The attorney appealing the state’s taking ownership of several leased Koke‘e cabins and putting them up for auction in December is questioning why the auction is necessary, as the state already owns 14 of them.
Attorney Dan Hempey, who filed Friday an appeal of a final judgment entered in August 2007 that ruled in favor of the state, said the argument that the auction would alleviate pent-up demand for leaseholds in Koke‘e doesn’t necessitate taking cabins from their Kaua‘i owners and auctioning them to the highest bidder. He also argued the state’s taking of the cabins without paying his clients is a violation of their Fifth Amendment rights.
“The state already owns several of the cabins that could be quickly auctioned without displacing an entire historic community,” he said, adding that several of the state-owned cabins have been left to fall into disrepair while the properties being surrendered to the state have been built, improved upon and maintained at the expense of his clients.
But Deputy Attorney General Bill Wynhoff said the fact that the state has ownership of the 14 cabins is irrelevant to its right to take the remaining lease-held cabins.
“The fact that there are other cabins or lots that are also owned by the state isn’t the point,” Wynhoff said. “From a legal point of view, the fact is we undisputedly own the 14 cabins and the cabins that people used to lease. From a policy point of view, the (Board of Land and Natural Resources) could have taken the impact of that into account, but it makes no legal difference at all.”
The Board of Land and Natural Resources at one point voted to hold a new auction and to pay the former lessees who were not successful bidders based on the appraised value of their cabins, Wynhoff said, but it then decided otherwise.
On Feb. 10, 2006, the board reversed its September 2005 decision to allow direct negotiations with cabin leaseholders, opting to instead auction new land leases to the highest bidder.
Wynhoff said the board’s decision was based in part on the advice of the office of Attorney General but said that advice is not public, as it is covered by attorney-client privilege.
The House of Representatives passed a resolution in 2006 requesting the BLNR provide first right of refusal to existing lessees who wish to renew their leases, the majority of whom are local, Kaua‘i residents who desire to retain these leases for the enjoyment of their families, friends, and members of the community.
The resolution also requested the board adopt as a primary goal the reduction and eventual elimination of the recreation residence lots at Koke‘e through attrition or other appropriate means, including not renewing any lease where the structures have fallen into disrepair or where the value of the improvements do not meet specified criteria or standards as determined by the board or through administrative rule.
The Legislature based the request, according to HR 187, on the findings that “it would be totally unfair for a prior lessee to bid on the land with the improvements which the prior lessee had paid for in its entirety.”
Hempey questioned “whether politics and money, rather than fairness and protection of Koke‘e, were really influencing (Gov. Linda) Lingle’s administration’s decision to take the cabins.”
“…And if the appeals courts ultimately rule that the state does have to pay millions of dollars in just compensation for the cabins, it will be another administration that has to foot the bill,” he said.
But, Wynhoff said, “that was the deal.”
“That ownership doesn’t have a fixed meaning. You can own all of something, fee simple, or part of it for a certain period of time. Whatever the deal is what the deal is. They owned it for 20 years and therefore don’t have any property right because that was the only ownership they had. At the end of the term, they don’t own them. The leaseholders had ownership, for 20 years.”
Hempey, who has stated since the onset of the lawsuit that the leaseholders are entitled to being compensated for the cabins, maintains his clients built, bought and/or inherited them. He reads the lease differently.
According to a specific portion of the 20-year lease, Hempey has said, leaseholders do have to surrender improvements to the state, but the lease defines improvements as fences, stockwaters and everything else except the cabins.
And, Hempey states in his brief, the Fifth Amendment provides that private property cannot be taken for public use without just compensation, and wrote that the state should not be able to incrementally take property over a period of time outright.
Though DLNR Director Laura Thielen said in an earlier interview the state is moving forward with the auction in order to try to open up the possibility of cabin ownership for more residents, Hempey said, that’s another issue that can be addressed without putting the cabins up for auction.
“Hawai‘i citizens have had the opportunity to get into these leases all along,” he said. “These leases and cabins have been bought and sold in the free market for at least 40 years.”
Theilen had said some 60 residents have shown interest in bidding on the cabins, alluding to a silent majority of Kaua‘i residents.
A survey conducted by QMARK, a polling company hired by Koke‘e plaintiffs, found 24 percent of participants agreed with the state’s position of putting the cabin up to auction, while 62 percent agreed with Koke‘e cabin leaseholders.
In 2007, Sen. Gary Hooser, D-Kaua‘i, Ni‘ihau, introduced SB720 regarding Koke‘e, which was referred to two committees but has yet to be heard. The bill would establish a requirement that the DLNR extend its Koke‘e recreation-residence use leases for five years and develop a community-based process to create a long-term plan and policy on its residential lease issue.
• Amanda C. Gregg, assistant editor/staff writer, can be reached at 245-3681 (ext. 252) or agregg@kauaipubco.com.
