STAND. COM. REP. NO. 960-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2005
                                     




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Tourism and Water and Land Use, to which
was referred S.B. No. 2005 entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC LANDS,"

beg leave to report as follows:

     The purpose of this bill is to stimulate tourism in east
Hawaii by creating incentives for reinvestment in the resort and
other infrastructure of the Banyan Drive resort area in Hilo,
Hawaii.

     Specifically, this bill permits the Department of Land
Natural Resources (DLNR) to issue new long term leases to
existing lessees of the Banyan Drive resort area, subject to
certain conditions.

     Testimony in support of the measure was received from the
Department of Land and Natural Resources, the Chamber of Commerce
of Hawaii, and the Hawaii Association of Realtors.  The Office of
Hawaiian Affairs opposed the passage of the measure.

     Your Committees find that the measure would affect fifteen
total leases in the Banyan Drive resort area.  Of these fifteen
leases, there are ten leases covering three resort facilities
(Naniloa, Hilo Bay, and Hilo Hawaiian), three leases for each of
three apartment/condominium facilities (Country Club, Bayview
Banyan, and Reed's Bay), one golf course lease, and one
restaurant lease.


 
 
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     With the majority of the leases in the Banyan Drive resort
area expiring in 2015, these affected lessees are faced with the
uncertainty of continued tenancy.  As the end of the lease term
nears, these lessees will have less and less incentive to make
major investments to improve their resort infrastructure and
ensure long-term maintenance of their resorts.  It is your
Committees' belief that this bill provides a necessary incentive
to ensure the continued reinvestment in the Banyan Drive resort
area.

     As affirmed by the records of votes of the members of your
Committees on Tourism and Water and Land Use that are attached to
this report, your Committees are in accord with the intent and
purpose of S.B. No. 2005 and recommend that it pass Second
Reading and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Tourism and
                                   Water and Land Use,

                                   
                                   
                                   
                                   
______________________________     ______________________________
ROMY M. CACHOLA, Chair             JERRY L. CHANG, Chair