OHA settlement with state is pono but issue of future claims remains

The Office of Hawaiian Affairs believes that there is widespread support within the community and among legislators for a proposed $200 million land settlement with the state.

We believe the settlement is pono and will provide a positive example of Native Hawaiians partnering with the public to jointly resolve disputes.

In exchange for 30 acres of Kakaako makai land, OHA will release claims for its pro-rata portion of the income and proceeds from the public land trust that derives from the Hawaii Constitution for the period 1978-2012.

Most of these claims were resolved by a 1993 payment of $130 million and money that OHA has received since then, including $15.1 million per year received pursuant to Act 178 (2006). The remaining unsettled claims are for $136 million from Duty Free Shops rent, and claims relating to state hospitals ($126 million) and state housing projects ($36 million) on public land trust lands. These latter claims were based on Act 304 (1990) which had clarified OHA’s entitlement to public land trust revenues.

Unfortunately in 2001, the Hawaii Supreme Court invalidated Act 304, which meant that the hospital and housing claims were less viable.

Thus, the remaining strong claim is for the $136 million DFS amount, which after taking all factors into consideration, the state was willing to settle all past due claims for $200 million.

A significant factor in determining that amount was that the state’s sovereign immunity bars any right to interest unless otherwise waived. However, the only waiver of sovereign immunity applicable to interest on this claim was contained in the now-invalidated Act 304. So there is no right to interest on the OHA revenue claims. Therefore, the longer OHA waits to resolve this case, the less valuable it becomes.

For these reasons, OHA believes that 30 acres in Kakaako makai with an appraised value of $200 million is fair consideration to settle the past due claims. These parcels likely will appreciate, given the increased development anticipated in the surrounding areas. This land also provides the emerging Native Hawaiian government with a campus in urban Honolulu.

If this past-due claim is resolved by passage of the settlement bill, OHA’s future right to public land-trust revenue will continue to be governed by Act 178, which provides OHA with $15.1 million annually. Act 178 also mandates that the state Department of Land and Natural Resources accurately compile data on the collection of public land-trust revenues that the Legislature may use to adjust future payments to OHA.

Some legislators may want the proposed settlement to also address OHA’s right to future revenues, but Native Hawaiians uniformly reject this approach because the $200 million does not provide compensation for future claims and there is no means to accurately calculate the value of future revenues. In any event, the resolution of OHA’s right to future revenues will be decided through the political process because the Hawaii Supreme Court has ruled that OHA cannot litigate this issue.

OHA looks forward to working with the Legislature to finally resolve this 30-year issue for the benefit of Native Hawaiians and the people of Hawaii.