(BIVN) – State officials say they knew upfront there was the possibility a single firm could end up with all four permits to operate surf schools at Kahaluʻu Bay, following a lottery drawing that they deemed would serve as the “fairest way to issue permits”.

“Seventeen surf companies entered the lottery, and three permits did go to three distinct companies that happen to be owned by the same individual,” said Meghan Statts, the Assistant Administrator for the Hawaiʻi DLNR Division of Boating and Ocean Recreation, in an amended statement. “Under the current rules and laws, as long as the companies were legally established, there is nothing we can do to avoid what seems unfair, especially to surf schools that were not selected during the lottery.”

The State says the division plans to introduce legislation again in 2024 to try and address the issue. It also added that the four permits that were awarded are conditional, “based on permittees gaining land access permits from the County of Hawai‘i.”

Here is the full news release from the Hawaiʻi Department of Land and Natural Resources (with one sentence later amended by the DLNR in a subsequent news release, shown in bold):

Four surf instruction companies received permits last week in a lottery conducted by the DLNR Division of Boating and Ocean Recreation (DOBOR), for the right to operate in Kahalu‘u Bay on Hawai‘i Island.

It is a step toward better management of large crowds of surfers and commercial instructors. Commercial surf instruction at the popular bay has been contentious for years because of unpermitted companies and overcrowding.

DOBOR first adopted rules for the popular surf school spot, working in cooperation with the County of Hawai‘i, in 2016. At that time the county was going to select four commercial surf operators and the state would issue permits. The county had difficulty selecting four surf schools and asked the state to take over the process. An amendment of the rules in 2021 directed DOBOR to take on the responsibility of selecting operators and the only option for doing so under the rules, was to issue permits by lottery.

In 2022, DOBOR sought to have the State Legislature amend the law. The division wanted to issue permits to companies with the longest standing and in order of seniority. House Bill 1090 was adopted, but the measure was vetoed by the Governor.

After randomly choosing four companies it turned out three of them are owned by the same person.

DOBOR Assistant Administrator Meghan Statts said, “We knew upfront there was the possibility a single firm, with distinct individual companies established under state statutes, could be awarded all four permits. Seventeen surf companies entered the lottery, and three permits did go to three distinct companies that happen to be owned by the same individual. Under the current rules and laws, as long as the companies were legally established there is nothing, we can do to avoid what seems unfair, especially to surf schools that were not selected during the lottery.”

The division plans to introduce legislation again in 2024 to try and address the issue. The four permits issued are conditional, based on permittees gaining land access permits from the County of Hawai‘i.

Statts added, “We realize that we could not please everyone, but we also realized we had to do something. We deemed the lottery as the fairest way to issue permits under the current rules and we did so after consultation with the Dept. of the Attorney General. These are one-year permits, so we encourage anyone who supports a rule change to contact their legislators.”

The four lottery winners were Kauakea LLC, Hinaea Iliahi LLC, Kahulu‘u Bay Surf & Sea Inc., and Kona Town Adventures LLC.

(NOTE) – This story has been updated to reflect a change in the wording used by the Hawaiʻi DLNR, which was provided in an amended news release.