-Ian Lind
Honolulu Weekly, May 14-20, 2008

Could a bill which claims to protect Hawaii’s undeveloped agricultural lands actually pave the way for more development?

The Hawaii Chapter of the Sierra Club thinks so, and is calling on Gov. Linda Lingle to veto SB 2646, a bill it says could “open up hundreds of thousands of acres of agricultural lands statewide for sprawling development”.

Jeff Mikulina, Sierra Club of Hawaii director, says the measure should be called the “give away the farm bill” or “the farmland sprawl bill”.

It provides several incentives, including tax credits, for landowners that agree to voluntarily designate some of their holdings as “important agricultural lands” or IAL. The provision that has drawn most of the attention of the Sierra Club would allow a landowner that agrees to pick certain lands for protection as important agricultural lands to simultaneous request reclassification of up to 15 percent of the total area into the urban or rural districts. The combined request would get expedited processing with few requirements for community input or review.

Although the bill would require any reclassification to urban use to be consistent with county land use plans, this restriction does not apply to reclassification to “rural”, a category which allows golf courses and “low density residential” developments on lots as small as 1/2 acre.

“Our fear is that it can be easily exploited, and we think it will be,” Mikulina said.

In Mikulina’s nightmare scenario, a large landowner would simply select land never intended for development, call it “important” and then, through an expedited process, recieve approval for rural development on 15 percent of the total. A landowner able to set aside 1,000 acres of fallow land in an agricultural district would potentially be allow “rural development”, including luxury-priced country estates, on up to 150 acres.

With 1.9 million acres across the state currently designated as agricultural, nearly 300,000 acres could potentially be urbanized under the terms of this bill, Mikulina said.

“To give a flavor of what this means, all the urban land on Oahu is only 100,000 acres,” Mikulina said.

The 85-15 provision was added to the bill at the last minute during conference committee negotiations at the insistence of House negotiators after another bill containing the proposal was turned down twice in the Senate.

In testimony earlier this year, Alan Murakami, attorney for the Native Hawaiian Legal Corporation and chairman of the Hawaii Rural Development Council, called the provision a gift to speculative investors.
“It will literally open up the floodgates for more of the same kind of agricultural subdivisions proliferating across the state already, but this time without violating permissible uses in the Ag District,” Murakami said.

The question of important agricultural lands has been nagging since a 1978 amendment to the Hawaii State Constitution required the state to “conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands.”

The constitution provides that once lands are identified as “important agricultural lands,” they cannot be reclassified or rezoned to uses other than agriculture without meeting conditions set by the legislature and a two-thirds vote by the agency responsible for approving the change.

But it has only been in the past few years that the legislature has seriously addressed the important ag lands issue by establishing a process and criteria for making these designations.

The bill’s backers, including House Speaker Calvin Say, argued that incentives for landowners that seek the “IAL” designation are necessary and long overdue.

Dan Nellis, operations manager of Dole Food Company Hawaii, testified that large landowners face higher property taxes on fallow agricultural properties, have insurance, liability, and maintenance costs ranging from maintaining irrigation systems to removing abandoned cars, and can’t cover their costs through leasing land for diversified agriculture.

“If the support of diversified agriculture is a constitutional mandate to meet a compelling public interest and our agricultural land is to be down-zoned to achieve this purpose, we believe it is unreasonable to expect landowners to bear the brunt of subsidizing the public interest,” Nellis said.

Mikulina agrees that there are legitimate issues of making agriculture financially viable for farmers and landowners.

“But we don’t make it viable by developing the land as homes,” Mikulina said.

SB 2646 gives landowners other incentives, including allowing housing for farmworkers and their immediate families on up to 5 percent of the IAL land, providing loan guarantees for new projects on important ag lands, and tax credits for certain qualified agricultural costs, including expenditures for roads and utilities, irrigation systems, housing for farm workers, agricultural equipment, even legal and consultant fees relating to obtaining or retaining water rights.

The bill faced significant opposition in the House, where 18 representatives voted against it on final reading, and passed by a slim 14-10 margin in the Senate.

Gov. Lingle has not indicated her position on the bill, and Mikulina is hoping she will agree that it is contrary to her stated goal of moving Hawaii’s economy beyond dependence on land development and speculation.

-Ian Lind (www.iLind.net)