A Hilo lease extension program could spread to the rest of the state under a bill currently before Gov. David Ige.
House Bill 499, which passed through the state Legislature and awaits the governor’s signature, would take the principles that formed the Kanoelehua Industrial Area Economic District in 2018 and apply them throughout the state.
Under a program begun in 2018, lessees of public lands within the Kanoelehua Industrial Area are allowed to extend their leases — many of which were first established in the aftermath of the 1960 tsunami and expire soon — so long as they make improvements to their property.
HB 499 extends that premise statewide, allowing lessees of public lands used for commercial, industrial, resort, mixed-use or government properties — with the exception of the University of Hawaii — to have their leases extended if they develop and execute plans to make improvements to their properties.
Hilo Rep. Chris Todd, who co-introduced HB 499 and was one of the primary architects of the Kanoelehua Economic District, said the measure will benefit at least several dozen Hilo small businesses on state land that are not already within the Kanoelehua Industrial Area.
“This has been a problem for decades,” Todd said, explaining that business owners whose leases are expiring aren’t able to invest in their properties, which leads to dilapidation. “Eventually, you end up with situations like Uncle Billy’s (Hilo Bay Hotel), which just have to be torn down.”
Kohala Rep. David Tarnas, another co-introducer of the bill, said the Kanoelehua Economic District served as a test for HB 499, which has been in development in some form or another for more than a decade.
“This has statewide impact, but it all comes from Hilo,” Tarnas said, although he added that a number of Kauai businesses also are well-suited for the program.
The bill received widespread pushback during its journey through the Legislature this year, with some committee hearings eliciting hundreds of pages of negative testimony, largely from private citizens.
Much of the criticism echoed opposition by the Office of Hawaiian Affairs, which opposed the bill out of concerns that it could “result in the use of public lands by private entities for 105 years, without any rent opening for over a generation,” OHA wrote in a March statement.
Native Hawaiian testifiers repeated those concerns, accusing the bill of selling Hawaiian lands to private and corporate interests.
On the other hand, Todd said allowing lease extensions serves corporations less than the alternative would. As downtown Hilo leases expire, with no way to extend them, corporate entities such as Wal-Mart would be free to consolidate leases on several properties at once.
Todd and Tarnas also noted the process will take place entirely within the public eye, with lease extensions requiring public hearings.
“I hope people will recognize who this is for: the small business owners,” Tarnas said, before jokingly adding: “Places like Cafe 100 are eligible for this — so everyone who likes Cafe 100 should support it.”
The bill awaits Ige’s signature or veto. Ige has until June 21 to announce which bills he intends to veto.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
