especially with only a few years left on the lease.

The last deal Silva rejected was one in which he said the museum offered to give him a nearby Liliha lot on which to build another house. But upon the death of him and his wife, Isabel, the museum would take the property back. "I said up your wrinkles," John Silva said. "I'm comfortable here."

John and Isabel Silva moved into the 3-bedroom, 1 1/2-bath house about 50 years ago, and raised eight children who have given them 14 grandchildren and one great-grandchild. The redwood house, painted barn red outside and a pale green inside, recently began showing more of its age, as Silva decided not to paint the exterior as he used to every few years. "I don't worry about taking care the house too much because it's going to the bulldozers," he said.

Of all the home improvements, including a rental extension above the carport, perhaps what Silva will miss the most is the smorgasbord of fruit and vegetables and the decorative plants he grows on the property. The exotic hibiscus that Silva enjoys showing Japanese tourists who pass by on their way from the museum and lilies from the Big Island, where his father ran a coffee farm, give him pleasure. A few patches of parsley grow like weeds on the back lawn. There is also liliko'i, lemons, limes, chili peppers, papaya, cabbage, sweet potato, squash, eggplant, chives, roses, carnations, string beans, tomato, breadfruit and orange. "When I get eggplant, all my neighbors tired eat eggplant," Silva said. "Cabbage and rice with pork — oh, boy, good stuff. The papaya coming, oh, the buggah sweet. See this breadfruit? Just like butter. "I've put in so much," he said. "I'm not in no hurry to move."

Silva said he plans to stay until his lease runs out in 2007, though he's not sure where he and his wife would go then. Residents also may be sad to see the Silvas leave, because during the holidays their house has been an attraction for thousands of people who come to see Isabel Silva's decorations.

A museum spokeswoman said the institution has no particular plan for the property including and around the Silva house, an area that has long been slated for possible expansion. In November, the museum broke ground on part of its additional land at the makai end of Kapalama Avenue, where some of Silva's neighbors once lived, as part of a $40 million Science Learning Center scheduled to open in December 2005.

** Note from Ken Conklin: See followup article about this particular situation on February 4, 2008, in chronological order below.

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** Here is an article from May 21, 2004 describing what happened when the leasehold owner of a hotel decided to convert the hotel to individually-owned condominiums. The landowner filed a lawsuit complaining that converting to condo ownership might allow the new individual condo owners to use the city law to force the sale of the land to the condo unit owners; and therefore the hotel should be prohibited from doing the condo conversion. The landowner won the lawsuit. So now it appears that the hotel must remain a hotel until the expiration of the lease 50 years from now, at which time the landowner can confiscate it.

http://the.honoluluadvertiser.com/article/2004/May/21/bz/bz35a.html
The Honolulu Advertiser, Friday, May 21, 2004

Judge voids sale of units at Coral Reef

By Andrew Gomes

Almost 250 hopeful condominium buyers who put down money a year ago for units at the Coral Reef Hotel in Waikiki recently had their sales canceled. A state judge has ruled that Coral Reef owner André Tatibouet cannot sell units of the leasehold property as condominiums, blocking 247 tentative sales.

The ruling, issued last week by Circuit Judge Victoria Marks, upheld an argument by the landowner, The Queen Emma Foundation, that condo ownership could force the foundation to sell its fee-simple interest in the property via the city's lease-to-fee conversion ordinance. "The ruling protects the foundation's continued ownership of the property," said Rosemary Fazio, an attorney representing the nonprofit landowner.

Terry Lee, an attorney representing Tatibouet, said his client respects the judge's decision, but disagrees with it. Coral Reef unit buyers will be provided full refunds, according to Hawaiian Island Homes Ltd., the brokerage firm handling sales.

Peter Savio, Hawaiian Island Homes president, said some buyers canceled because of the dispute and year-long delay, but most hoped they would be able to complete their purchases. "It's a bummer they couldn't get a unit in that building ... but there are going to be a number of other buildings — probably a thousand units — coming up for sale in the next six or seven months," he said.

Tatibouet in May 2003 offered units for sale at the Coral Reef, which is at 2299 Kuhio Ave., mauka of International Market Place. Buyers, most of whom either intended to live in the units or rent them out through a hotel management firm, snapped up more than 200 units in a single weekend at prices ranging from $59,500 to $150,000.

But weeks later, Queen Emma Foundation sued to block the sales that it said required its approval. The foundation emphasized that it did not intend to give such approval, which it said Tatibouet did not seek until after the lawsuit was filed.

Marks ruled that Tatibouet's lease with the foundation requires the foundation's consent to convert the hotel to condos, and noted that in the 1980s Tatibouet made a similar request that the foundation denied. The foundation was concerned that it could be forced to sell its fee-simple interest in the property via the city ordinance that mandates sale of the fee-simple interest in leasehold condos in cases where at least 50 percent of condo owners want to buy the land.

Tatibouet's attorney Lee said the Coral Reef will continue to operate as a hotel managed by Aston Hotels & Resorts, which has managed the hotel since 1973.

According to the lawsuit, the hotel is profitable and had a value of $27 million in April 2001. Lee said he does not expect Tatibouet to offer the Coral Reef for sale as a hotel. Tatibouet bought the Coral Reef in 1976. The ground lease runs until 2050.

The land under the hotel is part of the core real estate holdings that generate income for Queen Emma Foundation, which helps pay for operations of Queen's Health Systems.

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** Here's an article from June 4, 2004 describing the cutting in half of the number of residential leasehold condominiums on O'ahu since a law was passed in 1990 allowing apartment owners living in their units to force landowners to sell the fee-simple ownership of the land.

http://starbulletin.com/2004/06/04/business/story2.html
The Honolulu Star-Bulletin, June 4, 2004

Leasehold condos convert
A 1990 law has cut the number in half on Oahu, a study finds

By Dan Martin

The pros and cons of Honolulu's contentious leasehold condominium conversion law have been debated for years, but one thing's for certain: It's having its intended effect.

The number of leasehold condominiums on Oahu has been cut nearly in half to about 23,000 since the 1990 passage of the law known as Chapter 38, according to a panel set up to study the issue. A report by the Leasehold Conversion Task Group said 17,723 leasehold condominium units have been converted to fee-simple since Chapter 38's inception. Oahu still has 23,193 leasehold condo units.

But whether those numbers represent good news or bad depends on who you speak to on the task group. The group comprised representatives of both lessors and lessees and was set up by the City Council late last year to study ways of more fairly implementing the law. But its joint report discussed at a meeting of the council's Executive Matters Committee yesterday did little more than revive old polemics.

Chapter 38 proponents yesterday said the data meant the law has been effective in eliminating a property category that has been described as "pernicious" by the state Supreme Court. "Every court that has looked at this has ruled that the law serves a public purpose and now we have some numbers to back that. People are now able to buy the homes they live in," said Jane Sugimura, a member of the lessees component of the task group.

The law allows condominium owner-occupant lessees to petition the city to use its condemnation powers to compel a landowner to sell the fee interests on their units at prices determined by a third party.

The leasehold system was originally set up in the 1960s to make some degree of home ownership available to a wider segment of the population. But the system was increasingly seen as antiquated since lessees who can't afford to buy their fee interest could lose their homes once their leases expire.

Opponents of Chapter 38 said the law violates free-market principles by forcing owners to sell and is eliminating a property niche that offered a lower-cost alternative. "We should be looking at providing more housing options in this city. Not less," said Ben Kudo, an attorney and member of the lessor's team. Kudo said the law was having a "chilling effect" on developers who may have wanted to develop leasehold condominiums in Honolulu.

The task group found that 18,624 condominium units were built on Oahu since January 1, 1991, but just 452 of those, or 2 percent, were leasehold.

Sugimura said the lessee representatives supported some tax relief for landowners who may be forced to sell the fee interest in their condo holdings and called for greater cooperation between both sides to ensure a "fairer" process in the future.

But the lessor's team and a stream of mostly small landowners who said they would be forced to sell family property held for decades came forward to urge repeal of Chapter 38.

Thomas Kaulukukui, chairman of the Queen Liliuokalani Trust -- which serves orphans and poor children and is a major landowner -- questioned whether Chapter 38's stated public purpose of boosting fee-simple homeownership outweighed the trust's work. "Our land is the basis for the wealth by which these programs continue. If you take that away, it has a social impact because we serve the children," he said.

Council committee Chairman Romy Cachola asked members of the task group to look into conducting a survey to find out how many remaining lessors and lessees on Oahu were willing to undergo Chapter 38 conversion to gauge attitudes more accurately and to facilitate negotiations.

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** Here's an article from October 2, 2007 describing a terrible situation in which all leasehold owners of an entire cluster of apartments could lose their property at the expiration of a master lease of the land under the cluster -- and only a couple of months remain on the leases!

http://honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20071002/NEWS01/710020344/1001
Honolulu Advertiser, Tuesday, October 2, 2007

Kailua condo residents running out of time

By Catherine E. Toth
Advertiser Windward O'ahu Writer

KAILUA — The effort by residents of a two-story walkup on Kailua Road to save their homes has come to a crossroads, leaving them facing the prospect of paying far more than they do now in a real-estate market gone sky-high.

Residents at the 18-unit The Kailuan are caught between the expiration of the condo's ground lease and the landowner's rejection of their bid to buy the property.

They have until Dec. 31 to vacate their condos and enter a real-estate market they say they can't afford.

"I'm concerned and I pray a lot," said Sara Way, a 59-year-old resident of The Kailuan who's disabled and living on a fixed income.

Way bought her condo 12 years ago for less than $80,000 with a land lease that expires Dec. 31. In today's market, $80,000 would be a typical down payment for a Kailua condo.

"I try to put prayer in place of worry and fear because that comes up a lot," Way said.

The tenants of other nearby buildings have already moved out to make way for a new development, but The Kailuan residents have decided to fight.

This week, with their options limited and time running out, they plan to submit another proposal to buy the property from landowner Kaneohe Ranch Co.

Their first proposal — substantially less than the property's value, according to the landowner — was rejected. It also didn't outline how they would deal with a federal mandate to close the building's cesspool, which needs to be done by Dec. 31.

NEIGHBORHOOD HOLDOUT

The Kailuan is part of a cluster of two-story walkups — mostly affordable rentals — across from Kailua District Park.

Last year Kaneohe Ranch Co., which owns the 6.5 acres under the buildings, sold most of this property — but not The Kailuan — to the local Schuler Division of Texas-based home builder D.R. Horton.

The plan is to demolish these affordable rentals starting in January and replace them with mid-priced, for-sale condos.

Kaneohe Ranch Co. has offered the residents of The Kailuan $10,000 each to help with relocation costs if they move out by Nov. 1, and $5,000 if the move by Nov. 30.

The company hasn't decided what it will do with this piece of property once the building, which is located in the middle of the area where Schuler plans to build its condos, is demolished.

"We realize it's a hard situation for them," said Mitch D'Olier, president and CEO of Kaneohe Ranch Co. "We've tried to figure out how to ease the transition for these Kailua residents."

Residents of the other buildings — including the Kailua Palms, Coral Apartments, Kailua Arms and Countryside Apartments — have already moved out and into a high-priced rental market in Kailua.

Monthly rents in the area can range from $825 for a small studio to upwards of $12,500 for a five-bedroom beachfront home. Some of the former tenants in the now empty affordable rentals were paying as little as $700 for a two-bedroom unit.

"The rents have continued to stabilize or even wander up a bit," said Richard Carvill of Carvill & Co., a Kailua real estate firm. "And as you tear down, these people have to go somewhere."

As it is, Kailua doesn't have much to offer in the way of affordable housing, Carvill said. And whatever is available is usually snatched up quickly.

'MANY ... HAVE SUFFERED'

"There's such an issue of affordable housing in the community," said Vishaka Jokiel, a single mom of a 12-year-old son who bought her leasehold unit in The Kailuan in 1999. "Many people up and down this street have suffered as a result of having to move out."

Way doesn't have firm plans on where she'll go if Kaneohe Ranch rejects the tenants' offer to purchase the land. She doesn't want to think about it.

"I feel there's a chance," said Way, who's been living in Windward O'ahu since 1983. "In my heart and mind, I believe we deserve to be here, and that there's no better place for us to be. There's no reason to knock this structure down, and Kailua needs affordable housing."

The owner-occupants say they have the financial backing of a silent investor to make an offer on the property that includes the costs for the cesspool closure and any renovations that need to be done.

They hope that Kaneohe Ranch Co. will consider them viable buyers and take their proposal seriously.

"If Kaneohe Ranch is selling the land, we're asking them to sell it to us for the fair-market value," said James Severson, 53, an architect who owns a unit at The Kailuan in which his daughter-in-law and two grandkids live. "It was something we could afford when we bought it, and to lose it would be a huge financial loss. For some people, they're getting kicked out with no place to go."

And they would be entering a real-estate market significantly different from a decade ago.

Single-family homes in Kailua — with its desirable location near some of the state's best beaches — sold for a median $850,000 in the second quarter of 2007, according to Honolulu Board of Realtors data, compared with $665,000 islandwide.

The median price of a condo in Kailua was $491,000, compared with $328,000 islandwide.

That's a significant jump for resident Way, who bought her condo leasehold for $75,000 back in 1995.

But she's holding out hope.

"I'm one of those positive thinkers (who) doesn't stay up all night crying and worrying," Way said. "But that doesn't mean there aren't people who are. I'm sure that some of the people in our building are really terrified."

AT A GLANCE

Median price of single-family homes and condominiums for second quarter of 2007:

(Geographic area, single-family homes, condominiums)

Entire island: $665,000, $328,000

Metro O'ahu: $736,500, $320,000

Diamond Head: $1,025,000, $504,500

Hawai'i Kai: $910,000, $546,500

Kailua: $850,000, $491,000

Kane'ohe: $735,000, $394,000

North Shore: $902,500, $407,500

Central O'ahu: $595,000, $305,000

Leeward Coast: $375,000, $191,000

'Ewa Plain: $510,000, $294,900

Makakilo: $612,000, $305,000

Waipahu: $575,000, $300,500

Pearl City: $634,000, $299,000

Source: Honolulu Board of Realtors

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http://starbulletin.com/2007/12/22/news/story04.html
Honolulu Star-Bulletin, December 22, 2007

Leasehold owners face eviction

By Allison Schaefers
aschaefers@starbulletin.com

Negotiations over the expiration of the ground lease at the Kailuan, a Kailua cooperative built in 1959, have broken down.

If a settlement is not reached with landowner Kaneohe Ranch by Dec. 31, Kailuan shareholders will become the first set of multifamily owners in modern times to be forced to surrender their properties or face eviction.

Kaneohe Ranch "walked away from the table last night (Wednesday)," Vishaka Devi Jokiel told a news conference yesterday.

While the Kailuan leasehold co-op has troubles that are unique to its own circumstances, in other ways it is a forerunner of the problems that many leasehold condominiums will face in the years ahead of their expiration dates. Property records show that another 1,500 or so lessees and lessors will face critical decisions in the next decade as the terms of their leases begin expiring in 2010.

"What happens here will make a difference for thousands of people living on Oahu," said Jokiel, a single mother who has owned a unit in the cooperative since 2000.

The uncertainty has already begun to affect real estate purchasing decisions and pricing on Oahu and has caused considerable angst about who will ultimately pay the price as the leasehold era comes to an end in the next 20 or so years.

The situation has forced Kailuan owners like Jokiel to decide whether to stay and fight to remain in their properties or find alternate housing before they are evicted.

Meanwhile, landowner Kaneohe Ranch has had to risk public censure to enforce its property rights.

Kaneohe Ranch said that it closed negotiations with Kailuan's shareholders because it was not confident in the ability of co-op shareholders to close a transaction before the end of 2007.

The site also contains a cesspool that is in violation of the federal Environmental Protection Agency's Clean Water Act, and it is not clear that regulators will forgive the situation or extend the term for compliance, said Mitchell D'Olier, president and chief executive officer of Kaneohe Ranch.

"We are especially concerned because the shareholders do not have a loan commitment to finance the purchase," D'Olier said. "Simply put, closing the transaction after the term of the current lease is unacceptable. In fact, we are concerned that (Kailuan shareholders) may never be able to close such a transaction."

James Severson, a longtime resident of the Kailuan, said that residents did have a firm commitment letter from a lender that he declined to name and had offered Kaneohe Ranch $3.2 million

about $1 million more than developer D.R. Horton had paid for similar lands. Shareholders also had procured an additional $1.3 million loan to fix the cesspool and improve the property so that it would be in keeping with other neighborhood improvements, he said.

"We would have closed by the end of the year, and we would have been able to fix the cesspool and hook into the city sewer system," Severson said.

Since Kaneohe Ranch has closed negotiations, Kailuan residents say that they face an uncertain future. When their lease expires, they will have to seek legal intervention if they hope to remain in their homes, Jokiel said.

"The threat of eviction is high," she said. "Mitch D'Olier told our negotiators that they would shut off our water on the 1st. It's very troubling."

The Kailuan's cooperative owners have dealt with the possibility of eviction in a variety of ways. Some have sold their interest in the co-op for next to nothing or taken advantage of an offer from Kaneohe Ranch to compensate them for leaving early. But the bulk of owners have stayed to fight.

"Few of us know where we'll go," Severson said, adding that he might be forced to move in with his parents.

"We don't have other plans. When you use your hard-earned money to buy a place, you don't expect to have it taken away," he said.

Concern for the Kailuan shareholders brought Malia Thayer, a Kailua resident, to the press conference yesterday.

"People have been talking about this in our community," Thayer said. "It's one thing when development brings a Whole Foods or a big corporation into a community. It's another when people are losing their homes. Our hearts go out to these people."

The event also brought Calvin Santos, a native Hawaiian resident from Waianae.

"The rich gon' get rich and the poor get poorer," Santos said. "It's a sad thing to see people thrown out of their place."

Kaneohe Ranch said that it has offered Kailuan residents relocation assistance and support services through Catholic Charities, brokers engaged by Kaneohe Ranch and other resources Kaneohe Ranch has at its disposal.

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http://starbulletin.com/2008/01/19/news/story02.html
Honolulu Star-Bulletin, January 19, 2008

Judge lets ranch oust leaseholders
Residents of a Kailua cooperative can be evicted because their lease has expired

By Nina Wu

A Circuit Court judge ruled yesterday in favor of Kaneohe Ranch Co. in its battle against lessees at the Kailuan cooperative, meaning more than a dozen people will be evicted by Feb. 15.

Tenants were stunned by Judge Glenn J. Kim's decision.

Kim also ruled that the cooperative must close the cesspools that violate U.S. Environmental Protection Agency laws by the same date, and that to appeal the decision, they must post a $4 million bond.

Sara Way, a wheelchair-bound lessee since 1995, has no idea where she will go.

Way lives on the ground floor of the Kailuan, with two roommates and three cats. She said she purchased her leasehold apartment for about $74,000, with the belief that she would day be able one to purchase the fee.

In addition, all the equity she paid is gone.

"When Kaneohe Ranch puts us out, they put us out with a big zero -- nothing," she said.

Kaneohe Ranch began eviction proceedings earlier this month, while tenants argued they should have been given an opportunity to buy the fees to their units under the state "right of first refusal law."

The tenants said Kaneohe Ranch intended all along to sell the property to D.R. Horton Schuler, which is building market-rate condos adjacent to the Kailuan and along the stretch of Kailua Road dubbed "apartment row."

Instead, the ranch simply let the lease expire on Dec. 31.

Kim said certain key facts were undisputed -- that the plaintiff, Kaneohe Ranch, owns the property, and that the lease expired on Dec. 31. He said an agreement to sell or buy, with full and complete terms, is a prerequisite to the "right of first refusal" law.

Gerard Jervis, pro bono attorney for the tenants -- the defendants in the case -- said he was disappointed.

"I think we fought the good fight," he said, "but in the next 10 years, some 1,743 units are going to be affected by this. Landlords can have the intent to sell but stand back, do nothing, let the clock run out and circumvent 514(C)."

He said the lessees are hard-working people who will be put out of their homes. The $4 million bond makes it difficult to file an appeal, he said.

Jervis argued Wednesday that the Kailuan was included in a request for proposals that Kaneohe Ranch put out to developers with the intention of selling it. Only when Kaneohe Ranch realized there was a "right of first refusal" law did it decide not to include it in the D.R. Horton deal, he said.

But Rosemary Fazio of Ashford & Wriston, the ranch's attorney, argued that the state law does not apply since the Kailuan was not included in the sale, and that the ranch faced liability for the cesspool situation.

Mitch D'Olier, president of Kaneohe Ranch, said in a statement yesterday that the court's decision was clear and unambiguous.

"Kaneohe Ranch stands by its many previous offers to assist the remaining shareholders in need of relocation assistance through local real estate brokers and nonprofit entities to meet the deadline set by the court," he said.

But the lessees at the Kailuan are now faced with surrendering their properties -- and being out of a home.

Ken Adams, who bought his unit at the Kailuan 22 years ago, said the state law is useless if it does not apply.

"It's been a David-and-Goliath story and an uphill battle," said Adams. "We're still stunned because we thought we were in the right."

The leasehold owners at the Kailuan have been trying to buy the fee for many years -- even before Chapter 38, a law that allows the city to condemn land on behalf of leasehold owners -- was repealed in 2005.

The equity that a leasehold unit owner pays is gone when the lease expires, according to Michael Pang, president of Monarch Properties.

"The landowner gets the building back, free and clear," he said.

For single-family homes, the landowner is required to pay for improvements that the lessee made at the end of the lease, according to Pang. But this does not apply to multifamily homes like the Kailuan cooperative.

Pang, a witness in the case, said he put together a viable offer to purchase the fee on behalf of the lessees. The offer could have closed before the lease expired, he said, but Kaneohe Ranch decided not to negotiate the deal.

Pang said this decision sets a precedent for thousands of leasehold owners statewide.

"This judge felt the letter of the law was more important than upholding the spirit of the law," said Pang. "What's interesting here is this is the first time a property owner tried to take a property back, went through the process and was successful."

But Pang said the state Legislature should now be compelled to take action.

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http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20080204/NEWS01/802040348/1001/NEWS01
Honolulu Advertiser, Monday, February 4, 2008

Fight for land ends

By Mary Vorsino
Advertiser Urban Honolulu Writer

** Photo caption: John Silva, 88, is being forced to move out of his Kapalama Avenue home by the end of the month to make way for a setback in front of Bishop Museum. At rear is his wife, Isabel, 79, and their great-grandchild, Francisco Perez, 3.

"I don't want to see this go to the dump. Too much beautiful living in this home."
John Silva | Kapalama Tract leasehold owner

"We have needs as far as land and space to do things."
Blair Collis | vice president of public operations for Bishop Museum

John Silva has been fighting to keep his Kapalama home for 38 years.

At the end of the month, he'll be forced to give up and move out after exhausting his legal options in trying to buy the land under his home — one of 19 properties set aside in the 1970s to allow Bishop Museum to expand.

And his home on Kapalama Avenue, where he raised eight children, will be torn down.

"I don't want to see this go to the dump," said Silva, spreading his arms wide in his bright living room, lined with photos of his children, grandchildren and great-grandchildren. "Too much beautiful living in this home."

The 88-year-old is one of 19 Kapalama Tract leasehold owners who failed in a bid to buy the land under their homes. He is also the only homeowner who refused to take anything less than his land. Of the original 19 homes, 13 have been returned to the museum after their owners took land buyouts or died. The five remaining homes are under lifelong leases.

While Silva will be out by the end of February, to make way for a setback in front of Bishop Museum, the homeowners in the other five houses will stay until they die.

Then, the properties will go to the museum.

Bishop Museum officials did not want to speculate on when it would have all the properties vacated. But most of the tenants of the remaining tract homes are elderly.

The 19 lots form a semicircle around the museum on Kapalama Avenue and Bernice Street and total about 2.5 acres — a welcome land increase for the largest museum in the state, which has been struggling with space issues for years.

Bishop Museum officials said there are no immediate expansion plans for the museum, but acknowledged that a master plan for the institution is under way and that the tract lots will be considered as the museum moves forward.

The museum sits on 14 acres in Kalihi, and boasts a collection of more than 24 million Hawaiian and Pacific artifacts, a staff of 250 and a range of exhibits. Some 300,000 people visit the museum annually.

"We have needs as far as land and space to do things," said Blair Collis, vice president of public operations for the museum.

The museum was established in Kapalama in 1889. The existing homes around the museum sprouted up largely in the 1950s. Silva's home, for example, was built in 1954.

Of the 13 homes on the Kapalama Tract returned to the museum, 12 have been torn down, including all of the Silvas' neighbors. Officials said the remaining home on Bernice Street is being used as a meeting space for the museum. Researchers are also using the home to store specimens.

The emptying of lots on the makai end of Kapalama Avenue helped make room for the Science Adventure Center at the museum, which opened in 2005 and cost $17 million.

Now, discussions over what to do with the rest of the vacant or soon-to-be vacant properties come as the museum is also working to revamp its existing buildings.

In 2006, the museum kicked off a $20 million project to restore Hawaiian Hall, the oldest building on the campus. There are preliminary plans to take on Bishop Hall next.

Neighbors of the museum speculate that the tract lots around the facility will be used for new buildings and more parking. There is also talk of widening Kapalama Avenue.

But the museum said none of those options are on tap now. Collis said the only certain thing is that the Silva home must be torn down to comply with a city setback rule. He said the campus has until March to comply with the ordinance.

The museum agreed to provide the setback, officials said, as part of re-evaluating its master plan in the 1990s. The city set the due date for the setback based on the 55-year lease Silva had, reasoning that if the home were vacated when the lease expired in September 2007, that would be plenty of time to have the lot vacant.

Silva contends the setback rule is a pretext to get him out. "At least give us life here, then you can have it," Silva said, who contends he has been mistreated by the landowners and government.

Silva started his fight to get the land under his home in 1969. That year, he and 131 homeowners on lots surrounding the museum became some of the first to test the landmark state Land Reform Act of 1967. The law allowed leasehold owners to force landowners to sell them the land under their homes.

At the time, the land under the homes was owned by Bishop Estate, now known as Kamehameha Schools, which challenged the law. All but 19 of the leased fees were voluntarily sold by the estate in the early '70s, though. The excluded homes, including Silva's, were transferred to the museum in a land swap.

The lots under the 19 homes were not sold because the museum wanted the land for expansion.

The museum has also said that the homes didn't have to be sold under law because they didn't meet a 5-acre minimum for leasehold conversion.

Instead, the museum negotiated with the homeowners.

Jodi Yamamoto, vice president and general counsel of Bishop Museum, said Silva and others were offered money to surrender their leases. Others were allowed to stay in their homes until they died.

The lease buyouts were about $200,000 each.

Silva was also offered a land swap — a vacant lot in Liliha that would be returned to the Bishop Museum after the Silvas died.

The offers were made in 1993, after residents petitioned the state to condemn the lots.

Silva declined the buyout and a land swap.

Instead, he held out, keeping up the hope that he would get what he originally wanted — the land under his red and green home on Kapalama Avenue, which he diligently kept in top shape because he wanted to pass it on to his children.

Since Silva's 55-year lease for his property expired last year, he has been granted several extensions. The latest one — and likely last one — was accepted last week, and allows him to stay in the home until the end of the month.

He still doesn't know how he'll leave. "I never gave up," Silva said.

Still, the Silvas are readying themselves to go. Silva and his wife, 79-year-old Isabel, are packing up a life's worth of belongings, though they don't know how much they'll be able to keep when they move in with their daughter.

Three other people also live in the home — Silva's son, another daughter and her two children. They will also move in with family until they can find places of their own.

Isabel Silva said she can't imagine family gatherings anywhere but the warm, friendly neighborhood where she raised her children.

"To me, it's sad and depressing," she said.

Their home, known for its elaborate Halloween and Christmas displays, is still decorated for the holidays. They plan to leave much of the decorations up when they leave, to be torn down along with the home they thought they would die in.

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http://starbulletin.com/2008/02/05/business/story03.html
Honolulu Star-Bulletin, February 5, 2008

Kailuan eviction prompts land bill

By Nina Wu

The eviction of leasehold apartment owners at the Kailuan residential cooperative has prompted a state Senate bill that would amend the "right of first refusal" law.

Senate Bill 3196 would amend state law so that leasehold owners get the right of first refusal on the purchase of a property when the owner has displayed an objective intent to sell, or accepted a written offer to purchase the property -- not only before expiration, but also within two years afterward.

Currently, Hawaii Revised Statutes 514C reads that the refusal law is in place when the leased fee interest in land under a condo or co-op project "is to be sold."

In January, Circuit Judge Glenn Kim ruled in favor of landowner Kaneohe Ranch Co., setting the stage for unit owners at the Kailuan to be evicted on Feb. 15. The co-op's ground lease expired Dec. 31.

Judge Kim ruled that an agreement to sell or buy, with full and complete terms, is a prerequisite to the "right of first refusal law."

The current bill won't help the Kailuan owners, whose dispute was handled under existing law. But it would affect some 1,500 or more leasehold property owners whose leases expire over the next decade.

Leasehold owners would be informed of the impending sale and be given the right of first refusal to purchase the fee interest, for the same price as the written purchase offer, under the bill.

The right of first refusal would apply "prior to or within two years after the termination of the lease."

The bill -- introduced in late January and backed by Sen. Clayton Hee (D, Kahuku-Kaneohe)-- was heard in the Commerce, Consumer Protection, and Affordable Housing Committee yesterday. Action on was deferred to Feb. 11.

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http://starbulletin.com/2008/02/16/business/story01.html
Honolulu Star-Bulletin, February 16, 2008

Kailuan dispute comes to quiet end
Residents moved out yesterday after the state Supreme Court refused to intervene

By Allison Schaefers

It was a quiet end to a controversial issue yesterday as former members of the Kailuan residential cooperative packed up belongings and surrendered their homes to Kaneohe Ranch, owner of the building's ground lease.

A metal chain blocked entry into the building parking lot and a few security guards hired by Kaneohe Ranch supervised as former building leaseholders carried out suitcases and clothes, checked mail and gathered pets. Some leaseholders were denied entry.

On Thursday, the Hawaii Supreme Court denied a petition from residents of the Kailuan to intervene in their court-ordered eviction. The decision made these lessees the first multi-family tenants in the state to be evicted at the end of their lease term. The owners of more than 1,500 leasehold units across the state could face a similar situation in the next decade.

"It's the end of the road for us as far as staying here," said James Severson, who had lived at the Kailuan since purchasing a leasehold unit in the cooperative for $59,000 in 1986.

Severson, wearing a shirt chastising Kaneohe Ranch for refusing to sell to lessees, said he was the first buyer to purchase a unit in the building, which was developed as affordable housing.

"This is very difficult. I don't know that it's sunk in yet," said Severson, who has temporarily moved in with his parents. "We've lost our home, our investment and everything that we've worked for."

The Kailuan opened as a leasehold rental apartment complex in 1959 on land that Kaneohe Ranch says that it didn't plan to sell. Developer Peter Savio later bought the building, and turned it into a cooperative in 1985.

Members of the Kailuan Inc., whose ground lease expired Dec. 31, could still appeal to the state's highest court; however the latest ruling prevents them from ever returning to the place that they once called home, said attorney Gerard A. Jervis, who represented members of the Kailuan Inc. pro bono.

"Now that they are out of there, they won't be able to go back," Jervis said. "The Hawaii Supreme Court is just wrong on this issue. The system is flawed."

Jervis had argued that Kaneohe Ranch's decision not to sell the fee to the Kailuan Inc. violated a state statute that required land owners to give leaseholders the right of first refusal if they planned to sell the property. However Hawaii Circuit Court Judge Glenn Kim did not support his position. Last month, Kim ordered the cooperative to surrender their homes and to bring the property into compliance with federal environmental laws by closing cesspools.

Since then, Hawaii lawmakers have begun considering Senate Bill 3196, a bill which seeks to amend the state's current "Right of First Refusal" law, HRS 514-C2. The amendment would come too late to change the outcome at the Kailuan, Jervis said.

Now that the few remaining occupants have left the Kailuan, Kaneohe Ranch will begin to close the nine now-illegal cesspools on the property, said Rosemary Fazio, Kaneohe Ranch's attorney.

Closure is not as easy for Kaneohe Ranch's former lessees, who are struggling to find their places in Honolulu's notoriously high-priced real estate market.

While 12 out of the 18 owners at the Kailuan bought after 2000 in full knowledge that there weren't many years left on their leases, most expected that they would one day be able to buy the fee. The conversion of some two-thirds of leasehold inventory had given them false confidence, they said.

Vishaka Jokiel, a single-mother who has lived at the Kailuan since 2004, said she has found temporary housing in Waimanalo. Cost has prevented Jokiel, who paid $20,000 for her unit in the Kailuan, from finding a permanent home, she said, adding that other former leaseholders have had equal difficulty.

In addition to worrying abut their own relocation, former leaseholders are concerned for their former neighbor Sara Way, who is wheelchair bound and was hospitalized before she could find alternate housing.

"She was out in the rain passing out Save the Kailuan flyers two days before she got sick," Jokiel said. "I think all of this has been too much for her."

Kaneohe Ranch said that it tried to assist Way in moving and finding alternate housing on at least three separate occasions, but that their attempts were blocked by Jervis.

"The process has been a challenging one for all concerned. Kaneohe Ranch, however, has continually worked to help ease the situation," Fazio said. "Relocation assistance was offered to tenants including services from real estate brokers and non-profits, as well as financial assistance of up to $10,000 per apartment. Several of the tenants accepted the offer."


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