Split vote gives nonprofit group Kewalo Basin lease

A local nonprofit that helps at-risk teens and young adults received approval last week to use a state-owned waterfront storage building for up to 35 years following a split decision by a board.

The organization, Kupu, will receive a 15-year lease at $1 per year for an open-air building the state put up at Kewalo Basin for commercial fishing boat operators to dry their nets. The lease can be extended for two extra 10-year terms.

The board of the Hawaii Community Development Authority, a state agency that regulates development in Kakaako and owns what is known as the “net shed” building, voted 6-3 Wednesday to execute a lease negotiated following a unanimous board decision in April to proceed with such negotiations.

Board members who voted against the lease said Kupu’s work is good, but they expressed misgivings over the way Kupu’s deal with the state arose.

Specifically, dissenting board members weren’t comfortable with leasing public property to a private entity that approached HCDA’s prior executive director, Anthony Ching, who endorsed a lease with Kupu without seeking potential competing proposals for a prime asset partly within Kewalo Basin Park on the makai edge of the small-boat harbor.

Jason Okuhama, who cast one of the no votes, said he felt backed into making a “tough decision” over something arranged by HCDA’s former executive director and board.

Fellow board member Wei Fang said she would have liked to see competitive bidding for a long-term lease. “It doesn’t sit comfortably with me,” she said of the exclusive negotiation with Kupu.

The other no vote was from Mary Pat Waterhouse, who echoed Fang’s concerns.

Ching, who retired at the end of 2015 for medical reasons, received board approval in 2012 to sign a letter of intent to lease the property to Kupu, a couple of years after the nonprofit began using the net shed on month-to-month terms.

HCDA built the 8,400-square-foot building for fishermen in 1989-90. But the pavilionlike structure with one concrete wall and chain-link fencing serving as walls on three sides wasn’t used as intended for long because the commercial fishing fleet at the harbor shrank and the use of nylon nets grew.

Public charter school Halau Ku Mana used the building, which has bathrooms, from 2006 to 2010 for coastal education programs. After the school left, Kupu moved in and asked for a long-term lease.

After the commitment from HCDA’s prior board, which the Legislature disbanded in 2014, Kupu produced an environmental assessment in 2015 and then renewed its lease request.

Kupu, which was established in 2007 and provides education and job training programs centered around environmental conservation work, plans to spend $6 million remodeling the net shed, including $2 million in Hawaii taxpayer funds provided by the Legislature.

HCDA board member Beau Bassett said the process was imperfect but that Kupu’s presence has been a public benefit.

“I do feel like this is the best use of the property,” he said.

Added fellow board member Steve Scott, “You’re not going to find a better tenant.”

Since Kupu began using the net shed, its volunteers have helped with park upkeep, while daily activities in what had been a sometimes scary dead end of the park displaced drug addicts and the homeless.

In the past it wasn’t uncommon for HCDA to consider or award property leases to private entities that make unsolicited offers. One such deal involves a nonprofit developing a rental apartment building for low-income artists on HCDA land. At other times the agency has issued requests for proposals to use land it owns.

For Kupu’s lease, HCDA did reject a request by the nonprofit to earn and share income with HCDA by leasing out the net shed to others for special occasions. Instead, the nonprofit can provide space and services at cost for the net shed, which will be available for public use.