Kamilo Nui Farmers in Hawaii Kai Face Steep Lease Increase

We've been wondering for a couple of years how the lease negotiations for the 13 farmers in upper Kamilo Nui Valley would resolve. Now we know.

Kamehameha Schools recently notified its farm tenants that it is seeking a roughly 25-fold increase in rent. The trust, Hawaii's largest private landowner, believes the offer is fair because the farmers have been paying rent set in the early 1970s. The farm leases call for rent to be reset now for the 15 years remaining on the leases. Kamehameha Schools spokesman Kekoa Paulsen said the trust wants farming to continue on the land, but also wants to receive fair market rent based on agricultural use. "We feel we're presenting fair values for the time and the area," he said. "They've been paying 1970s rents for 40 years."

While the farmers have been paying a rent set many years ago, that doesn't mean they can now afford such a large increase to keep their land. Many of the farmers, some of whom are in their 80s, say they cannot handle such a drastic hike, especially at their age and with the economy the way it is. They now face a rent increase from around $200 an acre per year to around $5,000 an acre per year, according to tenant and landlord representatives. The old rental rate expired July 1, so the revised rate will be retroactive.

Not only will the new lease price change the lives of many of the farmers, but if they leave or retire, this will no doubt influence the future use of the last undeveloped valley in Hawaii Kai. 40 years ago, the farmers were moved to Kamilo Nui Valley from other locations in Hawaii Kai, and they formed a coop to pay for the infrastructure of roads and water.

As reported in the StarAdvertiser, "Paulsen said the proposed rent is based on appraisals for farmland in the broader area. He added that similar lease rent increases were proposed for seven farms about a mile away behind Kaiser High School and that five tenants agreed on new lease rents within the last 18 months. Two of the 13 Kamilo Nui Valley farmers have agreed to new lease rents since the trust made its opening offer in a June 9 letter, Paulsen said.
'This is not a take-it-or-leave-it proposition,' he added. 'This is the beginning of the (rent negotiation) process.'

"Other new terms being proposed by Kamehameha Schools include allowing farmers to sublease parts of their farm, which would help older farmers generate more income, and receiving half of any proceeds if farmers sell their leasehold interest in the property. The trust, however, is not offering to extend the term of the lease beyond 15 years or sell the land to its tenants.

"Paulsen said Kamehameha Schools is not trying to push farmers off the land before their lease ends. 'We want farmers to be there,' he said. 'We want farming to continue on that land.' Beyond 15 years, Paulsen said it is uncertain what the trust would see fit to do with the property."

Read more at the StarAdvertiser.com.

Barbara Abe, Realtor
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