The efforts of Nevada casino owner Ralph Engelstad and his wife, Betty, to build the home of their dreams in Lanikai have been chronicled in several past issues of Environment Hawai`i. Most recently, their house plans have been brought before the Board of Land and Natural Resources for approval or denial. The staff of the Office of Conservation and Environmental Affairs recommended the Board require the Engelstads to return with something a little more modest than the 30,000-square-foot edifice the Engelstads are proposing.
The staff’s position is that the house is “grandiose” and unsuited to the area — a steeply sloped parcel of land above Lanikai, in Windward O`ahu. The Engelstads’ position, staked out by their lawyer, Benjamin Matsubara, is that the Board has no authority to withhold denial of any plans that the Engelstads might submit, since the Engelstads won approval to build a house on their land by order of Judge Robert Klein in state circuit court. So long as the actual house built is along the lines of the house proposed in the original Conservation District Use Application, the Engelstads argue, the Board has no reason to object to the Engelstads building it.
Beating the Clock
From the very beginning, the Engelstads have played a waiting game — and have won. This particular permit, awarded by Judge Klein in 1989, came about after the judge determined that the Land Board failed to act in a timely fashion on the fourth Conservation District Use Application submitted by the Engelstads in less than a decade. (The first two were denied; the third was withdrawn. The fourth — the one now in question — was denied by the Board in January 1989 but, according to Matsubara’s argument, accepted by the court, that denial occurred outside the 180-day time frame the Board is given to act upon such applications.)
Now, once again, time is becoming a critical factor in the Engelstads’ case. At the time Judge Klein issued his order, in March 1989, it was not possible for the Land Board to attach any special conditions to the permit. By default, then, the standard conditions in Board rules applied. The Engelstads were notified of this and acknowledged and consented to this by action of their attorney on October 30, 1989. (On that date, Matsubara signed and returned to Land Board Chairman William Paty a letter acknowledging that the standard conditions would apply.)
One of those conditions is that construction be completed within three years of the permit’s award — or, in this case, by the end of March 1992. Matsubara himself admitted to the Board on November 22, 1991, that it will not be possible under any circumstances for the Engelstads to have their house built before the three-year deadline expires.
The Board is under no legal obligation to grant an extension beyond that three-year deadline. Board member Chris Yuen attempted to find out what would happen if that deadline expired and the Engelstads had begun construction. “Would we have the authority to order the house demolished?” Yuen asked Roger Evans, administrator of the DLNR’s Office of Conservation and Environmental Affairs. Evans cautioned against “arbitrary and capricious” action by the Board, but acknowledged that the Board could order the house removed. Matsubara, also questioned by Yuen, agreed that the Board had discretion in deciding whether to grant a time extension, though he expressed confidence that the Board would be reasonable in granting extensions.
Defining ‘Construction’
The Engelstad case illustrates a number of different points nicely, but one of the most important might be the need to tighten up the rules that speak to the need to begin “work or construction” within a year of the award of the Conservation District Use Permit.
Actually, last January, when the Board voided the permit of Timothy Hurst to build a house on Lanikai’s Ka`iwa Ridge, it seemed to have spoken with some finality on the matter. Hurst had done preliminary survey work and soil samples. Still, the Board determined, that degree of work was not sufficient to comply with the requirement that work be started within a year of his taking possession of the property. (For a fuller discussion, see the February 1991 article [url=/members_archives/archives_more.php?id=532_0_33_0_C]”Ka`iwa Ridge Is Spared As Board Defines Construction”[/url] of Environment Hawai`i.)
The “work” done at the Engelstads’ site is hardly more than what Hurst had done. Much of it, moreover, was done after the initial one-year deadline to commence work had passed.
Were the Board to make a firm determination (one that may entail altering its rules) that the one-year deadline refers to the start of construction proper, with all necessary plan approvals in place, the conundrum presented by the Engelstads could be avoided.
As it is, the Office of Conservation and Environmental Affairs has given the public mixed signals as to what qualifies as the “work or construction” that must start within a year. Clearly, two different standards were used in the Hurst and Engelstad cases.
In the latter case, the Engelstads may have believed they were buying time by having the OCEA go along with the rather minimalist definition of work. But, with the Board under no obligation to extend their three-year deadline for completion — a term that, one hopes, is less ambiguous than “work or construction” in the eyes of the OCEA — the generosity of the OCEA may have backfired on the Engelstads. The Engelstads’ project does not enjoy popular support in the surrounding community, nor have its proponents endeared themselves to the Land Board. They have themselves given the Board an opportunity to exercise its discretion by withholding an extension of the period within which construction is permitted.
Sue, sue sue
Whatever course the Board took, it was faced with an inevitable lawsuit. In November, on the eve of the Land Board’s first consideration of the Engelstad plans, Matsubara asked to have the 1989 court case reopened. Among other things, this would allow the court to consider requests from the Engelstads that it order the Land Board to issue approvals under authority of the court-awarded permit. That motion was granted November 27.
Meanwhile, the Lanikai Association, which has consistently and articulately opposed development in this area for nearly two decades, was also prepared to take the Land Board to court if it should approve the Engelstads’ plans. In a letter to the Board of Land and Natural Resources, Association President Tom Cestare rebutted a position paper submitted to the Board by Matsubara the day of its November hearing on the Engelstads’ plans. Whereas Matsubara argued that the court order effectively denied the Board anything more than ministerial review of the Engelstads’ construction plans, Cestare (also a lawyer, as are several members of the Lanikai Association Board) gave the Board what amounts to an opposing legal memo. As Cestare writes:
” ‘Use’ as it pertains to zoning regulations means object or purpose, not the structure to be placed upon the zoned land … As zoning is the overriding purpose of the subchapter [Chapter 183-41 of Hawai`i Revised Statutes], it can be conclusively stated that the term ‘use’ as utilized throughout §183-41 is synonymous with purpose.” In other words, even though the Engelstads may have received, through the court, permission to build a house on their land, nothing in the court order restricted the Board’s authority to review and approve plans for any house they might choose to build.
Volume 2, Number 7 January 1992