Late last month, hearing officer Mike Gibson convened the first hearing of the Pflueger-Pila’a contested case, centering on a proposed multi-million dollar fine for damages to the reef off the North Shore of Kaua’i allegedly caused by unauthorized grading. In coming weeks, state deputy attorney general Yvonne Izu will argue the state’s case for damages against James Pflueger, Pflueger Properties and Pila’a 400 LLC for harm to the marine environment at Pila’a Bay.
Pflueger and his companies are accused of damaging or killing at least 5,830 square feet of coral after a November 2001 storm washed tons of mud from Pflueger’s heavily graded property into the ocean. Defending Pila’a 400 will be a suite of lawyers including former deputy attorney general William Tam and former Justice Department attorney Noel Wise.
In a related case, Pflueger’s attorneys have been mediating for more than a year with county, state, federal, and non-profit agencies with a stake in violations stemming from work done by the Pflueger companies at Pila’a and a mauka area known as Kaloko.
Together, the contested case and mediation encompass the main issues surrounding Pflueger’s illegal actions in the Pila’a/Kaloko area. But loose ends remain unaddressed. When or whether they are neatly tied or simply cut as losses will depend on the outcome of the larger cases. In the meantime, enforcement is on hold.
Illegal grading of unencumbered state land at Kaloko Reservoir: In addition to the roughly 400 acres above Pila’a Bay, retired Honda dealer-turned-developer James Pflueger controls about 109 acres of agricultural land across the road, abutting the Moloa’a Forest Reserve. According to land agents with the state Department of Land and Natural Resources, the views are spectacular. And the copious grading that’s occurred there over the last decade has led them to believe Pflueger plans – or at one time planned – to sell it off as a residential subdivision.
In making the land suitable for building, Pflueger’s company has garnered a number of violations: In December 1997 and July 2002, the Kaua’i Department of Public Works issued notices of violation to Pflueger Properties for grading without a permit near Kaloko Reservoir. In September 2002, inspectors with the U.S. Environmental Protection Agency and state Department of Health found more than five acres at Kaloko had been disturbed by construction activities, which included road construction, slope-cutting and grading. The excessive grading was apparently contributing to polluted runoff and, two months after their investigation, the EPA and DOH ordered Pflueger and Pflueger Properties to stop illegal discharges of polluted stormwater into streams and the ocean.
The EPA order required Pflueger to halt all construction activities until all required permits were obtained, and by mid-January, Pflueger was required to complete a survey to identify potentially unstable or erodable soils on the property and submit a site stabilization plan. Stabilization measures were to have been completed by March 31, 2003.
Responding to the demands of the various agencies to restore the unstable lands at Kaloko, Pflueger contractor Belt Collins first sought permits from the county Department of Public Works to carry out remediation plans. In January, the department informed Belt Collins that the proposed remediation work encroached on unencumbered state land, as well as land owned by the Mary Lucas Trust. Before any remedial grading work began, a county letter stated, Pflueger needed authorization from the state and the trust.
According to its plans, Belt Collins intends to place silt fences and rock berms on roughly 1.5 acres in and around a triangular, 6.6-acre state parcel. Belt Collins also plans to regrade, compact and hydromulch the area.
Months later, in May, Pflueger attorney Max Graham wrote Land Division agent Charlene Unoki requesting an after-the-fact permit and permission to remediate. Unaware that state land had been graded without permission, Land Division Administrator Dierdre Mamiya instead notified the DLNR’s Division of Conservation and Resource Enforcement:
“According to Mr. Graham, in 1997 Pflueger Properties graded and filled the state property without permission or authorization from the Department. According to Mr. Graham, the state property now contains unstable soils, which need to be re-graded and or removed,” Mamiya wrote in the June 6 letter asking DOCARE to investigate.
On June 28, DOCARE investigator Corey Aguano inspected the site with Pflueger property manager Gordon Rosa. Aguano’s report states that although there appeared to have been a landslide on the state property, it was not near any streams and was mostly covered with vegetation. However, he added, he was not an expert in grading or environmental studies, and recommended that someone authorized to issue grading permits or with general knowledge of grading violations do a proper field investigation.
Since then, Unoki and Kaua’i Land Agent Tommy Oi have inspected the property, but there are no documents other than maps supplied by Belt Collins that indicate the extent of the violation. To date, no notice of violation has been issued.
Oi told Environment Hawai’i, “We’re putting it on hold for the outcome of the contested case on the lower section [Pila’a]… What we do on Kaloko might affect what happens on the bottom. Unauthorized use of [unencumbered] state land only allows a fine of up to $500.”
Unoki says she’s in a dilemma over how to approach a fine amount. Could she somehow stretch the fine to span multiple days, she wonders. Did the DLNR lose leasing revenue?
“We’d have a difficult time leasing that area. We’d need keys to two gates, there’s no water, no road. It’s land-locked,” she said, adding that only about one acre of the uneven parcel could support agriculture. “What kind of rent could we get?” Still, the fact that the parcel is owned by the state and should not be subsumed into a subdivision keeps Unoki from pursuing a fine just yet. “They’re saying it’s separate from Pila’a. We’re saying, ‘Oh, yeah?’…We’d like to wait.”
Water Code Violation: During a 1998 field investigation, the state Commission on Water Resources Management found three sites at Pila’a where work by Pflueger Properties was conducted without permission from the state. One of them – Site 4 – was the construction of a roadway and a diversion system at a waterfall plunge pool. This work, CWRM staff felt, required a stream channel alteration permit, a stream diversion permit, and a petition to amend the interim instream flow standards.
In the course of reviewing Pflueger’s application to resolve the CWRM violations, the Kaua’i County Planning Department found Site 4 to be within the coastal Special Management Area. In cases where an SMA permit is required from the county, state law prohibits other agencies from issuing permits before the SMA permit is obtained. Since the county had not yet issued an SMA permit, CWRM staff dropped its recommendations to the commission on Site 4.
In June 2001, CWRM did resolve the violations at the other two areas identified in the 1998 field investigation.
When asked about the fate of Site 4, CWRM’s David Higa told Environment Hawai’i that since the Kaua’i County is now involved in a federal mediation regarding a variety of environmental issues at Pila’a – including SMA permits – the Water Commission must wait until that mediation is complete before resuming action.
Conservation District violations dropped: In this case, enforcement is not pending. It’s been lost in the wake of the larger contested case on marine issues.
Back in August, when the Land Board was considering fines for Pflueger Properties/Pila’a 400’s violations and damages at Pila’a, the DLNR staff had proposed a fine of $12,000 for six land-based Conservation District violations that staff believed contributed to mud flows into Pila’a Bay. Four of the violations were on land directly above the impacted marine area. The other two were on the west side of the property and included a dirt road and a graded and grassed picnic area abutting the shore. This work, staff found through aerial photographs, occurred some time in the early 1990s.
Because the two latter violations occurred before Pflueger Properties bought the land from the Mary Lucas Trust in April 1997, Pflueger’s attorney’s refused to cop to the proposed $4,000 fine ($2,000 for each violation). The attorneys did, however, agree to pay $8,000 for the four violations that occurred after April 1997.
According to DLNR planner Dawn Hegger, the department will not pursue the remaining, unresolved violations in the contested case, which she says deals only with marine issues.
— Teresa Dawson
Volume 14, Number 5 November 2003
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