If folks on Lanai have their say, Gov. David Ige will veto House Bill 1032.

They are all riled up over a last-minute maneuver amending a bill that would have required the Department of Land and Natural Resources to tackle sea level rise before leasing any of Hawaii’s 16 small boat harbors to private management, and feel blindsided by an 11th hour shift that now targets the only recreational boat harbor on Lanai – Manele.

According to Ron McOmber, 20-year veteran of the Lanai Harbor Advisory Committee, “We knew nothing about this, no contact from DOBOR, no notice. We were totally taken by surprise.”

Elected officials are among those who were also unaware of the last-minute conference committee hustle.

“No one contacted me about this bill, and I didn’t see that it only applied to Manele small boat harbor until I read the Order of the Day on April 30,” said Rep. Lynn DeCoite, who represents Lanai as part of House District 13. April 30 is the day both chambers took a final vote on all bills.

It’s not surprising no one paid much attention to HB 1032 during the 2019 session because DLNR has been trying – unsuccessfully — to privatize the state’s small harbors for years.

The small boat harbor on Lanai may soon come under private management, a change that worries residents.

Sally Kaye

In 2004 DLNR tried to give harbor operations to the counties, and in 2011 the Legislature amended language permitting it to lease harbor management by public auction, a request for proposals, or by direct negotiation via Act 197. The Division of Boating and Ocean Recreation made shifting responsibilities to the private sector a key to its 2019 Strategic Action Plan.

Pretty much the only quibbling over the bill involved whether the Legislature should play a role in approving leases (it won’t), and when the law would become effective (upon signing). You can see the action on HB 1032 here.

The Ocean Tourism Coalition, speaking for over 300 mostly family-owned ocean tourism businesses, consistently opposed the bill. Alarmed that HB 1032 expanded DOBOR’s authority to privatize management of an entire state boating facility, beyond its existing ability to lease parts of harbors (with legislative oversight) if submerged lands were involved, the Coalition wanted all boating facilities to stay under state control.

Pulama Lanai, which manages and operates Larry Ellison’s 98% property interests on the island, supported it.

After pointing out she is a former BLNR member (the board that would approve any lease) Lynn McCrory, Pulama’s senior vice president of government affairs, insisted Lanai’s lone recreational harbor is the poster child for a small boat harbor that would benefit from private management. She testified three times that Manele “has surrounding land that could be added to provide more opportunities for the boating community,” although she neglected to mention Pulama owns and controls this land.

I wasn’t the only one initially puzzled by language that says DOBOR must submit recommendations to the Legislature in 2022, 2023 and 2024 on whether a 5-year pilot program the conference committee adopted for Manele should be continued, modified or ended — but then insists the program will end on June 30, 2024.

Lanai resident Jeff Menze, who fears boaters’ use of Manele’s ramp and slips could be restricted or subject to hefty fee increases under private management told me, “No sane private operator would put resources into improving a harbor over only five years. Just look at the 35-year lease Howard Hughes signed to manage and operate Kewalo Basin Harbor.”

DOBOR Administrator Ed Underwood agreed.

“The goal of this pilot is a long-term lease, which could take four years to implement; state law allows us to lease up to 65 years,” he said.

He insists DOBOR will lead the process to determine what the community wants and says he knows of several parties interested in taking over long-term management at Manele.

To Menze’s concern, Howard Hughes reportedly structured its lease so higher slip rates would help pay for harbor improvements.

Many Lanaians are perplexed by some of the terms of the pilot program that emerged from what they see as a last-ditch bait and switch.

Back in March, when the bill still applied to all 16 state harbors, the Senate Committee on Water and Land added community protections that had to be met “prior to (DLNR’s) approving” a lease of any state boating facility. Once the conference committee decided the bill would only apply to Manele small boat harbor, this language was deleted in favor of declaring that the board must “first find that the lessee has met certain community involvement requirements.”

Since a lessee by definition is one who has already “been given possession of land,” some are questioning whether a lease would already be signed before the community gets involved.

What struck me is how little protection the four community involvement requirements actually offer.

  • The final language requires the lessee to consider community concerns, but it doesn’t require the lessee to address them, answer them or alleviate them.
  • The lessee is required to develop a plan to deal with adverse impacts, but it doesn’t say who gets to decide what an adverse impact is or what metrics would be used to gauge success in tackling them.
  • The lessee has to engage the community affected by any proposed development, but which community? There are many, including residents, boaters, fisher people, visitors and commercial operators across the state that use Manele harbor, each with different interests; many question whether a Board most interested in divesting itself of oversight can act as an unbiased judge if a community complains it wasn’t properly consulted.

Has DOBOR been so abysmal at managing its small boat harbors that giving up is the only solution, or are the state’s small boat harbors too valuable a resource to give away to private interests?

Is Pulama Lanai looking to gain more influence over the 2% of Lanai it doesn’t already own and control, or will there really be other (competitive) bids for a long-term lease?

“We will not make a decision on whether to bid (on a lease) unless the bill is passed and an RFP is issued, allowing us to assess the scope of work,” Pulama’s chief operating officer Kurt Matsumoto told me.

He did not respond to a question about what role Pulama played, if any, in HB 1032’s last minute shift from applying to all state harbors to just Manele.

To fired-up residents and boaters that is the relevant question: how did Manele end up the only small boat harbor on the block at the 11th hour, with no notice to anyone?

For now, the answer for Lanaians is to ask for a veto, hoping the Legislature might try again next year to get this right.

Comments can be sent to the governor by clicking on this link: “comments on legislation”.

A small boat harbor near you could be next.

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