More info on the recent land deal that fell through
By Ian Lind | July 4, 2008
In a comment posted July 4 on the blog of Honolulu Advertiser reporter Rick Daysog, someone with inside knowledge of the recent deal writes about problems in the Bank of Hawaii’s handling of the sale. Scroll down through the blog entry to see comment #2.
According to this information, the $40 million deal fell through when BOH, as Galbraith trustee, refused a request for a 60-day extension to allow further due diligence, including waiting to see whether bills potentially impacting the property would be vetoed by the governor.
The comment also accuses the bank of dragging out contract negotiations for months over the course of the 2008 legislative session.
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Bank blows another deal on Galbraith land, public and nonprofit agencies seeking partnership
By Ian Lind | June 26, 2008
For the second time in a year, Bank of Hawaii has failed to negotiate a final deal for the sale of the Galbraith lands. The bank is trustee of the 104-year old George Galbraith Trust.
The Honolulu Advertiser reported today that the latest deal with a Canadian developer has fallen through and the property is likely to be listed for sale once again. At the same time, the Advertiser reports that the Honolulu City Council is considering putting money into a public interest partnership being organized by the Trust for Public Lands, which might include the State of Hawaii, Office of Hawaiian Affairs, and others.
The Bank of Hawaii’s failure to close the sale is especially striking after it reneged earlier this year on promises to consider other offers, including a prospective offer from the Trust for Public Lands.
Two failed marketing attempts probably didn’t come cheap, although the Bank has yet to disclose the internal costs and fees paid during the failed sales efforts.
The collapse of the latest deal has encouraged community leaders, who hope the land can be preserved in agriculture and open space.
State Rep. Marcus Oshiro, D-39th (Wahiawa), introduced legislation that set aside $13 million and enables the state to acquire the Galbraith lands with the aid of partnerships with public and private agencies.
The bill was passed by the Legislature and will become law.
Oshiro said the Trust for Public Land is attempting to secure money from the city, the Office of Hawaiian Affairs, the U.S. Army and others interested in preserving the estate.
“Over my dead body am I going to sanction these five-acre lots (proposed by the developer). There are actual farmers who are interested and can make a go of it and be profitable if we assist in acquiring the land,” said Oshiro. “I know the area definitely fits the criteria of the city’s Clean Water and Natural Lands Fund. It has all the features of prime ag land in terms of water, access to market, and electricity. It’s the ideal location.”
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Controversial Montreal investor linked to Galbraith land deal
By Ian Lind | June 6, 2008
Honolulu Advertiser reporter Rick Daysog says Phil Archer, “who was banned by the Alberta (Canada) Securities Commission from trading for 15 years for allegedly manipulating the stock price of a Canadian company,” was actively involved in negotiations for purchase of the Galbraith land on behalf of Nokaoi Development LLC. Read his blog entry here.
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Canadian developer seeking deal for Galbraith lands
By Ian Lind | May 21, 2008
The State of Hawaii’s renewed commitment to provide incentives and supports to farmers and meaningful long-term protection for important agricultural lands faces a major challenge in the fallow fields outside of Wahiawa in central Oahu, where a Canadian real estate developer is trying to complete a behind-the-scenes deal to buy and then subdivide 2,100 acres of prime land for high-priced McMansions on “gentleman farms”.
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May 16 hearing approves fees, next hearing postponed until Sept. 12
By Ian Lind | May 20, 2008
About two dozen beneficiaries and family members, along with a number of lawyers, crowded into the small courtroom of Judge Colleen Hirai on Friday, May 16.
The hearing was rather perfunctory, as reflected in the official minutes. Note that the official minutes only recognize the presence of the attorneys, and do not give any recognition of beneficiaries who attended.
Petition for Instructions, for Review
10:56 A.M.-11:10 A.M. CASE CALLED.
PRESENT: RAYMOND OKADA AND CONRAD WEISER FOR PETITIONER BANK OF HAWAII; LENORE LEE FOR JULIE FINLEY AND JONATHAN GURDIN; JULIE FINLEY; CARROLL TAYLOR FOR FRANCES MCCALLUM AND NEILL SCHOENING; MEYER UEOKA FOR FRANCIS AKINA, JR., ARLENE GALLIGHER, LORETTA DUNN, AND ADELE IWAMASA; S. KALANI BUSH FOR MOANA EISELE, PERSONAL REPRESENTATIVE OF THE ESTATE OF JOHN ADRIAN MCPHERSON; HOWARD MCPHERSON; DAVID DICKINSON; ROBERT BRUCE GRAHAM, JR.; MICHAEL LUM, MASTER; AND LLOYD NAKASONE.
THE COURT GRANTED THE PETITION IN PART SUBJECT TO THE RECOMMENDATIONS OF THE MASTER THAT WERE APPROVED AND ADOPTED AND CONTINUED IT IN PART TO
9/12/08 AT 10:00 A.M.THE PETITION WAS GRANTED IN PART AS TO THE REQUEST TO APPROVE THE ACCOUNTS, TRUSTEE’S FEES, AND FEES AND COSTS REQUESTED BY THE MASTER AND THE MASTER’S CONSULTANT.
THE PETITION WAS CONTINUED IN PART AS TO THE REMAINING REQUESTS IN THE PETITION.
MR. OKADA IS TO PREPARE THE ORDER AND FILE AN AMENDED ORDER SETTING DATE, TIME, AND PLACE OF HEARING.
The minutes fail to reflect the question asked by attorney Lenore Lee as the hearing ended.
As I understood Lee’s question, she referred to a previous direction from the court that official documents must be filed as normally required, that is with service to each party. In this case, with beneficiaries spread across the world, that’s a costly process. A number of documents have been filed with the court but not properly served on the parties, apparently to avoid the extra cost. Lee asked Hirai whether the Master should be required to disregard the improperly filed responses and only consider those properly filed documents when he makes his recommendations on the question of distribution.
Hirai seemed to step back from taking a clear position. She said that she was reluctant to restrict the Master, but then said something to the effect that she expected him to take into account those accepted standards for service.
Where that leaves us all isn’t clear. Perhaps David and others can add their interpretations.
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Canadian developer claims to now control Galbraith land
By Ian Lind | May 8, 2008
Canadian real estate developer Dennis Blain and his Nokaoi Development LLC stepped forward at the end of April claiming to currently control the 2,000 acres of Galbraith Estate land in central Oahu.
Blain reportedly has a contract with Bank of Hawaii, the Galbraith Estate trustee, to purchase the property. The deal was apparently struck in secret while other prospective bidders and the public were being assured the bank was preparing a new listing agreement and that all interested parties would have a chance to submit bids at that time.
All of this was going on behind the scenes at the Hawaii State Legislature considered several different bills to authorize purchase or condemnation of the Galbraith land in order to keep them in agricultural use.
While both House and Senate were giving final approval to HB 2293 CD2, which contains provisions authorizing the state to protect the 2,000 acres of agricultural land in Wahiawa owned by the George Galbraith Estate, the Bank of Hawaii, was apparently trying to preempt the process with its own secret deal.
The legislature’s move to protect this prime ag land was supported this year by a diverse set of organiziations, including the Agribusiness Development Corporation, Hawaii Farm Bureau Federation, Trust for Public Lands, Kamehameha Schools, Wahiawa Community and Business Association, ILWU, Local 142, HPC Foods, Ltd., and others.
There’s substantial community concern about the possible loss of this significant agricultural property triggered by Bank of Hawaii efforts to sell the property as part of the termination and dissolution of the Galbraith Estate. One deal fell through at the end of 2007 and since that time, in legislative testimony, in reports to estate beneficiaries, and in response to questions from other potential bidders, the bank’s trust officer has repeatedly said that the land would be going back on the market and all interested parties would have another chance to bid.
In January 2008, Bank of Hawaii representative Josie Bidgood presented testimony to the House Committee on Water, Land, Ocean Resources, and Hawaiian Affairs:
The Trust has continued to market the property. First, discussions are being held with parties which submitted unsolicited expressions of interest after learning that the first round of offers had concluded. In addition, the trustee has issued requests for proposals to several real estate brokerage firms, and anticipates selecting a listing broker around mid February.
What Bidgood failed to mention here was that at least one unsuccessful bidder in the first round, the Trust for Public Lands, had notified the bank that they were prepared to submit another offer.
Lea Hong, Hawaii director of the Trust for Public Lands, said she had spoken with Bidgood about her organization’s readiness to submit another bid. Hong said Bidgood repeatedly assured her that once the property was listed for sale, all bidders would have an opportunity to step in.
But in the final weeks of the session, Bidgood privately informed legislators that a contract had been signed to sell the Galbraith land without considering other offers. It isn’t known whether other bidders might also have stepped forward if given the opportunity.
And the deal doesn’t appear to improve prospects for preservation of the area in agricultural use.
In an e-mail to Wahiawa area legislators, Sen. Robert Bunda and Rep. Marcus Oshiro, Canadian real estate developer Dennis Blain, owner of Nokaoi Development LLC appears to present himself as the new owner of the Galbraith land.
In the e-mail, Blain says that he “conducted a market study into the salability of the lands and the price that could be generated through the marketing and sale of 30 acre farms.”
“The response that I received was tremendous with virtually every parcel being spoken for,” Blain wrote.
An appraiser put the value of the land at $252,000 per acre for 5-acre parcels, which are allowed under the current Ag-1 zoning, according to Blain.
The e-mail refers to “third party contracts that I currently have for the sale of these lands….”
Clearly, at these prices, Blain is aiming for pseudo-agricultural country estates rather than real farming.
Although circumspect, the e-mail appears to make clear that Blain is not talking about agriculture.
Farming is seemingly becoming feasibly more difficult in the State of Hawaii. Restricting these alnds will substantially reduce their value with the limited possibilities, and will cause me and my company substantial financial loss. I believe it woudl be extremely unfair if these restrictions were targeting 100 percent of one property owner’s lands.
In the end, Blain offers to sell the land to the state at “a reduce price of $68,000,000 or $32,300 per acre” in an unspecified partnership that would end up giving the state ownership of Lake Wilson. The e-mail doesn’t make clear whether this proposed deal would in turn allow his company to proceed with development plans for the rest of the Galbraith lands.
Nokaoi Development LLC’s web site says it is currently developing seven properties on Maui.
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