Rail to use eminent domain

Honolulu rail transit officials took their first steps Thursday to use eminent domain to acquire two privately owned properties they need to help build the 20-mile project — and the owners of those properties aren’t happy with the move.

The Honolulu Authority for Rapid Transportation board, which oversees the $5.26 billion project, approved two resolutions informing the City Council of plans to buy the Pearl City properties using eminent domain, after years of unsuccessful negotiations with the owners.

The two properties eyed by HART in the move are:

» A 9.7-acre plot on the 96-100 block of Farrington Highway used to store heavy construction equipment in Pearl City’s "Banana Patch," an area wedged between highways in West Oahu.

» A 2,200-square-foot stretch of parking that fronts a commercial building on the 900 block of Kamehameha Highway.

The Banana Patch property will be needed to build the rail route and a bus depot for commuters transferring to rail, HART officials said. The Kamehameha Highway property’s purchase will help widen the road there so it can handle columns for the elevated rail line, they added.

HART can move forward with the eminent domain process if the City Council doesn’t object within 45 days. It eventually would compel the owners to sell the property based on what a third party deems to be fair. HART officials say the move is necessary to avoid further costly construction delays.

"We believe the best option now is to have a third party, that is the court, decide the appropriate settlement," HART Executive Director and CEO Dan Grabauskas said in a statement Thursday. "This action will respect the property owners’ interests and those of the taxpayers."

However, Karen Lee, vice president of RHS Lee Inc., which operates a site-grading business in the Banana Patch, saw the move differently.

"I’m shocked at what I heard," Lee said Thursday. "I’m not happy. They’re offering me a dollar. That’s an insult."

Lee’s property, which she owns with her husband, Richard, is zoned agricultural despite the fact that their company stores graders, cranes and other heavy construction and industrial equipment there. In 2009, environmental inspections and soil samples by a private firm found the soil had been contaminated with oils and other chemicals, requiring a cleanup and hurting the property’s value.

An appraisal summary provided by HART on Thursday put the value of the land at $66,200 in 2010-2011. However, HART officials put the cost to clean the Banana Patch property at more than $500,000.

"The problem is the property today has a negative value based on the contamination," Grabauskas said.

Lee acknowledged Thursday the property wasn’t properly zoned for their business, but she added that city officials didn’t have a problem with it until the rail project started to gather steam.

"We were there for 30 years-plus, and they never said anything," Lee said. "They knew we were there. Now, all of a sudden, they want to take the property away."

Attorneys for the other property owner eyed for eminent domain, along Kamehameha Highway, said HART’s appraisal was an "incredibly simplified analysis." It did not consider how removing parking spaces would reduce the building’s overall value­ and eventually force the building owner to lower its tenants’ rent, said Bradley Pulice, a lawyer representing property owner Stuart Plaza Investments.

In May the city offered $115,000 for the 2,200-square-foot portion it needed to widen the street. Stuart Plaza Investments believes the compensation should be $950,000, according to documents provided by HART on Thursday.

"We are confident that the parties are going to reach an amicable resolution of the matter," Pulice said.

HART officials report they’ve so far acquired 21 properties, at a cost of $36 million, to make way for rail in Hono­lulu — all through successful negotiations with the owners. If the City Council does not object to the eminent domain plans, the public will have a chance to weigh in through public testimony, HART spokes­woman Jeanne Mari­ani-Bel­ding said Thursday.