Money, power and moral hazard: Is Hawaii's Public Land Development Corporation above the law?

Danny de Gracia interviews State Representative Jessica Wooley about Hawaii’s highly controversial new agency. Photo: AP Graphics

HONOLULU, December 11, 2012 ― Have you ever heard of Hawaii’s Public Land Development Corporation? It sounds innocuous, like an agency designed to build parks in Paradise.

Imagine for a moment an organization exempted from taxes and laws. Imagine further that this organization has the legal authority to do “any and all things necessary to carry out its purposes,” and can finance itself through the issuance of revenue bonds or the receipt of gifts or grants in any form from any public agency or any other source.

If you think something like that can only exist in fiction, a super-powerful organization out of a movie like The Bourne Legacy, think again: Those are the powers that the Hawaii State Legislature in 2011 vested in a new entity, the Public Land Development Corporation.

When the PLDC was first conceived, the Hawaii state legislature believed that public lands had not been “used effectively” and determined that creating a special public corporation with special jurisdiction over public lands would enhance development and create “revenue-generating opportunities for the new corporation.” In spite of public opposition and fears its broad sweeping powers could lead to abuse, Hawaii enacted the PLDC under Act 55 (2011).

One year later, anger over the PLDC and its broad powers has many locals and political experts alike wondering just how such a mandate could have been allowed to pass the checks and balances of the legislature. I had the chance to interview Hawaii State Representative Jessica Wooley – one of only 9 members of the House who had the courage and discernment to vote “no” to the bill that created the PLDC – for her insights on just what happened and why the system failed.


Danny de Gracia: Representative, in Hawaii there’s been a lot of controversy over something called the Public Land Development Corporation or PLDC, which was created in 2011 by the Legislature under Act 55 to “make optimal use of the public land for the economic, environmental and social benefit of the people of Hawaii” and gave this public-private corporation exemption from not only taxes but – this is the exact language – “all statutes, ordinances, charter provisions and rules of any government agency relating to special improvement district assessments or requirements” among other things. To me that seems really bolt-from-the-blue for a Legislature to give a public-private entity that kind of broad dispensation. What are your thoughts on this?

Representative Jessica Wooley: For the record, I voted no on final reading of the bill and was one of only nine of 76 legislators who voted no. Last session I introduced a bill to repeal Act 55 and worked to get a hearing in the House Committee on Finance that began the public discussion of a repeal. Also during this year’s election, my opposition to PLDC was a message in my campaign and contributed to a big and unexpected win in a difficult race.

You are absolutely right: Act 55 was a “bolt-from-the-blue” and has been both shocking and painful, especially for those connected with history, land and development challenges in Hawaii.

When this bill passed, the legislative hearing process itself was rife with abuse and public input was bypassed. The irony could not be worse. There was no public input on the elimination of public input. Major new language appeared in the House amendment of the bill.

There was only one opportunity for the public to comment on many substantial changes, including the county zoning, subdivision, and permitting exemptions. Notice to the public of that single opportunity to comment was provided less than two hours prior to the Finance Committee hearing.

Even after that, major changes in the bill appeared for the first time in a conference draft.  Specifications for the five voting member board and the agency funding mechanism – raiding the Land Legacy Act funds – and amounts were added. In addition, the purposes of the PLDC morphed to include the development of public land for office space, vehicular parking, commercial uses, hotel, residential and timeshare uses, fueling facilities, storage and repair facilities and seawater air conditioning plants. 

The public was never given an opportunity to testify on these dramatic changes. It’s difficult to imagine the outrage a legislator might face if the public had seen this language and been able to provide public comment.

Very little public scrutiny was given to this bill not only because language was changed dramatically and at the last minute, but also because the bill was not heard by all appropriate committees. Despite repeated express concerns, Senate Bill 1555 was not referred to the Committee on Hawaiian Affairs, though its purpose is to generate revenue by promoting culturally appropriate development of public land.

The result was a bolt from the blue. As many others have implied, there has been no other government agency ever created with such vague and overly broad language, so imbued with unfettered and uncensored power, assigned with such a perplexing purpose, or so devoid of existing checks and balances.

Hawaii’s PLDC has broad jurisdiction over public lands that many observers worry may lead to abuse.

DDG: Reynolds v. Sims gave us the warning that “Citizens, not history or economic interests cast votes. Considerations of area alone provide insufficient justification for deviations from the equal population principle.” That’s basic high school civics class right there. I look at this PLDC and my first thoughts were “How in the world did the Legislature draft this and not see the moral hazard?” The Legislature is supposed to have checks and counterchecks and yet we still got the PLDC. Do you think that the system failed?

Rep. Wooley: Yes, the system failed. In this day and age, and in this place, I see no reason to eliminate public or community input, especially with an issue like the development and potential sale of public land. The existing combination of power, lack of public oversight, exemptions from laws designed to protect the public, and control of money is a fiscal disaster waiting to happen, if not worse. The PLDC even has authority to issue its own bonds. 

As many have pointed out, this law promotes the use of public land to generate revenue, but it will never actually create government revenue. This law is wrong from the inside out, it bypasses home rule for counties, and only invites unnecessary risks and likely abuse.

DDG: I know that there are some elected and appointed people who are basically saying, “Easy, easy, the PLDC isn’t as bad as you think, stop being an alarmist.” I don’t know if that’s the right attitude to approach something like this, given the track record of government. What do you think will happen if PLDC is allowed to stand?

Rep. Wooley: Many have tried to work with the language in the law and believe we must make the best of the situation. Certainly good people can do good things with absolute power, no oversight, and temptation. However, as a legislator, I cannot help but be appalled that this bill became law. It was done wrong from the beginning and it is a disaster waiting to happen.

DDG: Do you see the PLDC possibly being repealed in the next session?

Rep. Wooley: Yes. I will continue to fight for a repeal of Act 55. In addition, the pressure of public sentiment is having an effect. Only two House members have publicly opposed a repeal, and one of them recently backed off of his position and recognized there should at least be revisions to the law.

More importantly, Speaker Souki has made clear that the first bill he will introduce at the very beginning of session will be to repeal Act 55. With his commitment, key House members have pledged their support for Souki as Speaker. You could say the very leadership of the House will change because of Act 55.

DDG: I believe in local, community-level government but I don’t think the Tenth and Ninth Amendments intended for states to basically say with things like the PLDC that “We can do anything we want and cheat the rules other people have to follow.” That doesn’t seem to be the spirit of the Constitution. Do you think that the U.S. Congress should be concerned about the implications of this?

Rep. Wooley: Yes, there is no question Act 55 has the potential to corrupt the intent of the Ninth and Tenth Amendments. Let’s just hope for a repeal.

DDG: What should Hawaii residents concerned about the impact of the PLDC do in the meantime?

Rep. Wooley: Write letters to the editor of every paper. Tell your friends they should too. Get involved in politics. Ask your senator and representative how they plan to help ensure the bill is repealed as soon as possible.

DDG: Last but not least, is there anything you’d like to say to the people of Hawaii regarding the upcoming legislative session?

Rep. Wooley: Please get involved any way you can. We are only in session from January to May. I hope to see you there.


We greatly appreciate the opportunity to interview Rep. Wooley. For more information about her, visit her official State Legislature page here.

This article is the copyrighted property of the writer and Communities @ Written permission must be obtained before reprint in online or print media. REPRINTING TWTC CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.

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Danny de Gracia

Dr. Danny de Gracia is a political scientist and a former senior adviser to the Human Services and International Affairs committees at the Hawaii State Legislature. From 2011-2013 he served as an elected municipal board member in Waipahu. As an expert in international relations theory, military policy, political psychology and economics, Danny has advised numerous policymakers and elected officials and his opinions have been featured worldwide. Now working on his first novel, Danny resides on the island of Oahu.

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