When it comes to streams worth protecting, the Hanalei River is without peer among Hawai`i’s streams. The Hawai`i Stream Assessment, prepared by the state Commission on Water Resource Management with the help of the National Park Service’s Rivers and Trails Conservation Assistance Program, found that the Hanalei River had resource value in all four categories it considered — aquatic, cultural, recreational, and riparian. What’s more, in every category, the values of the Hanalei River were outstanding. In the Stream Assessment’s list of candidate streams for protection, the Hanalei River qualified on more counts than any other stream in the state.
As the river approaches Hanalei town, it is afforded a measure of protection by the U.S. Fish and Wildlife Service, which operates the Hanalei National Wildlife Refuge. Upstream, most of the land surrounding the river is in the Protective subzone of the Conservation District and, what’s more, much of it is owned by the state. One might think that makes controlling the uses of the land along the banks — and therefore protecting the quality of the river — an easy matter for the state.
It hasn’t quite worked that way.
Nonconforming Uses
Long ago, the area in the back of the valley was carved into small lots. Ownership of most of the parcels has come to rest with the state, for various reasons. A few lots remain privately held; they are used mostly for residential purposes.
For years, however, the state had leased about 21 acres of its land to Billy Fernandes, a powerful Kaua`i politician, who used it for cattle ranching. Two leases were involved, one of 7.3 acres and the other of 13.64 acres.
Fernandes’ lease on the smaller parcel ran from 1986 to 2001. The lease on the larger parcel expired in 1991. By 1991, however, Fernandes was no longer using any of the land for agricultural purposes.
At that point, the Department of Land and Natural Resources could have allowed the lease of the larger area to expire. Ranching, after all, is not a permitted use in the Protective subzone. When nonconforming uses expire, it is not unreasonable to think that the state should strive for their elimination rather than their perpetuation.
However, in April 1991, the Division of Land Management presented the Land Board with a proposal to put up for public auction a new 15-year lease on the 13.64-acre parcel. At the time, the property in the area of Fernandes’ house was described as overgrown “with various wild vegetation including bamboo.” Across the Ho`opau Swamp, more toward the river, the area was said to be “California grass pasture mixed with hau, guava, wild banana, and other species.” The Board approved the plan.
When the lease auction was announced, the DLM informed potential bidders that they would be expected to undertake “full utilization of the land.” None of the “special conditions” refer to the fact that the land is already in the Conservation District (although lessees are told that they must keep all animals out of “any forest reserve”).
In June 1991, the DLM received an appraisal report, estimating the fair annual rental of the land at $840. (Fernandes had been paying $175 a year.) When the auction was held, one Randall J. Bandmann was the successful bidder, offering to pay $2,010 a year for the next 15 years.
Bulldozing Roads
Fernandes wanted to remove his house before Bandmann’s lease began. An October 12, 1991, memo from the Kaua`i land manager, Sam Lee, to DLM Administrator Mason Young describes Fernandes’ activity:
“An inspection of the premises on 9/30/91 indicated stepped-up activity by the lessee to prepare the residential structure … for relocation… A new road has been bulldozed down the hillside within the lease, ostensibly to provide a corridor through the underbrush to the Hanalei Valley road. With the lease expiration date of October 15, 1991 fast approaching, we will ask DOCARE’s [the Division of Conservation and Resource Enforcement] assistance with helping us monitor the removal of the structure.”
Lee was well aware that the land was in the Conservation District. The last paragraph of his memo reads as follows:
“Without getting into the issue of the Conservation District, DLM should write the lessee a letter requiring restoration of the area after the structure is taken off the property.”
Lee had already alerted DOCARE to the fact of the newly cut road and Fernandes’ anticipated house move. “Please ask your north shore officers to monitor activity and advise,” he had requested in a memo October 2, 1991 to the Kaua`i DOCARE supervisor, Mac Andrade.
DOCARE officers were on the lookout — but not, as one might have thought, for Conservation District violations. Rather, they reported to Lee on October 11, 1991, that they had spotted the house “on trailers parked off Kuhio Highway in Kealia on state land…”
Not until February 12, 1992, did the DLNR get around to asking Fernandes to restore the damage done by his bulldozer. On that date, William Paty wrote Fernandes, stating: “While we recognize the need for you to make some land alterations to facilitate movement of the structure, we need also to be aware of the potential for erosion if the road remains unvegetated. Please develop a plan to revegetate the roadway and submit the plan for our review.”
DLM files contained no response to the letter from Fernandes nor is there any trace of a revegetation plan.
A ‘Win’ Situation
The land covered in Fernandes’ other lease consisted of two separate, non-contiguous parcels. One 2-acre parcel lies along the Hanalei River. The second, about 5 acres, shares a boundary (on the north) with the other leased area, which since 1992 has been under lease to Bandmann. As with the land under the larger lease, this parcel, too, runs through the Ho`opau Swamp.
Soon after Bandmann acquired the first, larger lease, he apparently approached Fernandes, requesting that Fernandes transfer to him the smaller lease, which is not to expire until the year 2001 and for which Fernandes was paying the state $90 a year in rent.
In July 1992, Fernandes consented to the transfer. According to Bureau of Conveyance records, Bandmann paid Fernandes nothing for the assignment of lease.
By that time, Fernandes had pretty well abandoned any use of the land. As noted in a memo July 16, 1992, from the Kaua`i land agent, Sam Lee, to DLM administrator Mason Young, the land “has not been cleared or used to best advantage.”
“Furthermore,” Lee wrote, “non-compliance with several conditions, including submission of a lease bond, filing of liability insurance or a conservation and land development plan, have brought us to the point where a notice of default would soon be filed.”
The lease assignment “would present a win situation for all parties. Fernandes would be able to shed a lease he is not using, Bandmann would acquire additional land to supplement his recently acquired lease, and the state would not have to institute default proceedings and cancel GL No. S-5122,” Lee concluded.
The Board of Land and Natural Resources approved the transfer at its meeting of August 12, 1992. The map accompanying the DLM’s submittal to the Board, by the way, erroneously depicts the lease as consisting of one contiguous piece of land, as opposed to the two separate tracts, and as encompassing two privately owned parcels that lie between the leased tracts. The questionable utility of the leased land, composed as it is of two widely separated tracts, was thus not made apparent to the Board at the time it was making its decision.
Volume 3, Number 10 April 1993