Hawai`i County Board Deals Setback To Stalled Bridge Aina Le`a Project

The long-stalled development of more than a thousand acres near Puako, on the island of Hawai`i, was dealt a setback by the Hawai`i County Planning Board of Appeals at its meeting last month. The owner of the land, Bridge Puako, LLC, had asked the board to overturn county Planning Director Chris Yuen’s denial of a “non-significant” zone change application it said was needed to develop affordable housing on one corner of the parcel.

Construction of affordable housing is a condition of a Land Use Commission redistricting decision dating back to 1989, when then-owner Signal Puako planned to build six golf course “villages” with 2,658 dwellings designed mainly for workers at Kohala and Kona resorts. A Japanese company, Nansay Hawai`i, took over the project in 1990 with plans to market to a more up-scale clientele. The LUC and the County of Hawai`i continued to require an affordable housing component, however, although it was attenuated over the years to the point where, under an order of the LUC in 2006, Bridge is now obligated to build just 385 units. All are to be completed with certificates of occupancy in hand by November 17, 2010.

When the Land Use Commission order was made, it was based on a master plan map showing the affordable housing tucked into the southeast corner of the 1,060-acre block of land that had been placed into the state Urban district. That map, however, was at odds with a more detailed zoning map that had been approved by the Hawai`i County Council. On the county zoning map, the area proposed now for affordable multi-family housing (apartment blocks) is designated for minimum five-acre agricultural lots.

And so, last spring, Sidney Fuke, a planning consultant to Bridge Puako (also known as Bridge Aina Le`a), filed a “non-significant zoning change request” for four parcels within the Urban district having a total area of roughly 45 acres. Two of the parcels (zoned Ag-5a by the county) would see increased density, while the remaining two would see density reduced. Overall density for the total acreage would be slightly reduced, Fuke said. The changes were needed “to allow for the development of multi-family, affordable housing by maximizing the use of the land as it relates to the existing topography,” Fuke said in the application.

Yuen, the planning director, denied the request on May 22. He noted that a recently passed county ordinance that gave the director authority to “administratively grant any non-significant zoning change” also gave the director authority to deny such changes. “The zoning designations for this area were made by the County Council based upon representations about the development made at that time by the owner, and the detailed metes and bounds zoning was adopted by the council based upon those representations and plans submitted by the owner,” Yuen wrote. “Given that, it would be better public policy for a change to the zoning boundaries of 22 acres – a large land area – to be made by the county council, not administratively by the planning director.”

Yuen took note of the “stated reason” for the proposed change – “to facilitate construction of affordable housing.” Yet, he added, this “is not a convincing reason.” In 1996, the county had reduced the affordable housing requirement from 60 percent of the total units to 20 percent, he pointed out. “It should be easier, not harder, to fulfill the project’s affordable housing requirements,” he concluded, “and fitting the construction of affordable housing into the zoning is something that the owner should have anticipated doing some time ago.”

Bridge Aina Le`a appealed. The 22.5 acres proposed for rezoning at increased density amount to “approximately three-fourths of one percent of the total Aina Lea development owned by the petitioner,” wrote Bridge attorney Randall Sakumoto, referring to all of the roughly 3,000 acres owned by the company in the Puako area. Of the 1,060 acres in the Urban district, the 22.5 acres amount to just 5 percent of the total area, he noted.

Yuen’s decision, moreover, was not in accord with the county code as it existed when the non-significant zoning amendment application was filed, Sakumoto wrote. Until it was changed in April, the code allowed the planning director to “administratively grant any non-significant zoning change,” so long as it did “not result in a net increase in the density allowed” or was “the lesser of a five percent or one acre increase or decrease in the area of any zoning district(s).”

The appeal noted four approvals of other non-significant zoning change applications Yuen had approved in arguing that Yuen’s decision in the Puako case was “arbitrary and capricious.”

When the matter came before the Appeals Board, Yuen was represented by deputy corporation counsel Amy Self. “This is a situation where the director, by language in the [county] code, has been given discretion whether to grant a non-significant zoning change or not,” Self told the board. “The County Council … did provide criteria [the applicant] has to meet, but the important thing to keep in mind is that when the Council provides language that indicates the planning director has discretion, which is indicated by the word may and not the word shall, it is left up to the director. Unless that decision is unreasonable or conflicts or contradicts the purpose of the ordinance, then it is up to his discretion.”

In testimony, Yuen pointed out that over the years he has served as planning director, he had grown more uncomfortable with the broad leeway granted in county law for the award of so-called non-significant zoning changes. In one case that pre-dated his tenure, he noted that one “non-significant” change had involved moving a resort hotel some two and a half miles from the site originally approved in the council’s rezoning of a piece of property. His discomfort had caused him to propose the new, more restrictive law, passed last April, scaling down the maximum acreage that can be categorized as “non-significant.” Still, he told the Appeals Board, the decision to deny the application of Bridge Puako was made in conformance with the law existing at the time the application was made.

As further justification, Yuen noted that the area proposed for multi-family affordable housing had originally been designated for less dense development because of a floodway running through the land. “So this was set aside and not zoned to be in residential use, it was kept in agricultural use” when the County Council approved the rezoning, Yuen said.

Fuke testified that although the director is given discretion in the county code to approve non-significant zoning changes so long as they fall within criteria set by the code and implementing rules, it was “a reach” to think that a director could deny a change if it did fall within those criteria.

Yuen rejected that. “Let’s take the flooding,” he said. “It doesn’t say in the rules that if you’re trying to move the zoning from being open, in a flood plain, and you swap it so you have housing in a flood plain – it doesn’t say in Rule 8 that you shouldn’t do that, but that’s why the director has discretion. … You use your discretion not to do something dumb – not to put multi-family zoning in a flood plain.”

Yuen was also somewhat dismissive of the claims of Bridge Capital that it needed to have the county approval quickly in order to meet their deadline of November 2010 for affordable housing. He noted that when Bridge sought relief from the high affordable housing requirement, the LUC was skeptical, “but [Bridge] told the LUC that if they had this approval they were ready to go and could issue a contract for construction for affordable housing.” (The actual words of Michael Bowen, representing Cole Capitol/Westwood Development Group, a now-gone development partner of Bridge, were: “If this condition is amended, Westwood is prepared to begin development of this project immediately in conjunction with [Bridge].” No hint was given of any need to tweak the county zoning ordinance.)

Further casting doubt on the urgency, Yuen noted, was the fact that the original appeal was to have been heard in September, but was continued until November at the request of Bridge – and Bridge sought to delay even that, but the county refused to go along. “It doesn’t seem like they’re in a hurry to get a decision on this,” he said.

As an alternative to rezoning, Yuen had suggested in his denial letter that the owner ask the council for “administrative flexibility through ‘project district’ zoning.”

Fuke noted that Bridge had applied for this more than a year ago, but was informed it would need to prepare an environmental impact statement before the Planning Department could process it. For that reason, Fuke said, Bridge decided to seek the non-significant zoning change.

Yuen pointed out that had the developer sought full County Council approval of the zoning change, it could have been done by now.

In its annual progress report to the LUC filed in October, Bridge Aina Le`a reported that work was continuing on a draft environmental impact statement needed for the project district zoning. Botanical and faunal surveys were complete, as were a burial treatment plan and a cultural impact assessment. Other reports that would need to be included in the EIS, including engineering, drainage, socio-economic and noise studies, were still awaiting completion, the report said. “It is presently anticipated that all studies … will be completed by the end of the year and the draft EIS will be submitted for review and acceptance by the Planning Department by sometime in February 2009.”

The March 2008 edition of Environment Hawai`i contained several articles describing the status of the Bridge Aina Le`a development at Puako. They are available online at our website: [url=http://www.environment-hawaii.org.]www.environment-hawaii.org.[/url]

With all the changes that have been made to a development planned for Mahukona in the two decades since it first saw light, the confusion that surrounds current plans may be altogether understandable. “It’s so convoluted, it’s crazy,” said Toni Withington, representative of a community group that has been following the ever-changing project on the historic Kohala coast of the Big Island.

From a proposal calling for an 18-hole golf course, 240-room hotel, up to 150 one-acre house lots, tennis courts, and other resort amenities, the development has been significantly downscaled. Now, representatives of landowner Kohala Preserve Conservation Trust (formerly Surety Kohala, and before that, Chalon) say that they’re foregoing the golf course entirely. The hotel has dwarfed into a “temporary” complex of three duplex cabins. And last spring, KPCT asked the Hawai`i County Planning Department for approval of a consolidation-resubdivision request that would establish 48 house lots ranging in size from just over an acre to nearly 80 acres.

The original plat map was submitted in March. The Planning Department raised objections almost immediately, and over the next two months, KPCT submitted revisions. In July, then-Planning Director Chris Yuen deferred a decision on the subdivision request, awaiting comment from agencies including the state Historic Preservation Division and Department of Health, since the original conditions of approval of the development required actions to satisfy their concerns.

But for Kamakani O Kohala Ohana (KAKO`O), a citizens’ group concerned with protecting the aesthetic and natural resources of North Kohala, the county should have rejected the latest plans and voided the entire project altogether. The deadline for completion of the project expired on July 14, 2008, it argues. Despite “a recent flurry of marginal activity, KPCT is not even at the starting gate 18 years after the issuance of the Change of Zone (COZ) and Special Management Area (SMA) Permit.”

“KPCT has an obligation to perform all conditions of the original ordinance and permits, not to amend the agreement 18 years later to meet a scaled-back, phased project,” KAKO`O spokeswoman Withington wrote in a letter to Yuen last July. Her letter, which runs to 10 pages, details the many ways in which KPCT has not lived up to the commitments and conditions set forth in the original county approvals. “KPCT has been segmenting the project into small phased chunks so as to avoid the public review processes mandated by county and state statutes,” Withington wrote. “Many of the required plans and documents are missing from pertinent agencies, and many of the agencies are unaware of material changes to the development plan.”

In August, KPCT petitioned the county Board of Appeals, asking it to overturn Yuen’s deferral. By law, the county had 45 days within which to deny or defer approval of the subdivision, wrote KPCT attorney Randall Sakumoto of the Honolulu law firm of McCorriston Miller Mukai MacKinnon. That 45-day period expired June 21, he continued. The Board of Appeals was asked to invalidate the deferral decision and confirm that the subdivision map “has been automatically approved.”

Kamakani O Kohala Ohana petitioned the Board of Appeals to be allowed to intervene in the case. KPCT objected, arguing that the decision under appeal was limited to the subdivision request. “No decision relating to the underlying merit of the Mahukona project, or to any zoning permit, SMA permit, or other entitlement relating to the Mahukona project has been appealed,” Sakumoto wrote. “Therefore, the board has no authority to address any of the issues raised by KAKO`O.”

KAKO`O then filed an “objection to issuance of an automatic approval … and demand for automatic disapproval of subdivision application” – a bill of particulars, which, Withington told Environment Hawai`i, didn’t begin to touch on all the problems related to the landowners’ fulfillment of obligations under the zoning ordinance, special management permit, and other approvals, but which still came to more than 20 pages.

Full House

When the Board of Appeals met to consider the petitions on November 14, the small Kona conference room was crowded with people from Kohala, eager to testify about their concerns over the owner and the planned development. Residents pointed out the deteriorating amenities at Mahukona Park, where improvements were to be put in place by KPCT as a condition of development. Native Hawaiians were worried about the protection of the many historic sites in the area, while hikers voiced their concern over restricted coastal access.

But when the time came for the developer to present its case, a stunned silence fell over the crowd. Attorney Joel Kam, representing KPCT, told the board: “As you know, the parties have been involved in discussions, trying to work out differences that exist between my client and the department. We ask for another continuance until the next meeting of the board. We understand that this is inconvenient for the proposed intervenors. If the board is so inclined, we would like to ask that the board allow the intervenors to say what they have to say but defer a decision on the application to intervene until we find out whether it’s really necessary.”

The county deputy corporation counsel representing the Planning Department, Amy Self, agreed. “We have no objections. The parties are working hard to settle this…. We are agreeable to continuing this so the parties do have a chance to complete settlement negotiations.”

Board Chairman Joel Gimpel exercised his authority to postpone the hearing, without recourse to a vote of the board members. “I’m going to defer this until January 16,” he said, to the obvious disappointment of the Kohala residents. At that meeting, if the county and KPCT still had not settled their differences, “we will consider the petition to intervene,” he said. He did allow Withington to make a statement on her group’s petition to intervene.

“I think the people who talked to you earlier have indicated the public in Kohala has had no opportunity to participate in any way in this resort since November 8, 1993,” Withington said. “We’ve been aced out of everything. We take this opportunity to talk to the county because we think the county should know Kohala is upset … about being aced out, about public access, use of the Conservation District and shoreline, improvements for the park… These are the emotional aspects. But our petition contains a very specific procedural account of what has gone on in this case. Our legal arguments … are clear and straightforward…. Our group believes the law requires you to determine the preliminary plat was submitted on March 4 and the planning director responded appropriately… I don’t see how negotiations between the developer and director can change those facts.”

“The law requires the planning director to disapprove subdivision,” Withington continued, “because the applicant has not complied with conditions of zoning [set by the County Council] and the Special Management Area permit issued to it. We very carefully document at least five or six areas where this has happened. There are other areas where conditions have not been met as well. We think perhaps the planning director erred in deferring when the law says he should have disapproved.”

Gimpel offered Withington little hope that the petition to intervene would be granted. “The jurisdiction of this board is limited to final decisions of the director,” he said. “As I view it, the issue before us right now is whether director’s final decision to defer was proper under the law. If he chooses to enter into a settlement with the petitioner regarding the subdivision application, then the matter is concluded.”

— Patricia Tummons

Volume 19, Number 6 December 2008