Board Talk: Waikiki Zipline, Ala Wai Development, Legacy Lands

Board Grants Temporary Permit for Zipline Over Hilton Lagoon

They’re calling the zip-line that Waikiki Beach Activities, Ltd. (WBA), plans to string over the Hilton lagoon the “Coconut Glide.” And over the next several months, the company will be testing it out, paying the state $1.50 a head plus $1,425 a month for use of a parking area managed by the Department of Land and Natural Resources’ Division of Boating and Ocean Recreation.

A one-day test run in December using a 50-pound dummy was largely successful, but the company found that raising the end point by five feet would provide better clearance above beach goers. Raising the line puts the landing zone within DOBOR’s parking lot. WBA plans to take up two parking stalls for its ‘Landing Zone’vehicle and relocate two trees to create two replacement stalls.

On March 13, the Land Board approved a six-month right-of-entry permit to Waikiki Beach Activities to allow the company to assess the new configuration —with real, live customers —for future zip-line operations.

DOBOR determined that the permit did not require an environmental assessment under the state’s environmental review law, Chapter 343, because the permit falls under an exemption for “basic data collection, research, experimental management, and resource evaluation activities which do not result in a serious or major disturbance to an environmental resource.”

Although the board approved the permit, board members expressed several concerns about the project.

Hawai`i island Land Board member Stanley Roehrig said he worried about the precedent the operation would set. (Roehrig was the only board member to vote against the permit.)

“This isn’t Coney Island and we don’t want it to be Coney Island. …I have strong reservations of zip lines all over Waikiki Beach,”he told WBA owner Bob Hampton.

Hampton replied that he couldn’t foresee that happening since he thought there weren’t any other suitable areas in Waikiki.

“Koe aku ia — that remains to be seen,” Roehrig said.

He added that people can parasail if they want an aerial view of Waikiki and went on to describe how a number of people on his island have died from zip-line accidents.

“It isn’t a precise science. …People fly into the trees and they die,”he said.

At-large board member Ulalia Woodside added that if the operation does proceed, she wanted more information on how it might interact with other recreational uses in the area.

If the six-month trial period is successful, WBA will seek an annual revocable permit from DOBOR to continue using the landing zone, Hampton said.

Kaua`i Land Board member and former DLNR land agent Tommy Oi questioned whether WBA should also seek an easement for the line above the lagoon, which, although managed by the Hilton, is owned by the state.

“The state has got to weigh whether or not it wants to assume the risk of bad publicity on our pristine shoreline from someone getting hurt,”Roehrig said, adding that when WBA comes to the Land Board for future approvals, he wants Hampton to explain why the state should take that risk.

“Don’t tell me, ‘Generally it’s safe.’Generally, cars don’t run into each other,”Roehrig said.

Hampton told Roehrig that his company was very conscious of every possible risk the line posed.

Finally, board member Vernon Char said he wanted to make sure the private use of the lagoon and public parking lot benefitted locals as well as visitors.

“The other thing that offends me a little bit, charging $1.50 per passenger. It’s almost as if the state is hosting this event for tourists,”Char said.

Hampton replied that his company goes out of its way to serve kama`aina and explained that the pricing was simply borrowed from the rent structure it uses for its catamaran operation, which also uses DLNR land.

“What we’ve done is using exactly the same rent protocol [we’ve] been using for the last 20 years,”he said. He added that there will be kama`aina rates to use the zip-line.

 

***

Board Defers Termination

Of Ala Wai Development Lease

Would-be developers of the Ala Wai Small Boat Harbor blame the now-defunct Public Land Development Corporation for their lack of progress, but not for their failure to pay rent to the DLNR’s Division of Boating and Ocean Recreation.

On March 13, DOBOR recommended ending the 65-year lease and easement Honey Bee USA, Inc., was granted by the Land Board in November 2012. Following a 2008 request for proposals, DOBOR selected the company in 2009 to redevelop the division’s lands at the Ala Wai, including the fuel dock and boat repair facility. In addition, Honey Bee proposed building two wedding chapels, commercial space, and a practice facility for the U.S. kayaking team.

Although the company had fulfilled its commitments under the development agreement that preceded the lease, it eventually lost its source of funding and started falling behind on its rent last  October, according to a DOBOR report to the Land Board.

Under the lease, Honey Bee must pay $68,571 a month.

“As of February 26, 2015, Honey Bee paid to DOBOR $690,000 in development agreement fees and $470,515 in lease rent,”the report states.

At the Land Board’s meeting, Honey Bee representative Keith Kiuchi announced that his company had $420,000 in escrow to cure the rent default, as well as a new, mainland equity partner that would allow the development to proceed. He said the partner did not want its identity disclosed until it completes its due diligence. He said he also had funding commitments from at least one lender.

To date, Honey Bee has obtained permits, a Finding of No Significant Impact on its environmental assessment, and a sewer connection from the city. The sewer connection, Kiuchi said, is probably the most important element for any harbor developer to get since the Fort DeRussy wastewater pumping station is over capacity.

Kiuchi said that his company is on track to obtain building permits by May 14. He added that its contractor, Hawaiian Dredging, is ready to start construction some time in June and that the commercial space to be built is already 85 percent leased.

Honey Bee’s Deron Akiona added that $3.2 million has been spent preparing the project for development. Among other things, the company had to work around covenants in the lease limiting commercial development, as well as restrictions posed by the city’s Waikiki Special Design District.

Another problem was the creation of the state Public Land Development Corporation by the 2011 Legislature, Akiona said.

“When that came in front of the Legislature, this parcel came thrown into the pot of who would have jurisdiction,”he said. The PLDC was to have been administratively attached to the DLNR and would have overseen development of state lands. But public backlash over the way the PLDC was created and the extent of its exemptions from land use laws led the 2013 Legislature to dissolve the agency.

Between 2011 and 2013, nobody was sure who had clear jurisdiction and development rights over the area to be leased to Honey Bee, Akiona told the Land Board.

“It caused us a three-year delay,”he said. With regard to the rent, however, Akiona said he had no excuse and that he was prepared to cure it.

Kiuchi added that the performance bond required by the lease will be paid once financing is secured.

Keith Chun, a DLNR project specialist, told the board that the Ala Wai development is a difficult project and that Honey Bee had done a lot of due diligence, site work, and foundation testing and remediation. “A lot of it would be things the state would have to do,”he said.

Maui Land Board member Jimmy Gomes asked whether anyone else had expressed interest in developing the property.

Chun said he’d bet there would be.

“It’s not a matter of putting out the same RFP with a new date. There have been a lot of changes since 2008. Obviously, the economy improved. In 2011, the Legislature passed legislation to exempt Ala Wai properties from zoning, which not only increased the permitted uses, the legislation even allows us to do timeshare hotels,”Chun said.

Chun estimated that the value of the properties leased to Honey Bee has gone from $6 million to $20 million, assuming the state can take full advantage of the new economic and regulatory landscape. He noted that when DOBOR issued the original RFP, rail was still uncertain and now it’s going to run to the end of Ala Moana Boulevard, close to the Ala Wai harbor.

“I would think that we would really need to reevaluate what that property can do, knowing the type of uses that could be permitted,”Chun said. He speculated that the adjacent property owners would likely be interested.

“That said, for us to go to another RFP would take time. …We would need to get public and community input,”he said.

In the end, given the time and money spent by Honey Bee so far, the Land Board chose to defer termination for 90 days to allow the default rent to be cured, the performance bond to be paid, and Honey Bee’s mortgage to be approved by the board.

The rent has since been paid.

 

***

Board Grants $3.5M To Legacy Land Projects

On February 27, the Land Board authorized spending $3.5 million to buy land or easements across the state aimed at protecting natural, agricultural, and/or cultural resources.

Following the recommendations of the Legacy Land Conservation Commission, the Land Board approved funding for the following projects:

• $398,250 to allow the Waipa Foundation to buy 1.8 acres of wetland in Hanalei via the Trust for Public Land. Additional funding would come from Kaua`i County, which would hold an easement over the parcel. The area, known as Kaluanono, is a narrow strip of taro land that also serves as habitat for the endangered Hawaiian duck, moorhen, coot, stilt, and goose, as well as the native black-crowned night heron.
• $1.33 million to Hawai`i County to buy 322.167 acres of coastal land in Wai`opae adjacent to the state’s Marine Life Conservation District. In addition to preserving the natural and recreational resources of the area, the acquisition “protects the potential financial cost to the county to provide infrastructure and the protection of the residents in this high hazard zone and the subsequent repairs when natural disasters strike,” a report to the Land Board states.
• $855,625 to the DLNR’s Division of Forestry and Wildlife to acquire 800 acres in the Pua`ahala watershed on Moloka`i, which is “virtually an entire ahupua`a” and significantly contributes to the island’s sole aquifer, according to the report. The ahupua`a provides habitat to 48 federally protected species and contains the island’s largest freshwater pond.
• $500,000 to the Moloka`i Land Trust to purchase a conservation easement over 969 acres of Kalua`aha Ranch. The easement area is associated with “at least 64 populations of 41 federally listed rare or endangered species,” the report states. The upper 500 acres will be fenced to control ungulates.
• $416,125 to DOFAW to buy 3,716 acres in Pupukea, O`ahu, which contain headwaters that feed into Waimea Falls. The area would be designated as a forest reserve and public hunting area. Additional trails would be created, as well as picnic and camping sites.

One project that was approved by the commission but held back from Land Board approval was $1 million for DOFAW’s acquisition of 181.14 acres of the Ka Iwi coast’s mauka lands on O`ahu. The land would be managed as an open space forest reserve. The primary goal would be to protect the land from development.

At the Land Board’s meeting, DOFAW administrator Lisa Hadway explained that her division wanted to have further discussions with the non-profit organization working on the project — Livable Hawai`i Kai Hui — and the city regarding the city’s conservation easement. The city is providing 75 percent of the project’s matching funds.

— Teresa Dawson