Sunday, June 24, 2012


Could the state acquire Lanai by eminent domain?

by Larry Geller

Let me say up front that I have no idea what I am talking about. Ok? So here goes, anyway.

Comments have been building up on yesterday’s article, Likely Origin of private ownership of Lanai (6/23/2012).  One recent comment pointed to Jim Dooley’s report in Hawaii Reporter that Ellison’s company, Oracle, appears to owe Hawaii $333,824 in back taxes. Another mentioned Sen. Shan Tsutsui’s  letter to Governor Abercrombie quoted in the Star-Advertiser and elsewhere, which included this:

Currently, the State invests a great deal of money and resources in the island, including maintaining a public school, public library, state hospital, airport, roads, harbors and various state department offices to provide necessary services to Lanai residents and visitors.

Maui County also provides a myriad of services and support for the island and its residents.

However, Lanai residents are unable to purchase and develop lands that have been and may continue to be held in ownership by a single private individual or entity. The continued private ownership of Lanai may prove detrimental to the people of Lanai and the State, as a private owner is not subject to public, community or government input in making decisions that can and will affect such parties.

Tsutsui’s position would seem to suggest that the state could intervene somehow (or else, why write to the Governor)?

Hawaii has already intervened successfully in the private ownership of land. I wrote this in one comment:

Hawaii's 1967 Leasehold Conversion Act allowed the state to force mandatory conversions of houses from leasehold to fee simple ownership. So yes, a legitimate [private] ownership was modified by law.

The law was aimed particularly at the Bishop Estate. In 1979 Bishop Estate took the state to court. The 9th Circuit declared the law unconstitutional in 1983 but in 1984 the U.S. Supreme Court overturned the 9th Circuit in a unanimous decision. What was upheld, if I understand it correctly, is that the state may use eminent domain to change ownership of private property.

Now, again, I emphasize that I don’t know what I am talking about. So I ask the question: could the state exercise its power of eminent domain and intervene in the sale of the private property on Lanai, even taking it back for the state?


The state could exercise ED power, but that power is limited.

What would be the "public purpose," of buying the land? How (and how much) would the state pay for it?

Aside from those matters, would the state be a better/more reliable steward of the land than Ellison? (e.g. the windfarm issue)

And if they did it now due to Ellison, the question could be asked why they didn't to it earlier due to Castle & Cooke.

If they tried it, the case would be tied up on court for years.

Lanai's asking price was pegged between $500 million and $600 million. For a man of Ellison's means (6th richest man in the world; $36 billion), the purchase was roughly the equivalent of a family with $1 million net worth buying a used Chevy Impala, according to Forbes' calculations.

My mind is boggled by the whole thing. And I haven't had my morning coffee yet.

So I'm wondering if Ellison might be interested in buying Oahu one day.

Ok, where's that coffee...

If the State did it procedurally right and for the right reasons, it most likely does have the power to exercise eminent domain to take the property and transfer it to public ownership. Also, the state would be liable for the payment of just compensation and damages. Fair market value is the starting point for that calculation, so that alone might put the kibosh on any condemnation attempt. As another commenter noted, however, "likely" does not mean a slam dunk in favor of the state, and Hawaii law allows a more searching inquiry into the government's motive for a taking, so any attempt to condemn the island might end up in a protracted court battle; he certainly can afford attorney's fees to make such a fight if he wanted. And that's only the eminent domain issue, and other issues (EIS, etc) might be present.

I was saddened and troubled to learn that Mr. Ellison had hired Genshiro Kawamoto as property manager.

Well for one, it is not in the overall interest of the public good to have it owned by one person. The constitution states that.
As well, knowing full well Ellison will restrict access to the island and undoubtedly employ his own rules, dismissing the laws and permits that run with the land in Hawaii, this sale is a bad idea for the state of Hawaii. It is an invitation to abuse of the laws.
There was some lazy thinking or heavy payoffs involved in this.

But what I like to say is: Show me the money.

I am still suspicious about this stink deal. Maybe Ellison isnʻt worth what he claims and this is a rollover over some other scam.

We should know by now not to be dazzled by the frontal glitter. Looking deeper is wise.

Octopus, Tentacle holdings? Do those names indicate a mindset or what? Besides being gauche.

Who knows, maybe Genshiro is the REAL buyer.

Just spoke to a lineal descendant of Lanaʻi. Castle & Cook bought the land for $1 an acre.
There is a lot to this but due to the possibility it may give this deal more information it is best saved for when things go south; which they may from what I heard. Maybe not only the state never did their due diligence but neither did L. Ellison.
Itʻs sometimes called: Let the buyer beware.

If the seller agreed to sell the land for $1/acre, where's the problem?

There is no law against selling land for less than what fair market value would have been at that time.

I could sell my house for $1 if I so chose and my heirs could not do anything about the loss of a great portion of their inheritance.

I guess that was worded wrong. The original ʻownersʻ or plantation received the land from the government swindlers in control at the time of the illegal overthrow. The $1 cost was just transaction/symbolic.

In other words, it was given by the Provisional government to ʻfriendsʻ.
Actually, all lease land in Hawaii is from former Kingdom government (99 year leases) which on expiration were to be returned to the government. What happened after the illegal overthrow, was a bureau of conveyances fraud perpetrated by land leasers which converted the leases to ownerships - on paper.

Then the records were all burned.

No wonder the Hawaiians are a little bit ʻunhappyʻ with what theyʻve (not) been getting.

Cry me a river.

It's the 21st century now. And, as they say, possession is 9/10ths of the law.

It's not going back.

People that make these kind of assertive comments demonstrate a deep fear that it will be otherwise.

People that make these kind of assertive comments and who also have an understanding of how the world really works do so with the knowledge that their assertion is the most highly probable future.

They believe in the world that is, not the world that "should be".

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