Kamilonui farmers critical of rent plan

November 16, 2010

HONOLULU (AP) - Farmers who have tilled Kamilonui Valley's soil for decades are protesting a proposed rent hike, waving signs along Kalanianaole Highway over the weekend.

Kamehameha Schools, which owns land in the valley on the eastern side of Oahu, wants to raise rents from an average of $15 an acre per month to as much as $434 an acre each month, a move that prodded the farmers into action.

''We want to fight for the farmers in Kamilonui Valley,'' Judy Nii told KGMB. Her nursery, R&S Nursery, has been in the valley for more than 30 years.

''There are a lot of small farmers, vegetable farms, some nurseries, and the rent that they're asking for is just so outrageous that none of us can afford it,'' she added.

Nii said she currently pays $1,200 a year in rent for her 6 acres. ''And what they're proposing in my case is $32,000 a year, which is totally unfeasible,'' she said.

The farmers accused one of Hawaii's largest landow-ners of failing to negotiate in good faith. They said the lease renegotiation deadline was in July, and contended that Kamehameha Schools is now refusing to talk to them.

Kamehameha spokesman Kekoa Paulsen said Saturday that the institution has been meeting with the farmers since March.

''We have given them several extensions of time,'' said Paulsen. ''We are headed into arbitration on the lease negotiations. . . . We believe that the arbitration process will determine a fair price, and we will abide by the arbitrator's decision.''

Paulsen said Kamehameha hopes the farmers appreciate ''that they've been paying extremely favorable rents for 38 years for land that has provided their livelihood and also their residence.''

Republican state Rep. Gene Ward, of the Kalama Valley and Hawaii Kai areas, also participated in the sign-waving.

Kamehameha Schools

Kamehameha Schools asks slack, gives none

  November 15, 2010 by David Shapiro
Categories: Volcanic Ash

There was a dissonance in two stories about Kamehameha Schools over the weekend.

One in the Star-Advertiser by Rob Perez examined how Honolulu’s real property tax breaks for charitable institutions enables Kamehameha Schools, Hawai‘i’s  richest landowner, to pay only $300 a year in taxes on its 425-acre Kapalama campus that is valued at $157 million — the same tax a couple pays on a single parking space at their Waianae apartment.

A Kamehameha Schools spokesman said the relief is warranted in recognition of the value nonprofits provide to the public good.

Cut to the other story, about small farmers in Kamilonui Valley protesting an attempt by Kamehameha Schools to push their lease rents 28 times higher — from $15 per acre per month to $434.

Judy Nii, operator of a small nursery, is looking at a rent increase from $1,200 a year to $32,000, which threatens the survival of a business with a small profit margin.

“Basically, they’re asking us to work and give them whatever we make,” Nii said.

Kamehameha Schools was totally unsympathetic in a statement: “We appreciate that the Kamilonui lessees are facing a large rent increase, but we also hope the lessees appreciate that they’ve been paying extremely favorable rents for 38 years for land that has provided their livelihood and also their residence.”

I know there’s no direct connection between the two stories, but it leaves a bad taste when a multi-billion-dollar trust that expects an awful lot of slack on taxes it could easily afford refuses to give any slack at all to honest, hardworking farmers who can’t afford higher levies of the magnitude Kamehameha Schools is demanding.

The inevitable outcome if the hardball succeeds is that the farmers will be driven off the land and another piece of green Hawai‘i will be lost to development.

This is an example of public good worthy of enormous tax breaks?

1. Carolyn Martinez Golojuch, MSW Says:

   
   November 15, 2010 at 1:51 am Great insight into a problem that I face on a regular bases. The CC of HNL has a Tax Review board. It’s always made me wonder if the landowners who ask for a decrease in their 2nd, 3rd and 4th or more properties ever give the leasees a break on their monthly rent prices. Some by the photos of the property are really slum lords. Welcome to the land of Aloha.
   
2. Earl of Sandwich Says:

   
   November 15, 2010 at 7:41 am Somewhere along the line, KS went from charitable trust to evil empire. It’s true that a lot of the lessees have gotten off with good deals, but I know a number of them who really are on a thin line and could be at least treated with some flexibility in the payments. However, KS is towing the hard line, probably to force these folks out and redevelop to get some of that fat, juicy, mainland money.
   
3. Capitol -ist/WassupDoc Says:

   
   November 15, 2010 at 10:01 am oh, the rich get richer and the poor get children, in the meantime, in betweentime, aint we got fun.
   The more things change, the more they stay the same.
   Cliche Monday, I know….but what we see and what we get is how things go when we llive in a society where money talks and the rest of us walk.
   Off to work – have a Good Monday everyone
   
4. Michael Says:

   
   November 15, 2010 at 10:21 am “Business is War”.
   Not Kamehameha School itself but those who are trusted to run the School that are the ones to blame. It is again Business Persons who run Hawaii.
   If you note in the article presented, The Same Politicians who are deciding on the fate of Kalihi are involved again. Are they being “paid” off by donations to cater to the “rich”?
   I scratch your back, you scratch mine? The poor cannot afford a back scratcher!
   
5. anticoqui Says:

   
   November 15, 2010 at 11:12 am The State wants to help agriculture; step in and ‘condemn’ the farmland from KS/BE for $30/acre and then, negotiate a lease agreement with the farmers for slightly more per acre. The farmers, hopefully, won’t be stressed by a smaller increase of $15 to $32-35/acre compared to KS’s $434. Are the farmers using well water or paying for pumped in water? I guess land-owners always want incentive$ to keep agricultural lands in production but, why do some/most of them ‘ask for blood’ right off the bat’ instead of long-term vision toward sustained agricultural revenues? The Kamilonui Valley farmers seem to be in a ‘serf-like’ position….being asked/demanded to give all to the land-owner and hope for crumbs in return which seems doubtful in this situation.
   
6. David Shapiro Says:

   
   November 15, 2010 at 2:18 pm Kamehameha Schools forwarded a copy of its full statement to the media:
   

   We appreciate that the Kamilonui lessees are facing a large rent increase, but we also hope the lessees appreciate that they’ve been paying extremely favorable rents for 38 years for land that has provided their livelihood and also their residence.
   The lease renegotiation date has been known since the leases were signed, and we have been meeting with the farmers since March. We have given them several extensions of time. We are headed into arbitration on the lease negotiations, which is the process provided for in the leases if written agreement can’t be reached. We believe that the arbitration process will determine a fair price, and we will abide by the arbitrator’s decision.
   Our offer to the farmers in Kamilonui was approximately $434/acre/month. This included the right to sublease their property for bona fide farm use, and the right to reside on the property.
   They rejected our offer, and the lease rent will now be set by a three-member panel of arbitrators. We have named our arbitrator, and we are waiting for the lessees to name their arbitrator. The two named arbitrators will agree on a third arbitrator.
   We still believe our expired offer was fair. As a comparison, the State Department of Agriculture just completed a competitive bid process for agricultural acreage in Waimanalo that resulted in leases for bona fide farmers of $460/acre/month.
   Here is some information you may wish to consider:
   1. The average lease rent for the last 38 years in Kamilonui has been $185/acre/year or $15/acre/month. That includes the right to reside on the property.
   2. Out of the 87 acres under lease for farming in Kamilonui, less than half is actively farmed.
   3. The leases require that 50% of the land be in Ag use.
   4. Subleases are not allowed under the current leases, yet several of the lessees are currently sub-leasing or allowing others to use the property. Two of the sublessees are not doing any form of agriculture. We understand rent in one case is $1,875/acre/month. Again, our average rent currently for an entire parcel is $987 per year. The parcels range in size from approximately 3 to 10 acres.
   5. Several leases are in violation with rubbish, abandoned vehicles, scrap metals and discarded plastics.
7. ppcc Says:

   
   November 15, 2010 at 4:45 pm KSBE’s media statement is contradictory. If the lessees are in violation of the lease such as subleasing, not using at least 50% for agriculture or using the land as a dumping ground then KSBE should warn, then evict the people who violate the lease. Lessee violations should have NOTHING to do with increasing rent for everyone, INCLUDING the families/groups or are abiding by all lease rules, NOT using slave labor like Aloun farms, providing food for Hawaii residents and making a modest profit to continue on with their farming business.
   Also the difference in additional rent money collected by KSBE for the old lease rates with the higher lease rates for all 87 acres as identified by press release adds up to less than $260,000 more per year, which is chump change to KSBE. You get the feeling that KSBE figures it is legally easier and less of a public relations nightmare** to just ‘throw out the baby with the bath water’ and impose a blanket rent increase for everyone as a more effective tool to kick out the bad tenants once and for all. The legitimate tenants who are efficient and can make good use of KSBE land to farm can stay because only they will be able to comfortably abosrb the increase in their rent.
   ** Possible that some of the renters who are abusing their rental agreement with KSBE will try to get the local media to paint them as the “victims” who are now being kicked out of their “homes” by the “greedy” KSBE. Seems KSBE is using a preemptive strike to get it out to the public that some of these renters are not all “innocent victims”.
   
8. Hawaiino Says:

   
   November 16, 2010 at 6:58 am The lessees submitted a proposed lease rent based on the Income Capitalization method of valuing land. KS, and the other large landowners in Hawaii , have relied on Sales Comparison as their exclusive method for valuation. This allows them to hold their land for income (rent) yet value it at speculative levels as if it were for sale, which it is not.
   The local appraisers ignore the federally mandated principles contained in USPAP ( it uses “should” instead of “shall”) to the detriment of the lessees, who are the farmers and small businesses of Hawaii.
   The basic principle of choosing a methodology for appraisal is that it should reflect the actions of the market participants. If they are speculators or investors then Sales Comparison or Replacement Value is most appropriate. If they are seeking rent then the Income Approach is called for.
   But not in Hawaii.
   
9. ppcc Says:

   
   November 16, 2010 at 10:18 am Math correction:
   Current:
   ($185/acre-yr)*(87 acres)=$16,095/yr
   KSBE proposed:
   ($434/acre-mnth)*(87 acres)*(12 mnth/yr)= $453,096/yr
   Difference:
   $437,001/yr
   Still chump change to KSBE but that is salary for at least one KSBE lobbyist
   
10. Hawaiino Says:

    
    November 16, 2010 at 2:44 pm ppcc, re: “…at least one KSBE lobbyist”
    I was haunting the Capitol this past session, and in the process interviewed some registered lobbyists. One was a former KSBE contractor and they advised me that post “Broken Trust” KSBE had released all their formal contracts and were basically AWOL from the Leg. Too much scrutiny of their past bad behaviors had lead to hyper sensitive current trustees. Hence, no active lobbyists on the floor.
    BUT…I just had another talk with a lobbyist who advised me that KS is currently taking proposals from lobbyists for active representation in the next session. So, if in fact they ever really left, what with alumni sprinkled throughout elected and administrative positions, it seems like they’ll be back to politicize their interests once again. I guess 10 years or so was long enough in purgatory.
    This lobbyist advised me that KSBE was highly concerned about leasehold reform, and the HRPT success in having ACT 189 overturned had apparently emboldened them. They want to nip in the bud any attempts to change the status quo. I guess LURF and the other secondary representation is not enough.
    Have you ever wondered what a Dynastic Trust looks like? Well, I checked their latest reported 2008 results:
    9.44 billion 2008 up from 9.05 billion in 2007, thus they earned 435 million that year with Total Expenditures for ALL activities 273 million or less than 3% of assets. A Dynastic trust can keep increasing their portfolio basis by earning more than they spend with no statutory limit to the life of the trust. They have announced their portfolio is down to the 7+ billion range in 2010, but their income should be holding steady.
    And thanks to the farmers of Hawaii Kai, maybe even going up!

retired 

My feeling is they want the farmland for million dollar housing. It's a small, secluded valley perfect for a gated community. It only will benefit a few. Another sad chapter the powerful stepping on the weak.

HonoluluBoy

I think the King would just roll over in his grave to see what Kamehameha School is doing to this community of farmers who are too old to fight back and have very little cash to take it to court. Auwe...

Dee Jay Mailer On The Hot Seat Kamehameha schools Kamilonui agricultural land

DEE JAY A. MAILER
Chief Executive Officer
Kamehameha Schools

Remember these words? Look's like She only sees Economic $$$$$$$$$$$$ Now!!!!!

 

http://blogs.honoluluadvertiser.com/hotseat.php/2007/05/02/on_the_hot_seat_kamehameha_schools_ceo_d

 

Comment from: Dee Jay Mailer

Aloha Chris,

There is no current deal to sell Kamilo Nui agricultural land to any developer, and selling Kamilo Nui land was never our initiative. A couple of years ago, some of the farmers asked us if they could purchase their leased fee interest so they could, in turn, sell the property to a developer. We agreed to let them explore that option, as long as it was acceptable to all the farmers in the valley. The farmers and the developer were not able to reach an agreement and there are no further discussions taking place. Not all of the farmers supported the development proposal, therefore, Kamehameha will honor the current lease terms.

Chris, your question is focused on Kamilo Nui, but our stewardship kuleana extends throughout the state, and our approach is holistic. Every decision we make concerning our lands is weighed against five values: Environment, Education, Economic, Cultural and Community. Can it be used for a land-based educational program? Is it culturally significant to our Legacy or our people? Can it be used to benefit the Hawaiian community? Will it generate significant economic resources that allow us to fulfill our mission and expand our educational reach into the larger community? Is it environmentally sensitive, unique or precious? We were established in perpetuity, and we must make careful decisions about our assets to make sure we protect our future.

Kamehameha Schools/Bishop Estate wants to destroy farmers in Hawaii

First they nail you to the wall, then they said you are Great. Holy cow Batman!! Hard to figure
 Bra.
Kona Coffee Farms at Risk in Lease Talks
Special from Hawaii Free PressBy Andrew Walden, 12/4/2007
North Kona coffee growers fear being forced out of business under terms proposed by Kamehameha Schools’ land lease negotiators. Over 240 farmers face renegotiation as their 35-year ground leases expire. Demands by Kamehameha Schools (KS) would increase ground rents for the average five acre parcel from the current $1,250 to 7,500 per year to an average closer to $40,000 per year. Leasehold farmers in North and South Kona produce about 65 percent of Kona coffee. North Kona coffee growers have formed a leasehold committee to negotiate. They are asking Kamehameha Schools to pattern the North Kona lease renewals on the lease renewals given to South Kona coffee growers beginning in March, 2006 -- after 7 years of negotiations. South Kona leases were signed with four or five North Kona farms -- including one run by a former KS manager -- and then suddenly KS stopped and demanded higher payments from North Kona.
Robert Rosehill is the KS Land Assets Manager handling the negotiations. In an Oct. 31 letter to Kraig Lee, the Chairman of the North Kona Leasehold Committee Rosehill points to, “the combination of escalated real estate values (and) phenomenal profits to lessees from the sale of KS leaseholds ….” Rosehill asks, “… your understanding of the constraints that have been placed upon us by forces not directly involved with land management or farming.” Both the South Kona and proposed North Kona leases contain a 30 percent "assignment fee" paid to KS when leases are sold. Both also take a percentage of business revenues generated on the leasehold in the event that the percentage exceeds the base rent.
Over 250 farmers met Nov. 17 at the Church of Christ on Konawaena Rd in Kealakekua. A second large meeting of leasehold farmers was held in September. Farmers believe KS is pressuring media to remain silent. One supporter explains, “… more than 400 people were in attendance (in September), but there was no media coverage at all.”
One leasehold farmer, who asks not to be identified for fear of retaliation explains, “They (KS) are expanding Keauhou Shopping Center three times its current size. Our farm is mauka of that area and KS sees these leaseholds as potentially the Beverly Hills of West Hawaii. We have spent our own money and effort to establish our farm, our brand and our marketing.” Under the new lease agreement, “Before you grow your fist bean you’re nearly $100,000 in debt every year. We would have to surrender our lease. There isn’t enough money in coffee. For over 120 years bishop has renewed the leases. We built roads and houses based on the expectation.”
Another believes KS intends to drive out the North Kona coffee farmers and “develop for upscale properties instead.” Lee discounts these theories pointing out that KS has thousands of acres of undeveloped land, including Kona lands he feels are much better situated for luxury development.
As the negotiators crawl forward, some farmers are already on month-to-month leases. Others expire in 2008. Explains one farmer, “An ohia tree crashed down on my neighbor’s drying platform. He can’t justify spending $65,000 to repair it when he doesn’t know if the lease will be renewed.”
In a letter to Rosehill, Lee writes, “Most households could not afford an additional $3000+ a month increase in their budget. No farmer could afford it. If this increase were to happen, most lessees would attempt to sell their leases. This would not work because no one would purchase their lease even with a substantial or total discount in sales price, knowing they had to pay $3,333.33 a month in lease rent ….KSBE would go from having an income stream on their leases to a tremendous liability, expense and legal/litigation dealing with lessees, lenders, title companies, squatters, deterioration of crops, dwellings and buildings and abandoned leases, real estate taxes. This would not be good stewardship by KSBE and would be a major community disaster.”
The proposed $40,000 per year average annual lease payment is patterned on KS’ current 4-percent-of-fee-value “penalty rent” assessed only to leaseholders who don’t pay on time or otherwise fall out of compliance. Lee continues: “We would like to believe we are not being punished for farming ….At our own expense we have brought in utilities, cleared land, installed roads, paved roads, planted crops, installed water systems, irrigation systems, ripped out failed crops and installed new crops, built houses, barns and fences, etc. The proposed revised rent structure would … destroy farming on KSBE leased land in North Kona as we know it today.”
Rosehill responds “KS is bound by its fiduciary responsibilities to its beneficiaries”—the native Hawaiian students of Kamehameha Schools. “The Trustees…are prohibited from giving away trust assets. This includes negotiating rental income that reduces or falls below contracted levels.” He adds, “The absence of a current detailed, convincing argument makes it nearly impossible to justify application of the South Kona rent schedule and new 35-year lease in North Kona.”
The North Kona farmers have hired University of Hawaii - Hilo agricultural economist Dr. Sabry Shehata to study the economics of Kona coffee farming and help develop a compromise proposal.
Some Kona coffee farmers in late 2005 and early 2006 were outspoken in opposition to plans for by “PLK Air Services LLC” to build a $25 million coffee and macadamia nut processing facility financed by state-backed bonds at Kona’s Keahole Airport. The Kona Coffee Council, Hawaii Coffee Association, and the Kona Farm Bureau all opposed the new plant.
The “L” in PLK stands for Robert Lindsey, a former Land Assets manager and Regional Director for KS. In April the Office of Hawaiian Affairs board of trustees selected Lindsey as OHA’s Big Island trustee replacing the late Linda Dela Cruz. PLK announced in August it is purchasing the Hilo Mauna Loa macadamia nut processing plant from Mauna Loa’s new brand owner, Hershey. Market turmoil has left many Big Island macnut producers unable to sell their crops for the last two seasons. PLK partner Albert K.F. Kam Jr told Pacific Business News August 3 that PLK is still pursuing its Kona airport plans.
Lee discounts any connection, calling Lindsey “a nice guy” and pointing to “Honolulu bean counters” as the source of KS’ demands.
Says Lee, “There are some people who want to go right to litigation. Both sides have a duty to negotiate in good faith. We probably would be thrown out of court if we didn’t negotiate first.”
Related story, Coffee farmers oppose PLK:
http://www.hawaiiislandjournal.com/2005/10b05a.html
Andrew Walden is the publisher and editor of Hawaii Free Press, a Big Island-based newspaper. He can be reached via email at mailto:andrewwalden@email.com
HawaiiReporter.com reports the real news, and prints all editorials submitted, even if they do not represent the viewpoint of the editors, as long as they are written clearly. Send editorials tomailto:Malia@HawaiiReporter.com

Three years later, Best of friend

Kamehameha Schools at KCCF

November 11, 2010

MEDIA RELEASE
Kamehameha Schools stewards about 180,000 acres of agricultural lands as part of its statewide portfolio. On Hawaii Island alone, more than 72,000 acres of high-value agricultural lands help support a reliable food source, local jobs and a sustainable future for Hawaii.
Prudent management of the Schools’ natural and cultural resources is essential. Kamehameha Schools Land Assets Division (LAD) forged a strategic agricultural plan to provide goal-based initiatives for optimal agricultural management.
Roughly 800 Kamehameha Schools agricultural tenants are actively farming a variety of crops on Hawaii Island. These agricultural tenants play a vital role in providing Hawaii’s bountiful harvest and supporting Kamehameha Schools’ mission of creating educational opportunities to improve the capability and well-being of people of Hawaiian ancestry.
Makahiki heralds this time of year where abundance and the harvest is celebrated. With more than 70 percent of Kona coffee grown on the Schools’ lands, Kamehameha Schools is honored to participate as a sponsor of the 40th annual Kona Coffee Cultural Festival.
Les Apoliona, Kamehameha Schools North Kona land manager, said, “Farmers are the ambassadors of the Kona coffee brand worldwide.”
On of the highlights of the festival comes when the Kona coffee industry gathers at Keauhou Beach Resort to witness the prestigious judging of Kona’s finest coffees at the Gevalia Kona Coffee Cupping. The final round of cupping begins 9 a.m. Thursday, Nov. 11.
The public is invited to meet these Kona coffee ambassadors and to judge a bit for themselves at the Keauhou Resort Kona Coffee Label and Website Competition, and the art exhibit.
Dave and Trudy Bateman, KS agricultural tenants and owners of Heavenly Hawaiian, will be on hand alongside Kamehameha Schools to share farm information and samples of their 100% Kona coffee.
Also Thursday at the Keauhou Beach Resort, join Kamehameha Schools and its featured agricultural tenant – the family-owned Kona Coffee & Tea Company, the 2009 winner of the Gevalia Cupping Contest. The Private Reserve and Malia Ohana roasts will be available for sampling and purchase.
Following the Kamehameha Schools Kona Coffee Grand Parade on Saturday, Nov. 13, the Schools will join the festivities and cultural events at the Makaeo County Pavilion. KS agricultural tenants Hawaii Island Gourmet and Kona Cowboy Coffee will be featuring food pairings.
With three generations of paniolo, Onaka Ranch proudly makes its special Kona Cowboy Coffee available for all to taste and savor.
Hawaii Island Gourmet, known to many for their signature Atebara potato chips will also be available for sampling and purchase including taro, sweet potato and shrimp chips and cookies.
Also this week, the Association of Hawaiian Civic Clubs is convening its annual convention at the Sheraton Keauhou Bay Resort. Kamehameha Schools will be exhibiting and sharing its land stewardship and strategic agricultural plans with convention attendees.
For more information on how to support local farmers or to view Kamehameha Schools agricultural tenants with commercial businesses, visit www.ksbe.edu/land

Kamehameha Schools/Bishop Estate wants to destroy small business farmers in Kamilonui Valley

This letter when out to all the KS Alumni

 From: KS Alumni

Date: November 17, 2010

To: all the KS Alumni

Subject: Background on KS Lease Issues in Kamilonui

Aloha e Nä Hoaloha,

As you may already know, a small group of lessees who hold agriculture leases with Kamehameha Schools in Kamilonui - East Honolulu are protesting lease rent increases that we have proposed and consider to be fair.  We have been negotiating with the lessees since March, and while we continue to meet with them, we are also proceeding with arbitration, which is the process provided for in our lease agreements. We believe the arbitration process is a fair one.  A three-member arbitrator’s panel, selected by the lessees and Kamehameha Schools, will determine a fair lease rent structure based on comparable parcels in the area.  We respect the arbitrators’ expertise and will abide by their findings.

The lessees have taken their cause to the media, suggesting that the proposed lease rent increase is too high and jeopardizes their futures.  The news media appear to have accepted the lessees’ characterization of this process, so we wanted to share our side of the story and hope that you can help us by being advocates.  Here are some facts about the issue:

1.            KS has abides by all of the requirements of the lease contracts signed 38 years ago, even if those requirements did not favor Kamehameha’s interests.

2.            One of those requirements was that rents would not be increased from that time until July 1, 2010.

3.            This has resulted in lease rents for the last 38 years amounting to $15/acre per month (which includes the right to reside on the property).  Clearly this amount is far below market value and far below what is a fair return for KS today.

4.            The lease rent proposed by KS is about $434/acre per month.  Although this is a significant increase from $15/acre, the amount is still low and very fair especially considering the residential element. 

a.            As a comparison, the State Department of Agriculture recently completed a bid process for agricultural acreage in Waimänalo that resulted in leases, for bona fide farmers, of approximately $460/acre per month.

b.            KS has also already settled lease rents with several of the other agricultural lessees in the area who have agreed to KS’ lease rent offers.

5.            A majority of the current lessees are not currently farming the minimum requirement of 50% of their properties.

6.            Although subleasing is not allowed under the current agreement, several lessees are allowing others to use the property – and charging them for it. Two of these sublessees are not farming at all; we’ve also been told that one sublessee pays $1,875/acre per month. That means that their landlord (our lessee) is making a significant profit by subleasing our agricultural land for residential use.

a.            Recognizing that subleasing to bona fide farmers could allow current lessees to generate additional income to offset their new market rent, KS is offering to allow subleasing for bona fide agricultural use in the new leases.

7.            Several leases are in violation – using the land as dumping grounds of abandoned vehicles, scrap metals and discarded plastics.

Unfortunately, a group of the lessees who accepted the favorable terms of the lease agreement for nearly four decades, did not use the long stretch of very low lease rents to prepare for the eventual readjustment to fair market rates. As you know, we have a fiduciary duty to ensure that our lands provide the income critical to our ability to fulfilling our educational mission. We also have kuleana for the stewardship of our lands, and we take our kuleana very seriously.

Please help us be ambassadors for our mission and our children.  We would like to call on you to advocate for a fair and impartial resolution of this issue.  We believe that will be accomplished through the arbitration process.  Please let us know by email at land@ksbe.edu if you are willing to kokua this effort. 

Mahalo nui ia `oukou,

Ann Botticelli, Vice President

Community Relations & Communications Group

P.S.  We’ve also included (below) a quick-reference fact sheet regarding our Kamilonui lease issues. Mahalo for your consideration.

KAMILONUI FACT SHEET

11/17/2010

Lease history and current background

•              For the past 38 years, Kamilonui lessees have paid lease rents that have been far below fair market value; KS has abided by its agreement to not increase lease rents for Kamilonui lessees for that entire time.

•              The average Kamilonui lease rent has been $15/acre per month.

•              The lands have been used by lessees to generate income and for residential use.

•              The leases require at least 50% of the property to be in Agricultural Use; however, fewer than a third of the lessees are currently meeting the agricultural use requirement, and several of the Kamilonui properties have limited or no agricultural activity at all.

•              Although subleasing is not allowed under the current agreement, several lessees are subleasing or allowing others to use the property.

•              One sublessee pays approximately $1,875/acre per month in rent to our lessee.

New Rent Negotiation Efforts

•              The lease renegotiation period has been known since the leases were signed in 1970.

•              KS has granted lessees several extensions of time during the lease negotiation period.

•              KS has been meeting with the lessees and remains open to meeting with the lessees.

•              KS’ offer to the lessees was approximately $434/acre per month:

o        The offer included the right to sublease property for bona fide farm use;

o        A residence is allowed on the property.

Arbitration is Next Step

•              Several of the lessees have rejected KS’ offer; therefore, the new lease rent will be determined by an arbitration process that was contractually agreed upon when the leases were signed.

•              Arbitration requires that the new lease rent be set by a 3-member panel of arbitrators:

o        KS has named its arbitrator;

o        Lessees are required to name their arbitrator by mid November;

o        The two arbitrators will then decide on the third arbitrator.

•              KS believes that its offers were fair but will abide by the result of the arbitration process. 

•              As a comparison, the State of Hawaii recently completed a competitive bid process for Agricultural lands in Waimänalo; the winning bids by bona fide farmers were approximately $460/acre/month.

•              KS is seeking the same return as other comparable agricultural lands for its lands in Kamilonui.

•              KS is seeking fair market rent – nothing more.

 PLEASE NOTE:

You have received this email message as a graduate of Kamehameha Schools. If you wish to be removed from the email list, reply to this email and type UNSUBSCRIBE in the Subject Line, and include your name and graduation year. If you want to update your email address, please provide the following additional information to help ensure we update the correct record:  Full Name, graduation year and street address.

Kamilonui farmers protest

http://www.hawaiinewsnow.com/Global/category.asp?C=6743&autoStart=true&topVideoCatNo=default&clipId=5292070&flvUri=&partnerclipid=


HAWAII KAI (HawaiiNewsNow) - Farmers from Kamilonui Valley and their supporters lined Kalanianaole Highway Saturday in a quickly organized sign-waving effort to get their message out. They claim that a proposed lease rent increase will wipe out their small profit margins -- and their farms -- if it takes effect.


"We want to fight for the farmers in Kamilonui Valley," said Judy Nii, whose nursery, R&S Nursery, has been located in the valley for more than 30 years. "There are a lot of small farmers, vegetable farms, some nurseries, and the rent that they're asking for is just so outrageous that none of us can afford it."


Kamehameha Schools, formerly known as Bishop Estate, owns the six acres under Nii's nursery, as well as other small farms in the valley. Currently, those farmers are paying an average of $15 per acre each month. Kamehameha Schools has proposed increasing it to $434 per acre, per month.
Nii's current lease costs her $1,200 a year. "And what they're proposing in my case is $32,000 a year, which is totally unfeasible," Nii said.


The farmers say the lease renegotiation date came due in July, and claim that Kamehameha Schools is now refusing to talk to them. In response, Kamehameha Schools said, in a statement, "We appreciate that the Kamilonui lessees are facing a large rent increase, but we also hope the lessees appreciate that they've been paying extremely favorable rents for 38 years for land that has provided their livelihood and also their residence.


"The lease renegotiation date has been known since the leases were signed, and we have been meeting with he farmers since March," the statement continued. It also said, "We still believe our expired offer was fair."
The farmers fear that such a big rent hike will put them out of business. "What else are we going to do? That's all we know, farming," said farmer Richard Higa.


"I don't think they realize how difficult farming is, and how small our profit margin is," Nii said, "So basically they're asking us to work and give them whatever we make."


Kamehameha Schools said the issue is now going into arbitration. "We believe that the arbitration process will determine a fair price, and we will abide by the arbitrator's decision," its statement said.

Monday, January 23, 2006
Kamilo Nui farmers hope to stave off development
By Suzanne Roig
Advertiser East Honolulu Writer

	Richard Nii runs a nursery in Kamilo Nui Valley and is worried about development coming to the last agricultural valley in the Hawai'i Kai area. Stanford Carr Development has entered into a deal with landowner Kamehameha Schools to purchase and develop the 87 acres. DEBORAH BOOKER | The Honolulu Advertiser
	COMMUNITY MEETING Residents who want land in Kamilo Nui Valley to continue to be used for farming, and those who want it to be sold to a developer, can attend a community meeting at 6 p.m. Thursday at the Haha'ione Elementary cafeteria.

HAWAI'I KAI — Rows of vivid red and pink poinsettias fill the entrance to Dean Takebayashi's farm in Kamilo Nui Valley.
Likewise, up the street rows of blossoming roses of all colors greet visitors at R&S Nii Nursery, roosters and chickens roam freely, pecking at the dirt.
This piece of country living is wedged in the back of suburbia and has been here for decades. Every day, customers ask if the farmers will be here next year.
Takebayashi and the Nii family don't know how to answer that.
They'd like to continue farming in the quiet valley in Hawai'i Kai as they have for the past 40 years or so, but their landowner, Kamehameha Schools, wants to sell the land.
There's no value in holding on to the land in agriculture, particularly since the 14 farmers are paying slightly more than $200 a year per acre in lease rent, the landowner has said. Their leases expire in 19 years.
Because Kamehameha Schools has entered into an agreement with local developer Stanford Carr Development, which has agreed to purchase the 87 acres and develop it, Kamehameha Schools is left waiting for Carr to make a move.
This is the last chunk of land that, until recently, residents thought would remain in agriculture and not be turned into homes.
Residents who want to see the land remain for farming have organized a meeting with the landowner, the community and the farmers for the second time in six months to discuss its plans for the land.
That meeting is scheduled for 6 p.m. Thursday at the Haha'ione Elementary School cafeteria.
In September, more than 100 people showed up at the community meeting to voice concerns.
Land use has become a murky issue, as half of the 14 farmers would like to stay and farm and the other half want to retire. The problem is that many of their leases begin renegotiating as early as next year, and banks do not like to make loans to prospective buyers with such unknowns as what the lease rent might be or whether the owner will demand the land back.
And without an agreement from the landowner to write a new lease, farmers don't know where to turn.
"If I stay," Takebayashi said, "I want to renegotiate the lease rent for something that is economically feasible. I'd like to stay and continue my business if the lease rent is reasonable. I can't do my business if it's not.
"It's not easy being a farmer."
Kamehameha Schools has said that it won't negotiate with individual owners, but only the Kamilonui Valley Farmers Cooperative, an organization formed when the farmers first moved to the valley as a way to fund road, sewer and water improvements more than three decades ago.
"There is nothing new from Kamehameha Schools perspective," said Kekoa Paulsen, the landowners' spokesman. "The proposal (from Stanford Carr) is still out there. Stanford Carr is the one to make the deal happen."
Residents say the valley plays a vital role in preserving Hawai'i Kai's ecosystem. It is a watershed, a green belt. Mostly, it's the last valley in Hawai'i Kai to remain free of homes.
"Once it's gone, it's gone forever," said Tai Hong, a member of the Livable Hawai'i Kai Hui, a group formed to preserve open space in the community. "The land is very valuable now, but we want to strike a balance between preservation and development."
The land lies outside the city's designated area for development. Being outside the urban growth boundary and being designated as agriculture land, should offer protection, but rezoning has happened before on farm land in Hawai'i Kai. More than 1,000 new homes have been added to the community during this recent spate of development and is not reflected in current census figures that show there are 27,657 people. That's a 0.8 percent increase from 1990 to 2000.
City Councilman Charles Djou, who will be at Thursday's meeting, said that he believes the land should remain agricultural and not be developed. And while the community of farmers and residents have been discussing the future of the valley as if a proposal is before the city for a housing development, no plans have been submitted to the city for review, Djou said.
The process, should plans come forward, would take at least two years from re-zoning to the start of construction, he said.
"Kamilo Nui's future rests with the City Council," Djou said. "The zoning code is the law of the land and the law of the land says this parcel is designated as agriculture."
Those trying to keep the valley undeveloped and in agriculture believe they have to remain vigilant, despite Djou's promise of many public hearings. It happened before where a piece of agriculture land was carved out to make room for 65 homes built by Schuler Homes. That was nearly four years ago.
Richard Nii, who has spent his whole life farming, sees the area differently.
He sees it as home, the place where he was raised and where he has raised his children.
He has been in Kamilo Nui Valley since his dad's farm was moved from Mariner's Cove in the late 1960s to make room for a housing development. That was the family's second move because of a shift in land use.
"I've always known it would come to something like this," Nii said. "We want to continue farming. Many of our customers ask us if we're going to move or stay."

Bishop Estate refuses to negotiate lease with Kamilonui Valley

Sunday, November 14, 2010

	VIDEO: Bishop Estate refuses to negotiate lease with Kamilonui Valley farmers By News Release  Oahu News, Oahu Politics
"BISHOP ESTATE UNFAIR TO FARMERS" "The Trust refuses to meet with farmers to negotiate new lease rents." from Rep Gene Ward (R-Hawaii Kai) Representative Gene Ward (R-Hawaii Kai – Kalama Valley) said today on behalf of the Hawaii Kai community keenly interested in keeping the Kamilonui Valley farmers on their agriculture lots leased from Bishop Estate – Kamehameha Schools, that the Estate has not negotiated in good faith, and is calling upon the community to support the farmers. The farmers' leases expired and the farmers went to great length and expense to hire expert Agriculture Economist, Professor Chaudrey Shehata (UH-Hilo Campus) only to be told by the Estate's lawyers that such a study is irrelevant and means nothing and refused to meet with the farmers and the professor. This is the same "income based" rather than "commercial land value based" type of study that Dr. Shehata had done for 220 Kona coffee farmers just over a year ago to negotiate their new lease rents with the Kamehameha Schools/Bishop Estate. They accepted Dr. Shehata's Kona coffee study as relevant. "I find it rather unconscionable that the one of the biggest trusts in the world will not sit down and hear out a small group of farmers who have been on the land for the past 35 years. All Judy Nii and her farmers want to do is present Dr. Shehata's study and ask for fair lease renegotiations like the coffee farmers did," Ward said. Fearing that the Estate will remain obstinate and not meet with her and the farmers after so much time has passed since she has tried speaking to the estate weeks ago, Judy Nii has put out a call to the Hawaii Kai community to begin a sign waving protest campaign beginning tomorrow. Residents of Hawaii Kai fear that if the farmers are forced off their land, a new sub-division will be built and the lifestyle and density levels of Hawaii Kai will spoil the entire community. Sign waving how unfair the estate is in refusing to meet or negotiate lease rents will start at 8am at Maunalua Bay in Hawaii Kai. A second shift will wave protest signs from 10 am to noon. Saturday, November 13th and Sunday, November 14th, are both scheduled for sign waving with the farmers. "My family and I will be joining the sign-wavers at Maunalua Bay until we see some justice," Ward concluded. ---30--- Saving Kamilonui Valley in Hawaii Kai, Hawaii http://www.youtube.com/watch?v=0fvz_zOUS5c&NR=1 Kamilonui Valley Farmers Speak With Kamehameha Rep http://www.youtube.com/watch?v=6VIqnNBJOvg Kamilonui Farmers Speak With Kamehameha Rep Part II http://www.youtube.com/watch?v=g40sdFZwFjY BISHOP ESTATE UNFAIR TO FARMERS http://www.youtube.com/watch?v=_Rkmg3d_h3k