The largest private owner of industrial land in Hawaiçi, HRPT Properties Trust, today sued the state alleging that a one-month-old law intended to give its tenants more leverage renegotiating rents is unconstitutional.

The Massachusetts-based company said it filed the suit in federal court in Honolulu.
HRPT earlier this week said in a conference call with stock analysts that tenants have been citing the new law in an effort to avoid paying what the company believes to be market-rate rent.
The law affects some of the more than 180 businesses that lease land from HRPT in Mapunapuna and Kalihi Kai on Oçahu.
The law requires that a unique phrase in HRPT’s Hawaiçi leases referring to “fair and reasonable” rent be construed as being fair and reasonable to the lessor and the lessee.
The language was created by prior landowner Damon Estate, and inherited by HRPT when the company bought roughly 10 million square feet of land in Mapunapuna and Kalihi Kai plus a few other parcels from Damon in 2003 for $480 million.
Damon had maintained that its lease language stating “rent shall be such fair and reasonable annual rent for the demised land” means fair market rent for the property. But arbitrators have long argued over the meaning of the phrase.
The law also mandates that the type and intensity of use on the property be considered when determining what’s fair and reasonable under the law.
Many tenants formed an association to fight attempts by HRPT to raise rents, in some cases by two or three times, after land values skyrocketed in recent years. A bill passed by the Legislature was a result of the effort. Gov. Linda Lingle let the bill become law without her signature.
The state attorney general had testified that the bill might be found unconstitutional because it alters terms of a lease, though an expert retained by the tenant’s association argued that the law is constitutional. That will now be up to a federal judge.