On Department of Hawaiian Homes trust land in Kapolei, Oahu

Hawaiian Homes Commission to evaluate construction of casino

Hawaii is one of two states that hasn’t legalized any form of commercial gambling — Utah is the other.
Reading time 4:07 min
The proposed legislation would authorize an appropriation of $5 million from the Hawaiian Home Lands trust fund "or so much … as may be necessary for fiscal year 2022-2023 for the purpose of funding the operations of the Hawaii gaming commission."

At its next week's meeting, the Hawaiian Homes Commission will consider a proposal to build a casino on Department of Hawaiian Homes trust land in Kapolei, Oahu. The idea is raising eyebrows statewide, especially among trust beneficiaries.

The bill would authorize an appropriation of $5 million from the Hawaiian Home Lands trust fund "or so much… as may be necessary for fiscal year 2022-2023 for the purpose of funding the operations of the Hawaii gaming commission."

Should the bill be introduced in the legislative session that starts next month and become law as written, a commission would be established with a mandate to select a licensee to develop, construct and operate "an integrated resort on the site selected by the Department of Hawaiian Home Lands."

The selected licensee would agree to invest at least $50 million to do so, and would reimburse DHHL $5 million to reimburse the trust fund for the gaming commission “no later than the first day on which the casino opens for operation.”

The bill notes 28,000 Native Hawaiians on the wait list for homestead leases — some for decades — and states DHHL requires more than $6 billion to meet their needs, the Hawaii Tribune-Herald reports.

"In the face of an unprecedented and historic budget shortfall as a result of the ongoing COVID-19 pandemic, the department … must seek alternative means of revenue," the measure states.

Hawaii is one of two states that hasn’t legalized any form of commercial gambling — Utah is the other — and beneficiaries of the 203,000-acre land trust for Native Hawaiians are shocked and surprised they weren’t consulted prior to the agenda item and proposed measure surfacing on DHHL’s website.

"That’s what pisses me off," said Patrick Kahawaiolaa, homesteader and president of the Keaukaha Community Association.

Kahawaiolaa said there will be beneficiaries both for and against the casino proposal, but the process should have included “a true beneficiary consultation."

"The beneficiaries were never part of this discussion," he said. "If they’d done that, then I think the traction would’ve been better. But right now, it just smells the way it did in (DHHL) giving the exclusive (high-speed internet) contract to Sandwich Isle Communications."

Sandwich Isle’s president and founder, Albert Hee, was convicted of fraud in federal court for diverting company funds for his own personal use. Hee and Sandwich Isles are being fined more than $49 million by the Federal Communications Commission.

According to Tyler Gomes, deputy to Chairman William J. Aila Jr., the proposal is in response to the state’s economic downturn due to the pandemic.

“Given the impact of COVID-19 on our state’s economy, the department is proposing a bold measure that has proven successful for indigenous groups in generating critically needed revenue to improve the lives of their people,” Gomes said in a written statement. “We are at a pivotal moment in the history of the Hawaiian Homes Commission Act and resources to develop infrastructure and acquire lands will be needed to fulfill the vision of Prince Kuhio.”

County Councilwoman Sue Lee Loy, who lives on a homestead in Panaewa, said she is “finding out about this like everybody else.”

“No one from the department reached out to me, as the representative of the district that … takes care of two special homestead communities, Panaewa and Keaukaha,” she said.

Lee Loy, like Kahawaiolaa, said she knows there will be constituents who “support the idea of gaming.”

“However, we know this island is very special and our resources are very special to us. So, is that the type of economic growth that we really want to see and visualize for this place?” she said.

State Sen. Mike Gabbard, an Oahu Democrat who represents the district where DHHL proposes to build the casino, voiced his objection during an online media conference Tuesday.

“In my time as an elected official, gambling has been unique in that it’s brought together those on the right and left in opposition,” Gabbard said. “I’ve been opposed to gambling throughout the years, primarily because of the social costs. And with gambling, and specifically with casinos, you see an increase in gambling addiction, which leads to more poverty and more substance abuse. It has an overall negative impact on families.”

Gabbard said he also was surprised at the suddenness of proposal.

“I’ve reached out to some of my DHHL beneficiaries in my community … and I’ve heard from some who are opposed and others who would like to get more input,” he said. “But community outreach is something that DHHL would definitely need to do on something like this, and I haven’t seen any evidence of that, so far.”

If a majority of the nine-member commission that oversees DHHL approves the measure, it would be forwarded to Gov. David Ige, who would consider whether to submit it to the Legislature for the 2021 session.

“I question whether it’s even legal for DHHL to do this with their proposed bill, given that gambling is not allowed in our state,” Gabbard said. “Their proposal brings up a lot of legal questions at the state level and even the federal level, given the fact that Native Hawaiians have still not received federal recognition like Native Americans.”

Lee Loy said she hopes, regardless of what happens, the proposal results in a “conversation on mortgages, mortgage lending and tools for beneficiaries that fee-simple landowners have that beneficiaries don’t have — or are being told that they don’t have.”

“If you even just pull an agenda … you’ll see so many people who fall into foreclosures, who have to refinance their mortgage, who are struggling with paying of real property taxes — not only here on our island but in the entire state,” she said. “… If this sparks a better conversation on how we manage our lands and afford opportunities to our beneficiaries that are afforded to others with fee-simple properties, it’s worth the conversation.”

DHHL will accept written testimony on the proposal on its website. But the meetings Monday and Tuesday will be livestreamed remotely because of the pandemic, with no oral public testimony accepted.

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