Reeds Bay Resort Hotel is seen here Tuesday afternoon.
By TOM CALLIS
Tribune-Herald staff writer
Should the Banyan Drive resort area be transferred to Hawaii County?
The state Senate’s Ways and Means Committee will consider that question today when it takes up a bill that would make the county the landlord for the nine hotel properties.
The lands are currently owned and managed by the state Department of Land and Natural Resources but some lawmakers have expressed frustration by the deteriorating quality of the facilities.
Other proposed remedies have included establishing a new community development district for the area or a partnership with the Public Land Development Corporation.
Forming an independent Banyan Drive district has failed to gain much traction over the last few years. A bill to form such a district that was introduced this year is expected to die in committee.
The PLDC is being considered for repeal, leaving that agency as an unlikely solution.
Senate Bill 1361, introduced by state Sen. Malama Solomon, D-North Hawaii, is the first to propose transferring the lands to the county.
If approved by the Legislature, the bill would mean about $800,000 in annual lease revenue for the county, which would also be responsible for negotiating land leases.
But the goal of transferring ownership, Mayor Billy Kenoi said in his testimony to the committee, is to be an active manager of the lands in order to improve an area that helps fuel the East Hawaii economy.
Kenoi wrote he believes the county is in a better position to meet those obligations, including ensuring that tenants comply with the terms of their leases.
He cited the situation at Naniloa Volcanoes Resort as an example of what has gone wrong.
The hotel filed for bankruptcy last year after securing a lease from DLNR seven years ago. It has seen little improvements since the acquisition and remains underutilized.
“Enormous effort has been invested in bringing direct flights to Hilo to boost the East Hawaii economy, yet the lingering problems at the Naniloa jeopardise all of the progress that has been made,” Kenoi wrote.
DLNR Chair William Aila has wrote in opposition to the proposed transfer, noting the agency uses the revenue to help manage its many acres of public land.
He noted lease agreements are being negotiated to include substantial investment in the properties and that the Hilo Hawaiian Hotel has proposed making $5.4 million in improvements.
“There is no explanation in the bill as to how the county will better be able to manage the properties,” Aila wrote.
Five of the nine Banyan Drive leases will expire in 2015.
Rep. Mark Nakashima, D-Hilo, Hamakua, said the state Office of Planning may help DLNR with developing a master plan for those properties, rather than simply leasing to the highest bidder.
Relying on the bidding process alone doesn’t always produce the best results, said Nakashima, who used Naniloa as an example.
Nakashima introduced the bill to form the community development district, which, if approved, would be responsible for creating a development plan for the area.
He said the bill was sent to the wrong committee, but could be revived by being tacked onto other legislation sent over from the Senate.
SB 1361 was initially incorrectly written to transfer Banyan Drive — the road, not the area —to the county.
The county already owns the road and Solomon’s staff attributed the error to miscommunication.
The Water and Land, and Public Safety, Intergovernmental and Military Affairs committees amended the bill Feb. 13 to accurately reflect the proper intent.
Email Tom Callis at firstname.lastname@example.org.