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 Wednesday, September 10, 2008, in which to submit completed applications for DHHL consideration.

Interested applicants may obtain a prospectus (“Information Packet”) beginning on Tuesday, September 2, 2008. All completed applications received no later than 4:00 p.m. (HST), Monday, October 27, 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, January 30, 2009. 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 Wednesday, February 11, 2009, 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 originally was to be an extension of DHHL’s existing Kaei Hana I industrial subdivision development built in the mid sixties. Bordered by Makaala Street to the north, Kanoelehua Avenue to the south and east, and Kekela Street to the west, the property is located in Waiakea, South Hilo, Island of Hawaii and identified as Tax Map Key Nos. (3) 2-2-060: 001-010, 085-089, and further designated as Lots 75-79, 80-88, and remnant roadway lots, containing approximately 8.300 acres of land. A portion of the property is highly visible from the thoroughfare of Kanoelehua Avenue. The surrounding area is commonly referred to the Kanoelehua Industrial Area.

Purpose/Use: The property is being offered for Industrial/Commercial Mixed (MCX) Use development. Improvements and uses shall conform to those allowed in an 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.

Lease Rent: This disposition will be conducted by a sealed bid auction in which a qualified applicant shall submit their bid in a separate sealed envelope to be opened Tuesday, February 3, 2009.

The Minimum Upset Rent for the first twenty-five (25) years is:

Period Annual Rent/ Escalation Factor
Years 1-10 $ 176,420.00
Years 11-15 $ 225,835.00 (preceding rent x 1.2801)
Years 16-20 $ 255,510.00 (preceding rent x 1.1314)
Years 21-25 $ 289,084.00 (preceding rent x 1.1314)

The highest sealed Rent Bid, equal to or greater than the Minimum Upset Rent, proposed for the first twenty-five (25) years of the lease, will determine the successful bidder who will be offered the opportunity to negotiate a general lease with DHHL.

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 56th year, to including step ups at each five year interval.

Telecommunication Service: Sandwich Isles Communications, Inc. (SIC) will provide, at Lessee’s cost, 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 Ryan Fujitani, Land Agent, Department of Hawaiian Home Lands, Land Management Division, at (808) 620-9459 on Oahu or email ryan.k.fujitani@hawaii.gov.

Date: Honolulu, Hawaii September 10, 2008

State of Hawaii
DEPARTMENT OF HAWAIIAN HOME LANDS