Time is running out for the state and the owners of Turtle Bay Resort to decide how much Hawaii should pay the hotel to conserve some of the land it owns on Oahu’s North Shore.

The iconic resort has been embroiled in litigation for decades over plans to add new hotels and homes. Many Hawaii residents oppose the hotel’s expansion because they fear it would increase traffic congestion and diminish the rural character of the area.

In January, Gov. Neil Abercrombie proposed spending $40 million in general obligation bonds to pay Turtle Bay to establish a conservation easement, a legal agreement that would permanently prevent development on 69 acres of the resort’s land at Kawela Bay and 541 acres at Kahuku Point. The hotel would still be able to add two new hotels but would refrain from building another 750 planned homes.

Abercrombie told lawmakers that he wanted the issue resolved this year in order to help end the controversy and protect the area from development and urbanization.

“This has to be settled now,” Abercrombie told state lawmakers on Jan. 8. “This has to be done. Everybody’s got to move.”

Since then, the state has been working on negotiating the exact price with the resort. But with the legislative session nearing its end, there’s been no word about a final settlement. The deal must be reached by the end of this month in order for lawmakers to set aside money for the easement in the state budget.

Signs on the North Shore protest Turtle Bay Resort’s planned expansion. (PF Bentley/Civil Beat)

The governor’s office said that the state is still in the midst of negotiations.

“We are mindful of the legislative timetable and hope to have a decision and announcement very soon,” said Justin Fujioka, the governor’s spokesman.

Drew Stotesbury, CEO of Replay Resorts which owns the hotel, said that the process has been very smooth and very constructive.

“We’re active and hopeful,” he said, noting that he’s confident an agreement will be reached in the next month.

But even if a settlement is reached, it will have to fight for a spot in the state budget. Lawmakers are still grappling with ways to reduce spending in light of a recent Council of Revenues projection, revised downward, that the state will see no revenue growth this year.

The House only included $1,000 for the deal in its budget draft. House Finance Committee Chairwoman Sylvia Luke said that the money was just a placeholder to show that the Legislature had “some kind of commitment” to the issue. She noted that the state only has between $300 and $400 million that it can float in general obligation bonds for a wide array of projects this year.

“Turtle Bay, in the end, will have to compete with all the other interests,” said Luke, including multimillion-dollar proposals to develop the Kona judiciary complex and provide air conditioning in public schools.

Luke called the Turtle Bay Resort negotiations “unusual” because rather than purchasing the property or conducting a land exchange, the state is trying to simply pay the developer not to develop. She said she asked the governor’s office why the state is purchasing the conservation easement without buying the land outright, but hasn’t received a response.

Turtle Bay Resort (PF Bentley/Civil Beat)

Blake Oshiro, Abercrombie’s deputy chief of staff, told Civil Beat the administration is pursuing the easement because Turtle Bay Resort is interested in it and that the Lingle administration considered buying the land but it was too expensive.

“The benefit of a conservation easement is that maintenance of the property remains with the landowner,” he said in a statement. “This is not a new concept. The state currently has a few conservation easements in forestry and agricultural areas.”

The Senate budget similarly included just $1,000 for the settlement. Senate Ways and Means Committee Vice-Chair Michelle Kidani said the allocation is also a placeholder that allows the Legislature to continue discussing the proposal.

Members of the governor’s working group on the issue said that both sides are working hard to reach a deal. Sen. Clayton Hee, a big proponent of limiting development in central and north Oahu, said he is confident that a settlement will be announced soon.

But if the deal falls through, lawmakers could revisit the issue in conference committee to allow the state to secure the land through eminent domain.

Contact Anita Hofschneider via email at anita@civilbeat.com or on Twitter at @ahofschneider

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