April 2, 2001
Contributed by CEO Message
This settlement reflects an acknowledgement that the action taken by the City Council in 1989 was unconstitutional, and it provides fair value to Kamehameha Schools in compensation for the taking. Most importantly, however, the agreement brings a good measure of finality to this matter so Kamehameha Schools can focus more resources and attention on our educational purpose and our strategic goal of extending Pauahi's legacy to more Hawaiian children. The settlement comprises cash payment and exchange of strategically valuable real estate to KS and MAI for which the City receives title to the Golf Course 5&6 parcels. As you may recall, MAI had secured all of the permits and land entitlements necessary to build on the parcels, and that land would have been sold to homebuyers had the downzoning not occurred. The major terms of the settlement are as follows: 1. The City will pay KS/MAI $5 million within 30 days. 2. The City will proceed with sale of its 20-acre parcel in Manana (near Pearl City) to Wal-Mart; proceeds from that sale will go to KS/MAI. When this sale closes, the settlement will be final. 3. Another 26-acre City property in Manana will then also be listed for sale, the proceeds of which will again go to KS/MAI. 4. Also assuming the Wal-Mart sale closes, the City will convey to KS/MAI various other remnant properties within Honolulu, and pay KS/MAI another $400,000 cash. 5. Upon the sale of all remnant parcels, KS/MAI will convey title to the Golf Course 5&6 land to the City, which commits to using the land for park purposes in perpetuity. 6. If the remaining parcels are not sold by 12/31/03, the City will be required to condemn the Golf Course 5&6 land and pay KS/MAI fair compensation for the parcels less a credit for the initial $5 million paid and a portion of whatever other remnant land sales have occurred. 7. If the Wal-Mart sale does not close, then the trial judge Sabrina McKenna will be free to enter her ruling and the litigation will resume, at potentially very high risk to the City. As indicated, this has been a long and expensive exercise for everyone involved, and those involved in negotiating the settlement are to be commended for coming up with some very creative proposals for reaching agreement. While we are optimistic that resolution is at hand, it is important to understand that we still have some hurdles ahead. On behalf of the Board of Trustees, your continued support is much appreciated as we work to bring this matter to full resolution.
Kamehameha Schools’ policy is to give preference to applicants of Hawaiian ancestry to the extent permitted by law.
