Dela Cruz Downplays Development Role of Public Land Development Corporation

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The Public Land Development Corporation state Sen. Donovan Dela Cruz envisions may be more of a land manager than a land developer, at least with regard to properties owned by the Department of Land and Natural Resources.

Amid the recent calls by state legislators and activists for the Legislature to dissolve next session the nascent but highly controversial development arm of the DLNR, Dela Cruz, state Sen. Malama Solomon, and the governor’s office have been working to correct what they see as misinformation about the agency they created in 2011.

“Part of the information that’s not getting out there is that the PLDC can help with existing uses. … That’s going to be the majority of this thing,” Dela Cruz says. “Quite a bit of the partnerships may not be construction. It could be management.”

Although the PLDC has not yet drafted the Public Land Optimization Plan required by its enabling statute, Dela Cruz brims with ideas of what he’d like to see the corporation do.

The DLNR doesn’t have a whole lot of undeveloped — and developable — land. The department has provided the PLDC with a list of all of its properties, which the corporation is still combing through, looking for potential project sites, says DLNR Land Division administrator Russell Tsuji. Even so, the Legislature has already directed the DLNR to transfer development rights for lands at Honokohau and surrounding all of its small boat harbors to the PLDC. Dela Cruz says that transfer is mainly for management purposes.

As another example, he describes a project, not yet proposed by the PLDC, involving a non-profit group that wants access rights to and some management authority over lands owned by the DLNR and the Department of Hawaiian Home Lands in East O`ahu’s Haiku Valley.

“They’re not a developer. A lot of the land now is basically abandoned. The DLNR and DHHL don’t manage. That’s one partnership that I would like to see. DHHL and the DLNR would transfer management rights. Now, the Haiku non-profit could have a long-term lease, develop a plan to manage the area, and apply for grant money, with the state not having to commit as much resources to it,” Dela Cruz says, adding, “We can put conditions on the transfer — provide public access, work with kids from the area.”

A lot of the larger development projects may be on lands controlled by the Department of Education, for 21st century schools, “not so much DLNR,” he says.

The PLDC could be an agency that ties other agencies together “to try to break silos of government to provide better service, jobs, and expand public benefits,” he says. For now, the PLDC doesn’t own anything. It’s simply “an assistant to another agency,” he says.

During public hearings in August on the PLDC’s proposed administrative rules, former DLNR director Laura Thielen argued that the PLDC is likely to be a drain on the DLNR’s finances, rather than an assistant.

“As the former chairperson of this department, I can tell you unequivocally the PLDC is and will take revenue away from DLNR. Under the law, the PLDC will take its own costs and a 15 percent cut out of any revenue it generates,” she said.

Regarding PLDC executive director Lloyd Haraguchi’s statements to the press that his agency’s objective is “to provide the alternative funding that will make programs self-sufficient,” Thielen said, “It appears that the intention is to defund DLNR of all general fund revenue and replace it with the PLDC project-generated revenue. In that case, the PLDC development will not bring any new resources to DLNR, but instead place DLNR on more unstable footing.

“All this background begs the question: if one is purely interested in supporting DLNR, why create a new, redundant board that siphons revenue away from DLNR?” she asked.

Thielen also complained that the establishment of the PLDC “effectively severed any connection between the mission of resource conservation and the development of state land. … [T]he PLDC’s mission is to develop state land in a manner that maximizes revenue. The PLDC board has no obligation to balance the interest of resource conservation.”

In response to Thielen’s argument that the PLDC projects are going to cost the DLNR money, Dela Cruz says, “then the department doesn’t have to do it.”

He claimed that the ‘Recreational Renaissance’ program Thielen proposed in 2009 to upgrade the state’s recreational facilities wouldn’t have generated revenue. Thielen asked the Legislature to support the $240 million project.

He added that given her support of telescope development on Mauna Kea, among other things, it would be “interesting to see someone go through her record” on resource protection.

* * *

The ‘LDC’

In his interview with Environment Hawai`i, Donovan often referred to the PLDC as the LDC. And it’s understandable. Under Act 282 of the 2012 Legislature, lands held by the PLDC are now exempt from the definition of public lands.

Normally, the disposition of public lands is strictly regulated. For example, public lands generally have to be disposed of via public auction, which involves a pre-qualification process. An applicant that has had a state lease, license or permit cancelled within the preceding five years for failing to satisfy terms and conditions is not eligible for a lease of public land. Leases are limited to 65-year terms; no one in arrears on taxes or state rents can receive one; and transfers need Land Board approval.

But lands held by a select few government agencies are exempt from these and other restrictions. The agencies include the Agribusiness Development Corporation, the Aloha Tower Development Corporation, the Hawai`i Community Development Authority, the Hawai`i Housing Finance and Development Corporation, and the University of Hawai`i.

With Act 282, lands set aside by the governor to the PLDC, lands leased to the PLDC by any state department or agency, and lands to which the PLDC holds title in its corporate capacity are also exempt.

However, lands to which the PLDC holds only development rights would appear to still be considered public lands. (Act 282 also amended the definition of development rights to mean “all of the rights related to the development of a property including but not limited to the rights permitted under an ordinance or law relating to permitted uses of a property, the density or intensity of use, and the maximum height and size of improvements thereon.”)

The only mention of development rights in a recent posting on the PLDC that appears on the website of the governor’s office is with regard to whether or not the PLDC can sell public land. The office states, “The initial premise is that title will remain with the respective agency and only the development rights will transfer over to the PLDC; therefore, the PLDC cannot sell the fee title to any of the lands. If the respective title agency transfers the fee title to the PLDC, the PLDC may sell title, subject to the same restrictions as other state agencies.”

Teresa Dawson

Volume 23, Number 4 — October 2012

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