Board Talk: Board Reconsiders Granting Rent Discount to Non-Profits

posted in: March 2017 | 0

Last August, the Board of Land and Natural Resources approved the continuation of all the revocable permits issued by the Department of Land and Natural Resources’ Division of Boating and Ocean Recreation, except those for the Honokohau small boat harbor in West Hawai`i.

On January 27, DOBOR planning and development manager Dana Yoshimura once again presented those permits to the board for approval. The division had proposed increasing the rent for all of them, including those for three non-profit organizations: the Hawai`i Big Game Fishing Club, the Kona Sailing Club, and the Hawai`i Island Paddle Board Association.

Land Board member Stanley Roehrig, a longtime member of the state’s paddling community (his online bio states that he’s paddled for the Keaukaha Canoe Club since the 1980s), bristled at the notion of the increased rents.

“The Hawai`i Island Paddle Board Association is the one-man paddlers at the harbor. They have a halau there and they store their canoes. They’re all volunteers. … I’m not particularly enthusiastic about tripling their rent,” he said.

State law allows the DLNR to charge non-profits nominal rent for leases. There may also be some leeway with regard to revocable permits, rent for which must “serve the best interests of the state.” Yoshimura said that within DOBOR, however, there is no policy directing the division on how to deal with non-profits.

Roehrig said that he would be fine if, at least at Honokohau, DOBOR wanted to charge all three of the community service groups the same reduced rent, but he would not agree to charging them at the same rates paid by retail operations.

Yoshimura said he appreciated Roehrig’s concern about the non-profits at Honokohau, but then noted that his division has issued permits to at least a dozen other non-profits whose rents the board approved without question last year. Those non-profits range from small paddling clubs that rent 800 square feet to the Waikiki Yacht Club.

While Roehrig continued to insist that the one-man paddler group, which works with children to make them better paddlers, was worthy of a rent discount, Land Board member Chris Yuen expressed some skepticism about the worthiness of the Kona Sailing Club.

“Generally, I’m super in favor of helping out the non-profits,” he said. But with regard to the Kona Sailing Club, he noted that the bulk of the property covered by its permit is “being used to store people’s very nice sailing boats. That’s fine, but you gotta pay money to store your sailboat next to a harbor. Just because you and a group of people make a non-profit and then get a RP (revocable permit) or lease on state land and do some nice public [services] …” Yuen trailed off. “The fact that the bulk of it is used to store boats suggests we ought to charge a commercial rate to store boats,” he said.

Land Board chair and DLNR director Suzanne Case added that the Hawai`i Big Game Fishing Club is making money from renting out space, and so is the paddle board group, which rents out lockers. She also questioned how much the paddle board group’s work involved working with children.

“We have to be carful what’s the public purpose here. These are basically benefitting the users. You mentioned the Waikiki Yacht Club. Do we not charge them rent because they’re a non-profit?” she asked. “If the benefit is primarily the user group … it does not fall into the category of a public purpose,” she said.

When it comes to charging rent to non-profits, she said, “we need a consistent policy.”

In the end, the Land Board approved the permits, with the rent increases intact, but gave the non-profits three months to offer an explanation to the board of why their rents should not increase to market rates. Case said that the explanation should include proof of the organization’s non-profit status, an income statement, its charter, and a statement about its public benefits, as opposed to benefits for their own members.

Such an approach may be applied in the future to those non-profits with permits outside of Honokohau, Yuen said.

— Teresa Dawson

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