Amid leasing dispute, future of Big Island’s largest shopping mall in limbo

HONOLULU (HawaiiNewsNow) - The future of the Big Island’s largest shopping center appear in limbo due to a dispute between the federal government and state Department of Hawaiian Home Lands.

The DHHL is negotiating with the mall owner Brookfield Properties for a 40-year lease extension for the Prince Kuhio Plaza, whose lease won’t expire until the year 2042.

“It is important for us to get this lease to do more investments in the property,” the mall’s general manager Daniel Kea said, during a Sept. 19 DHHL board meeting.

Brookfield said it plans to invest $14 million to expand the center and attract new tenants. It said it has invested over $21 million in the mall since 2016.

But in a letter last week, the U.S. Department of Interior said any long-term commercial lease extension by the DHHL may be illegal and a breach of trust.

“I respectfully request your prompt attention to this matter to avoid unnecessary conflict between the United States and the state,” Interior Department’s Solicitor Robert Anderson said in his letter to the state Attorney General’s Office.

The feds want a full review from its staff and Congress to see if a long-term lease doesn’t shortchange Native Hawaiian beneficiaries, said activist and Office of Hawaiian Affairs Trustee Mililani Trask.

Rental income from the mall goes towards funding for Native Hawaiian housing programs.

“There is currently a waiting list of 28,000 Hawaiians, what that means is that the state needs ... to increase revenues to address that kind of obligation,” Trask said.

Meanwhile, the DHHL has made no decision to extend the lease and is currently reviewing its options.

“DHHL intends to continue discussions with the Department of the Interior to address their concerns on the proposed lease extension for Prince Kuhio Plaza,” said DHHL Chairman William Aila.

Real estate experts said the dispute threatens to put the mall’s future plans in limbo.

“It puts it on hold completely. I mean, you’re not going to do anything. You’ve got the federal government against you,” said real estate expert Ricky Cassiday.

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