The Waimanalo property was leased from the Department of Hawaiian Home Lands for stabling horses.
But the tenants also used it for auto repairs and other unauthorized purposes, including boat and truck storage and as an industrial base yard, according to DHHL records.
In addition, the tenants expanded the 1.9-acre property boundaries by roughly three acres without DHHL permission and erected multiple unpermitted buildings, documents show.
The agency discovered some of these infractions while inspecting the Windward Oahu parcel as part of a statewide check earlier this year of all its property leased under a problem-plagued revocable permit program.
In all, tenants at 24 of 181 parcels — or 13 percent — were determined to be in violation of their month-to-month rental agreements with DHHL as of Oct. 21, according to the agency. Another nine permits were canceled or the tenants opted not to seek renewals.
Some of the infractions were relatively minor, such as tenants’ failure to maintain current business registrations with the state. Others were more serious, including three properties found with unauthorized or illegal structures, according to DHHL’s list of tenants not in compliance with the agreements.
The statewide inspection effort was prompted by a Honolulu Star-Advertiser series in May that found the revocable permit program suffered from a host of problems, including mismanagement, lax oversight, selective enforcement and a lack of rules.
In response to the newspaper’s findings, the department placed a moratorium on new permits, vowed to inspect all leased parcels and launched a reform effort to make the system more efficient and transparent. It said a lack of resources hampered past inspections and enforcement.
Six months later the agency is touting an 82 percent compliance rate among tenants. DHHL says it still is working on rules for a revised program, getting help from the attorney general’s office and the Departments of Land and Natural Resources and Budget and Finance.
But as tenants await the revisions, problems from the old system persist.
The department last month sent certified letters to the 24 tenants considered not to be in compliance and warned that the agency could take back the properties if the violations weren’t corrected by Nov. 29. The Hawaiian Homes Commission, which oversees the department, will make the final decisions.
In trying to resolve the violations, the agency is dealing with such issues as unauthorized subleasing of the properties, encroachment onto neighboring land and delinquent rents.
Five tenants on the list, for instance, collectively owe the department more than $42,000 in overdue rent, with one in arrears nearly $20,000, according to DHHL data.
The short-term leasing program was designed to place tenants on mostly undeveloped land that was not ready or suitable for homestead lots. The idea was to generate income from the otherwise unused property while helping reduce the department’s cost of maintaining the sites. Tenants are responsible for upkeep.
More than 38,000 acres from DHHL’s 203,000-acre trust are being leased through the 30-day agreements, generating roughly $2.7 million in rents annually. The money goes toward the department’s main purpose: getting beneficiaries who are at least 50 percent Native Hawaiian onto homestead lots for residential, ranching or farming use. More than 26,000 beneficiaries are on a wait list.
While the month-to-month permits are meant to be short term and consequently come with deeply discounted rents, the agreements largely have become long term, with some in place more than two or three decades.
As a result, permit holders have developed a sense of ownership and entitlement to the property, DHHL officials say.
In the case of the Waimanalo parcel, Benjamin Char and Allan Silva are leasing nearly two acres for stabling, paying $3,538 in annual rent, according to DHHL documents. The permit has been in place since 1995.
In an Oct. 21 warning letter to Char and Silva, the agency noted the unauthorized boundary expansion and property uses and said the tenants had not obtained by a September 2012 deadline the DHHL approvals and government permits required for the unauthorized buildings. It also determined that the tenants did not have a required insurance certificate, documents show.
The parcel was one of two on the October list with four infractions each. All the others had three or fewer.
"DHHL does not take this matter lightly and has conducted a thorough investigation into these violations," agency spokesman Puni Chee said in written responses to Star-Advertiser questions.
Char declined comment, referring questions to Renwick "Uncle Joe" Tassill, a DHHL commissioner.
Asked about the permit violations, Tassill said two or three storage sheds were erected on the property, with Char allowing homeless Hawaiians to stay there in exchange for caring for the property.
Tassill also said Char has allowed Hawaiians to park cars there so he can repair them, and Char only charges the cost of the parts.
The DHHL commissioner, one of nine who oversee the agency, applauded Char for trying to help beneficiaries and said he hoped the case could be resolved without an eviction.
"Let’s see how we can bring (the property) into compliance," Tassill said.
The other tenant with four listed violations was Save Oahu’s Race Tracks, or SORT, which operates a dirt racing venue on a 38-acre Kalaeloa parcel leased from DHHL on a month-to-month basis.
According to the agency, SORT owed $18,000 in delinquent rent as of Oct. 21. The company’s other violations included unauthorized site grading, no insurance certificate and noncompliance with how the property can be used, the documents show.
SORT representatives did not respond to requests for comment.
One of the more egregious cases on the list involves Stuart Hanchett, a former DHHL commissioner who violated his month-to-month agreement for the entire six years he served on the commission.
Before becoming a commissioner in 2005, Hanchett built a home on a 316-acre DHHL parcel he was leasing on Kauai, even though residential use is prohibited on revocable permit land. Although two Kauai residents complained to DHHL about the home in 2010, the agency failed to investigate the matter until the Star-Advertiser inquired about it earlier this year.
The Hanchett case was examined in the May series.
The DHHL list noted only a single violation on the Hanchett property: "Illegal structure."
Hanchett did not respond to two Star-Advertiser emails seeking comment.
"It is our understanding that Mr. Hanchett is in the process of removing his illegal structure," Chee wrote.
Another case detailed in the series involves a 105-acre Waimanalo parcel leased by brothers Nowlin and Weston Correa. Even though the commission in March 2009 voted unanimously to revoke the brothers’ permit, the newspaper noted that the state took no action over the ensuing four-plus years to take back the ranching property, and the family continued to use it.
Two days after the Star-Advertiser asked about the case last week, the attorney general’s office filed a lawsuit against the Correas, seeking return of the property.
The Correas did not respond to requests for comment.
DHHL says it hopes to have a proposal for a revised permit program before the commission by year’s end and promises "an improved land management tool that will increase revenues through a competitive selection process."
