Hawaiian Home Lands

Hawaiian Home Lands
Chairman of the Department of Hawaiian Home Lands Micah Kane

Micah Kane’s approach at DHHL isn’t pleasing everyone

Hawaiian Home Lands / With Micah Kane in the running for Kamehameha Schools trustee, his record in managing the Hawaiian Home Lands trust is coming under public scrutiny.

Kane, formerly a Building Industry Association lobbyist and head of the Hawaii Republican Party, was named chairman of the Department of Hawaiian Home Lands in 2002, in part to deliver on Gov. Linda Lingle’s campaign promise to shorten the waiting list for homestead awards.

Kane set a bold goal of awarding 6,000 residential leases during his tenure, compared to the 7,200 that had been granted over the entire prior history of the department. Even bolder was his plan to fund the agency’s operations and projects through revenues generated by commercial leases.

But with just 18 months left in his term, critics say Kane has missed his residential lease target and forgotten the original intent of the 200,000-acre Homelands trust–to rehabilitate Native Hawaiians by getting them back on their own land–in his quest to satisfy Lingle’s goal of making the department financially self-sufficient.

Big Island homesteader Wallace Beck said DHHL has repeatedly tried to get him to give up his 10-acre farm lot across from Home Depot in Panaewa so that it can be leased to industrial tenants instead. “Now that Hawaiian Homes sees the value of the land, they’re trying to get it from me,” said the 86-year-old Beck, who has farmed there for 50 years. “Most of my neighbors were evicted to make way for industrial lots and warehouses.”

Kane has also drawn criticism for supporting the governor’s de-funding philosophy by steadily reducing the agency’s share of general funds. When Kane was named chair, the agency was receiving $1.35 million in general funds. He requested none for the 2010 fiscal year.

“What kind of trustee neglects his beneficiaries?” asked attorney Alan Murakami of the Native Hawaiian Legal Corp., which last year sued DHHL and the governor for failing to request or secure sufficient public funding for the agency. A judge dismissed the claim, saying it was a political question that he couldn’t decide.

Kane, however, said he’s proud to have “weaned” DHHL off general funds, a strategy he pursued for two reasons. Accepting taxpayer funds to operate programs that “benefit a single class of people” could open up the department to an equal protection lawsuit, he said. Secondly, he believes that “financial self-sufficiency is political independence.”

“I don’t want the Legislature to get off the hook,” said Jerry Mauhili, former president of the Keaukaha-Panaewa Community Association, which previously sued DHHL over the loss of trust lands to a Hawaii County flood control project. “The attitude is always, we’ve given you land. You want money, too? We need to look at what can make us money and also what is due us from the state Legislature. The Hawaii Visitors Bureau is given millions annually and Hawaiian Homes has been neglected. We’re lost in the shuffle.”

Kane said he has pursued state support of DHHL programs through funding for capital improvement projects, such as roads and water lines that benefit “a broader sector” than solely the agency’s beneficiaries.

DHHL also receives $30 million annually under a $600 million settlement with the state over its prior uncompensated use of DHHL lands. That funding ends in four years. Kane has maintained that the general leases he’s pursued will help make up for the loss of those monies. During his tenure, the agency approved 19 new general land leases totaling $4.6 million annually and 102 new revocable permits that generate some $2.45 million each year. Another six properties are currently being marketed, and the agency expects to formalize leases on them over the next 18 months.

For Murakami, Kane’s rationale doesn’t make sense because the numbers don’t add up.

Even at $30 million a year, it would still take 76 years to exhaust a wait list of 18,000 persons, he said. Kane believes the general lease revenues will provide adequate funding to meet homestead demand. The agency also has partnered with Office of Hawaiian Affairs to float revenue bonds to help pay for future infrastructure costs.

Critics, however, contend that the agency’s recent infrastructure spending has primarily benefited commercial leaseholders.

“Hawaiian Homes hasn’t provided any infrastructure for agriculture,” said Molokai homesteader Glenn Teves. Nor has the department helped Molokai farmers purchase equipment so they can work their homestead awards, even though DHHL has a program for such purposes.

The Council for Native Hawaiian Advancement, which conducted a March 2009 budget analysis of the DHHL, also raised questions about the agency’s infrastructure spending. In its report, it requested “a breakdown of how the $410.9M in trust funds were expended, by year, with specific data for 2007 and 2008 wherein $143.8M and $142.0M was expended in each year respectively [and] breakdown by administration versus capital expenditures with a listing of the capital projects constructed.”

Although Kane has achieved his goal of generating additional commercial lease revenues, he has fallen short of awarding 6,000 new residential leases. Only about 2,500 have been awarded to date, a figure that includes some 1,436 “undivided interest awards” in future subdivisions where the infrastructure is still being developed.

DHHL maintains that the undivided interest program gives people a chance to get their finances in order so they’re ready when the lots are. But Murakami said it instead serves “to disguise their failure to perform” by artificially inflating the number of lease awards.

“These leases are real,” DHHL spokesman Lloyd Yonenaka said in an e-mail, noting that some families who got undivided interest awards in Kapolei are now residing in their homes.

Kane said the agency “can award demand” and currently has lots available on the Big Island and Kauai. But many of those on the waiting list, especially those that applied prior to 2003, have financial and social problems that prevent them from qualifying for home mortgages.

“When I started, I thought all we needed to do was build homes,” Kane said. “Then I realized we needed to build people, too. We’ve purposely pulled back on lease awards so we can focus on the families.”

Mauhili said home ownership could be made truly affordable if homesteaders were given 99-year mortgages that match the length of their land leases. “The purpose of the Trust was to get Hawaiians back on their own land, to keep them from being homeless,” he said.

Mauhili and others said their criticisms go beyond Kane and his predecessor Ray Soon. Both men were simply carrying out the wishes of the governors who appointed them–minimizing the state’s financial obligation to DHHL.

“What it always comes down to is this: we don’t have money and we don’t know when we’re going to get money so you folks just have to wait,” Mauhili said. “We’ve waited half a century and we’re still waiting. Don’t make us wait another half-century.”