Some in the community are alarmed by the loose limits placed on using DLNR land

Tenants ranging from a global agricultural conglomerate to the state’s most exclusive private school have been leasing land from the Department of Land and Natural Resources for decades, paying as little as pennies per acre monthly under a program that operates with no formal rules and is limited by law to temporary, month-to-month uses.

Many of the discounted rents have remained unchanged since the 1990s.

Dozens of revocable permits covering thousands of acres of public land effectively have become long-term agreements without the oversight associated with regular leases, including environmental reviews and the ability to seek fair market rents through competitive bids, according to a Honolulu Star-Advertiser analysis of state documents obtained through a public records request.

The absence of rules, the state’s application of a vague law and lack of resources have given rise to deals like this:

>> Hawai‘i Preparatory Academy, the state’s most expensive private school, has been able to lease 10 acres of Hawaii island pasture land since 1954 and has paid the same monthly rent — $1.30 per acre — for the past quarter-century, according to the newspaper’s analysis. The nonprofit school has used the Waimea parcel for its equestrian program.

>> Syngenta Seeds, part of the multinational agriculture operation, has rented nearly 44 acres of Kauai farmland on a month-to-month basis for 33 years. The company has been paying the same $17 per-acre monthly rent since 1999, the analysis shows.

>> Gay & Robinson, a major Kauai landowner and onetime sugar cane grower, pays 3 cents per acre monthly to lease more than 1,600 acres of Waimea pastureland on that island. Its rent also has remained unchanged since 1999. The permit was issued in 1983.

“I’m just appalled,” said Marjorie Ziegler, executive director of the Conservation Council for Hawai‘i. “These are public lands. Why are these people getting such sweet deals?”

DLNR officials defended their management of the program in an email to the Star-Advertiser, noting the law doesn’t provide a maximum term for revocable permits. They also said formal rules are not needed.

“The department has operated effectively under statutory provision and does not believe administrative rules are necessary,” DLNR officials wrote. According to department spokeswoman Deborah Ward, the officials were busy with legislative matters last week and could not speak with Star-Advertiser reporters.

The little-known revocable permit program was thrust into the public spotlight a month ago when a state judge ruled that four permits the department had with Alexander & Baldwin Inc., the $1.5 billion agriculture and real estate business, were invalid.

The court determined the permits, which were issued in 2000, did not comply with state law restricting usage to “temporary occupation of state lands.” Even though the statute allows the DLNR board to approve one-year permits and gives the panel the power to continue the agreements for “additional one-year periods,” Circuit Judge Rhonda Nishimura said A&B’s continuous, uninterrupted use of public land for more than a dozen years on a holdover basis was not temporary.

“Otherwise, holdover tenants could arguably be allowed to occupy public lands almost in perpetuity for continuous, multiple one-year periods,” Nishimura wrote. “Such a prospect is inconsistent with the public interest and legislative intent.”

The state has challenged her ruling.

Just a month before Nishimura’s order, the land agency board issued its annual bulk approval of more than 300 revocable permits covering nearly 100,000 acres — an area more than three times the size of Kahoolawe.

The permits — for land uses ranging from grazing and farming to parking and landscaping — are expected to generate about $2 million in rents annually for the department. Some of the permits are ministerial or for tiny parcels. Many others are held by private for-profit companies, including some major ranching and real estate players.

Because of the short-term nature of the permits, which enable the state to reclaim the property with minimal notice, the department typically discounts the rent about 25 percent.

More often than not, though, the agreements are renewed year after year, sometimes lasting decades, providing the tenants with the benefit of discounted rents while being spared the cost of meeting the requirements pegged to long-term leases.

More than 30 of the deals with nongovernment entities have been in place for three decades or longer, according to the newspaper’s analysis.

“This is absolutely ridiculous,” said Blossom Feiteira, a Native Hawaiian advocate for more efficient and transparent land-use programs of the state.

Several tenants told the Star-Advertiser that they would welcome the stability that comes with long-term leases, but the state is the one calling the shots. Feiteira said she knows of several nonprofits that have been clamoring without success to convert their revocable permits to leases.

DLNR officials said the department is able to ensure fairness and uniformity in negotiating, monitoring and enforcing the agreements because similar types of uses generally are treated in the same manner. Rents for pasture use, for example, are based on the animal capacity of the land, the officials wrote, adding that land agents monitor compliance of the permit terms by conducting periodic inspections.

However, program administrators have repeatedly noted in their annual reports to the board that a lack of appraisers and other factors have hampered efforts to accurately gauge land rental values. In 2005, the board agreed to review commercial, industrial and base-yard/storage categories annually for possible rent adjustments. Agriculture, pasture and residential uses were to be examined every five years and other uses every 10 years.

All 300-plus permits were due for review at the beginning of last year. However, no rents were changed. The Star-Advertiser reviewed 278 permits that have been in place for the past five years and found rents were changed in only five cases.

“The department has limited resources and staff to manage approximately 1.3 million acres of state land,” the officials stated in their email. “However, the department will be taking a closer look at its revocable permits in 2016 as the board has already requested additional information on the permits the next time they come up for renewal.”

The permits will be evaluated for rent increases to be effective next year, according to the officials.

Concerns about unchanged or deeply discounted rents and lax oversight have been voiced recently by the Office of Hawaiian Affairs, Conservation Council, Sierra Club, Native Hawaiian Legal Corp. and others.

In written testimony to the board in December, Kamana‘opono Crabbe, OHA’s chief executive, took issue with the board’s annual bulk approvals of the permits.

He told the panel insufficient information was presented by staff to support the bulk approvals, and such an approach was depriving the state of needed revenue. Some of the permits involved ceded lands, which generate revenue for OHA.

“The lack of a formal, open process to review the state’s 300-plus revocable permits, with nothing more than a superficial annual disclosure in a DLNR staff submittal, has resulted in the repeated rubber-stamping of past permit issuances with minimal accountability or oversight,” Crabbe wrote.

The Conservation Council’s Ziegler said the state administration’s claims of insufficient resources to justify “nickel and diming” environmental initiatives ring hollow when DLNR is renting land so cheaply.

“We are giving away public land for virtually nothing,” she said. “It’s so unfair.”

Not all the permits generate nominal rents.

Hilton Hawaiian Village, for example, is paying the state $405,192 annually — the highest amount of any lessee in the program — to rent a tiny sliver of submerged land beneath the pier it owns in the lagoon adjacent to its Waikiki resort.

Yet the concrete structure is not temporary, raising questions about its compatibility with a program intended for temporary, month-to-month uses.

“It is the state that selects the leasing methods for public land,” said Jerry Gibson, area vice president of Hilton Worldwide, in an email to the Star-Advertiser.

The DLNR officials, asked about the the multiple permits for piers and docks, said the agreements are being converted to a type of easement, “but this is an ongoing process that will take time to complete.”

Hilton has been renting the .09 acre of submerged land on a month-to-month basis since the late 1950s.

The land agency does not publicize property that is available for revocable permits. Typically, an interested party — often an adjacent landowner — makes an inquiry about using a parcel. If staffers determine a permit is appropriate, they will negotiate a potential deal and make a recommendation to the board, which makes the final decision during one of its regular monthly meetings.

Others are able to submit testimony about the proposed permit.

Joshua Uyehara, a station manager for Syngenta Hawaii, said his company would be “completely open” to discussions with the state if DLNR were ever to offer a long-term lease for the Kauai property now being rented month-to-month.

A lease would reduce the risk related to the infrastructure investments the company already has made on the land and “provide an incentive for our continued local economic investments,” Uyehara said in an email.

A spokesman for Gay & Robinson could not be reached for comment about the company’s permit deal, and a Hawai‘i Preparatory spokeswoman would only confirm that its leased parcel is “very intermittently” used for the school’s equestrian program.

Ziegler said she hopes many people are outraged enough by the state’s mismanagement of the program that they demand reforms.

“That’s what makes this so egregious,” she said. “It’s our land.”

NOT EXACTLY TEMPORARY

The Department of Land and Natural Resources’ revocable permit program is designed to allow lessees to occupy state land on a temporary, month-to-month basis. But dozens of permits have stretched decades. Here are some nongovernment lessees with the longest-running permits.

Sources: Department of Land and Natural Resources records, Honolulu Star-Advertiser

THE CHEAPEST RENTS

These nongovernment organizations or individuals are paying the lowest rents on a per-acre, per-month basis through the Department of Land and Natural Resourcesâ revocable permit program.

Sources: Department of Land and Natural Resources records, Honolulu Star-Advertiser