Kewalo Basin Harbor is a major asset of the Kakaako waterfront that’s owned by the state but under private management. However, a dispute that’s arisen over renewal of mooring permits for two of the boats there demonstrates the duty of the state in maintaining firm oversight on the whole deal.

Three years ago, the Hawaii Community Development Authority (HCDA) signed a 45-year lease on the harbor, which has for years suffered from deferred maintenance and the need for facility improvements. Hughes in turn contracted with Almar Management Inc. to handle the day-to-day managerial functions.

What’s now in contention is the termination of permits for the Emeraude II, an 80-foot sailboat, and Queen of the Ring, a 64-foot fishing boat. HCDA has been requested, and should agree, to conduct a contested case hearing on the matter to ensure the management of the tenants is being handled fairly.

Last week the HCDA board considered but did not approve a proposal to authorize spending more than $25,000 to conduct the hearings, principally to fund the hiring of a hearings officer.

An HCDA spokesman said this will not stop the scheduling of the hearings, which should indeed be put on the calendar as soon as possible, to settle the matter for small businesses currently left in limbo.

Queen of the Ring has occupied its front-row slip for four years, while the other businesses, the Emeraude, has run tours for 44 years.

In petitions seeking the hearings before the HCDA, the advocate for these two businesses asserts they are unfairly being scrutinized and penalized, being ejected from their slips to make way for larger-capacity vessels that could do a bigger business and generate more revenue for the state and management. The Emeraude, for instance, can take out only six passengers at a time, according to the petitions.

In the petition documents, attorney Christopher Muzzi also alleged that Almar, for example, required an audit from these two businesses but not others in the harbor, and was selectively enforcing Hawaii Administrative Rules (HAR) that apply to the harbor.

The petitions contest assertions that the two boats are in violation of the rules — violations that are not specified — and claim violations by other vessels are not being penalized.

“Almar is selectively enforcing the HAR … in an arbitrary and capricious manner,” according to one petition.

Almar has declined comment due to the litigation. A spokesman for Hughes would say only that Almar operates Kewalo Basin under the requirements of its lease with HCDA and enforces state regulations governing the harbor.

The hearings will provide the proper venue to air the complaints of all parties; until then, it’s impossible to know for certain whether there is a legal basis to terminate the permits. And it’s essential that HCDA moves quickly to assert its authority over the management of the harbor in the public interest.

There’s been a long community discussion about the best way to improve harbor facilities. Hughes won the lease for both the slips and the surrounding land-based improvements, making the persuasive case for a $20 million series of upgrades, but maintaining a low-key vibe.

“We think the right thing to do is a lower-scale development that really does (make) improvements to what’s already there,” said Race Randle, Hughes’ senior vice president of development, speaking in 2015 at a meeting of the Honolulu Star-Advertiser editorial board.

The executives also expressed a hope that the harbor could become more vibrant and well-used, similar to harbors in other coastal cities. It’s hard to argue against that objective.

But Kewalo is a state-owned harbor that, above all, must be run fairly, and in the public interest. A prompt hearing on the dispute will help keep the improvements on the right track.