OHA’s Kakaako settlement benefits all people of Hawaii

The effort to settle the back rent debt owed to the state Office of Hawaiian Affairs is now in its 34th year, fourth governor and 17th legislative session.

The debt is a legal obligation of the state, upheld by the courts, which tossed the ball to the Legislature to resolve the exact amount.

The good news is that Gov. Neil Abercrombie is sincere and passionate about wanting to bring closure to this long-standing issue. Both sides have agreed on the amount of the back rent at $200 million covering the period from 1978 to 2012. The governor has introduced settlement legislation that is now being vetted by the state Legislature, which has to approve the settlement agreement.

The state is not in a position to pay cash, which would be OHA’s preference because it would create an immediate revenue stream. Instead the governor is offering 10 parcels of land in the Kakaako makai area, next to Kewalo Basin. But unlike the state Department of Hawaiian Home Lands, Kamehameha Schools and other Hawaiian institutions that are land trusts, OHA is a money trust. OHA’s charge is to manage the revenue stream that flows to us by virtue of OHA’s 20 percent share of revenues derived from certain state lands known as ceded lands. The cash is deposited into OHA’s investment portfolio, a percentage of which is drawn down and flows directly into programs and services that empower Hawaiians and increase their capacity to build better families and better communities.

At this writing we are in the midst of an exhaustive due-diligence, fact-finding process covering zoning and land use, environment, current leases, revenues and expenses, realty inspections of existing structures, title research, property surveys, utilities, geotechnical issues and sea-level rise.

While the Legislature is processing the settlement, OHA has until the end of February to back out. But so far, the settlement looks like a long-awaited and exciting opportunity to grow the trust.

We hope legislators and the general public will view the Kakaako settlement as more than simply paying off a debt, and recognize that it’s a profound opportunity for OHA to grow its capacity to affect the Hawaiian economy in ways that help everyone.

Consider that OHA money flows to every corner of the state. Our $12.5 million in program grants last year alone was channeled to communities on every island. Much of it translated directly into enhancing family incomes by creating jobs and supporting a statewide network of health, education, recreational and financial services.

Some $90 million in bond financing over 30 years assists the Department of Hawaiian Home Lands to build residential communities on every island, which then translates into hundreds of jobs — not just for Hawaiians but for every person and every business that is connected to building homes.

OHA’s annual $42 million operating budget represents hundreds of jobs held by Hawaiians and non-Hawaiians, not limited to OHA employees but spread to our network of subcontractors, suppliers, consultants and so forth.

Over the years, OHA has allocated $9.5 million in support of the 17 Hawaiian charter schools, which has literally allowed them to keep their doors open. Our First Hawaiian Bank Malama Loan Program has put money in people’s pockets that then flows into the marketplace. The list of programs, services and the portals through which OHA’s resources flow out to every corner of the state is exhaustive.

OHA is relevant to the growth of the Hawaiian economy in profound ways. While meeting our obligations to our beneficiaries, the benefits flow through them to the larger community, making Hawaii a better place for everyone.

Hawai‘i Loa Kū Like Kākou — All Hawaii Stand Together.