In the preceding obituary of Jess Jackson, noting his prowess as an eminent domain lawyer before he became a vintner of Kendall-Jackson fame, we made some observations about the wretched Kaiser Development case, that Jess and your faithful servant handled in Hawaii in 1990. That caused additional information to trickle in, and we are now able to beef up our unkind assessment of that litigation with some additional data.
We already noted that after that case was over, Honolulu filed a condemnation action to take Queen’s Beach from the Bishop estate and deposited $11.6 million. This, we learn, came to 87 cents/square foot, which makes that offer a clear lowball. Using that pricing, you could buy a 10,000 sq. ft. beachfront lot — and what a beach! — for $8,700. Need we say more?
So a question virtually asks itself: since Honolulu did intend to acquire Queen’s Beach, why didn’t it just make an offer and file an eminent domain action if necessary, as required by the Uniform Relocation Assistance Act, instead of attempting extortion and going through that tortuous inverse condemnation litigation that in the end must have cost the city a pretty penny but gained the city nothing because it de facto conceded the fight by later filing its direct condemnation action? Did the powers that be in City Hall actually believe that the city could steal Queen’s Beach? You tell us.
For the complete Honolulu Star-Bulletin article reporting the filing of the direct condemnation action to take Queen’s Beach (now known as Ka Iwi) go to
Follow up. This condemnation action eventually settled for $12.8 million (evidently consisting of the deposit, plus interest), even though the Bishop Estate/Kamehameha Schools properly thought its fair value was $80 million. The condemnation action settled for less because, as reported by the Honolulu Advertiser, the land had been downzoned (evidently in anticipation of the condemnation, which is illegal — the constitutional “just compensation” clause contemplates fair market value undiminished by the anticipation of the condemnation). The division of the settlement amount was $8.12 million to Bishop Estate/Kamehameha Schools, plus 70% of the interest earned on the $11.6 million deposit. Kaiser Development got $3.48 million, plus 30% of that interest. Kaiser was in the picture because it had a contract to develop the subject property into a golf course.
The settlement resulted in state acquisition of 30 acres, the last part of the larger, 316-acre beach area. In a bit of fiscal legerdemain, $5.6 million of the settlement fund came from federal highway funds. Go figure.
For the Honolulu Advertiser story (State’s Purchase of Ka Iwi Will Preserve Shoreline, June 27, 2001) go to http://the.honoluluadvertiser.com/articla/2001/Jun27/In/In02a.html
Historical note. So it looks like the poor Hawaiians got screwed out of their land once again. Remember that the Bishop Estate/Kamehameha Schools is not a commercial venture like the other Hawaiian “missionary trusts.” It is a charitable trust created by Princess Bernice Pauahi Bishop, the last member of Hawaiian Royalty, when she left the remnant of royal Hawaiian crown land (which she held in trust for the Hawaiian people) to the trust, to be used in perpetuity to generate income with which to fund the Kamehameha Schools for Hawaiian children. So the Estate got lowballed so that visiting haoles and local NIMBYs can enjoy Queen’s Beach.
Next time you are in Hawaii, you can see a bronze statue of the Princess in the Royal Hawaiian Shopping Center on Kalakaua Avenue in Honolulu.