Report Title:

Galbraith Estate Acquisition

 

Description:

Directs the Department of Land and Natural Resources or any appropriate entity of the State to acquire lands situated in central Oahu owned by the Galbraith Estate by negotiation or condemnation.

 

 


THE SENATE

S.B. NO.

2423

TWENTY-FOURTH LEGISLATURE, 2008

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

relating to land acquisition.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that the George Galbraith Estate (Estate) was established pursuant to the will of George Galbraith, which was admitted to probate on March 25, 1905.  Due to considerable ambiguity on the intention and validity of the will, the will was litigated extensively.  In Fitchie v. Brown, 18 Haw. 52 (November 1, 1906), the Hawaii Supreme Court held that the will created a trust to accumulate unapplied income; that the lives in being listed in the will were the named annuitants; and that the trust estate would be distributed twenty-one years after the death of the last surviving annuitant listed in the will.  The Supreme Court of the United States upheld this interpretation in 211 U.S. 321 (1908).

     Subsequent litigation established that the heirs of life annuities took their shares of the annuities by right of representation; that annuities could be sold in fee; and that the final holders of the annuities, at the time of distribution, would take a per capita share of the estate.  Hawaiian Trust v. Galbraith, 22 Haw. 78 (1914); Hawaiian Trust Co. v. Galbraith, 24 Haw. 174 (1919).

     The corpus of the Estate currently includes twenty individual and contiguous parcels having a combined area of approximately two thousand one hundred acres situated north of Wahiawa--a significant assemblage of some of the most fertile agricultural land in the state.  These lands were historically leased to pineapple growers on a long-term basis and have not been available for sale for more than one hundred years. 

     On April 26, 1986, Arthur Cathcart, the last named annuitant in the George Galbraith will, died.  Pursuant to the terms of the will, the Estate was to terminate on April 26, 2007.  However, because of the numerous interpretations of the will and the passage of time, a large number of minuscule life annuities were created precipitating considerable difficulty in determining who some of the annuitants are, and how the corpus would be distributed among the beneficiaries.  Accordingly, although the termination date of the Estate has passed, the trustees have not yet sold the landholdings while these and other legal issues are addressed.  Furthermore, chapter 517, Hawaii Revised Statutes, authorizes the trustees of an estate or trust, with the approval of the court, to sell the real property of the estate or trust beyond the expiration date of the estate or trust.

     The legislature further finds that the State of Hawaii is committed to preserving its limited natural resources.  Article XI, section 3, of the constitution of the State of Hawaii requires the State to "conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands."  As such, the legislature asserts that the acquisition of the Galbraith landholdings in central Oahu furthers this essential public policy.

     The legislature also finds that the body of water in Wahiawa, commonly referred to as Lake Wilson, is on real property owned by the Estate and an affiliate of Castle and Cooke Hawaii (Castle and Cooke).  While the Estate intends to sell that land upon the termination of the Estate, Lake Wilson remains an agricultural irrigation asset of the other half-owner of the land under the Lake--Castle and Cooke.

     According to the American Society of Civil Engineers, the earthen Wahiawa dam on Kaukonahua stream that creates Lake Wilson is classified "high hazard", not because of structural or functional deficiencies, but because of its precarious location.  A failure of the Wahiawa dam could cause massive loss of life, injuries, and property damage to downstream areas throughout the communities of Waialua and Haleiwa.

     While the State has had discussions with the Estate and Castle and Cooke on the possible "gifting" of the landholdings under Lake Wilson, the imminent termination of the Estate and the fiduciary responsibility of the trustees to obtain the maximum return for beneficiaries have greatly compounded the complexity of the negotiations between state officials and the landowners.

     Lastly, the valuation of the Estate's landholdings has been a matter of conjecture for many years, especially because of the enormous potential it may hold should the land ever be reclassified from agricultural to a higher use.  As such, there is a strong possibility that the placement of these lands on the open market may create a frenzy of speculative buying that might result in the break up of these large contiguous tracks of land.

     For tax purposes, the city and county of Honolulu has determined that as of October 1, 2006, the total property assessed value of the parcels situated in central Oahu was approximately $100,000,000:

                Parcel                   Assessed Value

            TMK 6-5-002:010                $10,569,100

            TMK 6-5-002:025                 $6,154,700

            TMK 6-5-002:026                 $3,589,000

            TMK 7-1-001:001                 $1,898,900

            TMK 7-1-001:002                $17,492,900

            TMK 7-1-001:003                 $7,879,900

            TMK 7-1-001:005                $12,969,000

            TMK 7-1-001:006                 $3,421,500

            TMK 7-1-001:007                   $813,500

            TMK 7-1-001:008                $17,613,100

            TMK 7-1-001:012                 $1,736,400

            TMK 7-1-001:013                       $900

            TMK 7-1-001:017                       $100

            TMK 7-1-001:020                    $11,300

            TMK 7-1-001:021                     $7,200

            TMK 7-1-001:022                   $156,800

            TMK 7-1-001:023                 $1,041,200

            TMK 7-1-001:024                       $200

            TMK 7-1-001:025                   $998,600

            TMK 7-1-001:026                $11,356,900

            TMK 7-1-001:027                   $464,100

            TMK 7-1-001:028                   $507,400

            TMK 7-1-001:029                   $335,500

            TMK 7-1-001:032                   $878,900

                 TOTAL                     $99,897,100

     The legislature therefore declares that it is in the public interest to acquire private lands currently owned by the George Galbraith Estate for the preservation of agricultural lands in central Oahu, and protection of the health, welfare, and safety of the people of the State of Hawaii by exercise of eminent domain.  The legislature further declares that it is necessary to provide for public financing of the acquisition of these lands by condemnation through the expenditure of general funds, revenue bonds, or any other public and private funds at the disposal of the State.

     SECTION 2.  The department of land and natural resources or any appropriate entity of the State shall immediately initiate negotiations with the trustees of the George Galbraith Estate, or its successor in interest, to acquire the property in central Oahu designated by tax map keys 6-5-002:010, 6-5-002:025, 6-5-002:026, 7-1-001:001, 7-1-001:002, 7-1-001:003, 7-1-001:005, 7-1-001:006, 7-1-001:007, 7-1-001:008, 7-1-001:012, 7-1-001:013, 7-1-001:017, 7-1-001:020, 7-1-001:021, 7-1-001:022, 7-1-001:023, 7-1-001:024, 7-1-001:025, 7-1-001:026, 7-1-001:027, 7-1-001:028, 7-1-001:029, and 7-1-001:032. 

     The department of land and natural resources or the appropriate entity of the State shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2009 regarding its efforts to acquire the aforementioned lands and its recommendations for financing the purchase of the property.

     SECTION 3.  If an agreement to acquire the property is not reached within a reasonable time as determined by the department of land and natural resources or any other appropriate entity of the State, the state agency shall exercise its power of eminent domain to acquire the property.  For purposes of this Act, condemnation of the property shall not be subject to legislative disapproval.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $          or so much thereof as may be necessary for fiscal year 2008-2009 for the purpose of negotiating with the trustees of the George Galbraith Estate to commence the condemnation process.


     The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

     SECTION 5.  This Act shall take effect on July 1, 2008.

 

INTRODUCED BY:

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