On June 30th 2009, Iolani School announced that it purchase a large parcel of leasehold land owned by Lum Yip Kee Ltd. and Lum Chang Tai Inc. The price - $23 million dollars.
The highlighted area below shows the property purchased by Iolani School. Map courtesy of Google Maps.
The land consists of approxmately 21 properties situated on a block of land in a prime area of Honolulu. It's bordered by Date and Laau Streets, near the Ala Wai Golf Course and Kapiolani Blvd. Nearby neighborhoods include Waikiki, Kaimuki and Kapahulu.
The purchase includes a private road (Laau Street), four vacant lots, two individually-owned apartment buildings and nine coop buildings - Iolani Banyan, Lani Home, Laau Gardens, Iolani Gardens, Princess Anne Apartments, Canal House, Hale Laau, Hale Laau II, and Diana Apartments.
The lessors are selling the property in fee simple and are not offering the fee to current lessees. Many of the lessees are owner occupants.
Leases expire in early December, 2012. That leaves three years and several months for current lessees to use their properties or sell them. Iolani School has indicated that it will convert the area to other uses in a gradual manner. This may mean that occupants will have a chance to extend their leases under the new lessor.
Obviously, many lessees were hoping to see the fee offered on the units they purchased. It's not clear whether the purchase complies with section 514-C2 of Hawaii State Law.
§514C-2 Right of first refusal. When the leased fee interest in land under a condominium project or cooperative project or any part thereof is to be sold to any party other than the association of owners or the cooperative housing corporation, the seller shall first provide the board of directors of the association of owners or the cooperative housing corporation with written notice delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, to any two of the president, vice-president, or managing agent (if any), of its intent to sell that interest, together with a complete and correct copy of the purchaser's written offer, which offer shall contain the full and complete terms thereof. The association of owners or cooperative housing corporation shall have a right of first refusal to purchase that leased fee interest for the same price as is contained in the written purchase offer. [L 1988, c 298, pt of §1; am L 2008, c 28, §33]
There may be hope yet for lessees on Date and Laau Streets. I imagine some of the lessees are going to start making some noise about getting their first right of refusal to buy these properties. This could be in interesting show! It's a prime area for affordable living in town, close to the beaches and Waikiki. In recent years, lease prices of properties in the area have been in the $20,000 - $50,000 range, making them good investments for owner occupants as well as investors.
Aloha, Mike Bates