The state Office of Hawaiian Affairs was denied in its bid to develop residential towers on a couple of large parcels in Kakaako on Friday after House leaders in the Legislature dramatically altered a bill sought by OHA and then rejected that draft, citing a lack of support from the agency.
The death of Senate Bill 3122 decided one of the most controversial measures at the Legislature this year and came after three days of negotiations in a joint House-Senate conference committee that was capped by a long day of suspense Friday.
The decision on the bill also realized a prediction made two weeks ago by House Majority Leader Scott Saiki (D, Downtown-Kakaako-McCully) that SB 3122 would die in conference committee.
OHA officials were clearly frustrated by how SB 3122 was treated, while opponents of allowing residential use on OHA land in Kaka­ako makai of Ala Moana Boulevard rejoiced in the bill’s fate.
"It’s unfortunate how things went down," said Kawika Burgess, OHA’s chief operating officer. "I’m disappointed."
Ron Iwami, president of the organization Friends of Kewalos, expressed relief that the bill didn’t pass. "We are ecstatic," he said.
OHA, a state agency established to benefit Native Hawaiians, had sought permission to develop residential towers on a portion of nine Kakaako makai parcels that the state conveyed to the agency in 2012 to settle a long-disputed debt over ceded-land revenue owed by the state
The agency accepted the land, which is valued at about $200 million, as full payment for the debt but said this year that a prohibition on more lucrative residential use of the property reduces the income it can generate from development that benefits its programs and services for Hawaiians.
For most of this legislative session, SB 3122 proposed allowing residential towers on three OHA parcels, including two fronting Ala Moana Boulevard and one shaped like a piano a block inland from the ocean and Kewalo Basin.
OHA attracted strong support largely from the Hawaiian community, including 100 individuals and organizations who submitted written testimony to the House Finance Committee earlier this month.
Opposition to the bill was also strong and came from the group Save Our Kaka‘ako and individuals including Iwami who fought to preserve Kakaako makai from residential development and helped persuade the Legislature to pass a law in 2006 that did so, blocking private developer Alexander & Baldwin Inc. from executing a plan for three towers in the area.
On Thursday evening Rep. Cindy Evans, the conference committee chairwoman representing the House, proposed amending the bill by allowing residential towers on eight large parcels between Ala Moana Boulevard and Ilalo Street.
Of the eight parcels, Kamehameha Schools owns four, OHA owns two and the state owns two.
Evans said the change, which included doubling the height limit to roughly 400 feet, would create a more uniformly defined residential area in Kakaako makai.
Sen. Maile Shimabukuro, committee chairwoman for the Senate, offered a competing compromise proposal to allow residential towers on just two OHA parcels fronting Ala Moana Boulevard.
Friday morning, Evans rebuffed Shimabukuro’s proposal and said a broader Kakaako makai residential zone would be better so Kamehameha Schools doesn’t ask the Legislature later for the same opportunity as OHA. Evans said limiting the residential area to OHA’s two parcels would force Kamehameha Schools to seek residential use on its land makai of Ala Moana.
However, Sen. Brickwood Galuteria, another conference committee member, said he previously had discussions with Kamehameha Schools about such an idea and that the trust said it isn’t interested in residential use of its land makai of Ala Moana.
OHA concluded that it didn’t want to be seen as driving the change for a broadened residential zone and issued a statement Friday morning from trustee Peter Apo that said the agency didn’t support the proposal from Evans.
"We are not willing to abandon our values and principles of responsible development by declaring a residential free-for-all along the entire makai corridor of Ala Moana Boulevard and would prefer to withdraw from the field of play," the statement said.
Apo added, "If the House wishes to re-draw the residential entitlement line from Ala Moana Boulevard to Ilalo Street let them do so, not because of OHA, but because they believe this best serves the public interest. We do not want to be stigmatized and branded as being responsible for what we believe would be a travesty of the public trust and would rather stand down."
At about noon Shimabukuro said Senate negotiators reluctantly agreed to the proposal by Evans "given no other options."
Then five minutes before a 6 p.m. deadline to pass all bills out of conference committees, Evans announced that House leadership had decided not to endorse her proposal after OHA decided not to support it.
A statement from House Speaker Joe Souki said efforts would continue with OHA to find solutions to help maximize the value of the agency’s Kakaako land.
