DHHL ANSWERS TO OUR QUESTIONS

Subject: Re: Fwd: Questions regarding Lease Agreement 603
From: Blaine.C.Fergerstrom@hawaii.gov
Date: Tue, November 13, 2012 3:53 pm
To: Carroll Cox <carroll@carrollcox.com>
Cc: Blaine.C.Fergerstrom@hawaii.gov, "zztype@alohatown.com"
<zztype@alohatown.com>

Aloha Mr. Cox,

Mahalo for your patience. Your list of questions was lengthy and required detailed research by staff before we could release the responses to you.

Aloha,

Blaine Fergerstrom


Here are your questions, along with our responses:


1) When was the original contract for the Kauhalepono Downpayment Assistance Program agreed upon?

The Department issued a Contract 52388 to the Hawaiian Community Development Board on May 1, 2004.

2) Was the original contract related to the Lease Agreement 603?

No.

3) What was the total acreage contained in the original Lease Agreement 603?

The original License included 5.257 acres, along with an additional 1.565 acres. The additional acreage was taken back in 2005.

4) What was the monthly charge for the lease?

Originally $10,000 per month, then increased to $11,600  starting June 9, 2005 thru February 8, 2009.  $15,600 per month from February 9, 2009 thru February 8, 2014 including a rent offset of -$5,000 per month as compensation for completing work on contract 52388.

5) When did the original contract for the Kauhalepono Down Payment Assistance Program expire?

LMD recently learned that contract 52388 was not renewed past December 2011 because of insufficient reporting.  The Terms of lic 603 require state, “if,after annual evaluation, the LICENSOR determines the LICENSEE’S services were insufficient, the rent and the offset may be adjusted for the following year”.  Rent was adjusted retroactively starting January 2012.  

6) Some records we have recovered suggest that the Kauhalepono Down Payment Assistance Program expired in 2009 and the Lease Agreement 603 is still active.  If true, will your agency recover the monies discounted or waived for the Hawaiian Community Development Board?

LMD believes that Contract 52388 was not extended beyond Dec. 2011.

7) If the Kauhalepono Down Payment Assistance Program expired, will the Department of Hawaiian Homelands cancel the discounted monthly payment for land leased under Lease Agreement 603?

Yes.

8) Will the Department of Hawaiian Home Lands recover the discounted monies given to the Hawaiian Community Development Board. If yes, what will the amount recovered be?

Yes, $5,000 for every month past Dec. 2011. DHHL sent a letter on October 4, 2012 demanding back rent of $50,000.  

9) Was Lease Agreement 603 connected in anyway to the Kauhalepono Downpayment Assistance Program?  If yes, please advise.

Yes, money from the Kauhale program (Contact 52388) targets/helps DHHL beneficiaries and rents (money) received from Lic 603 is directed to the benefit of DHHL beneficiaries.

10) Was the Hawaii Community Development Board given a discounted price on the lease of the land covered under Lease Agreement 603?  If yes, what is the amount?  Was there a reduced monthly charge for the lease ?  If yes, what is the discounted amount? Why was the discount granted?

Previously discussed.  

11) Was Lease Agreement 603 extended?  If yes, when and why was it extended?   When does the extension expire?  

(See Jan 2009 submittal attached, showing why the HCC made the decision)


12) What is the termination date for Lease Agreement 603?

February 8, 2014.

13) Some information we have received suggest that the contract expires in 2014.  What is the specific date Lease Agreement 603 expires?

Previously discussed.

14) If the Kauhalepono Downpayment Assistance Program expired.  Was Lease Agreement 603 submitted to the Hawaiian Homelands Commission for revocation or modification of monthly lease fees charged to the Hawaiian Community Development Board for land lease under Lease Agreement 603? If yes, when was it submitted and what was the specific adjustments?

Rent for Lic 603 was adjusted as previously stated, on November 1, $55,000 of back rent is due.  In a October 26, 2012 letter to DHHL, HCDB disputes the charge, and requests a meeting with the DHHL administration and the HH commission to resolve the issue.


Attached: Jan 27 Submittal HCDB


---
Blaine Fergerstrom
Department of Hawaiian Home Lands
Information & Community Relations Office
91-5420 Kapolei Parkway, Kapolei , HI  96707
(808) 620 9512 w / 620-9599 f / 497-9463 c
Blaine.C.Fergerstrom@hawaii.gov
http://www.hawaiianhomelands.org