Kauai Real Estate Update and Local News

Poipu Beach Sunday a.m.

Poipu Beach was beautiful at 8 a.m. yesterday morning as you can see by this photo. The water was so warm you didn’t even need a wet suit. We are having some really wonderful weather island wide in between the vog that continues to drift over from the Big Island. This Monday Morning I have another posting for you with some interesting island news including:
Go! Airlines Pilots Sacked
Hawaiian Airlines Adds a New Flight
Aloha Airlines Cargo Division Sold

and more but first we’ll cover Real Estate here on Kauai.

Lynda Gill

*****Kauai Real Estate News*****
Year to date the number of sales are down but the median sales price on Kauai is up. Here are the numbers island wide:

Housing +3.46%
Vacant Land +47.07%
Condominium +18.01%

Our sales continue to hold the same line as they have been the last couple of months. For a complete list of what has been listed and what has sold this last week CLICK HERE

*****Go! Pilots Sacked*****
The two Go! Airlines pilots that overshot the Hilo airport by 15 miles have been fired. Mesa Air Group has not released the pilot’s names and the Air Lines Pilots Association says it has filed a grievance for the two pilots. Investigations have focused on the possibility of the pilots falling asleep. The plane, which was carrying 40 passengers, had to circle back and landed safely at the Hilo airport on February 13, 2008.

*****Did You Lose Your Sailboat? *****

An unmanned 30 foot sailboat drifted into Hanalei Bay and remained stuck for several hours. Good Samaritans worked together and freed the boat by 7 pm. The “Felicia” escaped fuel leaks and had minimal damage to it.

*****Uncle Sam and the State of Hawaii*****
In the state of Hawaii Uncle Sam is a true benefactor. On a federal level the government collects and average of $5,500 per person at tax time but spends an average of $10,500 for every resident. Hawaii ranks #2 per capita for national spending on the federal payroll. Where do the dollars go to? By far a good share of it is for military spending with 3.7 billion going towards salaries for military, federal and civilian workers.

*****Hawaiian Airlines to Add Oakland Flight*****
Hawaiian Airlines is adding a Oakland to Honolulu flight this Thursday. This new route will have a kick off celebration in Oakland with live music and hula dancing along with a Hawaiian blessing ceremony.

*****Lawmakers Endorse Turtle Bay Plans*****
State lawmakers have agreed on a bill to allow the purchase of the Turtle Bay Hilton on the North Shore of Oahu. The preliminary plan is to sell the resort itself and keep the multitude of acreage as State land and keep undeveloped. The State is also going ahead with plans to buy 2,100 acres owned by the Galbraith Estate in Central Oahu. These lands would also be left undeveloped.

*****Aloha Air Cargo Winner Is…..*****
Los Angeles Pacific Air Cargo LLC was approved by the US Bankruptcy courts to be the winning bidder for Aloha Air Cargo division. Aloha Airlines filed bankruptcy and shut down service on March 31 leaving its passengers to a mad scramble for tickets to and from Hawaii. The air cargo division is profitable and it services 85% of the states air cargo including all the mail to and from Maui and the Big Island. Pacific Air Cargo already provides similar ground services in Honolulu for Qantus Airlines for their Honlulu and Los Angeles route. Seattle based Saltchuk Resources pulled out after their 13 million offer was outbid at 13.65 million.

Meanwhile Aloha Airlines former pilots union ALPA (Air Line Pilots Association) is seeking the courts assistance to make the sale contingent on the new owner abiding by the terms of the pilots contract that they had with Aloha. Pilots that flew the passenger planes are getting retrained for the cargo division and they would like their pilots to be hired on a seniority basis

Kauai Real Estate and Local News

Lynda Gill
Aloha from Kauai! Last weeks news events were wide ranging as you will find. A cocker spaniel rescue from Fanning Island, Superferry breaking news, tragedy at Kalapkai beach and more. We’ll start with the real estate news:

Closed transactions have been keeping steady these past months and this week it went up by 1/4 as evidenced by the excel spreadsheet that I have attached. We are getting back to normal with most of the “spring breakers” back in school and the island remains busy with couples traveling. We will see it stay this way until mid June. For a full excel spreadsheet on last weeks activity CLICK HERE

*****Snickers the Cocker Spaniel Rescued At Sea*****

Now here’s a story that just makes you feel good. Snickers story began when his owners catamaran developed mast problems and drifted 200 yards to Fanning Island where it hit a reef and the couple swam 200 yards to shore carrying their 5 month old Cocker Spaniel, Snickers, and their Macaw Gulliver. A cargo ship rescued the pair but they were forced to leave the pup and bird behind since it was not allowed to carry animals on board. The couple returned to their home and moved on with their lives and left the memory of Snickers and Gulliver behind. A Las Vegas pet lover, Jack Joslin, read the story and financed a rescue mission that involved the Hawaii Humane Society, Hawaiian Airlines and NCL cruise lines. But the mission proved to not be as costly as he thought it would be as Hawaiian Airlines will fly Snickers to Vegas for free and the Hawaii Humane Society donated it’s animal carriers and services. Snickers has been in Honolulu quarantine and is set to fly to his new Las Vegas owner this next week. Paperwork problems prevented Gulliver from making the trip but bird lovers have gotten involved in a elaborate plan to move Gulliver to Christmas island where he can be transported back to the states. “Snickers is going to live with me for a long time,” Joslin said “and we’re trying like hell to get the bird back here.” Fanning island is one of 33 coral atolls that make up the remote island of nation of Kiribati.

*****State Had CAVED into Superferry Demands Auditors Find*****
Last we left the superferry the courts had ordered the State to audit itself on how the Superferry was allowed to bypass the Independent Environmental Study before setting sail. Operations of the Superferry have been suspended here in Kauai after an all out protest in Nawiliwili Harbor last year. State auditor Marion Higa released the first part of her study on Thursday which revealed that the Superferry CEO John Garibaldi gave the state a June 30, 2005 deadline to waive the Environmental Study or he was not going to do business in the State of Hawaii. Garibaldi states that he had to give the State the deadline as he needed the waiver to get the loan for building the new mode of transportation. But contrarily Marion Higa finds out from the Maritine Association that the loan was good until January of 2006 and that it was the Superferry that forced the hand of the State by setting a six month earlier deadline. The auditor continues to gather information for a second report to be released later.

*****Hawaii The Most Expensive State For Renters*****
The National Low Income Housing Coalition named Hawaii the highest in the nation for rentals with an average of $1,509 a month for a two bedroom apartment. What island had the most expensive rent? Oahu came in number 1 and Hawaii had the lowest rent at $1000 for a 2 bedroom apartment. Rent has gone in up 70% in Hawaii since the year 2000. Hawaii was followed by California, New York, Massachusetts and New Jersey for the highest rents in the USA.

*****Vacation Rentals on Ag Land Being Questioned*****
The Kauai Council is requesting a legal opinion on vacation rentals on ag land. Currently vacation rentals are not allowed on land that is zoned agricultural but it these types of vacation rentals are known to exist. An example was cited by County Councilwoman JoAnn Yukimura: a 10,000 square foot vacation mansion with a few fruit trees and a couple of horses could mask the vacation rental that it is. It is feared that this type of misuse of ag land would drive up prices on agricultural land and making it not affordable to farmers. This issue was hammered out during a meeting on April 4th and it was determined that legal investigation is needed.

*****Man Drowns Off Kalapaki Beach and Rescue of Swimmer at Kiahuna Beach*****
A 30 year old United Airlines flight attendent was pulled from Kalapaki Beach on Saturday. His coworkers had lost sight of him swimming in the water and went searching for him and after having no luck they alerted the Marriott emlployees. They got to the beach right away to find that tourists had pulled the cyanotic man out of the water. He was taken to Wilcox and was pronounced dead.
On the same day, around 2 pm, rescuers responded to a boogie boarder who had lost his board some 70 yards off shore in front of the Kiahuna Plantation. South Shore waves were rolling in at 8 to 10 feet. People on the beach had seen his distress signal and alerted Kiahuna security who called 911. Medics checked him out and he was released on site.

Kauai Real Estate and Local News

Lynda Gill Aloha From Kauai! It’s been getting warmer but still a little chilly at night. We’ve also had “vog” visiting us from the Big Island, read more about this in my posting today. For real estate news I’ll be posting a special piece about a tax law that was passed concerning leasehold land and a little history on this type of land ownership. If you have any questions your welcome to contact me.

*****Real Estate News*****
The spotlight is on leasehold land. Leasehold land is very common here in the State of Hawaii and was born out of the need for affordable land in the 1960’s. Lease’s are now at a point in Oahu where they will be coming due and the State has passed a bill in June of 2007. Act 166, tax exemption incentive for fee owners to sell. It is a “carrot” incentive in an effort to avoid a possible “stick” of a statewide mandatory conversion law for condos and co-ops.
Act 166 was signed into law by the Governor and it provides capital gains tax exclusion to leased-fee owners who sell their interest to the Association of Apartment Owners. This creates a win-win situation for everyone since lessees would get fee simple home ownership, fee owners can profit in reinvestment and the state can free up millions of dollars to be put into the economy, hopefully generating use tax dollars that would not be generated otherwise. This tax free exclusion will expire on December 31 2012. So at a State level there would be no tax but there would be tax on the Federal level. To answer that H.R. 2613 was recently introduced by Representatives Abercrombie and Hirono to provide a similar capital gains tax exclusion from federal income taxes. Given that this bill represents and affects a very minor issue from a national perspective and is unique to Hawaii, there is no guarantee that Congress will consider it this year let alone take action on it. To see a copy of this bill click this link…..Leasehold Land Act

*****Real Estate Sales and New Listings*****
Our number of sales have held up to the same levels that they have been at for the last several weeks. We expect our activity to get a little stronger with the majority of spring breaks behind us. For a complete list of what has come on the market and what has sold CLICK HERE

*****Hawaii Tourism Authority Helping With Stranded Passengers*****

The Hawaii Tourism Authority is adding charter flights daily to help out passengers who were scheduled to fly home on Aloha or ATA airlines. Given the new flights that had been added by Delta, Alaska Airlines and United we don’t expect to be running short on seats after the readjustments.

*****Aloha Airlines Sells Off Cargo Division*****

Aloha Airlines was running in the black with their cargo business and it still is in operations. A Seattle based company, Saltchuk Resources, Inc. Saltchuk was given the green light by the Honolulu Bankruptcy Court to purchase the company. Given this is not a normal sale there is some protocol to follow. Here is what Saltchuk Resources is outlining to happen:

“Due to the fact that the bankruptcy court will not announce a winner of the auction until April24th, and closing is required to occur the following day on the25th, we are thus required working on a transition plan that will ensure continuity of all Aloha air cargo operations.

There are many issues that we are working on, complicated by the fact that we are acquiring assets as opposed to purchasing the stock of an ongoing business. The most important is our need to hire employees at our new Hawaiian corporation to allow operations to continue without interruption. “

Union officials for the airline are in heavy negotiations for the Aloha Airlines pilots to be re-hired.

*****Vog Visits Us From The Big Island*****
Kauai’s eastside has been hit with Vog from the Big island. Vog is elevated sulfur dioxide levels from active volcano’s and creates a haze over all the islands. Kilauea volcano has been erupting since January 3, 1983 but recent activity forced the closure of Volcano’s National Park on Hawaii. 2,000 people were evacuated from the park and one school was closed. On Wednesday night the noxious gas forced an explosion which sent rocks 230 feet in the air. On Thursday the winds had shifted enough to allow the park to be re-opened which includes the 42 room Volcano House hotel and Kilauea Military Camp.

Kauai Real Estate and Local News

Lynda Gill Aloha from breezy (but warm) Kauai and I hope you all had a great weekend. I have a lot of local news and a real estate update for you.

*****Kauai Real Estate*****

5 Kukui’ula lots here in Poipu sold this week and a new subdivision came on the market in Kapaa. The new subdivision is called Aina Wai Agricultural Subdivision. This project is designed specifically for farming uses and has great mountain and ocean views. These lot sizes start at 1 + acres and should qualify for one house plus a guest house. The offerings on these lots are for non-binding reservations only as the subdivision has Tentative Subdivision Approval at this time. Call me for more details. For a complete list of what has been listed and what has sold this last week CLICK HERE

*****ATA shutdown*****

Another surprise move was the shutdown of ATA Airlines on April 2. In a press release on their website they state: “After filing for Chapter 11 on April 2, 2008 in the U.S. Bankruptcy
Court in Indianapolis, IN, ATA Airlines has discontinued all operations and cancelled all current and future flights. Following the loss of a key contract for our military charter business, it became impossible for ATA to continue operations. Unfortunately, we were not in a position to provide our customers or others with advance notice.” ATA abruptly went out of business on Friday leaving hundreds of travelers stranded. ATA had filed for bankruptcy in 2006 and came out of it after partnering with Southwest Airlines. Officials say that the most affected travel routes for the state of Hawaii that the Aloha and ATA leaves us is the Hawaii to Las Vegas routes of which these two airlines had 40% of the market.

The shutdown triggered the Hawaiian Tourism Authority to release 5 million in travel funds to help stranded passengers. Hawaiian, United, Delta, Continental, Northwest, Alaska and US Airways are all working with Aloha and ATA passengers to get them back home. United, Go! and Hawaiian Air are adding new flights to fill the void. Hotels here are working with people who need an extra night stay and are keeping them up to date on the airline changes.

What has the mood been here on Kauai? You wouldn’t know anything happened besides an occasional reference. Everyone is pretty calm about it and to quote a gentleman that spoke to our newspaper “If I have to be stranded I’d rather be stranded in paradise”

*****Aloha Airlines Fallout Continues*****
Aloha Airlines has been in the news daily. The biggest headlines have
been the stranded Merrie Monarch Halau’s and the adding of flights by
Hawaiian and Go! Airlines. The Merrie Monarch Festival which
is dedicated to the memory of King David Kalakaua, known as the Merrie
Monarch. King Kalakaua came to the throne of the Hawaiian Kingdom in
1874 and reigned until his death in 1891. He was a patron of the arts,
especially music and dance. This year the festival is being held in Hilo and
with the 24 hour notice that Aloha Airlines gave the dancers and
festival goers were stranded and scrambling for tickets.
Hawaiian Airlines is credited to stepping up to bat and helping out
the festival participants and the halaus which had members coming from as far away as Japan.

Hawaiian Airlines and Go! put out an ad to fill 54 positions to meet
the demands of new flights being added. “This is only the first step,
in what we hope will be many more announcements regarding employment
opportunities at Hawaiian Airlines” said mark Dunkerley Hawaiian
Airlines president and CEO.
Officials say loss of Aloha airlines will not affect tourism because
Aloha only accounted for 4.5 percent of the nearly 7.6 million
passenger seats from the Mainland to Hawaii. Rex Johnson, from the
Hawaii Tourism Authority, said Aloha’s competitors should have no
problem filling the void.

*****Superferry Gearing Up Early*****
Seeing a void in interisland travel and freight service the Superferry is back in service 2 weeks early. Their Maui to Oahu run will start today. Controversy still surrounds the new mode of transportation as the Environmental Impact Study is still underway.

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