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The OHA Settlement

The OHA Settlement. Briefing to the State Legislature November 15, 2011 (Updated and revised – December 30, 2011). Constitutional History.

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The OHA Settlement

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  1. The OHA Settlement Briefing to the State Legislature November 15, 2011 (Updated and revised – December 30, 2011)

  2. Constitutional History • Article XII, section 4 of the State Constitution, provides that certain lands ceded by the United States to the State of Hawaii as part of the Admission Act (section 5(f)), are held by the State as a public trust for native Hawaiians and the general public. • These are known as the ceded lands. • Under article XII, section 6 of the State Constitution, a portion of the income and proceeds derived from the ceded lands are to be used by OHA to better the conditions of native Hawaiians.

  3. OHA’s Claims • Since 1978, OHA has made certain claims for payments for ceded lands income and proceeds, and has filed several lawsuits to assert these claims. All lawsuits have been dismissed on grounds that “how much” and “which ceded lands” are political questions for the Legislature to resolve. • In 2008, a settlement agreement was reached between the Lingle Administration and OHA contingent upon passage of implementing legislation. The implementing legislation did not pass. • OHA’s claims that remain unresolved concern income from State hospitals, State rental and affordable housing programs, and DOT Airports’ prior Duty Free leases.

  4. Legislative Approval • It is up to the Legislature to determine what constitutes the appropriate portion of the income and proceeds derived from ceded lands that is to be given to OHA to administer. • Over the years, the Legislature has specified at different times and in different Acts, what portion of which funds, and from which lands, OHA is to receive under the State Constitution, and various payments have been made accordingly. • OHA’s current annual share of ceded lands receipts in the amount of $15.1 Million is specified in Act 178, Session Laws 2006.

  5. Agreement in Principle • The State and OHA have reached an agreement in principle, subject to Legislative approval. • This will finally and completely resolve any and all claims relating to OHA’s share of ceded land receipts under article XII, sections 4 and 6 of the Constitution, from November 7, 1978 to July 1, 2012. • The State and OHA agree that a $200 million approximate settlement amount represents a reasonable compromise of the disputed claims. • The State is conveying lands at Kaka‘ako Makai to settle these claims. There is no cash being paid.

  6. The Kaka‘ako Makai Lands

  7. Terms of the Agreement • The lands to be conveyed are all in Kaka‘ako Makai. • The value of approximately $200 Million for the lands has been confirmed for the State by one of Hawaii’s top appraisers, and OHA’s appraiser preliminarily agrees that this is reasonable. • The lands are contiguous and adjacent parcels near Kaka‘ako Waterfront Park, including Fisherman’s Wharf.

  8. Terms of the Agreement • The lands are and will remain under the jurisdiction of HCDA. • The lands will continue to be subject to HCDA’s zoning and other land use conditions.

  9. Parcel A: 1011 Ala Moana Boulevard and Kewalo Basin Total Land Value: $34,980,000 TMK: 2-1-58-95; 2-1-58-125 Land Area: 221,363 Zoning: WC Density: 1.50 Height Limit: 65

  10. Parcel B: 123 Ahui Street and 113 Ahui Street Total Land Value: $17,750,000 TMK: 2-1-58-2; 2-1-58-35 Land Area: 137,213 Zoning: WC Density: 1.50 Height Limit: 65

  11. Parcel C: 59 Ahui Street /Ahui Street Total Land Value: $13,820,000 TMK: 1-2-58-124; 1-2-58-126 Land Area: 88, 916 Zoning: WC Density: 1.50 Height Limit: 65

  12. Parcel D: 45 Ahui Street and 53 Ahui Street Total Land Value: $7,400,000 TMK: 2-1-58-48; 2-1-60-13 Land Area: 40,841 Zoning: WC Density: 1.50 Height Limit: 65

  13. Parcel E: 919 Ala Moana Boulevard (AFES) Total Land Value: $17,160,000 TMK: 2-1-58-6 Land Area: 95,832 Zoning: MUZ Density: 2.50 Height Limit: 400 (assumes height limit change to 400’)

  14. Parcel F: 160 Ahui Street Total Land Value: $30,660,000 TMK: 2-1-60-5 Land Area: 200,942 Zoning: MUZ Density: 2.00 Height Limit: 200

  15. Parcel G: 160 Koula Street Total Land Value: $18,470,000 TMK: 2-1-60-6 Land Area: 110,904 Zoning: MUZ Density: 2.00 Height Limit: 200

  16. Parcel I: Ala Moana Boulevard, Ilalo Street, and Forrest Avenue Total Land Value: $25,540,000 TMK: 2-1-15-53 Land Area: 145,316 Zoning: MUZ Density: 3.50 Height Limit: 400 (assumes height limit change to 400’)

  17. Parcel K: End of Ahui Street and Point Panic Total Land Value: $11,420,000 TMK: 2-1-60-1 Land Area: 69,000 Zoning: WC Density: 1.50 Height Limit: 65

  18. Parcel L: End of Keawe Street Total Land Value: $21,930,000 TMK: 2-1-15-51 Land Area: 227,645 Zoning: MUZ Density: 0.60 Height Limit: 45

  19. Total Land Value • Parcel A: $34,980,000 ($158/sq. ft.) • Parcel B: $17,750,000 ($129.35/sq. ft.) • Parcel C: $13,820,000 ($155.30/sq. ft.) • Parcel D: $7,400,000 ($181.20/sq. ft.) • Parcel E: $17,160,000 ($179.10/sq. ft.) • Parcel F: $30,660,000 ($152.60/sq. ft.) • Parcel G: $18,470,000 ($166.55/sq. ft.) • Parcel I: $25,540,000 ($175.75/sq. ft.) • Parcel K: $11,420,000 ($165.55/sq. ft.) • Parcel L: $21,930,000 ($96.35/sq. ft.) _____________________________________ • TOTAL LAND VALUE: $199,130,000

  20. Terms of the Agreement • The lands will be conveyed “as is”, “where is”. OHA will be allowed to do due diligence investigations on the lands, and can walk away prior to Legislative approval. • Unlike prior settlement attempts, the lands involved here are highly valuable, commercially zoned, and concentrated in one discrete geographic area near downtown Honolulu. • The lands used in the prior settlement attempt were in three non-contiguous areas in Hilo, Kalaeloa, and Kaka‘ako Makai.

  21. Terms of the Agreement • The State is not giving up any mineral, surface or ground water rights to this land. • All current leases are still valid and will pass to OHA. Once those leases expire, OHA will decide how to proceed, consistent with HCDA’s master plans and rules. • The State will have access rights and easements as reasonably necessary for the benefit and use of its adjoining properties.

  22. Release • In exchange for the land, OHA will release, waive and discharge any and all claims that it, and any other person or entity, might make to ceded lands receipts under article XII, sections 4 and 6 of the Constitution, or any related statute or law, for the period of 1978 to July 1, 2012.

  23. Settlement Limits • The settlement only applies to claims for ceded lands receipts that the State collected between 1978 and 2012. • The settlement has no effect on claims to ceded lands receipts for future periods, which is currently governed by Act 178 (2006). • The settlement has no effect on DHHL “available lands”. • The settlement has no effect on other claims that Native Hawaiians could assert, e.g., overthrow or sovereignty.

  24. Next Steps • Preparation and approval of settlement documents • OHA due diligence investigations, community meetings, and possible opt out • Attorney General meeting with legislators • Legislative approval

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