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HomeMy WebLinkAbout2018-09-24 BDHRA Minutes BANYAN DRIVE HAWAII REDEVELOPMENT AGENCY COUNTY OF HAWAII MINUTES September 24, 2018 The meeting of the Banyan Drive Hawaii Redevelopment Agency was called to order at 2:10 p.m. in the County of Hawaii, Office of Aging Training Room, 1055 Kino`ole Street, Hilo, Hawaii, with Chairperson Pro Tempore Nathan Gaddis presiding. MEMBERS PRESENT: Nathan Gaddis (Chairperson Pro Tempore), K.T. Cannon-Eger, and Barry Taniguchi MEMBERS ABSENT & EXCUSED: Brian DeLima and Elmer Gorospe ALSO PRESENT: Michael Yee (Planning Director), Amy Self(Deputy Corporation Counsel for the Agency), Jeffrey Darrow (Planning Division Manager), Kim Tanaka(Secretary), Richard Onishi (State Representative), Gordon Heit (DLNR Representative) A quorum was present with three members in attendance. STATEMENTS FROM THE PUBLIC There were approximately 11 members of the public in attendance. At 2:10 p.m. Chairman Pro Tempore Gaddis opened the floor to take statements from the public. GADDIS: So it's about 2:10 and we still don't have any sign of the gentleman whose business is on the agenda, but we still need to discuss it anyway so we'll go ahead and make a call to order. And we'll ask one more time right now if there's any statements from the public today. Apparently not, so we'll go ahead and move on to scheduled business of the agency. BUSINESS OF AGENCY The Agency took this item up at 2:11 p.m. with approximately 11 members of the public in attendance. 1. Open discussion regarding the submittal by Donald T. Inouye for the new lease request to DLNR for the Reeds Bay Resort Hotel. This agenda item is for information and discussion purposes only. GADDIS: So our business that we had scheduled today was going to be an open discussion regarding a letter that was submitted by Mr. Donald T-. Inouye for a new lease request to Department of Land and Natural Resources for the Reed's Bay Resort Hotel. Now this agenda item that we have on here is only for informational and discussion purposes only. We're not going to be taking any actions today, making any recommendations today. So we can go ahead and move on to discussion of that. What I want to do, since we don't have Mr. Inouye present, I wanna go ahead and just read the first page that he submitted to us to be included on today's agenda, which is a letter written to the Banyan Drive Hawaii Redevelopment Agency, County of Hawaii, and the members of the Board present. This is from Donald Inouye, President of Page 1 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes Reed's Bay Resort Hotel regarding a request to be on the agenda for the upcoming agency meeting, today. I'll just read it very quickly so we can get some background. At this time Chairman Pro Tempore Gaddis read the letter from Donald T. Inouye to the Banyan Drive Hawaii Redevelopment Agency. GADDIS: Now what I'd like to do since this was supposed to be an open discussion is just to get maybe some statements from DLNR regarding where they are with this. Just so we can put it on the record for Mr. Inouye to review at a later time since everything's going on paper here. HEIT: Okay thanks, Mr. Gaddis. My name is Gordon Heit. I'm a District Land Agent for the Department of Land and Natural Resources and as what the letter states, we have received a request for a new lease for the property, Reed's Bay Resort Hotel property. It's currently on a month-to-month revocable permit as granted by the Land Board as (inaudible) December 12, 2014. The request as stated is being reviewed and we're looking at several options to go forward with this property. One of which is including similar to what we did for the Hilo Bay Hotel property, which is do a request for interest. So that's where we are right now with it. GADDIS: Okay. Mr. Yee, do you want to give any input on the situation or comments made by Mr. Inouye? YEE: Not specifically to him specifically. However, in general I want to continue to say that the County wants what's best for Banyan Drive and given its blighted status right now, investment into the property is long-term is why we kind of went down this road with a redevelopment agency. So I would just want to be sure any new project, any renovation stays within that goal. GADDIS: Mr. Onishi, thanks for being present. You don't have to make a statement; I just want to offer you an opportunity to do so if you choose. ONISHI: No. GADDIS: Okay, all good. Any other board members have any questions for DLNR or Planning since we're here, or comments to make? Anything to add? TANIGUCHI: If I may, Mr. Chair? I'd like to ask DLNR, what's taking so long? HEIT: As far as like the timeframe goes as Mr. Yee mentioned, we're looking at long-term planning here. You know, the decisions we make now are going to have an effect 40, 50, 60 years from now. We want to make sure what we do decide on is the correct one. So TANIGUCHI: So if you don't mind,just dialogue with him. GADDIS: Yeah, go ahead. TANIGUCHI: So another question is what's taking so long to determine what you want to do? In other words I want to know why are you not takingI see this guy spending a lot of money just to come to compliance with the County requirements, you know, to get, correct their deficiencies. And he gotta do that to stay in business number one, but number two, he's also Page 2 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes saying he's putting in a lot of money and he doesn't know what's going to happen. He might have to walls away from it next month. And it's not fair to him too. If he weren't doing anything I can see, yeah, you can play with that, but you know, he's trying to do something to (inaudible). So what is the long-term plan for that building? I think the answer is you want to do a master plan for that Banyan. And the next question I'm going to follow with that is what's happening with the master plan? Why isn't it being done? Is it fair to keep him hanging because of that? You could not get a master plan for another five years. You know, so I'm justanyway. That's just kind of like what kind of direction are we going to take to kind of resolve this situation? It's really not fair to him. HEIT: No, I understand and I agree with you. And that's why we have this month-to-month permit in place until we do make that determination, the master plan involves not just DLNR but also involves the County. So it's a joint effort, interagency effort that has to come up with this plan. Until we do come up with a plan, putting a long-term, another long-term disposition on the Banyan Drive area is going to change it so it's hard to, you know, kind of a catch-22 situation. TANIGUCHI: You know, I know one of the funding, the problems thatI understand one of the problems that DLNR has is funding. They can do the plan but they don't have the money to pay for it. Why can't we think a little differently, out of the box, what if we assess all of the lessees right not X-number of dollars so we can get this master plan done? So whether you're Naniloa who had just completed, Uncle Billy's who's nothing there, this guy, they all pay, contribute to do this master plan so we can get things going. The County doesn't have money either, but maybe the County can come up with a little bit to participate in that. But in other words, what, we cannot, if we just say we don't have the funds we're never going to do it. So is there a creative way that we could do it? HEIT: Just to clarify the, I think what you're referring to would be the Environmental Impact Statement? TANIGUCHI: Yeah. HEIT: Which is a component of the master plan, not the master plan itself. TANIGUCHI: Right. Yeah, okay, I'm sorry. HEIT: And not, yes, I agree, there's it's a funding issue that can be resolved. It just takes creative minds to come up with a solution for it. One that is, you know, one you just suggested, and I'll definitely bring that back to the powers that be within the department. TANIGUCHI: That would help and to at least to shake this thing loose and start moving. It seems like everybody's waiting for something else to happen. HEIT: I agree. Absolutely. TANIGUCHI: Nothing's going to—the first step gotta be that EIS, right? HEIT: Correct. Page 3 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes TANIGUCHI: So may as well start. HEIT: Well, I'd clarify that by, I believe, the first step would be YEE: Yes, we've been consistent in saying we need the EIS, at a minimum we've been looking for $500,000 to do it. Certainly we've gone to the last two Legislative sessions to try to get that allocated to us and that has not happened. I've also said in previous meetings here, you know, if, I agree with Chairman DeLima that I get tired of banging my head against the wall if we just keep going around the same ask and not getting it at some point for us to figure out creatively what some options could be. But again, that's easier for me to say when we're not the ones holding the dollar signs, so difficult place to be in right now. GADDIS: Is there some sort of projected timeline for when he would get, you know, some sort of concrete response? I mean, I know that the request for proposal is one venue for you guys, but just so that, you know, so we can respond to him as far as when he may know what he's dealing with. Because at the moment HEIT: The short answer is no, we don't have a timeline. GADDIS: Okay. Got it. Yeah, hence the frustration. Any other comments, questions? Yes, Mr. Onishi, please. ONISHL So I'm a little confused. So we're talking about a master plan. What master plan are we talking about? GADDIS: Actually it's TANIGUCHI: I think one of the problems is that in 50 years they envision the shoreline to be higher; do we want to allow now for somebody to put a building in that's going to—or how do you correct those situations? What's going to happen? So to do a kind of plan of this whole area, like for example, what's going to happen to the golf course? You know, is it going to remain a golf course? We gonna convert it to a that's all part of a master plan. But the first step in that master plan is you gotta get an EIS for that whole area and the EIS would also determine what the master plan would come up with in terms of Mr. Inouye's property. Or, or the Uncle Billy's property for example, what are you going to allow there? And ONISHL Okay, so I guess for clarification purposes, doesn't the EIS have to be done based on some kind of criteria? So, I mean if you don't have any criteria as to what you wanna do there, how do you do an EIS? YEE: So I want to back up in that the authority for the BDHRA to, to enact and do things would come once the master plan was, is adopted. In getting to that point, a conceptual master plan, which is up on the board behind you, was developed in 2017, right before I arrived. And that was enough to be able to tell a consultant on how to approach an EIS. Okay, so that in itself was giving them the idea from an EIS you would also produce alternatives to this conceptual plan behind you. And so that answers your question, how do you know what's the criteria, what is based on this conceptual plan that was developed by BDHRA. Page 4 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes ONISHL Okay, so for clarification purposes, we are not talking about a master plan. We are talking about a conceptual plan that has been approved by the County Council? YEE: There's been a Reso, correct? SELF: I'm not, I think it was a YEE: There was a resolution that adopted the—Jeff? SELF: It's just been adopted by this body, right? YEE: Okay, adopted by this body. ONISHL So that provides the authority for funding? YEE: Not for funding. Just it was the first step in being able to get to an EIS was to provide a conceptual concept plan at this point so you can go out for an EIS. ONISHL Okay, so that still is within the County's purview. Am I correct? YEE: Purview ONISHL Well, I mean in regards to who approved it, where the source of funding should be coming from, or who would be responsible for the next step. SELF: Well, the County really can't do anything without the State being on board because the State owns the property. ONISHL Okay, so has the State approved the conceptual plan? SELF: You'd have to ask Gordon. ONISHL Has that been put to the Board? SELF: Gordon? HEIT: Not at this time, no. ONISHL So the County hasn't put before the Board a request to approve the conceptual plan? HEIT: If I'm not mistaken, I believe before we can take it to the Board, I may be beyond my realm of knowledge here, but it has to be approved by the Planning Commission, then taken to the Council, then—there are processes, I believe, how to proceed with this. CANNON-EGER: Mr. Chairman? GADDIS: Ms. Cannon, please go ahead. Page 5 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes CANNON-EGER: I'm the new kid on the block so I may not be totally up to speed, but first I'd like to ask is the drawing on the wall the current, not with that purple blob over there. What Gordon's got in his—this was a matter of discussion at the first meeting I attended and a new map was provided to us. HEIT: Scenario two. CANNON-EGER: Scenario two is the current one. Is that correct? DARROW: The updated map is 12/12. HEIT: That's what I have. ONISHL So I think it goes back to process CANNON-EGER: The second thing if I might, Representative,just a moment. The previous meeting when Senator Kahele was with us, he did speak of a bill that had been introduced in the last session and failed to advance that would have provided funding for this body. So it will, according to him, be reintroduced in the next session that would provide some funding here. And this is where I need some correction if I'm wrong that Senator Kahele did offer to reintroduce that bill in the next session. Is that correct? GADDIS: My last understanding was that they, they have a variety of thoughts going into that. One component, last I understood, was they were gonna introduce that as part of a general request for funds pertaining to the lava flow to have some funding allocated toward Banyan Drive Redevelopment to look at that as an option for housing and for sort of resettlement in general. CANNON-EGER: Representative Onishi, the chart on the wall now is the approved, by this body, conceptual plan. There was a different map on the wall when you first came in. ONISHL Okay, so I still think that without—well, I think that the Legislature would be concerned in regards to the Planning Commission and the County Council not providing approval for this conceptual plan prior to us providing funding. So, I mean I don't know if that discussion has ever been made, but you know, and I've been in discussions in regards to emergency funding and no mention has been brought up about funding Banyan Drive as part of that request. Unless it's buried in the whole request for the redea second redevelopment agency. But nothing specific was identified as far as I know about funding for the Banyan Drive Redevelopment Agency, unless Michael YEE: Yeah, not unless it was an immediate need it was taken out of the thought for an emergency request. GADDIS: Mr. Yee, did you want to address Mr. Onishi's concern about Planning Commission not having reviewed, you know, the conceptual plan? YEE: Yeah, I'll need to talk to staff around what, where we need to bring it. However, I generally think that probably wouldn't be problematic to bring it to the Planning Commission or Page 6 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes to the Council at this point. Again you know we're, this is a unique situation where the lands are the State. The County had it blighted, the County's trying to show the leadership to get it redeveloped yet we don't collect the land lease money, we don't, we don't have direct revenue coming in to be able to afford an EIS. And so we're stuck in that situation of trying to find the funding, trying to get it from the State, and we're in this circular loop right now. TANIGUCHI: Mr. Chair, if I may make a comment, it's, I've been using this term a lot the last couple months, you know you can do things right or you can do the right thing. Doing things right is probably following all the steps here; doing the right thing is doing something now. How do we do it? How can we get it done? I think Mr. Yee pointed out that the County doesn't have the funds to do the stuff on lands that they don't own. They're not getting any revenue off of that. The revenue's going all to the State of Hawaii. So, can we get some kind of funding so that we can start the ball rolling? I think if you look at it that way ONISHL One point of clarification. So Mr. Yee,you guys don't receive any property taxes from those properties? SELF: That's my understanding. ONISHL And the exemption comes from? SELF: I think it's because they don't—has something to do with the fact that they don't have leases. Isn't that correct? Because we HEIT: Incorrect. Actually they do pay taxes. All properties whether it's a lease or revocable permit with DNLR pay property tax. SELF: So on all of the, well we're definitely not getting anything on the property where Uncle Billy's is currently, right? HEIT: That you'd have to check with the Real Property Tax office. But if we have a disposition on, which is a month-to-month permit, they're supposed to be paying the property taxes. That's the obligation of all the permittees. SELF: I'll have to check with Real Property Tax because I was under the understanding from Craig that they weren't collecting property taxes. YEE: Right. And I would say at the last legislature, the suggestion was for $500,000. The mayor met half of that along with the Leg working out they would catch the other half. So, you know, as much as that causes me personally indigestion that we were, the County was going to put up $250, clearly the County saw a need to, like you said, do what's right regardless. So I, you know, I think the County went into this Leg session wanting to pay their portion of it. You know I would argue coming that I've come from property management prior to this job, you know when you're collecting lease money, land leases and as the asset manager, there are many things you're saving, you know, an asset fund for—for the replacement or repair of the lands that you're managing. And so, I have a hard time absolving DLNR of having no responsibility or the State in having to provide some funding for the EIS. So, from a philosophical standpoint we were willing to stick at fifty-fifty, and even that wasn't a go for some reason. Page 7 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes HEIT: Just to clarify. The State Department of Land and Natural Resources has expended funds to date. We've provided over $500,000 in studies on three properties in the Banyan Drive area. The three that, one of which we're talking about today. So it's not like we don't have any skin in the game; we do. We have over half a million dollars that we've put into doing studies including, you know, sea level rising, the evaluation or the proposed use of the existing structures. TANIGUCHI: I agree, and maybe you're doing the right thing, but the, to do it right you gotta, to me, you gotta get the master plan. And all that master plan will take care of all, not take care, but consider all the sea level studies that you guys are—so it's not dollars not spent for anything. There's a purpose for that. But when are we going to put it together? To come up with a plan taking all these different discoveries so far, you know? You know what I'm saying? You got the sea level plan, so what's, what does that do? What does the sea level rise plan that you commissioned, gives us good information, but what does it do? Nothing I think, as far as I'm concerned. YEE: You know I'll agree with Gordon that DLNR has consistently testified to, through testimony, on the bills that they've certainly put up a half million dollars into Banyan Drive over a period of time here. Again, what does that mean if you fix a house and the roof is still leaking, it doesn't matter how much money you've poured in at that point, you still got a leaky roof and who needs to fix it? Certainly you can debate that. And so I would get to that point of, great you spent the half million, Gordon, I think I know Gordon well enough that I could at least throw the challenge out here that, you know, we can acknowledge that but right now we're stuck in this place where we need more and how do we come up with it. I don't expect to solve that today, but Mr. Taniguchi certainly asking the same questions that we've been kind of pondering for a while now. SELF: Just to get back to what Representative Onishi was asking, I have to point out that under Chapter 53, HRS 53, you know 53-5 states the powers and duties of the Agency. Well, one of the things, in addition to a master plan, is that plans have to be prepared for and assist in relocation of persons displaced from this urban renewal in that area. So a lot of that depends on what happens with the leases because I believe that some of those, some of the buildings probably have Section 8 housing. So that all has to be planned for too. So it's not just a master plan and an EIS, there's gonna have to be relocation of persons who are losing their homes. TANIGUCHI: May I ask a question? The structure between Mr. Inouye's property and the old Travel Lodge structure, what's happening there? There are people living there, right? That they think they own the premises? HEIT: You're thinking of the Bayview Banyan property. TANIGUCHI: I don't know the names. HEIT: That's a long term lease. You know, it's strictly a rental unit. Strictly a rental unit. TANIGUCHI: No, the other one that'sI thought there's another one where people think that they own the property Page 8 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes HEIT: Okay, you might be referring to the Country Club. TANIGUCHI: Oh yeah, maybe the Country Club. Yeah. What's happening with that? HEIT: Can't speak for the mindset of people who think they own property there but they don't. TANIGUCHI: No, I know, but what is being done to resolve that problem? There's gonna be people that if you, if they determine that that building has gotta go, they're gonna be, they have to be relocated out. HEIT: Correct. TANIGUCHI: But I guess that's where my question is. What's being done in terms of the peninsula, in terms of master plan? Because the first thing you gotta do is determine that. And if it's going to be determined that that building cannot stay for a number of reasons, whether it's because of the sea level rise, deficient construction, whatever it is. You know, somebody, we gotta get some kind of plan or document to say that this is what the plan is for the area. I mean, so the first step to me is, well the first step is you gotta get the EIS only to start the process, everything going, but the, if you, without the master plan we cannot do a lot of different, other things I think. ONISHL So I have a question for Amy. So Amy, you brought up that issue. So, in this conceptual plan, what was supposed to happen to those people? SELF: I don't believe that was ever taken into consideration. This plan was put together by the previous administration and so I don't think that's been a consideration. This is just a conceptual plan. ONISHL Okay, previous administration but some of the same members on this redevelopment agency, am I correct? SELF: Were you on there? I don't think—you were not. GADDIS: No, no. SELF: And KT wasn't; she just joined. ONISHL I think Chair DeLima was on it. SELF: Yes. ONISHL But what I'm saying is, so in essence it's a deficient plan. SELF: Well, it's ONISHL Because it didn't follow the statutes. Page 9 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes SELF: It's not a master plan. It's a conceptual plan. ONISHL Yeah, well, I mean SELF: So it's not going to be a master, in addition to the master plan you have to have this other plan to determine the relocation of persons who are going to be displaced. That step has not been taken yet. ONISHL But that doesn't have to be part of the master plan? SELF: I think it would be, yes. Because that determines what you can do with that property once—that has to be another step. You have to take care—that has to be something that's considered when you're doing the master plan. So I would think that they would need to work with the County Housing Office, but I think before that can happen, DLNR has to make a decision as to what they're going to do with the month-to-month leases. Because all of them are on month-to-month right now. All the buildings that are being used right now, right? ONISHL Well, if I might, I think DLNR's concerned with certain properties is what is going to be the master plan. So they're not going to issue leases to these properties unless one of two things happen. One, the current lessee is willing to make the investments to bring it up to a long- term standard, right? And that get approved by DLNR board, or this master plan that is being defaulted to the County because of the County's decision to set up this agency to plan this whole thing occurs. So, I think from the State's standpoint, we're caught in between what you guys wanna do, and the requirements of DLNR to move forward. Because, you know, I mean, there's two properties already that moved forward with long term leases. Now how does that affect the master plan because, you know, I think Naniloa, right, when this agency was created I don't think that was finalized. I might be mistaken but HEIT: Oh no, it was. ONISHL It was. Okay. So, you know, I mean if the State keeps going out and putting long term leases on property with their considerations and not yours, how does that affect the so- called plan that you guys have come up with? TANIGUCHI: If I may? GADDIS: Yeah. TANIGUCHI: I think the problem is just what you said. What's going to happen, and if the State wants that, it's their land, that's fine. They're going to have to—he's going to be pushed into a position where, okay, what does Don have to do, or anything have to do to meet what the State wants. What does the State want? You want to move in 50 feet because of sea level rise, or 5 feet, whatever it is? Even that is not determined. So ONISHL Okay TANIGUCHI: what I was saying is that if we're satisfied to have Banyan just rebuild whatever's there, not just put enough money to get another 55 year lease, then go. That's fine. Page 10 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes Or does the State as a land owner really want to look at that peninsula? Because the State owns pretty much the whole peninsula. Do they want, do they envision something different in the future than what is there now? And we gotta determine that now so we can start working on these things. How are you gonna do that? Maybe in Mr. Inouye's case, and sorry I'm using you as an example, but maybe they'll come out and say eventually we, that area, we want to do something else to it but we're not going to reach there for another 20 years. Okay, let's give them a 20 year lease instead of a 65 year lease or something. But you know, the land owner, I think, which is the State, gotta kind of get the guidelines first. What do they want done with the property? ONISHL So two years ago we had a bill in order to develop a planning committee for Banyan Drive at the State level through DLNR. I didn't see the County, if I'm not mistaken, there to testify in support. The idea was to set up a committee, a planning committee, for ten years that would be required to come up with a master plan in two years, and then have eight years to begin to explore how to execute the master plan. I didn't see this agency, I didn't see the County Planning Commission, or Planning Department, or the Mayor's Office testify in support of that bill even though it reached the floor of the House for final reading, I mean the Senate, and then got tabled. So, you know, it's not like we haven't been trying to do something. And as Gordon mentioned, the Legislature has appropriated money a number of times to do studies on planning for Banyan Drive. You know, it's not like we're not trying to do something, but the problem is with the development of this agency comes into conflict with the requirement of the State to move forward with coming up with a real plan. So, I think at this point what we're deferring to is to the County to come up with the plan, put it through the approval processes that the County's required to do, and the State Land Board, and then the Legislature can look at the funding aspect of it. But until that happens, we're in limbo too. We don't know what you guys want to execute, we don't know what the Department's willing to execute. Department has come up with a ten million dollar proposal to tear down Uncle Billy's; I don't see the Legislature acting on it. So, you know, I mean again, until we get some clarification on who's going to take the lead, which agency, I don't see the Legislature really addressing it in a meaningful way. So, again, but that's, you know, my opinion. I've been trying to push this whole thing through the last few years and nothing has happened. You know, even the last bill we provided that the Legislature passed is really not going to do anything for Banyan Drive unless one of the current month-to- month lessees can convince the Board that through that bill they're willing to put in a bunch of money and they're going to get a new lease. But, you know, I mean that's up to the Land Board to make that decision, so. And I really apologize for leaving you guys like this, but I'm sorry, I do have another meeting I gotta attend to so. I appreciate you giving me the opportunity to speak. And more than happy to continue the discussion. GADDIS: Thank you for coming, Mr. Onishi. There anyone else want to follow up on that? YEE: You know, I hear Representative Onishi. Two years ago, or you know, for the Leg in 2017, it started when I had been in this job for two weeks. There were many things on my plate and getting up to speed on what needed to be testified on. After a year on my belt, I was there last year, I was in Honolulu testifying for the County on Banyan Drive. So, you know, that's just the reality of that situation. I think, I'm disappointed to hear that Representative Onishi feels as if it's 100 percent on the County to have to put up for funding for an EIS. Cause part of what, Page 11 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes and his argument is kind of, you know, if the Banyan Drive didn't exist, are we better off? I mean there's a reason why it was created. There is a reason why things were reached, you know, occurring with blight as the description. And you know, Gordon doesn't hold all the purse strings, right? Yet DLNR is the land owner there. And so we're, you know, we can go round and around over who should pay for the EIS, but the plain truth of last year, the County committed to the $250. I don't know how else to sit there and say we committed 50 percent to get it going, and we got right to the finish line and it was yanked. And so that was really disappointing. Whether or not we can cross the finish line this year with the same kind of request, we'll see. Clearly the County's in a different position of having to put $250 up this year with all the losses we're seeing and the budget deficit we received coming from the lava event. So, we're not better off this year. I think it demands that DLNR and the County try to be creative where we can. You know, clearly I think folks will present the same, similar type of bill, we continue to pursue that, but behind the scenes we need to be working on other ideas that might push an EIS forward. GADDIS: You want to make any comments on, since we're still in discussion, you want to make any comments on you know, items that you mentioned, having the Planning Commission review things, you know,practicality and liability of that, you know, since he brought that up as a concern? YEE: You know, I don't see it as a concern. If we need to take it into the Planning Commission or the Council, I would see quick adoption with the resolution if that was necessary. Cause again, we only needed to drive this to very conceptual ideas which a consultant can start an EIS. They don't need details, they don't need to have a housing plan for everybody who'd be relocated. That would always come in later in the steps. So, you know, it gets back to the basic thing, is how do we fund an EIS? That's, we keep coming back to the same question and how to fund it. You know, until we answer that question we're just going around in circles. GADDIS: Well, any other comments from anyone seated at the table at this stage? TANIGUCHI: I have a question of Mr. Yee. What are the changes of County committing again $250, even if, given the situation? YEE: Frankly speaking, there's a huge deficit currently. Unless there's an additional quarter percent GET passed again, I think there's almost zero chance. Whether or not the County can even pass another quarter on top of the quarter they already approved, I don't even know that's even a legal question. So I don't see it being very likely, but certainly not impossible. I know there are Councilwoman Lee Loy is, and her staff are here today, has been very much willing to try to find a way to fund the EIS through the County cause she wants to see it happen. Whether or not she can garner enough votes on the Council to pass it is a whole other question, but I know she's been a pretty strong advocate to seeing that the County get this done, like you said, because it's the right thing to do still. TANIGUCHI: What if the County, I mean could they, the County go to the lessees and say, "Look, you guys want to help, maybe you come up with the $250 and let the State come up with the other $250." The State get more money than the County, I agree. Page 12 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes YEE: So, there's always plan C and D with me, because we're even past plan B at this point. And so yes, we have private parties approaching the County saying, you know, how can we still provide some funding to get this going cause they can still see it in the long-term interest of everybody to front the money to get something done. Again, given all the issues I've had on my plate recently hasn't risen to a point where I can sit down with Corporation Council to talk about the legalities over what's being proposed, but yes, I am collecting those ideas and have to meet with them soon knowing that the, you know, the Leg is just around the corner again so we better have our ducks lined up again. So yes, I've been approached with plan C and D, and again, it's the constant juggling of the "what if's." Just for the audience too, I want to be able toI came from Washington State where I worked close to 20 years on preservation and development authorities, which are very similar to, to the Banyan Drive Redevelopment Agency. This is a very unique situation where an agency was set up by the County but that doesn't own the land. It was a very difficult thing to kind of start off with. And so, working for an agency in Washington State where we had more control of land, or more income coming in, it was a different set of economics that you could drive the agency. Setting up an agency with no funding to start with was, boy, it just a difficult place to start. I totally understand why Banyan Drive certainly deserves the attention, but again, that's where we get caught up in all this cross-jurisdictional discussions that have to happen which, you know, if you're from the public can seem quite frustrating that government isn't working efficiently. TANIGUCHI: You know you have plans C and D; what about plan E? No, no, no, I just thought about it now. What if plan E is to go ask the Governor to EO the land to the County? SELF: They're not going to give up their money. YEE: I'm way ahead of you, Mr. Taniguchi TANIGUCHI: Oh shucks. YEE: —and I did ask to have the Mayor ask for that as a parting gift someday. I hope the Mayor makes the ask. I certainly wouldn't bet on that happening. CANNON-EGER: There's precedent. TANIGUCHI: Well we could tell them that you want to keep your future cash flow, you help us get this thing going. Give us the money to get this thing going, you keep the land, you keep the rents later, but put some money into it now. YEE: Again, the reason why I actually like that idea is, again, is trying to align missions with government agencies, with agencies that are better suited to the mission and in this case, you know, DLNR's mission is really a conservation mission yet they're kind of tied up into this economic development realm. So that's not their focus. And so, could they still make the money they need to make off the land, off the land lease, but still have the control go to an entity that is focused on economic development so the returns for them because it's not the focus will be much more in the future. It's how do you sell that to the here and now of the powers that be at DLNR is always going to be the trick. Easier said than done. Page 13 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes TANIGUCHI: My understanding is that the reason that DLNR doesn't want to give up control of the land is they really don't have general funds to take care of other public lands. They have to rely on these kind of deals where the lease is generated to support the Department. They don't have general funds. If all of this money went into the general fund and yet they get an allocation to take care of all the rest of their expenses, I think they wouldn't care less. If, but because they keep that money for their operations they don't want to let go. But again, that's why maybe the approach gotta be you wanna enhance this, we gotta develop for you guys to do it. But we need help to get started. YEE: Absolutely. I think you described it right on there and I think that's why I sit close to Gordon and continually have these conversations over how do we try to make it work together. I understand Gordon lives on this island with us and he is invested into wanting to improve the situation, but he works within the system that he's in. HEIT: Correct. Unfortunately my hat is, there's a tight drawstring on it to keep it on because I do live on this island. I do care about what goes on here, and I want to see what's done pono for the land. You have to make it right. I work for a State agency, you know that outside a larger picture, I guess. So it's hard, you know, to convey the message to them. But I'm doing my best. I am trying to make it right, you know, to make sure that it does get done. And we're not just sitting around twiddling our thumbs doing nothing; we are looking at ways to try to get this resolved the best way we can. TANIGUCHI: But it takes too long. I mean, I'm not picking on you, it's just that it takes—lot of times, you know the best example I can give—analogy I can give is the Legislature; it takes six to eight years before you get anything. SELF: Microphone. TANIGUCHI: The best analogy's the Legislature. It takes six to eight years to get anything done that should have been done last year. You know, it just takes time and sometimes time works against you. HEIT: That's one of the frustrating things about bureaucracy and I can't make any apologies for it, yeah no, I can't, you know, it is what it is. GADDIS: Since Mr. Inouye arrived, we want to give him a moment to, or an opportunity to come up and say some things if he'd like to. Mr. Inouye? Why don't we start with five or ten and we'll see where we get here. Go ahead. INOUYE: Alright. Yeah, I'm Don Inouye and I appreciate the opportunity to be here and recognize the chairperson today and the Board members. You know, it's been a very hard situation in what we have. I remember when the carrot came out, that was in July 11, year 2011, and that was when Act 219 was passed. It opened the door for Uncle Billy's, Country Club, and Reed's Bay to apply for a lease extension, and there were certain conditions that were put in it and that was that we would be 100 percent hotel. But I had already started converting the building to a 100 percent hotel before that date. And the thing that really set me was because there was four leases that were expiring at the same time, and one of them was Naniloa. And Senator Inouye passed a bill that allowed Naniloa to have ten years' head start on this whole Page 14 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes situation and that property came out for bid and as we know, it's history now, it went through bankruptcy and everything else. But that ten years, I thought "Wow,"you know, nothing was done for Uncle Billy's property or for Country Club, or Reed's Bay. Then when the new bill came out I said, "Well I guess maybe now they're going try to do something for us," and unfortunately when I analyzed it, I knew Uncle Billy was not going to extend their lease. He had reasons and I think was because of his property he had in Kona. And Country Club was ineligible completely. There's no way they could get the lease according to any statute on the books. The only one that could qualify would be Reed's Bay, and there we sit throughout all these years in trying to get our lease. I'm talking to you today for the staff and over our 20 employees that we have and we fill a void on Banyan Drive. Our hotel is, will always cater to the economical traveler. If I can upgrade the building, and the building, initially I submitted an application years back, in fact five years back, and that was for $1,171,000 of improvements and that would've took care of all of the problems that we had since the Marco Polo fire and all of the inspections and the things that I had to go through, we spent almost $200,000 of our money in fixing all of these complaints and things and these go back over 20 years because we're a grandfathered building in making improvements. And so there we still sit, okay. I have an application in to DLNR now, which is over a year old, hasn't been, no notification, no turn down, no nothin' and it is for $2,200,000. Now you know, I'm able to get the financing, it isn't my money, and this financing sometime is going to go way. You know, we're talking about funds and things and improvements and everything, and Reed's Bay has a million dollar view. It used to be, I would call it my ten dollar building when I got involved in it, and I moved into that building in 1996. And I've had experience as a broker, real estate in Kona, also in Honolulu, in timeshare. I used to have a timeshare room. Development, not development but I knew the developer and we were in good shape. I spent two years there in that type of business. I have the background to turn that building over into a first-class hotel with $2,200,000. And the price tag is still gonna go up the longer we wait because it was only $1,171,000 when I was looking at making improvements. And I don't have too much more to say. You know, I could make complaint—you know, I have a filing cabinet with over two hundred items in there concerning Banyan Drive and Legislature and all the bills and everything that has gone on. And all I ask is if I can get a consideration to do the upgrade with DLNR, get a lease, then my staff will be certainly happy. And we are doing over a million dollars in gross revenue two years already; we're into our third year. I expect it to go over $1,700,000. It's not a small business, okay. I'm going to rebuild the restaurant that was there that burnt down years and years ago. And I see Mr. Heit writing down and figuring how much he can make my lease for this next year. Anyway, I don't have much more to say unless you have questions, but it's been a long wait. TANIGUCHI: What's the minimum amount of time your lease has to beI mean, the standard lease is 55 or 65 years. INOUYE: Yeah well, the new bill that came out recently that was passed said that 40 years, is what they're asking. But you know, if I can get a letter of recommendation, my, my point is I'd like a letter of recommendation from this committee, agency, to DLNR stating that yes, they should consider making the lease now this time and frame that we're at in the master plan, if we're not going get nowhere. Or if we are going get where, maybe we're at that point where you can make that decision that I could actually get a lease. And going from there and doing what I have to do. Page 15 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes HEIT: Just to clarify, any long-term disposition for a lease on that property would be through public auction. So you would have to INOUYE: Okay now wait. Let's back up, okay? When the Bill 209 came out, I was eligible for a lease extension. Now when that came out, you all came up with a bunch of studies that allowed my lease to run out. They gave me an extension. Not only that, I went in front of the board when you gave me my month-to-month revocable permit. TANIGUCHI: The Land Board? INOUYE: And I talked to the Board. And we discussed this, because they wanted me to tear the building down if I stayed there longer. The Board said that's, that's stupid. Who wrote this? No one answered. But anyway, it ended up I don't have to tear the building down, I get to stay there month-to-month on the revocable, but I get to own the improvements that are on the property. Now how in the world could I be owning the improvements on the property on a month-to- month, and operating like I do? I said how in the world I'm going to be doing any improvements that I'm doing as I go along because I know there's a lots of things; I've been doing it for years. I've spent over a million dollars in maintenance fees and things that we had to do and we have to upgrade that building. And we're still in making improvements all the time. And that comes off of the revenue that we get, that we earn. And I feel that because we're in the situation we're in, that we should be eligible for a lease extension because the last bill that was passed said that the Land Board can do anything. And if I can get the sympathy of the Land Board maybe I'll get my lease extension. HEIT: Well, I wish the Land Board could do anything. It'd make my job a lot easier. INOUYE: Well, come on. You know we can go back now HEIT: Unfortunately we are constrained to statutory limitations INOUYE: I beg your pardon? HEIT: We are limited by the statutes. This Act, the new Act 149 that was recently passed, is for existing leases. INOUYE: Okay, let's look at this. Limited by the statutes, but the Land Board can do anything, right? HEIT: Within statutes, yes. INOUYE: Well, I mean it said that they could, they said that could HEIT: Within the law; we cannot just do any, the Land Board can't do anything. INOUYE: According to the new bill that went out, it gave the Land Board authorization to go back and make any changes or anything they wanted to do. And now, what I'm referring to is number one, when, when DLNR approved Hilo Hawaiian for their improvement concept for their lease, there was also a letter made approving concept for Reed's Bay, but it wasn't signed. Page 16 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes They were thinking very strongly of doing it but they didn't do it, okay? And unfortunately I have a copy of it, okay. TANIGUCHI: Fortunately maybe. INOUYE: Oh well, depends how you look at it. GADDIS: Thank you, Mr. Inouye. INOUYE: I'm caught in between. Reed's Bay is caught into a situation GADDIS: Go ahead and use your microphone when you're speaking. Thank you. INOUYE: Any questions? TANIGUCHI: That letter he speaks of, does there exist an unsigned letter? Do you know, Gordon? HEIT: Not that I'm aware of, no. TANIGUCHI: Yeah see, that's why it's better you have it. But what does the, what did 149 do? Extend for how long? HEIT: It extended existing leases in the, I believe, primarily in the Kanoelehua, Banyan Drive area an additional 40 years beyond the current lease term. Oh sorry, the original lease term. But again, Mr. Inouye doesn't have a lease with us TANIGUCHI: Yeah, because it ran out. HEIT: it's a month-to-month, yes. But he has a month-to-month permit. TANIGUCHI: But, but that's why I'm curious. HEIT: He did come to the Board prior to the expiration of his lease TANIGUCHI: Yeah. HEIT: requesting extension under Act 219 back in 2014. The Board denied his request but granted him a one year hold over on his lease and upon termination or expiration of the one year hold over, gave him a month-to-month revocable permit. And that's where we are today. TANIGUCHI: How long has that been? HEIT: Excuse me? TANIGUCHI: How long has it, have they been on month-to-month? From 11 HEIT: Since 2016, I believe. Page 17 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes GADDIS: Well Mr. Inouye, I just want to summarize; you had requested, as far as this board, this Banyan Drive Redevelopment Agency, you're requesting that we offer our support by way of a letter to Department of Land and Natural Resources. That's the specific request you're making of this board. Well, we called it today, the meeting, specifically so we could talk with you and have an open discussion, so I just wanna reflect that we received that request and, you know, we'll consider that at a later time. Is there anything else you wanted to say before we conclude, Mr. Inouye? And then I'll offer it one more time to the rest of the board here. INOUYE: I think I covered things, and I did want to be more prepared for this, but it caught me off-guard because I thought the meeting was tomorrow. I went to my softball practice game, did my softball today, and was in the shower when I got the call. So I apologize. GADDIS: No, not a problem. Does anyone else wanna make any comments before we move on? We're good? Okay. I think we'll conclude Business of the Agency then and go ahead and move onto Administrative Matters. Thank you again, Mr. Inouye, for coming down. ADMINISTRATIVE MATTERS The Agency took this item up at 3:11 p.m. 1. Approval of minutes from the August 29, 2018, Banyan Drive Hawai`i Redevelopment Agency meeting. GADDIS: The only thing we have on the agenda for Administrative Matters is the approval of minutes from our August 29, 2018, meeting. Anyone want to make a motion to approve the minutes on file? TANIGUCHI: So move. GADDIS: Okay, we have a motion from Mr. Taniguchi. Anyone want to second? CANNON-EGER: Second. GADDIS: Second from Mrs. Cannon. Let's call for a vote to approve the minutes from August 29, 2018. All in favor say aye. ALL: Aye. GADDIS: All opposed? Alright, motion is carried. ANNOUNCEMENTS The Agency took this item up at 3:12 p.m. 1. Next meeting date. GADDIS: Our next meeting date, do we have one at this point? Thirty-first of October. Okay. Same time, 2:00 p.m., and location? Back at Aupuni Center? Okay, very good. Page 18 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes At this time Mr. Taniguchi informed the Agency that he will not be able to attend the meeting in October. Meeting adjourned at 3:13 p.m. Respectfully submitted, Kim Tanaka, Secretary ATTEST : Nathan Gaddis, Chairperson Pro Tempore Banyan Drive Hawaii Redevelopment Agency Page 19 of 19 Banyan Drive Hawaii Redevelopment Agency September 24,2018 Minutes