In late 2010, DW ‘Aina Le‘a Development, LLC, published a final environmental impact statement for its planned series of villages on about 1,100 acres of land in the Hawai‘i island district of South Kohala, just mauka of the Mauna Lani Resort.
The Mauna Lani Resort Association (MLRA), unhappy with several aspects of the proposed development, timely chal- lenged the final EIS with a complaint in 3rd Circuit Court.
One of the major points in the challenge was the fact that the EIS considered the project’s impacts only on the land within the state Urban land use district, even though the EIS preparation notice had included both DW ‘Aina Le‘a’s land as well as the surrounding 1,900 acres in Agricultural land that Bridge still held title to.
All 3,000 acres had been part of the original development plan presented to the Land Use Commission.
This, the MLRA argued, amounted to improper segmentation of the project. Named as defendants were not only DW ‘Aina Le‘a Development, LLC, but also Hawai‘i County and its planning director, at the time B.J. Leithead-Todd.
Unbeknownst to the county when it signed off on the final EIS, ‘Aina Le‘a and Bridge had entered into a joint development agreement (JDA), which provided for most of the services and infrastructure that ‘Aina Le‘a needed for its development to eventually be used as well by Bridge when it got around to building on the Agricultural land. Yet the EIS made no mention of the JDA. Its content was disclosed to the county only in December 2012, at which time the county ceased to defend its previous acceptance of the EIS and instead asked the judge to remand the matter to the county for further proceedings.
In February 2013, Judge Elizabeth Strance ruled that the county Planning Department had erred in accepting the final EIS and granted the county its request that it be allowed to require the developer to prepare a supplemental environmental impact state- ment (SEIS) dealing with all 3,000 acres. Until that SEIS was final, all development on the land was tolled, Strance stated in her order, which ‘Aina Le‘a did not appeal.
Now, though the committee of unsecured creditors of ‘Aina Le‘a, Inc., are asking that the court reopen the matter. On February 1, Ted N. Pettit of the law firm Case Lombardi & Pettit, representing the committee, filed a motion in 3rd Circuit Court seeking to intervene in the lawsuit and also to substitute the ‘Aina Le‘a, Inc., for the original defendant, DW ‘Aina Le‘a Development.
Both ‘Aina Le‘a’s reorganization plan, presented to its creditors, as well as court filing by the unsecured creditors’ committee state that “regular meetings” have been held with county representatives, the committee’s land use counsel, and representatives of ‘Aina Le‘a. In an addendum to the mo- tion, Robert Wessels, the chief executive officer of ‘Aina Le‘a, also says he has “been working with representatives” of the Planning Department and other agencies on a plan “to resolve the tolling order” of Judge Strance. On February 6, Pettit disclosed to the bankruptcy court that Dennis Lombardi was the attorney involved in negotiations with the county on behalf of the unsecured creditors – whose interests are so closely aligned with those of ‘Aina Le‘a as to be indistinguishable. (Pettit acknowledges to the bankruptcy court that he is proposing “a unique coordination between the debtor and the [unsecured creditors’ committee],” but to justify this, he refers to “commentary found in Collier on Bankruptcy,” a sort of bible for bankruptcy law: “The primary purpose of a [creditors] committee in any case … is to maximize the return to the constituency represented by the committee.”)
“Mr. Lombardi has substantial experience in developments comparable to the debtor’s ‘Aina Le‘a development and in development of affordable housing projects,” Pettit added. “He has been directly involved in ongoing discussions with county officials concerning implementation of the land use action plan.” (For his services, Lombardi is charging $650 an hour.)
No County Commitment
In a footnote to the brief supporting inter- vention, Pettit explains that while it is necessary to substitute ‘Aina Le‘a, Inc., for the original party in the case – DW ‘Aina Le‘a Development, LLC – it is not necessary to substitute the current director of planning for Leithead-Todd, even though “that office is currently held by Duane Kanuha.”
Kanuha has not served as planning director since 2016. Although he was recently named deputy director of the department, the current director, who has held the job since December 2016, is Michael Yee.
Kanuha has, however, been involved in talks with ‘Aina Le‘a since his return to the Planning Department. Yee confirmed to Environment Hawai‘i that Kanuha is in regular discussions, on the order of once a week or so, with attorneys for the company.
At the time of the LUC vote to revert the ‘Aina Le‘a land to the Agricultural district in 2011, Kanuha served as a commissioner. He was one of just two members who did not support the majority decision. Still, Kanuha is named as a defendant in the Bridge ‘Aina Le‘a lawsuit in federal court, which is seeking damages from individual commissioners as well as the state.
Yee said he was not aware of Kanuha’s prior involvement in the ‘Aina Le‘a case until Environment Hawai‘i brought it to his attention.
Whatever Kanuha’s involvement, Yee stated that there was no commitment on the part of the county to go along with the proposed plan of ‘Aina Le‘a to move forward on the basis of the 2010 EIS.
‘No Active Litigation’
While the county Planning Department was involved in the talks, not so the Mauna Lani Resort Association.
“It is the MLRA’s position that the … litigation has been completed,” its attorney, Randy Vitousek, wrote in a February 12 reply to the unsecured creditors’ committee request to intervene. “Judgment has been entered and not appealed, and the court’s order tolling development until the applicant complies with [Hawai‘i Revised Statutes chapter 343] is final. There is no ongoing proceeding in which to intervene.”
In any event, “the proposed intervenor is not a proper party, does not meet the requirement for intervention as of right or permissive intervention, and the request to intervene is untimely.”
— Patricia Tummons
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