The development company Alexander & Baldwin spent $35,000 this year on lobbying during the legislative session, but a water rights bill that would have benefited it was defeated and a tax on real estate investment trusts that it opposed was approved.

Organizations have until Friday to file reports with the state Ethics Commission on their expenditures for March and April, but some have already done so. That includes A&B, a REIT itself, which reported its highest lobbying expenses at this point in the year since 2012.

Meanwhile, even though it hasn’t filed its March-April lobbying reports yet, the single largest spender since January remains a trade group representing REITS, the National Association of Real Estate Investment Trusts, which reported spending more than $126,000 in January and February to oppose the REITs tax.

A&B has not appeared at the top of the list of lobbying spenders in recent years, and although the company stayed relatively quiet this session, its presence hung over the State Capitol with talk that lawmakers would attempt to revive the water rights bill, which ultimately did not happen.

State Capitol Building with Hibiscus in foreground.

Some companies lobbied heavily at the Capitol against taxes on real estate investment trusts and resort fees, according to lobbying reports filed early with the state Ethics Commission.

Cory Lum/Civil Beat

From January to April, A&B paid its in-house lobbyist Paul Oshiro $29,583. Meredith Ching, the company’s executive vice president of external affairs, was paid $5,280 for lobbying efforts.

A&B’s report indicates it was focused on a broad range of issues this session, including agriculture, communications, culture and the arts, energy and the environment, health, Hawaiian affairs, land and water use, transportation and science and technology.

The company reviews all the bills introduced each legislative session and tracks any that could have an impact on its business, a company spokesman said.

It submitted no testimony on Senate Bill 1326, the water rights bill, which would have extended for seven years permits allowing the diversion of state waters by A&B, utilities, landowners, small farmers and ranchers.

SB 1326 died after being deferred by the Senate Ways and Means Committee following a proposal by Sen. Kai Kahele to cut A&B out of the bill entirely. The company said that hundreds of farmers and ranchers could be hurt if the measure did not pass.

A&B opposed measures that would tax REITS in the state. It owns several notable commercial properties on Oahu including the Manoa Marketplace, Pearl Highlands Center, the Waianae Mall and Kailua Town.

Senate Bill 301, a measure proposing a 6.4 percent corporate income tax on REITS, passed the Legislature in April and now sits on Gov. David Ige’s desk.

A&B converted itself to a REIT in 2017. REITS distribute at least 90 percent of their taxable income to shareholders annually in the form of dividends. Shareholders pay taxes on that income in their home state, which isn’t always Hawaii.

Manoa Marketplace water reflections with shopper talking by with Manoa Safeway grocery bag. 9 sept 2016.

The Manoa Marketplace, pictured in 2016, is owned by Alexander & Baldwin, which opposed a proposed tax on real estate investment trusts.

Cory Lum/Civil Beat

Opponents of the legislation said a tax on REITS could mean a net revenue loss for the state, while lawmakers who supported it hope that the new tax, only the second of its kind in the nation, would mean a boost in revenue to the state general fund.

“A REIT structure enables A&B to attract new investors to its stock, giving us capital to invest in our Hawaii focused strategy, and puts us in a better position to compete with large, out-of-state investors,” Oshiro, A&B’s lobbyist, wrote in testimony to the House Finance Committee.

Beyond its legislative lobbying, A&B and its affiliates have been one of the most active donors to politicians in the state.

A&B’s political action committee has contributed $111,350 to candidates at all levels in the state in the past two election cycles from 2014 to 2018, according to campaign spending data. In the same time period, A&B executives have made donations totaling $80,225.

Stanley Kuriyama, former A&B CEO and current board chair, gave $86,875 from 2014 to 2018.

Lobbying On Resort Fees

In another report filed this week, Marriott International reported spending over $49,000 in consultants’ fees last session. Marriott paid out about $9,700 to lobbyists from March to April, according to its new report

So far, Marriott has been the top-spending hotelier at the Capitol this year.

General managers at several hotel properties either licensed or owned by Marriott submitted testimony copied from the Hawaii Lodging and Tourism Association opposing a proposed tax on resort fees that now awaits Ige’s signature or veto.

The HLTA, which spent $22,000 on lobbying from January to February, said in its testimony that the tax on resort fees would be a financial burden for Hawaii’s hotels.

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