Hawaii lawmakers want to buy a stretch of scenic real estate from Maui Land & Pineapple Co. to protect a coastal area from possible development and to shore up pension obligations for the financially struggling company.
A bill at the Legislature that proposes purchasing 270 acres above Honolua Bay in West Maui passed the full House on a unanimous vote Thursday and is now on its way to the Senate for consideration.
The measure, House Bill 1424, represents the second initiative by lawmakers this year to buy land from a resort owner and developer.
In recent weeks three Senate committees passed a bill that calls for appropriating up to $50 million to buy undeveloped portions of Turtle Bay Resort on Oahu to block a $1.2 billion development plan that would add 1,375 hotel and condominium units largely concentrated along the mostly undeveloped North Shore coastline.
The Turtle Bay bill, Senate Bill 894, has drawn a contentious mix of public support and opposition, and only squeaked by the Ways and Means Committee on a 7-5 vote Wednesday where five yes votes were made with reservations.
The Maui land bill calls for appropriating general obligation bonds for the state Department of Land and Natural Resources to acquire the property above Honolua Bay at Lipoa Point.
However, no price or appropriation figure has been included in the bill.
Environmental groups and other proponents of the purchase say Maui Land won’t sell the parcel for less than $20 million and that the price could be as high as $30 million.
The nonprofit preservation group Hawaiian Islands Land Trust is going to appraise the property, which is zoned for agriculture and is appraised by Maui County for property tax purposes at $2.6 million.
The bill has garnered an outpouring of support — about 200 pages of testimony all in favor of acquiring the land.
Maui Land testified that it is willing to sell, and encouraged appropriating funds for the purchase. The company did not respond to a request for comment on a sale price.
The bill states that Maui Land has committed to pledging any revenue from the sale completely against its pension fund.
If the state buys the property, it would protect the area from potential development and also shore up shaky finances for Maui Land.
Honolua Bay is a protected marine preserve known especially for fantastic surfing, snorkeling and diving. But the area has no amenities for visitors, and the reef has been degraded by sediment.
Maui Land provides public access to the bay but hasn’t maintained the area well in the face of high visitor traffic, according to written testimony from the executive board of the Surfrider Foundation’s Maui chapter.
The foundation said grass-roots organizations shoulder most stewardship responsibilities but are limited as to what they can do.
“Although we have made great strides in enhancing the overall environmental and natural quality of the Honolua Bay area, the fact that Lipoa Point remains in the possession of (Maui Land) severely undermines efforts of all parties to create and implement a comprehensive, long-term management plan,” the organization said in its testimony.
Maui Land has made attempts to improve and preserve the area in recent years, but those efforts have faltered.
In 2007 the company floated a proposal to add recreational amenities at the bay such as parking, restrooms, picnic areas, a canoe hale and an educational facility dedicated to perpetuating Hawaiian language and traditions.
But to finance those improvements, Maui Land said it needed revenue and sought to earn it by developing 40 home sites mauka of Honoapiilani Highway and an 18-hole golf course makai of the road.
The plan was roundly opposed by community groups, and the company abandoned the idea.
Then in 2008, Maui Land sought county approvals for more urban and resort development in nearby Kapalua as a trade-off for protecting Lipoa Point and conveying the parcel to the county. This proposal gained support from county officials and preservation groups, but Maui Land imposed what the county viewed as a hasty deadline and no deal got done.
In more recent years, Maui Land has sunk into financial turmoil largely because of soured resort development in Kapalua and has resorted to selling land, including two golf courses, to stay solvent.
The land sales helped the company generate a profit of $30 million over 2010 and 2011 after $200 million in losses over the two preceeding years. But last year Maui Land fell back into the red with a $4.6 million loss.
The company, which owns 23,000 acres of mostly agricultural land, has pledged substantially all of its real estate as colleteral for debt obligations, including its pension fund.
Meanwhile, preservation groups kept up efforts on how to improve and preserve Lipoa Point and Honolua Bay. One of those efforts was reflected in the production of a county plan defining land development and preservation boundaries.
A draft of that plan called for putting Lipoa Point into a preservation district, but Maui Land argued that such a change would devalue its property and thus jeopardize an asset backing its pension obligation, according to testimony from Maui County Council Chairwoman Gladys Baisa. As a result, all or nearly all of the land was left out of the county’s new preservation district.
More than 1,600 Maui Land retirees, most former pineapple workers, could have their pensions threatened if the property is devalued, Baisa said. The company, which shut down pineapple operations in 2009, had only 17 employees at the end of last year.
In addition to the pension concerns, those in favor of the state buying the land say it would prevent development.
Although the Lipoa Point parcel is in the state’s agriculture and conservation districts, some preservationists fear that up to 20 homes could be developed on the site under lax state and county rules governing development on agriculture land.
That perceived threat of development has led to much passion and emphasis being directed to support a state purchase.
David Kapaku, who testified that his family has lived in the area for 900 years, fears development will ruin one of West Maui’s last open spaces. “Develop the area and you’ll have another Cancun, Bermuda or South Florida,” he said in written testimony. “Be smart. Support HB 1424 to keeping Maui … Maui.”
Sara Smith, another testifier, wrote, “The very real threat of development is painfully evident all along the West Maui coastline. At this critical juncture, please exhaust the full capabilities of the Hawaii State legislature to see this land into conservation.”
John Carty, vice president of the Save Honolua Coalition, said he doesn’t expect the state to put up all the money to buy Lipoa Point. He said the coalition anticipates raising several million dollars, while Maui County has pledged $1 million and federal and private contributions are possible.
“Even though it looks like a lot of money, if you break it up it’s very, very doable,” he said. “The community has been so passionately fighting to preserve this area.”
