HOUSE OF REPRESENTATIVES

H.R. NO.

142

TWENTY-SEVENTH LEGISLATURE, 2013

 

STATE OF HAWAII

 

 

 

 

 

HOUSE RESOLUTION

 

 

URGING THE DEPARTMENT OF LAND AND NATURAL RESOURCES AND THE SAND ISLAND BUSINESS ASSOCIATION TO CONTINUE THEIR DISCUSSIONS REGARDING THE SALE OR EXCHANGE OF PARCELS OF LAND WITHIN THE SAND ISLAND INDUSTRIAL PARK.

 

 

 


WHEREAS, in 1992, the Department of Land and Natural Resources entered into a fifty-five year master lease with the Sand Island Business Association for the Sand Island Industrial Park on the island of Oahu; and

 

WHEREAS, the Sand Island Industrial Park is approximately seventy acres divided into one hundred twelve lots sublet to Sand Island Business Association members; and

 

WHEREAS, Sand Island Business Association members have invested over $41,000,000 in infrastructure improvements and over $55,000,000 in leasehold improvements to the individual parcels; and

 

WHEREAS, with such substantial investments, Sand Island Business Association members have expressed a strong interest in purchasing the fee interest in their leasehold lots; and

 

WHEREAS, with the lease period shortening every day, it becomes more difficult for the Sand Island Association members to rely on the leasehold as an asset when attempting to secure bank loans; and

 

WHEREAS, Act 235, Session Laws of Hawaii 2011, authorizes the Department of Land and Natural Resources to consider the sale or exchange of Sand Island Industrial Park lots to leaseholders; and

 

WHEREAS, the Department of Land and Natural Resources has expressed a willingness to sell or exchange Sand Island Industrial Park lots, provided that certain conditions are met; and

 

WHEREAS, this body recognizes the Sand Island Business Association's considerable investment in the infrastructure, i.e. roads, utilities, and landscaping, at the Sand Island Industrial Park; and

 

WHEREAS, this body understands that a significant portion of the recent $97,200,000 appraisal value of the Sand island Industrial Park is due to the Sand Island Business Association's considerable infrastructure investment; and

 

WHEREAS, this body recognizes that the Department of Land and Natural Resources has the legal authority to administer the disposition of the Sand Island Industrial Park through land exchanges; and

 

WHEREAS, the majority of Sand Island Business Association's membership is comprised of small locally owned businesses employing approximately two-thousand employees; and

 

WHEREAS, this body recognizes the State's need to foster the long-term growth of the Sand Island Business Association members while promoting revenue growth for the Department; and

 

WHEREAS, this body recognizes that a land exchange would help secure the viability of small businesses while enhancing the State's opportunities for higher valued properties; and

 

WHEREAS, this body recognizes the need to mitigate the risks associated with over half of the Department of Land and Natural Resources' revenue for operations concentrated in a single market segment located in a tsunami inundation zone; and

 

WHEREAS, geographic diversification in areas less susceptible to natural disasters further protects the Department of Land and Natural Resources' income stream; and

 

WHEREAS, this body understands that a portfolio of diversified properties offers the Department of Land and Natural Resources increased opportunities for stronger future revenue growth while reducing risk; and

 

WHEREAS, this body recognizes that time is of the essence with properties available for sale at discounted prices; and

 

WHEREAS, currently low interest rates allow for maximum borrowing capacity to the Sand Island Business Association members to help finance the land exchange; and

 

WHEREAS, the recent economic downturn has provided opportune timing to acquire premium properties at significant discounts; and

 

WHEREAS, interest rates and the availability of prospective replacement properties are constantly changing, and to take advantage of the timing in market dislocation, exchanges must occur with urgency; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-seventh Legislature of the State of Hawaii, Regular Session of 2013, that the Department of Land and Natural Resources and the Sand Island Business Association are urged to continue their discussions regarding the sale or exchange of parcels of land within the Sand Island Industrial Park; and

 

BE IT FURTHER RESOLVED that the Department of Land and Natural Resources is requested to submit three preliminary reports to the Legislature as follows:

 

(1)  A report regarding discussions and actions taken prior to the adjournment of the Regular Session of 2013, to be submitted to the Legislature no later than twenty days subsequent to the adjournment of the Regular Session of 2013;

 

(2)  A report regarding discussions and actions taken prior to July 1, 2013, to be submitted to the Legislature no later than July 31, 2013; and

 

(3)  A report regarding discussions and actions taken prior to October 1, 2013, to be submitted to the Legislature no later than October 31, 2013; and

 

BE IT FURTHER RESOLVED that the Department of Land and Natural Resources is requested to submit a final report of the discussions and actions taken, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2014; and

 

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Governor; the Chairperson of the Board of Land and Natural Resources; and the Executive Director of the Sand Island Business Association.

 

 

 

 

OFFERED BY:

_____________________________

 

 

Report Title: 

Sand Island Industrial Park; Sand Island Business Association; Department of Land and Natural Resources