State land swap called a bad deal
A Maui firm wants to trade industrial lots in Waipahu for state agricultural land
Thursday, April 22, 2004, Starbulletin.com

By Nelson Daranciang, ndaranciang@starbulletin.com

Some lawmakers say the state is making a bad deal in giving up 226 acres of agricultural land in Kapalua for 1.4 acres of industrial property in Waipahu.
Maui Land & Pineapple Co. wants to include the state land in an expansion of its luxury Kapalua Resort development. The state land is a narrow strip in the middle of the company's property.
In exchange the state would get three vacant lots, totaling 1.4 acres, in the Mill Town Center industrial park in Waipahu that Maui Land & Pine will purchase from Alexander & Baldwin for the exchange.
Rep. Alex Sonson (D, Pearl City-Waipahu) said he thinks Maui Land & Pine is getting the better end of the deal. "Much better, a lot better," he said. He said the Maui land is undervalued while the Waipahu property is overvalued.
According to land appraisals by Medusky & Co., the Kapalua land, which is mostly gulch, is worth $1.5 million, while the Waipahu property is worth $1.6 million.
Sonson said the appraisal does not consider how much the property will appreciate because of the Kapalua project. Maui Land & Pine leases the land for $6,060 a year to grow pineapple. It is asking the state Land Use Commission to reclassify 60 acres of the state property from agriculture to urban in anticipation of the exchange.
The state is expecting annual lease rents from the Waipahu property of $98,400 to $131,200. Sonson said there is a lack of Mill Town Center tenants. He also noted that the state has yet to receive any income from three other parcels in the center it acquired in a land exchange with the Aloha Council of Boy Scouts of America the Legislature approved last year.
The state has not received income from the property because the exchange was just completed this month, said Keith Chun, Department of Land & Natural Resources planning manager.
The state Board of Land & Natural Resources agreed in principle to the Kapalua land exchange in October. According to state law, the state can complete the deal after it is reviewed by the Legislature. Lawmakers can reject the exchange with a two-thirds vote in either house of the Legislature or by a majority vote in both houses.
Because of concerns expressed by Sonson and other lawmakers, the House Water, Land Use and Hawaiian Affairs Committee recommended passage of resolutions prohibiting the construction of homes on the upper portion of the state land and limiting the lower portion to park and open space.
If Maui Land & Pine wants to remove the restrictions, it must pay the state the added value of the land, under the resolution.
The House approved two resolutions, Senate Concurrent Resolution 9, HD1, and House Resolution 157, HD1, asking the state to include the conditions in the agreement. Dede Mamiya, Land Division administrator in the Department of Land & Natural Resources, said the state would add the restrictions to the exchange deed.