This past weekend, a matter that had been the subject of some public discussion — but mostly private negotiations — was taken to the media by a small group of lessees who hold agriculture leases with Kamehameha Schools (KS) in Kamilonui, East Honolulu. These individuals are protesting lease rent increases that we have proposed and consider fair, as well as our efforts to compel them to honor the farming and stewardship requirements of their leases.

We have been negotiating with our Hawaii Kai lessees since March and have settled matters with about a third of them. As set forth in our lease agreement, to resolve the impasse with the remaining lessees, we have elected to submit the issue for arbitration. We believe the arbitration process is fair. A three-member panel selected by the lessees and KS will evaluate the facts and determine new lease rents based on market comparables for similar parcels. We respect the arbitrators’ expertise and will comply with their findings.

Rather than proceed with arbitration, the lessees have elected to negotiate through the media. Now we find it necessary to share information that gives insight into our perspectives and position.

» The contracts at issue were signed by both parties some 38 years ago. Kamehameha Schools has abided by all terms of the agreements, whether or not the provisions favored our interests.

» One of those requirements was that rents would not be increased for nearly four decades. Therefore, rent for leases that allow farmers to occupy a residence on agricultural lands were maintained at about $15 an acre per month for over 38 years. Although these low rents slipped farther and farther below market value with the passage of each year, KS has honored this contractual obligation.

» The lease rent now proposed by KS is about $434 an acre per month. While this is a significant increase from $15 an acre, the amount is our best estimate of fair market value based on other leases of agricultural lands that also permit a residence. For instance, the state Department of Agriculture recently completed a bid process for agricultural acreage in Waimanalo that resulted in agricultural rents of approximately $460 an acre per month.

» Despite the fact that these leases were intended for the personal and exclusive use of the lessee, several individuals in the protesting group are violating their lease by subleasing or allowing others to use the property. Two of these sublessees do not farm at all, and one sublessee reportedly pays $1,875 an acre per month to live on the premises. This means that the lessee has exploited our low agricultural rent and ignored the farming requirement in order to produce a very significant income stream from residential rents.

» While we cannot condone residential subletting that allows lessees to garner unauthorized income at the expense of KS beneficiaries, we do recognize that other circumstances may motivate some of our lessees to solicit assistance in fulfilling their farming obligations. Therefore, the KS rent offer includes a lease amendment that would permit subleasing to bona fide farmers.

» This amendment is also inspired by our desire to optimize production from several lessees who farm less than 50 percent of their land and a few others who do virtually no farming at all. Besides bringing these lessees into compliance with our contract, this would have two public benefits. First, increased farm yields would contribute to statewide efforts to become more self-sufficient in meeting our agricultural needs. Second, in order to put their unfarmed lands into production, several of our lessees who use their parcels as unpermitted dumping grounds for abandoned vehicles, scrap metals and plastics would need to remove garbage from their property and meet regulatory standards.

It is neither our practice nor our preference to negotiate lease matters through the media. However, the release of incorrect or misleading information to the public has made it necessary to set the record straight.

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Neil Hannahs is director of Kamehameha Schools’ Land Assets Division.