A federal lawsuit over whether development on a 96-acre agriculture/preservation-zoned property on O`ahu’s North Shore requires a Special Management Area permit has been amended again. This time, the plaintiffs forgo their original claims that the Honolulu Department of Planning and Permitting (DPP) violated their constitutional rights by withholding approval of building permits for farm dwellings and other agricultural structures and infrastructure.
The original complaint by developer Jeremiah Henderson III, through his companies that own units within the Marconi Point Condominiums project, alleged that corrupt employees with ties to architect William Wong, a convicted felon, led the DPP to renege on assurances that no SMA permit was needed and to deny or refuse to approve applications for building permits, a roadway subdivision, and an agricultural subdivision.
The city filed a motion to dismiss, which U.S. District Judge Jill A. Otake granted in part last December. She granted the city’s motion to dismiss the claims regarding permits and the roadway subdivision. However, she kept alive claims regarding the developer’s agricultural subdivision application, which the plaintiffs argue was automatically approved when the DPP failed to act on it within the time allowed by city ordinances. She also granted the plaintiffs leave to amend their complaint to provide more evidence supporting claims regarding the permits and roadway subdivision.
The plaintiffs, which include Makai Ranch, LLC; Marconi Farms, LLC; MP Unit 21, LLC; and RCA Trader Center Inc., filed an amended complaint in January, which was followed by a motion to dismiss from the city on April 1. Among other things, the city argued that the complaint improperly failed to name Wong as a defendant.
Less than three months later, on June 24, both the plaintiffs and the defendants filed a stipulation regarding the city’s motion to dismiss.
Included in the stipulation was the voluntary dismissal of the plaintiffs’ claims regarding the building permits, as well as the city’s withdrawal of its motion to dismiss, both without prejudice.
The city also agreed to stipulate that the building permits the DPP approved for the exteriors of eight large agricultural warehouses within the condominium property regime were “properly issued and remain in full force and effect. Thus, construction of the warehouses and related infrastructure work may proceed, but only to the extent consistent with: (A) the plans and specifications submitted in connection with said building permits, and (B) all applicable statutes, ordinances, regulations, and rules (collectively, ‘Approved Plans’). The city expressly agrees and acknowledges that there is presently no ‘stop work’ order in effect and that the city does not intend to seek tear down or demolition of the existing Warehouses at this time, provided that their construction complies with the Approved Plans.”
(This stipulation follows an April 24 decision by 1st Circuit Judge Jon Tonaki to dismiss a lawsuit brought by RCA Trade Center and MP Unit 21 against Marconi Point Condominium unit owners Wayne and Tara Hu regarding a complaint letter the couple wrote about various aspects of the development. In particular, the lawsuit against the Hus sought a court declaration that the companies’ eight agricultural warehouses, most of which were partially built, could remain and/or be completed. Judge Tonaki suggested that the city, not the Hus, were the proper party to provide such relief.)
Also, the parties agreed that Wong would “not be joined as a necessary party at this time,” but could be added later, “and Plaintiffs will not object to such joinder.”
Two days after the stipulation was filed with the court, the plaintiffs filed their second amended complaint. The companies still seek a court declaration that the DPP is prevented from withholding roadway consolidation/re-subdivision approval and agricultural subdivision approval (or recognizing automatic approval of the agricultural subdivision). They also seek a declaration that the city deprived them of due process rights, equal protection rights, and violated their constitutional property rights by withholding those approvals. And they want to be compensated for the alleged loss of their property rights.
“The withholding of the agricultural subdivision permit and roadway permits amounted to a regulatory taking of Makai Ranch’s property rights. In addition, the DPP Defendants imposed different requirements on Makai Ranch than similarly situated condominium projects, each of which is zoned agricultural and within the SMA,” the complaint states.
The companies want an order that prevents the city from withholding approvals of the roadway subdivision and agricultural subdivision while also recognizing that the agricultural subdivision has already been given automatic approval.
On July 12, the city filed its answer to the second amended complaint. The city largely denied the plaintiffs’ allegations, including those suggesting that the DPP acted improperly in response to a request by Wong to cancel a farm dwelling permit (for unit owner Mary Breen) he had been working on.
According to the amended complaint, “DPP was the subject of a public corruption scandal involving at least Wong, [former DPP building plans examiner Kanani] Padeken, and other DPP employees. Plaintiffs believe that, when Makai Ranch declined to pay additional consulting fees to Wong or his affiliates for a new [Archeological Inventory Survey], Wong contacted Calvert Hung, Kanani Padeken, or some other employee at DPP, with whom Wong had a relationship, to cause DPP to stop, delay, or otherwise impede the processing of the Breen permit applications. Plaintiff believes this intentional delay was just one of many instances of the corrupt ‘pay to play’ system that has been widely publicized in the news media as plaguing DPP.”
To this, the city replied that Wong was a known agent to the DPP “and on that basis was able to cancel or withdraw the permits or permit applications.”
The city also argued, among other things, that its actions were lawful, that the federal court lacked jurisdiction over one or more of the complaint’s claims, that the plaintiffs failed to exhaust administrative remedies, and that they also failed to establish that they had suffered an actual injury.
The city asked that the complaint be dismissed with prejudice and that the city be awarded attorneys’ fees, litigation costs and other appropriate relief.
Trade Name Dispute Dissolves
Back in April, Environment Hawai`i reported on a dispute between the developer of the Marconi Point Condominiums project on O`ahu’s North Shore and a newly formed community organization calling itself the Malama Marconi Coalition, following the killing of protected species and unauthorized habitat clearing within the project area.
On January 25, shortly after the Malama Marconi Coalition’s early posts on social media and its letters to government agencies calling for greater law enforcement at Marconi Point, project developer Makai Ranch registered the trade names Mālama Marconi and Mālama Marconi Coalition with the state Department of Commerce and Consumer Affairs.
In a March 14 press release, Maxx Phillips, Hawai`i director and staff attorney at the Center for Biological Diversity, which is part of the Malama Marconi Coalition, called Makai Ranch’s move a “back-door maneuver to snag our name,” and that it looked like the company was trying to “divert the public outrage over environmental and cultural destruction at Marconi.”
The group filed a petition in February with the state Department of Commerce and Consumer Affairs seeking to reclaim ownership of its name. It also changed its name in the meantime to Aloha Marconi Alliance.
Makai Ranch’s attorney, Ross Uehara-Tilton, asserted that Makai Ranch owns the trade name/trade mark “Marconi” when used to describe the area.
“The name ‘Marconi Point’ only came into use as a descriptor when Makai Ranch created the condominium property regime known as ‘Marconi Point Condominiums,’” Uehara-Tilton explained to Environment Hawai`i.
“We believe the individuals behind ‘Mālama Marconi’ and the ‘Mālama Marconi Coalition are improperly infringing upon the Marconi trade name, and their use of the name causes confusion to the public. … Makai Ranch does not object to environmental and cultural advocacy, but is only trying to protect against the spread of false information.”
Environment Hawai`i then presented him with screen shots of a 2002 book on Hawaiian place names by John R.K. Clark, indicating that the area had been known as Marconi for at least a century.
On May 23, attorneys David Abitbol and Uehara-Tilton, who represent Makai Ranch, LLC, requested the cancellation of the Malama Marconi and Malama Marconi Coalition trade names.
The names were officially cancelled on June 3.
According to Phillips, Makai Ranch’s cancellation request resulted from the DCCA petitions the community group had filed. A pre-hearing conference had been set for June 12, and a hearing scheduled for July 24.
Recognizing that the trade name cancellation in May rendered the group’s petitions moot, Phillips and Abitbol signed a stipulation for dismissal, without prejudice, of claims against Makai Ranch late last month.
— Teresa Dawson
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