Nawililwili lease on the line

LIHUE —Nawiliwili Yacht Club is fighting for their lease of the Nawiliwili Small Boat Harbor, set to expire in September and go up on the block for public auction.

And it’s a tax status discrepancy that’s endangering the 15-year lease, which was extended for a year after technically expiring September 2016.

Since then, the state has been looking into the property’s suitability for long-term disposition, maximization of best use, and fair market value return, according to Deborah Ward, spokesperson with the Department of Land and Natural Resources.

“We’ve had letters from our County Council and others sent straight to the DLNR requesting not to place the property up for public auction, but rather allow the charitable organization to negotiate directly for a lease to perpetuate and continue our community service,” said Fred Styer, Nawiliwili Yacht Club Commodore.

The problem is NYC doesn’t qualify to be a leaseholder because it’s a 501(c)4 nonprofit organization instead of a 501(c)3 nonprofit organization. But NYC’s sister organization, Kauai Sailing Association (KSA) is a 501(c)3 and was formed in 2005 to satisfy lease requirements. KSA organizes, sponsors and conducts an accredited Junior Sailing Program. The hope is the lease can be transferred from NYC to KSA and kept in the organizational family.

Incorporated as a non-profit 501(c)4 in 1979 to promote recreational sailing and boating, as well as associated safety education on Kauai, the club was awarded the lease beginning in 2001 after more than 10 years of negotiating.

In 2005, when KSA was formed, club members funded, designed and built a 2,500-square-foot facility to serve the community, and enhanced the appearance of the harbor with a landscaped entrance. Sailing programs for Kauai youth and adults developed successfully enough with KSA to keep the nonprofit going.

The association continues to provide popular year-round educational programs with opportunities for low-income and disadvantaged youth to participate, and plans are under way for inclusion in local school curriculum. Its student scholarship program also grants aid to sailors based on financial needs and special circumstances.

“We have established a very unique and valuable maritime education program … particularly for youth sailing and safe boating practices,” said Styer. “We dovetail right into the U.S. Coast Guard Auxiliary, take what they teach, and bring people in on small boats to do the practical side.”

Partnered with Kauai Community College, KSA provides workshops and training camps for marine biology and ecology, sailing instruction, and physics of sailing and marine safety programs.

Alongside Hawaii Technology Academy, it also teaches marine biology free to the public and sailing instruction for the Polynesian Voyaging Society, including for crew members of Namahoe, Hawaii’s youngest and largest voyaging canoe.

“The DLNR’s decision to publicly auction the lease has area residents concerned about losing important community-based organizations as well as public access to Kauai harbors,” said Richard Olsen, KSA instructor and U.S. Power Squadron Navigator.

The facility at Nawiliwili provides storage and launching facilities, training areas for the fleet of small boats used in its programs, and meeting places for other non-profit organizations such as U.S. Coast Guard Auxiliary and Rotary. CPR/AED classes have been held for the community with a newly installed emergency station located on the premises for use by anyone at the harbor.

When the original NYC lease expired in September 2016, a holdover lease was issued in February with rent adjusted to fair market value based upon independent appraisal. That carries NYC’s current lease through until September 2017. NYC opposed paying twice the amount, claiming financial hardship and eligibility for discounted rent under 501(c)3 charitable organization status.

The board approved the original discounted rate under the expired boating lease and provided that NYC submit documentation within 90 days to review. Although KSA is a 501(c)3, the affiliated NYC is a 501(c)4 not eligible under 171-43.1, according to Ward.

On May 22, DOBOR received a request for state lands application from KSA, requesting direct negotiation of a lease on the property, stating affiliation with NYC. The property is currently still encumbered by the holdover lease, being prepared for long-term disposition and not available for lease by negotiation.

The association has contributed hundreds of volunteer hours with Malama Huleia and Surfrider Foundation, for mangrove eradication and harbor and beach cleanups, as well as organizations like Leadership Kauai, Sea Scouts and Boy Scouts, Hawaii Children’s Theater, and Taste of Hawaii.

NYC hosts the annual Father’s Day Keiki Fishing Tournament, Island School Science Fair, and Kauai Channel Race and Single-Handed Trans Pac regattas. Additional community partnerships included the recent Japanese Maritime College’s visit from a Japanese multi-mast cutter ship.

“We hope to perpetuate our presence and to enrich the maritime programs we currently provide to Kauai and the state of Hawaii as a whole,” added Styer.

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