Since 1975, Frank O. Hay has been able to spend weekends by the fireplace in his cabin on leased state land in the often chilly, wet Koke'e State Park on Kaua'i.

He isn't giving up his secluded spot in the forest without a fight.

The state contends Hay's cabin, along with 113 others in the area, must be surrendered at the end of the year, when the state land leases expire.

New leases then will be offered to the highest bidders at a public auction. According to state land managers, the 20-year Koke'e leases clearly state the cabins on the lots automatically belong to the state at the end of the leases unless the current tenants remove them.

Cabin owners disagree and some sued in Kaua'i Circuit Court, demanding that the state pay the lessees for the value of the cabins. Hay, who is president of the Koke'e Leaseholders Association, has joined in that lawsuit, but said he isn't really after money.

"Quite frankly, most of us really don't want compensation," he said. "We want our cabins, and if we were to give them up at some point, that should be our choice, not have an artificial 20-year lease" that forces the cabin owners out.

Peter Young, chairman of the state Department of Land and Natural Resources, said the board considered sitting down with the cabin owners to negotiate new leases for each of them, but decided to open the leases up for public bidding instead.

"It's about being fair to everyone, because it's a public asset," Young said. "The existing lessees have had the opportunity and privilege to use state property for the last 20 years. The lease is clear, it's a 20-year term."

The only exceptions will be a handful of cabins held by nonprofit organizations, he said. Those churches and other nonprofits will be allowed to negotiate new leases with the state without going through competitive bidding, he said.

The leases originally were to terminate last Dec. 31, but the state granted one-year lease extensions to most of the cabin owners. Now the lessees are seeking revocable permits that would allow them to legally remain in the cabins after the end of this year while the dispute over payment for the cabins is being resolved.

That arrangement would require the consent of the state land board, and Young said the board will consider the issue at its meeting on Friday.

Daniel Hempey, a Kaua'i lawyer who represents about 20 Koke'e lessees in the lawsuit seeking payment for the cabins, said the state agreed Wednesday to delay the public auction for the land under the cabins until sometime in 2007. A lawyer for the state also agreed to give the cabin owners three months' notice before the auction is held, he said.

The first Koke'e cabin was built by the Knudsen family, which held leases on land in the area from 1856 to 1920. New "recreational residence" lots for additional cabins were created in 1918 at Koke'e, with additional lots added at Pu'u ka Pele and Koke'e up until 1951, according to DLNR records.

Koke'e was established as a park in 1952, and now covers about 4,345 acres. Koke'e and the adjoining 1,837-acre Waimea State Park together make up about 40 percent of the state park land on Kaua'i.

The 114 remaining "recreation residences" or cabins are in three clusters along wooded dirt roads or up dirt driveways at Koke'e Camp Site Lots, Halemanu Valley and Pu'u ka Pele Camp Lots. Legally the cabins can only be occupied for six months out of the year, but cabin owners say that rule has never been enforced.

Most cabins have wide porches, stone fireplaces and metal roofs that give them a rustic look, and 92 of the cabins are more than 50 years old, meaning they may qualify as historic properties under state law.

In 1965, state lawmakers authorized state land managers to offer 20-year leases through direct negotiation to people who owned cabins in Koke'e, and the first public auction of the cabins was held in 1985 when those leases expired.

Hay described the auction as a "bitter, recriminative event." He said 51 of 121 cabins changed hands at the auction, leaving some of the losing bidders angry. Some outgoing owners could not persuade some of the successful bidders to pay for the cabins, and some of the structures were torn down.

Hay's cabin is about 600 square feet, with a lanai, a stone fireplace and a well-groomed yard. He visits the cabin on weekends or spends vacations there, reading or taking walks in the surrounding forest. He often lends the cabin out to friends and family.

He guessed the cabin is worth $200,000 or more in Kaua'i's frenzied real estate market, but he isn't sure even that amount would be a fair price for the peace and quiet he enjoys at his cabin.

More than 80 cabins have changed hands since 1985, a turnover rate Hay said is similar to any established community. If people want cabins in Koke'e, there are some available today, he said.

But Hay and other cabin owners contend an auction would force most of them out as wealthy out-of-state buyers outbid the local residents.

"The whole local flavor of the community is lost," Hay said. "That's the problem with selling things to the highest bidder. It results in wholesale change, and we think that forced wholesale change is wrong."

Young said state officials are concerned that an auction might allow the cabins to be snapped up by the "ultra-rich" from out of state, and said state lawyers are researching whether the DLNR can legally limit the bidding to Hawai'i residents only.

However, Young said state law "suggests that the public auction is the preferred approach for issuing rights to use state property."

Hay, meanwhile, said cabin owners will go to state lawmakers next year to ask that Koke'e be designated as a historic district, and to require the state to negotiate new leases with the cabin owners under state historic preservation laws.

A number of other changes at the park are being considered as part of a master plan that is supposed to guide state preservation efforts and development of new facilities at Koke'e over the next 20 years.

Those plans include a new park entry, improvements to or rebuilding of the lodge building, new lookouts and additional parking.

The park is visited by about 300,000 people each year, and the improvements detailed in the master plan are expected to cost more than $28 million.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com.