Board Talk: Board Bemoans Tepid Response To Auction of Big Island Ag Lands

posted in: October 2016 | 0

“it’s deep dirt. It gets loads of rain …” Board of Land and Natural Resources member Chis Yuen said of the seemingly perfect 6.7-acre lot in Hakalau.

“And if you live on the Big Island, you dream of dirt,” land agent Gordon Heit added.

But at the public auction held by the state Department of Land and Natural Resources on August 23, there was only a single bidder, Yun Yan Huang. Huang won a 30-year lease for the land at the upset rent of $1,700 a year.

The result of that auction, at which two other parcels were leased out at the upset price, worried Land Board members and led them to conclude that 1) the state’s paradigm for leasing agricultural lands needs to be changed; and 2) there just aren’t enough willing, able, and business savvy farmers out there.

This past summer, the DLNR’s Land Division put leases for four parcels up for auction. A total of seven people applied. For three of the parcels, the division determined there was only one qualified applicant. No one bid on the fourth parcel, a 7.8-acre lot in Waiakea designated for intensive agricultural use.

The weak response to the auction wasn’t for a lack of trying, Heit told the Land Board at its September 9 meeting. In addition to advertising the auction in three daily newspapers, Heit said, his office mailed 250 letters to potential lessees.

Board member Yuen, a farmer and resident of Hawai`i island, expressed his surprise that the Hakalau parcel attracted just four applicants, only one of which was deemed qualified. He said the property was similar to what he farms.

While he said he understood that sweet potato or ginger farmers might not be interested in such a long lease term, “for there to be only one serious person who’s actually in the business, this raises the question whether we or Department of Ag should have first-time farmer leases.”

Indeed, Heit explained that the DLNR’s qualification requirements are geared more toward experienced farmers, not first-time farmers.

“Most of these guys are immigrants and aren’t really business-plan savvy, the ones getting their fingernails dirty,” Yuen said.

He also echoed a widely held sentiment that there simply aren’t enough farmers out there. “For all the talk about ag … and farming, the actual number of people who are like seriously ready to bust their ass is not that much,” he said. “There’s loads of ag land, private as well as state, that is asking somebody to farm it. In some cases, water is an issue.”

Yuen suggested that if the state could make the lease application process easier, more people might bid.

More than a decade ago, the Legislature passed what became Act 90, which directs the DLNR to transfer certain agricultural lands in its inventory to the DOA. That transfer has never fully been completed, although the DOA has taken on some parcels.

“It was my understanding the DOA would be the agency to get the new farmers on the land. The DLNR is looking for the second tier of farmers, those who already know the process,” Heit said.

Land Board chair Suzanne Case reported that she and DOA director Scott Enright have been discussing transferring more DLNR ag land to the DOA in the near future.

“It’s really them who are more suited to work with these folks,” she said.

 

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Legacy Land Funding Shifts

In Kukaiau Ranch Acquisition

At its September 9 meeting, the Land Board approved a request by the DLNR’s Division of Forestry and Wildlife to redirect $600,000 approved in 2012 for the acquisition of a conservation easement over 3,688 acres on the lower end of Kukaiau Ranch on Hawaii island to the fee purchase of 4,469 acres above it.

In short, plans to acquire the conservation easement “fell through,” said DOFAW administrator Dave Smith. “The landowner backed out on that.”  However, the owner is willing to sell the upper piece.

Although there is already a conservation easement over the mauka lands, buying them would allow the division to erect a fence line around a portion of Mauna Kea, where the state is court-mandated to eliminate ungulates in palilia habitat, Smith said.

He urged the Land Board to approve the funding shift, in part, because if the money goes back into the Legacy Land Conservation fund, it could get raided by the Legislature next session.

Questions over whether the easement and fee would merge once the state took ownership and whether the value of the land includes the easement are yet to be worked out, but the board ultimately voted to approve the funds transfer.

“There’s some technical issues associated with the purchase. None are deal-killers. Overall, it’s a really good piece of property, if we can restore koa forest,” Smith said.

— Teresa Dawson

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