On September 26, 1995, the parties owning or holding a development interest in East O`ahu lands submitted their “settlement perspective” to the members of the Honolulu City Council. Excerpts from the 12-page document follow:
Hawai`i Kai Development Company, Kamehameha Schools/Bernice Pauahi Bishop Estate, and Kaiser Aluminum & Chemical Corporation (“Plaintiffs” or “we”) each have a land interest in the eight pending Hawai`i Kai inverse condemnation cases.
We appreciate the opportunity to begin a face-to-face settlement dialogue with you. In order to facilitate this dialogue, we would like to set the table by explaining where we think we’ve been and where we think we are now. Once you appreciate our perspective, perhaps we can jointly focus on any differences in perspective that you may have. Then we can develop solutions.
Six years ago, perhaps as a result of too little dialogue, we were going at it hammer and tongs with the city in eight inverse condemnation suits. The downside risk to the city in these cases may run anywhere from $30 million to $100 million or more depending to whom you talk. Even a $30 million hit to the county could be catastrophic. With this level of exposure, the issue becomes an islandwide concern. It is not simply a Hawai`i Kai matter.
At the request of City Council, we consented to enter into negotiations to see if there was a better way to solve our differences. We agreed to do this because we understood that the city was genuinely interested in finding a workable solution to a difficult problem. We entered into this process in good faith on the understanding that any negotiated proposal be acted upon promptly and in good faith by the City.
In order to preserve a statesman-like posture for the City council, Corporation Counsel was designated as the negotiation focal point, with the assistance of the directors of the DGP [Department of General Planning] and DLU [Department of Land Utilization] and subsequently the Managing Director’s Office. In this way, each side could explore the concerns and needs of the other side.
Once the needs of each side were identified, bridging solutions could be explored. Once this group reached a consensus, it was contemplated that the City Council would then act as the great public convener and statesman.
As in most litigations, the City Council would be presented with the recommendation of its counsel, after arduous court encouraged settlement negotiations. Council would then be able to say, although these recommendations appear reasonable, we want to invoke the public comment and scrutiny and will reserve our judgment on the fairness of the settlement until we’ve received this information.
An important factor here was that we were not prepared to expend time and money on a wild goose chase. From the outset it was our understanding with Corp Counsel that if no deal could be reached or if the path that we were following had no chance of acceptance, we would be promptly advised.
In pursuit of these negotiations, we had periodic progress briefing sessions with both the state and federal courts, who continue to encourage us to negotiate a settlement.
From the very outset we were advised that the City had no money. As such we had to find a non-monetary solution. In order to accommodate the City’s no-money mandate, procedure became critical.
We retained Professor David Callies to help us brainstorm non-monetary settlement vehicles. Eventually, jointly with the City, we began to focus on a court-supervised process involving the transfer of development rights by way of a consent decree. This idea had been tried before in Constitutional land use disputes. High federal courts endorsed this procedure even if land use ordinances had to be bypassed.
Not wanting to waste time pioneering, we floated these concepts nationally. Professor Callies published a law review article regarding the use of consent decrees in solving land use disputes. Supportive nationwide comment resulted and more courts began using the concept. Recently Urban Land Magazine detailed the successful use of this transfer development rights concept in California.
Although these cases legally support the transfer of development rights with very little public involvement, the negotiators went to great lengths to build in numerous public participation opportunities so as to preserve the City Council’s role as convener and statesman.
We, on the other hand, were concerned about proceeding down an expensive uncharted path. If mutually agreeable procedure could be developed, we might be willing to negotiate land use compromises and submit them to the public for scrutiny. We were not willing to approach this effort on an unlimited time basis.
Structure and timing thus had to be settled before land use negotiations could be finalized.
Once both procedure and land use targets were in place, the concept called for the court to authorize the procedure. At this point, the landowners would be bound to accept the proposed land use compromises, but the City Council would be free to reject the proposal at any point along the agreed path.
It was envisioned that the City Council would be above the fray until the third reading [of the bill that would make the proposed zonings law]. It would be in a position to say “Corporation Counsel has made a recommendation that the court has imposed settlement procedures to facilitate consideration of the recommendation. We, your City Council, want to hear what you, the public, have to say. Then and only then will we decide if we want to accept the settlement.”
In this manner, City Council would have the benefit of public participation before positioning itself. To the extent that Council desired modifications, it would be in a position to do so in response to public sentiment. Throughout the process, City Council would encourage responsible inquiry on both the up and down side of the issues raised by the proposal in a statesman-like way….
It is important to note that presently the landowners are acting in concert with an eye towards a comprehensive solution. If the settlement fails, there may never again be an opportunity for a comprehensive plan in Hawai`i Kai.
As you can see, public involvement permeates the process. Opportunities abound for City Council to withdraw from the fray — your hands are not tied. The court has the innate power to appoint a settlement master, who could conceivably order procedures approaching this. Rather than going this route, however, the parties have sought to work these matters out on their own in good faith.
If you have concerns with these concepts, we really need to know before we go any further down this path. Neither of us want to waste our time on a process that is doomed to be unsuccessful. Unless we understand your concerns, we can’t suggest solutions…
The land use proposal before you is not our desired land use future. During six years of negotiations we made numerous concessions in land use options. Further, we conceded over a third of the units that would be acceptable under the zoning now contemplated. Further, we gave up fee title to 30 acres of beach view property worth, by your own appraiser’s opinion, at least $30 million. This has not been an easy negotiation, but we have participated in good faith.
Volume 6, Number 8 February 1996