HOUSE OF REPRESENTATIVES

H.B. NO.

331

TWENTY-SIXTH LEGISLATURE, 2011

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to pUBLIC LANDS.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  On May 23, 1960, a tsunami struck Hilo with great effect.  In the period of time immediately after that disaster, the State found that it was in the public interest to establish a safe area for Hilo businesses outside of the tsunami inundation zone.  The State then began leasing properties in Waiakea, South Hilo, to allow for this relocation.  The areas now known as the Hilo Industrial Area, and the various businesses therein, have organized themselves into what is now the Kanoelehua Industrial Area Association. The Hilo Industrial Area is the economic center of Hilo, positioned between the historic downtown, now primarily shops and restaurants, and the newer Prince Kuhio Mall and Puainako retail areas.  Newer big box retailers also have located in this area.

     The first leases for land in the Hilo Industrial Area were written in 1961 and had a lease term of fifty-five years.  These leases will expire in five years, in 2016.  Many of the original lessees or their families remain on these leasehold lots and continue to do business there after fifty-five years.  Other leases have been assigned or transferred as changes in ownership or business use have taken place.  Many of the properties have been allowed to deteriorate or are in need of reconstruction due to the age of the properties and the imminent expiration of the leases.

     The legislature finds that the department of land and natural resources has not provided guidance on the management of these leases when they expire.  The lessees at Hilo Industrial Area are concerned because they do not know how they will be treated by the State at the end of their lease terms.  The legislature further finds that the assets that these lessees have created, invested in, and used for many years will continue to have value after 2016.

     The legislature further finds that the economic recession has affected the Big Island especially badly and has resulted in job losses and high unemployment.  In addition, the recession has caused record deficits in the State's budget due to lowered tax revenue.  The legislature finds that it is unlikely that the State will be able to invest in the revitalization of the Hilo Industrial Area.  In the absence of this investment, the legislature finds that it can encourage leaseholders to continue their own investment by extending leases in the Hilo Industrial Area.  Lease extension would remove uncertainty for lessees, encourage private business investment, and provided improved services to the public, all of which would benefit the overall economy.

     The purpose of this Act is to help stabilize and support Hilo's economy during this recession and for the future by extending the leases for properties in the Hilo Industrial Area.

     SECTION 2.  (a)  Notwithstanding any law to the contrary, the department of land and natural resources shall extend the terms of all existing leases that were conveyed after May 23, 1960, on properties in the area known as the Hilo Industrial Area in Waiakea, South Hilo, until no earlier than 2026.  The amounts of lease rent due on properties subject to a lease extension pursuant to this Act shall not increase.

     (b)  No later than January 1, 2016, the department of land and natural resources, in consultation with the Kanoelehua Industrial Area Association, shall determine whether it is in the public's interest to relocate the existing lessees or redevelop the existing infrastructure.  In making its determination, the department of land and natural resources shall evaluate separately the parcels located on each side of Kanoelehua Avenue.

     SECTION 3.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Public Lands; Hilo Industrial Area; Leases

 

Description:

Directs DLNR to extend the leases in Hilo Industrial Area until 2026.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.