Here’s a story of perseverance, then of pure luck, told to us at the HVCA-ThinkTech Update on Agriculture on Oct. 27 and now being played on ThinkTech on OC16.

Act 271 was adopted by the Legislature in 2006 to incentivize farming by allowing an owner of farmland to subdivide and lease small parcels to farmers without the delay and expense of also being required to get county subdivision approval.

Motivated by the act, businessman Cal Lui and some of his partners in the Filipino community decided to buy, subdivide under the act and distribute 854 acres of Kunia farmland to people who wanted to farm on their own land.

It was a business deal, but they were also motivated by a desire to help small farmers. They engaged veteran real estate attorney Ray Iwamoto to help them implement their plan on a fast-track basis under the act.

The act expressly exempts the project from city and county subdivision requirements and requires that the lots be considered lots of record for mortgage-lending purposes. But things are not always as they seem.

They found that despite the language of the act, if the farmland was registered under the Land Court, the Land Court would not accept a conveyance or lease without Land Court subdivision approval, which in turn required city and county subdivision approval. Regrettably, this land was Land Court land.

Thus began their perseverance. They worked on both levels: They split the land into 99 5-acre, 99-year leasehold farming-only (dwellings not permitted) parcels to comply with Act 271, and they also applied for subdivision approval with the city and county as required by the Land Court. This turned out to be a mouse trap.

They explained to the city and county that the project was for small farmers and neither they nor the farmers had the money for an elaborate subdivision with paved roads, sewers, power or potable water. They also explained this to several other agencies that had to approve the subdivision.

The city and county was sympathetic to the predicament under Act 271 and was prepared to approve it as a special subdivision to allow the project to proceed and encourage small farming. Not so for other approval agencies.

The State Historic Preservation Division, on the Office of Hawaiian Affairs’ advice, recommended that the city and county not approve the subdivision until Lui and his partners undertook a costly archeological survey of the entire 854 acres, even though 500 of them had been cultivated in sugar and pine for generations. More, the state Department of Transportation required Lui and his partners to pay for costly improvements and deceleration lanes on Kunia Road. With these exactions, the feasibility of the project became doubtful.

Then came a stroke of luck. The 2009 legislature had enacted Act 120, which allowed an owner to de-register his land from the Land Court, effective July 2011. If Lui and his partners could get the land out of the Land Court, no city and county subdivision approvals would be necessary, the exactions would not apply and the project could move forward under Act 271.

It was an easy decision; they de-registered the land, thus avoiding the need for subdivision approval by these agencies. Also, the state Department of Agriculture indicated a willingness to finance the acquisition of the leases. With that the project became feasible.

Despite the torturous route involved, Lui and his partners stuck with it. They got the deal done, established the corporate structures to allow farmers to take the lots under long-term leases and a co-op arrangement, and have sold most of the parcels. They’re heroes for persisting, even though it took longer and cost more than it should have. In telling us about it now, they and their attorney help us come to grips with the barriers we face in projects of this nature.

Why these barriers? In Act 271 the Legislature enacted an incentive for small farmers, but controlling agencies stood in the way, constrained by archaic attitudes and inappropriate regulations. These agencies should respect state policy and find ways to achieve it, rather than imposing conditions to defeat it. Perhaps at the end of Act 271, the Legislature should have added, "Yes, we really mean it."

This story is instructive but unacceptable. State agencies should work together to avoid tripping up each other. They should see themselves in the public service, not as adversaries or obstacles. Until we get this straight, neither farming nor any other initiative will have a secure place in the framework or the economy.

Jay Fidell, a longtime business lawyer, founded ThinkTech Hawaii, a digital media company that reports on Hawaii’s tech and energy sectors of the economy. Reach him at fidell@lava.net.