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New Appraisal Sought Before Vote on Launiupoko Acquisition

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   November 15th, 2013 · 4 Disqus Comments ·
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Shoreline at Launiupoko, Maui. File photo by Wendy Osher.

Shoreline at Launiupoko, Maui. File photo by Wendy Osher.

By Wendy Osher

The Maui County Council today approved of a resolution authorizing a new independent appraisal of 186 acres of land at Launiupoko being considered for use as future park space.

Council members voted 6 to 2, in favor of the new appraisal, with one member excused.

The appraisal is for the 2.5 mile stretch of shoreline from Olowalu to Puamana that the county is considering for purchase to use as future park space.

Budget and Finance Committee Chair Mike White said, “It’s imperative for us as the council, as the holders of the purse string, to have at least one appraisal that is not flawed.” White noted that the committee was informed that previous appraisals were invalid because of the way in which the appraisal companies were instructed to complete them.

The county administration today released a five-page summary of information detailing its negotiations and timeline, saying White’s allegations of a “flawed” appraisal are “wrong.” In concluding statements it said:

“Chair White’s allegations are badly misplaced and clearly without merit. Contrary to his apparent belief, the $13 million figure did not suddenly drop out of the sky. Instead, one could argue that this figure is the result of negotiations that started 20 years ago. At the very least, it’s the result of the more recent negotiations between the County and landowners over the last 2 years. These negotiations were often-times heated as the administration fought for the best price possible to preserve open space. The $13 million figure also is based upon an appraisal by a respected and experienced appraiser hired by the County and therefore owing a fiduciary duty to its client, the County. The appraiser clearly explains the difference between the $8.7 million and $13 million appraised values.”

Although the county is up against a December deadline to close the deal with the seller, White said he believes the new appraisal will be done in time to review and get into the decision-making process.

“I agree with the comments that this land is priceless, but at the same time our job is to come up with what the council and county are willing and able to pay,” said White.

File photo Luaniupoko by Wendy Osher.

The parcel under review is a 2.5 mile stretch of shoreline between Olowalu and Puamana in West Maui. File photo Luaniupoko by Wendy Osher.

South Maui Council Member Don Couch was among those who cast no votes for the new appraisal saying, “There’s been some circumstances that have caused some delays, but we’ve had this since January and now we’re up against the wall at the last minute.”

“I don’t like the feeling, but I still think we don’t need to spend any more money than we have to and get another appraisal. There’s been appraisals of this stuff all over the place. Our choice is yes or no on buying it at $13 million.”

Couch said he didn’t like the idea of “gambling on the deadline.”

“We’ve been given two letters saying December 31st is the date.  The other thing in those letters says that’s that price, and they’re not going to negotiate again. That’s something that I have to be cognizant of. I know that could be a tactic, but are we willing to gamble that. We can get 100 other appraisals, and we can get 100 other different prices. As somebody said, it’s an inexact science. We all know the land is priceless,” said Couch.

Kahului Council Member Don Guzman, also voted against the resolution but explained, “I just want to reiterate that I am in support 100% of an independent appraisal, but I also am worried about the message that we send to the seller.

“The reason why I’m going to cast my vote for no, is to make sure that the message is sent that whatever the independent appraisal comes out to, I want to make sure that the seller knows that we are open to negotiations,” said Guzman.

Among those casting votes in support of the measure was Wailuku Council Member Michael Victorino who said, “I can support this so long as there’s an opportunity to vote on the matter before it closes on December 31st. I believe that we need this open space, and we need to do it, and do it soon.”

Molokaʻi Council Member Stacy Crivello also expressed similar views saying, “We have a willing land owner. We are not part of the negotiation. We are part of the approval for the budget, and I hope that on our December 6th meeting we will have something substantial before us that can be satisfactory.”

The vote today is not a vote as to whether we purchase the land or not — it’s simply to provide us with a clearer idea of what the value might be,” said White.

“Everyone wants to preserve open space… We all voted during the Maui Island Plan to put not just what we’re considering today, but the entire 363 acres, into open space.  And this vote today is about getting an accurate estimate of value,” said White, who noted that the two estimates received from the administration were “significantly flawed,” with one appraised value at $8.7 million, and the other at $13 million.

“The only difference between the $8.7 million valuation, and the $13 million, was that they increased the value of the two non-developable lots. That creates a little bit of a problem because non-developable lots are generally assigned no value. Of course there is a value to those lots to the county,” said White.

“In 2006, the land trust had done an appraisal, and the total appraised value was $24.4 million, and there was an agreement between the land trust and the owners for a sale price of $21.5 million.  It’s important to note that the appraisal that was done, assigns no value to the two non-developable lots,” he continued.

“With that understanding, parcels that we are being asked to purchase for $13 million represent approximately 39% of the value arrived at in the appraisal done for the land trust,” said White.

“If you take 39% of that value, it means that the owners were willing to sell the 186 acres for $8.4 million in 2006; and now, want approximately 55% more, when values have dropped since then by more than 25%. With this clear indication, there’s a major difference in the market value, we need the second appraisal. We need honest figures with which to deal,” said White.

The county administration statement challenged White’s assessment saying:

“At this point, a new appraisal would be moot and a waste of County monies and time. The landowner has already said that no matter what the new appraisal is – their offer of $13 million is final and will terminate on December 31, 2013. Now is the time that we can save our coastline from development. It is not a time to be playing a game of “chicken” with the landowners, as Chair White calls it, hoping that they’ll either lower the price again or further extend the December 31st deadline. Once this opportunity to preserve open space is gone, it’s gone forever.”

Fellow Council Member Bob Carroll, who voted in support of the resolution, said his intent is to bring the item up for vote on Dec. 6, utilizing whatever information is available at that time. “This is a time sensitive item. It needs to be decided, and the people of Maui County deserve to see the members of this council, with all the concerns that we have, what we do support, and what we do stand for.”

West Maui Council Member Elle Cochran said she “does not buy into the time-sensitiveness of this issue.”

“I recall back when Honolua-Līpoa Point, in everyone’s mind, was in imminent danger of being developed. Almost eight years later today, it finally has been protected. A particular land trust back then had no interest in assisting in that particular protection back then.”

According to Cochran, perseverance prevailed. She said her vote is in support of an additional appraisal, “to allay fears and doubts that may be in our taxpayers minds and the hearts of some of our members here on the council too.”

“These kinds of controversies are very difficult for us; and it takes a lot out of the discussion and everybody gets very emotionally involved. But, we can do this.  We are a team and I think we all share one thing — we love Maui, we love our county, and we want to do what’s best for the people — and that’s where I’m going,” said Council Chair Gladys Baisa in calling for the vote.

The final vote tally was: Baisa, Carroll, Crivello, Chochran, Victorino, and White in favor; Guzman and Couch opposed; and Hokama was excused.

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  • cmholm

    Good gravy, the County has been sitting on this since summer. I don’t know why the Mayor is holding back information, and I understand why some members of the Council are concerned. However, since Mr. White opens the door to a bigger budget picture, lets look at the whole picture. It doesn’t matter what was paid for the land in 2001, when it had just come out of cane production, at the start of a decade-long state-wide run up in land prices. The current asking price, if applied strictly to the 148 acres of developable land, works out to under $88k per acre, rather than the $275k+ just up the hill, and unlike the salary increases Mr. White mentions, is a one-time cost.

  • Uncle

    Arakawa is well versed in the old boy network. He understands information equals leverage. He has the knack for one ear out the other. He is methodical in his interpretation and whats good for Arakawa at he moment is good for all Mauian’s according to him.

  • TSL

    Here is my advice to the council PLACE THE BET at 8.7 ml.NOW!Dont check the bet away!

  • hobie

    Isn’t it a little early for Mike White to be running for mayor? Apparently not.


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