Early Developers of Leilani Estates Ignored the Eruption in Their Back Yard

posted in: June 2018 | 3

On May 26, 1959, representatives of the Hawai`i Land Hui, a group of three Honolulu businessmen, met with Hiroshi Kasamoto, director of the Hawai`i County Planning and Traffic Commission.

As their attorney, Masanori Kushi, later described the encounter, the investors were assured by Kasamoto that “a road bond as such is not necessary and that a written guaranty would suffice” to give the county assurance that roads would be built in the subdivision they were proposing in the Puna area known as Keahialaka.

With this promise in hand, the investors proceeded to purchase 2,400 acres from the Ola`a Sugar Company on June 10, 1959, “for a sizable consideration.”

“The capital raised by the Hui took into account the purchase price of the land, survey expenses and road construction costs, and other subdivision expenses,” Kushi wrote, “but the road bond requirement” – imposed by the county commission when it approved the subdivision – “was not taken into account.”

The commission then waived the bond requirement and by early 1960, the hui – made up of Maurice Takasaki, Ramon Chiya, and Kenneth Ing – began its efforts to sell off the first lots in the Leilani Estates subdivision. Advertisements enticed buyers with the prospect of “fee simple land as low as 4¢ per sq. ft.” and “one acre lots as low as $1695.00.”

At the same time as the subdivision was being considered by the county government, just a few miles distant, residents of the village of Kapoho were struggling to save their homes, farms, offices, and shops from being overrun by the lava that, on January 13,1960, began to erupt from a series of fissures along the east rift zone of Kilauea volcano.

The devastating eruption lasted for six weeks, obliterating Kapoho, taking out the Coast Guard lighthouse station, consuming homes, and leaving what had been fertile fields of coffee, papaya, and orchids buried under dozens of feet of fresh lava.

The outbreak left a new cinder cone on the east rift, joining a series of others along an almost straight line leading back to the Kilauea caldera – a line that crossed through the heart of the new subdivision.

The Fire of Laka

Generations before the subdivision was a glimmer in the hui’s collective eyes, a Hawaiian community had lived in the area, known to them as Keahialaka, a name that, literally translated, means the fire of Laka, goddess of hula.

According to Hawaiian legend, this was the place where Pele first made her presence felt in Puna, where Pele dug a crater in which Laka built a fire.

The new name, Leilani  – heavenly lei, or, figuratively, royal child – effectively erased any hint that the older name gave about the volcanic nature of the place.

Instead, prospective buyers in California who read the California Division of Real Estate report on the subdivision were told that the division “has no information as to the hazards of volcanic eruption as it may affect this subdivision.” For further information, buyers were referred to the volcanologist in charge at the Hawai`i Volcano Observatory.

By May of 1961, the hui had sold 90 lots, “the majority of them being on terms of $15 down and $15 per month.” By this time, the hui was hoping to work with promoters in Arizona to sell “our entire subdivision in the shortest time possible,” Takasaki stated in a letter to the county Planning and Traffic Commission.

The problem of roads would not go away, however. Although sales promotions mentioned that roads would be developed and one of them “paved to county standards,” the hui was unable to follow through with payments to contractors.

In November 1962, the California Division of Real Estate ordered the Hawai`i Land Hui to “desist and refrain from selling or offering to sell … lots or parcels” in Leilani Estates. In an effort to get the project back on track, Takasaki informed the county in December that he and his partners “have mortgaged our homes to finance construction of road and engineering” in the first increment of the subdivision.

“It is true that we have tried practically every financial institution in Honolulu to grant us a loan on our sales contracts but none of them have come through with a loan,” he wrote. “One of the reasons was that the buyers were mainland persons and not local residents.”

At its meeting in May 1963, the subdivision committee of Hawai`i County met and effectively voided the subdivision approval and approved a motion asking the county attorney to take legal action to force completion of the three and a half miles of roadway that the developer had promised to pave to county standards.

Nearly three years later, the Puna Sugar Company requested the county Planning Commission “reactivate” the subdivision on the same conditions as before, so that the company could “dispose of the [land] to a responsible developer.”

By the end of December 1968, a new developer was in place: The Realty Investment Company, Limited, whose principal was then-Senator Richard Henderson.

Of the more than 2,000 one-acre lots carved out in the subdivision, by the time the fissures began to break out early last month, homes had been built on just around 800. The population was thought to number around 1,600.

Leilani Estates was just one of dozens of subdivisions approved in this period. As George Cooper and Gavan Daws point out in Land and Power in Hawai`i, “Evidence of Hawai`i County’s real attitude in the early boom years toward controlling or restricting development in general could be seen in a Big Island Planning Commission move in 1962, on the eve of the effective date of the Land Use Law, when on a single day 42 new subdivisions involving 3,500 lots were approved, ‘in order to beat the [Land Use] law deadline,’ according to the Honolulu Star-Bulletin.

— Patricia Tummons

3 Responses

  1. Charles Manning

    The county appears to have operated in a manner which was grossly derelict of it duty to ensure the reasonable safety of the area in which the Leilani Estates subdivision was approved in addition to being woefully impudent in the enforcement of the terms under which the establishment of the subdivision had been constituted in regards to the roads which were faithfully promised at the time which the subdivision was approved.

  2. At the age of 20, my wife and I newly married , lived in Honolulu , Walking by a realtor office we saw a sign ( FREE TRIP TO THE BIG ISLAND) one acre lots for sale , We were more interested in the free trip than the lots. We traveled to the big island . The realtor took us on a tour of the Puna area void of any fresh lava , Mackenzie Beach area was to be a huge resort with a harbor and air landing strip ,YADA YADA . We bought a lot and own it today . It is now, I assume worth less than we payed then, which was 3500. 35.00 a month and I think the kicker was NO DOWN , how could you pass that up ? There was no talk of riff zone or active lava . No vog , we had just bought a piece of paradise . I found it no surprise that a senator was involved , some things never change.

  3. Cliff John’s; We still live in Leilani. Your lot is worth FAR more than $3,500!
    Whatever you do, do NOT give your deed to anyone OR sell it cheap! There is a group who are trying to snag any lots they can from Leilani residents for their own personal gain and to try to overthrow our current Board of Directors and take control of our subdivision. Hold onto your lot for a few years. With the possibility of gating Leilani and the new shopping center, amphitheater and wider highway currenyly in the works,being, I believe lots in Leilani will be worth $30K-$60K by 2020.

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