Kahele divesting himself of controversial beach home

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HILO — State Sen. Kai Kahele is selling his beachfront Milolii home back to the family he purchased the leasehold from, after questions arose about his residency qualifications for his Hilo-area Senate seat.

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HILO — State Sen. Kai Kahele is selling his beachfront Milolii home back to the family he purchased the leasehold from, after questions arose about his residency qualifications for his Hilo-area Senate seat.

Kahele, a Democrat, is running for election to the District 1 Senate seat that Gov. David Ige appointed him to in February after the death of his father, Sen. Gil Kahele.

State law requires those holding legislative seats to live in the district for that seat.

State law also requires that those holding the low-cost Milolii leases use the property as their primary residence, under provisions of 1982 legislation providing the low-cost leases to those displaced by the 1926 volcanic eruption of Mauna Loa.

Kahele maintains his Keneki Place, Hilo, address is his primary residence. He has said he was unaware of the residency requirements of the Milolii lease until pointed out by West Hawaii Today in February.

It’s taking a while to rectify the situation, Kahele said Friday in an interview at the downtown Hilo office of his attorney, Peter Kubota.

“My two challenges were finding someone qualified, a direct descendent of someone affected by the 1926 lava flow, and who had the ability to pay the costs,” Kahele said.

The 10,000-square-foot lot with a 936-square-foot house on Milolii Road, which Kahele took over in 2011, has a total taxable value of $140,700. The state charges the leaseholder $132 a year.

The lease is being assigned to Orasa Fernandez for $60,000.

The assignment agreement is scheduled for the July 22 Board of Land and Natural Resources meeting in Honolulu, Kahele said.

A DLNR spokeswoman confirmed that an assignment is in the works, but couldn’t confirm the Land Board date when asked Friday.

“We anticipate it coming before the board in July,” said spokeswoman Deborah Ward. “A date is not yet set.”

Fernandez is the granddaughter of the former owner, Sally K. Dacalio, who is Gil Kahele’s cousin, according to a genealogy chart the younger Kahele provided Friday. Dacalio’s mother and Gil Kahele’s father were sister and brother, he said.

He said the two families share the property for holidays and vacations.

Fernandez plans to live in the house, according to the application to assign the lease provided to the Land Board.

Kahele said he originally purchased the leasehold for $35,000 as a favor to the family, because Dacalio was in ill health and had to move. There was a lien on the property that he paid, he said. He invested a few thousand more in upgrading electrical and plumbing and painting the building, he said.

“Our goal is to have this taken care of before the election,” Kahele said, “but it’s not something we wanted to rush.”

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Kahele faces off in the Senate District 1 race against fellow Democrats Dennis “Fresh” Onishi and Kaloa R.N. Robinson in the Aug. 7 primary. The winner takes on Libertarian Kimberly Arianoff in the Nov. 8 general election.

Onishi declined comment on the issue. Robinson and Arianoff couldn’t be reached by press time Friday.