Three weeks after Gov. Linda Lingle’s surprise state of the state address proposal to have Hawaii buy the Turtle Bay Resort on Oahu’s north shore, legislation to implement the plan is moving in the Legislature.
Lingle proposed having the state purchase the 850-acre property to forestall the resort owners’ plans to build a massive expansion of the 500-room hotel.
Following a public hearing Saturday, the Senate Committee on Water and Land this week approved a bill to begin the process.
Testifying in favor of the bill, Linda L. Smith, senior policy adviser to the governor, recommended that a provision earmarking general obligation bond money for the purchase be left out.
“If this bill were enacted with a stipulation of how much in general bonds would be issued to purchase Turtle Bay, the negotiating team will lose leverage in negotiating a fair and reasonable price,” she said.
The amended bill passed without a dollar figure attached to the bond authorization. Smith also urged that the authorization allow the state to purchase the entire Turtle Bay property, including its existing hotel, rather than just the undeveloped component of the land.
The state has no intention of owning and operating a hotel, she said, but it may be simpler to buy the entire property as a package and sell the hotel later, she said.
Nicola Jones, chief executive of resort owner Kuilinia Resort Co., submitted written testimony, noting that the company is involved in a mortgage foreclosure action filed by the holder of its first mortgage.
Any discussion about the resort should bear the company’s obligations in mind, she said — including more than $400 million in debt, with “significant interest accruing each month.”
Jones also objected to language in the bill authorizing the use of eminent domain.
The bill moved on to the Ways and Means Committee.
