Late last year, Kona citizens opposed to the 530-acre marina project known as Kona Kai Ola –
which proposes the expansion of Honokohau small boat harbor and the construction of roughly 1,500 hotel and timeshare units on raw coastal land north of Kailua-Kona — sent out frantic emails that the state Board of Land and Natural Resources was planning to decide on December 11 whether to “give the Jacoby marina resort project the go-ahead.”
Nothing could have been further from the truth. In fact, the future of the proposed marina development known as Kona Kai Ola is in limbo.
Both the state Department of Land and Natural Resources and project developer Jacoby Development, Inc., have fallen behind on deadlines set forth in their November 2005 development agreement, and the current version of the project departs from the minimum size and boat slip requirements laid out in the agreement.
Last December, says DLNR project specialist Gavin Chun, the Board of Land and Natural Resources was to have been briefed on the project’s various problems, but Jacoby representatives were not able to attend the meeting. He says the proposed briefing was probably what led people to think that the Land Board was granting Jacoby some kind of approval. As of mid-January, Chun had not rescheduled the briefing and without any word from Jacoby representatives, progress on the project has stalled.
One of the issues Chun planned to raise with the Land Board was the possible amendment of deadlines set forth in the development agreement. Under the agreement, Jacoby was to have submitted a preliminary master development plan to the Land Board or its chair by November 2006, which it did. The Land Board or its chair had three months to either grant its approval or submit objections. If the Land Board failed to meet that deadline, the preliminary MDP would be deemed to be accepted and Jacoby would then have about three years to obtain various entitlements, including various government approvals and Land Board approval of a final development plan, among other things. If it obtained all the necessary entitlements and permits in time, Jacoby would automatically obtain a lease from the Land Board for about 350 acres at Honokohau. If Jacoby failed to meet that deadline, the development agreement would expire.
Despite efforts to gather comments on the plan from the DLNR’s various divisions by early February 2007, then-Land Board chair Peter Young did not submit his department’s objections to the preliminary plan until April 20. Although it would seem that this meant the preliminary MDP was automatically approved, both parties seemed willing to let the deadlines slide. Under the development agreement, Jacoby had two months to respond to the DLNR’s comments, but was given an extension by then-Land Board chair Allan Smith until August 21, 2007.
In reading the DLNR’s comments on the project, it’s easy to see why both parties found it difficult to meet their deadlines. In his April 20 letter to Jacoby, Young attached an 18-page memo from his staff listing more than 140 questions, comments, and objections. Among other things, the memo stated that the proposed basic marina facilities did not include all required facilities, the proposed phasing of the project seemed to depart from the requirements of the development agreement, the extent of the public’s ability to use the marina facilities was unclear, and the company’s boat traffic study indicated that the proposed 45-acre, 800-slip marina would cause boat traffic problems.
With regard to the 1,803 timeshare units proposed for the development, DLNR staff wrote, “It is not clear how much of an unmet demand for timeshares exists in the Kona market and whether the Kona market can absorb the number of timeshare developments being proposed.”
On August 21, Jacoby submitted a modified MDP (along with master covenants, conditions, and restrictions and a core infrastructure plan) aimed at addressing comments from the DLNR and others. The new plan introduced a very different project based on the preferred alternative identified in Jacoby’s final environmental impact statement for the project. The FEIS recommended the adoption of its Alternative 1, which reduced the 45-acre, 800-slip marina required under the development agreement to a 25-acre, 400-slip marina. In response to community concerns, Jacoby also reduced the 1,803 timeshare units and 700 hotel units initially proposed to 1,100 timeshare units and 400 hotel rooms.
The downsizing did not reduce the DLNR’s concerns, and on October 19, Land Board chair Laura Thielen responded to the modified plan, attaching yet another long memo – 17 pages, this time – from the Land Division and Division of Boating and Ocean Recreation.
The memo repeated concerns that the proposed phasing of the project was not in line with the development agreement. It also weighed in on an ongoing dispute between Jacoby and the Hawai`i County Council and Planning Department over whether a General Plan amendment would be required. The county’s Planning Department contends that the scale of the project requires a portion of the DLNR land to be reclassified to a Resort designation, something which it has recommended against. Jacoby representatives, however, have stated that the project could be built under the current designation, Urban Expansion, which allows for the building of hotels and timeshares.
“The development agreement contemplated that a County of Hawai`i General Plan amendment would be required and obtained to allow rezoning and SMA [Special Management Area] approvals that are required for development of the project. Subsequent to the execution of the development agreement, a General Plan amendment [changing the Open designation of some lands to Urban Expansion] was approved by the Hawai`i County Council. However, the County Planning Department has indicated the project is not consistent with the amended General Plan and that county rezoning and SMA approvals cannot be obtained without a further General Plan amendment,” the memo stated.
Based on the county’s position, the DLNR’s Land Division wrote that Jacoby’s list of discretionary entitlements and permits “does not include all required entitlements/permits, including the County of Hawai`i General Plan amendment.” The division asked Jacoby to confirm whether the company planned to seek another General Plan amendment, “and if not, explain why no such amendment is required and how JDI can obtain the required zoning and SMA approvals in light of the Planning Department’s position.”
The Land Division also pointed out that Jacoby, which is required to pay the DLNR $101,500 a year in development fees, was delinquent in its payments. At the time, Jacoby owed the state $57,040, which Chun says was paid late last year. To date, Jacoby has received two notices of default in the last year.
In its comments, DOBOR stated that traffic congestion from the 400-slip marina would result in unsafe conditions unless the harbor channel was widened or an alternative channel was constructed. Although Jacoby argued that widening the channel would allow more waves to penetration the harbor, DOBOR wrote that that conclusion was not supported by any data.
By mid-January, the DLNR had received no response from Jacoby, and at this point, it is unclear how or whether the deadlines in the development agreement are still in effect. Despite the fact that the development agreement provides for automatic approval of the preliminary MDP if the Land Board fails (as it has) to meet any of its deadlines, Chun says that no approval of a preliminary MDP has been given. The agreement allows Jacoby three chances to get Land Board approval of its preliminary MDP before the agreement is terminated, and the company has already used up two.
Jacoby representative David Tarnas said he was still awaiting clarification on the issues from his bosses at press time. The DLNR’s Chun says that amending the development agreement was one of the things that Jacoby wants to discuss with the Land Board. Without amendment, it’s unclear how the project can proceed.
A September 21 letter to Chun from Jacoby consultant Oceanit states, “While it can be concluded that the 25-acre marina in Alternative 1 would be the preferred size, the DLNR agreement establishes the size of the marina at 45 acres and 800 slips. An amendment to the DLNR agreement is required in order to allow Alternative 1 to proceed. Hence, selection of Alternative 1 is an unresolved issue at this time.”
— Teresa Dawson
Volume 18, Number 8 February 2008
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