Senate Standing Committee on Hawaiian Affairs

Aloha, everyone. Welcome to this 1:00 Joint Hearing of the Water and Land, Hawaiian Affairs and the Housing Committees. Today is Wednesday, January 29th, 2025 regarding SB534, and we'd like to welcome Members of the Committee who are here and those of the public.

We welcome you to enjoy our afternoon here at the State Capitol as well as those who are on Zoom as well. Just some housekeeping measures we'd like to share with you. For all of the testifiers, those particularly on Zoom land, we ask that you stand on your written testimony.

And if your oral testimony is different from your written testimony, we will be limiting you, for each testifier will be two minutes. The content, including the hearing notices and copies of SB534 and testimony can be found on the legislature's website. And this hearing is being live streamed on the senate's YouTube channel as well.

Decision making will follow if time is permitted for today's hearing. And we'd like to share with- with all of you as well. You will see some movements here on this stage because we are already in session. Many of our Committee Members are in and out at their own hearings as well. So please bear with us.

You'll see some of the Members leaving and you will see some of them returning, and some will be here that haven't been at the first part of the program or the agenda and will be joining us. So just to let you know that, please bear with us because we are all here to do the people's work.

Now for my Committee, the Committee of Water and Land, I am Senator Lorraine Inouye. I am the Chair of the Committee. And I'd like to introduce and let you know who are my Members of the Water and Land Committee. My Vice Chair is Brandon Elefante.

Senator Stanley Chang is a Member of the Committee on Water and Land as well. And Senator Angus McKelvey. And of course, our Senator Samantha DeCorte.

Yeah.

DeCorte. Senator of the Hawaiian Affairs Committee. Mahalo for joining us today. And this is Senator- our Senator from the Big Island, Senate District 4, Tim Richards.

Aloha. And thank you on behalf of the Senate Committee on Hawaiian Affairs. I am the Chair, Senator Tim Richards. My Vice Chair is Senator Joy San Buenaventura. I have Senator Les Ihara on the Committee with me, as well as Senator Jarrett Keohokalole and Senator Sam DeCorte. Thank you for joining us.

Senator Stanley Chang, my Committee Member, as well as the Chair of the Housing Committee. Welcome. Thank you so much.

Thank you very much. And the Committee on Housing's Vice Chair is Senator Hashimoto. And we also have Committee Members, Senators Aquino.

Mahalo and Members. Let's continue with and for all of you. We will be and mahalo for the notices that you all are respecting as well.

And it's going to be the only agenda on today's agenda because this is a very important bill and we want to make sure there's transparency as well, give an opportunity for the communities to also bear with us and have the time to ask questions as well as hearing the presentations.

So we will start with the committee with the Office of Hawaiian Affairs proposal and the testifying. We will not stop the OHA to the two minute level because this is such an important community benefit as well as important for the issue before us on SB534.

We will make sure that OHA's presentation is to allow them to tell all of us what's happening in Kaka'ako Makai and the plans that they have for us. After this, we will have HCDA do their presentation as well comments and we will not limit them with their comments and presentations. Thereafter,

we will continue on with the agenda as well and including those that are on Zoom who has sent us messages that there will be some speakers on Zoom as well and we will carry that throughout the day.

And so however, there are going to be questions after the- from the Committee Members here to OHA and the exchange with HCDA before we allow all of the other testifiers.

So please bear with us because we want all of you to understand what's happening in our beautiful lands in Kaka'ako district and the island of Oahu and make sure that the members have time to also ask questions as we hear from the presenters.

Mahalo, trustee, our constituent from Hawaii island and we're proud to allow you to present your proposal with regards to Kaka'ako Makai. Welcome. Aloha.

Aloha. Aloha 'auinalā kakou, Chair Inouye, Chair Richards, Chair Chang and distinguished Members of the Senate Committee on Water and Land, Committee on Hawaiian Affairs as well as the Committee on Housing.

It's our deep and sincere appreciation that we're giving this opportunity for the Office of Hawaiian Affairs to present its plan to the Triple Committee, the Senate for this upcoming legislative session. I just want to acknowledge the fact bringing a Triple Committee together Chair is no easy task.

Having it here in the auditorium for members of the public and others that will join us over this next couple hours is important because as you elaborated on the gravity of this bill and the gravity of Kaka'ako Makai is something that we take very, very seriously, at the Office of Foreign Affairs.

And so mahalo for giving the opportunity for the public to come. It's great to see everyone here. We had a presentation on January 8th at Kupu where we had a- at least 200 people showed up for our community presentation.

And that was a good thing because democracy at its finest was on display then and it is on display now. And so it is my honor to represent the Board of Trustees as its chairperson and testify in strong support for Senate Bill 534 and acknowledge the Senators that introduced this bill, that co sponsored this bill.

And we're looking forward to providing as much information in as much of a transparent way as possible to the plans that the Office of Hawaiian Affairs has for its lands.

Mahalo. One- One second, please. A reminder, please. Can you all silence your cell phones, please? Mahalo.

Thank you. Thank you, Chair. What you will see today and what you see in this bill is something that the Office of Hawaiian Affairs has never brought to this legislature before.

Joining the Office of Hawaiian Affairs on this bill is going to be a coalition of partners and stakeholders and landowners that has never come before this body before to testify in support of the proposed plans that the Office of Foreign Affairs has.

We have critical representatives from the state's essential workforce, from our construction industry, from our hospitality industry, from our education industry, our law enforcement, our civil service. We have the Kamehameha Schools, which is probably the first time schools has come to this legislature to testify on this bill.

And I'm looking forward to hearing what Kamehameha Schools in the position they take on this bill, that has never happened before. And so we're honored by everyone's presence.

We also are honored by the Friends of Kiwalos who are here, who for the last 18 years have stood firm in protecting Kaka'ako Makai because they believe in preserving our shoreline and preserving the last open space in East Honolulu. And so we aloha them and we mahalo them for coming as well. The presentation I have,

I'm going to try and get through it as quick as possible, and I apologize for. There- There's a diverse group of senators that sit on this panel, some that have been here for a, you know, a lot longer than I was here and are very well versed on some of this content.

But we also have new senators and congratulations, Senator DeCourte, for joining the Hawaii State Senate. And we hope to give you an opportunity to learn a little bit more about Kaka'ako Makai and why this bill is so important, not just for the Office of Hawaiian Affairs, not just for the state, but for the people of Hawaii.

And so, with that being said, I will advance to the next slide and give you a little bit of history on Kaka'ako Makai. You know, Kaka'ako Makai is and the surrounding area were largely fishing grounds. It was a reef, you know, what we know today as Ala Moana Boulevard was actually the shoreline.

And the shoreline was even further inland. And so what was developed throughout the 1800s and the early 1900s was what was once shallow coral reef flats, salt beds. At one time, these lands belonged to the members of the Kamehameha royal family through Land Commission Awards.

And it is why the Kamehameha Schools and Kep Hawaii is a significant landowner in Kaka'ako Mauka as well as Kaka'ako Makai. Over the course of the last 19th and 20th centuries, the area underwent a major transition, which included a bunch of different things.

The old ironworks is at the site of the today restaurant row, which is controlled and owned by Kamehameha Schools. There was a quarantine center, a coastal battery, a military fort. There was a shanty town for immigrants, laborers.

There were two waste incinerators that would, through the course of about 80 years, burn the refuse in urban Honolulu and fill that refuse through ash into what is now Kaka'ako Makai today. But it also included a sewage pump station, a tuna cannery, and a bunch of different things, including a municipal landfill that still is there today.

It's just covered near the shoreline by what is now the city and County of Honolulu's park. In the early 20th century, boulders that were brought from Punchbowl and from Aina Haina formed the existing seawall that exists there today. An ash material from two incinerators was used to fill the seawall.

And in 1971, the state mandated that the city and County of Honolulu stop placing ash at Kuala's. The incinerator was shut down. Today the incinerator is the Children's Museum, A place where we take our children. A safe place where we take our children.

I want you to remember that when testimony is brought up discussing how incompatible and toxic the soils are throughout the surrounding Kaka'ako Makai area. Because, in fact, the Children's Museum occupies the incinerator that remains there today. Next slide. In 1976, the Hawaii Community Development Authority was created. And in 1982, the HCDA Kaka'ako Community Development District.

Boundaries were expanded at the time to include the land Makai of Ala Moana Boulevard. Height limits at that time are limited. They varied throughout the course of the years. But generally speaking, they were limited to 200ft and the area was zoned public open space.

It also include industrial use, housing, commercial use along Ala Moana Boulevard and for commercial development along Kiowala Basin. During the Administration of Governor Ariyoshi, who was big into planning, Governor Ariyoshi created the state's first state plan.

Through the Office of State Planning, they published a master plan highlighting a future redevelopment of the Kaka'ako Makai area, noting that this would be an integral part of the state's waterfront revitalization program. Over the next decade, changes to the Makai area plan were proposed. I'll talk about those in a second.

It flip flopped between residential and not allowing residential over the course of the years at least twice. But as the demand for continued housing in the urban core became so important, there was a need for housing. There was a need for commercial activity to fund the public uses. Next slide.

In 1998, as I mentioned before, the Hawaii Children's Discovery Center opened at the old Honolulu incinerator facility. This would serve as one of the first anchor tenants in the Kaka'ako Makai Waterfront Park. In 2002, the HCDA adopted the Waterfront Business Plan which guided the vision, mission and strategy for future development in Kaka- in the Kaka'ako Makai area.

That plan envisioned this area as a gathering place that should accommodate a mix, a mix of retail, commercial and residential activities. That was just 23 years ago.

The residential component was intended to provide the economic and social basis for a desirable urban live, work and play community, which is what we see across the street in Kaka'ako Mauka, centered around a walkable mix- mixed use community. So these concepts were codified in 2005 in the Makai Area Plan and Rules.

And In September of 2005, the HCDA selected Alexander and Baldwin to develop just under 37 acres in Kaka'ako Makai. And A&B's initial proposal was to build three 20 story residential towers. Next slide.

As we well know, public opposition to the A and B plan especially was starting at the Ala Moana-Kakaʻako Neighborhood Board in addition to the Friends of Kuala's reached community and elected leaders. That resulted in Act 317 in 2006 becoming law which banned the sale of public land and residential development in the Makai area.

In 2007, HCDA would establish the Kaka'ako Community Planning and Advisory Council, what they refer to as CPAC. And they funded a multi year planning and community outreach effort which resulted in the 2011 Kaka'ako Makai conceptual Master Plan which was unanimously adopted by the HCDA.

The plan codified 14 guiding principles for the area and identified desirable benefit uses including a performing arts center, a museum, community center, a farmer's market, a fish market. The plan estimated between $350 million to $490 million would be required to bring the 2011 Kaka'ako Makai community Master Plan to fruition.

But it didn't identify any way to raise those funds, didn't provide any means for revenue generation to offset the cost of implementing the plan. Next slide.

In 2012, under the Abercrombie Administration, and it's our honor today to have the former Governor State of Hawaii. You know Abercrombie join us, Governor. With the support of the Office of Foreign Affairs and its Chair at the time, Chair Colette Machado, passed Act 15 which would convey 30 acres of land from the HCDA to the Office of Foreign Affairs.

And the reason for this was prior to this during the Lingle Administration they the Administration OHA was negotiating unpaid public trust revenues to the Office of Hawaiian Affairs from 1978 up until 2012. In the around 2007-2008 the number that they settled on was about $200 million.

At the time the state was about and the country was about to go into a recession. We were land rich, cash poor. The Abercrombie Administration takes on the work of the Lingle Administration brings OHA together and puts together a settlement of $200 million conveying 30 acres of land for that settlement. The Kaka'ako Makai Area Parks master plan.

In 2019 the HCDA was blessed and established. It opened the Entrepreneur's Sandbox as a planned multi phase innovation block in a high tech corridor in Kaka'ako Makai. In 2024, just last year, the HCDA authorized Executive Director. It's great to see Craig Nakamoto, here. Wherever Craig is. To engage in the community planning sessions regarding the Makai area.

These this plan is ongoing Office of Foreign Affairs has invited to participate. We will participate and we look forward to those conversations.

And here In January of 2026, OHA introduced and the Board of Trustees took in a 9-0 unanimous decision to put forth Senate Bill 534, what would become Senate Bill 534, as well as his House companion before the Legislature, based on a novel idea that OHA had never attempted before. Next slide.

So I don't want to take away any of Craig's thunder, but just to touch on the HCDA very quickly. The Hawaii State Legislature created the HCDA in 1976. It's codified into HRS 206e. Its purpose was to help spearhead the revitalization of underdeveloped and underutilized urban communities throughout the state.

Kaka'ako Makai or Kaka'ako was named as HCDA's first community development district. HCDA's goal is to provide more housing, parks, open space as well as commercial and industrial spaces near the downtown core of Honolulu.

Of course HCDA also has a lot of other missions that it does, but it is core or one of its original missions was to develop the Kaka'ako lands.

Wendy, I would note that when the Kaka'ako lands were looked at in the statute that codified that it noted the Kaka'ako lands, at those times, were underutilized, they were blighted, they were deteriorating.

And the vision that the Legislature had was that the HCDA in developing these underutilized blighted lands in Kaka'ako that it would serve the community to its highest needs and its highest aspirations.

And that's something important, the highest needs because today in 2025, one of the highest needs we need in this state is housing, specifically workforce housing and affordable housing for our local families. HCDA of course is attached to DBEDT. It has the power over zoning, the issuance of development permits as it was a part of grant variances.

HCDA in Kaka'ako requires a reserved housing of at least 20% for all new residential development in Kaka'ako as a set aside for below market rate workforce housing.

It also meets HCDA's requirement to have inclusionary housing, where we don't just have out of state market rate luxury units filling an entire building. That we have an inclusionary housing model, where we have communities and families and individuals of various economics on, on various economic scales of the economic ladder that live in and cohabitate in one building.

There's also the HCDA and Craig will talk about this has has changed its rules and there are buyback requirements, shared equity that has been implemented now for the reserve housing. But at the end of the day, HCDA must approve OHA's proposed development master plan well, whether residential is included or not.

And so if this Bill is able to become law, OHA will immediately move into the master plan development process so that it can master plan based on the desired entitlements that OHA would like to develop the Kaka'ako Makai plans with extensive community input.

It has not done that yet because it has not been able to secure the desired entitlements that were discussed in 2012 that have never been able to come to fruition. Next slide.

OHA was created in 1978 via constitutional amendment ratified by the people of Hawaii Article 12, Section 5 of the Hawaii State Constitution to better the conditions of Native Hawaiians. That is recognized as the indigenous people of these islands. OHA is codified in Chapter 10 of the Hawaii Revised Statutes.

And OHA's core mission is to advocate for the betterment of COVID conditions of Native Hawaiians as defined by the Hawaiian Homes Commission act of 1920, as well as Native Hawaiians that are not and do not fall under the category of having greater than 50% blood quantum. OHA is governed by nine trustees. We're all elected.

We serve four year terms. Next slide. The public trust is very important because it is OHA's North Star right. It is embedded in Section 5F of our Admissions Act.

It holds lands that were former kingdom lands of the Kingdom of Hawaii, what sometimes are referred to as ceded lands, and it holds a portion of those lands in trust for five purposes, one of which is the betterment of the conditions of Native Hawaiians.

And so part of the statutory powers of the board of trustees codified in the Hawaii State's constitution is that the trustees have the power to exercise control over real and personal property set aside by the state, federal or private sources and transfer it to the board, for Native Hawaiians.

That is a constitutional mandate that the constitutional power that the board is vested with. Next slide. OHA's history for Kaka'ako Makai In 2012, the lands were transferred. There were two bills. One was to transfer the land. The other one was to to grant zero how they desired entitlements.

The entitlements were not put in to the Bill transferring the land and the entitlement Bill did not pass, but in Committee in various different committees that oversaw this Bill.

The Committee reports clearly say that it is the intent of this Legislature to come back in subsequent sessions and be able to deliver the desired entitlements that the Office of Foreign Affairs desires. Specifically, because the $200 million settlement and the $200 million valuation in 2012 was based on the ability to develop residential housing in Kaka'ako Makai.

That's what that number was based on. That's what the global settlement was on from 1978 to 2012 in unpaid public trust land revenues over the last 12-14 years. OHA has never been able to realize the full value of those lands because it was based on a number that we are not entitled to develop to.

So to make the Office of Hawaiian Affairs whole, to ensure that we're meeting the highest and best aspirations of our people and that OHA is meeting its mandate of improving the lives of Native Hawaiians, it's vital that OHA is able to realize the full economic value of these lands.

And we have a way that we would like to do it that we feel addresses the most important issue in this state. When OHA commissioned a strategic action plan led by Group 70, it determined the estimated residual land value of various land uses.

And at the time, this is in 2013, the residential condominium price of a square foot of land was at $219 a square foot. But everything else, commercial, mixed use, rental apartments, retail, nothing that compares to residential. And this is market rate residential. This is not workforce housing residential. Next slide. This state is facing a crisis.

It's not one that's unique to Hawaii and not. Not one that's novel in 2025. We have been dealing with this crisis for decades. Called it the Price of Paradise. Books were written about it in the 90's. It's the cost of housing. It's the cost of living.

But the single most important barrier to living in this state is the ability to own a home, the ability to rent a place. Wages have not kept up, inflation has not kept up, and our people are hurting.

O'hara did a report last year that talked about that there are more people that leave the state than are coming into the state. We lost 11,000 people in 2022 that went to the mainland. The number one reason, Housing. It's too expensive. $1.1 million average single family home price on the island of Oahu. Local families cannot afford that.

And so our best and our brightest are leaving the state. Our central workforce that we desperately need are leaving the state. We're having to fly in teachers to teach our students because we don't have enough teachers, because they can't afford to live in Hawaii and they'd rather live on the mainland.

So housing is a critical, critical challenge for this Legislature to address. High interest rates. Right now, interest rates are six and a half, almost 7%. High prices, low supply make housing extremely unaffordable in Hawaii. And as a result, of migration, homelessness, local families and individuals are being priced out of the housing market.

In 2023, a household in Hawaii needed to earn 183% of the median household income on this island to afford a single family home. In 2022, 87,000 residents left Hawaii for other states. 56,000 moved back to Hawaii resulting in a net loss of 11,000 people.

A domestic outflow of people that left this state to go to other places on the continental United States. Number one reason based on surveys, the high housing costs. So our workforce housing shortage is forcing locals and local families to leave. Like I mentioned, the average single family home on this island is $1.1 million.

The average condo is $541,000. Housing and Urban Development HUD defines affordable housing as spending no more than 30% of your gross income on housing costs. HUD calculates the area median income. HHFDC can't calculate that. City and county can't calculate that. You can't calculate that. That is defined by HUD.

The area median income on the island of Oahu is $121,000 per single individual. So a typical 140% area median income household is a HFD fireman, a policeman, a DOE teacher that have one child, and that gross annual income for that example is $175,420. That's what that husband and wife make with a single child. Next slide.

HHFDC is a critical part of this as well. It's the primary agency charged with overseeing housing financing and development in Hawaii. HHFDC's focus is providing affordable housing for residents by working with developers to develop projects at below market prices. That is defined workforce housing is defined as 80% to 140% of AMI.

What we know as the gap groups, right? These are individuals that they don't, they make, they don't make enough money to qualify or they make too much money. They're in this gap, right? They don't get, they make enough money where they can't get subsidies and they can't afford the $1.1 million home. So they're in the middle.

And so to apply for an affordable housing condo, an applicant must meet the following requirements.

You must be a US citizen, 18 years of age, legal resident of the State of Hawaii, physically reside in a unit that will be purchased and not only 50% interest in any property worldwide and be pre qualified for a loan and meet the income eligibility requirements. Next slide. 201H.

201H is a process that offers financial incentives to affordable housing developers. That's basically it. These incentives include low income housing tax credits, otherwise known as LIHTC tax exempt revenue bonds and low interest loans.

It allows developers to expedite the review process and order seek exemptions from certain laws and rules of any government agency related to planning, zoning and construction standards. What is the requirement to trigger 201H? It's 50% plus one unit.

If a developer is willing to build an affordable housing project and dedicate 50% plus one unit of those units to workforce housing between 80% to 140% AMI, they can apply to the 201H process through either HHFDC or the City and County of Honolulu here on this island.

And allows HHFDC with the approval of the City and County of Honolulu to apply for increased density, increased heights. It also allows the waiver of sewer fees, of building permit fees, of setbacks. All winded intent to improve the economic feasibility of the project.

A developer wants to build to 60% of affordable and it triggers a General excise tax exemption which in some projects can mean $100 million of savings because at the end of the day the developer needs to pencil the project out and it's going to use a buffet of financing and real estate strategies to pencil that project out.

Developer is not going to build a project to lose money, so they have to be able to pencil project out. 201H allows that process to do that if the developer meets at least 50% plus one or even raises it higher to 60% affordable. Next slide. I'm going to skip these slides.

These slides, Senators, show the Honolulu county income schedule by family size. These are right off HHFDC's website. As you can see there, the median income is $120,100. But this generally gives you an idea of what a limits by family size would be in terms of the percent of income that the individual would have to make. Next slide.

Okay, let me skip these slides. Okay, let's stop here. There's been a lot of discussion about what is affordable and what is workforce because affordable is not affordable. So some say.

But these are the actual current condo rates right now for a fee simple affordable and a fee simple market rate unit in Kaka'ako Makai that have been presented to me by a developer who is developing a project in Kaka'ako Makai right now.

So for our fee simple affordable rate unit which is 140% AMI or below as set by HUD. A one bedroom which averages 520 square feet is currently the starting price is $370,000. $370k, for a one bedroom 520 square foot unit, the average price is $469k. The maximum price is $606k.

But to get a basic unit, one bedroom is $370k. A two bedroom is $521k. Square footage is a little bigger. A three bedroom is $695k. The fee simple units are going to be larger in size. For a one bedroom price starts at $662k. Average unit is $737k. This is for a 632 square foot one bedroom condo.

Fee simple market rate unit in Kaka'ako Makai being built on Ala Moana Boulevard Right now, a three bedroom approaches $1.1 million and the average unit is $1.16 million for a market rate three bedroom 1,091 square foot unit. But the affordable rate units, the starting price is attainable for individuals.

Many of them that are part of our essential workforce today that want to get out of a rental unit or want to get out of living with their parents at home to own their first fee simple condo for the very first time in their life, it is attainable for them. Next slide.

So let's talk about our Bill, Senate Bill 534, which the Office of Hawaiian Affairs presents its testimony and strong support. The Bill is titled Relating to the Hawaii Community Development Authority. It presents a framework for residential development in portions of Kaka'ako Makai. It allows the HCDA the ability to approve residential development.

HCDA cannot do that right now because it is following the law and the law says you cannot have residential development Makai Ala Moana Boulevard. This is a different situation than it was in 2006 and this Legislature. These are why the people of the State of Hawaii elected you to represent them, to make the best policy decision possible.

And you have the ability to reverse the residential prohibition in Kaka'ako Makai and give OHA the opportunity to develop residential housing. The Bill also provides other measures that I'll discuss in terms of residential framework and I'll get into the specifics on the next slide.

Our Bill focuses on one thing and that is to be a part of a whole of government effort to build workforce housing in the urban core period. And when I mean a whole of government effort, I don't just mean OHA and the State of Hawaii. I mean the Kamehameha schools.

I mean our construction industry, I mean our hospitality industry, our healthcare industry. So we can provide the state's essential workforce, those that want to live in the urban core, Hawaiian or non Hawaiian, the ability to live in Kaka'ako Makai. But we have a unique and novel idea of how we can help Native Hawaiians.

Because at the core, that is OHA's mission, to get Native Hawaiians into housing, affordable housing, fee simple housing. So first and foremost, the Bill asked for this Legislature to repeal the residential housing prohibition in Kaka'ako Makai. But it does it differently than it had in the past.

It defines a specific geographical area, allowing HCDA to approve residential development on certain parcels as part of OHA's Kaka'ako Makai master plan. And we. I have a map that will distribute. We also have it on the screen. I'll show you in a second.

It asked the Legislature to raise the building height limit on the parcels along Ala Moana Boulevard from its existing 200ft to a maximum of 400ft. It statutorily requires 50% plus one unit of all residential housing in that Ala Moana Boulevard corridor to be dedicated to workforce housing, minimum.

That would be to households that make 140% or less the area median income for the island of Oahu. It takes an existing precedent that this Legislature already passed two years ago. When it desired to utilize underutilized Department of Education land. The DOE has one of the largest land holdings in the entire state, our schools.

We have a crisis. We can't have enough, we don't have enough teachers in this state to teach our children. And so this Legislature and a novel idea was to utilize DOE land to build housing for teachers preferenced for teachers.

So this Bill takes that idea and it expands it to five additional essential workforce categories that we think are vital and critical to the state.

It includes so any applicant for or anyone that is applying for residential housing in the proposed OHA workforce Housing Development Corridor that works within a five nautical mile radius of Kaka'ako Makai, which touches all of Waikiki, the University of Hawaii and all of downtown Honolulu, including where the main health care hospitals and health care centers are.

It creates an essential preference for these six categories. Healthcare, education, law enforcement, civil service, the construction industry and the hospitality industry. So if you work in one of those six essential workforces within a five nautical mile radius of Kaka'ako Makai, you will get a preference when the building is ready for the lottery.

And that gives that individual an advantage to get one of those workforce housing. So our teachers, our University of Hawaii Faculty, the individuals that service our hospitality industry and clean our hotel rooms, our construction industry, the bedrock of our state and building everything that we see around us.

We want to provide housing for those working force families, workforce families. The Bill also does something unique. It statutorily requires owner occupant housing for every single residential unit in Kaka'ako Makai. The message is we are not here to build housing for out of state investors.

We are not here to build housing for people that are looking for investment properties. We are here to build housing for owner occupants, affordable housing workforce, housing preference around the state's six essential workforce categories. Next slide. The Bill also establishes a Kaka'ako Makai special Fund. OHA has a proposed amendment for that.

These this Fund would be used for basically park maintenance, additional free parking, ocean recreational access, cleaner bathrooms, more showers to make Kaka'ako Makai safe, security, everything we want in a safe community. Because if you go down to Kaka'ako Makai tonight and go walk around, it's not a pretty safe place to be.

The Bill requires OHA to address all the issues and concerns raised by the community regarding the proposed residential plan prior to submitting its plan master plan to HCDA for approval. It also requires HCDA to hold a public hearing and consider all community concerns as part of the review of OHA's Master Plan.

By allowing OHA by by repealing the residential prohibition for Kaka'ako Makai, we provide OHA three avenues for potential pathways for development. Pathway one master plan present to HCDA.

Pathway two, we can go through the 201H process and HHFDC because we want to build to 50% plus one minimum and pathway three, we can partner with the Department of Hawaiian Homelands so that we can address the 29,000 that are on the wait list and we can build housing for native Hawaiians that want to and deserve to be able to live in urban Honolulu.

Next slide. So this is the Kaka'ako Makai map. There are several major landowners in Kaka'ako Makai. The HCDA is one of them. They have the three yellow parcels. They lease the John A. Burns School of Medicine as well as the Entrepreneur Sandbox. The four darker blue parcels along Ala Moana Boulevard going from left to right.

That would be the Kamehameha Schools, Bishop Estate starting with the Gold Bond Building and then they have three car dealerships on the other three properties. The green area is the city and County of Honolulu and their lands. And finally the light blue area is the Office of Hawaiian Affairs. Next slide.

The total land area in Kaka'ako Makai, we can distribute the map. That's okay. If the chair would allow so the Members can see the map better. Maybe take it to the Committee staff lane. Allah. It's the same map. It's just your ability to see it a little bit better.

Of the 220 acres in Kaka'ako Makai OHA controls 30 acres and a little less than 14% of the total land acreage. Where we are asking to repeal the residential prohibition is in the yellow dashed line area. It includes OHA's lot I and E as well as lots F and G.

It also includes the Fisherman Wharf parcels in on lot A and B and so that yellow dashed line and we're distributing a map now. That is where we're asking to repeal the residential prohibition. We have absolutely no intention to build high density 400 foot towers on the waterfront on any of our parcels.

We emphatically support the 2011 Master Plan's concept of a lay of green first spoken by Governor Waihee that provides an unobstructed view of the ocean front along the entire Kaka'ako Makai peninsula. So we preserve that. Our proposal is to develop 2,400 foot residential towers on lots I and lots E.

What we are also asking for has the potential to allow the Kamehameha Schools the ability, should they choose to or should they not, to do the same thing.

And we're looking forward to, if this Bill comes to fruition, having conversations with Kamehameha about a possible joint venture because clearly their developments in Kaka'ako Mauka are, are something that I think we would emulate their 2009 Kaka'ako Master Plan. If you have a chance, visit the our Kakaako website by Kamehameha Schools.

It's fantastic and it provides the conceptual renderings their vision of what they're bringing to fruition right now. And you can imagine what that would look like if this Bill was able to be passed.

On lots F and G, our desire is to build a load medium density, so keep it at 200ft Hotel Condotel because we think that's also critically important. And on lots A and B, OHA would like to develop low density market rate housing.

So just to be clear, the current height limits on lot I and E are 200ft and we are asking those to be increased to 400ft. On lot F and G, the current Height limit is 200ft. We are not asking to raise that height. And on lots A and B the current Height limit is 65ft.

And we are not asking to raise that height. Next slide. Two of our amendments that OHA proposes in its Bill. You know what, can you go back one slide, Stacy?

Two of our amendments that we are proposing in our Bill, there's two things that we you need to build high density housing, workforce housing, specifically 400ft, which is what is being built across Kaka'ako Mauka. You need the height 400ft, you need the density, otherwise known as the floor area ratio.

The current floor area ratios that exist on lots I and E are not ideal and or really compatible with workforce housing and the ability to have the most affordable prices for its occupants by building as dense as possible.

So we're asking in our amendment only in the lot I through E corridor for not just the 400 foot height limit, but the increase of up to 10.0 in the floor area ratio, otherwise known as the FAR. That's important.

And I'll leave it to Kamehameha Schools and the land development experts to answer any questions on why floor air ratio is so important. When you're dealing with market rate units, lots A and B have a floor air ratio of 1.5. That's fine.

But for us to really develop how we are proposing to develop, we need that floor area ratio increased. Seven to eight would be acceptable. We can live with that. 10 would give us the maximum flexibility.

So those are our 2. One amendment is to increase the floor area ratio to up to 10.0 in the area that we're asking for 400 foot height increase which is between lots I and E. Next slide.

And the second amendment is when the Special Fund was written into the Bill, it was to be expended by the HCDA to be used for the various services that I discussed earlier.

But in consultation with our board of trustees, we felt that OHA would be the best agency to expend those funds and that OHA didn't want to, I guess what would be the word, you know, like not require the other land owners to take care of their lands, let's say the sitting County of Honolulu.

So OHA would take care of its lands that it controls and do all the things that we want to talk about and in some joint area uses, but we don't want to relieve other landowners of also taking care of the things that they need to take care of, sidewalks, security, you know, etc.

So our amendment is to, for your consideration is to. We propose new language in our testimony to have OHA expand the Makai Special Fund and to focus it on specific items towards OHA's lands.

Or if executed with other landowners in a memorandum where we all have a shared responsibility for these lands, then we can dedicate some resources to that. The Fund would be funded by maintenance fees that would be assessed to each residential homeowner and this would be a nominal fee.

One of the biggest issues with developing housing, especially high density housing, is the amenities. Individuals that own $1.0 million market rate units that expect swimming pools and gyms and beautiful common use areas and barbecue grills, they pay for that in $1,000 and up amenity fees. But those occupants that are affordable can't pay for that.

And so striking a balance between that amenity fee is going to be very important so the project can pencil up. Next slide. This is what a proposed residential high density development unit would look like if this Bill was passed. First and foremost, the most expensive thing for any developer to develop is the land.

OHA brings that to the table. OHA is not going to develop a building. We don't have the expertise, we don't want to have the expertise for that. There are much smarter people and developers that can do that and we're looking forward to those relationships with Kamehameha Schools and others that have the expertise in how to do this.

But OHA brings the land to the table. It owns the land, it retains the land. OHA would retain the podium, what is known as the first and second floors of the building. That's where the commercial use, the activity, the restaurants, the Merrimans, the Starbucks are. That's where the activity and the life is.

All would share in the sales of the, of the units with the developer through a joint venture. What OHA would do is bring the horizontal resources to the project. The water, the sewer, the infrastructure, the potential environmental impact studies that need to be done. This area is in the special management area.

So it would, it would trigger that. It would trigger the OHA would have to do an eis. We would need to look at climate change, climate adaptation, soil remediation, all the issues that, that we well know. OHA would do much of that work, all the horizontal work.

It could partner with the Department of Hawaiian Homelands for that horizontal work. The idea is to de risk the project for as much as possible so a developer can just go vertical and it can pencil because of the 50 plus 1 requirement, because of the owner occupant requirement. Those are high thresholds for the developer to meet.

OHA is going to have to bring in the horizontal improvement. OHA would sell the air rights to the unit because that's how it retains the land. It sells the air rights to the unit, sells a parking stall to the owner and it grants them an easement into the building. zero would complete the master plan.

All the required studies, including the geotechnical studies, soil mitigation, climate change studies. I talked about the horizontal development to derisk the project. But this is how OHA intends to support its native Hawaiian beneficiaries with housing assistance. Give an example.

We have a recent UH Manoa graduate of its nursing program, graduated from Waianae, lives out Nānākuli, got $75,000 of student loans, graduated from high school, went to Leeward, eventually made it into UH Manoa because she's always or he has always wanted to be a nurse and graduated from the UH's or state's flagship schools nursing program.

That individual is just hired at Hawaii Pacific Health, the starting salary for a registered nurse is $126,000. She, he or she commutes two hours every day. Took me an hour yesterday to go from Kapolei to Nānākuli at OHA.

So I know how much it takes if you're living way out there in Makaha or in Nānākuli or in Maili, takes two hours minimum, if not longer, three. But his or her job is here in the urban core. They're a nurse at Hawaii Pacific Health, their dream job, single, just starting out, making $126,000.

So she meets the essential preference, he or she or he. OHA builds the affordable housing unit. We auction it at a, at a, you know, a raffle day or whatever it's called. What's the term for that?

When we auction a building, a lottery, thank you, and she or he has more tickets at the lottery because they're an essential worker, meets the preference and they get a unit. And if you look at the 140% AMI, he or she falls in that range at $126,000. And she also happens to be Native Hawaiian.

So she's our beneficiary. Big N or small N doesn't matter. So then OHA works with her. And OHA goes to one of our local banks which are in the process of right now to present a novel financial instrument for this borrower. This pre qualified borrower, OHA owns the land.

We have one of the most important things that a developer needs and what a bank would recognize is if we can collateralize that land and OHA can guarantee the loan for that borrower because we own the land and we can create a financial instrument that allows that borrower to borrow at 100% loan to value.

Because the most expensive, the most, the biggest hurdle she or he has to get that unit is a 20% down payment. They don't have it because they got $80,000 in student loans.

So we collateralize the land, we work at one of our local banks, we guarantee that loan and we present a financial instrument almost like a VA loan. We can even roll closing costs into that so that borrower can get into that $326,000 fee simple one bedroom condo with zero down.

That's how we help our Native Hawaiian beneficiaries and OHA can do that. We can also partner with DHHL and we can build housing for waitlist applicants that want to live in the urban core and are willing to live in a condo rather than a single family home.

Because let's face it, the reality is we have 28,000 people on the waitlist and we will never build enough single family homes for DHHL applicants in our lifetimes. It's just not going to happen. We have to look at going vertical. We have to look at other means of housing. Next slide.

There are environmental and climate issues in Kaka'ako Makai. We are not blind to that. Developers across the street are dealing with the same issues. Just walk on Kaka'ako on Ala Moana Boulevard and just look at the current project being built by the Kobayashi Group, the Alia project.

They are hauling out material from that project site because that's what the Department of Health requires. There's opportunities to do CAP in place, which is what was done at JABSOM. But when you want to go residential, you have to meet the highest standards of development because people are going to be living there.

So if there's any types of high levels of toxicity in the soils, those, those likely have to be removed. Ideally, CAP in place is a safe way to do it.

But right now, depending on the studies done and the toxicity levels in the soil, which all of the areas experience, it's not just unique to Kaka'ako Makai, it's across the street as well. That soil has to come out. But we've also and are in the process.

We're working with SOEST and we are going to work with SOEST and Chip Fletcher who has presented various different sea level rise studies to the Department of Transportation and Ed Sniffin and his team. And we are going to be working on that as well and using that type of modeling. Next slide.

We also, if I go back to the soil piece, are in conversations with the EPA and I've already had conversations with Congresswoman Tokuda to see if there's federal funding that we can use with EPA's Region 9 to be able to use federal funding, not just for the bulkhead, which we need some serious money for that maybe HCDA will be asking for, I'm not so sure.

But we will need money to recycle and repurpose these lands. But make no mistake, that is What EPA Region 9 does, is it recycles and repurposes previous lands that were contaminated. This is not something that cannot be done. It can be done.

We built JABSOM, we built a children's center, we have a park, we can do residential housing safely in Kaka'ako Makai. And so that is the summary of our Bill. At the end of the day, 18 years later, after residential prohibition was implemented, Kaka'ako Makai really has not changed much. Hasn't changed much. And that's not progress for Hawaii.

That's not moving the state forward. Not, that's not developing a world class live, work play community that we want to have here in Honolulu, in urban Honolulu.

And so OHA is genuine about transforming this place into something that is and addresses the most pressing needs of Hawaii's people while also preserving the rich cultural heritage of the Hawaiian people that all of Hawaii will benefit from. OHA is committed to responsible development. We're committed to the lay of green.

We're committed to an open ocean promenade along the ocean. We're committed to open parks, spaces and public access. We are committed to building a Native Hawaiian Culture Center that I know is very important to Senator Kim. The best place to do it is in Kaka'ako Makai, one of one Native Hawaiian Culture Center.

We should have Native Hawaiian Culture Centers throughout the Paina, but here in the urban core, we should have one in Kaka'ako Makai and we will have one in Kaka'ako Makai with your help. We are also open to whatever great ideas the community has, including our community partners and stakeholders.

Whether it's a marine science research facility, an aquarium, an open market, fish market, team lab, incubator hub, performing arts center, museum, civic resources; we can really do something special in Kaka'ako Makai. What we are trying to do at the Office of Foreign Affairs is think about Kaka'ako Makai 30 years from now.

What is the infrastructure we need to put in today to plan for 30 years from now? Because this is a multi decade development. It takes seven to 10 years to develop a 400 foot residential tower, minimum. So even if we were to start on lot I with our first workforce development tower.

It's going to take 7, 8, 9 years before you ever see that building and have people living in that building.

And so, Madam Chair, I'm gonna wrap up my testimony by just giving you this assurance that OHA is committed to creating a cultural gathering place for all the people of Hawaii that balances our culture, our commerce, while preserving the Kaka'ako Makai area so local residents.

We can play, we can surf, we can fish, we can continue to experience the ocean recreation activities that we love while also giving the opportunity for our people a place to live in the urban core for an affordable price. So with that, I'll stop my testimony. Thank you so much.

Thank you. Thank you, Trustee. Members, let's hear from HCDA, Craig Nakamoto. And IT, if you're there, is the Attorney General available now on Zoom? Is someone from Attorney- Okay, so HCDA, next, please. Craig Nakamoto. Mahalo. And then followed by the Attorney General and Members, That's when the questions will be forwarded to all of you as well.

And then after that, we'll be following with testimonies from the general public. Thank you. Aloha. Thank you, Craig, for being available today.

Good afternoon, Members. Good afternoon, Governor Abercrombie. Good afternoon members of the public, OHA staff, all those who are on Zoom and present to present their views. My name is Craig Nakamoto. I'm the Executive Director of the Hawaii Community Development Authority.

Leading up to today's hearing, Chair Kahele and his team have presented their views to various groups, the media, members of the legislature. So I'm happy to have this opportunity to share our views, to frame our comments a little bit more and- and kind of to take off on what Chair Kahele talked about as our mission under 206E.

I wanted to note that we're also an agency that was tasked with doing long range planning. So just wanted to note that as I head into my comments to further frame my comments for today and to to build on the concept of a planned development and planning.

I just want to note at the outset that our comments are intended to be agnostic to any side. They're agnostic to landowners or agnostic to any other community groups.

I just want to focus my comments as an Executive Director of the state agency that's tasked with planning and redevelopment for all of the Mauka, all of the Kaka'ako Community Development, including the Makai area, and just focus on sound planning principles.

Before- Before I kind of start sort of my prepared testimony, I just wanted to kind of hit on some of the comments the Chair Kahele present-presented and maybe provide a little bit more illumination on some of them. As I mentioned, our- our role is not- is not entirely based on housing.

As the chair mentioned, we do have a housing component. In recent years, the board has tasked me to do more housing in the district. And in fact we are working on three housing projects within the district, as some of you know.

So I just wanted to emphasize that we share that in common with the Office of Hawaiian Affairs. We- there was some mention about an appraisal done in 2012. I haven't seen that appraisal. I don't know how many of you have, and apparently it was based on the ability to- based on the ability to do residential.

And all I can say about that is I'm sure both parties to that transaction procured an appraiser to do the appraisal. I'm sure they also hired, you know, a qualified appraisal- appraiser to do it.

And I'm sure any qualified appraiser would have taken into account the entitlement and zoning at the time, which were that how residential uses were not allowed in Kaka'ako Makai. Chair also mentioned 201H and the desire to build 50 plus 1 units.

He talked about the benefits of 201H, namely that it allows exemptions from certain land use and like setbacks, height density and so forth. But I also want to note that 201H or use of it also brings burdens as well.

201H, if he's going to use 201H, it has benefits and it has burdens such as a regulated term, equity sharing and other things to ensure affordability.

I'm gonna- One of the things that Chair touched on was building for owner occupants and I'm gonna make some comments later on about that. He also talked about the boundaries and I'm gonna discuss the boundaries in my specific comments.

But the boundaries are important because the boundaries that designate parcels for 400ft and residential need to be made clear. The boundaries include lands that are owned by HCDA. They include lands that are owned by the city and county, namely the Gateway Park.

And especially for the lands that are owned by HCDA, those include lands that the Pacific Gateway Center sits on, that is the senior center that former Senator Galuteria was instrumental in starting. It includes the sheriff's quarters and it also includes the new pumps- the new pump station, the city's pump station.

So to me, those lands shouldn't be identified in those boundaries and I'll probably ask that they be taken off. I'll talk about- I'll hit on touch on the maintenance fees and the in the latter part of my testimony. So if I can let me just kind of go back in history a little bit.

The last time that OHA- that OHAs bills were being considered, I remember going through the committee hearings and after the hearings were done, there was a lot of dialogue back and forth, a lot of good discussion about the bills at the time.

I promised Chair Lindsay, Chair at the time that my staff and I would be available to discuss proposed developments- development plans with OHA. My door was- would always be open. My staff would always be available to discuss with them development plans other than residential.

So since then we've met with OHA staff on prosed- proposed development for their Lot I the former site of Reuse Hawaii. It was a development that was going to kind of take up some of our Lot C where the sandbox is.

We've also met and and worked jointly on a proposal by Regent Seaglider and this is 100% sustainable seaglider that is being tested right now. And we talked about a possible terminal on the site of the former Fisherman's Wharf. We we signed an MOU with the Hawaii Seaglider Initiative. I believe OHA has done so as well.

So my point is that we've worked with OHA on development and I'm trying to live up to that promise to then Chair Lindsay. I want to reflect a little bit on sort of where I think OHA and we stand. And I thought the best way to do that was to look at areas where we disagree.

And this will be a preface to my first comments. General comments. I think we both agree that we want development in Kaka'ako Makai. They want development for the reasons eloquently stated by Chair Kahele. We want development in Makai because that's our DNA. You know, we exist to facilitate development in the districts that we have.

The second is, we agree that the OHA's development and the revenue therefrom support OHA's beneficiaries. And this is the reason why I promised Chair Lindsay that I would support and work with their staff on development because I want to see them do those- do revenue generating developments that support their beneficiaries.

We also are agreement on that point and that we build communities in the districts we serve and we serve people in the community just like they serve their beneficiaries. Thirdly, OHA and HCD are committed to development in the Makai area.

And I'm going to say this next- next commonality and I'm going to say it twice because I don't want to have any mistake about this. When we look at residential development in Makai, I think as Chair Kahele pointed out, it's been a sort of a yes, no history on residential development in Makai, that's clear.

And it started out with the A and B development. But I'm going to say this again for clarity, twice. I think I'm not necessarily opposed to residential development in the Makai area as of course is OHA. But where we differ- where we differ is how do we get there. So I'm going to say that again.

We don't necessarily- I don't necessarily disagree or you know, oppose residential or other uses in Makai like hotel, if that's what people want. Hotel use is not allowed right now. But we disagree or differ on how we get there. How we get there.

So the, the disagreement or the where we differ is both the state and HCDA signed an MOU that was related to the transfer and in that MOU it obliged or- or rec- obli- or was obligated to follow HCDs statutory zoning and rules. So what they're proposing now is to go to legislature U and mandate residential use in the Makai area.

And this is the expedient way that they want to do it.

What I'm suggesting, for the reasons stated in my testimony, that instead of that, allow us to do a community engagement plan and effort in the Makai area along with Chair Kahele and the OHA team and let's see what the community wants because this is our mission is part of our goal is to plan and it should be planning before development and to plan it, engage with people and let's see what other uses come out of that.

Prior to the authority adopting the 2023 rules recently there was an idea to allow hotel uses in Makai. To allow hotel uses in Makai. It's not allowed now and at the time we decided that we weren't going to put that in because I think it required more study than just dropping it into the rules.

You know, as a state agency, I think we often get chided for underspending, overspending, underperforming, over hiring or underhiring. We don't often get scolded for following our statutory framework, which we are suggesting now, or getting community feedback on- on- that on issues which we are also suggesting.

So for the reasons stated in my testimony, what I'm suggesting, instead of the legislature saying allowing residential uses, we take it to the community and gage- engage along with OHA in community planning that solicits community feedback on that and other uses in- in Makai area.

So let me get to some specific comments and then I'll wrap up and I'll be available for questions. As I mentioned in- right now and in the- in the current budget, there is an appropriation to do community planning. My board, as Chair mentioned, has authorized me to engage in community planning.

We also have funds in the- in the budget to do a assessment, community outreach and planning to promulgate rules to implement Act 221, which asks us to look at the mitigation efforts that are necessary in the design and siting of buildings to take into account sea level rise- the effects of sea level rise.

So my specific comments one, on page four- on page six of the comments, I think the bill presumes that development is will yield the maximum income. I would suggest to you that development is inherently risky.

As Chair pointed out, there's a lot of- there's known contaminants, there's known soil conditions that need to be addressed before any kind of development is done, including an environmental impact statement.

And those are the kind of things that need to be done, I think, before any development is- is looked at and the kind of planning that we would do would assess some of those things to see if a 400 foot tower is even feasible or not, the community planning will bring out all the different uses.

On page 7, the boundary descriptions, particularly in subsection 6 and 7 are incorrect and need to be fixed. They talk about the boundaries. One boundary is described as Ahui Street from its intersection at Olomehane Street to the shoreline of Kuala Basin. Ahui Street doesn't go down to the shoreline.

There's another boundary, the shoreline of Kuala Basin doesn't go all the way to Ala Moana Boulevard. And secondly, as I mentioned in my opening remarks, the inclusion, I think of Kamehameha Schools parcel in the- in the boundary, that's- that they want to entitle for residential and 400ft.

If Kamehameha Schools is concurs with that and they're going willing to let that plus the 5050 plus one requirement encumber their land, I have no objection to that.

But as far as that boundary and its implications on the city- cities, Gateway Park and also our own parcels, I think our own parcels should be removed from that and the city's Gateway park Removed from that.

Because unless they've asked Director Thielen, I don't think the city is going to be building a 400 foot tower on Gateway Park. So I would suggest strongly the that our parcels and the city's parcels get deleted. I think the height- height- height additions on Ala Moana Boulevard need to take into account urban form.

I think they also, at least for one or two parcels need to take into account FAA requirements for flight paths and also should be considered. There's some references to hearing requirements in there. If- If their hearing requirements are going to be exempt from Chapter 91, i.e..

That they're going to go out and do their own pre hearings and community outreach that's going to be exempt from 91. I- I'm okay with that but I want to make clear, I want to make clear that whatever hearings we do right now for development permits, it's a quasi judicial process and it's based on a record.

And that should be clear that we're gonna- we're gonna stick to that kind of quasi judicial hearing for our public hearing which is we have a presentation hearing and we have a decision making hearing. Environmental reviews need to be done.

It- It- Whatever happens with this bill, even if we do a planning effort, if we're going to suggest different heights, different uses, including hotels or other things, I think an environmental impact statement needs to be done. Whether it's done by HCDA or OHA. It has to be done. I want to turn now to Reserve Housing.

So as I mentioned, you know, I think OHA and HCDA kind of share that in common. We want to- they want to build housing. We also, as a sort of a ancillary mission to our agency, we want to build housing.

As I mentioned, we have three housing projects right now in Kaka'ako Mauka that we are working on a rental project, 99 year leasehold project, the that is part of Act 97 and then a supportive housing project. So we are- the agency is invested in housing.

The board has said, look Craig, you- you go and find innovative ways to do housing in the district, so support that. But I just want to point out, you know, one thing- one or two things with the housing ideas and I- I'm again prefacing this by saying I'm supportive of housing. So talk about it as- they talk about it as workforce housing.

The requirement for owner occupancy is- is tied into our current condo statute 514B. That owner occupant requirement is for 365 days. That owner occupancy requirement is for 365 consecutive days.

So without anything more, I think the question is after the 365 days has elapsed and with nothing more, will somebody who's the owner of that unit can sell that unit to somebody. A foreign investor can sell that unit to anybody. So they've lost affordability. It seems inconsistent with the workforce housing notion.

Other thing is with again as I mentioned with the 201H requirements also they have- 201H requirements require a regulated term of 10 years. 10 years. And that's the burdens of you using 201H. Chair mentioned the benefits of 201H and I agree with that. Also the 50 plus one requirement is only for certain lots.

On the other lots I'm going to presume, presume that HCDA's Reserve Housing Rules for the whole district apply and that they're going to build at least 20% of those- of those units, residential units as reserve units.

Now currently, currently our reserve housing rules require a 10 year regulated term where they have to be owner occupants and they have this equity sharing and there's buyback provisions. So just want to let you know that on the, on the- on the landowner assessment fee, I'm glad that OHA amended the bill to have them collect the fees.

This was not something that I wanted to do and I think they should collect it. The only thing I would note and- is this: for the affordable units, the cost of home ownership should be roughly no more than one third of income.

And that includes mortgage payments, insurance payments, HOAs, homeowners insurance and other things, and will probably include this landowner, you know, this- this assessment fee. So the hope is that, you know, this assessment fee is reasonable and is proportional to an affordable unit because it does go against. It's a lien.

It's probably going to be a lien against individual apartment owners. The public dedication- the public facilities dedication fee, or proposes- the bill proposes to exempt them, and that's something we object to. The public facilities dedication fee goes to, you know, sidewalks, other kind of public facilities, and we oppose that.

In summary, Members of the Committee, as to my first comments, I would suggest that as a voting matter, you know, if- if you vote for or if you decide that it's better to defer this and allow us to work with OHA as a participant along with everybody to do community planning, get community engagement for-

for- before, you know, imposing residential or other uses. I would suggest that that's not necessarily a vote against OHA. It's not necessarily a vote for the Friends of Kewalo or anybody else. What it's a vote for is process and community engagement. Again, something that we often as state agencies don't get.

We- We don't get scolded for doing too much of and for allowing me to do- do our job as a state agency, which is to plan. So I thank you for the opportunity to share my thoughts with you. I look forward to working with Chair Kahele, the staff and everybody on to realize their goals for Makai.

I look forward to getting stakeholder engagement and working with everybody else. So thank you for the opportunity and I think Chair Kahele and I stand open for questions.

Thank- Thank you, Craig. Members, just to refresh, our suggestion is that we will hear. Thanks, Craig.

Thank you.

We will hear the Attorney General and then we'll open up for Members of the Committee and other Senators who are here to ask questions. Aloha. And we're happy that you're joining us today.

Good afternoon.

State your name. And we- we're happy and thank you for sending your testimony as well. Please proceed. Thank you.

Good afternoon, Chairs and Members of the Committees. I am Deputy Attorney General.

Can you go closer to the mic? Yeah.

I'm Deputy Attorney General Kevin Tongg. We have comments contained in our written testimony and I'm available for questions.

Yeah. I think you need to go closer and yeah. Into the mic.

And I would suggest, because this is an open forum and we wanted to ensure that the public is out there not only hearing us today, but I know you're going to say you had submitted testimony, but we'd like to hear your testimony if you have it available to you.

Verbatim?

With you as well.

Summarize. Summarize.

Yeah. And you can summarize. Yes. It's pretty extensive. But we certainly appreciate your comments.

So we have concerns that.

This bill could be challenged in certain portions as special legislation in violation of Article 11, Section 5, of the Hawaii State Constitution, as well as authorizing an illegal tax in violation of Article 8, Section 3 of the Hawaii State Constitution. But I understand from Chair Kahele's testimony that they are proposing to amend the Association fee language. So if you don't mind, I would skip over that part of our testimony.

Thank you.

With respect to the special legislation concern under Article 11, Section 5, of the Constitution, we think there might be concerns with the proposed lifting of the residential band in the geographic area in Kakaako Makai, as well as the increase of the height limit to 400ft, and the affordable housing requirement.

Under the Constitution, legislative power over lands owned by, or controlled by the state, must be exercised by General laws. And in this situation, we feel that the proposed bill is special law, not General law, because it's identifying specific parcels of land and requiring certain things on that land.

Would you like me to go into our proposal to fix the bill? Or is that okay for now?

Please, no, I would suggest that you make your statement on the recommendations on the amendments.

First of all, we suggest amending the bill to replace paragraph one, on page seven, lines eight to nine, with, quote,"clarifying the procedural requirements for the Hawaii Community Development Authority to prove residential development on certain parcels", end quote. Second, delete paragraph 2 on page 7, line 10.

Third, delete paragraph 3 on page 7, lines 11 to. 20. Fourth, renumber paragraph 4 on page 8, lines 1 to 3, and paragraph 5 on page 8, lines 4 to 6, to paragraphs 2 and 3, respectively.

Fifth, replace the title of the new Section 206E-A, proposed by Section 2 of the bill. On page 8, lines 10 to 12, with quote "Kaka'ako residential development procedure, public hearing, disclosures, nuisance, mitigation", end quote.

Sixth, replace the text for section 206E-A, subsection A on page 8, line 12 to page 9, line 9, with quote, "if the authority finds that the developer's plan or proposal for a residential development, in that portion of the Kaka'ako Community Development District Makai of Ala Moana Boulevard and between Kewalo Basin and the Foreign Trade Zone is reasonable and consistent with the development rules and policies of the Kaka'ako Community Development District, then the authority may approve the proposed residential development project, provided that approval may be granted only after the applicant seeking approval conducts public hearings held in accordance with subsection b and section 206E-5.6.", end quote.

7. Delete section 206e a, subsection e. On page 10, lines 13 to 178 delete section 206e a, subsection g on page 11, lines 8 to 29. On page 13, lines 20 to 21, delete from Section 206e 31.5, the proposed new wording quote, and accept as provided in Section 206e A, subsection A.

Okay, Mr. Hong, thank you. I understand that there are several more pages of your recommendations. Yes. So are we saying that with your first comments with regards to the objections and the special legislation, so the amendments that we see on at least four pages of your recommendations for change, are we saying that.

So the comments earlier made again in the objections on special legislation. So the recommendations that you suggested, including other areas, will that suffice then?

Yes, that is our position.

Okay. All right. So there's. And Members, and for the public as well, there's several pages, as I note that the Attorney General recognizes. And so for the Members, we have copies of it. And we'll go into questions as. Because we're already in a time constraint.

However, we certainly appreciate your attendance here, but will you remain for questions from the Committee?

Yes, I will.

Okay. Members, we have now heard from Oha, hcda, and the Attorney General with regards to the measure before us. Questions? I see the first hand. Senator Favela, a question to who? HCDA.

Good afternoon, Senator Favela,

A couple of questions real quick. How long you been at HCDA?

I actually had two stints at HCDA. I was. I was the community outreach, probably about now, maybe four to five years.

You was around when all of this was taking place? We was trying to talk about presidential and billing over there. Because what I hear from you.

So, Senator Favela, just. Just to be clear, when you say I was around. What. Around for what? Because.

Okay, I just want to be clear. Okay, thank you. Please change the question for you. In your testimony, you said I about 27 times. When you reference things to I, what do you mean by I don't. I don't recommend this. I don't suggest this. But what. Who is I?

You know, Senator Fevella, when I talk, when I say, you know, I. I rec. I don't recommend this. I'm. What I'm doing is reading from my testimony. This is the. This is my points.

Your testimony or the board's system?

This is the testimony of the agency.

Senator, you need to say we, the agency. Okay.

Yeah. This is. This is. So, Senator, let me correct this, that this is the agency's testimony that I Am presenting to the Committee.

Okay, so question that I have is that you're talking about other things that cannot be done unless HCDA have these meetings and all of this stuff plan for KAKA will never get done. And then again, part of being one state agency and working with others to get this thing done for our community. Not gonna happen.

Even though you said you like work, you like work, you never have come over here with any suggestions prior to this. How long did you know about this, this process that they had given you to look at? How long did you know?

So Senator Favela, let me, let me, let me just clarify something for you. I never said anything cannot be done. I didn't say cannot be done. What I'm suggesting is the way that Kakaako, Mauka and also Makai was developed was through a planning process or several planning process undertaken by hcda. So I'm not saying cannot be done.

What I'm saying is that let's go through that planning process again. Let's engage the public, determine what they want to see in Makai. Right. Because there's a lot of interest in Makai. Now. There's been a lot. There's been land ownership changes. Also there's sea level rise. That has to be taken into account.

Let us plan that like you established HCDA to do.

Great question. So when Stanford CAR came to make changes on their zoning and the billing out over there, your board took a stand to support their changes even though the community didn't want it. Reason why I sing this, I want to share this with you. Is the haves and the have nots nobody.

And again I'm gonna share this with you. All opposition that you guys had, but not to raise or whatever you guys did for Stanford Car, you still get here in the board. Not you or decided go ahead and approved it for them to go ahead and make changes. This is what I'm saying.

Because everything Malka of Kakaako, nobody asked my UN if they could block their view, right? Kaku, you heard the, you heard the Chair. What did the chair say? That place wasn't even there. So I'm just saying talk about contamination.

You talk about working together, but you want OHA to go through HCDA and that's what it sounds in your testimony. So through your testimony you want OHA to get approved on their land HCDA because you think that's what we did. See as lawmakers, people on this panel can make changes and make changes. So I'm just saying.

So if you really are a willing Partner, you should have come up with something to say. We report from HCDA really have these guys we're going to take the lead on OHA erecting this because I just kind of saddened that we cannot.

And then again you bring up the paths about other chairs and other people that you had worked with. This is a new regime, this is something new. So this is something new that is offered. So I just saying even though you're saying you're willing to work, this is going to be my last.

Even though you're still doing it to work to listen to all the monkey wrenches you intro into this thing not just you Attorney General again rental portable housing, everything that you said you for then you get one but you get otherwise.

Thank you.

Just wanted to make that comment.

Thank you. Thank you Senator.

Prior to Craig, that. That's fine. We'll move to further questions but the chair would like to at least recognize the that we have couple of our colleagues who are not Members of the three committees and I recognize them as an attendance to participate in this hearing as well.

And I also like to recognize Senator Moriwake is here in attendance as well as our, our Vice Chair. Is she here? Our Vice President Senate Senator Kidani is here as well. We will have an open questions now from the Members first and if they have any questions from our guest Senators Chairs will allow that. Senator. Yes.

San Buenaventura.

Sorry Chair, if I may.

Yes, and one second Senator Craig, please proceed then.

Sorry, apologize Chair, if I may. You know Senator Fevella, you know, was it one question? I know and it was a comment.

So you don't need to respond. Yeah, Chair you don't need to respond.

But, but I feel, I feel compelled to because

Senator Craig, tell him I don't even. Yeah, Craig, maybe I have a, I. Have an actual question. Yeah, maybe. Craig, how about this. Why don't you send in writing and an email to Senator Fevella and later on we'll allow you to come back.

Yeah, I, I don't need to send a response. I just say that this is not a case of haves or have not and this is. I'm sorry you feel saddened about this but these are the, these, this is how through planning we, you know, we facilitated development in Mackay.

So again it's not a, it's not about the haves and have nots and it's not about requiring only OHA to come to Stanford.

Okay. Senator San Buenaventura.

Carr went over there. You got approval.

Thank you. And my question is not addressed to you, it's to Kai Kahele or OHA. Anybody for OHA?

Yes, Chair.

Thank you, Chair.

Trust. Yes. Trustee Kahili.

Yes, Chair Kahele. So here are my questions. I have two. One is, did you see HDOT's concern about the flight path and the FAA requirement of maximum 355ft?

Yes. That's a great question, Senator. As somebody who is an airline pilot. Yeah. And who is a licensed air transport pilot and a captain on an Airbus 330 that departs from the reef Runway hundreds of times through my, through my career and observes the various different climb gradients and flight paths that are required.

It's very specific in terms of the FA's flight path. And the proposed boundary where we would like to develop 400ft residential towers is 100 yards across the street from the collection and from every other 400 foot residential tower that's being developed to include Alia, which is adjacent to our lot E.

So that would have no bearing on the current FA flight paths. Okay, so you're. And I've looked at that, yes. FA calls it terps. It terps the climb grade, the minimum climb gradient for an airliner in the event that you have a catastrophic engine failure or something along those lines and it decreases your climb gradient.

And the Kakaako Makai area. If you wanted to develop a residential tower on the Reuse Hawaii lot or where Point Panic is on the edge of the waterfront, that would be an issue. But not a quarter mile away where Ala Moana Boulevard is.

Okay, so as long as that's concerned, I have a second question. Sure. So I looked at the bill proposed and the bill basically allows the authority, HCDA to approve these plans. It does not require them.

And Senator Favela has basically stated some of my concerns about HCDA, which is although the testifier says it's agnostic, when you looked at the written testimony, it's really against. Okay, so if HCDA, even if we pass this bill, HCDA, when they're already saying no, may not approve it. Have you looked at that?

Well, I mean, the Executive Director said he's not opposed to residential development. Okay, so he's, he's willing, is that correct?

I don't know. I mean, I'm just looking, I'm just looking at their testimony.

He's not opposed to residential development. So, you know, at the end of the day, Senator, this is a policy decision for this body, for this Legislature to address an issue that is the number one priority of the Governor in his State of the State. And it's the number one issue for this state, and that's housing. Housing.

We cannot wait any longer. Just to make a comment really quickly on what Craig said. After the residential repeal was in place in 2006, HTA spent over half $1.0 million on community meetings, on charrettes. A lot of people put in a lot of work. From 2007 to 2011, we've had these conversations.

The 2011 Makai Master Plan was adopted. We like many of those aspects of that plan. So the point is, more conversations, more community planning meetings are going to put us in the same position we are in now where Kakaokumakai is fallow, underutilized land that does not meet the highest and best needs of. Yeah.

So, Chair Kahelu, I'm in agreement. I'm just saying the bill as written. Knowing that hcda, you saw the written testimony. Anybody who reads the written testimony could see that they're actually in opposition. And all we're saying is the bill is seeking their approval.

If they're already telling you they're going to be in opposition, it doesn't really matter whether or not we pass the bill. That's my concern. Okay. But hopefully you guys can work it out.

Thank you. Thank you, Senator. Senator Ihara, followed by Senator Richards. Hello, sir. Your question to whom?

Chair Kahele.

Okay, proceed.

I applied OHA for tackling a real critical issue in Hawaii, cost of living and particularly affordable housing. I guess the question is how long? So these the. I'm asking about your intent. And is the intent. The intent Is to have 50% plus one residential units to a certain income group.

How long would that those units stay in that income group? Does it? My concern is that you have houses for the local residents who need it, but after a certain time they go sell out and hit the jackpot and it doubles the price and it's suddenly out of the reach.

So is there a way to keep those units in the hands of the workforce?

There is, and I believe that it should be. I know Craig mentioned 10 years. I personally think it should be in perpetuity. If you apply and are given a workforce housing unit, that should stay workforce housing. You shouldn't be able to flip that 10 years from now and capitalize on a market gain.

And so there is a way to put in a deed restriction on that deed so that you can sell that 7810 years from now, but you need to sell it at the 140AMI or below the. The privilege that was given to you.

You need to extend that to someone else you can, you can reap the capital gains of that, but you still need to keep that in workforce housing. I don't believe in, you know, the opportunity for somebody to get in at affordable and flip it for market at any time during the loan.

And so can I proceed follow up on, on this line of questioning? So how, how, what is the target, let's say of the 50% plus one units, how many would be native Hawaiian?

You know, that would be a difficult question to give you.

What would you, what would be the intent?

Well, you know, the Office of Hawaiian Affairs cannot restrict non Hawaiians from applying for the housing units.

But you know, we are in the process of gathering data from the six essential workforce categories in our bill to determine how many native Hawaiian health care workers are there in the health care industry, how many are in the hospitality industry, how many are in the hospital, the construction industry.

So we can get an idea of how many native Hawaiians we're helping. Of course, if it's DHHL, then it would be 100% native Hawaiians.

Okay, so I understand the purpose. Also, since you can't. It's really not designed for Native Hawaiians. It's designed and I think your testimony says it's really to raise income for OHA program programs. And so I'm trying to get the rationale of OHA, what is OHA's benefit out of this?

I mean, it's doing good for the, for the state, but from OHA's point of view, I would imagine that. So how much. So it's sort of like return on investment. You put all this effort in on these two parcels of land to get a certain income and is it, I guess I'm trying to.

Is it worth all of that if you're not the developer or how do you.

Well, we believe it's worth it because, oh, we'll retain the commercial mixed use aspect of the buildings. So all the, all the economic activity, you know, imagine the Whole Foods, right. And everything that's down in Kaka Kumaka. OHA would control 100% of that revenue.

It would also get 100% of the revenue from lots A and B that we want to sell at market. All of that revenue helps our native client trust fund. It helps our beneficiaries and it helps us achieve the, the non housing impact things that we want to achieve in Kakaoka Makai.

Do you have a sense of a ballpark kind of range of what you would from a low to a high kind of to. After all is said and done. You know, you've accomplished. What would you like to accomplish in terms of a low and a high additional revenues for OHA programs?

I'd have to get back to you on that and talk to our team. You know, generally speaking, our investment development lands, we like to see a 5 to 7% rate of return. You know, right now the OHA lands in Kaka Kumakar barely generating any revenue for us. And I think that's the issue that we're in right now.

And it's one we've been dealing with for over 12 years. It's time for a change.

Thank you, Senator Richards and Co Chair Richards.

Thank you, Senator Chuck. I had a following up on what Senator Ihara said, keeping it in a workforce housing, affordable housing characteristic. Would you or are you supportive of keeping it in perpetuity in workforce housing? Whatever the AMI.

I personally am, I would need to take that to the board. I'm not speaking correct for that regards to the board, but I think that's fair and I would be in favor of that.

Okay. Because that's one of the things that again, coming up from county, we look at the two on each and they have the 10 year deal. In 10 years, you haven't really built anything more because it's just rolling. But you'd be supportive of. Absolutely. Okay, thank you. Thank you, Chair.

Thank you, Senator Hashimoto.

Okay, so you're on record being okay with perpetuity, that 100%. Okay, so. So Chair, I would, I would hope that we would address that because that's a specific part of the bill that they're asking for. I guess in terms of when you take a look at the infrastructure.

Kakaoko Makai, what are the things that you're, you're, you think that you have already that you won't have to put in more. For example, the big things that we always have issues in the Kakaako area is electrical upgrades. We have enough sewer capacity. Are those big things all taken care of?

And have you guys looked at, when you pencil this project out, can you actually do this if we give you this authority?

So we are in the, you know, OHA has done work in the past to look at those studies, but because we have not been able to develop an actual master plan based on the desired entitlements, it's all pie in the sky right now.

There's no doubt that we're going to have to put in a significant amount of horizontal infrastructure. There's other developers in this room, you know, Kamehameha Schools can speak to that a lot better than I could. But it's going to take, you know, you don't put potentially 1500-2000 additional units in Kakaako Makai without increasing sewer capacity water.

So I guess the bottom line question is, are you going to come back to the state for those infrastructure upgrades? Are you guys going to take care of that yourselves? It would be our hope that we could take care of that ourselves.

And would you be opposed for us to put that in the bill that this is it, we're giving you this and this is what it is. So then you're not going to tap low income housing tax credit, you're not going to tap some of the other, you know, potential dwelling unit revolving fund.

You guys are going to be able to do it on your own.

For, you know, the reason why the bill says 140% and there's no bottom limit on it, is the potential to be able to use that entire stream of 140% down to the 50% or 60% so you can have this gap financing, this stack of financing that potentially could include the rental Hauser Revolving Fund or could include LIHTC credit.

Okay, so your, your intent, so we're clear, this is just the beginning.

Just the beginning, yeah.

Okay. Because I think how you're selling it to us is you guys, once you get this, this is your golden ticket to then be able to develop housing. And I'm saying I've seen so much housing people coming to my office and Senator Chang's office to ask for all these subsidies.

And what I'm saying is we're opening pandora's box that he. I'm not sure that you can do this without all the subsidies. And it's fine. I think it's fine in terms if you're going for housing, that's one thing, but it does sound like you're doing this to raise money. That's another thing.

But I think my whole point to OHA for all these years and I called previous chair to tell her that I think the place that really OHA should develop right now because everyone is putting in a lot of infrastructure dollars is an evol. That is where everyone is trying to develop.

So to me, to embark on something big like this without even testing your capabilities in somewhere easier like Evola, I get very, very concerned because this is a very, very complex project that could cost millions and millions of dollars just in the infrastructure.

So I really hope that you guys know what you're getting yourselves into because you have a golden ticket in evole where we're throwing tons of money into making sure that project gets off the ground. So I just want you to know that, that this is not, you know, this is just the beginning for Kakaako Makai.

And everyone here should be aware of how much money if OHA's saying they're going to be magically able to do all this, I'm not quite sure you're going to. You're probably going to need a whole lot of resources. And I think we're opening, as I said, we're opening pandora's box.

So I think you should be very, very clear with us on what it's going to take. And I'm very nervous that if you don't have that bigger plan that it's going to be it's that we don't know the full picture.

I share your concerns as well, Senator. And we are working with the different stakeholders in the EVLA corridor on what their plans look like. KS is a partner. So is Castle and Cook sitting County Honolulu. We're working with Councilman Tyler DeSantis Tam on what those infrastructure requirements are going to need as the rail corridor comes on Dillingham.

So that's something we're working on in parallel to this project.

Well, and I think you need to work a little bit clearer because when we had a gathering that Councilmember Los Santos Tam put together when OJA was asked what are you developing in Evely, the answer was no plans. So just FYI.

Okay, thanks.

Thanks.

Thank you. Members, before we proceed with more questions, I have one question but then I'd like to Members, we have those that offered to comment on this SB534 there are 141 in support in opposition 78 and comments 8 but there are other testimonies that we need to hear from Some are on zoom like DOT as well.

So let's cover some of this first to complete some of those that has asked to be make their comments on this particular measure but before that Kai trustee, come on down.

Just one question from myself previously with the developments of Kakaama Kakaako Makai and I think I am one of the only one here that was here during the Caetano's time in the early 2000 from 1999 as well when the plans were also if some of you remember the development of the aquarium and what we're going to do before Pre Jabsan, the issue that was raised during that time that we brought to the Cayetano Administration was that what are we doing with public parking in the lands map that we see so far, including hcda, hopefully that we can make sure one of those lots somewhere identifies public parking aside from developments that we're talking about.

So just an FYI so hopefully that we can work on that as well. Chair I would like to call on we do have DOT testimony. IT, is DOT still with us?

Not present on Zoom, Chair.

Okay. DOT what was it? Okay, if it's a fast question. Okay. Attorney General, thank you for being here.

We have a request from Senator Ihara very fast question.

Is your test is your testimony that the recommendation you submitted that AG's office submitted in the testimony does does the does your recommendation cure the concern about potential lawsuits on based on Article 11 Section 5, does your fix kind of handle that or not?

I can't say that it completely cures it. There's always a risk. But we believe that this is as best as possible constitutional under that Article 11 Section 5.

Okay, thank you. Okay.

And Attorney General Mr. I just want you to add as well that we'd be happy to receive additional comments from Attorney General because you're here at this hearing as well.

If there's anything left out or the discussions that have been asked as well that you'd like to add to ensure this Committee recognizes that there's a recommendation that you're adding as well. We'll be open to that.

Okay. Okay.

Thank you. Chair would like to. IT I haven't heard from you. Is DOT still on Zoom?

Not present on Zoom, Chair.

Did I hear not?

Yes. Correct. Not present.

Okay. All right. The we do have and the Chair I haven't heard from any testimonies or received anything but the chairs at this time would like to recognize that former Governor is here and we will give you maybe 2-3 minutes. Okay.

But we welcome you here because you were instrumental in creating what we're here deciding to move forward and appreciate your attendance.

Thank you very much, Senator. I'm very grateful. Just one disclosure, I have to say, my conflict of interest, because Senator Richards is here chairing one of the committees, and I got my start in. In this body, in the. In this house, in 1974 formally, and the best mentor I had, the.

The one who welcomed me the most, the one that gave me a good start, was his dad. And his hair was dark then. He was just a little fella, and now he has little ones of his own. But. So that's how long.

And you're referring to Monty Richards, are you? I certainly am. Okay, proceed.

I'm here, all right, not for the. Regents, but as a Regent. I'm here as someone who. You said you were the. Maybe the only one in the room when the Caetano Administration was here. Well, I was in. In this room when. When Caetano got started and, and back when the HCDA was formed, and I.

Referred that as a Member of a Senate. Thank you. Thank you.

So that's. That's one of the reasons that I wanted to testify today. I've really come full circle now, all the way with Kakaako Makai, this plan. And what you have the capacity to do. I wish the HCD had come up and said, of course we're going to. Be for this housing.

We're going to do everything we can to make it work. And if we see some things that are problems, we're going to fix that. And I wish the Attorney General had come up here and said, of course we're going to be able to do this.

Whatever has to be done in order to make sure that it can be done, that's what we're going to do. If we don't have housing in the urban core, if we do not make for housing in Kakaako Makai, what we're telling everybody is you don't count, not really. And as Chairman Kaheli said. Where is he? Still here.

Here he is. As Chairman Caheli said, we have discussed this business about housing and how to do it forever. It's been done already, over and over and over again. HCDA was created in the. Created in the first place by the Legislature, especially out of the House of Representatives.

They did it because they were afraid Frank Fosse was going to put housing down in Kakaako. They were afraid Frank Fosse was going to be able to put small business down in Kakaako, and they didn't want him to do it because they're afraid then he'd be able to run for Governor. And beat the other Democrats.

This is the truth. This is what happened. I'm looking around the room. There's some of you are as ancient as I am, not many of you, but, you know, I'm telling that that's what happened. And the reason I'm bringing that up is not to, not to create an anecdote, but say to you, this is the legislative business.

It's not HCDA's business. It's not the Attorney General's business. This is the opportunity for the Legislature to set the standard just as HCDA came into existence because the Legislature created it. The Legislature can create circumstances now to address us in 2025. It's not 1975.

I ought to know about it because I was the only one who voted against HCDA. How many? 76 we're dealing with. Right? I lost 75 to one. It was Abercrombie. No. And the reason I voted no was.

And the reason I voted no, I said not because I was against the idea, but I was against the City Council's capacity to be able to take care of zoning and the Legislature being able to make decisions about land planning being shifted to the HCDA because they wanted to get. Frank Fosse.

You have the authority, you have the responsibility, you have the jurisdiction today to set the standards and conditions. Now, if that means taking the residential blockage that HCDA has now, take it out. It got put in. Take it out. Take it out and put in the kind of circumstances that you think is. Is necessary for the.

The View planes to be. To be handled. Whether it's Malcolm or Kai or whether it's Eva, Eva or Diamond Head. We've done that with, with, with the rest of it. Set the standards. I, And I can speak with some authority on this because it's not abstract to me. I, I'm building residential units in Chinatown right now.

I've already built 48 at 60%. 30 to 60% permanent rental. 60 years. It's not a problem as to whether 10 years. Make it, make it perpetuity. Of course you can do it. I'm doing it right now. I'm working with the city and I'm working with the state right now. And I'm doing it in Chinatown.

And I'm looking to build, repurpose unused commercial property right now for housing and more small business down in Chinatown. We have to stop talking about it. I'm on the Board of Regents.

I'm not speaking for him, but as a region, I can tell you so as knows what they're doing with respect to climate change and working with OHA to see that we, we take care of whatever needs to be done with China, with, with climate change and the rest. All these things can be done and should be done.

But it is dependent and I'll conclude with this, it's dependent on the Legislature taking the challenge up. Now. If you folks don't do it now, if this Legislature doesn't do it now, if this Administration doesn't do it now, it's not going to get done. This is it.

The reason I'm, I'm here today and, and, and, and the reason I'm as passionate about it as I am today is I trust you folks to understand that this is it. If this isn't done now, it's not going to get done. It's going to be 5 years or 10 years community engagement and all.

It's going to, it's going to be a reason for who, if anybody wants to stop it, to do it. I was one last thing I'll say and I appreciate your indulgence on this. I couldn't agree more with the Kakaako folks.

I was there, I was one of the people in opposition in 2006 to what A and B was trying to do because I thought it was high end. I'll tell you what I said. It's kennels for the rich. That's what I said it was in 2006.

I think an honest effort is being made, a good faith effort is being made by zero to avoid that. They understand the, the, the what, what the Koalas folks were for. And I understand it and I'm for it. And I think that they're, they're being respected in this. This is your chance. This, this is our chance.

The housing crisis is the single most important issue facing the people of Hawaii today. And you have the opportunity to work with OHA to make that challenge, meet that challenge in a way that people can be proud of and you can be proud of. And I thank you for your time.

Governor, let me pose this one question for you.

Yes.

We created HCDA?

It was pre when I became a Senator in 1998. I've been water and land Chair under Caetanos and parts of lingo and I am here again as water and land Chair.

Yes.

You're right.

Created HCDA. We've worked with them. Just something out of the box. I'll just float it out there. What happens if we take HCDA from the management of Kakaako Makai?

Are you asking me?

We can, the Legislature can do that?

Oh, sure.

Okay. That answers my question. It's just throwing it out there because there's so much discussion how we're going to move with the meth, the measure before us. Okay. Having said that, mahalo.

We got more to do. Chair would like.

Thank you very much.

Thank you. Good to see you. All right, let's proceed because there's lots of testimonies that we should try to hear. Chair would like to call on then the George Paris from the Iron Workers. Is he still here? Okay, you have, you have all of you to testify. We're going to time you now at two minutes.

Stand on your recommend your testimonies. However, if you believe you can do it in two minutes, go ahead. We'd like to hear from you. Yeah, we'll do it in two minutes.

Thank you very much. Hello, Chairs, Chang, Richards, Inouye and board Members. I'm here to represent the George Paris of the Iron Workers Stabilization Fund. And I just want to touch up on some of his testimony that he has with you.

I'm sorry, did we hear your name again?

My name is Cliff Leboy.

Okay, I'm sorry.

Line Workers Stabilization Fund stands in strong support of SB534 with its current intent, which addresses a critical issue of affordable housing in Hawaii. This legislation takes multiple approaches to increase the availability of housing for essential workers. SB534 will empower the Office of Hawaiian affairs to develop its land for workable for workforce housing and mixed development.

It is a crucial step towards addressing the housing needs of Hawaii residents and ensuring that OHA's lands are utilized to benefit the community and also Fund programs for advancement of Native Hawaiians. We strongly urge that this Committee passes this SB3400, 534 without any delay. Thank you very much.

Okay. Mahalo. Chair would like to recognize the budget and finance, Louis Salaveria or a Member of the Cabinet. Okay, Members. He sends comments. Department of Hawaiian Homelands. Aloha.

Aloha. Chairs. Vice chairs, Members of the committees. Orianaleal Koinoa, the Department of Hawaiian Homelands. Nahas, the Government Relations Program specialist. Chair Kali Watson sends his warm aloha and sincere apologies that he could not be present today. He's currently out of state traveling handling other DG Chel business.

But I know that if he could be here, he would be here standing in support of not just ESPY, but 534, but in strong support of the Office of Hawaiian Affairs. And the HHL remains committed to working with OHA as well as the Other necessary organizations, agencies and stakeholders to see this initiative through. I'm available for questions.

Mahalo for the opportunity to testify.

Mahalo, HSTA.

Or do we wait for question?

Okay, you want to read? Do you know who you are?

Yeah, one. One question for.

For?

For HHL.

DHHL. One question from Senator Ihara.

The Department of Hawaiian Homelands develops home to deliver.

We develop and deliver residential, agricultural and pastoral lots.

So could OHA, since OHA would say contract to a developer, could they contract to Hawaiian Homelands and have the entire condo or whatever be dedicated to native Hawaiians? Is that legally possible?

We are open to exploring options that may be available for engagement going forward.

Okay, thank you.

Okay.

All right, HSTA. Okay. Sense testimony and support. And we're supposed to be here, but we're sorry. We're running as fast as we can. Henry Curtis in opposition. He was going to be here in person. Malama Pono, Hawaii. Ilima De Costa. Aloha.

Aloha. Chair and Members of the Committee, thank you so much for holding this hearing. I wanted to thank my representative Morwaki for being here today. I live in the Ala Moana area, not quite Kakaako. I actually can't afford to live over here. It's getting too expensive for me.

I can barely afford to live in the unit that I live in now. And a lot of the reason why I can't afford to live there is because wages haven't kept up pace with the cost of housing. Right. We don't have any kind of housing controls.

And I think that this is the best option that we have to trying to get some additional housing and perhaps some additional rent controls or housing controls. With regard to the cost, I'm concerned mostly at the fact that it seems to be some sort of. The projection is that Kanaka Maoli are not concerned with open spaces.

We are. We're so concerned with open spaces that we want to make sure that every. Every space is kept as open as possible. But we also need places to live. So unless we're going to redevelop hotels into housing units for Kanaka Maoli, I strongly urge that we consider this Proposition.

I myself would be willing to take a look at removing HCDA from oversight of Kakaako. That would be an option. Or expanding the opportunities to build to other landowners in other areas of Oahu, because I think it's that important.

I do want to be able to maintain housing on Oahu, but that is a challenge for me as a single woman right now. My only options would be to live with other people, maybe my family or roommates or get myself a Kane. But I want to live independently and I can barely do that.

So please consider this option because I think it's the best option way forward. We can haggle out some of the details, but I really do believe that this is the best path forward. Mahalo.

Thank you, Ilima. Okay, I'm going to call some of you and if you can start lining up right now, we'd like to call Kamehameha Schools and Kael Duarte. Are you going to represent Kamehameha Schools? Okay, these should be after him. Ronald Iwami, friends of Kevalo. Audrey Lee testifying for Malama Moana.

And we do have Wayne Takamine, I think. IT is Mr. Takamine on Zoom?

Not available on Zoom Chair.

Next to follow up. Joanna Jenks, please stand in line. And Kenneth Conklin with the Center for Hawaiian Sovereignty Studies, please proceed.

Aloha Mai Kakou Chairs, Vice Chairs and Committee Members. My name is Walter Tamis. I'm actually here on behalf of Kah Dort with Kamehameha Schools. Our Ainapuahi team, we oversee the land portfolio for the trust. I am the managing Director of our planning, industry and development team.

So we focus on value creation, land planning, investments into industry and development. Kamehameha Schools appreciates the opportunity to Support Senate Bill 534. The Office of Hawaiian Affairs, you know, is critically important to the advancement of our Native Hawaiian families, culture and Lahui and as well as to the state overall.

The intention of this bill enables OHA to add to multiple efforts across the state to provide housing and also better serve Hawaii's workforce, which includes many Native Hawaiian individuals, families and community. We support this good intention which uplifts our communities and helps ensure the perpetuation of our culture at Kamehameha Schools.

We work to advance our Native Hawaiian people through education and are committed to to working with community partners, organization, state leaders like yourselves and our collective efforts to empower the well being of our lahui. As it's been mentioned here, Kamehameha Schools does own lands that would be covered by this bill.

I can share with you at this time. We have no plans, there are no development plans over these parcels. And it's really for three practical reasons.

One, you know, our lands are throughout the state and we've been focusing on a number of areas actively pursuing potential housing development in places like Māʻili, Waipahu, Kapalama, Wahiawa, and of course, as has been discussed Here, Kaka'ako, Mauka. But we do recognize the opportunity here on the Makai lands.

Our focus on Malka has really been since 2009 to fulfill the promise of that plan. And that focus remains today. We're about 50% the way through on developing our Mauka lands with the most recent project Aliyah just breaking ground in the past year.

Another and the third practical reality is our lands are currently leased two lessees in timelines that stretch out into the early 2000 and 30s and as far out to 2079. And obviously as a lessor, we honor those agreements with our lessees, even as we might want to plan for future use of our lands.

Mahalo for the time and opportunity to testify and I'm available for any questions.

I have a question for you. I mentioned earlier that the issue we're going to find ourselves in with developments to add to Makai and the entire Kakaaku region is always lack of public parking. And this is true for, for many areas on Oahu, particularly in East Honolulu.

Would you folks be amenable to at least look at one of your properties to develop public parking?

That could be, you know, it's, that's an interesting one. Parking is a practical reality of the marketplace. I hope we can envision a future where we're less dependent on cars and we're realizing the, the new technologies that are coming as well as with investments like transit.

As far as public parking, it's just, it's an incremental cost to any project. So whatever block you choose, if you're going to develop housing on it, and that housing the market requires so much parking. It's an incremental cost. And if someone is willing to help share in that cost, anything's possible.

Thank you. Well, you know, having been around for many, many years, this is simply a problem throughout the state. You know, we got our, our, what do we call our new trained in a way hopefully that can help at least with our transportation problem. But this is an issue that is, is a concern.

But we thank you very much. Okay, who's next that standing in line there, please? Come on. And Chair would also like to it one second please. It anyone still on Zoom that have noticed to speak today? And we have several of them that we're looking at, but are they still with us?

Yes. Chair, we have two present on Zoom.

Okay, those on Zoom, we will call on you in after the second person in line. Thank you. Proceed please. Your name?

Okay. Aloha to Chair Inouye, Chair Richards and Chair Chang and the Members. I'm standing here in testimony and strong opposition to SB534.

And your name, please?

My name is Ronnie Wami. I'm the President of Friends of Kuala, and we stand for protecting open spaces for Hawaii's future generations. And we've been doing this for 20 years since the law became. And we were very instrumental in getting that law passed. I would like to open with.

We are not against residential development, nor are we against oha, but when anyone attempts to change a landmark law that has been protecting this last open public oceanfront land on the south shore of Oahu under the guise of being environmentally safe and feasible to build, and under the guise of being truly affordable, that to me, is not porno.

To elaborate further on the law, the importance of this law, it has been. It was passed by the Legislature back then in 2006, unanimously, except one that's showing the strong public sentiment for this land. This sentiment still remains today because everyone has asked, would you like to see more high rises on the Makai side?

And everyone said, no, we have enough already. Mauka with more coming, so ask yourselves that. I feel Mauka is out of control. It's just moving ahead. And Urban Planner told me that Kakaako Makai is unsafe to build, being on toxic land, federally considered a brown field, an unstable field, land to support 400 foot towers.

He said there will be tremendous construction costs to remediate this land and to make it safe.

Ron, please summarize. Your time is up.

Okay, I want to say, yeah, I agree to the rules or follow the rules, but I want to follow the law, too, because that's the right thing to do.

Thank you, Ron. Okay, next up. Is that Audrey Lee, please? All right, to follow, please. If you're still here on Zoom after, after. Audrey Lee, is that you?

Good afternoon. Aloha, everyone. Aloha. My name is Audrey Lee with Malama Moana, and I heard many things today that I didn't actually hear about before that would. Some things that were not in the bill that was very interesting to know about, like the Evile building out there and also various other things.

But my question is, if OHA was serious in building affordable housing for the Hawaiian people or anyone, wouldn't it be of grave importance to know the land on which it was being built, that it's safe and to live and thrive on, wouldn't an EIS come first before trying to overturn a law restricting residential zoning?

Not if they were just going to turn it around and sell and let someone else worry about it. But according to Cherkahele that, you know, he has really solid plans. So this is very interesting to me, too. I didn't know about some of that.

But, you know, the picture that we're seeing is that the EIS wasn't called for before and that picture is not a pretty one. So I very strongly oppose SB534. I ask all of you to do the same. If it can be reworked into a way that the.

The deeds are in perpetuity or something like that, you know, that sounds pretty good. Affordable housing is a key issue, But I feel SB534 is not about that issue. Thank you.

Thank you. I.T. on Zoom, please. And for those of you who are able to hear us on on Zoom, I will call these names and I understand there's two waiting. One is Kawai O Hawaiki Anakalea, are you there? Celeste Rojas, Kapua Kamai, Lee Sector.

I'm here.

Okay, proceed and thank you for waiting with us as well today.

Thank you. Good afternoon. Aloha, Senators. My name is Lee Sichter. Please allow me to elaborate on my written testimony. I oppose Senate Bill 534 because it is inappropriate to increase population density in the Makai area at this time.

In its wisdom, the Legislature adopted the Hawaii Environmental Policy Act, also known as Chapter 343, to require any project involving government owned lands or government funds to conduct an environmental assessment and I quote, "at the earliest practicable time," so that environmental, economic and technical concerns are given appropriate consideration by decision makers.

Environmental assessment is not a permit approval. It. It is an informational document intended to inform decision makers. SB 534 is placing the cart before the horse. OHA is seeking entitlements before engaging in a formal planning process. This is contrary to the accepted processes and contrary to state law. The planning process includes community outreach, master planning, and environmental analysis.

OHA needs to first refine the conceptual master plan to detail currently proposed land uses, urban design considerations, construction methods and infrastructure requirements for the development of Kakaʻako Makai and submit it to the public for review and comment. And then it needs to prepare an environmental impact statement for its proposed development as required by law.

It would be premature for you to act until OHA fulfills its Chapter 343 and Chapter 205A obligations, and provides you with the requisite technical environmental, economic and alternatives analysis contained in an EIS that you need to inform your decision making on entitlements in the Makai area.

Thank you, Lee. Thank you so much. IT, anyone else I understand is waiting on Zoom?

Senator, Chair, question.

To Mr. Sichter? Okay. Senator Hashimoto, Mr. Sichter, we have a question for you.

Mr. Sichter, thanks for your written testimony. I've read it. It's very detailed, I think-- Great verbal testimony as well. So just, because of your background, I'm just curious because I did ask Chair Kahele about this, and he doesn't sound like they're quite far.

But what do you believe is needed before-- you know what is actually required, typically, for this kind of housing development, especially along the shoreline, to be done? And do you think, are we allowing the typical type of process to be bypassed through our pieces of legislation?

Thank you, Senator. That's what it feels like to me. Typically, whether it's residential or any other kind of development, if it's on government-owned land or involves government funds, typically what is done is a master plan. And that master plan is distributed to the public for review and comment.

And then an environmental assessment is conducted to evaluate the impacts of that master plan. And then all of that information is forwarded to decision makers.

Okay. And then so under your impression is that we're giving this-- We're not complying with essentially 343, then we're allowing them to bypass. That is from your understanding of the law?

Yes. By granting entitlements, you're putting yourself in a precarious position of saying it's okay to do residential development here and then find out down the road that it may not be okay because there's technical considerations.

Okay, thank you, Chair.

Does that satisfy your question then, Senator Hashimoto? Thank you so much. Mr. Sichter. IT, I understand there was one more on Zoom. IT? May I ask who's standing by on Zoom? Is that Jerich Garcia or Jermaine Myers? Oh, okay. On Zoom. IT, will you identify the person, please?

The person testifying is Celeste.

Okay, Celeste, proceed.

Good afternoon, Senators. I'd like to say that I did put a testimony in, but after listening to this entire situation, I agree with the person that spoke earlier because it's going to take a lot of planning and getting the right team together.

The idea is great, but everybody-- Since I'm new to the islands, moving here and knowing how the laws are, everyone has to be a team to work it out. And it does take time, but it can be done.

And like Kahale said, it is a benefit for the state for workers to stay in Hawaii and revenue comes to Hawaii because people are staying here. I know the planning and getting all that takes time. But then there's the respect of the land itself because part of it has a history behind it.

So you have to think of how we respect the land and how it's going to make our future better for the new Hawaiian generation, or people who are just coming in from wherever they're coming from.

All right, thank you, Celeste. So we did receive your comments in support. Are you still in support or you're not? Okay, thank you so much. Okay, Chairs, we're going to wrap this up in couple of minutes.

I understand the storm is going to start coming and we don't want all of you to get involved with getting home safely. So we did receive testimonies and I'm going to just identify those by associations because these were group supports or opposition. Testifying Queen Emma Hawaiian Civic Club in support. The Center for Hawaiian Sovereignty Studies in opposition. Testifying for UPW in support.