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Home My WebLink AboutCOM 0337.006 1998-2000 9EP-21-99 16:38 FROM:ADMIN. DI RECSOR ID=e095399e55 PACE 1/S ~1 Office of the Administrative Director of the Courts THE IUDI RY -STATE OF HAWAII 417 50uTNKING STReEr - ALI'IOLANI NAIE • HONOLULU, HAWpJ'I 96813- 2902 • TELEPHONE ) 539900 FAX 5344$55 ~~9 SL!Z2 ~~J Mlthael F. Broderick R!ry g 2 ADMINISTRATIVE DIREROR ^i gyde W. Namu•o - ~ DEPUTY ADMINISTRATIVE DIRFGTOR w~ I ~I I _ I Ul- f-l'w1/~ FAX TRANSMITTAL DATE: September 21, 1999 TO: Councilmember Dominic Yagong FAX (808) 775-7122 FROM: Michael F. Broderick PHONE: 18081 539-4900 Administrative Director FAX: (808) 539-4855 of the Courts Number of pages transmitted including cover sheet: 5 337. oo~ Comm. No. File No. FMK praseEEtEad coun)u~-- Ref. Tot ~p 2 2 1999 Ref. Date SEP-21-99 16:30 FROM: ADMI N. DIRECTOR ID: eee5399B55 PAGE 2/S ~°r rr Office of the Administrative Director of the Courts THE JUDICIARY -STATE OF HAWAII J~ 417 $OVTH KING STREET • ALI'IOLPNI FLALE • HONOLULU. HAWAf 196813.2902 • TELEPHONE (808) 539.4900 • FAX 5394855 ~,r~ Michael F. Broderick ADMINISTRATIVE DRIFROR tlyde W. Namu'o DEPUTY ADMMI$iRATNE DIREROR September 21, 1999 Councilmember Dominic Yagong Chair, Public Works and Parks Committee County of Hawaii ' 25 Aupuni Street Hilo, Hawaii 96720 Dear Councilmember Yagong: 1 am in receipt of your September 15, 1999 letter in which you pose the following questions: 1. "The Judiciary offered the County of Hawaii S6 million dollars for the former J_ C_ Penney building site, and the offer was refused by the county administration. If the County of Hawaii determines that accepting the S6 million dollar offer would be in the best interest of the courts, would the Judiciary consider placing that offer back on the table?" The Judiciary did not formally offer the County of Hawaii S6 million for the former J. C. Penney site (Penney site. This sum was initially discussed because it was close to the amount which the County of Hawaii initially paid to the J. C. Penney company to purchase the site. In order for the State of Hawaii to make a formal offer to the land owner, a bonafide formal appraisal must be completed by the Department of Land and Natural Resources (DLNR). At one point during our discussion with Mayor Yamashiro regarding the possible purchase of this site, we decided to have DLNR conduct an "informal" appraisal of the Penney site. Their "informal" appraisal indicated that the site would be valued at approximately $5.2 million. It is my understanding that the process for conducting an appraisal of commercial real estate is very complex and involves comparing the revenues generated by the property over a period of time. Because negotiations with the County were only preliminary, we decided not to have a formal appraisal done until we had a meeting of the minds in terms of an acceptable asking price. 6EP-21-99 16:39 FROM: ADMi N. DIRECTOR 1D:6066394655 PACE 3/5 Councilmember Dominic Yagong September 21, 7999 Page 2 Chief Justice Ronald Moon selected the former J.C. Penney site for the new judiciary complex in Hilo after an extensive site selection study involving both planning consultants and the Judiciary's Center for Alternative Dispute Resolution (ADRj. As part of the site selection process, alternative sites were identified through a public consensus process organized by the Center for ADR. These alternative sites were then turned over to a consultant which rated each of them based on prescribed Criteria. The Penney site was the highest-rated site. Prior to the Chief Justice's final decision to select the Penney site, we advised all Big Island legislators of the Chief Justice's tentative decision, and asked for their input. No Big Island legislator opposed the site. Our decision to move forward with developing the Penney site was also based on our understanding that Mayor Yamashiro was not opposed to selling the property if the Judiciary and the County could agree on the price. In early discussions with the Mayor, the S6 million figure surfaced as a possible starting point for our negotiations with the County, as it was our understanding that it was reasonably close to the amount which the County originally paid for the property. During our discussions with the Mayor, however, it became clear that he wanted to recover all Costs which the County had incurred in purchasing the Penney site and renovating the former department store building; i.e., the costs of roof repairs and the like. Because of the current nature of real estate sales, it would be difficult for the Judiciary to justify to the Legislature the need to pay more than the "fair market price" for the former J.C. Penney parcel, when other similar properties could be purchased for below their "fair market price." As our discussions with the Mayor were ongoing, Sure Save Super Market vacated a significant portion of the Kaiko`o Mall shopping center. This created an opportunity which did not exist at the time that the Penney site was originally considered. Based on Sure Save's decision to vacate their Kaikoo Mall store, and the knowledge that other spaces in the mall had remained vacant for significant periods of time, the Judiciary decided to reopen the site selection process to consider the possibility of the previously unavailable Kaiko`o Mall parcel. The Department of Accounting and General Services is presently assisting the Judiciary in completing an Environmental Assessment on this newly identified site. The most recent information we have is that the environmental assessment report is projected to be completed about February of next year. SEP-21-99 16:39 FROM:ADMI N. DI RECSOR IO: B0e5399B55 PAGE 9/S Councilmember Dominic Yagong September 21, 1999 Page 3 Prior to the Judiciary's decision to reopen the site selection process, we asked all Big Island legislators for their thoughts concerning this matter. The Judiciary received replies from two (2) senators. Senator David Matsuura simply indicated that he wished to be kept apprised of the Judiciary's actions concerning this project. Senator Andrew Levin supported reopening the site selection process to consider the Kaiko`o Mall site. The Judiciary's decision to select the Penney site was based on the fact that it was the site which received the highest rating by the site selection consultant. Until the aforementioned study regarding the Kaiko'o Mall alternative site is completed, it would be premature for the Judiciary to reopen negotiations with the County regarding the J.C. Penney parcel. To summarize, the Judiciary does not wish to re-open negotiations regarding the Penney site until the environmental assessment on the Kaiko'o Mall parcel is complete. However, depending on the results of that environmental assessment, at that time the Judiciary may be interested in initiating discussions regarding the Penney site if the selling price is in the 6 million dollar range referenced in your letter. 2. Does the Judiciary have the support of our Big Island State Legislators to propose an appropriation for a Judiciary Complex on the former J. C. Penney site?" As we explained above, prior to Chief Justice Moon's decision to select the Penney site, we contacted all Big Island state legislators and asked their opinion regarding the Judiciary's impending decision. No Big Island state legislator opposed the selection of the Penney site. Because the Judiciary was not able to reach an agreement with the Mayor over the asking price for the Penney property, the Judiciary has not contacted the Big Island legislators to determine whether they continue to support the Penney site and whether they would also support an additional appropriation. As also explained above, we sought all Big Island state legislators' views regarding re-opening the site selection process to address the Kaiko'o Mall site. Only Senator Levin had substantive input, and it was to include the Kaiko`o Mall site in the analysis. 9EP-21-99 16:39 FROM:ADMIM. DIRECTOR ID: 8085399855 PACE 5/5 Councilmember Dominic Yagong September 21, 1999 Page 4 The Judiciary currently has an appropriation of S3.0 million which was provided by the Legislature for the purpose of acquiring a site and/or design of the Hilo Judiciary Complex. We realize this appropriation is probably less than what would be required to purchase the Penney site or other comparable site. The Judiciary intends to eventually ask the Legislature for an appropriation sufficient to cover the entire land acquisition costs. Should you have any questions concerning the information outlined above, please contact our Deputy Director, Clyde Namuo at 539-4902 or me at 539-4900. ~jfY~ours very truly, /%~,7 Michael F. Broderick Administrative Director of the Courts c: The Honorable Stephen K. Yamashiro, Mayor The Honorable James Y. Arakaki, Council Chair