When it comes to charitable trusts related to Hawaiian royalty and established to benefit Native Hawaiians, the William Charles Lunalilo Trust Estate isn’t typically one that is top of mind for many people in Hawaii.
Lunalilo Home
Established:1883 under a trust devised by Hawaii’s first elected King, William Charles Lunalilo, who died in 1874
First trustees: Sanford B. Dole, E.O. Hall and John Mott-Smith, appointed in 1877
Present trustees: Harvey McInerny, Stanley Hong and Kamani Kuala‘au
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At one time Lunalilo, Hawaii’s sixth king, had about 400,000 acres of land on five islands — slightly more than the holdings of what has long been Hawaii’s largest private landowner, the estate of Bernice Pauahi Bishop known as Kamehameha Schools.
But early in its 134-year history, Lunalilo Trust sold most of its land and today owns just five acres occupied by its sole enterprise, Lunalilo Home.
Now the trust, which operates the modest care home for 41 mostly Hawaiian kupuna, or seniors, on the slopes of Koko Crater in Hawaii Kai, is aiming to expand its presence and its profile.
Trust Executive Director J. Kuhio Asam said Lunalilo Home is looking at expanding or relocating to Kapolei and broadening its range and delivery of senior services.
The trust also aims to develop new sources of income, including possibly affordable rental housing next to Lunalilo Home, which along with enhanced fundraising efforts would increase the trust’s financial resources and ability to grow.
"We aim to be the foremost system of elder care for Hawaiians, and the place of choice for kupuna," Asam said. "That’s what we want to be — the best."
Lunalilo Home’s pursuit of growth follows roughly a decade of financial struggle and unstable leadership that the trust managed to pull out of only recently.
If successful, the plan would be the first major expansion for Lunalilo Home in its long history.
Lunalilo Trust was established by Hawaii’s first elected king, who died in 1874 from pulmonary tuberculosis after reigning only one year. The trust was formed in 1877 after Lunalilo’s father, Charles Kana‘ina, died.
King Lunalilo stipulated in his will that his estate be sold to generate proceeds to build and perpetually operate a home to care for sick, poor Hawaiians with a preference for seniors.
Three trustees were appointed by the Hawaii Supreme Court and began disposing of land holdings.
There are some questions about whether the trust got maximum value from Lunalilo’s land holdings, but the mandate to liquidate the real estate left Lunalilo Trust with relatively little land or cash assets compared with other Hawaiian trusts.
The king’s holdings, which represented about 10 percent of Hawaiian kingdom lands, were reduced to five acres owned by the trust today along with an investment portfolio valued at about $9 million.
The Queen Liliu‘okalani Trust owns 6,200 acres and total assets of about $600 million.
Queen Emma Land Co., a nonprofit previously known as The Queen Emma Foundation and established to help perpetuate what is now known as Queen’s Health Care Systems, owns about 12,600 acres. An asset value was not available, though the endowment provided $17 million for health care operations in 2006 and 2007, or $34 million in two years.
Lunalilo Trust used $25,000 in land sale proceeds to build a care home in 1883 for about 50 residents in Makiki makai of where Roosevelt High School is today on 21 acres of land provided by the Hawaiian government.
In 1927, Lunalilo Home was relocated to Hawaii Kai to accommodate urban expansion and because the original home had become costly to maintain.
The new 20-acre site was donated by a local family with ties to King Lunalilo’s father. The trust sold the Makiki property and used proceeds to buy and renovate former RCA radio station buildings including a dormitory on the new site.
In 1959, Lunalilo Trust developed 15 acres of the Hawaii Kai site into a leasehold residential subdivision, and later sold the leased-fee interests under the homes, providing more money for an endowment.
But in the past decade, Lunalilo Home’s financial stability was shaken somewhat after the home was closed from 1997 to 2001 for a $4 million renovation that took longer than anticipated.
The main building, which was built in 1918, received needed renovations. But no former residents returned for a variety of reasons including deaths and getting comfortable elsewhere.
Asam said trustees faced tough and unpleasant choices about how to keep Lunalilo Home solvent given the difficulty of rebuilding a resident population critical for sustaining operations costing about $2.5 million a year.
Trustees obtained court approval to deviate from some terms in Lunalilo’s will, and opened the care home to non-Hawaiians. The trustees also stopped accepting residents who couldn’t pay the cost for full services.
Resident fees range from $4,000 and $5,000 a month, which is toward the low end of care homes in Hawaii for services including room, meals and nonmedical physical care.
To fill beds temporarily and generate revenue, Lunalilo Home started a respite care program that allowed other caregivers to take a break and have Lunalilo Home provide 24-hour care for up to 30 days.
Other ways Lunalilo tried to restore revenue included converting a former laundry building into a 25-person adult day care facility, starting a food delivery service and cooking meals for Hawaii Meals on Wheels.
"It helped pay some of the bills, and I think really saved the place from further deterioration of its finances," Asam said.
Most of the changes were made over the past four or five years, and bought time for Lunalilo Home to rebuild its occupancy.
During the rocky period exacerbated by an economic recession, Lunalilo Home saw its investment portfolio decline to $7 million from $12 million. Leadership also suffered. The trust had five executive directors between 2001 and 2009.
Asam was hired in March 2009 to lead Lunalilo Home in a direction of more stability and growth while staying true to the king’s original mission.
Asam, 59, had retired in 2008 as a health care administrator. His wife, a trustee at Queen Liliu‘okalani Trust, mentioned the predicament Lunalilo Trust was in, and Asam decided he would help.
Recently the care home welcomed its 39th full-time resident, filling all but two beds. Today about two-thirds of residents are Hawaiian. Subsidies for residents also have been resumed, and 17 residents receive subsidies from the trust averaging $3,000 a month.
Four months ago Lunalilo Home hired Michelle Nalei Akina as administrator to assume day-to-day operations, freeing Asam to focus more on a strategic development plan.
Akina, a kumu hula and co-director of the Hawaii Cultural Foundation with a master’s degree in public administration, helped enhance cultural activities and reconnect Lunalilo Home to its core values.
Asam said the changes have been dramatic. "I get emotional about some of this," he said. "It’s becoming alive again."
With a turnaround complete, Asam is now looking toward expansion. Objectives include enhanced fundraising programs, growing the endowment, serving more seniors, partnering with other organizations and adding more levels of service that could include skilled nursing.
"We can’t do it alone," he said.
The trust recently signed a letter of intent to explore the possibility of letting a luxury condominium developer satisfy an affordable housing requirement by building 63 low-income rental apartments on part of Lunalilo Home’s 5-acre property. About half the units would be for seniors, and the rental income would go to the trust.
Another potential endeavor is opening a care home in Kapolei. Lunalilo Trust has preliminary approval from the state Department of Hawaiian Home Lands to use a 5-acre parcel. Asam said it could be used to expand or move Lunalilo Home.
Bob Ogawa, president of the Hawaii Health Care Association, said there is room for expansion. "There’s no question the whole spectrum of long-term care you’re going to see an explosion in demand because of the baby boomers," he said.