On April 19, in accordance with a decision made earlier this year by the Board of Land and Natural Resources, the state House of Representatives adopted a concurrent resolution authorizing the public auction of a 55-year lease for submerged lands where the Kaneʻohe Yacht Club has its piers.
In January, to end the decades of annually renewing the club’s month-to-month revocable permit for the lands, the Land Board approved a request by the Department of Land and Natural Resources’ Division of Boating and Ocean Recreation to offer the lands at a public auction.
DOBOR had tailored its request to require that the lands be used for recreational boat pier purposes, and to require bidders to “have permission to access the subject submerged lands from adjacent fast lands.”
In effect, the yacht club would likely be the only qualified bidder.
At the Land Board’s January 8 meeting, board member Vernon Char expressed his confusion over the requirements that seemed to preclude any other bidders.
DOBOR’s Richard Howard admitted that the eligible pool would be restricted by the access requirement.
Because the yacht club owns the piers that sit on the lands to be auctioned, it would have the right to remove them if it did not win the lease. Otherwise, the ownership of the piers would revert to the state, Howard added.
To Kauaʻi board member Tommy Oi, “it’s not a fair auction,” given the access requirement.
“I don’t know. It’s not the largest pool. Correct. Nobody else has expressed interest in using that land. The neighbors to either side have not inquired about renting the submerged land,” Howard replied.
“The question is not so much gonna be who gets it, because the likely bidder will be the yacht club, but the price for it,” board chair and DLNR director Suzanne Case explained.
Board member Chris Yuen agreed, noting that with or without the access requirement, “the only practical bidder is the Kaneʻohe Yacht Club.”
“For better or worse, we’re kind of stuck together,” he continued. “They need the lease … and from our point of view, you need a substantial piece of property next to the piers to use them. At the very least, you need a parking lot.”
He said he was glad to see that the upset price DOBOR set would bring in substantially more rent than what the yacht club has been paying. Under the proposed minimum lease rent, rather than earning revenues based on a rate of $4.75 per foot per month on each of the vessels moored at the yacht club’s piers, DOBOR’s revenues would likely be based on a rate of $8/foot/month, Yuen estimated.
“It’s a bargain,” he said. He added that even though he was unhappy with the way the appraisal that determined the upset price was done, “I think we’re in the ballpark.”
He pointed out that if the state set the minimum rent too high, and the yacht club then chose not to bid, “we end up in a game of chicken. If they pull the piers out, we both lose.”
In the end, the board approved DOBOR’s request as submitted, although Char abstained.
(For more background on this, see, “Board Talk: Boating Fees, Bottomfish Reserves, and Yacht Club Encroachments,” from our February 2019 issue, and our July 2, 2020 EH-XTRA item, “Kaneohe Yacht Club Keeps Permit, For Now.” All are available free on our website, environment-hawaii.org.)
— Teresa Dawson