Developers Set Sights Once More On Coast of Rural East Moloka’i
In November 1969, the Board of Land and Natural Resources approved a Conservation District permit for a marina and other improvements that were part of a huge resort development to be built near Kamalo, Moloka’i. Included in the larger development were five six-story hotels to be built makai of the highway, with condominiums to be built mauka. Seaward of that a marina would be dredged on 108 acres of submerged lands that the developers had leased from the state in the same month that the Conservation District permit was approved.
Extensive dredging – of up to 1.5 million cubic yards – occurred in the year following. Much of the dredged material was used to fill in about half of the adjoining Paialoa fishpond. No construction or excavation has taken place since.
But if the developers have their way, all that will be changing soon. In November 1994, almost 25 years to the day from the time the Conservation District permit was issued, Chris Hart, the former planning director for Maui County now in private practice as a consultant, wrote Keith Ahue, then the chairman of the Board of Land and Natural Resources. On the developers’ behalf, Hart sought Ahue’s approval of revised plans for what is now being called Kamalo Marina Park.
The Department of Land and Natural Resources has so far accepted Hart’s argument that the new marina is covered by the original 1969 Conservation District permit and that the only requirement now is that the board approve an amendment to that permit.
Economic Stimulant
Included with Hart’s letter to Ahue were plans calling for construction of a “public boat launch, if requested by the Board;” a “proposed Conservation District Wetlands Area” of some 18 acres (generally covering the unfilled portion of Paialoa fishpond); a general store, ice house, boat repair yard, public yacht club (all on the now-submerged lands under lease), and an access drive alongside the eastern boundary of Paialoa fishpond. Mauka areas, owned by the same parties that now hold the lease of submerged lands, would be developed into two-acre “agricultural” lots. (The area now zoned agriculture had been upzoned to urban in 1969; however, because the anticipated development did not occur, the land reverted to its prior zoning in the mid-1970s. The exception to this is the half of Paialoa fishpond that had been filled: The entire fishpond had originally been in the Conservation District. Only the unfilled half reverted to Conservation status. The remainder was placed into the Agriculture District.)
In early 1995, Hart met with staff from the Department of Land and Natural Resources, including Deputy Director Gil Coloma-Agaran, Roger Evans, administrator of the DLNR’s Office of Conservation and Environmental Affairs, and James Schoocraft, administrative services officer of the DLNR’s Division of Boating and Ocean Recreation. In a follow-up letter to Coloma-Agaran, dated April 7, 1995, Hart recapped their discussion, and mentioned that “in the process of preparing the revised Master Plan,” he had met also with Mason Young, administrator of the Division of Land Management, and William Kennison, the Maui member of the Land Board. “In every case,” Hart wrote, “there has been acknowledgement of” a need for more marinas statewide, a need to stimulate Moloka’i’s economy, and the ongoing force of the lease of submerged lands. No one had objections to the new plans, Hart said.
A Valid Permit?
The first point raised in Hart’s letter addressed the ongoing validity of that 1969 Conservation District permit. Hart referred to a memorandum dated May 11, 1983, from Roger Evans of the OCEA.
That 1983 memo traces back to a notice of default that the DLM had sent to the lessees of the submerged land. The default was cured, but, in the course of clarifying the status of the lease and other matters, the consultant for the developers sought confirmation that the Conservation District permit remained valid. In a letter dated January 25, 1983, Stanley G.H. Yim, the consulting engineer on the project, informed the DLM that expenditures amounting already to almost $1.7 million had been spent on dredging. “Even though such large sums of monies have been spent to date, there still remain a lot of outstanding work before the project is completed,” Yim wrote. “Since the last construction activity occurred quite a few years ago, we can only assume that the Conservation District Use Application approval for the project is still valid. If it is not, we request, by way of this letter, for authorization to complete this project.”
Yim’s inquiry was forwarded to Evans, who responded on May 11, 1983. The CDUA was valid, Evans wrote, “for the following reasons:
“At the time of approval, there was no requirement for project completion within a limited time. In addition, at the time of approval there were no environmental requirements – i.e., environmental assessments and impact statements.
On June 30, 1995, responding to Hart’s April letter and apparently taking at face value the documents Hart had provided, Board Chairman Michael Wilson informed Hart that the original Conservation District permit remained valid. To address any revisions to the approved plans, however, it would still be necessary for Hart to obtain from the full Land Board approval for any revision to the original plan, Wilson wrote.
Altered Footprints
The original permit covered only that portion of the development proposed for the submerged leased lands. While the dredging and other activities allowed under that permit were part of a larger resort development, approvals for that larger development, on that land, would have been granted by Maui County. As mentioned earlier, that land had been upzoned earlier in 1969 into the Urban land use district from the Conservation and Agriculture districts. By that action of the Land Use Commission, the fist lands proposed for development were removed altogether from the jurisdiction of the Land Board.
Since 1969, however, the land use classification for that land has changed, so that now, areas that were not under the board’s jurisdiction in 1969 are included in the revised project. Among the amenities now proposed that appear to lie inside the Conservation District but outside the original Conservation District permit “footprint” are the “wetlands” area and the road by which access to the leased submerged lands is to be gained.
Scaling Back
The developers’ original plans for the submerged lands anticipated a much more extensive development than what is now being proposed. Included were three “boatels” with up to 550 rooms total, a yacht club, several hundred boat slips and parking for up to 700 cars. On adjoining fast land were the five six-story hotels and, across the highway, condominiums.
In 1994, Hart informed Ahue that the developers anticipate a “Marina Park which complements the scale and character of rural East Moloka’i.” More recently, Hart has informed Coloma-Agaran that the Marina Park “is being designed … to reflect the softer curvilinear forms of the ancient Hawaiian fishponds still clearly visible along the shoreline of East Moloka’i.”
In 1991, when the Land Board approved the transfer of the lease to a new company, the Maui board member at the time, John Arisumi, required that the developer and the DLNR “work with the community on the proposed development of the project.” In that same vein, Hart, in his letter of November 24, 1994, to Ahue, states that his client “has asked us to design the Marina Park to be used by the residents and fishermen of East Moloka’i.” People who live in the area, however, say that as of mid-August, there had been no overtures to the community by the developer or Hart.
The Principals
The original developers were all based in California: Paul Noel, Leroy Austin, Herbert Austin, and an Austin-owned company, AUSCO. They formed a partnership in Hawai’i called Pua’ahala Company, which obtained the original lease of the submerged lands.
In 1978, the lease was assigned to Pua’ahala Enterprises, whose general partner (and owner of an 86 percent share) was Pacific Investment Company, Inc. PIC in turn, was owned by Hadley-Spector, Inc., a company based in Seattle, Washington, and whose chairman is Richard H. Hadley.
Ninety-one percent of Hadley-Spector is owned by Pacific Building Corporation, which, according to Richard Hadley, had lent more than $2.5 million to Hadley-Spector to support the development of the Moloka’i property. In addition, Hadley-Spector had obtained a $1 million loan from HonFed Bank for the project, with the leased land being posted as collateral.
In 1988, the Land Board consented to transfer of the lease from Pua’ahala Enterprises to Hadley-Spector, but by 1991, the debt Hadley-Spector had run up was more than it could handle. According to a letter from Hadley to the DLNR September 4, 1991, when the debt to HonFed came due, Hadley Spector, Inc., did not have the funds with which to meet this obligation. Further, to proceed with development, an additional capital infusion was absolutely necessary.
$3 Million Investment
In 1991, Hadley-Spector asked the Division of Land Management to convey the lease to a new partnership, called K & H Horizons Hawai’i, Inc. At that time, Richard Hadley informed the DLM, half the partnership was owned by Pacific Building Corporation (parent of Hadley-Spector); half was owned by KGM America, Inc., a Japanese-owned company incorporated in Hawai’i. According to Hadley’s September 4, 1991 letter, “KCM America, Inc.,… brings $3,000,000 into the project. This enabled the repayment of the HonFed debt and is providing the seed capital requirement for development.” Hadley’s company, Pacific Building Corporation, “has contributed to the joint venture partnership the approximately 709 acres of fee title lands and the assignment by Hadley-Spector, Inc., of General Lease No. S-4269 to the partnership will complete Pacific Building Corporation’s initial capitalization obligations to the partnership.”
The lease assignment was approved by the Land Board on November 22, 1991. But when the lease transfer was effected on December 12, Pacific Building Corporation was no longer one of the two partners in K & H Horizons Hawai’i. Instead, Hadley-Spector’s (and PBC’s) interests appear to have been assumed by a company calling itself An. H. Corporation. Records at the Department of Commerce and Consumer Affairs show that An. H. Corporation was formed in Hawai’i on November 1, 1989, with its corporate headquarters housed in the same building as Hadley-Spector and PBC. Directors include Richard Hadley (president), Robert Hadley (vice president), and Harold Spector.
County Concerns
Before any work is done, the project still must obtain a Special Management Area permit and a Shoreline Setback Variance from the County of Maui, through its Moloka’i Planning Commission. In addition, the Moloka’i Community Plan, which does not now call for development in this area, would need revision. To accomplish that, public hearings would need to be held by the Planning Commission, which would then forward a recommendation to the Maui County Council for its ultimate decision.
According to a planner for Moloka’i in the county Planning Department, neither the developer nor its agent has approached the county about obtaining the needed county permits.
On August 11, the Board of Land and Natural Resources gave permission to a koa logger to use state land in the Conservation District for access to private property in the South Kona district of the Big Island, where a koa logging operation has been in place since May of this year. The logger has been using state land in the intervening months, although no permit had been obtained. Were the state to withhold its permission, the logging venture would have become uneconomical, in all likelihood, and would have either had to cease or be done covertly.
The company seeking the permit (in the form of an easement over state land) is KoaAina Ventures, incorporated in November 1994 by principals Kyle Dong and Kent Untermann. KoaAina has a contract to purchase for $1.6 million about 2,250 acres of land now owned by Dillingham Partners, which land it intends to log. That same contract allows KoaAina, at no additional cost, exclusive rights for the next three years to log portions of an area of some 4,080 acres immediately to the south of the parcel to be purchased. (Worth mention is the fact that $1.2 million of the loans taken out by KoaAina for purchase of the land has been guaranteed by the federal Rural Economic and Community Development Agency, an arm of the U.S. Department of Agriculture.)
Both parcels are difficult to access. The only legal access to either one crosses a state parcel makai of the one Dillingham will continue to own. In 1978, Dillingham acquired an easement over the state-owned land, allowing it to carve through the forest and lava fields a rough jeep road onto the more southern of the two parcels. Under terms of the Deposit, Receipt, Offer and Acceptance (DROA) between Dillingham and KoaAina, it fell to Dillingham to secure legal access, so, although KoaAina is the party seeking use of the access, Dillingham Partners was the party applying to the Land Board on KoaAina’s behalf.
Although the state-owned land lies within the Conservation District, Roger Evans, administrator of the Office of Conservation and Environmental Affairs, determined that the use of the road had been established before the area was placed in the Conservation District, and no conservation permit was needed.
Sensitive Issues
Long before the application came to light, evidence of the logging had been reported by residents in the Ho’opuloa area. In June, the Big Island Rainforest Action Group had issued a press release describing “secret logging of 500-year-old koa forest” on the Dillingham land. BTRAG spokesperson Jim Albertini was quoted in that release as saying the ancient trees “are being cut, milled on site, and secretly trucked out of the area in closed container trucks. And it appears the sneaky logging above 4,000-feet elevation has been going on for some time, judging from photos of the area.” Photographs distributed by BIRAG show cut logs, cut lumber and trimmings in the vicinity of the mill and large swaths of cut trees.
According to the staff report to the Land Board, the Division of Land Management asked Dong about the BIRAG allegations. Dong, the report says, “denied this allegation and stated that beginning in March of this year, a saw mill site was being cleared and prepared for placement of a horizontal band saw, carriage, log hoist, and edger saw” on the Dillingham parcel. “Further,” the staff report continues, “Dong stated that the actual logging of old growth (50 years or more) koa trees, and dead, dying and fallen koa trees commenced sometime after the June 12, 1995 commencement date of KoaAina’s Logging Agreement with Dillingham Partners.”
Environment Hawai’i received calls in May reporting that the logging was already well underway before the June date acknowledged by Dong. However, because of the inaccessibility of the site, these reports could not be verified first-hand or confirmed by any state official.
A New Road?
Testifying in opposition to the granting of access was Marjorie Ziegler, resource analyst with the Sierra Club Legal Defense Fund. Ziegler pointed out that the area proposed for logging had been identified as essential forest bird habitat in documents prepared by the federal U.S. Fish and Wildlife Service and the state of Hawai’i. While no formal map of critical habitat for endangered species has been prepared, Ziegler noted that preparation of such a map is a pending issue in an out-of-court settlement of a lawsuit brought by SCLDF against the federal government on behalf of the Hawai’i Audubon Society and the Conservation Council for Hawai’i. For the Land Board effectively to allow the destruction of potentially vital habitat was ill-considered, Ziegler contended.
The Land Board failed to pursue, in its questioning of Dong and Tom Leuteneker, attorney for Dillingham, any of the points Ziegler raised concerning forest-bird habitat. However, Ziegler raised another point that caught the board’s attention: A map that had been drawn with the assistance of the DOFAW chief for the Big Island, Howard Horiuchi, showed that the actual road being traveled by KoaAina vehicles diverged significantly from the legal access granted Dillingham in 1978. Rather than the road zig-zagging up the state-owned parcel, with two very distinct turns, the road used by KoaAina (according to Ziegler’s map) headed directly uphill with no broad turns, entering the Dillingham parcel much farther to the north than the legal access enters it (and also much closer to the parcel to be purchased by KoaAina).
‘Something Positive’
In the end, the Land Board awarded an easement over state land to KoaAina Ventures, subject to a host of conditions. Big Island board member Chris Yuen made the motion for approval, explaining at the same time his reasons for doing so:
“The dilemma we have here is that this is private land in the agricultural district, and under the zoning, the landowner can actually cut down every tree that’s there and not get any permission from the state whatsoever. The only reason that we’re here is that they need to get across state property to haul it out. I don’t know what would happen if we said no. I suppose if the wood is valuable enough, they could take it out by helicopter.
“This is a problem that’s everywhere in South Kona, North Kona as well. There’s a whole band of native forest in Kona that is not protected. There is very little of that land in the Conservation District. Most of that forest is in the Agriculture District. Some of the private landowners have voluntarily held back from cutting their koa, but for the most part, the forest is being degraded by continued pasturage, and is in a severe state of decline.
“I think that by going into this agreement, we would have the opportunity to do something positive in an area that might otherwise just simply die of neglect. So, my specific motion is to approve the staff recommendations, with the amendments attached today… and with some more specific conditions.”
Off Limits
The staffs’ recommendations were for approval of the easement conditioned on KoaAina’s preparation of a forestry management plan acceptable to the Division of Forestry and Wildlife and certain other, less onerous, conditions. Yuen explained his added conditions:
“The management plan still needs to be worked out in its exact details, but my amendment is that the management plan shall contain a provision that there be no harvesting of trees in the area that’s identified as the more intact native forest, which is approximately from 3,600 feet 104,200 feet, the exact boundaries would be worked out in the process of developing the management plan, and that any activities in this area would be strictly to enhance it as a native forest.
“Second, which is something that’s already contained in the draft management plan prepared by the applicant, is that the cutting of trees is limited to dead, fallen, and die-back trees, and that the definition of dieback would be worked out between the applicant and DOFAW. Any harvest of ‘ohia would be incidental.
“Third… the management plan shall have conditions to protect the native bird life that maybe in the area. I did consult with DOFAW – the most knowledgeable person in DOFAW about birds in the area; he confirms they do not find rare or endangered birds in this area, except for ‘io, which is found island-wide. It still does have potential as native forest bird habitat, though, and needs to be protected as such.
“The management plan shall also contain provisions for the fencing and control of ungulates. We don’t want this to be turned into pasture after harvesting is completed…
“Compliance with the obligations of the management plan will run with the land and be binding on any subsequent purchasers. It will run with the land during the entire term of the easement. And even if the easement is abandoned, the management plan is still in place…
“Forestry would have the right to inspect the area on reasonable notice to the applicant, and Forestry can bring with them people not necessarily DOFAW employees, but people such as Forest Industry Association members or interested environmental groups under their supervision in doing their inspection. Forestry will mark samples of the kinds of trees that are not dead, fallen, or dieback – that are not to be cut.”
Although Land Management staff, on the advice of DOFAW, recommended a 25-year term for the easement, Yuen – perhaps because he made the management plan binding on future land owners – proposed that the easement term be 65 years.
The motion was unanimously approved (O’ahu board member Michael Nekoba did not attend the meeting).
On August 2, the Commission on Water Resource Management voted 4-0 to deny the request of the state and the county of Kaua’i to divert water from Makaleha Springs into the Kaua’i municipal water system. This proposal has been discussed at some length in past issues of Environment Hawai’i, especially in the [url=/members_archives/archives_more.php?id=1054_0_29_0_C]March 1995 cover article[/url].
At the CWRM meeting, public testimony was generally opposed to the project. However, both the county Board of Water and the state Division of Land and Water Development (a branch of the Department of Land and Natural Resources) stood firmly behind it.
Among the information that was brought out during the course of testimony were two important disclosures. First, Board of Water Chairman Murl Nielsen stated that estimated water losses in the Kapa’a-Wailua service area ran as high as 15 percent. (Lost water is water that leaves the system in some fashion other than metered usage: examples include leaky pipes, unmetered services, and water used in fighting fires – though almost always, leaks in the system account for the greatest portion of loss).
Second, Andrew Monden of DOWALD disclosed that an agreement existed between the County of Kaua’i and Lihue Plantation, whose irrigation system diverts water downstream of Makaleha Springs. Under that agreement, were Makaleha Springs to be developed as a source for the municipal system, Lihue Plantation could at any time request that the county stop withdrawals so that the water would flow into the plantation’s ditch. Such an agreement would, presumably, be invoked at precisely those times when reliance on the Makaleha Springs system would be greatest, thus undermining the county’s claim that Makaleha Springs was needed as a primary (that is, not a back-up) source of water for the Kaua’i municipal system.
Denial of the application by the commission comes on the heels of Army Corps of Engineers’ suspension of the provisional permit it had issued in March 1994. In a July 27, 1995, letter from Ralph H. Graves, district engineer for the Corps, DOWALD was told that the Corps had “found that there are extended wetland areas along portions of Makaleha Stream… [A]lignment of the 4,000 foot long access road appears to be adjacent to the stream and within these areas.”
Graves continued: “I have also considered changes in circumstances and all substantive objections relating to the authorized activity since the provisional nationwide permit was issued. The potential adverse environmental effect on wetlands from the construction of the access road and pipeline, the substantive objections raised by the [U.S. Fish and Wildlife Service], other agencies, and the public, indicate that the proposed project may have more than minimal net adverse impacts on the environment, and may be contrary to the public interest.”
— Patricia Tummons
Volume 6, Number 3 September 1995
Leave a Reply