EXCLUSIVE: State paid millions to lease vacant dirt lot

EXCLUSIVE: State paid millions to lease vacant dirt lot
Published: Jan. 6, 2015 at 12:08 AM HST|Updated: Jan. 6, 2015 at 10:15 AM HST
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MAALAEA, MAUI (HawaiiNewsNow) - It was supposed to be a part of the state's plan to revitalize the Maalaea Harbor on Maui.

But for the past 20 years, the 1.1-acre dirt lot has remained undeveloped with Hawaii taxpayers footing the bill.

The state Department of Land and Natural Resources has paid more than $7 million -- or about $1,000 a day -- to lease the property that's only used to store old boats, buoys and other ocean equipment.

"This is the classic example of the public being fleeced. Whoever entered into this lease did not have the public's best interest at hand," said environmental activist Carroll Cox, a longtime critic of the DLNR.

The lease was first signed in 1994. DLNR initially wanted to build a retail and office center there but that plan fizzled. It also wanted the property for the ill-fated Hawaii Superferry.

Past DLNR chairs have raised questions about the costly deal. But only after 20 years has the state done anything to halt the lease. In July, it began condemnation proceedings and stopped making payments.

A spokesman said the state now holds title to the property, but Don Williams, who bought the property in 1994, said there are problems with the way the condemnation is being handled.

According to Williams, the lease is irrevocable, meaning that the state is required to pay $350,000 in annual lease rent until 2024. Breaking the lease will require the state to pay millions.

"To get rid of the lease, they have to pay a minimum of $4 million because it's an irrevocable lease," Cox said.

And that's just part of the cost. To condemn the property, the state has to pay the fair market value.

The Williams Trust is currently listing the property for sale at $11 million, even though similar sized properties in Maalaea are going for a fraction of that.

The state declined comment, citing the legal dispute.

Cox said money used for the rent and to condemn the property could be better spent on the DLNR's aging harbor facilities.

"Some of them are broke and in a state of disrepair, just horrible," he said.

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