New bills strive to improve Banyan Drive area

After passing legislation to extend leases for the Kanoelehua Industrial Area last year, state lawmakers are again turning their attention to improving Hilo’s hotel area on Banyan Drive.

Concerns about dilapidation of buildings in the area, also known as the Waiakea Peninsula, prompted Hawaii County to form its own Banyan Drive redevelopment agency.


The group drafted a conceptual plan for the district in 2016, but that effort hasn’t progressed without financial support from the state.

Bills that intended to resolve the issue, either by forming a state redevelopment district or by providing funds for needed studies, have failed during the last several sessions of the Legislature. Most of the land is state owned.

Some of those ideas are being pursued again, and at least three bills have been introduced.

• SB 914: Allocates 10 percent of lease revenue from state lands on Banyan Drive to Hawaii County’s Banyan Drive redevelopment agency. Funds would support environmental impact statements needed to complete the agency’s redevelopment plan. Hawaii County would provide $250,000 in matching funds. Sponsored by Sen. Kai Kahele, Sen. Dru Kanuha and five others.

• HB 1219: Creates the Waiakea Peninsula redevelopment district with an appointed board of directors and district administrator. Half of the state’s revenues from the public lands in the area would support the redevelopment district. Sponsored by Reps. Richard Onishi, Mark Nakashima, Richard Creagan, Joy San Buenaventura, Chris Todd, Nicole Lowen and three others.

• HB 910: Requires the state Office of Planning to conduct a study on the infrastructure needs of Banyan Drive. The study would look at infrastructure that needs improved as well as barriers to redevelopment of the area. The study would be funded with a $250,000 appropriation. Sponsored by Onishi, Nakashima, Lowen, Rep. David Tarnas and five others.

The Legislature has taken an incremental approach to addressing redevelopment and investment of commercial or industrial state lands in Hilo.

Last year, it passed a bill introduced by Kahele allowing tenants on certain state lands in Hilo to extend their leases by up to 40 years if they submit a reinvestment plan. The bill established the Hilo community economic district and targeted KIA leases for reinvestment, many of which were issued following the 1960 tsunami.

But a separate bill, SB 918, introduced by Kahele this year would appear to complicate those extensions.

The bill as introduced would limit all nonresidential state land leases to 35 years, down from the current cap of 65 years.

The bill keeps the section establishing the community economic district but strikes the language regarding 40-year extensions. It instead states that the “aggregate of the initial term and any extension granted shall not exceed thirty-five years.”

Kahele, who chairs the Senate’s Water and Land Committee, said it’s not his intent to affect the Hilo community economic district legislation.

“This bill is just an opportunity to start that conversation of how we govern and utilize public lands,” he said.

Kahele, D-Hilo, said he didn’t think the bill would affect the community economic district, only new leases, but added he could have Senate attorneys look at it in case changes need to be made.

“It’s not my intention to have the Legislature supersede what we did last year,” he said.

As for the purpose of the bill, Kahele noted laws regulating state land leases originated following statehood, when sugar was prominent, and might be out of date.

“They revolved around an agricultural and pastoral dominating economic society,” he said, adding the state’s economy has changed.


“I think it’s a good opportunity for the state to look at how we utilize public lands to ensure we are getting the highest and best use of the lands.”

Email Tom Callis at

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