Ka Wai Ola - Office of Hawaiian Affairs, Volume 22, Number 8, 1 August 2005 — Leasehold conversion [ARTICLE]

Leasehold conversion

In July, a federal judge ruled that the repeal of the city's condominium leasehold conversion law was legal. U.S. District Judge David Ezra

said, however, that while the city acted within its legal limits when it abolished the law, the subsequent lawsuits resulted in an "avoidable waste of taxpayers' money." "The fair and wise decision, from the perspective of the city, would have been to draft the repeal of Chapter 38 [the leasehold conversion law] so as to allow those leaseholders such as Plaintiffs, who have begun in good faith the process of conversion to be grandfathered in," Ezra said. The leasehold conversion law, passed in 1991, allowed the city to use its condemnation powers to force condominium landowners to sell the fee interest in the land under their buildings to qualified lessees. Many lessees supported the law because it provided them with a process to purchase the fee-simple interest in their homes. However, affected landowners, whieh include ali'i trusts, churches and families, likened the law to legalized theft. After the City Council voted 6-3 against the law, the mayor signed the leasehold conversion repeal on Feb. 9. Ezra's ruling eame as the result of two lawsuits that were filed against the city by lessees of the Admiral Thomas and Kāhala Beach eondominiums buildings. Both groups had already initiated the leasehold conversion process and asked the See BRIEFS page 7

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city to let them complete the conversion of their condominiums. The attorney for the lessees of the Kāhala Beach said that he and his elients would meet to discuss what they will do next, according to loeal media reports. The state Supreme Court is also considering a similar case. VI