East Hawaii News

UPDATE: Banyan Drive Bill Amended, Mayor Vows to Continue Fight

March 1, 2013, 4:45 PM HST
* Updated March 28, 5:18 PM
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Three Senate bills that would transfer state property to Hawaii County were approved Friday by the Senate Committee on Ways and Means, but not before significant changes were made.

Senate Bill 1361 deals with nine state parcels containing a mix of hotels and condominiums on Hilo’s Banyan Drive.

Under the latest draft of the bills, rather than giving the properties to the county outright, the state Department of Land and Natural Resources, which currently manages the properties, “shall in good-faith” negotiate with the county regarding leasing the properties to the county for $1 per year.

However, a portion of lease revenues from the land – the percentage has yet to be determined –  would be returned to the state.

In the case of the Banyan Drive properties, the total lease revenues amount to more than $800,000 annually.


The length of the lease that the county would assume also has yet to be determined.


All three bills were introduced at the request of Mayor Billy Kenoi.

Kenoi today told Big Island Now that the important thing is that the discussion is continuing.

Kenoi has told state lawmakers that he firmly believes that the county can do a better job of maintaining the Banyan Drive leases.


He said it is critical that the county take over the properties to reverse the decline that has occurred in the past seven years since Ken Fujiyama’s company took over the state lease under the Naniloa Volcanoes Resort.

“If (the state) is not going to do it, let us,” he said. “We’ll do it better.”

Kenoi has told the state that Fujiyama has violated key conditions of the agreement signed in 2006 and that the lease should be terminated.

“Banyan Drive is in deplorable condition,” he said, adding that the current DLNR management “has allowed Ken Fujiyama to hold Banyan Drive an economic hostage.”

Asked whether the amount of lease revenues that the county is allowed to retain is a factor, the mayor said it is not.

“The issue for the county is not money, it’s effective management,” he said.

“I’m mad and I’m ready to fight for it,” he said. “We’re not going to tolerate it anymore.”

Among other things, the change from transferring the land to leasing it to the county reflects concerns expressed by the Office of Hawaiian Affairs that ceded lands – property which once belonged to Hawaii’s monarchy and is now in the public trust – remain under the ownership of the state “until the native Hawaiian people’s claim to ceded lands has been resolved.”

The Naniloa is also the subject of an October foreclosure action and subsequent bankruptcy filing.

Senate bills 456 and 457, which deal with the management of Mauna Kea State Recreational Area on Saddle Road and Hapuna Beach State Park in South Kohala, respectively, were amended Friday in a similar fashion.

***Updated to correct a link.***

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