A century and a half ago, the kingdom of Hawai’i undertook a road-building project that, in its time, was probably no less ambi–tious than that of today’s H-3 freeway. The idea was to connect Kona with Hilo by the most direct means possible – that is, a road that traveled in a straight line, heedless of topography or more convenient routes.
The road was never completed, but for 10 years, from 1849 to 1859, crews of prison–ers worked on the project. Before work ended, about 16 miles had been built, run–ning mauka from the coastal road just south of Holualoa to a point high on the southern slopes of Hualalai. (Work also began on the Hilo side at about the same time; it appears to have been largely covered over by lava flows as early as 1855.)
Today, much of the Judd Trail remains intact, although floods in the early part of this century washed out much of the road–bed. In several areas, the trail is no longer clearly visible, and at some points, it has been breached by modern roads and highways, including Kuakini Highway. Still, the state claims ownership of the trail as a public road. Would-be developers of the private land crossed by the trail therefore need to obtain permission of the state to use the land under the trail.
This assertion of state ownership was made in 1990 by the attorney general. At the time, two developers were proposing to subdi–vide land in Holualoa into five-acre “agri–cultural” lots. Running through the prop–erties was the Judd Trail. The Hawai’i County Planning Department had received the subdivision applications from Edward J. Mahoney III and Arthur D. Nearon (ADN Corporation). The county planning director at the time, Duane Kanuha, asked the state whether it had any interest in the trail, and in a response dated May 4, 1990, deputy attorney general Dona L. Hanaike said the state certainly did have such an interest.
After describing the laws that applied to the matter, Hanaike informed Kanuha that the state had not sold its interest or other–wise disposed of it, and therefore the “Judd Trail is a ‘public trail’ owned in fee simple by the state of Hawai`i.”
Nearon and Mahoney then negotiated with the state Department of Land and Natural Resources, including its Na Ala Hele, or trails, program. The area proposed for development had seen two major floods (in the 1930s and again in 1969) that for all practical purposes erased much of the trail. For this reason, Na Ala Hele agreed with the developers that it would not be “prudent for public safety reasons to restore the trail along a known flood-prone course.”
Instead, Na Ala Hele recommended that the trail be relocated along the southern boundary of the proposed subdivisions. In return, the state would sell to the developers the fee interest in the trail as it bisected their properties. The newly realigned trail was to be 10 feet wide and delineated with a two-foot-by-two-foot rock wall running along both sides. In addition, the developers were to provide two off-road eight-car public parking areas to accommodate a total of at least 16 cars.
Nearon and Mahoney agreed with the proposal and on December 7, 1990, the matter came before the state Board of Land and Natural Resources. Na Ala Hele staff recommended the board approve the agree–ment, subject to several conditions. In addi–tion to those relating to the trail’s relocation and parking, a condition was imposed to require construction of the relocated trail and parking areas “as part of the bonded subdivision agreement. Trail and parking improvements shall be completed along with all other subdivision improvements.” Another condition required Nearon to “complete an archaeological survey of the Judd Trail remnant and the proposed new Judd Trail alignment.” Finally, Mahoney and Nearon were to convey title to the realigned trail to the DLNR, after which the Land Board would recommend that the governor set aside the land to the DLNR for use as a public trail.
For most of the last 35 years, since passage of the state Land Use Law, lands in the state agricultural district have been pretty well protected from speculative development. In recent years, however, a brisk market has developed in ag lands that are near popular resort destinations such as Kona and Kohala on the Big Island and Lahaina on Maui. Owners of large tracts of land have discov–ered that they can develop the land, or sell it to other developers, for subdivision into gentleman-farmer type lots. No real agricultural activity is proposed for these mar–tini ranches; in many cases, restrictive cov–enants forbid all agricultural activity except the odd horse paddock or picturesque graz–ing cow (which also helps justify the real-property tax breaks extended to ag land).
Another advantage such agricultural sub–divisions have over subdivisions that re–quire a boundary change by the Land Use Commission to place the land in the Urban instead of the Agricultural district is that they requite no environmental impact statement.
There are risks associated with such sub–divisions, however. Owners of the lots have little hope of using the land productively so that it can generate income to pay for the usually high costs of the lots. (In the case of Mahoney’s subdivision, the cost of a five-acre lot was advertised at $395,000.) In less-than-robust economic times, the market for upscale lots crashes, leaving developers stuck not only with their land costs, but also with the costs of any infrastructure im–provements they may have made.
What happened to Mahoney illustrates those risks. After receiving Land Board approval, Mahoney obtained from the county in April 1991 tentative approval of his subdivision. That approval incorpo–rated the Land Board’s conditions, includ–ing the requirement that he grant an ease–ment for the Judd Trail along the southern boundary of his land and that he “construct the realigned portion of the Judd Trail and its related improvements including the parking areas specified by the decision of December 7, 1990.”
Mahoney installed most of the required improvements, but did nothing to carry out the terms of the Land Board’s approval. In January 1994, he began advertising lots for sale. That drew the attention of Keith Wallis, of the Mayoral Advisory Commit–tee on Bicycle and Pedestrian Safety. Wallis wrote Planning Director Virginia Goldstein to inquire if this was allowed.
Wallis reminded Goldstein that the county had requited Mahoney to meet all conditions attached to approval of his sub–division before offering any of the parcels for sale. Those conditions, Wallis noted, included the requirement to complete trail improvements. When Wallis and others on the committee visited the site on January 6, 1994, he wrote, “no evidence of trail, walls or parking improvements was seen. All other subdivision improvements appear to be complete.” In addition, Wallis said, “one large home in the subdivision appears to be near completion.”
Wallis asked Goldstein if there might be “a valid reason for the delay” in trail improvements. If not, he wrote, “please inves–tigate this possible violation and keep this committee informed of the results and ac–tions taken.”
Goldstein then asked Steve Lim, Mahoney’s attorney, about the status of improvements to the trail. Lim responded on January 18, informing Goldstein that Mahoney was involved in discussions about trail improvements with Rodney Oshiro of the Hilo office of the DLNR’s Na Ala Hele program.
On February 16, 1994, Goldstein replied to Wallis, saying that in discussions with Lim, “he stated that the trail was located and graded … and that the wall has been installed. The developer is currently working with the state Department of Transporta–tion regarding access to install the parking facilities.”
Goldstein assured Wallis that “the Plan–ning Department has requested confirma–tion in writing from Mr. Lim and from the Department of Land and Natural Resources that the trail and walls have been installed to their satisfaction. In addition, Mr. Lim will clarify the situation with the parking lot along with a projected completion date. In any case, the bond shall remain in effect until all conditions have been met.”
ADN Drops Out
By September 1994, ADN Corporation had made no progress, either on its subdivision improvements or on relocation of the Judd Trail. This prompted Lim, Mahoney’s at–torney, to inquire of Goldstein what effect ADN’s failure would have on his client.
In reply, Goldstein said Mahoney would not be hurt by ADN’s actions. “However,” she continued, “your client must also com–plete all conditions imposed by the Board of Land and Natural Resources regarding the relocation of the Judd Trail on his prop–erty.”
Two months later, Mahoney asked the county to reduce the required bond from $225,270 to $75,000, based on the estimated cost of “the two remaining items yet to be installed, which consists of two bridge crossings.” No mention was made then of the trail improvements. In an accompanying memo to Goldstein, an engineer with the county Department of Public Works agreed that a $75,000 bond would be sufficient to complete the work identified. On Decem–ber 13, 1994, Goldstein accepted the re–duced bond.
That same day, Lim apparently informed Goldstein that “the required improvements were completed, inspected, and approved by the Department of Land and Natural Resources, Division of Forestry and Wild–life.”
The DLNR had done nothing of the sort, however. When Oshiro of Na Ala Hele found out about Lim’s December 13 letter, he sent a memo to Goldstein, accompanied with photographs of the subdivided prop–erty. “It is our understanding,” Oshiro wrote, “that several lots have already been sold but none of the conditions as proposed in [the DLNR agreement with Mahoney] have been completed. We request that until written confirmation has been received from us, the county refrain from any favorable action to the developer.” Oshiro’s photo–graphs included shots along the southern boundary, where no evidence could be found of a trail or two-foot-high stone wall.
By June 21, 1995, it was apparent that noth–ing more was likely to happen at the Estates at Holualoa, Mahoney’s subdivision. At a meeting of the Na Ala Hele advisory coun–cil held that day, an agent of Maryl Realty, which was representing Mahoney, informed the council that “there are four lots in escrow and no lot sales have been made in four years. The developer is presently work–ing with Central Pacific Bank to pay off its debts.”
Instead of realigning the trail along the southern border, as anticipated in the Land Board approvals, Maryl Realty now was offering a 10-foot easement along the paved roadway that runs through the property. In a follow-up letter, dated September 6, 1995, Maryl Realty asked that the requirement of a two-foot-high stone wall be eliminated. At the September meeting of the advisory council to Na Ala Hele, Maryl Realty said that Central Pacific Bank had $1.6 million in claims against the developer; First Ha–waiian Bank was owed about $600,000; other creditors were owed about $1 million.
At the same time Na Ala Hele was con–cerned about the Judd Trail’s status, so was the Mayoral Advisory Committee on Bi–cycle and Pedestrian Safety. Chairman Wallis wrote Goldstein on September 21, in anticipation of a meeting he had scheduled with her for September 27.
“The bank/developer, through their rep–resentative, has verbally offered Na Ala Hele $50,000 and an additional easement on the shoulder of the subdivision road for the elimination of trail and parking im–provement requirements that have been estimated in the neighborhood of $250,000,” Wallis wrote. “Their logic is that if pressed to complete the improve–ments, the bank will simply foreclose, sell the lots at auction as is, then Na Ala Hele would have to sue each individual land owner for the improvements, the point being that the state would most likely never have their improvements completed.”
Wallis posed seven pointed questions to Goldstein for discussion at their meeting on September 27. First, he wanted to know why money was released from the bond before the trail and parking improvements were completed. Second, he asked, “was any money released from the bond after the original letter of inquiry from the Mayor’s bicycle committee or the letter [from] Rodney Oshiro of Na Ala Hele?” Third, he wanted to know how much money was left in the bond; fourth, what legal recourse the county had to encourage completion of improvements. Fifth, “if the bank fore–closes, will the county be at the head of the line or at the end of the line (as the bank’s representative has suggested) when the money is distributed among creditors?”
Wallis’ sixth question was: “How is it possible to make it known to all prospective buyers the copy of the BLNR agreement (that states certain responsibilities of the lot owners) and the status of the (non-com–pleted) sale of the Old Judd Trail right of way?”
Last, Wallis was interested to learn whether the title insurance company might have “an interest in making sure that the Judd Trail sale is complete and requirement improvements on the realigned easement are finished.”
On September 29, 1995, Ken Kjer, principal broker with Maryl Realty, offered Na Ala Hele a settlement. A 10-foot-wide easement would be granted along the southern bor–der of the property “for a future trail”; the roadway through the Estates at Holualoa “will remain open from dawn to dusk for pedestrian traffic”; and a payment of $50,000 would be made to Na Ala Hele “in lieu of construction of the trail, rock walls, and parking areas as originally proposed.”
Oshiro of Na Ala Hele responded on November 29. The Na Ala Hele Advisory Council and staff had agreed to accept the 10-foot easement along the southern bound–ary and the dawn-to-dusk pedestrian and bicycle access along the subdivision road. Payment of $50,000 would be acceptable, Oshiro wrote, in the belief that that was all that was available.
On February 26, 1996, the Board of Land and Natural Resources was asked to approve the resolution. The staff recom–mendation called for just five parking spaces, in addition to the other conditions mentioned in Oshiro’s letter to Kjer. The right to pedestrian and bicycle access along the subdivision road was to be “perpetual.”
Board member Chris Yuen raised a ques–tion about the $50,000 payment, in light of his understanding that the bond amount remaining with the county was $75,000. He made a motion to approve the staff recommendation, but to require payment of $75,000, if that was the amount of the bond held by the county. The motion was passed without dissent.
About three weeks after the board ac–tion, Mahoney’s attorney, Steve Lim, wrote Yuen, attempting to explain that the bond was never intended to cover the trail improvements. “I understand that at the last Board of Land and Natural Resources meet–ing, you expressed concern that if the $75,000 subdivision bond remaining in the possession of the county of Hawai’i covered the Judd Trail improvements, that the en–tire $75,000 bond amount should be given over for that purpose. As previously dis–cussed between the parties, the $75,000 bond is secured by a $50,000 letter of credit, and the developer had reached an agree–ment with Na Ala Hele that the $50,000 letter of credit would be acceptable. As a practical matter, unless the county is will–ing to undergo the lengthy procedure to call upon the bond and collect it, we believe that the release of the $50,000 letter of credit towards the improvements for the Judd Trail will better serve the public’s interest in getting something done in a reasonable time period.”
Lim called Yuen’s attention to the De–cember 1995 correspondence with the county engineering, which, he said, “indi–cates that the surety bond was primarily for the ‘construction of roadways and drainage for the subject subdivision.’ The letters relating to the bond reductions and partial releases thereof are especially informative.” Because of this, he wrote, “we believe that the $75,000 remaining on the bond… did not represent security for all or any portion of the improvements required to the Judd Trail.”
Finally, Lim wrote, “I am informed by Mr. Kjer on behalf of Mr. Mahoney that in consideration of the full and final release by the state of Hawai`i Board of Land and Natural Resources and the County of Ha–wai`i for the subdivision in question and the Judd Trail improvements required by the Board of Land and Natural Resources, that they are willing to immediately take the necessary steps to release the $50,000 letter of credit directly to an escrow account for disbursement to an account designated by Na Ala Hele for the improvement of the trail, public access or bikeway improve–ments in the Kailua-Kona area.”
No written response from Yuen exists; when Yuen was contacted by Environment Hawai`i, he could not recall writing one. However, on June 3, 1996, Lim again wrote Goldstein, asking for release of the $75,000 bond. “This will confirm that the Depart–ment of Land and Natural Resources through Land Board member Christopher Yuen has agreed with Mahoney Contract–ing that the above bond does not provide security for the construction of any Judd Trail improvements.” In lieu of those im–provements, Lim went on to say, the Land Board “will accept a cash payment from Mahoney Contracting Inc. to the Depart–ment of Land and Natural Resources… in the amount of $50,000.”
Four days later, Goldstein authorized release of the $75,000 bond, “inasmuch as all subdivision improvements have been completed and inspected by the appropri–ate agencies.”
Two years later, the state still has not received any payment from Mahoney, Maryl, Lim, or any other representative of the developer.
On March 8, 1998, the Office of Environ–mental Quality Control’s bulletin carried notice of the availability of a draft environ–mental assessment for a project that could further compromise what remains of the Judd Trail. The project is an five-acre “agricultural” subdivision of lands lying be–tween Ali’i Drive and Kuakini Highway.
The landowner is Matsuzato Hawai’i, Inc., while the developer is Nohona Part–ners. Attorney for Nohona is none other than Steve Lim.
Nohona is seeking approval that would allow access to lots in the subdivision over and across the Judd Trail, which, according to a preliminary subdivision map, would run alongside a new subdivision road. In some areas, the Judd Trail appears to cross what would be the front yards of some lots.
The draft environmental assessment, prepared by Lim, notes that the land pro–posed for subdivision is included in the area proposed for reclassification as Urban by the county of Hawai’i. That petition is pending before the state Land Use Com–mission.
As Environment Hawai`i has reported earlier (August 1997), the preservation of historic sites and public trails in the petition area is the chief obstacle to LUC approval of the county’s application. While most appli–cants for LUC redistricting must provide the commission with detailed archaeologi–cal inventories, the county has asked the LUC to waive such a requirement, arguing that it would be too much a burden on the county and, in any case, not all the lands of the petition area are likely to be immedi–ately developed.
To allay concerns that detailed archaeo–logical and historical review will not be done at all, Virginia Goldstein has testified that the county Planning Department will ensure that the historic preservation review requirements of state law will be carried out by her department, in cooperation with the DLNR’s Historic Preservation Division, when the various tracts included in the petition area are proposed for further devel–opment.
Expedited Review
At a LUC hearing on March 19, Guy Archer, deputy attorney general representing the state Office of Planning, asked Goldstein to explain how this cooperation would work. Goldstein outlined her department’s re–view process for rezoning applications, which entails sending the application out to a variety of county agencies and departments (Public Works, Water Supply, Po–lice, etc.) for comment. The state Historic Preservation Division could be included in the routing list, she suggested.
Archer then asked Goldstein how long the state would have to review the application, suggesting a thirty-day period might be reasonable, given the need for on-site visits and the like.
Goldstein objected. The normal response time for agencies was 15 days, she said; to prolong this for the convenience of the state historic preservation review would not be reasonable. In any event, she said, the His–toric Preservation Division would already be well aware of the plans for rezoning long before the application came in. Further–more, she added, since the state has an archaeologist on the island, a short turn–around time for review would not be im–practical.
Goldstein did not take note of Governor Cayetano’s plan to cut the division’s archeology staff by half (from eight to four). Instead of having staff review proposals for development, the governor’s plan calls for such review to be done by contract archae–ologists, which, Cayetano claims, would streamline the process.
At least one expert in Hawaiian archae–ology has harshly criticized the proposal. Patrick V. Kitch, a professor of anthropol–ogy at the University of California at Berkeley, has written that the new “privatized” system is riddled with opportunities for abuse, with “consultants at both ends of the process … beholden to the developers, with no one to speak for the public.”
In addition, Kitch writes in an essay published in the March 20, 1998 Honolulu Advertiser, “it is not clear that even developers will benefit from this proposal. Instead of paying one consultant, they will now pay two – one to do the archaeology, another to review the report.”
Kitch continues: “I predict that, rather than being streamlined, the development review process is likely to become more costly and more complex. The remaining staff at the state Historic Preservation Of–fice will not be able to give the necessary oversight to protecting Hawai’i’s historic and archaeological sites. More heiau, house sites, petroglyphs and human burials will be lost.”
Volume 8, Number 10 April 1998