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Notice #: 0000041053-01
Public Notices



Property Location: Waiakea, South Hilo, Island of Hawaii

The Department of Hawaiian Home Lands (DHHL) is seeking applications from qualified individuals or entities to enter into a general lease agreement for the construction, operation and management of an industrial/commercial mixed-use development and related facilities on Hawaiian home lands further described below. As authorized by §204(a)(2), Hawaiian Homes Commission Act, 1920, as amended, all parties interested in leasing the property herein described shall have 45 days from the date this “NOTICE OF PROPOSED DISPOSITION” is first published, that date being Friday, June 13th, 2008, in which to submit completed applications for DHHL consideration.

Interested applicants may obtain a prospectus (“Information Packet”) beginning on Friday, June 13th, 2008. All completed applications received by 4:00 p.m. (HST), Monday, July 28th, 2008, shall be reviewed and only those applicants that meet DHHL’s initial objectives and criteria shall be notified in writing as being eligible for further consideration of their proposals. Eligible applicants shall be required to submit detailed development plan information, a sealed rent bid proposal and an earnest money deposit to DHHL by no later than 4:00 p.m. (HST), Friday, September 26th, 2008. After DHHL reviews the detailed development plan information, those eligible applicants who meet DHHL’s additional objectives and criteria shall be deemed “qualified” to attend the opening of all qualifying sealed bids to be conducted at DHHL’s Honolulu Office located at 91-5420 Kapolei Parkway, Kapolei, Hawaii on Friday, October 17th, 2008, at 10:00 a.m. (HST).

Information Packets containing an application form, property information and other requirements for completing the application process are available for pick up by prospective applicants during regular office hours at DHHL’s Honolulu Office located at 91-5420 Kapolei Parkway, or at the district offices located on the neighbor islands. The appraisal report, which shall not be removed from DHHL’s office, may be reviewed during regular office hours. Please call (808) 620-9456 (Honolulu) for the locations of neighbor island district offices and/or to make an appointment to review the appraisal report.

Land to be disposed: The property to be disposed is located at the northwestern corner of Makaala Street and Railroad Avenue in Waiakea, South Hilo, Island of Hawaii and identified as Tax Map Key No. (3) 2-2-47: 59. This subdivided parcel is designated as Lot 5-A-1 and contains approximately 15.574 acres (678,403 square feet) of land. The lot has excellent street frontage and exposure to existing traffic patterns.

Purpose/Use: The property is being offered for Industrial/Commercial Mixed Use development. Improvements and uses shall conform to those allowed in a MCX zoning district and all applicable permit requirements consistent therewith. Further, the use must comply with the “non-competitive provision” in the lease agreement with the Home Depot Center (any lessee or user whose principal business is a home improvement center, lumberyard, or hardware store will not be permissible) whose premises is located well within one and one-half (1.5) miles of the subject property to be disposed.

Lease Term: Flexible: Minimum of twenty-five (25) years but not to exceed a maximum term of sixty-five (65) years.

Minimum Upset Rent: This disposition will be conducted by a sealed bid auction. The minimum upset rent for the first twenty-five (25) years is as follows:

Annual Rent Period Escalation Rate
$ 568,460.00/Per Annum Years 1-10 —
$ 727,686.00/Per Annum Years 11-15 1.2801
$ 823,304.00/Per Annum Years 16-20 1.1314
$ 931,486.00/Per Annum Years 21-25 1.1314

The highest sealed Rent Bid, at or greater than the Upset Rent, submitted by the prospective applicant for the first twenty-five (25) years of the lease will be the determining factor in the final selection of the successful bidder by DHHL to enter into an agreement. The stepped-rent determinations are based on a constant escalation rate of two and a half percent (2.5%) per year, on a compound basis.

Rent Reopening: If the term of the lease extends beyond 25 years, the rent shall be re-determined by an independent appraisal prior to commencement of the 26th, 36th, 46th and 56h years.

Earnest Money “Bid” Deposit: Payment in the amount of one hundred forty-two thousand one hundred fifteen and no/dollars ($142,115.00) (equal to three (3) months of the Minimum Upset monthly rent) in the form of a cashier’s or certified check payable to the Department of Hawaiian Home Lands for assurance of selected applicant’s commitment to the project.

Utilities: All public utilities, including water, sewer and electricity are available to the subject property along and within surrounding public roadways. Connection to all utilities is the sole responsibility of the successful applicant.

Special Condition: In order to make the subject parcel more attractive for development, a DHHL lessee occupying a portion of the subject parcel has agreed to relocate to another nearby site. An application for subdivision of the nearby site has been submitted, however, county approval has been deferred until certain subdivision requirements are met. The successful applicant to be granted a lease for the subject parcel shall be required to participate in and bear all cost to obtain final county subdivision approval of the nearby site and construct the necessary improvements accordingly. More detailed information is available in the General Property Information, section VI, of the Information Packet.

Telecommunication Service: Sandwich Isles Communications, Inc. (SIC) will provide telephone and broadband services to the project at a time when such services are needed.

Chapter 343, Environmental Assessment: The successful bidder shall be required to complete compliance with Chapter 343 of the Hawaii Revised Statutes, as amended, prior to the start of any demolition or construction activity on the site. Such compliance shall assess the impacts that the proposed development will have on the surrounding environment, such as infrastructure, traffic, parking, noise, etc.

The Department of Hawaiian Home Lands reserves the right to cancel or modify this disposition from time to time as to all or any of the items listed hereunder by public announcement to that effect by order of the Chairman, Hawaiian Homes Commission.

For additional information and/or inquiry, you may contact Peter “Kahana” Albinio, Jr., Property Development Agent, Department of Hawaiian Home Lands, Land Management Division, at (808) 620-9454 on Oahu or email

Date: Honolulu, Hawaii June 13, 2008

State of Hawaii
Micah A. Kane, Chairman
Hawaiian Homes Commission
(SB41053 6/13/08)