Kapolei casino seen as key to land trust’s future

Given the severe budget deficits expected by the state over the next several years, a plan to develop a West Oahu casino is key to avoiding the prospect of more Native Hawaiians waiting decades for homesteads and thousands dying without getting onto the land, according to an executive with the Department of Hawaiian Home Lands.

Tyler Gomes, deputy to the department’s top executive, told the Hawaiian Homes Commission on Monday that a proposed resort casino on trust lands in Kapolei would generate desperately needed revenue for the trust to develop homestead lots at a quicker pace and acquire land needed to serve 28,000 Hawaiian beneficiaries seeking residential, ranching and farming homesteads statewide.

“This bill is the single greatest opportunity we have to put ourselves in the dominion of exercising economic self-sufficiency,” he said of proposed legislation to pursue the project. “Self-­sufficiency is self-determination. Self-reliance is an act of sovereignty. This is a very real chance for Hawaiians to be in the driver’s seat on the economic engine for our own futures and to make sure it directly benefits and fulfills beneficiaries and helps us solve the problem of putting Hawaiians on lands.”

But several commissioners told Gomes and William J. Aila Jr., the department director and commission chairman, that they were caught off guard by the abruptness in which the controversial proposal emerged last week and needed more time to consult with beneficiaries and understand the ramifications of the proposed project.

“This seemed to have been something that just popped up overnight,” said Commissioner David Kaapu of the Big Island.

Gomes apologized for suddenly broaching the proposal just a month before the legislative session is scheduled to start, and said it was partly in response to the drastic budget cuts anticipated because of the coronavirus pandemic and its impact on Hawaii’s tourism-driven economy.

He also cited findings from a Honolulu Star-Advertiser and ProPublica investigation published in October that, according to Gomes, reflected universal agreement “that the status quo is not working for our department, the status quo is not working for our beneficiaries.”

He mentioned several key findings from the investigation, including that it would take DHHL 182 years to accommodate the 23,000 people who are awaiting residential homesteads and that at least 2,000 have died while on the wait-list without getting one.

Gomes said he challenged his staff to think outside the box to come up with one big move that could make a difference over the next 100 years and underscored that legislators will have no money to hand out in the coming session.

Gomes touted the expected economic benefits from the proposed casino, cited data to show concerns over increased crime are unfounded and noted that 75% of the gaming tax revenue would go toward lot development and the acquisition of land.

A story this past weekend from the Star-Advertiser and ProPublica highlighted the severe residential land shortage on Oahu and how land transferred to the trust by the state and federal governments since the 1990s to settle past claims has done little to alleviate the problem.

Referring to the land shortage, Gomes told the commissioners, “At the very base level, we simply do not have enough developable residential land to solve our need.”

The casino resort, which would cost a minimum of $50 million to develop, is expected to create an estimated 3,000 to 8,000 jobs in Hawaii, including managerial positions, and it would be structured so that training opportunities are available to help trust beneficiaries land careers in the gaming industry, according to Gomes.

The commission is scheduled to vote on the proposal today, and Monday’s discussion among the nine-member body reflected a lack of a consensus. Several said they needed more time to fully evaluate such a significant proposal, noting that the feedback they’ve received from trust beneficiaries — those at least 50% Hawaiian — thus far has been overwhelmingly negative.

“I’m not sure there’s any support for this bill, actually, to tell you the truth,” said Pauline Namuo, a commissioner from Oahu.

Randy Awo, a Maui commissioner, said more time was needed to consult beneficiaries, but recognized the reality of the department’s dire fiscal situation. “The evidence is all around us that the cavalry is not coming anytime soon,” he said.

Several commissioners expressed support for the measure.

One of them, Dennis Neves of Kauai, responded to legislators who already are speaking against the proposal. He noted that the department has received appropriations far short of what it sought, and wondered how the DHHL was supposed to make up the difference, which has been in the tens of millions of dollars annually in recent years. “If you don’t give us the money, where do you think we’re getting it from?” he asked.

Yet if the casino project is done right, Neves added, “we could take care of our problems in a very short period of time.”

Gomes said a conservative estimate on the low end on how much a single Hawaii casino would generate is $30 million annually, but he also added that there are billion-­dollar operations on the mainland.

He urged commissioners to approve the proposed bill, which would carve out an exemption to Hawaii’s law that currently makes the state one of only two — the other is Utah — that prohibit gambling. The measure would authorize only one resort casino on the trust’s commercial land in Kapolei. An actual site has not been identified.

But Gomes said the trust lands in Kapolei designated for commercial use — a designation that resulted from beneficiary consultation when the agency’s Oahu island plan was last updated — cannot be used for residential homesteading. So the question is what type of commercial use should go on those lands, he added.

If the commission passes the measure, the proposal would be sent to Gov. David Ige for his consideration. If Ige approves, the bill would be included in the package of measures he intends to submit to the Legislature for the upcoming session, which starts Jan. 20.

Ige was not available for comment Monday.

If the bill makes it to the Legislature, Gomes said he expects to see millions of dollars spent on lobbying from out of state to keep gambling out of Hawaii. The state provides a steady stream of visitors to Las Vegas to gamble in the casinos there.

But DHHL doesn’t intend to sit idly by if mainland interests try to exert their lobbying muscle. If the bill is introduced, the department is looking to tap consultants and lobbyists to help promote the bill, according to Gomes. “That’s not a detail we’ve ignored.”

Gomes cautioned commissioners against waiting until 2022 to seek the introduction of the legislation. Now that the idea has been floated publicly, the mainland interests who oppose the proposal would have a year to lobby against passage and “essentially buy its failure,” Gomes said.

“A year from now we will lose on this at the Legislature,” he said. “Guaranteed.”

The department received more than 100 written testimonies to the proposal, and over 90% were in opposition, according to DHHL. But only about 10% were from beneficiaries, the agency said.

Even though today’s commission meeting is being held remotely because of the pandemic, state Sen. Kurt Fevella, whose district is in West Oahu, has put out a call for protesters — urged to wear face masks and maintain social distancing — to show up this morning at DHHL’s headquarters in Kapolei to wave signs.

While most of the written testimony opposed the casino idea, there were voices of support.

Kali Watson, a former Hawaiian Homes chairman, was among those. “In the past, and more so in these pandemic times, the state has not and will not be able to provide sufficient funding to truly make a difference in significantly reducing DHHL’s waiting list,” Watson wrote.