Proposed Kapolei casino survives narrow vote to move forward

A controversial proposal to develop a casino resort on lands set aside for Native Hawaiians in Kapolei survived a narrow vote Tuesday at the Hawaiian Homes Commission and now heads to Gov. David Ige for his consideration.

By a 5-4 margin, the commission approved a measure that asks the Legislature to adopt a bill allowing development of a single casino on a commercial parcel that is part of a land trust created a century ago to return Hawaiians to their native lands.

The bill ran into resistance because the Department of Hawaiian Home Lands, manager of the 203,000-acre homesteading trust, abruptly floated the measure last week without vetting it first through trust beneficiaries, who are those at least 50% Hawaiian.

>> PHOTOS: Group rallies against casino proposal before Department of Hawaiian Home Lands headquarters

After DHHL unveiled the draft measure a week ago, the panel was briefed for the first time Monday and was asked to vote on it the next day. But several commissioners said they didn’t have enough information to make such an important decision, felt rushed and underscored the need to consult beneficiaries before making the call.

“For me what remains are many, many more questions that (are) unanswered,” said Maui commissioner Randy Awo, who joined three of his colleagues in voting against the proposal.

Big Island commissioner David Kaapu, who also voted no, cited “huge concerns,” including turning over too much control to a newly created gaming panel whose five members would be appointed by the governor to license and regulate the casino developer and operator.

Patricia Teruya, an Oahu commissioner, said the process was moving too quickly to make a “massive decision” for beneficiaries and the state. “I do not want to rush into this,” she said.

Molokai commissioner Zachary Helm was the fourth no vote.

But William J. Aila Jr., citing a variety of circumstances, warned the commission that a delay beyond next month’s legislative session likely would doom the proposal and leave the department stuck in a situation in which huge financial shortfalls undermine its mission to get Hawaiians onto the land in a timely basis. And no alternatives have been offered to fill those gaps, department officials said.

“If we wait, it’s going to be next to impossible,” Aila said. “This is the time — or there’ll be no time.”

Postponing the matter for a year would allow the Las Vegas casino industry to mount a sustained lobbying campaign to kill the measure, department officials warned. Las Vegas is a popular destination for Hawaii residents wanting to gamble.

Also, the chances of getting legislative approval for something so controversial is unlikely in an election year, Aila said. The majority of the Legislature would be up for election in 2022.

Aila urged his fellow commissioners to advance the measure, saying it can be amended as the process unfolds and beneficiaries are consulted. But he acknowledged the proposal was a “very last-minute initiative.”

In briefing the commission Monday, Aila’s deputy, Tyler Gomes, justified taking such a bold step on short notice by citing the October findings of a Honolulu Star-Advertiser and ProPublica investigation that he said showed the status quo is not working for the department and beneficiaries.

And even commissioners who opposed the casino measure acknowledged that DHHL cannot expect anyone else to bail them out, emphasizing that funding shortfalls have plagued the program for decades. “Nobody is coming to help us,” said Awo, the Maui commissioner.

If the governor does not include the casino bill in his legislative package, DHHL said it might ask a legislator to introduce the proposal. Ige could not be reached for comment Tuesday afternoon.

One legislator said he intends to introduce a similar bill even if Ige opts not to submit the DHHL one. “It’s an opportunity to have more voices participate in the discussion,” said Sen. Jarrett Keohokalole, whose father is a beneficiary. Keohokalole said he supports the DHHL measure.

Hawaii is one of only two states where commercial gambling is not allowed. Utah is the other.

The bill would essentially create a carve-out to the state prohibition and authorize the appointment of a gaming panel that would issue a 10-year license to a company to develop and operate the resort casino. Hawaiian Homes would grant the land lease for the site, which has not been identified yet.

Once the facility is open, it is expected to generate conservatively at least $30 million annually for the department, and potentially much more, according to DHHL. The bulk of the money would go toward lot development and land acquisitions so the department can more quickly issue homestead leases and pare a wait-list that now totals around 28,000 beneficiaries. Some have languished for decades on the list, and more than 2,000 have died without getting 99-year homestead leases.

The department estimates that at least $4.5 billion would be needed in the years ahead to install infrastructure on homesteading lots for the 28,000 wait-listers. Growth in the wait-list would add to the tab.

The casino proposal is expected to face rough waters at the Legislature, just like other gaming measures in prior years. “Realistically, I think it would be long odds that something like this could pass,” Senate President Ron Kouchi said recently.

House Speaker Scott Saiki told the Star-Advertiser on Tuesday that he has reservations about the proposal. Saiki said he is concerned that allowing casino gaming in Kapolei might trigger the federal law that would allow Indian tribes to open gambling operations in Hawaii.

The department received more than 100 written testimonies to the casino proposal, and over 90% opposed the measure.

A handful of opponents on Tuesday came to DHHL’s main office in Kapolei to wave Hawaiian flags and signs in protest.

Steven Thomas of Mililani said DHHL is not fulfilling its mission, but running itself like a business instead. “This is just another example of the double-cross of this department,” he said.

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Staff writer Nina Wu contributed to this report.