Senate President Ron Kouchi has had long-standing and substantial business ties with one of the owners of thousands of acres of South Kona conservation and agricultural land that lawmakers now want the state to purchase and preserve, the Honolulu Star-Advertiser has learned.

Hawaii developers Kevin M. Showe and Jeffrey R. Stone each have an ownership interest in the isolated South Kona lands in an area called Kapua, and Kouchi has both invested with Showe and worked for years for one of Showe’s companies as a community relations representative.

Kouchi (D, Kauai-Niihau) said he has not been directly involved in the effort this year to push a bill through the Legislature to buy the Kapua makai lands or exchange state land for the Kapua property, but said he did have a role in meetings related to the deal.

Kouchi said he set up a meeting between the late Sen. Gil Kahele and Showe shortly after Kahele (D, Hilo) took office in 2011 to allow Kahele to make a pitch for the deal, and attended a meeting last year between Kahele and state Board of Land and Natural Resources Chairwoman Suzanne Case to discuss the Kapua lands.

When asked if it was improper for Kouchi to have any role in the Kapua issue given his business ties to Showe, Kouchi replied: “To my knowledge I wasn’t an employee of Showe’s at the time that I was assisting Sen. Kahele last year, and so I certainly had not viewed it that way.”

Kouchi acknowledged he was both a senator and a Showe employee in 2011 when he arranged the meeting between Showe and Kahele. Kahele had been advocating for a state purchase of the Kapua lands since at least 2003, and immediately began pursuing a state acquisition after he was appointed to the Senate in 2011, Kouchi said.

Kouchi, who became state Senate president last year, said he has already cashed out an investment he had in one of Showe’s companies that earned him more than $100,000. State and county records show he was also employed as a community relations representative for Showe for at least seven years, but Kouchi said he discontinued that work in 2014.

In any event it is unlikely Kouchi’s involvement would run afoul of the State Code of Ethics because state lawmakers are not subject to the conflict-of-interest provisions that govern other state employees.

Lawmakers who are executing their official duties are also exempt from the provisions of the state’s “Fair Treatment” law, which bars state employees from using their positions to grant anyone an unfair advantage.

Kouchi emphasized that Showe was “not the decision-maker in the transaction.” Kouchi said his understanding is that Stone is the majority owner of the Kapua property, and would have final say over any proposed state purchase or land exchange for the Kapua lands.

Stone’s attorney is former U.S. Rep. Colleen Hanabusa, and Kouchi said he was instructed that “any contact as far as discussions for potential acquisition should be directed through Colleen Hanabusa.”

“So, any contact that I’ve had regarding the Kapua transaction has been with Colleen,” he said.

He added that “the only thing that I’ve talked to Colleen about is that they were open to listening, and they would be open to considering a land exchange, but we would have to present information to them, and Colleen understood the passion that Gil Kahele had for Kapua.”

According to state records, Showe Family Hawaii LLC owns a half-interest in more than 4,233 acres at Kapua that lawmakers identified in Senate Bill 3071 as property the state should acquire. Showe Family Hawaii is managed by National Housing Corporation of Hawaii Inc., and Kevin Showe is listed on state records as vice president and treasurer of National Housing.

Another company called South Kona LLC owns more than 3,546 acres that are also included in the proposed state purchase. South Kona LLC has as its member and manager Pacific Northwest Ltd., and Stone is president, treasurer and director of Pacific Northwest, according to state records.

A state purchase of the makai Kapua lands likely would be pricey. Case, the Land Board chairwoman, told lawmakers this month that according to a 2007 appraisal by the state Department of Land and Natural Resources, the Kapua lands covered in SB 3071 are worth $13.9 million. Case told lawmakers her department is updating that appraisal now.

Showe partnered with Jeff Stone years ago to develop Ko Olina, and Showe and Stone apparently also had planned to develop Kapua. Stone’s website for his company, The Resort Group, lists “Lands at Kapua” as one of its projects, and Stone and Showe were both officers in a company called Lands of Kapua Corp. that was created in 1997. The company was later dissolved.

An earlier draft of SB 3071 said the Kapua lands are “slated for resort development by its owner, The Resort Group,” but that language was deleted from later versions of the bill. Longtime South Kona residents who are familiar with the area said they doubt the property could ever be profitably developed as a resort, mostly because there is no water source nearby.

Showe and Stone did not respond to requests for comment.

Hanabusa said she represents South Kona LLC in the transaction, and said Stone is interested in preserving the land “so it’s just a matter now of finding the mechanism by which it can be done.” She is concerned that the state is not in a position to buy the parcel “because it is huge,” and said a land exchange may be the most practical solution.

“No question that Lands of Kapua is something that should be preserved,” she said. “No question; everyone knows it is a piece of land that is so culturally significant, probably one of the last big parcels available, and it was Gil’s dream to have that land … like in a wilderness preserve.”

Hanabusa said there have been no “major negotiations” as yet because she is waiting to see whether SB 3071 will be approved.

The bill that proposes the Kapua land purchase has a sad and dramatic history.

Kahele’s family comes from the Kapua area, and he advocated for a state purchase of the land for years. He signed SB 3071 proposing that the state buy and preserve the Kapua land in January while he was hospitalized after suffering a heart attack. Introducing that measure became one of his last official acts as senator; Kahele died the following day.

Kahele’s son, Kai, was appointed by Gov. David Ige to fill the vacant Hilo Senate seat after the elder Kahele’s death. Kai Kahele has pressed for passage of the bill to pursue a purchase or land exchange to acquire the Kapua lands. The measure moved quickly through the Senate because “there was an urgency by the members to honor Sen. Kahele’s legacy,” Kouchi said.

State Rep. Richard Creagan (D, Naalehu-Captain Cook-Keauhou) told his colleagues in floor debate this month that authorizing the state purchase of the lands should be approved, and not just because it was one of Kahele’s “dying wishes.”

Creagan said the property has a variety of archaeological sites, including a well-preserved holua slide, or ancient course used for sledding.

The Senate version of SB 3071 authorizes DLNR to negotiate to buy the Kapua lands, or swap other state lands for the property. It also includes a $500,000 appropriation for a “due diligence” study of the property that among other things will determine whether it is likely there is unexploded ordnance on the land.

Case said she supports the purchase, and noted in testimony to lawmakers that two of the four parcels included in the bill are next to the Manuka Natural Area Reserve and the South Kona Wilderness Area that lawmakers created in 2011. She said the department has been discussing the proposed purchase or land swap with the Trust for Public Land, which also supports the acquisition.

The property has significant historical and cultural resources including a coastal trail and village sites in addition to the holua slide, and also features “superb” biological resources in a dryland forest with rare native plants, Case said in written comments to lawmakers. The remote site has extensive, uninterrupted coastline, and coastal waters are in pristine condition, she added.

Case also noted the land is degrading because of goats and other invasive species. If the deal closes, she asked that DLNR be given an additional $1.6 million immediately to pay for fencing, access improvements and enforcement, and $500,000 annually in the years ahead to properly manage the lands.

Kouchi said he has never been to the property, but he expects Case will drive a hard bargain. “What she believes the property is worth and what the owners think it is worth is two different things,” Kouchi said. He noted the state cannot pay more than the appraised value of the land.

The measure has now been referred to conference committee, where lawmakers will try to iron out differences between the House and Senate versions of SB 3071. Kouchi said he expects House Speaker Joe Souki will use the bill as leverage in negotiations with the Senate because he said he believes senators are “emotionally attached” to the measure in the wake of Kahele’s death.

Given those realities of the end-of-session negotiations between the House and Senate, “even if I had tried to use some undue influence, I would have failed miserably,” Kouchi said. “I was smarter than to ask the speaker anything about it because I know that he was already identifying us as weak on that.”

Kouchi served for 22 years on the Kauai County Council before he became a senator, and has done business with Showe for years.

Kouchi’s annual disclosure form filed with the Hawaii State Ethics Commission shows he was a shareholder in a real estate company called Leahi LLC from 2011 to 2015, and Kouchi’s 2016 ethics filing values that investment at between $100,000 and $150,000.

Leahi LLC lists Showe Land & Marine LLC and Kauai Development Manager LLC as its members, and Kevin Showe is listed as member and manager for both of those companies.

Leahi was involved with a group that was formed to purchase the site of the former Kyo-ya Restaurant at 2057 Kalakaua Ave. in Waikiki, which was sold to Japanese investors last year for $30.5 million. Kouchi said the $100,000 to $150,000 in value listed on his ethics filing this year represented his share of the proceeds from that sale.

Showe, who was a partner in the Kauai Lagoons development on Kauai, has also employed Kouchi as a community relations representative, according to state and county records.

Kouchi was described as a representative of Kauai Lagoons in news accounts in 2009, and he noted in his state ethics filings that he served as director of community relations for Showe Land & Marine LLC from 2009 to 2014.

His state filing indicates he was not paid anything for that work in 2014, but his previous years’ filings show he was paid between $25,000 and $50,000 a year from 2011 to 2013 for his community relations work for the company.

He was paid between $50,000 and $100,000 for his community relations work for Showe in 2009 and 2010, according to state records, and in 2009 represented Showe in matters before the state Department of Health and Department of Transportation, according to his state filing.

Kouchi’s Kauai county ethics filings show he was paid $90,000 a year for his work for Showe or his companies from 2006 to 2008.