A company that leases more than 35 acres from the state Department of Hawaiian Home Lands to operate a racing facility in Leeward Oahu has been hit with more than $100,000 in property-related violations, is several months behind on its rent and is under investigation by DHHL for allegedly clearing land outside the parcel’s boundaries and possibly damaging historically significant sites, according to public records and information from city and state agencies.
The actions targeting Save Oahu’s Race Tracks LLC and its principal, George Grace III, have cast an unflattering spotlight on Kalaeloa Raceway Park and raised questions about the future of the island’s only auto racing venue.
The controversy also is bringing more attention to what some Native Hawaiians, preservationists and others believe is a broader problem: the demise of historically and culturally significant sites on the old Barbers Point Naval Air Station, particularly as vacant land is cleared for possible development.
"This is short-term gain for long-term destruction," said Michael Lee, a retired educator and Native Hawaiian who believes the state is failing to adequately protect the historical sites.
After signing a monthly lease with DHHL in August 2007, Grace over the next several years transformed the 38.7-acre parcel along Coral Sea Road into a venue that has featured stock car, drag and motorcycle races on dirt tracks. It officially opened in 2010. But along the way, his company has run afoul of government regulations and hit other rough patches.
Save Oahu’s Race Tracks, or SORT, has been cited three times since 2008 for grading land or stockpiling dirt without a permit, including a May citation involving both infractions that still have not been corrected, according to city Department of Planning and Permitting records. As of last week the fines for the 2012 violations totaled more than $100,000 — and they increase by $750 a day until the violations are corrected.
In September 2010, SORT paid the city $4,390 in fines for a 2008 violation of stockpiling without a permit.
About a month later the city issued a second violation notice against the company for grading without a permit, but the case was closed several weeks later when a permit was issued, according to the planning department.
Just a few months ago, Grace was fined $10,000 by the state Department of Health after he refused to let inspectors and DHHL personnel onto the property in June to investigate possible solid and hazardous waste violations, including suspicions of illegal dumping, according to court records. The Health Department, concerned that evidence of possible violations could be removed or tampered with, went to court the next day and obtained a judge’s order to gain access, the records show.
But when the inspectors went to the property later that day — with the court order and accompanied by police — they found no dumping violations, and soil samples tested for hazardous metals were negative, according to the department. Grace was fined, though, for his refusal to allow inspectors onto the site, a violation of state rules and his lease with DHHL, according to the records.
A Health Department spokeswoman said the agency will pursue payment of the fine or a settlement.
WHILE DEALING with those cases, Grace now has a DHHL investigation to contend with.
Darrell Young, a department spokesman, said in a written statement that the agency is investigating complaints received last month alleging damage to significant historical sites and grading beyond the property boundaries.
Responding to Star-Advertiser questions, Young also acknowledged that Grace’s company is four months behind on the $2,000 monthly rent for the 38-acre parcel and four months behind on the $500 monthly fee for water, or about $10,000 in arrears overall.
Asked whether his department has been satisfied with the performance of its tenant, Young wrote: "Like many struggling small mom & pop operations, there have been some tough times in which payment to the department has been delinquent. However, in most cases, SORT has done their best to keep their payments as current as possible with us.
"We have worked with them on occasion to address operational issues that have arisen."
As it does with any of its lessees or permit holders, the department is working with SORT to keep current the company’s financial obligations to DHHL, Young added.
Grace did not respond to written questions from the newspaper about the city and state violations, grading and cultural site allegations and financial problems.
But in a general statement, Grace said he and others were working with the city and DHHL to settle differences and move the project forward.
He called the raceway a success, though he said track building still is two years behind schedule and that the company’s original plans had to be revised several times to accommodate the racing community.
Acknowledging difficulties in the past five years, Grace described "an ongoing battle with a small group in the community that wishes for us not to succeed," adding, "Their opposition and goal to shut us down has created many challenges along the way."
Yet he said plans call for continued growth of the facility. "We are committed to providing a safe racing venue for our motor sports community that satisfies the need for speed through recreation and, most importantly, to try to keep racing off the streets," Grace wrote.
He also referred to various community and charity events held at the track and noted that the venue is operated by volunteers and not funded by city, state or federal agencies. The gate proceeds, he added, pay for development, maintenance and legal fees.
Grace said that on advice of his attorney, he could not discuss some matters, but didn’t specify what they were.
Some in the Native Hawaiian community and elsewhere have questioned why DHHL hasn’t terminated the company’s lease, given the violations through the years, concerns about damage to important cultural sites and the agency’s mission to work on behalf of Native Hawaiians.
"When we hear these stories, we always ask ourselves why the department is still doing business with SORT," said Lance Holden, who in April 2011 wrote to the agency expressing alarm about recent damage found at a historical site in a wooded area on the property.
Holden, who was then president of ‘Ahahui Siwila Hawaii o Kapolei, noted in his letter that a club member and a Navy archaeologist had discovered that one portion of a wall of what was believed to be a heiau, or Hawaiian temple, had been destroyed and that a hole had been dug inside.
A second organization, Kalaeloa Heritage and Legacy Foundation, also wrote to the department that same month about the issue.
Asked whether DHHL investigated the two groups’ concerns, Young said the department was assured by SORT in 2011 that no archaeological sites were in the wooded area and that the company would provide a Bishop Museum report supporting that assurance.
More than a year later, Young said the department still is awaiting receipt of the report.
MORE RECENTLY, concerns have been raised about damage to what is considered a historically and culturally significant pond adjacent to the raceway parcel. It is believed to be the last major pond in the area and held significance in Hawaiian cultural practices.
Eight years ago the pond water was clear, fish life and waterfowl were plentiful and the pond didn’t smell, according to Lee, the retired educator.
When he visited the site last month, the water was murky, a foul aroma hung in the air, no waterfowl were seen, dead fish were found floating and a red algae clung to the pond edges, Lee said. He said he believes dust kicked up from the nearby racing activities contributed to the degradation of the pond.
"Now it’s really highly polluted," he said.
Grace’s financial problems with the state aren’t just limited to the raceway.
The Department of Taxation has a pending lien against another Grace company, Paradise Lua Inc., for more than $250,000 in back taxes dating to 2004, according to records at the Bureau of Conveyances.
Grace did not respond to a question about the lien.
Until the Kalaeloa facility opened, Oahu had gone without an auto racing venue for more than five years, after a track closed at Campbell Industrial Park.
Although some racing enthusiasts are disappointed in the Kalaeloa site, they say Grace deserves some kudos for providing a racing place.
"I’ve got to give (him) some credit," said Bobby George, 55, who has been involved in racing here and on the mainland for about 40 years. "He’s been able to pull this off and get oval track racing started again. But it still has a long ways to go."
