By Andrew Gomes

agomes@staradvertiser.com

The state Office of Hawaiian Affairs won support from two Senate committees Wednesday for developing condominium towers on land in Kakaako makai of Ala Moana Boulevard despite deeply divided testimony on a bill that would reverse a 2006 law prohibiting residential use in the area.

The bill that passed, however, was amended to restrict housing to three inland parcels out of nine mostly waterfront lots that the state gave to OHA two years ago to settle disputed claims over unpaid ceded-land revenue.

OHAhad said it was seeking to develop housing on only three or four parcels, though the original bill allowed for residential use on all nine lots covering 31 acres.

Committees on Hawaiian Affairs and Economic Development, Government Operations and Housing voted unanimously to pass the amended version of the bill, Senate Bill 3122.

Hawaiian Affairs committee Chairwoman Maile Shimabukuro (D, Kalaeloa-Waianae-Makaha) acknowledged the heavy split of support and opposition over allowing condo development in the area, and proposed several amendments seeking to strike a balance.

One of the amendments would impose fees on residential units to be spent on helping maintain the area’s parks, ocean access, security and free public parking for park users.

Another amendment increases the development height limit on two parcels fronting Ala Moana Boulevard for residential development to 400 feet from 200 feet.

OHA sought the bill because it concluded that income from commercial development allowed under current zoning would fall short of what would typically be expected from land worth about $200 million, which was the ceded-land settlement value.

Appraisers for the state and OHA calculated that the land was worth $193 million to $198 million, which is what OHA could expect to receive if it sold the property.

However, a study commissioned by OHA last year assessed the earning potential for the land and concluded that achieving a market-rate annual income of $14 million to $16 million from $200 million of real estate isn’t possible with retail and other commercial development that would suffer from a lack of residents in the immediate area.

OHAtestified that it will balance commerce and culture to create a redeveloped Kakaako Makai that will make Native Hawaiians and the general public proud.

“We seek to find the highest point at which the culturally rich use of our Kakaako Makai lands intersects with revenue-generating use of the parcels,”

the agency said in written testimony. “We understand better than any other developer the impacts of irresponsible development. Native Hawaiians have been victims of, and suffered most from, the consequences of reckless development.”

Many OHAbeneficiaries testified in support of the agency’s request, and urged lawmakers to pass the bill.

“While we will hear voices who oppose the passage of this bill, it is time for all to hear (that) we are tired of being told what we can or cannot do, or what we should and should not do with our lands,”Homelani Schaedel told committee members. “I ask all here to remember, it was our ancestors who walked and worked these lands. They taught us how to be good stewards of the aina (land). We agree Kakaako Makai is for the benefit of Native Hawaiians. What we may not agree on is how it should be developed. That kuleana (responsibility) rests on the shoulders of OHA and its trustees. Do not tie their hands.”

Schaedel was among 51 individuals or organizations that submitted written testimony in support of the bill before it was amended.

The committees also received testimony from 59 individuals or organizations in opposition.

“OHA accepted the deal; they need to live with it,”Darrell Chun said in written testimony.

Much of the opposition to the bill came from people who lobbied the Legislature in 2006 to kill a plan by local developer Alexander & Baldwin Inc. to build three condo towers on one Kakaako Makai parcel. That plan was approved by the Hawaii Community Development Authority, the state agency that previously owned the land.

A&B’s plan was scaled back to two condo towers, but lawmakers passed a law outlawing housing in Kakaako Makai.

The condos in A&B’s plan were sited on an inland parcel shaped like a grand piano, and is one of the lots in SB 3122 that would allow 200-foot condo towers.

Sen. Suzanne Chun Oakland (D, Downtown-Nuuanu-Liliha) said she didn’t feel right about undoing the 2006 law to benefit OHA

and that she wouldn’t have voted to approve the ceded-land settlement if she knew OHAfelt it needed to develop housing in Kakaako Makai to make the deal fair.

“Iwould have fought for something else outside Kakaako Makai,”she said. Chun Oakland voted with reservations to pass SB 3122. Another yes vote with reservations came from Sen. Sam Slom (R, Diamond Head-Kahala-Hawaii Kai).

One potential hitch in the OHA bill is a concern raised by the state Attorney General that passing a law benefiting a single entity could be unconstitutional based on a 2009 Hawaii Supreme Court decision involving the state Department of Transportation and the Hawaii Superferry.

OHA officials disagreed that the Superferry case is relevant because OHA, as a state agency, is exempt from the prohibition on so-called special legislation and hasn’t decided how exactly to use any land granted residential use if SB 3122 becomes law.

The bill will move along to the Judiciary Committee, and if passed would then be taken up by House committees. A House version of the OHAbill, House Bill 2554, was heard by a pair of committees Saturday but no decision has been made on that measure.