Public Land Development Corporation Will Negatively Impact State

I have not commented publicly on the business of DLNR since I left that position because I wanted to give this Administration and Chairperson the same respect as previous DLNR Chairmen provided to me.

However, my concerns over the Public Land Development Corporation (PLDC) and the impacts it will have on the mission of DLNR have grown so great that I can no longer remain silent.

Because we have a limited time to speak, I am limiting my comments to the most serious structural flaw in the PLDC and recommending you adopt five provisions in your administrative rules to address this flaw. But first, let me provide the context for these recommendations.

During the early days of Statehood, the predecessor of DLNR was created with the goal of developing state land in order to develop our state economy. This mission was laid out in the original enabling legislation.

Over the next few decades development flourished, often at the expense of our resources and our communities. Our state economy grew, but unfortunately, an insatiable appetite for development and the significant money it brings to the developers and their supporters, also grew unchecked.

In time, the residents of Hawaii rebelled and advocated to change Hawaii’s laws. In the following decades our State adopted many laws, which have clearly re-defined a new, modern and relevant mission for DLNR: conserving, protecting and enhancing Hawaii’s natural and cultural resources.

Up until last year, DLNR was an agency governed by a single Board. The Board of Land and Natural Resources (BLNR) was exclusively tasked with balancing the modern mission – conserving our resources for future generations – with the old laws authorizing DLNR to develop state land.

While this balance can be a challenge, in recent years the BLNR has clearly been shifting DLNR to focus more on resource conservation. DLNR development has been limited to minor projects that support DLNR’s base operations (park and harbor improvements; fencing native forests), or a select few larger projects in already urbanized areas, which must comply with all federal, state and county permitting, zoning and land use laws.

Last year the Legislature adopted a law that completely shatters any concept of balance. By creating the PLDC, the Legislature effectively severed any connection between the mission of resource conservation and the development of state land.

Now there are two disconnected Boards. The PLDC is tasked with a mission to develop state land to generate revenue. While some lip service is given to supporting DLNR, the reality is the PLDC’s mission is to develop state land in a manner that maximizes revenue. The PLDC Board has no obligation to balance the interest of resource conservation; no obligation to have projects meet land use or county zoning laws; and no obligation to ensure the BLNR supports the projects.

We are being told we should support the PLDC because it will generate revenue for DLNR.

As the former Chairperson of this department, I can tell you unequivocally the PLDC is and will take revenue away from DLNR. Under law, the PLDC will take it’s own costs and a 15% cut out of any revenue it generates. In addition, the PLDC apparently does not have to abide by the public bidding or lease limitations governing DLNR, thereby opening the door to “sweetheart deals” that may generate revenue, just not to DLNR.

Equally worrisome are the comments of the PLDC Executive Director in this daily newspaper. He stated that the PLDC’s “objective is to provide the alternative funding that will make programs self sufficient…”. It appears that the intention is to defund DLNR of all General Fund revenue and replace it with the PLDC project-generated revenue. In that case, the PLDC development will not bring any new resources to DLNR, but instead place DLNR on more unstable footing.

All this background begs the question: if one is purely interested in supporting DLNR, why create a new, redundant Board that siphons revenue away from DLNR?

It appears to me that the PLDC was created by interests who do not like the fact that the development of state land has been governed by the BLNR. I guess those interests want the development of state lands to be unfettered by concerns about resource conservation; and hence the creation of a new Board free of such concerns. It is this suspicion that is fueling the growing opposition to the PLDC that you have been hearing this past month.

I realize that this Board did not introduce the legislation creating the PLDC. You were just appointed and are trying to meet your legislative duties. While I personally will work next session to repeal the PLDC, I realize that is beyond the scope of this Board’s authority and you cannot grant this request.

You do, however, control the content of the administrative rules governing the PLDC. You do have the ability to address these public concerns by adopting administrative rules that place limits on the PLDC authority going forward, in the event it is not repealed.

I ask that you demonstrate good faith with the public, and adopt the following procedures and commitments in the PLDC administrative rules.

– The PLDC will seek BLNR approval of any project involving the development of state land.

– The PLDC will not seek to develop agricultural lands eligible for designation as Important Agricultural Lands.

– The PLDC will voluntarily abide by state land use and county zoning laws, and any projects that require an exemption or amendment to such will follow the established public processes.

– The PLDC will be responsible for providing OHA with any ceded land revenue, and will not transfer this responsibility to DLNR or any other agency.

The draft rules include provisions that authorize the PLDC to make investments in securities, including providing seed capital even when no other professional investor is involved. Any provision authorizing investments should be eliminated, as it is fiscally irresponsible to allow the PLDC to use state funds to engage in speculative trading.

I’d like to make one last request in which your Board can demonstrate it is taking these public concerns to heart. Next legislative session there will be a significant effort to repeal the PLDC. We’ve recently seen how the City, ignoring the opposition to the rail project, moved forward with contracts that will now cost taxpayers extra money due to delays that should have been readily apparent when the contracts were written.

This Board should not move forward with any projects, contracts or investments until we see whether the Legislature will repeal the PLDC. It would be manifestly unfair and unwise for the Board to entangle the State in obligations that it may not be able to meet starting in 2013 if the PLDC is abolished.