Senate Bill 499 – Extending Leases on Public Lands

Hawaii Lands

By: J. S.

A bill that would extend public land leases up to an additional 40 years made its way through the 2021 legislative session and is now on Governor Ige’s desk. Both strong opposition and strong support for the bill have been raised by stakeholders since it was introduced in January.

Now, some groups are asking the governor to veto the bill that would essentially provide hundred year leases on public lands for commercial properties, resorts, government and more.

Senate Bill 499 would authorize the board of land and natural resources to extend certain leases of public lands for commercial, industrial, resort, mixed-use, or government use upon approval of a proposed development agreement to make substantial improvements to the existing improvements.

The bill comes shortly after Act 149, a 2018 pilot project for improvements in Hilo on the Big Island. According to OHA testimony, Act 149 was initiated to determine whether public land lease extensions in the dilapidated “Hilo community economic district” could “facilitate efficient and effective improvement, and economic opportunity,” and whether such an approach “could be replicated in other areas of the State.” The pilot project has not yet been finished, and OHA made the point that the outcome of extending these leases is not yet realized.

Concerns regarding the bill have been voiced by groups and individuals alike. The leases sit on ceded lands, and Native Hawaiian groups are asking for accountability in how the land will be used going forward.

OHA has voiced concerns that the leases approved for extension under SB 499 “may authorize leases that violate the State’s fiduciary obligations under the public trust and public land trust, and lead to the alienation of public and “ceded” lands.”

The Bureau of Land Management will be the entity responsible for approving extended leases. Concerns have been raised that this non-elected entity would be responsible for deciding what leases are extended, without further input from elected officials or the public.

Ka Lāhui Hawaiʻi Kōmike Kalai’āina submitted strong testimony against the bill for these same reasons. They also stated that the “measure does not provide for any process where public input can be provided on past, current, and future land stewardship. Were these lessees to go through a public process others would have an opportunity to bid on the property, public input would be allowed, and in some cases environmental assessments taken into account on how well they have cared for the public land they were entrusted with.”

The desire for accountability from the government in dealing with leases is quite clear. The Bureau of Land Management’s questionable track record for accountability raises concerns regarding how it will qualify the improvements necessary for businesses to extend leases. The desire for many groups is for the government to be accountable and transparent in how it will use large swaths of land that are supposed to be upkept in the people’s best interest.

Support for the bill has come in from leaseholders and businesses with vested interests in extending lease times. Shareholders with short lease times left state they are unlikely to be granted funding to make any improvements on lands if their leases are not extended. This would prohibit further improvements even with years remaining on leases.

Among the leaseholders is Brookfield Properties, who owns Prince Kuhio Plaza as well as Ala Moana Mall in Oahu and Whaler’s Village in Maui. The group raised concerns about it’s likelihood of being able to continue investing for further improvements in PKP should the lease fail to be extended. Since acquiring PKP in 2018, millions have been invested to improve the properties and also pay for leases of tenants through the pandemic. The plaza houses over 60 unique businesses and restaurants.

The Pacific Resource Partnership believes SB 499 can “incentivize small businesses and developers to reinvest in properties on public lands to ensure that properties evolve to meet the demands of businesses, residents, and the community at large.” The group raised the possibility of extended leases providing local jobs through different improvement projects that will be a condition of all lease extensions.