Allowing private companies to profit from state parks and beaches may sound like a tough sell in Hawaii.

But Act 55, signed into law two months ago by Gov. Neil Abercrombie, facilitates just that.

The law creates the Public Land Development Corporation, which will act as the development arm of the Hawaii Department of Land and Natural Resources. Board members have recently been appointed and a range of possible projects, such as renovating state park facilities and constructing boat slips, are on the radar.

The law’s supporters say profits generated by such improvements could provide a long-awaited salve to DLNR’s budget woes and aid the department in better maintaining neglected public lands.

The public-private partnerships are also part of a broader national trend, in which states, struggling with decaying infrastructure and restricted budgets, are turning to the private sector for help.

But the new corporation, which spearheads project financing through a mix of revenue bonds and private capital, has raised some alarm.

“I’ve been told over and over it’s all about money,” said Donna Wong, executive director of Hawaii’s Thousand Friends, a watchdog organization for land use decisions. “We’ve joined other states that are selling their stadiums, fairgrounds and public parks because they need money. It’s a trend to sell it for quick cash. But once it’s gone to private hands, you don’t get it back and are beholden to what the [private companies’] want to charge and their rules.”

The language of the law appears to impart broad powers to the corporation with limited oversight, allowing it to develop everything from hotels to parking lots on state land. But supporters say its intent is not to open the floodgates to unrestricted development.

“Without equivocating, we’re not going to take a state park and put a hotel on it,” said Guy Kaulukukui, deputy director at DLNR.

He also said that he believed there were legitimate concerns about the powers of the corporation, and that the board will need to constrain its own behavior.

Sen. Donovan Dela Cruz, who sponsored the legislation, which passed by a 23-1 vote in the Senate and a 30-9 margin in the House, said that any transfer of state lands must be approved by the Board of Land and Natural Resources.

The corporation is also subject to the Sunshine Law.

“That’s huge,” said Dela Cruz. “There are no back-room deals.”

Board Members Seated, First Meeting to Come

Recently appointed members of the board include Duane Kurisu, a partner in the real estate investment firm, Kurisu & Fergus, and former state senator, Bobby Bunda. They will join Department of Business, Economic Development & Tourism Director Richard Lim and Budget and Finance Director Kalbert Young. DLNR will be represented by either by DLNR chief William Aila Jr. or Kaulukukui.

The board meeting has yet to meet, but Kaulukukui said that there were already potential sites for development, such as Mauna Kea State Park, where only six of 24 cabins are operational.

In addition to enlisting the help of private companies to renovate the cabins, Dela Cruz said that the park could be developed for marathon or cycling competitions, and as an eco-lodge.

Other potential projects include developing boat slips along Sand Island, with related concessions and public facilities, and the Ala Wai boat harbor could become a commercial center.

Hapuna State Park on the Big Island is also a possibility. While officials at DLNR drafted a master plan for renovating the beach park, Kaulukukui said that it had been shelved for lack of funds.

Lack of State Resources

The act’s supporters argue that DLNR’s gutted budget has made the department increasingly anemic and unable to fulfill its mission of protecting the state’s cultural and natural resources.

Funding for DLNR’s capital improvement program has declined 55 percent from $29 million in 2002 to $13 million this year.

The lack of funding for upgrading essential infrastructure and protecting natural resources poses a public threat, according to Kaulukukui. Revenue generated from the Public Land Development Corporation could compensate for the losses.

As an example, Kaulukukui cited Hawaii’s endangered watersheds, which provide all of the state’s drinking water. He said invasive plants and hoofed livestock have compromised the ability of soil to absorb water, particularly on Oahu.

With revenue generated by the corporation, DLNR officials hope to increase the budget for watershed protection tenfold.

“We have to address this now and we have to pay for it now,” said Kaulukukui.

He said the alternative to harnessing drinking water was desalinating seawater, which would quadruple the cost.

Ceded Lands and Regulatory Exemptions

But some advocacy organizations and government officials have expressed concerns that the law threatens the state’s cultural resources.

Ninety-seven percent of the land under DLNR’s control are ceded lands that are supposed to be held in trust by the state. And the law exempts the corporation from county permitting and zoning regulations

“We are deeply concerned that while [the legislation] makes reference to culturally sensitive development, there are no opportunities for environmental or cultural input,” said Robert Harris, executive director of the Sierra Club. “The plain language statute reads entirely like the most important thing for this body to do is to develop public land.”

But he also said that he believed that the intent of the legislation was good.

“In the abstract, I think everyone can and should be for it,” said Harris, who predicted that the legislation could undergo some re-hashing during the upcoming legislative session.

Kaulukukui said that the corporation would not develop ceded lands that were of “great Hawaiian cultural significance,” and that 20 percent of project revenues would be transferred to the Office of Hawaiian Affairs.

The exemptions from county regulations, meant to entice private developers to enter partnerships with the state, are also similar to those afforded to the Department of Hawaiian Homelands and the Agribusiness Development Corporation, according to the original bill.

Dela Cruz said that without the law, community improvements would continue to languish.

“I’m really excited about the possibilities of this,” he said. “We’re talking about the economy, the future and small businesses. People are quick to criticize. But look at the communities of Waialua and Wahiawa – what has the state done to turn them around?”

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