The term of Honolulu attorney Gary Okuda on the state Land Use Commission has ended. But even as his time on the commission was running out, his frustration with developers who do everything but develop seems to have increased, even as the commission’s ability to enforce conditions has been hobbled.
It was on full display at the February meeting of the commission, which was conducting a status review of a project proposed some four decades ago for the Kona area of Holualoa. It was half-built, with most of the planned market-rate homes being developed. Things stalled. The land changed hands. And now the new (since 2015) owners are trying to complete the project, though in the years since initial approvals were granted by Hawaiʻi County, circumstances and community sentiment have dramatically changed.
After hearing testimony from dozens of residents voicing their frustration with traffic, drainage, and concerns over claimed cultural and historic sites, Okuda expressed his frustration with both the slow pace of development as well as the commission’s limited powers of enforcement.
Referring to the Supreme Court’s decision in the ʻAina Leʻa case, Okuda said: “DW ʻAina Leʻa says we have no power to revert once substantial commencement is set forth. And that makes sense. If a piece of property is better suited for urban development, then, yeah, it should be urban.
“But the court also warned about the fact that the property that has been given these entitlements, rezoning – if improvements or promises are not kept to the community, what that allows is land speculation.
“In other words, people make money off of the fact that there’s an upzoning from Agricultural to Urban or Conservation to Urban. And they don’t even have to do anything for the community just to make money off the property.
“The frustration I have – we’re seeing these dockets where all these promises have been made, 20, 30, 40 years ago. And you see transfers of title of property. I don’t see any evidence that these were charitable transfers. It looks like there’s consideration passing hands, and we’re faced with a housing situation that just gets worse and worse and worse.
“So I’m trying to see whether or not, in addition to, or as a supplement to reversion, which might not be the most appropriate measure, maybe the thing to do is to force landowners to live up to their promises by means of a specific performance lawsuit. And if they can’t comply with the court order, maybe we should have contempt of court proceedings after that, and daily fines for not complying. And maybe then they’ll come to the county and do what they’re supposed to do with the county.”
Okuda went on to suggest that the Supreme Court might be liberal in its grant of broad community standing to bring such litigation. “The Supreme Court has said in many cases … that environmental types of cases have broad community standing, so almost any interested person in the community can bring the lawsuit,” he said.
“I’m not advocating lawsuits, but just looking for an additional tool so we at the commission don’t have developers come back to us and say, ‘Yeah, we didn’t comply with your conditions, but we did a little bit of work, so, like Bridge ʻAina Leʻa, you can’t touch us.’ And the counties aren’t enforcing these conditions – for example, we see non-agricultural activities on Agricultural lands, but we have no power to do anything about it.
“So I’m just seeing whether the law prohibits specific performance as an additional tool to make people live up to their promises in the community.”
In a 2020 hearing on the Kehalani-Piʻihana development on Maui, Okuda suggested to the Maui County deputy corporation counsel, Michael Hopper, that the county does not have to simply accept it when a developer sells off land without performing on the commitments in redistricting orders.
“Would you agree it’s not unreasonable to hold the developer entities responsible … for the obligations they should have known with due diligence follow from a Land Use Commission order?”
“The fact that a landowner, somebody who has an obligation, gets rid of an asset doesn’t necessarily absolve that person from obligations to perform on the obligations that they should have performed.
“For example, isn’t it true that under the Uniform Fraudulent Conveyance Act, if you own a corporation, and you know the corporation has obligations, and you intentionally don’t perform the obligations and you drain the corporation of its profits, there still might be in fact personal liability against corporate owners.
“Sometimes the obligation not only runs with the land, but it might even follow when you get rid of the land.”
Former commissioner Dawn Chang – now head of the Department of Land and Natural Resources – often proposed the idea of requiring developers to post performance bonds to ensure compliance with LUC conditions of redistricting.
In one of her last meetings as a commissioner, she again posed the prospect of requiring a bond to Randall Sakumoto, the attorney representing RCFC Kehalani. “Would your client be willing to post a bond” for the value of outstanding commitments on the Kehalani portion of the C. Brewer docket? she asked.
“Frankly, I don’t believe a bond will be necessary or the cost would be justifiable,” Sakumoto responded. “I can’t make any commitment for my client without having a discussion with them on that point.”
Chang then added, “It’s just that, in a lot of – not only this project, but other projects – the public comes forward to us and says these conditions have not been met. And then there’s a foreclosure or a bankruptcy and they never get met.
“In the future, I will want to perhaps include as a condition the placement of a bond to ensure that these kinds of conditions are met, because in the absence of that, there’s no guarantee that the public will get the benefit of those conditions.”
At LUC, It’s Lawyers Out, Developers In
The make-up of the Land Use Commission is changing. Two attorneys and a planner are leaving. Their replacements have backgrounds in construction and development.
Gary Okuda, an attorney holding an at-large seat, left on April 28, owing to term limits.
Lee Ohigashi, an attorney holding the Maui seat on the commission, will see his term expire June 30.
George Atta, a planner and former director of the Honolulu Department of Planning and Permitting, will see his term expire. He was not reappointed.
The Legislature confirmed all four of the nominees of Governor Josh Green. They are:
Nancy Carr Smith. She began serving as an interim appointee last August and was confirmed this legislative session to fill out the Hawaiʻi seat until June 30, 2025. Smith has a background in real estate. Her husband, Riley Smith, serves on the Board of Land and Natural Resources.
Miles Miyasato. Miyasato is a past executive director of the Hawaiʻi Operating Engineers Stabilization Fund. He will hold an at-large seat when his term begins on July 1. His term will expire on June 30, 2025.
Ken Hayashida. Hayashida is an engineer and president of KAI Engineering. His term as Oʻahu member will expire June 30, 2028.
Bruce Uʻu. Uʻu has worked for the Hawaiʻi Regional Council of Carpenters. His term as the Maui representative to the LUC will expire June 30, 2028.
— Patricia Tummons
Carl Christensen
PRP is getting their money’s worth from Gov Josh.