HomeMy WebLinkAboutCOM 0118.011 2002-2004 0099633030 P. 01
qUG-01-004 1i0 :52 qM R. RLDERSON ~ .
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July; 3 t, 2004
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Dr. Fred Holschuh 0 2 a,Y~,,- - _ ~ .
Hawaii County Council ~ couM~i - .
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County of Hawaii, State of Hawaii _
Re; Bi11 N0.49, Draft 2
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Dr. l~olschuh and Council Members,
Thank you Dr. Holschuh for speaking with me today and listening to my
cone s re; the above mentioned Bill 49 and its long term effects on our
lslan .Like you, l have many questions on how this Bill will change the
pattiP sand 'direction of growth in our community, particularly the rural
areas of the County, zoned Agricultural Use.
Yq r predecessors, in their wisdom and foresight, created Zoning and Tax
strud a to promote a healthy economy and quality of lifestyle for the
cilia s of Hawaii.
,you all know, there is an influx of people moving to tho Big Island
from neighboring islands and the mainland. This will continue, and the
population growth, combined with incoming people will accelerate the
growing pains of the community. Careful planning is needed to prevent the
overgrowth problems that many other Countios across the nation have faced,
such ais urban sprawl, strain on infrastructure, overcrowding of roads,
pollution, crime, etc.
My anuly camp to the Islands in ] 973, and we have owned property in
Hilo s ce 1981.Our combined background experiences include
archit cture, building, banking, small business and real property appraisal.
We w re drawn to the Hamakua Coast for our retirement, by the natural,
rural auty, and the healthy lifestyle that accompanies it. The current Real
Arope Tax structure was an incentive for us to transfer our property assets
from a mainland into unimproved farmland here. Most of the acreage was
ahead under cultivation, through leasing, and we have retained the farming
and gj~ ing uses. Under the proposed $11149, the viability of continuing to
lease ~ r land to farmers and ranchers will be threatened. I will give 2
examp es.
Comm. t`1o.~, v' ((r~~
Ref. To: h~~~ ~1L...~
Ref. Dote eIIG `3 f11 0>l
1
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0089633030 P•0~
AUG-01-2004 10:33 AM R. ALDERSON
1) 131 acres in Umauma; 80 acres usable; fenced and leased for cattle
gran g pasture; lease amaunt $4,000/yr
current tax .195/vr
$3,805 gross/yr
We invested $450,000 in this parcel. The current return is .8%; less than
1°/ ,not even keeping up with inflation.
The ame property under Bi1149; appraised at $5,000/acre's value at
$650;000; with the 10 yr dedication option, 50% exemption='s
$325,000 taxable valuation; taxed at ] °/r-'s new tax amount of $3,250, so
lease amount $4,000/yt
new tax .3.250/vr
$750 gross/yr
The return would then be .166%. Then if next years' appraisal rises to
$6,OOp/acre; the new tax would be $3,930; leaving a $70 return, on a
$450, 00 investment.
2) 6I acres in Papaikou; 6 acres usable (due to rock); leased for truck farm;
lease amount $1,500/yr
cumnt tax ; ~ 26/vr
$1,374 gross/yr
This s a return of .4% ,again less than 1%.
The s e property under Bu1149; appraised at $7,000/acre's value at
$434', 00; with the 10 yr dedication option, 50% exemption='s $217,000
taxable valuation; taxed at 1 %~'s new tax amount of $2,170, so
lease amount $],500/yr
new tax -2,170/vr
-$6701oes/yr
Then if next year's appraisal rises to $8,000/acre; the new tax would be
$2,480; leaving a -$9801oss.
•The gures above are based on qualifying for the l 0yr dedication program.
Thes 2 real examples demonstrate that as a land owner, leasing to farmers
and r ' chars under the current Agriculture exemptions is not profit
motiv td. The return does not even keep up with the inflation index, it has
been o choice to continue with the Ag uses, however, because farming the
land p motes smelt farm industry and keeps the land productive, green and
boauti I. This is our personal reward; but not a prudent use of our mone;/.
fiUG-01-2004 10:33 RM R.fiLDERSON 8099633030 P. 03
The changes under Bill 49 destroy any small monetary incentive wo had to
continue to loose the lands we own.
Cdnsider the alternative. Under Bill 49 Ag lands become too expensive for
1`and~owners to justify farming or grazing, and the land will then lay fallow,
unk pt and overgrown; until such time as it is sold and likely developed as
resi ential, which Bi1149 presumes to be the lands' "highest and bast use".
0th communities across America have recognized the value in promoting
ng, at times even supporting farmers with subsidies. Communities,
Simi ar to ours with scenic beauty, have recogniud the damaging effects of
too* ease development and sought methods to control growth, at times even
Ares ruing open space with conservation programs. Tourism is the Island of
Hawaii's biggest industry. In addition to the appeal of the volcano, the
beaches and the resorts; the beauty of the rural landscape is one of its best
features. What the tourists enjoy, we residents appreciate and enjoy, too. We
ask that you consider the "big picture", and look past the short-term benefits
to the finance department's increase in tax revenue; to the long-term
damaging effects on the Island by Bi1149, which future Counoil Members
and 1!'lanners will then be forced to attempt a more costly repair.
W~ respectfully request that you deny Bill 49. We are willing to give our
time in study and planning workshops to help come up with better
alternative solutions for the betterment of our community.
Thank you fbr your consideration,
Rich ~ d and Virginia Alderson
PO B
ox 166
II eau Hi 96710
808 63-5030