Kaneohe Ranch
Sightings from The Catbird Seat
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January 1, 2008
Kailuan residents on borrowed time
As the ground lease expires, remaining residents
are weighing their options
By Allison Schaefers. Star-Bulletin
The ground lease at the Kailuan expired last night, but at least some shareholders at the leasehold cooperative said they intend to remain in their homes despite being given notice to leave.
Talks broke down Dec. 19 between unit owners at the Kailuan and landowner Kaneohe Ranch, who declined to accept a multi-million offer from residents who wanted to buy the fee. Now, shareholders legally must surrender their leasehold properties or face eviction.
While it's unclear how many Kailuan residents are left, several of them have said that they are staying, in the hope that Michael Pang, president and principal broker of Monarch Properties Inc., will be able to get Kaneohe Ranch to reopen negotiations. Others have remained because they don't know where to go or are evaluating legal options.
"We plan to stay for the moment," said Dragoslav Saban, whose family owns five of the building's 18 units. "We still hope that our representative will be able to arrange something."
Landowner Kaneohe Ranch said yesterday that it has begun taking legal steps to finalize the recovery of the property. The take-back of the property by Kaneohe Ranch will be the first of its kind in modern times.
"It is unfortunate that the remaining occupants have chosen instead to breach their contractual agreement despite the fact that they had years to prepare for their transition," said Mitch D'Olier, chief executive officer of Kaneohe Ranch.
In the meantime, Kaneohe Ranch has hired area realtors and charities to assist their former lessees.
"It is our sincere hope that all remaining occupants of the Kailuan will reconsider their position and act swiftly to also seek our assistance to relocate," D'Olier said.
Sara Way, a disabled leasehold owner who has lived at the Kailuan since 1995, is among the residents that Kaneohe Ranch has offered to help.
"I sure hope they can help me, because otherwise I just don't know what I'm going to do," Way said, adding that she needs an affordable place big enough for a caretaker and three cats.
www.archives.starbulletin.com/2008/01/01/business/story02.html
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August 19, 2007
Gathering Place
By Dan Bremner
Kailua transformation -- all that glitters might not be gold
The Star-Bulletin's story last Sunday "Transforming Kailua Town" makes us mindful of the threats to the future of Kailua and to the character traits that endear it to its residents. The glitter of "progress" via development is being dangled before our eyes again. It's a good time to remember that all that glitters is not gold and might not even be of value.
This "progress" has already dislodged many former "small town" merchants in Kailua. The future of others is on the block. Kailua is not alone in this concern. Recently, the advent of Whole Foods at the Kahala Mall coincided with the departure of several venerable tenants, creating a disquieting situation.
Into this arena, we ask the participants to seek a transcending goal as they try to "transform" our town. This goal is to preserve the desirable attributes, general character and pleasing atmosphere of Kailua. It is important that the so-called "growing pains" referred to in relation to "transformations" be prevented from becoming chronic diseases. That's why the community group Keep It Kailua is concerned with these changes to Kailua, and will be carrying out its goal of making sure that only change for the good of the community is embraced and other change is prevented.
What category does Kaneohe Ranch's desires for Kailua fall into? Well, we're not quite sure yet -- but we have seen that Kaneohe Ranch is a much more aggressive entity under its new CEO, Mitch D'Olier, than it had been previously. D'Olier, formerly CEO of the Victoria Ward Estate in Kakaako, did a lot of developing there, which was a distinct change for the previously semi-dormant Ward Estate. When he was through, Ward Estate was sold to General Growth Properties Inc., a national real estate giant and owner of the Ala Moana Shopping Center. Is that a scenario that might be repeated in Kailua?
Kaneohe Ranch owns about 45 acres in central Kailua. This is less than 1 percent of the whole town, but it is the "center" of town and what happens there can establish an image for the community. Otherwise, it is an insignificant portion of Kailua and this "tail" should not be allowed to swing the "dog" in the wrong direction. Kaneohe Ranch did conduct an extensive opinion survey in Kailua in 2004. The populace responded emphatically. They said the most important concern was to keep the "small town" feeling of Kailua and to manage growth accordingly. This same theme had been repeated by people making comments at the Kailua Town Party over many years.
One of the uncertainties about Kaneohe Ranch's intentions arises when its plans dislocate existing tenants for the purpose of accommodating a 40,000-square-foot store for the national retailer Whole Foods. Is this consistent with our "small town" atmosphere? Does this "small town" need and, more important, can its population of 40,000 plus 11,000 Marine families support five supermarkets and a health-food store within a half-mile radius, and seven supermarkets and a commissary within 1 mile or so of one another? Something might have to give.
Or will the proliferation of national retailers require market expansion beyond that available in Kailua for some to survive? Where would such market expansion come from? The official community plan for Kailua, the city's Ko'olaupoko Sustainable Communities Plan, indicates that Kailua has reached a growth saturation point and projects future change at the miniscule rate of 0.15 percent a year. Consequently, market expansion is not likely to come from growth. Kaneohe Ranch already has raised another question about its intentions by reaching out to other markets on Oahu with its "Shop Kailua" advertising campaign, begun around the time of the Kailua Pier 1 Imports opening.
Other potential for expanding markets for national retailers in Kailua exists in the area of tourism. Greed already is driving some to try to change the character of Kailua into a resort town. Not surprisingly this movement finds support in the small number of merchants in Kailua's business district and through them into the Kailua Chamber of Commerce. Kaneohe Ranch is a major mover in the Kailua Chamber of Commerce. Is Kaneohe Ranch counting on this direction for market expansion? We hope not, because the vast majority of Kailua's residents opted to live in a residential area, not a resort.
Kaneohe Ranch says it wants to keep Kailua, Kailua, but what do we measure, actions or words? When actions are inconsistent with words, we worry. We worry about the seeming inconsistency between the market needs of large national retailers and the continuance of "small-town" Kailua. We worry about Kaneohe Ranch's disavowal of a "resort" town desire when it already has made efforts toward market expansion beyond Kailua. We worry that an unnecessary parking structure poses a future loss of open-space parking for new buildings. We worry when Kaneohe Ranch says it aspires to a pedestrian-oriented town center, but acts to insert new streets in the interior of our already pedestrian-oriented super-block behind Macy's and Longs. Introducing through-traffic into a pedestrian-oriented area is not usually the way to make it more pedestrian-friendly!
We worry, and so we will watch and act to make sure the desirable traits of the Kailua community are not threatened by design, lost by inadvertence or otherwise circumvented under the guise of "progress."
July 8, 2004
Hawaiian Air owes $129M, IRS claims
The airline's bill for more than two years of underpayments
includes $40.5 million in penalties
By Dave Segal, Star-Bulletin
The Internal Revenue Service is seeking nearly $129 million from Hawaiian Airlines for the underpayment of federal excise and corporate income taxes over more than two years.
The IRS claim, filed in federal Bankruptcy Court, seeks $84.1 million in taxes, $4.3 million in interest and $40.5 million in penalties. The airline industry excise taxes, which cover such areas as fuel and transportation, are for 2001 and 2002 and the first two quarters of 2003. The corporate income tax claims are for $43.1 million in 2001 and $19.7 million in 2002.
Most of the claim covers time before the airline's Chapter 11 reorganization filing on March 21, 2003, when John Adams was chairman and chief executive of the company. He was removed two months later by Bankruptcy Court Judge Robert Faris for financial decisions he made involving the airline's $25 million stock tender offer in 2002.
Hawaiian Airlines had been aware that the federal agency was conducting an audit for 2001 and 2002, but airline trustee Joshua Gotbaum, who took over the company in July 2003, called the magnitude of the claim "unjustified."
"We believe the estimate is substantially overstated and expect the claim will be greatly reduced by the bankruptcy court," Gotbaum said. "Hawaiian Airlines has been providing detailed information and cooperating fully with the IRS over the past year."
The state Department of Taxation also has filed a claim with Bankruptcy Court but lists the amount it is seeking as "unknown."
State Tax Director Kurt Kawafuchi said he does not know how much the state might seek from the airline in back taxes.
"We definitely will follow up on it and will do whatever we can to protect the state's interest," Kawafuchi said. "We need to look into what the IRS was making as claims to see if we have parallel state adjustments, and if we do, we'll do whatever steps we can to protect the state's rights."
Hawaiian Airlines, which expects to emerge from bankruptcy this fall, has received claims in excess of $500 million since filing for reorganization. Insiders connected with the case expect the number of legitimate claims to end up around $300 million.
The IRS claim is the largest so far in the case, just ahead of a $110 million claim by aircraft lessor Ansett Worldwide.
Insiders say the amount that Hawaiian ultimately pays likely will be considerably less than what the IRS is seeking.
For example, the IRS initially sought $138 million from bankrupt Hawaii retailer Liberty House but ended up settling $103 million of that claim for $4.2 million and capped the remainder at $14 million.
Carol Muranaka, special assistant U.S. attorney, said the two cases cannot be compared because they are different taxpayers. She declined to discuss any details about the Hawaiian Airlines case due to privacy issues.
"The government always tries to determine the correct amount of tax," Muranaka said. "We filed the proof of claim because we believe we have determined the correct amount of tax that is due."
http://starbulletin.com/2004/07/08/news/index1.html
May 30, 2003
Monahan will lead Hawaiian
The executive piloted Liberty House
through its bankruptcy reorganization
By Dave Segal, Star-Bulletin
Former Liberty House executive John Monahan, who piloted the Hawaii department store chain through a three-year reorganization, was chosen today to be the trustee of bankrupt Hawaiian Airlines.
The selection by U.S. Trustee Steven Katzman followed a two-week search that was triggered after federal Bankruptcy Court Judge Robert Faris found questionable business dealings in Hawaiian's financial operations.
Monahan, who was president and chief executive officer of Liberty House but doesn't have any airline experience, beat out a field of more than 20 candidates. They included Rono Dutta, former president of United Airlines parent UAL Corp.; Bill Compton, former CEO of Trans World Airlines; and Joshua Gotbaum, former executive associate director and controller of the U.S. Office of Management and Budget.
Former Hawaiian executives Michael McQuay and Paul Casey dropped out of consideration earlier in the search due to financial ties with the airline, while Jim McCrea, the former CEO of Air New Zealand, was ruled out because he wasn't a U.S. citizen.
The 52-year-old Monahan, who led the Hawaii retailer through the costliest bankruptcy in state history, couldn't be reached for immediate comment. A court filing naming him as trustee was expected this afternoon.
Monahan would have the option of bringing in an outside airline expert as CEO to complement whatever current management he decided to keep. As the trustee, Monahan would have complete control in running the airline and would have the power to retain or release any management.
The only certain casualty will be Chairman and CEO John Adams, who came under fire at a Bankruptcy Court hearing earlier this month. The hearing had been requested by aircraft lessor Boeing Capital Corp. Hawaiian filed for bankruptcy March 21.
Faris said he ordered a trustee be appointed because Hawaiian, and specifically Adams, consistently had placed the interests of the investors ahead of creditors and said a $25 million tender offer by Hawaiian was ill-timed in light of the airline's decreasingly worsening financial condition.
Despite his lack of airline expertise, individuals acquainted with Monahan said he more than makes up for it with his knowledge of bankruptcy reorganization.
Carlsmith Ball attorney Tom Roesser, who was the local counsel for the secured creditors in the Liberty House bankruptcy, said Monahan has proven his ability to function effectively under public scrutiny.
"I think John did an excellent job under very difficult circumstances," Roesser said. "In the Liberty House case, there was a dispute over which board of directors was in control, and John basically had to respond to both boards. That was difficult for someone in his position, but he did a great job."
Roesser said he didn't think Monahan's airline knowledge shortcoming would be a disadvantage because Monahan can rely on some of Hawaiian's current management or bring in outside help.
"He went through a successful Chapter 11 reorganization with Liberty House and I think that's what Hawaiian wants to accomplish," Roesser said.
Monahan, who came to Liberty House from Los Angeles-based May Co. in 1990, began his career with the Hawaii retailer as the vice president, director of stores. He was named senior vice president and chief operating officer in 1994 before being promoted to president and CEO in May 1997.
Liberty House's three-year bankruptcy ultimately ran up legal fees and other expenses totaling a record $16 million. Ironically, the previous record holder was Hawaiian, which spent $5.4 million before emerging from Chapter 11 in 1994.
In the process, though, Monahan worked himself and other local management out of a job but succeeded in keeping alive the stores and saving most employees' jobs.
Monahan started his own consulting company last year, JMN Associates, which specializes in restructuring, retail and real estate.
"You know, this is a real bittersweet time," Monahan said at a June 2001 press conference after it was announced that Liberty House had been sold to Macy's parent Federated Department Stores Inc.
"(It's) bitter because of reaching the end of my association with this great store and with the great people at Liberty House.
"However, today is sweet also because it puts an end to all the uncertainty and speculation about Liberty House."
Once again, Monahan finds himself surrounded by uncertainty and speculation. Hawaiian's 3,200 employees and one of the state's two major airlines could be counting on his ability.
Roesser, for one, isn't betting against him because Monahan has been through the bankruptcy process before.
"I think that would be a big advantage because bankruptcy is kind of a world of its own," Roesser said. "It has its own specific set of rules that govern it. So to have lived through a Chapter 11 reorganization previously means he has familiarity with the bankruptcy rules and what's necessary to get a plan confirmed."
Liberty House, which filed for Chapter 11 in March 1998, emerged from bankruptcy in March 2001, largely owned by two venture capital companies, Oaktree Capital Management of Los Angeles and DDJ Capital Management of Wellesley, Mass. The companies had bought up the bulk of Liberty House's devalued debt during the bankruptcy and sold the company in June 2001 to Federated.
The $200 million sale was completed in July 2001 and all the Liberty House stores were renamed Macy's in November of that year.
Dwight Yoshimura, general manager of Ala Moana Center, said Monahan had to walk a fine line in leading the company through reorganization. Liberty House was an anchor tenant at the center.
"He's a very capable individual," said Yoshimura. "He's got tremendous character. I think it was very difficult for him because he obviously had the community at heart and was just trying to balance what the owners of Liberty House were trying to do. A lot of time he was caught between a rock and a hard place and, in the end, he did the right thing to make sure the employees were taken care of as well as the community."
http://starbulletin.com/2003/05/30/business/story1.html
June 21, 2002
KS Names IT Director
By Kekoa Paulson, Kamehameha Schools Press Release
Kamehameha Schools today announced the selection of Joseph Ferreira, Jr. as Director of Information Technology, effective July 1, 2002.
Ferreira joins KS from Hawaiian Airlines where he was the Senior Director of Information Technology, responsible for directing and overseeing the company's nationwide information technology functions. From 1996 to 2000, Ferreira headed Hawaiian's Systems Development and Integration, where he rebuilt the company's IT infrastructure when outsourced functions were returned in-house.
Ferreira also held previous IT positions with the U.S. Joint Intelligence Center Pacific at Pearl Harbor, Hawaiian Electric Company and Amfac, Inc., where he helped develop their land records system and Liberty House's merchandise information system.
Ferreira holds a Bachelor's degree from the University of Hawaii, and is knowledgeable
in a number of operating systems and applications....
As IT Director, Ferreira will report to Chief Operating Officer/Chief Financial Officer Eric
Yeaman.
He replaces Dwight Kealoha, who will head the newly formed Kamehameha Schools Pauahi Leadership Institute.
www.ksbe.edu/index.php?topic=news&page=16
January 11, 2002
Anzai recuses self in airlines merger
The attorney general's wife is counsel for Hawaiian Airlines
By Lyn Danninger, Star-Bulletin
State attorney general Earl Anzai said yesterday he has completely recused himself from oversight of the proposed merger of Hawaii's airlines because his wife is legal counsel for Hawaiian Airlines and worked on the merger.
“It was done at the very beginning. I'm not that stupid," he said. "I have not been in a single meeting or seen a single document."
As vice president, general counsel and corporate secretary for Hawaiian Airlines, Anzai's wife, Lyn, would have played a key role in the due diligence phase and other activities related the merger.
But she has not had any direct role in negotiations with the Attorney General's office, spokesman for Hawaiian Airlines Keoni Wagner said.
The state Attorney General's office will likely play a bigger role in any approval of the Hawaiian-Aloha merger than federal regulators.
Anzai said potential conflicts of interest are not unusual and he has always recused himself from past cases in order to avoid any appearance of a conflict.
Questions regarding potential conflicts of interest were first raised as far back as Anzai's legislative confirmation hearing to become attorney general. At one time, his wife had also worked as an in-house attorney for Kamehameha School which was then under investigation by the Attorney General's office.
From the Hawaiian Airlines Chapter 11 Claims Administration Website:
Some of the interesting listed creditors:
ACE American Insurance Co., San Diego, CA
AIG Aviation Inc., Atlanta, GA
AIG Hawaii Insurance Co., Honolulu, HI
AIG Law Dept-Bankruptcy, Attn: David A. Levin, Esq., New York, NY
AIGAMAUA AVEGALIO, Pago Pago
Lyn Anzai, 1645 Bertram St., Honolulu, HI 96816
Aon Consulting, Inc., Honolulu, HI
AIU Insurance Co., Japan (AIG)
Allstate Insurance Co., Roanoke, VA
(Also see: http://www.allstateinsurancesucks.com/Lawsuits.htm)
American Family Insurance Group, Kansas City, MO
Amica Mutual Insurance Co., Costa Mesa, CA
Aviation Insurance Agency, Atlanta, GA
Aviation Insurance Services Pacific, Inc., Las Vegas, NV
AXA Corporate Solutions Insurance Co, Paris, France
Cal Farm Insurance, Sacramento, CA
Chubb Group of Insurance Co., New York, NY
CIGNA Group Insurance, Philadelphia, PA
CNA Insurance Companies, Des Moines, IA
Employers Insurance Co. of Nevada, Reno, NV
Federal Insurance Company, c/o Chubb Group, San Francisco, CA
Federal Insurance Company, c/o Marsh USA, Inc., Seattle, WA
Fireman’s Fund Insurance Co., Honolulu, HI
Hartford Fire Insurance Co., Hartford, CT
Hawaiian Insurance Consultants (AIG), Honolulu, HI
Insurance Ltd Fortis, United Kingdom
Internal Revenue Service: Kailua-Kona, HI; Seattle, WA; Fresno, CA; Wailuku, Maui; Memphis, TN; Ogden, UT; Monterey Park, CA; Cincinnati, OH; Honolulu, HI; Washington, DC.
Island Insurance Co. Ltd., Honolulu, HI
Marr Hipp Jones & Pepper, LLP, Honolulu, HI
National Pacific Insurance Co., Pago Pago
National Union Fire Insurance Co. of PA (AIG), New York, NY
New York Life Insurance Co., Honolulu, HI
Prudential Insurance Company, Florham Park, NJ
RLI Insurance Company, Houston, TX
Royal Insurance Company, c/o Hobbs Group, San Diego, CA
Rush Moore Craven Sutton Morry & Beh, Attn: Susan Tius, Honolulu, HI
Steven Guttman, Kessner Duca Umebayashi ..., Honolulu, Hawaii
State Compensation Insurance Fund, San Francisco, CA
Tokio Marine & Fire Insurance Co., Japan
Transamerica Insurance Finance Corp, Williamsville, NY
Travelers Insurance Co., San Diego, CA
United States Aircraft Insurance Group, New York
United States Fire Insurance Group, c/o Crum & Forster, San Francisco
XL Specialty Insurance, Greenwich, CT
Zurich American Insurance Co., Schaumburg, IL
... ‘Nuff said?
If not, for more, GO TO > > > Allianz (Fireman’s Fund); Confessions of a Whistleblower; Claims By Harmon; Looking for Crumbs at Crum & Forster; Predators in Paradise; RICO in Paradise; The Vampires at Zenith Insurance
MORE TO COME
Meanwhile, you can peruse more buzzard poop by flying to....
Buzzards in the East-West Center
Looking for Crumbs at Crum & Forster
Marsh & McLennan: The Marsh Birds
Marsh & McLennan’s Mercer Consulting
More Claims by Harmon: Kessner Duca
Office of the U.S. Trustee vs Harmon
Scampering With Kemper Insurance
The Vampires at Zenith Insurance Co.
# # #
For Sidney Skolnick’s excellent series entitled
The Bankruptcy Bordello, see...
www.skolnicksreport.com/bankbord-1.html
www.skolnicksreport.com/bankbord2.html
www.skolnicksreport.com/bankbord.html
www.skolnicksreport.com/bankbord4.html
www.skolnicksreport.com/bankbord5.html
www.skolnicksreport.com/bankbord6.html
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TO FLY TO THE TOP OF THE TREE!
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Last Update March 29, 2009, by The Catbird