Another pending land swap involving the state Department of Hawaiian Home Lands is raising questions about whether the agency’s Native Hawaiian beneficiaries are getting the short end of the deal.

This property exchange isn’t linked to the Thirty Meter Telescope but an equally controversial construction project: the city’s multibillion-dollar rail line.

The pending deal involves a nearly 56-acre Waipahu parcel that DHHL intends to give to the city in exchange for more than 50 acres the city owns in Kapolei.

The city, which has a licensing agreement to use the Waipahu parcel, already has constructed a rail maintenance and storage facility on the DHHL land.

But some beneficiaries say the planned trade short-changes the land trust that DHHL is supposed to manage for the benefit of those at least 50% Native Hawaiian.

The DHHL property, zoned residential, has an assessed value of more than $21 million, while the city parcel, zoned agricultural, is valued at less than $5 million, according to city property tax data.

“When you look at the numbers, it just doesn’t make sense,” said Blossom Feiteira, a beneficiary and Maui president of the Association of Hawaiians for Homestead Lands. “Why are they giving our trust lands away?”

The planned deal dates to 2006 when the Hawaiian Homes Commission, which oversees DHHL, gave its chairman permission to pursue a land exchange involving the two parcels.

The city wanted what was referred to as the Ewa Drum site for the rail project, and DHHL sought what was called the Varona Village site, adjacent to the department’s East Kapolei master planned community, for future development.

A memorandum of agreement was approved by the commission several years later for an exchange or sale, and the two sides eventually settled on an exchange. But they have yet to complete the transaction, partly because the appraisals haven’t been done and Department of the Interior (DOI) approval of the exchange is needed.

The unfinished deal brings to mind another DHHL land swap that has languished for years and made headlines recently because of the protest over the $1.4 billion telescope project on Hawaii island.

Agreed to a swap

The state in 1995 agreed to a swap to compensate DHHL for trust land that the state used without the department’s permission about 50 years ago. The land was used to construct Mauna Kea Access Road, which leads to the summit where a group of telescopes are located and where the TMT is slated to be built.

TMT opponents have blocked the road since mid-July, preventing construction vehicles and crews from getting to the site. The protesters consider the mountain sacred and argue that construction of the telescope would further desecrate Mauna Kea.

Despite the 1995 agreement, the state has yet to execute the land swap for the Mauna Kea property, leaving DHHL uncompensated for now. The Ige administration says completion of the deal is a priority.

Asked about the fairness of the Ewa Drum deal given the disparity in the assessed values, DHHL spokesman Cedric Duarte noted that those values are based on different uses — residential for the department parcel and agricultural for the city one.

“The new appraisal report will determine the fair value on these properties for the land exchange,” Duarte wrote in an email response to Honolulu Star-Advertiser questions. “DOI requires equal value exchange, not just in terms of dollars.”

Asked why the exchange has taken so long to complete, Duarte said that was mainly because of the different use categories of the two parcels.

“It has taken the city and DHHL time to agree on appropriate instructions for the appraisal because it’s not just an ordinary appraisal,” he wrote. “It is more intensive because federal guidelines also have to be considered, and it’s subject to DOI review/approval.”

Interior has oversight of the trust because it was created by the federal government for the purpose of getting Native Hawaiian beneficiaries onto the land, mainly through homestead leases.

As a condition of statehood, the state agreed to manage the trust. About 28,000 beneficiaries are on waiting lists for homesteads, and some have died after years of waiting.

An Interior spokesman said in an email to the Star-Advertiser that the state and city have yet to conduct full appraisals of the two parcels and that Interior has offered to review any appraisal instructions.

“We appreciate the willingness of both the state and the (city) to ensure our main concern — that all appraisals involving the exchange of trust lands adhere to the full requirements of the law — is met,” the spokesman wrote.

Duarte said the Varona Village site fits into the department’s master plan for Kapolei, where four homesteads already exist, and provides for various development options.

Since 2009, the agency has held multiple consultation sessions with beneficiaries to discuss possible uses, including a cemetery, genealogical research center and residential and commercial development, according to Duarte.

“DHHL has invested millions of dollars in infrastructure improvements in Kapolei, and it is prudent for the department to make the most of those investments by building out more lots for applicants on the waiting list,” he added.

A spokesman for the Honolulu Authority for Rapid Transportation did not respond to a request for comment on whether his agency considered the land exchange fair to both sides and what would happen to the rail facilities if the exchange doesn’t go through.

The licensing agreement is good for 75 years or until the exchange is completed and allows for the construction of the rail facilities.

Although DHHL and the city approved memorandums in 2009 and 2010 to pursue a sale or exchange of the properties, they didn’t grant licenses allowing access to the respective properties until October 2014.

Yet the city awarded a contract to build the maintenance facility in 2010 and construction began in 2012 — two years before the city obtained the access license, according to city and state records.

Robin Danner, a DHHL beneficiary and head of the Sovereign Council of Hawaiian Homestead Associations, said the Ewa Drum deal is yet another example over the past 60 years of government abuse of the trust.

“How is giving our trust lands to rail — (land) that is valued 5 times more than the county lands they want to give us — helpful to us, the owners of our trust lands, dying by the thousands over decades on a state government wait list?” Danner wrote in an email. “It isn’t. Any more than rolling over our lands to build an access road to Mauna Kea more than 2 decades ago had anything to do with the purposes of our land trust.”