BOARD TALK: Owners of Sunset Beach Home Contest Proposed Fine, Sand Burrito Removal

One would think home buyers might want to conduct due diligence investigations before they close on a home along Sunset Beach that looks as though it might not survive the winter swells without some fortification.

One would also think the real estate agent for the seller would provide information, before the sale closed, to the buyers’ agent on any government authorizations for the shoreline protection structure fronting the property, in this case, a single, temporary sandbag burrito.

According to documents submitted to the state Department of Land and Natural Resources, that doesn’t appear to have happened with the as-is sale of a 1,600 square foot home, where new owners Gary and Cynthia Stanley had a contractor install additional burritos.

The Stanleys are the most recent property owners in the area to face fines for allegedly violating state Conservation District rules by installing structures on the beach to keep their house from being dragged into the sea.

In a September 14 letter to Department of Land and Natural Resources (DLNR) director Suzanne Case, the Stanleys admitted to being made aware of the property’s serious erosion problems before they bought it, but claimed they were led to believe that they had a permit to add to the sand burrito that the department had allowed the previous owner to install earlier this year.

They were wrong.

On November 8, the DLNR’s Office of Conservation and Coastal Lands recommended that the Board of Land and Natural Resources fine the couple $2,000 for unauthorized construction and charge them $1,000 in administrative costs. The office also recommended that the Stanleys remove the structure to avoid erosion around the ends of the structure (called flanking) and that the board impose additional fines of $15,000 for every day the fines were unpaid or the structure remained in place.

Because the couple’s attorney, Greg Kugle, requested a contested case hearing on the alleged violation and proposed fines, the board did not discuss or vote on the matter at its November meeting. By requesting a contested case hearing, the Stanleys have likely bought themselves enough time to keep their sand burritos in place through the winter surf season, when waves on O‘ahu’s North Shore are the highest.

Hot Potato

“Over the past several years, the department, through the OCCL, has worked with landowners in the subject area to manage severe erosion. Dozens of authorizations for temporary soft erosion abatement have been granted (more than 40) and sand pushing requests (to artificially recreate the storm berm) have become seasonally recurrent,” the OCCL’s report to the Land Board states.

The OCCL has been overseeing erosion control measures fronting the Stanleys’ home for nearly six years, beginning with a January 2014 emergency authorization for a sand push. The following year, a previous owner, Alice Lunt, requested and received permission from the OCCL for another sand push in 2015 for her property as well as several neighboring properties on Ke Nui Road.

When Gary Karrass bought Lunt’s property in February 2018 for $2 million, the sales pitch on HiCentral.com called it a “prime ocean/beachfront home” that boasted fabulous views of the “World Famous” Sunset Beach to Ka‘ena Point.

“Watch pro surfers & whales during the winter months & turtles & monk seals during the summer months. … After a day frolicking in the sun, sand, & surf, enjoy the wonderful outside hot/cold shower. Possibility of adding second ADU home. This home has a LEGAL VACATION RENTAL LICENSE. BEST DEAL FROM SUNSET TO PIPELINE!!!!!” the site stated. (ADU stands for accessory dwelling unit.)

In March 2018, Karrass joined five neighbors in agreeing to the terms of another sand push. But by 2019, in the midst of remodeling his new investment property, he wanted something more substantive. On February 7, developer Jillian Spaak was given permission from OCCL and Case to install a single, temporary ballast tube wrapped in a tarp (a.k.a. sand burrito) at the base of a steep escarpment that had formed below Karrass’s home.

“If you proceed, you are proceeding at your own risk. We will come take a look after the swell and determine what happens next (e.g. removal/further permitting, etc.),” OCCL administrator Sam Lemmo wrote in an email to Spaak.

In her email that same day to Spaak and Lemmo, Case asked the OCCL to “keep an eye on the potential flanking issue, which may result in the temporary action authorized being revoked, if necessary.”

With the burrito in place, Karrass (author of the 1987 book, Negotiate to Close: How to Make More Successful Deals) listed the home for sale in June for $2.688 million and sold it in late August to the Stanleys for $2.55 million. The sale was recorded in the Bureau of Conveyances on September 5.

Karrass’s real estate listing on HiCentral. com had remarked: “Transferrable LEGAL VACATION RENTAL PERMIT! One of only a very few homes with a legal vacation permit on the North Shore. Exceptional investment home! This stylish house offers all of the amenities of an upscale hotel on the perfect stretch of beach with the best views.”

The Stanleys, who own a home in Kailua, were experienced in managing vacation rentals. Gary Stanley has an Airbnb listing for a six-bedroom mountain chateau in Colorado Springs.

‘Quite a Shock’

According to their September 14 letter to Case, the Stanleys conducted some due diligence before buying the Sunset Beach house, which sits on a lot of just under 5,000 square feet. They had been informed of the property’s severe erosion issues and had a structural engineer evaluate the home. The engineer, Horst Brandes, “informed us that this house was experiencing extreme erosion, was one of the worst he had seen, and that it was ‘falling into the ocean.’ He also pointed out that most of our immediate neighbors had geotextile blanket and tubing or a seawall grandfathered in like our immediate next door neighbor.”

Also before the purchase, the Stanleys said, they spoke with contractor Buddy Sheppard, who installed the initial sand burrito for Karrass and the extra sand burritos for them. They said Sheppard had “informed us that we had a permit that was good for three years regarding the geotextile blanket and tubes to mitigate any erosion issues and to fix the steep drop off. He advised that the current system needed to be fixed and suggested adding additional tubes upon the failing current damaged system and to add tubes up to a 45 degree angle up to our deck where there is a steep drop off. Based on this, we bought the property.”

Even though Sheppard was the one who told the Stanleys that there was a permit for additional work, he apparently only asked to see the permit after starting his work for them, according to their account. It was then that the couple discovered there was no permit, they wrote.

They attached a September 13 email from Scott Langford of Fahrni Realty, Inc., to Jerry Adamany, the real estate agent for the Stanleys. In that email, Langford included the February 7 emails Case and Lemmo sent to Jillian Spaak regarding the temporary sand burrito.

In their email to Case the next day, the Stanleys apologized for the unauthorized work and asked for permission to install a line of burritos up the scarp as Sheppard had recommended.

“[T]here is already significant water erosion up to the deck. … I note that the current fence is now leaning due to the erosion and that this fence used to go out about 4-6 feet further but was destroyed due to erosion issues,’ they wrote.

The Stanleys’ deed states that they agreed that the property was being conveyed in as-is condition, “WITHOUT WARRANTY OR REPRESENTATIONS, EXPRESSED OR IMPLIED.” Even so, they wrote in their letter to Case, “It came as quite a shock that we did not have the proper permit as it was represented. Knowing that, we certainly would not have bought the property and most certainly would not have begun work without the proper permits. …

“We have six children (kind of snuck up on us :)) and this is where we want to raise our children. We want this to be a safe place (severe drop off on deck) and also structurally sound. We thought we were doing the right and sensible thing for our family and our home,” they wrote. (Currently, the Stanleys have listed the 1,600-square foot, 3-bedroom, 2-bathroom home on Airbnb for about $800 a night.)

No Dice

Rather than granting the Stanleys permission to continue stacking burritos, the DLNR issued a notice of alleged violation and order on September 18 after an OCCL inspection. The notice recommended that they remove all unauthorized structures. Otherwise the matter would be referred to the Land Board.

When the matter was brought to the Land Board on November 8, the staff report from OCCL stated, “while soft measures are currently mildly effective at protecting beachfront development, it is understood that sea level rise will render these temporary measures increasingly ineffective. For this reason, the OCCL encourages beachfront homeowners living on chronically eroding shorelines to take proactive measures, such as decreasing their building footprint and relocating structures to the extreme landward extent of their property boundaries.”

In the Stanleys’ case, the agency stated it was particularly concerned about flanking to the west of the structure and that it was “potentially damaging to the beach and neighboring residences.”

“[I]t appears that the Stanleys did not perform their due diligence in ensuring that the information that they were given regarding permitting was correct. … This case exemplifies brazen disregard for Hawaii Administrative Rules, which are intended to promote proper stewardship of Hawai‘i’s natural resources. In recent years, such disregard has become increasingly prevalent along Oahu’s North Shore. … [L]andowners are actively being urged to install these structures by contractors profiting form their installation. It is our belief that this case exemplifies such unauthorized activity,” the report stated.

The Stanleys’ contested case petition argues that removing the burritos will “create a physical taking of their real property interests.”

— Teresa Dawson