Will East O`ahu, from Sandy Beach to Makapu`u, retain its present wild character, belying its proximity to the sprawling Hawai`i Kai subdivisions? Or will it, too, be consumed by suburban and resort development?
In recent months, two vastly divergent plans for the area have been unveiled. One, prepared by the Division of State Parks, within the Department of Land and Natural Resources, describes several possible approaches to development of what has become known as Ka Iwi State Park, taking its name from the channel that lies between East O`ahu and Moloka`i. The second, prepared by the owners of the property, its developer, and negotiators for the City and County of Honolulu, calls for building between 1,500 and 1,700 residences (single-family houses, townhouses, and apartments) in the area over the next 20 years, developing more than 40 acres of land into business and industrial areas, building a new golf course, and constructing a 140-unit hotel.
The first plan was prepared in response to a resolution adopted by the state Legislature in 1988. The second was prepared in an effort to resolve litigation over development rights that has been in court for the last nine years.
The first is the product of repeated public meetings over the last three years. The second resulted from closed-door negotiations held without the public’s knowledge or consent.
The first is undergoing now the public review process that attends preparation of a state-mandated environmental impact statement. Under terms of the secret agreement giving rise to the second plan, however, the entire EIS review process — and indeed, the very preparation of an environmental impact statement — will be avoided. In its place is a proposed “environmental impact report,” which is supposed by some to satisfy the need for environmental disclosure, but which, unlike an EIS, is not subject to the same legal challenge should anyone dispute its conclusions or the scope of the anticipated projects.
Which vision will prevail? The answer hinges, in all probability, on a decision to be made by the Honolulu City Council sometime in the next few weeks or months.
How did this situation arise?
Evolving Views
Starting in the late 1950s, the Hawai`i Kai Development Corporation, a subsidiary of aluminum giant Kaiser Industries, entered into several agreements that allowed Kaiser to develop land owned by Bishop Estate in East O`ahu. Almost all of the present development of Hawai`i Kai resulted from these agreements.
By 1964, the City and County of Honolulu had changed its own zoning maps to reflect the plans prepared by Kaiser; under the city’s Detailed Land Use Map prepared in 1966, the area from Sandy Beach to Makapu`u was designated for resort and commercial development.
In 1971, Kaiser requested city approval for 10 hotels and five high-rise apartment buildings, among other things, on land between Koko Crater and Makapu`u Point. The hotels were to be built on 42 acres of land at Wawamalu, between Sandy Beach and Makapu`u. Initial plans called for about 1,700 rooms, according to reports published at the time, but Kaiser was hoping ultimately to develop 4,000 to 5,000 “resort units” in the area from Hawai`i Kai to Makapu`u. The Star-Bulletin reported on May 12, 1972, that a brochure published by Kaiser “talks about a complex of hotel sites, golf courses, and resort-residential uses planned for the area, salt-water lagoons, ‘small off-shore islands,’ and recreational activities such as boating.”
Within a year of the hotel development request, the Save Queen’s Beach Association — the first of a series of groups opposed to developing the area — had formed and was urging the city to reject the zoning changes. Three years later, Governor George Ariyoshi directed the state Department of Land and Natural Resources to conduct an appraisal of the Queen’s Beach land as a first step to state condemnation, for park purposes.
Throughout the 1970s, a host of grass-roots groups, led by a loose-knit coalition called Friends of Queen’s Beach, pressed for amendments to the city zoning maps that would eliminate the potential resort and urban use of the Queen’s Beach-Makakapu`u area. Despite that, when the city’s General Plan was updated in 1977 and again in 1982, the area remained designated urban and commercial.
Finally, in December 1982, under Mayor Eileen Anderson, the Honolulu City Council removed the resort and commercial designations from the planning maps for the 212-acre Queen’s Beach area (stretching roughly from Makapu`u to Wawamalu, makai of the Kalanianaole Highway) and another area of 34 acres known as Golf Course 2/1A (lying between Hawai`i Kai Drive on the north and Kalanianaole Highway on the south, and between Kealahou Street on the east and Koko Crater on the west). This prompted filing of the first lawsuits in federal court.
But residential zoning for another 30-acre area, known as Golf Course 5 and 6 (lying immediately mauka of Kalanianaole Highway, opposite Sandy Beach Park), remained on the planning maps. In 1986, Hawai`i Kai Development Co. applied for a Special Management Area Special Management Area permit for development of a subdivision of 211 single-family houses. The SMA was needed since 75 of the proposed houses would be on land lying with the county’s designated Special Management Area.
After a year of negotiations and hearings, on April Fool’s Day, in 1987, the Honolulu City Council heard six hours of testimony, nearly all of it opposed to the SMA permit request. Two weeks later, after another lengthy hearing — with, again, almost all of the speakers opposing the permit — the requested SMA permit was issued, although for a somewhat smaller project: just 57 houses in the SMA, and fewer than 200 houses overall. Voting in favor of the permit were Council members Arnold Morgado, Donna Kim, David Kahanu, John DeSoto, and Randall Iwase. Voting in opposition were Marilyn Bornhorst, Gary Gill, Leigh-wai Doo, and Dennis O’Connor.
Thus was born the Sandy Beach Defense Fund.
Taking the Initiative
Following the 1987 SMA approval, the newly formed Sandy Beach Defense Fund sued Kaiser and the city, claiming, among other things, that the City Council erred procedurally in its approval of the permit. While that suit was pending, members of the group began collecting signatures on a petition for a referendum vote on whether the Golf Course 5 and 6 area should be developed as proposed or remain in open space. By summer’s end, nearly 40,000 O`ahu citizens had signed the petition, and by September 11, the referendum had been accepted for presentation to voters at the next scheduled election — the September 1988 primary.
Hardly was the ink on the petitions dry when Kaiser, on September 30, sued the city and the Sandy Beach group, asking the court to invalidate the initiative petition and bar the referendum from appearing on the primary ballot.
November 1987: then-Circuit Judge Robert Klein issued a summary judgment in the suit brought by the Sandy Beach Defense Fund over the city’s issuance of the SMA permit. Klein found in favor of the city. The Sandy Beach Defense Fund immediately appealed to the state Supreme Court. (In April 1989, the Supreme Court upheld the SMA.)
March 1988: in the suit filed by Kaiser, Judge Klein determined that state law gives authority for zoning exclusively to the counties.
At the same time in the Legislature, support was growing for the idea of turning most of the coastal areas of East O`ahu into a state park. Both the Senate and the House unanimously adopted a concurrent resolution calling for the Department of Land and Natural Resources to develop a plan for the park. Ultimately, this led to publication in December 1995 of the draft environmental impact statement and master plan for Ka Iwi State Park.
A Watershed Year
In July 1988, Judge Klein issued an injunction barring the referendum from the primary ballot. It took an emergency act of the Supreme Court to lift Klein’s injunction so that the proposed ordinance could be decided by voters in November’s general election.
The vote was two-to-one in support of keeping the 30 acres in open space. Victory was short-lived, however, when on May 17, 1989, the Supreme Court upheld the lower court ruling of Judge Klein that zoning could not be undertaken through initiative referenda.
In an apparent bow to public opinion, the City Council in October 1989 took the action needed to achieve the same result, downzoning the Golf Course 5 and 6 land to preservation from residential. By then, the damage had been done: by granting the SMA permit for Golf Course 5 and 6, the city had given Kaiser and Bishop Estate what legal theorists call the last discretionary permit. From this point forward, in other words, any additional permits needed for undertaking the proposed development would be administrative only (grading, construction plans approvals, and the like). When this occurred, the developers’ claims to have a vested right to develop the land became legally much sturdier.
A month following the enactment of the ordinance placing the 30 acres of Golf Course 5 and 6 into preservation, both Kaiser and Bishop Estate sued in state court.
Since that time, the city’s office of Corporation Counsel has been engaged in talks with Kaiser and Bishop Estate, attempting to work out a no-cost settlement to their claims. The first hint of what the settlement package would contain emerged in April 1995, after the City Council was briefed on progress in the negotiations. In June, the council’s Policy Committee voted in closed session to reject the settlement offer.
By late September, however, Councilmember Jon Yoshimura, chairman of the Policy Committee, reported to the full council that “the proposed procedure presents a reasonable opportunity for the settlement of numerous complex claims against the city and an opportunity to avoid substantial litigation costs.” The full council gave preliminary approval to the procedure worked out for bringing the settlement to fruition, and on October 11, gave final approval.
That approval gives the Corporation Counsel’s the green light it needed to fine-tune details of the procedural agreement with Bishop Estate and Kaiser. Only if the Corporation Counsel deems the changes are “substantial” will the City Council have an opportunity to review the final agreement before it is submitted to federal court. After that, the city must enact ordinances allowing the agreed-upon development to occur, and the mayor must sign them into law. If the City Council reneges on any part of the agreement, Bishop Estate and Kaiser are free to resume pursuing their claims in court.
Never Say Die
At the time of the council’s action in October, Jim Boersma of Starr Siegle McCombs, Inc., a public relations firm that represents Hawai`i Kai Development Co., put the landowners’ spin on things when he strongly hinted that city taxpayers might have to pay a heavy penalty to Kaiser and Bishop Estate if the two latter parties resumed prosecution of pending lawsuits over downzoning of East O`ahu land — land owned by Bishop Estate, but to be developed by Hawai`i Kai. “Every resident on O`ahu will have to pay the bill if the landowners go to court and the landowners win,” Boersma told the Honolulu Advertiser when it sought his comment on a proposed settlement of the lawsuits that was before the City Council for a vote on October 11.
That notion — that Bishop Estate and Kaiser will take the city to the cleaners if they proceed with the litigation — has colored most of the discussion of the settlement. In a document labeled “Landowners’ Settlement Perspective” (reprinted elsewhere in this issue), Kaiser and Bishop Estate refer to their “land interest in the eight pending Hawai`i Kai inverse condemnation cases.” The “Pretrial Settlement Procedure Order” approved by the Council in October also makes reference to “eight state and federal cases,” and, as if to underscore the threat of their renewal, the order lists each one of them.
On closer review, it is not so clear that there are, in fact, eight pending suits. One of the federal cases was tried. The outcome was in favor of the city, and remained so, despite appeals to the 9th U.S. Circuit Court of Appeals and ultimately the U.S. Supreme Court, which refused to hear the case. Litigation of the remaining federal cases was stayed for years, pending outcome of the appeals of the first suit.
Four additional lawsuits have been filed in state Circuit Court. As shown on the accompanying chart, the earliest was filed in 1984 by Bishop Estate. At issue was the city’s 1982 downzoning of Queen’s Beach land. In 1988 — after Kaiser losing its initial appeal of the Queen’s Beach downzoning in federal court — Kaiser brought a similar suit in state court. In 1989, immediately following the City Council’s downzoning of Golf Course 5 and 6 mauka of Sandy Beach, both Bishop Estate and Kaiser sued the city in state court.
Linkages
The closely linked nature of the four federal suits is described in a federal court document (Plaintiffs’ Status Conference Statement, filed October 22, 1987): “Since the same issues and parties were involved in all four of the cases … it was decided that Civil No. 84-0389 would proceed first [Kaiser’s lawsuit against the city over its Queen’s Beach downzoning, with Bishop Estate allowed as an intervenor]. Claims were resolved in favor of the City and against Kaiser by decision on Motion for Summary Judgment entered on September 25, 1986, and Order Upon Motions for Summary Judgments filed on November 13, 1986. Some of Bishop Estate’s claims were also disposed of in those orders. Bishop Estate’s remaining claims proceed to trial in July and August 1998. Those claims were disposed by Decision and Order Granting Motion for Directed Verdict filed on August 10, 1987, and by the Judgment in a Civil Case filed on August 11, 1987.
“On September 10, 1987, Kaiser filed its Notice of Appeal to the United States Court of Appeals for the Ninth Circuit… On September 9, 1987, Bishop Estate filed its Notice of Appeal…
“Thus, Civil No. 84-0389 was designated as the first case to be considered. The legal issues are now on appeal and may well influence the disposition of the [remaining cases]…”
U.S. District Judge Samuel P. King had ruled in 1987 that the city’s action did not deprive the plaintiffs of all economic use of the land. Although the land had been rezoned from urban use to preservation and park use, the owners could still build, for example, a golf course there and in that manner derive economic benefit from the land. King’s reasoning was upheld in March 1990 by the 9th Circuit Court of Appeals.
In 1991, the Supreme Court rejected the appeal of Bishop Estate. Given that the legal arguments of taking in all four lawsuits were so similar, it is unlikely that any of the remaining suits would, if litigated, yield an outcome favorable to Bishop Estate or Kaiser.
Federal Jurisdiction?
In summary, then, up to the present time, eight lawsuits have been filed in two jurisdictions — federal and state court — over downzoning at Queen’s Beach, Golf Course 2/1A, and Golf Course 5 and 6. With one lawsuit in federal court having been fully litigated, and found in the city’s favor, it would seem that the remaining federal lawsuits would, if litigated, have a similar outcome. None of the state lawsuits has come to trial.
Still, the federal lawsuits remain technically viable. Since 1991, federal magistrates began issuing periodic orders to the plaintiffs to “show cause” why the lawsuits should not be dropped as a result of the plaintiffs’ failure to prosecute the cases. In response, lawyers for Kaiser, Bishop Estate and the city indicated settlement talks were under way to resolve the issues.
Kaiser and Bishop Estate, meanwhile, had retained University of Hawai`i law professor David Callies to “help us brainstorm non-monetary settlement vehicles,” as they phrased it in describing their perspective on settlement to the City Council. (According to Kaiser and Bishop Estate’s background information on the settlement, also presented to the City Council, they spent “$2+ million studying settlement.” How much of this went to Callies could not be determined.)
Callies’ research was eventually published in the Stetson Law Review.1 His article there may help explain why the jurisdiction of the federal court continues to be sought by the plaintiffs. In exploring the history of the use of consent decrees — such as that proposed for the settlement of the East Honolulu land use disputes — Callies found that “state courts do not often permit the use of the consent decree to get around state and local land use and environmental laws,” although some state courts have done this. Some federal courts, on the other hand, “apparently have no qualms about using the consent decree to settle constitutional housing discrimination and environmental litigation, even if the decree requires local government to act outside of, or contrary to, their state statutory authority and/or local ordinances and regulations.”2
“In sum,” Callies writes, “consent decrees appear likely to fare better in federal court than in state court. However, there are state courts that will confer the same kind of superior status on consent decrees by emphasizing the judicial decree rather than the contractual nature of the beast. It would also appear that the pendulum is swinging in favor of using such decrees even if some formal process is lost, so long as there is some process in the judicial proceedings.”3
In early October 1995, attorneys for Kaiser prepared the necessary document that would allow a federal magistrate or judge to have jurisdiction over the settlement of the four federal cases. The document, entitled “Consent to Exercise of Jurisdiction by a United States Magistrate Judge,” was signed by attorneys for Bishop Estate and for the city, and was approved by Judge Samuel P.King on October 18. The document assigns to U.S. Magistrate Judge Barry Kurren responsibility for conducting “any and all further proceedings in these cases for the limited purposes of facilitating and consummating settlement of the … four cases, including … the full power to enter and enforce consent decrees.”
Overriding State Law
Opponents of the proposed consent decree have raised precisely the issue addressed by Callies: Can the parties to a settlement agree among themselves to circumvent state and local laws?
The draft consent decree approved by the City Council on October 11, 1995, provides for just such circumvention. “As this has been a court-mandated settlement, normal planning procedures may be altered … [C]ompliance of the City with this Court’s pretrial order and this Settlement Order and Consent Decree shall constitute compliance with the legal requirements relating to the processing and adoption of ordinances relating to zoning, planning, and coastal zone management.”
Gary Gill, a former member (and at times chair) of the City Council who now is director of the state Office of Environmental Quality Control, told Environment Hawai`i that the proposed consent decree does conflict with state law. “I think there’s a bona fide 343 trigger,” he said, referring to Chapter 343 of Hawai`i Revised Statutes, the law that governs preparation of environmental assessments and environmental impact statements. Under Chapter 343, any amendment of a county development plan in favor of a private developer requires Chapter 343 compliance.4
The state Environmental Council heard testimony on this subject at its meeting of October 25, 1995. Paul Cathcart, manager of Bishop Estate’s urban O`ahu land, told the council that while Kamehameha Schools/Bishop Estate is aware that Chapter 343 “requires an environmental assessment for amendments to the existing county general plan,… this section also provides an exemption for ‘actions proposing any … amendments to any existing county general plan initiated by a county.’ In this instance, the general and development plan amendments have been initiated by the City as part of its efforts to achieve a settlement … on terms negotiated by and acceptable to the city.”
Cathcart added: “We stress that in KSBE’s view, none of the actions contemplated in the settlement are illegal or inconsistent with state law. In fact, the process and procedures proposed in the settlement have been endorsed by Professor David L. Callies of the William S. Richardson School of Law.” Cathcart then refers to Callies’ article in the Stetson Law Review, failing to mention, however, that Callies work was underwritten by Bishop Estate.
Despite circumvention of Chapter 343, Cathcart continued, “as part of the settlement process and procedure … the city has required the preparation of an Environmental Impact Report containing the type of information which Chapter 343 is designed to elicit. None of the private entities have any legal obligation to provide this information.”
Postscript: The Rock Pile
One of the conditions of the settlement is that the city is to “extend all stockpiling permits previously issued with respect to any of the parcels involved for up to 12 months following the termination of this order.” The condition appears designed to quiet claims that have surfaced over the years that Bishop Estate and Kaiser have illegally been using Golf Course 5 and 6 and the Queen’s Beach area for stockpiling of fill taken from other areas in Hawai`i Kai.
In October 1972, The Honolulu Advertiser reported a “moonscape” of boulders had been created at Queen’s Beach. The landscape “is a rugged contrast to the natural foliage and duck pond, which used to make up the area.” As many as four acres of land were reported to be covered with rocks “and other excavation refuse” removed when Kaiser put in a roadway, underground utilities, a drainage channel, and subdivisions in the adjacent Kalama Valley. At the time, a spokesman for Kaiser said the boulders “are being stored there for future use.”
“It will be a gradual process, and the boulders will remain until we can actually move in there,” the Advertiser quoted an engineer for Kaiser as having said.
Nearly 17 years later, the boulders were still there. On September 6, 1989, the Star-Bulletin reported that the Sandy Beach Initiative Coalition was calling for an environmental impact statement and public hearing over the stockpiling of boulders at Queen’s Beach. Tom Grande, a spokesman for the coalition, was quoted as saying Kaiser had dumped “more than 350,000 cubic yards” of boulders and debris on the site over the last 15 years. All but one of the nine sites identified by the coalition lay within the Special Management Area and, as such, an SMA permit should have been required for the stockpiling to occur.
No SMA permit was required originally since the initial dumping permit issued by the city in 1973 was granted before passage of the state Coastal Zone Management Act, which establishes the SMA permitting procedure. According to the Star-Bulletin, Kaiser obtained a “minor” SMA permit — one requiring neither a public hearing nor preparation of an environmental assessment — in 1987.
A similar issue arose in 1988, after the City Council issued Kaiser the major SMA permit it needed for a housing subdivision at Golf Course 5 and 6. Kaiser had placed fill, to a height of up to 10 feet, in the area some years earlier, in anticipation of building houses at an elevation level with the existing golf course. In response to a challenge by the Sandy Beach Initiative Coalition, John Whalen, director of the city’s Department of Land Utilization, indicated that Kaiser might be required to remove some of the fill or justify why it should remain.
Chris Oliver assisted with research for this article.
1. “The Use of Consent Decrees in Settling Land Use and Environmental Disputes,” Stetson Law Review, Vol. XXI (1992), 871-897.
2. Callies, p. 879.
3. Callies, p. 899.
For a further discussion on this point, see “[url=/members_archives/archives_more.php?id=1150_0_29_0_C]Chairman of Water Code Review Panel Denounces Scare Tactics of A&B on Maui[/url].”
Volume 6, Number 8 February 1996
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