The state Land Use Commission does not seem to be in any rush to force Kuilima Resort Company to show why 236 acres of Urban land on the North Shore of O`ahu should not revert to the Agricultural District. Last month, the LUC deferred for the second time action on an April 2008 request by Defend O`ahu Coalition, Keep the North Shore Country, and the Sierra Club, Hawai`i Chapter for an order that the company be required to show cause why the land, redistricted in 1986, should remain in the Urban District when most of the conditions placed on that redistricting have not been fully met.
More than 20 years ago, the City and County of Honolulu and the LUC entered into agreements with KRC predecessor Kuilima Development Company that would allow it to expand its modest Turtle Bay resort to a 3,500-unit master-planned resort community, complete with employee housing, a shopping village, five new hotels, and nearly 100 acres of resort condominiums. None of these have been built and the plan seemed to have been all but forgotten by the general public until KRC sought city approval for a massive subdivision in 2005.
Since then, KRC’s efforts to expand the resort have been fought in court and before various government agencies by the coalition of community groups whose aim is to “Keep the Country Country,” as their now ubiquitous bumper sticker says. At the same time, many resort employees who live nearby and want to see more jobs in the community have countered: What’s so great about keeping the North Shore undeveloped if your family and friends have to move away to find jobs?
Should the LUC choose to put the 236 acres back into the Agricultural District, KRC manager Stanford Carr says the future of the entire 860-acre project, which would stretch from Kuilima to Kawela Bay, would be jeopardized. “More importantly, what message would that send to the world on vested rights?” he asked the commission at its meeting last month.
During the LUC’s February meeting in Honolulu, attorneys for the coalition, the developer and the state Office of Planning (OP) reiterated many of the arguments made last year about the case, as did more than two dozen members of the public – opponents identifiable by their green shirts, with supporters, mostly resort employees, outfitted in white. While the LUC took no action on the matter, it became clear during discussion that a few of the commissioners are considering following the OP’s recommendation to add performance deadlines to the 1986 LUC Decision and Order.
A Progress Report
The first deferral on the coalition’s motion came last July and was made, commissioners said, so that they could discuss legal issues with the deputy attorney general assigned to the commission. At the same time, though, it ordered KRC to provide a status report on the project. KRC submitted reports in August, November and February on efforts over the years to comply with the nine conditions in the D&O. Those conditions are: 1) build hotels on adjacent property already in the Urban District; 2) construct employee housing; 3) improve Kamehameha Highway; 4) develop water sources and infrastructure; 5) help improve the adjacent Punaho`olapa Marsh wildlife preserve; 6) protect archeological sites; 7) provide public access and parking and a city park; 8) build a sewage treatment plant; and 9) implement a monitoring program for coastal resources.
The reports revealed the obvious – that no hotels or employee housing have been built – but included a long list of other improvements and efforts that KRC says has cost many millions of dollars: a wastewater treatment plant, a well facility, a sewer force main, a water line, the 18-hole Palmer Golf Course and associated maintenance facility, consolidation and resubdivision approvals, employee training efforts, expansion of the Fazio Golf Course, $100 million in improvements to the existing Turtle Bay Hotel and Ocean Villas, acceptance by the city Department of Planning and Permitting of a landscape master plan, and marsh improvements, among other things.
A summary attached to the November report notes that the 113-acre Palmer golf course and the 2.7-acre portion of Punaho`olapa Marsh that lies within the reclassified area make up about 49 percent of the 236-acre property.
The most recent report, which Carr submitted February 5, details KRC’s ongoing efforts. Although KRC received tentative subdivision approval from the Department of Planning and Permitting in September 2006, the company has not yet been able to obtain final approval from the state Department of Transportation of its Traffic Impact Analysis Report (TIAR), needed for final subdivision approval.
“This is the only remaining outstanding item for final subdivision approval as far as Petitioner is aware,” Carr wrote. He added that he planned to send a revised TIAR to the DOT before February 13 and expected it would be approved in three months.
Once the subdivision goes through, development of the hotel and condominium sites will become feasible “as they can be considered individually for purposes of financing and development investment. Individual parcel development will be by way of direct development, joint development with development partners, or for-sale development parcels,” Carr wrote.
Carr added that he expects that $5 million in improvements to Kuilima Drive, the resort’s main access road, will be completed in September and that groundbreaking on a park at Kawela Bay will begin by the end of the year.
Legal Arguments
When Kuilima Development Company was making its case for redistricting before the LUC in the mid-1980s, it made several statements regarding projected construction deadlines. According to the LUC’s Findings of Fact, KRC stated that 1,000 condominiums were going to be completed by 1991, 315 of which were going to be substantially complete within five years of the redistricting, and the entire project would be completed by the end of 1996.
Last year, the coalition pointed out in its filings that the LUC’s administrative rules in effect when the Decision and Order was issued required substantial progress to be made on the expansion within “a period specified by the Commission not to exceed five years.” At the LUC’s February meeting, the coalition’s attorney, Gregory Kugle, added that the LUC’s current rules state that whenever the commission has a reason to believe there has been a failure to perform according to conditions or in conformance with “the representations or commitments made by the petitioner,” the LUC must issue an order to show cause why the land should not revert to its original classification.
Kugle said that KRC can still only estimate when its project will be completed. “What are we talking about – ten or twenty years?” he asked, adding that the resort and its attorneys “gloss over” nearly 15 years (from about 1991 to about 2005) where nothing was done to advance the project.
In response, KRC attorney Sharon Lovejoy restated previous arguments that the Decision and Order contains no clear conditions regarding when the expansion or its components were to be completed and that all of the representations made by the developer were couched in terms like “we anticipate” or “we intend” or “we propose.”
“The only way you can go forward with an order to show cause is if you find there was a violation,” she said.
She also argued that very important parts of the project have advanced, although they may not be visible, and that of the entire project area, only one third of it, 286 acres, is to be developed with buildings. Because the last discretionary permit for the expansion has already been issued, “our position is that the rights are vested,” Lovejoy said.
As he stated in briefs filed last year, deputy Attorney General Bryan Yee, representing the Office of Planning, said the D&O lacked binding timeframes. The OP, he said, takes the position that the order was flawed in that it failed to establish a deadline and give fair warning to the developer.
“The Office of Planning believes the LUC cannot revert the property, so an order to show cause hearing is not required,” he said.
To this, Kugle, the coalition attorney, responded: “Since when is it not fair warning to hold someone to their word? The commission made a decision based on representations….Everybody seems to be ignoring the rule that applies today…. They’ve [KRC and the OP] both lost sight of that. You can hold them to their representations.”
Yee answered that despite current standards for an order to show cause, provisions regarding representations did not exist at the time the Decision and Order was issued.
“We have to acknowledge that the decision back then should have had a deadline and that’s the flaw. We could correct the flaw, but we have to acknowledge the flaw,” Yee said.
Moving Forward
Given KRC’s current efforts to comply with the D&O, LUC vice-chair Ransom Piltz said, “to revert this back to zero doesn’t make much sense.” However, he asked Carr, if the commission decided to go along with the Office of Planning’s suggestion and correct the order, what kind of time period for affordable housing would be reasonable.
LUC chair Duane Kanuha and commissioner Normand Lezy also pressed Carr about timelines for the expansion.
“We do need to have concrete timelines. Not date-specific, but an amount of time to comply with the Decision and Order,” Lezy said.
At first, Carr said only that he was working diligently on a “daily and weekly basis” to meet the conditions of the decision and order. He also said that when there is pending litigation, as there is in this case, it casts a cloud over his ability to move forward.
Carr then referred to a timeline included in a July 24, 2008 Turtle Bay Resort Master Plan Revised Traffic Impact Analysis Report Update for the state Department of Transportation. At the earliest, the first hotel, the one to be located east of the existing Ocean Villas along Kuilima Bay, would open in 2011, and the last one, one of two along Kawela Bay, would open in 2015. Construction on the first resort condominium parcel would be completed in 2013 and the last would be done in 2018, the report states. (All of the condominium parcels are located on the 236 acres that are the subject of the coalition’s request.)
In a February 5 letter to the LUC, Carr notes that this development schedule includes “anticipated earliest possible completion dates, but those dates are merely estimates based on guesses as to time frames and assumptions regarding governmental approvals, economic conditions, demand of the project, and impacts of challenges to the project.”
When Lezy asked how long it would take to complete the affordable housing component of the project, Carr said it would take at least ten years “if it was my property,” adding that he did not want to commit to a time frame on behalf of the owners of the property. Carr agreed with Lezy that it would take more than ten years to fully comply with the Decision and Order and said the rate of completion would depend on several things, including “where the world is.”
When it came time to vote, chair Kanuha said, “I think there are several issues of concern. One, whether modification through the order to show cause is an option, and two, we are also inclined to consult with counsel a little more on issues of standing,” referring to an argument Lovejoy made that the community groups do not have standing to be a party to the case.
Kanuha suggested that the commission defer action “pending consultation on legal issues,” and the commission unanimously agreed.
Meanwhile, at the Capitol
After nearly all members of the public had left the room, OP director Abbey Mayer asked the commission for permission to testify before the state Legislature in favor House Bill 1055.
The bill, introduced at the request of the Lingle administration, seeks to put an end to cases, like Kuilima, where lands reclassified by the LUC sit undeveloped for many years.
“In some cases,” the bill states, “conditions have changed so significantly that the development proposal as originally conceived may warrant review and reconsideration. Premature urban or rural reclassification may encourage speculative land banking and creates uncertainty in the build out of planned urban or rural infrastructure.”
The bill would add a new section to Chapter 205 of Hawai`i Revised Statutes that would require land reclassified to accommodate a proposed development to automatically revert to its original classification “absent substantial commencement of use of the land within ten years.” The LUC would be tasked with defining what constitutes “substantial commencement”in each case.
The bill adds that the LUC would be able to grant one extension of up to five years and that the reversion condition would not apply to petitions initiated by the state or a county for a regional boundary amendment based on a regional boundary review or petitions accepted by the commission before the bill is signed by the governor.
(For more on the Kuilima development, see the June 2006 and September 2008 issues of Environment Hawai`i, which are available on our website, [url=http://www.environment-hawaii.org.)]www.environment-hawaii.org.)[/url]
Hawaiian Memorial Park
At its February meeting, the LUC granted a group of Kane`ohe residents permission to intervene in a petition by Hawaiian Memorial Life Plans Ltd. to reclassify 56.6 acres in the Conservation District to the Urban District. Hawaiian Memorial plans to use the land to expand its cemetery and to develop a 20-lot residential subdivision on the hilltop north of Kapa`a Quarry.
The LUC accepted the company’s final environmental impact statement on January 14 and two weeks later, Grant Yoshimori, Richard and Juliane McCreedy, Lianne Ching, Mavis Suda, Ernest and Bettye Harris, Jessie Reavis, and a group called Hui O Pikoiloa filed a petition to intervene.
At the February meeting, Yoshimori testified on behalf of his fellow petitioners that their concerns involved the project’s potential impacts on native gathering, access, flooding, rock slides, natural resources, traffic, the loss of Conservation District land, viewplanes, microclimates, criminal activity, historic sites and property values.
Attorney William Yuen, representing Hawaiian Memorial, opposed the group’s petition, while the city Department of Planning and Permitting and the state Office of Planning did not.
Because the petition to intervene included so many people and because Hui O Pikoiloa is not an incorporated group, the commission decided to allow only the individuals to intervene on the condition that Yoshimori must speak on their behalf on all matters before the LUC. The LUC is expected to hold a hearing on the boundary amendment petition early this month.
— Teresa Dawson
Volume 19, Number 9 March 2009
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