The legislature’s fair-market-value fraud . . .  and how it’s sucking down the credibility and reputations of politicians all over Hawaii’s legislature

How the SEVEN NINE FIVE fraud is a red flag about how business in done in Hawaii's legislature

SB795 is a thinly veiled pretense to hand public recreational harbors over to big-money private interests

At first glance this looks like a normal committee meeting hearing in our Hawaii state legislature. But watch carefully. What you're witnessing is a committee chairperson manipulating the committee hearing process to attain his desired outcome for a bill.




Every good fight needs a rallying call, a feel-good reason -- a raison d'être, if you will -- to motivate its soldiers.  When Representative David A. Tarnas read off the preamble for SB795 during the WAL hearing last week, he paused slightly, and someone said that they were sure they'd heard his voice crack when he came to the words "fair market value."  Ah, there's nothing that plucks the heart strings of  a true American patriot more than these three hallowed  words.  After all, "fair market value" is the American way: fair=moral high ground, market=marketplace economics, and value -- ah value -- the bling that gives this phrase its sting . . .  Americans LOVE the idea of value.  Not "value," as in the value of morality, the value of honesty, or the value of ethical lawmaking, no, least we digress, we're talking about a much higher plain here -- the value of STUFF.

That SB795, if passed, would literally create more homelessness in a state that already tops the nation in per-capita homelessness, at a taxpayer cost of some $3,000 per homeless person per month, was of no concern to the WAL committee members, who mostly chose to mute their mikes and cams during the entirety of the meeting, leading some to believe that Chair, Rep. Tarnas may have been talking to himself that morning.  Nope, there were higher stakes here.  Forget about protocol, or even knowing anything about the details that inform the bill -- not important.  Howard Hughs Corporation and Hilton Hawaiian Corporation, among other multinationals -- oh, and let us not forget Larry Ellison -- want full possession of the public's recreational small boat harbors, and they've waited long enough, dammit, and we firmly believe we've schmoozed your Hawaii politicians long enough and we're damn-well ENTITLED to them now . . . we've got super yachts lining up to fill your harbors, dammit . . . so let's get this show on the road!

Yep, fair market value.  We'd sell our souls for that and carefully and respectfully install it in its rightful place  on the throne of the alter of capitalism;  and we'd worship it first thing every morning and then last thing before bed . . . even if its origin was 100% pyrite fake.

And, in fact, the entire premise behind the "fair market value" metric in SB795 is as fake as a zirconium setting in a gold-painted pot metal wedding ring.  So fake, in fact, its currently undergoing the scrutiny of the courts --  the very same lawsuit that suggests that Suzanne Case's DLNR and Ed Underwood's DoBOR, broke the law by not raising public harbor rates according to Hawaii's Cost of Living Allowance when they should have, years ago.

Of course, the fact that the foundational premise of SB795 is under court purview, that it seems to actually have no basis in fact whatsoever, and that its passing will result in the further demise of our already beleaguered budget, is of little concern to our legislators.  It's the ring of that "fair market value" thing . . . what a great sell to constituents next election!

So this wouldn't be the first time that Hawaii's legislature was sold a bill of goods by "Hawaii's Slickest Con Man" Ed Underwood . . . making our legislators look like a sorry lot -- really, a circumstance of their own making since most of them only moonlight, choose to remain ignorant, and don't take the time necessary to study the details behind a proposed bill before casting their vote.  Ignorance is bliss in Hawaii's legislature because our politicians know they can get away with it, put a happy face on the dismal outcome, and come back and get reelected once again by a constituency that's been mislead and bamboozled.

We think CBRE, the appraiser supplying the State of Hawaii with the "fair market value" opinion that fuels SB795, sold the state a bill of goods.  First of all, CBRE, in Hawaii, concerns itself mostly with commercial real estate leasing and sales.  They were WAY out of their comfort zone with the fair-market-value project that landed on their doorstep, commissioned by Case's DLNR and Underwood's DoBOR.  Case and Underwood asked them to come up with some magic to make credible an apples-and-oranges comparison between the monthly rental rates for families with State-issued Principal Habitation Permits paying for a 2-dimensional length-by-width spot  in a public recreational harbor environment, with the monthly rates charged by surrounding private condo units -- 900 square-foot-and-up cubic-footage facilities, with kitchen, bath, bed, etc.  This is akin to asking for a comparison of beach balls and interstellar black holes.

CBRE probably took one look at this and realized they were way over their head.  What to do: 1) because they knew absolutely nothing about public harbor system metrics in Hawaii, they would rely heavily on Ed Underwood's version of his harbors' amenities -- the very same Ed Underwood who needed to find justification for his "fair market value" ploy, and, 2) they would rely on a fictional, hypothetical model, based on their own lack of understanding of how one might even begin comparing the two metrics. 

And,  Voilà,  FAIR MARKET VALUE.  (a moment of quiet reverence, please . . . and please don't touch, the paint chips easily)

Another slight problem with all of this, assuming that the CBRE appraisal was even the least bit legitimate, which, of course it wasn't, was that another appraisal, a few years ago, was already in place, this one by Colliers.  According to the verbiage in the law, this Colliers appraisal was supposed to be the baseline, the last and final appraisal, and thereafter, public harbor rents would increase according to Hawaii's Cost of Living Allowance.   This was written into law, HRS 200-10, et. al., but somehow, Case and Underwood acquired a severe case of functional illiteracy -- this was before Covid-19, so we can't blame it on that -- and completely ignored the statute.   Fast forward 2021, post pandemic, the State's out of money, all of Case's and Underwood's screw-ups that resulted in millions of dollars lost for the Boating Special Fund and state taxpayers, come to light.  Now it's damage control time.

Since push-back is rare in Hawaii, why not just get a law passed that would legitimize this fake fair market value thing . . .  Case and Underwood would look like cosplay superheroes, the politicians who passed the law would look like fair-market-value American saviors, and the legislature would look like they actually knew what they were doing.  Marvelous, except for a couple of tiny details: some families would be made homeless by the law, the bill would inevitably deplete -- not enrich -- the state's budget, and that little niggly thing about the bill being purpose-designed, from the bottom up, to dupe clueless legislators and the public alike, through the juxtaposition of two completely different issues: 1) the per-person tax on commercial tour boat operations, and 2) public recreational harbor rates based on "true market value" . . . suspect bedfellows on the best of days. 

Not to mention of course, the darkest reason for this legislation, still lurking quietly in the background because our legislators haven't found the heart to tell the truth:  SB795 was purpose-built to toss families holding State of Hawaii Principal Habitation Permits out of its public harbor system for the sole purpose of preparing these public recreational harbor properties for handover to private multinational corporations who could care less about their impact on the local community.

Think before you vote.  Hawaii needs to be a community of, by, and for the people of Hawaii . . . but, courtesy of our current slate of leadership, it's being rebuilt for a select few private financial self interests who couldn't care less about how they impact our quality of life.  The damage has been considerable so far.   We can still stop it and make a better Hawaii for our Keikis, but we have to act now because later will be way too late.

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