Hawaii lawmakers are trying to force the University of Hawaii to give a long-vacant piece of land near Diamond Head to the state Department of Hawaiian Home Lands.

The effort, being facilitated via a bill that could lead to condemnation of the UH land in court, is pitting one state institution against another in a contentious assessment of whether higher-education facilities are more important than homes for Native Hawaiians, or vice versa.

UH intends to seek private development proposals to turn its 2.5-acre site across from Kapiolani Community College on Makapuu Avenue between Leahi Hospital and Diamond Head Theatre into some kind of health care school facility, possibly within a few weeks or months so that a winning proposal can be selected by year’s end.

DHHL also could put the property to good use under its obligation to provide homesteads for beneficiaries who must be at least 50% Hawaiian, though the agency did not seek the introduction of House Bill 2288 and has no specific vision as to how many homes might be developed on the site.

Many state lawmakers, who have committed to appropriate a record $600 million to DHHL this year so the agency can develop homestead lots on land it already owns around the state, favor wresting ownership of the Diamond Head property from UH to benefit DHHL.

“This is a unique opportunity to place Native Hawaiians in the urban core near a community college, near health care,” the bill’s lead introducer, Rep. Patrick Branco (D, Kailua-Kaneohe), said in February at an initial hearing on the measure. “These are the solutions that we as a body have to look for to help our native Indigenous population.”

House members voted 47-0 on March 4 to send the bill along to the Senate for consideration after three committee hearings that elicited a mix of conversations. The amended bill passed second reading in the Senate on Thursday and was referred to the Ways and Means Committee, which could position the bill for a full Senate vote.

UH and DHHL officials have been cordial to one another while describing the importance of the land to their respective institutions.

“We do stand in strong support of this measure and offer a public apology to the University of Hawaii because it’s their lands that may come to DHHL for affordable housing,” DHHL Director William Aila Jr. said at the initial hearing Feb. 3 before the House Water and Land Committee.

Kalbert Young, UH’s chief financial officer, began his testimony by thanking Aila. “Appreciate the acknowledgement from DHHL,” Young said. “We respectfully are going to oppose this bill.”

Some lawmakers offered more pointed comments, pressing UH as to whether its plan is more important than DHHL’s need, questioning whether the university devised its plan in response to the bill’s introduction in January, and even suggesting the Legislature might cut UH’s budget if it contests the land conveyance effort.

“Would you agree that the university needs it more than the Department of Hawaiian Homes, which after 100 years has (28,000) people on the wait-list (for homesteads) and in 100 years has broken promises for those 50% Hawaiian and above?” asked Rep. Gene Ward (R, Hawaii Kai-Kalama Valley) of another UH official at a Feb. 10 House Judiciary and Hawaiian Affairs Committee hearing. “You guys have a better need than they have? That’s what this bill is based upon.”

Michael Shibata, director of strategic development and partnership at UH, didn’t answer Ward’s question, but restated the university’s plan for the property.

To the surprise of some lawmakers, the state Department of the Attorney General submitted comments on the bill noting that enacting a law to have UH convey the land to DHHL would be ineffective because the state Constitution establishes the university as a quasi-independent entity that is governed by a board of regents and holds property in trust for university purposes.

Deputy Attorney General Craig Iha’s testimony also noted that an eminent domain lawsuit could be filed to acquire the property. As part of such a condemnation, the Legislature would have to appropriate money to compensate UH for the land as determined by a negotiated agreement or neutral-party decision overseen by a judge.

A 2020 appraisal values the land at between $5 million and $6 million.

At a March 17 joint hearing of the Senate committees on Higher Education and Hawaiian Affairs, Sen. Donna Mercado Kim (D, Kalihi Valley-Moanalua- Halawa) criticized UH for seemingly taking a long time to craft a plan to develop the parcel that Leahi Hospital partly uses for parking, and said she believes DHHL can move faster with development.

Kim, Higher Education chair, also asked whether a “friendly” condemnation could happen and said that maybe some kind of pressure could be applied to achieve that.

“I believe that we should be compensating the university,” she said. “But in the interest of the entire state … we should have some kind of friendly agreement. I mean, the Legislature could always cut their budget or do something to get them to be more friendly.”

If the land is acquired by DHHL, it’s unclear when or how the agency would turn the property into housing that serves beneficiaries.

The land is zoned by the city for minimum 5,000- square-foot residential lots with a 25-foot building height limit. This would permit up to 21 homes. However, DHHL doesn’t have to abide by city zoning rules or Diamond Head special district regulations aimed at protecting views of the crater, a state and federal monument.

Aila said DHHL might seek to maximize development density.

Demand for homesteads, where beneficiaries receive 99-year leases on lots for $1 a year and must buy or build a home, is most out of balance on Oahu, where DHHL estimates it has about 600 acres available for residential homestead development and a shortfall of nearly 1,000 acres to serve about 9,600 applicants on its wait-list.

Aila said during the bill’s initial hearing that the UH property, along a transit corridor and walking distance from the community college and retail stores, provides a unique opportunity to produce a vertical project delivering more housing.

“Our shortage of land on Oahu, where we have the greatest amount of folks on the wait-list, has always been problematic for us, and your sponsoring of this bill would assist us in providing more opportunities for members of beneficiary classes on the wait-list,” he said.

UH also referenced possible residential use as part of its envisioned health care facility, saying that a “multigenerational live-and-learn” component could be part of what a developer proposes.

The university, which around five years ago had discussed letting the Hawaii Office of Veterans’ Services develop a 120-bed veterans home on the site before deciding against that, said it has been working on its own plan for a few years, and that work in 2021 included ground surveys and environmental assessments.

“This project is a priority for the university,” Shibata said.