Some families who have gone years without performing cultural activities in lieu of monthly rent at a state-owned Kahana Valley “living park” also are way behind on loan payments to the state.

Eight of 26 families who each received $50,000 low-interest loans — mostly in the 1990s — to build homes in Ahupua‘a ‘O Kahana State Park are in arrears and have not made payments for two to six years, according to data from the Hawaii Housing Finance and Development Corp., which oversees the loan program. That’s a 30% delinquency rate.

Despite the severe arrears, the state has not taken action to evict or foreclose on the families, raising additional concerns about lax enforcement in the residential portion of the 5,000-acre Windward Oahu park.

“Everybody is chicken,” said Punaluu resident Cathleen Mattoon, who was an original member of a Kahana advisory board that was formed in the mid-1980s. “They’re afraid of enforcing the law.”

She said the state has fallen short of providing sufficient oversight for the residential community, which sits on about 10 acres at the front end of the valley. “It has just been poorly, poorly, poorly managed,” Mattoon said.

Acquired in the late 1960s, the Kahana parcel is the only intact ahupuaa — mountain-to-sea stretch of land — owned by the state on Oahu. When the state became owner, it planned to relocate Kahana residents outside the valley, but that proposal sparked protests and eventually was dropped.

The state instead came up with the living park concept and in 1993 the Department of Land and Natural Resources, the landowner, awarded 65-year residential leases to more than 30 families. In lieu of rent, they were required to devote 25 hours monthly to interpretive Native Hawaiian cultural programs.

But as some of the original lessees died and relatives took over the leases, fewer participated in the cultural practices, and DLNR has not enforced the requirement. Today more than two-thirds of the families are delinquent, owing hundreds and even thousands of hours, state records show.

The Kahana loan program, in which the state granted $50,000, 30-year loans at 3% interest, also has suffered from lax collection enforcement.

Two loans have been in arrears since 2013, one since 2014, two since 2015 and three since 2016, according to the housing finance agency. The outstanding amount in each case ranges from about $6,000 to $20,000.

The state has not started foreclosure proceedings against any of those lessees.

Kent Miyasaki, an agency spokesman, said in an email that foreclosure discussions were held with DLNR and the attorney general’s office in 2013 and 2018.

Questions were raised about lessees who died, successor lessees and eligibility restrictions related to assigning new leases. The agencies also discussed liability problems pertaining to three Kahana homes that never were completed, according to Miyasaki.

During the 2018 discussion, he added, a decision was made to proceed with foreclosures on the severely delinquent loans, but that plan later was put on hold while state legislators considered Senate Bill 1387, which was introduced this session.

The measure, which ultimately died, would have authorized low-interest home-­repair or construction loans for Kahana residents as long as the borrowers were current with their interpretive hours and financing payments.

The housing finance agency opposed SB 1387, citing in its written testimony the record of the prior loan program.

Only two of the 26 state loans have been fully repaid, while one was foreclosed on, according to the agency. Bank of Hawaii is servicing 14 that are current. When a loan becomes delinquent, it is transferred to HHFDC, which currently is servicing 9 loans, all but one in arrears.

Concept not working

The delinquent loans, the lack of participation in the interpretive programs and the visual blight — derelict cars, unkempt yards, dilapidated structures — that taints some portions of the residential community are among the problems people cite to conclude that the living park concept is not working. A consulting company for the state, Townscape Inc., also came to that conclusion last year.

“DLNR needs to get control of that place,” said Sen. Gil Riviere, whose district includes Kahana. “They can no longer be absentee owners.”

Curt Cottrell, parks administrator for the department, agreed that the living park concept is not working and that the status quo in Kahana is unacceptable. He said his agency is good at managing parks but doesn’t have the training or expertise to manage a residential community.

Cottrell believes DLNR, valley residents, the attorney general’s office, legislators and the broader community need to discuss the future of Kahana, including whether the living park concept should be retained and what happens after 2058 when the leases expire.

“It’s just me and the residents (talking) now, and we’re just going around and around in circles,” he told the Honolulu Star-Advertiser.

Cottrell said the residents, through their community association, would be in a better position than DLNR to police the look of the neighborhood, developing their own standards for such things as yard upkeep and storing of derelict vehicles.

“Do they really want us meddling in their lives to that degree and coming up with some quality standards when in fact a community association — that’s more their kuleana,” Cottrell asked.

Eviction dilemma

Beyond the aesthetics, there are some especially thorny problems to resolve.

One is what to do about the Kahana families no longer complying with the lease terms. A 1986 attorney general’s opinion said residents were only allowed to live in the park if they participated in the interpretive cultural programs.

Townscape, hired by DLNR to examine possible Kahana strategies, proposed two alternatives to that dilemma:

>> Evict families violating the leases and bring in new ones with ancestral ties to Kahana who will commit to fulfilling the cultural hours requirement.

>> End the living park concept but allow the families to remain there by paying a nominal rent of no more than $400 yearly.

Either option, however, doesn’t address the longer-­term question: What happens in 2058?

The leases specify that upon expiration the state assumes ownership of the homes and any other improvements.

But state efforts to relocate or evict residents in the past have triggered protests, and DLNR has been reluctant since then to pursue evictions.

When the 65-year leases were awarded in 1993, little thought was given to what would happen at the end of the leases, according to Cottrell and others. Back then, state officials were focused on resolving the immediate problem of what to do about families who had lived in Kahana for generations, and they decided the leasing option in a living park was the answer.

“They kicked the can down the road, thinking we solved the problem while we’re around,” Cottrell said.

Some lessees, such as Jim Anthony, are hoping for an opportunity to purchase the land on which their homes sit. Otherwise, Anthony said, their home equity erodes with each passing day and will dwindle to zero when the leases expire.

“We are sitting on economic death row,” he said.

A bill that would have allowed Kahana lessees to purchase their lots also died in this year’s legislative session.

Another dicey issue involves six families who have lots in the valley near the coastline — a flood plain that DLNR intended to keep clear of residents.

The agency attempted to evict the families a decade ago because they had no leases but dropped that plan after protests erupted and legislators intervened. In 2013 the DLNR board authorized leases for the six, but none have been awarded because of complications over sewage disposal. The lots have unauthorized cesspools.

DLNR had proposed paying for the installation of sewage vaults on each lot, with the lessees responsible for maintaining the tanks.

The state Department of Health, however, told the Star-Advertiser that vaults would be OK only if DLNR owns and maintains them.

“DOH is currently working with DLNR to come up with a viable solution to prevent eviction of these six families,” said DOH spokeswoman Janice Okubo in an email.

Other Kahana families are responsible for their own disposal systems.

The difficulty in managing the valley comes partly from its uniqueness.

Kahana is believed to be the only state park in the country in which residents leasing land are required to participate in interpretive programs in lieu of rent.

When the National Association of State Park Directors recently polled its members to check if any had a park similar to Kahana, several responded.

But residents in those states leasing park lands are simply tenants or homeowners, according to the responding directors. The residents do not have to participate in park activities.