Board Talk

New Rent Policy For Non-Profits Is Sent Back For Fine Tuning

The Board of Land and Natural Resources has decided its new policy on lease rents for non-profit corporations needs a it of fine tuning.

The policy was adopted just last September, roughly a year after need for it surfaced as the board discussed a proposed lease rent increase for the Easter Seals Society of Hawai`i. (For details, see the Board Talk” column in the November 1997 issue of Environment Hawai`i.)

The policy was developed by the Department of Land and Natural Resources’ Land Division at the request of the board, which wanted to have some guidance on how to set rents for non-profit agencies and corporations. Traditionally, non-profits occupying state lands have enjoyed substantially discounted lease rents.

At the Land Board’s May 28 meeting, it became evident that the new policy still needed some work when the Easter Seals Society — one of several non-profits disputing assessed state rents — sought a rent reduction on land it had been leasing at Kewalo.

The Easter Seals Society lease rent had been set at about $6,500 by the Land Board on August 21, 1997. The amount represented 20 percent of what the Land Division said was the fair-market rent of $32,547. Easter Seals then requested a further reduction “due to the financial hardships rent, even at 20 percent of market, would bring to the non-profit,” according to the staff submittal to the board for its May 28 meeting.

After evaluating Easter Seals in accordance with the Land Division’s non-profit leasing policy, the staff recommended that the non-profit lease rent be reduced to a nominal $1 a year. Kaua`i Land Board member Lynn McCrory moved to defer the issue after voicing doubts as to whether a department or division that deals with natural resources is the appropriate entity to evaluate a non-profit that deals with handicapped children.

BLNR chair Tim Johns agreed, “If it were a non-profit dealing with natural resources, we wouldn’t be having the same problems.”

McCrory suggested that the state Department of Health or the Legislature would be better qualified to evaluate Easter Seals. The board then voted to defer the rent reconsideration.

After the television series “Wind on Water” was canceled on November 7, 1998, the National Broadcasting Company (NBC) donated the remaining structures to the Department of Land and Natural Resources’ Division of Boating and Ocean Recreation. Since then, nighttime vandals have pilfered materials left at the site, at Kawaihae Small Boat Harbor on the Big Island.

On May 14, the Board of Land and Natural Resources granted a revocable permit to the Big Island YMCA to take over the site. The organization had requested Land Board approval to relocate its Aquatics Center to the “Wind on Water” site after six years of operating under a permit with the Department of Transportation/Harbors Division at Kawaihae Harbor.

“They believe this new site will provide a safer environment. It will greatly improve its existing programs of sailing, water safety, surfing, free diving scuba diving, wind surfing, fishing and cultural awareness, environmental and recreational programs,” a staff submittal by DOBOR’s acting administrator Howard Gehring stated.

The “Wind on Water” site lacks adequate water and electricity, and its buildings are not up to code. According to the staff report, the State Boating Program does not have enough resources to maintain and develop the facility. At the May 14 Land Board meeting, representatives of the “Y” indicated that the Waimea Family YMCA would establish a committee to improve the facilities. The committee will be made up of 12 representatives from various community organizations such as the Kawaihae Canoe Club, Kawaiahae Community Association and Na Kalae Wa`a — Makali`i `Ohana.

Board members had several reservations about the staff recommendation. For one thing, DOBOR recommended that the pay no rent for the site — just as it had paid no rent for six years under its permit from the Department of Transportation to use the harbor’s military cement dock.

Board member Colbert Matsumoto asked Gehring, “Can you verify whether or not this is ceded land, subject to the 20 percent OHA payment?” Twenty percent of rent from ceded lands is paid to the Office of Hawaiian Affairs.

Gehring said he did not know. Bob Matsuda of the Big Island YMCA answered that the entire area where the site stands was filled since the 1950s.

That would make the area ceded lands, Matsumoto said, adding: “We have to be careful of our liability to OHA.”

Land Board chair Tim Johns said there was no question about the project’s benefit to the community, but, “If we give the permit gratis, we’ll have to pay out of another pocket to OHA.”

Matsuda suggested that the temporary nature of a revocable permit might get around the 20 percent requirement. Johns stated that he wasn’t sure that a revocable permit was a way out.

Matsumoto showed some concern that DOBOR would propose a gratis lease. “If Boating does not understand the state’s liability, it needs to get together with the Attorney General,” he told Gehring. “You need to get better versed in leasing practices. It’s not 20 percent of what the state gets… We’d love to lease lands gratis, but we are bound by a requirement to generate 25 percent of the fair market value.”

Gehring said that the proposal is not bringing anything new onto the land and that it would be a benefit to OHA, since the majority of the project’s beneficiaries would be native Hawaiian.

To that, Matsumoto told Gehring to get a letter from OHA saying that they won’t make a claim on that land. To date, OHA has never given any such exemption.

Matsuda stated that the YMCA would “be delighted” to work with OHA on the issue. And if OHA refuses to allow the permit to be granted without charge, “The YMCA will go on record to say we will cover the 25 percent rent,” Matsuda said.

Matsumoto commended Matsuda’s effort, but said he was distressed at “the failure of our staff” to properly assess the state’s potential liability with regard to renting out ceded lands.

Big Island Land Board member Russell Kokubun moved to approve the permit, adding that issues with OHA still needed to be resolved. Mastumoto seconded the motion, which was approved.

When the Land Board approved a construction right-of-entry last August for the Hawaiian Electric Company, Inc.’s transmission lines on O`ahu’s North Shore, it overlooked approving HECO’s request to delete a condition that says that trees lying beyond nine feet of either side of a transmission pole may not be trimmed lower than 15 feet above the ground.

On May 14, HECO returned to the Land Board to get that condition deleted on the ground that it limits HECO’s “ability to safely install the subtransmission lines and further limits their ability to maintain the line’s reliability,” according to a staff submittal by land agent Al Jodar.

HECO representatives said its helicopters need some 50 feet of clear space to shuttle materials to the pole sites from HECO’s staging area at the Kahulu motocross park. The permit condition gives it just 18 feet.

HECO worked with the DLNR’s Division of Forestry and Wildlife on a vegetation management plan that “minimizes the removal and/or trimming of trees and vegetation, balanced against the need for safe access and the reliable delivery of electricity,” the staff submittal states. “This program will be utilized for the initial installation phase and the maintenance phase of the new lines. Also, in places of uneven terrain, vegetation clearing or tree trimming may need to be lower than fifteen feet.”

Board member Russell Kokubun expressed concern that invasive species might move in on the cleared area. HECO assured the Land Board that the area would be restored to a state satisfactory to the DLNR. The board approved the request to delete the condition and gave HECO until the end of the year to complete construction.

Collecting precious corals is a risky practice. The coral beds lie hundreds of feet underwater, where divers may have time enough for only a few breaths to harvest what they can before resurfacing. For decades, only a handful of people have collected the corals, which are used in jewelry making or as aquarium items. And because Hawai`i’s precious coral beds have been visited by so few, they are believed to be healthy enough to survive occasional harvest.

Within the last year, however, two permits have been issued to companies seeking to harvest coral from a Makapu`u bed using submersibles. This newer technology, while costly, would extend the time at sea for harvesting and thus might threaten the bed’s ability to regenerate quickly enough to allow for sustainable harvests.

Also, the Hawai`i Administrative Rules that govern the harvesting of pink and gold corals in Hawai`i restrict harvests to the Makapu`u Bed only. According to a May 14 Division of Aquatic Resources staff submittal to the Land Board, “New technologies are making deeper ocean areas more accessible and future exploration and harvest would be restricted due to this existing rule provision.”

The DAR submittal notes potential threats to harvests of shallower black corals as well: “Because newer underwater technologies allow diving to greater depths, this fishery could experience increased harvesting and is recommended to be protected at this time. There is also a need to clarify that the taking of these corals is not construed to be the taking of rock to which marine life is attached.”

The DAR proposed revisions to the DLNR’s administrative rules to establish a minimum size for the take of black corals, to eliminate the quota and area restriction for the Makapu`u Bed, and to replace it with a general permit provision for the harvesting of pink and gold corals from all state marine waters.

Public hearings on the amendments were held in March on Maui and on O`ahu. Much of the discussion at those meetings revolved around the proposed minimum size for black coral. The DAR proposed that a minimum diameter size of three-quarters of an inch — equivalent to a fifteen-year-old coral tree — would allow the coral ample time to reproduce. The Western Pacific Fisheries Management Council maintains that a one-inch diameter or 48-inch height minimum — roughly equivalent to a 19-year-old coral — would better protect the fishery.

In response to concerns expressed by Land Board members about the possible degradation of the coral beds, DAR acting administrator Bill Devick said harvesting could be “shut down within a year” in case any further changes to the DLNR’s administrative rules needed to be made.

On May 14, the Land Board approved the rule changes.

— Teresa Dawson

Volume 10, Number 1 July 1999