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  2. Implementing the OHA Real Estate Vision • OHA commitment to create property strategy • Diagnostic work to assess SWOT, address objectives, create strategy • Design strategy re REVMS • Board of Trustees assess and discuss strategy • Board of Trustees approve strategy • Pursue return of Ceded Lands • Translate strategy into investment policy • Extend strategy to create real estate business plan

  3. OHA Real Estate Vision Mission & Strategy • Champion best practices re property involvements for every aspect of board and staff organization. • Expand the portfolio of Hawaii lands over which OHA exerts direct influence and control. • Pursue initiatives that can facilitate creating dominion over all of Hawaii’s lands and the public aspects of every decision concerning Hawaii’s lands. • Establish powerful organization and strong infrastructure to implement OHA land vision and mission. • Build financial foundation to support the OHA land and real estate objectives.

  4. Implementation Involves Balancing Multiple Considerations • Fiduciary duty • Compliance with REVMS guidelines and OHA Real Estate Investment Policy • Current organization resources and capabilities • Building a land base plus wealth creation aspirations • Fiscal prudence re current financial realities

  5. Pursue Return of Ceded Lands • Engage in negotiations to gain return of ceded lands • Establish process to evaluate and select target lands • Evaluate all Hawaii public lands • Select target properties • Negotiate terms of selected properties with State • Board approval • Finalize approved properties to be returned to OHA

  6. Translate REVMS into Investment Policy • Consider how reconcile multiple competing priorities • Address specific critical strategic investment issues • Integrate ceded lands into Investment Policy and Portfolio Composition Guidelines • Specify portfolio composition • Specify Investment return targets

  7. Must Reconcile Multiple Competing Priorities • Role of land in Hawaii Culture • Objective to build land base for future nation • Consequence of return of ceded lands • Responsibilities • Opportunities • Implications • Balance user and programmatic priorities with fiduciary investing principles

  8. Strategic Portfolio Management NeededTo Balance Competing Interests • Balance staff needs and project requirements • Balance timing of current and future returns • Balance allocation to legacy/programmatic property and economic property • Create portfolio management function • Balance competing interests re OHA property involvements

  9. Address Specific Critical Strategic Investment Issues • Allocation of total investable funds to real estate investing program • Specify portfolio composition guidelines • Specify return objectives for each property type • Establish decision process re direct investing • Role of global real estate securities in portfolio • Diversify Hawaii risk • Realize higher investment returns

  10. Strategic Implication of Future Value Property • Timing re when value might be realized, • Duration of time that might be required to realize the value • The political challenges OHA might confront, • The political capital OHA might need to expend to harvest the value • The financial resources OHA might need to spend to steward • The ultimate value of the property.

  11. Implications

  12. Management Resources and Property Involvement

  13. Financial Consequences of Property Involvement

  14. Management Resources and Financial Consequences of Pure Stewardship: Culturally Significant Sacred Property

  15. Management Resources and Financial Consequences of Pure Stewardship: Programmatic Lands

  16. Management Resources and Financial Consequences of Pure Stewardship: OHA Direct Property Involvements

  17. Management Resources and Financial Consequences of Pure Stewardship: Global Property Securities Investment

  18. Management Resources and Financial Consequences of Pure Stewardship: Integrated OHA Property Involvement Strategies

  19. Implication of Integrated OHA Property Involvement Strategies Diverse range of activities Varying management resources Varying financial consequences Much interdependency between different strategies Integrated, holistic strategic approach preferred over incremental, transactions style

  20. OHA Real Estate Value Mission and Strategy Mandates Championing Cultural, Advocacy and Programmatic Objectives and Building Solid Financial Foundation

  21. OHA Real Estate Value Mission and Strategy Mandates Championing Cultural, Advocacy and Programmatic Objectives and Building Solid Financial Foundation

  22. OHA Real Estate Value Mission and Strategy Mandates Championing Cultural, Advocacy and Programmatic ObjectivesBuilding Solid Financial Foundation

  23. New Slide

  24. OHA Investment Return Expectation

  25. OHA Real Estate Portfolio Composition Targets

  26. Significant Organizational/Financial Implications of Portfolio Composition Decisions • Balance managerial/financial inputs and sacred/financial outputs • Inputs and outputs vary considerably by • Type of property • Specific property • Portfolio decisions influence OHA’s ability to delivery beneficiary services and achieve OHA mission • Portfolio strategy decisions determine requirements for organization resources to support OHA property involvements: • Stewardship, • Programmatic • Advocacy • Investment

  27. Organizational and Financial Inputs Vary Considerably by Type of Property and Specific Property • Magnitude of capital investment • Intensity of staff resources • Professional services requirements • Ongoing business support and deficient subsidy

  28. Cultural and Financial Outputs Vary Considerably by Type of Property and Specific Property • Financial returns • Programmatic requirements and benefits • Promote Hawaii sense of place • Enhance property involvements in Hawaii • Level of/balance between inputs and outputs influence OHA ability to delivery beneficiary services and achieve OHA mission

  29. Craft Real Estate Business Plan • Translate REVMS into structured, staffing, rewards systems, processes • Create LAND MANAGEMENT HALE • Establish business management structure • Establish investment ownership structure • Design and implement staffing plan • Prepare financial plan and management system • Specify staff criteria, development and rewards

  30. Staffing Requirements Follow From Need For Strategic Real Estate Management • Every property is a business • Real estate businesses are not all the same • Resource needs, scale, complexity of different property businesses vary considerably • One size fits all style – NOT! • Decisions where each property have profound implications

  31. OHA Organization Chart

  32. Establish Limited Liability Corporation Ownership and Foundation Funding Structure • Establish Land Management operating entity as LLC • Overall Managerial oversight for all property involvements • Provides services to particular property entities • Create family of foundations to fund real estate acquisitions and stewardship of legacy land • Specify LLC and/or Foundation for each property and project • Some major properties shall have full time dedicated staff employed by LLC/Foundation

  33. OHA Property Foundation Provides Input To All OHA Property Involvements • Family of foundations for specific properties • Each individual island • Programmatic priorities – i.e. housing • Legacy lands stewardship • Historic landmark stewardship • Each major property shall have dedicated foundation to fund that land involvement

  34. Create LAND MANAGEMENT HALE • Create three divisions, each led by Deputy Administrator • Establish new Deputy Managing Administrator position • Design LAND MANAGEMENT division within OHA • Specify functions within LMH • Link REVMS priorities to LMH functions • Build organization and supporting infrastructure • Prioritize and hire staff

  35. Implementation Priorities reLAND MANAGEMENT HALE • Substantial investment in LMH team • Substantial investment in LMH technology • Strategic portfolio management to balance competing interests • Design and Implement • Prepare business plan for each property involvement • Determining what OHA needs to do • Informs timing re staffing additions • Implement organization infrastructure • Systems • Equipment

  36. Substantial Investment in to build land management organization • Substantial investment to build land management organization • Substantial investment in team • Talent/knowledge/skills • Professional development • Motivation/incentives • Substantial investment in technology • Systems automation • Analysis software • Databases: MIS and GIS • Financial models for LAND MANAGEMENT