Board Talk

Land Board Approves Legacy Land Projects

On May 11, the Land Board unanimously approved funds totaling $4.6 million for seven projects of the Department of Land and Natural Resources’ Legacy Land Conservation Program aimed at protecting more than 12,000 acres statewide.

On O`ahu, the projects include the only relatively intact heiau in the Ko`olauloa region, a significant portion of the popular `Aiea Loop Trail, and a monk seal resting area on the North Shore.

On the island of Hawai`i, they include an easement over and a fee simple purchase of portions of Kuka`iau Ranch. The state will pay $600,000 for a conservation easement over 3,688 acres in Hamakua restricting operations to sustainable forestry practices. Although the applicant was The Nature Conservancy of Hawai`i (TNCH) and the DLNR’s Division of Forestry and Wildlife, only DOFAW will hold the easement.

The Board also approved $1 million for the fee simple purchase by TNCH of 4,469 acres of Kuka`iau Ranch for watershed and palila habitat protection.

(On May 22, a Big Island real estate agent announced that the entire Kuka`iau Ranch – 9,390 acres – was for sale, with an asking price of $16.8 million. For more on Kuka`iau Ranch, see the March 2012 issue of Environment Hawai`i.)

In addition to the Kuka`iau lands, the purchases include 635 acres in O`ahu’s Kalauao Valley for critical habitat and watershed protection ($192,750); 9.08 acres protecting the Maunawila heiau ($650,000); 0.75 acres of sand dunes adjacent to the Ka`ena Point Natural Area Reserve on O`ahu ($86,450); 34.64 acres in Kaiholena South, Hawai`i, to add to the Ala Kahakai Trail ($1,449,555); and 3,127.95 acres of coastal land in Ka`u to protect shorelines and access to an area adjacent to the Manuka NAR ($621,245).

At-large member Sam Gon, who is also TNCH’s lead scientist, recused himself from voting on the matter.

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Land Board Writes Off

Uncollectible Accounts

With more than $100,000 at stake, Land Board members Jerry Edlao and Samuel Gon pored over the list of uncollectible accounts submitted by the DLNR’s Division of Boating and Ocean Recreation, looking for anyone they could help track down.

Sixty-four former boating permittees have skipped out on fees and fines totaling $118,159.61, according to a DOBOR report. And that’s just the first round.

DLNR’s collection agency, Medcah Inc., informed DOBOR in August 2005 that the accounts had been removed from the collection process because it had been unable to locate the debtors, some of which owed more than $10,000.

On April 27, DOBOR asked the Land Board to write off the accounts.

“It’s just so sad when you have to write off these uncollectibles,” Edlao said.

DOBOR administrator Ed Underwood noted that the list submitted to the board was just one small portion of uncollectible accounts that the division will eventually forward to the Land Board.

“A lot of these people left and there’s just no way to track them down,” he said.

Land Board chair and DLNR director William Aila said the department is investigating whether it can recoup the money through the debtors’ tax returns.

“Letting these things get up to $11,000, $13,000, $14,000 in arrears, I hope we’re not allowing that,” Big Island Land Board member Robert Pacheco told Underwood.

Underwood explained that once a penalty is imposed for non-payment, they increase exponentially, very quickly.

“By the time we run through the process, the clock is ticking,” Underwood said. “We can impound the boat, but then we forgo fees. The boat may be worth only $500 and you owe us $10 grand.”

He said the department has tried for the past two years to revise statutes governing DOBOR’s ability to recover fees so the division isn’t stuck with a bunch of old, worthless boats.

“In Ke`ehi small boat harbor alone we disposed of 40 boats last year,” he said.

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Board Approves Limited Access 

Over Old Haleakala Trail

On May 11, over objections from hiking groups, the Land Board approved a memorandum of agreement with Haleakala Ranch Co., to allow a minimum of two guided hikes a year on a trail in Makawao that cuts through the ranch toward Haleakala National Park — with a stipulation that an attempt must be made to reasonably accommodate demand.

In January, Public Access Trails Hawai`i (PATH) filed a lawsuit in 2nd Circuit Court against the ranch, the DLNR, the Land Board, the Office of Hawaiian Affairs and other entities seeking to confirm the state’s ownership of the trail and to force the state to provide reasonable public access.

Paul Conry, administrator for the department’s Division of Forestry and Wildlife, told the Land Board on May 11, “we maintain we own the trail,” but the MOA does not address ownership or who has access rights. It does, however, allow DOFAW staff to immediately work on the trail and coordinate with the ranch on a minimum of two guided hikes a year.

DLNR staff had determined in 2000 that the state owned the trail and a deputy attorney general found in 2003 that there was significant evidence to support that conclusion. But in 2009, deputy attorney general Pam Matsukawa had a different opinion. She advised then-DLNR director Laura Thielen that the state may be able to prove it owns an easement over the trail, but it was not clear whether the state owned the trail in fee simple. She recommended an MOA.

DOFAW’s May 11 report to the Land Board claims that PATH doesn’t have the right to litigate the ownership issue on behalf of the state. Not only is litigating the matter an imprudent use of the state’s resources, it also doesn’t benefit the state or the public, the report continues.

“It is not practical or economical to allow the public to use the trail without HRC’s cooperation. Losing the ownership issue will remove any chance that the state and HRC could compromise as to use of the trail. Losing the ownership issue may set a bad precedent as to other possible … trails,” it stated.

With regard to PATH’s attempt to force the state to open the trail within one year of a court order, “whether and how to open the trail to public use is up to the department and ultimately this board. The court cannot order the board to open the trail or spend the money and incur the liability to do so,” it stated.

Conry told the Land Board his division has received testimony in favor of and opposed to the MOA.

“While your staff was negotiating the MOA, some folks got tired of waiting and sued the board and Haleakala Ranch,” deputy attorney general William Wynhoff added. “Assuming it goes to fruition, ownership will be determined, even though that’s not something staff wanted to push.”

Trial has been set for January 2013.

PATH attorney Tom Pierce noted that the territory of Hawai`i had staked the trail from Makawao to the top of Haleakala crater and that the trail appeared on maps as early as the 1860s.

Several years ago, PATH tried to work with the ranch on a solution, but the ranch rejected its settlement offer and instead started working on an MOA with the DLNR, Pierce said.

“The DLNR is looking for something that is administratively simple. But is to basically rubber stamp what the ranch has submitted appropriate? We would argue that it’s not,” he said. Pierce asked that the Land Board table the MOA and launch its own investigation into the state’s ownership of the trail. Approving the MOA would send the wrong message to other landowners who might have public trails across their properties.

“The BLNR does not have the authority to enter into an MOA for land that it owns,” he said.

Land Board members Rob Pacheco and Jerry Edlao, on the other hand, didn’t see any real downside to the MOA.

Board chair and DLNR director William Aila added that an MOA providing for controlled access was an interim solution pending resolution of the ownership dispute.

“If the state were in control, I don’t know if I have the resources to make it safe. It’s on a working ranch. … The ranch will be able to chase the cows away. … We’re being sued every day for people falling off a mountain,” Aila said.

To Haleakala president Don Young, unfettered public access was also out of the question given the surrounding livestock operation and the trail’s difficult mauka section.

“It’s important that whatever access is there is managed,” Young said. “If it did become a 20-foot corridor owned by the state … the reality is it would [need to] be a fully fenced corridor” to protect the public.

In the end, the Land Board voted unanimously to approve the MOA with additional language requiring the parties to allow as many trips as needed to reasonably meet demand. Pacheco also recommended that guides could be from an agreed upon hiking organization and not be limited to ranch or DLNR personnel.

He added that providing unlimited access to a trail that is not well defined at the start, crosses a working ranch, and ends where there are no parking facilities is premature.

“I just hope the hiking community realizes this is giving us something,” he said. If the lawsuit proves the state doesn’t own the trail, the public would have no access. If it does own the trail, it would still take a long time for the DLNR to go through the process to open the trail,” he said.

Nakula Trail

The Haleakala trail isn’t the only source of friction between PATH and the DLNR. PATH executive director David Brown has alleged that government corruption is interfering with efforts to access the Nakula Natural Area Reserve.

At the March 21 meeting of the Na Ala Hele Maui advisory council, DOFAW access and acquisitions coordinator Jordan Jokiel announced that he had plans to meet with surrounding landowners, including the National Park Service, the Department of Hawaiian Home Lands, Haleakala Ranch Co., and state lessee Brendon Balthazar to discuss incentives, terms and conditions associated with establishing a route to the Nakula reserve. Jordan is also drafting an MOA.

“Support for access to Nakula is growing and DOFAW wants to move forward,” the meeting minutes state.

One council member suggested that the best route might be through the historic access across DHHL’s lands.

“The connection between Sen. [Clayton] Hee and Brendon Balthazar make it impractical to pursue access to the Nakula trail through the Balthazar leased land and it is best to look at the DHHL property for access,” the minutes state.

In a May 14 letter to Environment Hawai`i, Brown alleged that Na Ala Hele administrator Nelson Ayers told the council that “Senator Hee would ‘protect’ Mr. Brendon Balthazar and his large Nakula lease (1,565 acres) and that the Hawai`i state public would never have legal access. … On Maui, we call this GOVERNMENTAL CORRUPTION.”

Hee, an O`ahu rancher, is chair of the state Senate Judiciary and Labor Committee. In 2000, he accompanied then Land Board chair Michael Wilson on a site visit of Balthazar’s leased property to investigate unauthorized structures that had been built.

Balthazar, owner of Diamond B Ranch, leases 1,565 acres of state land near Hana. His lease expires in 2038.

Ayers told Environment Hawai`i that Clayton Hee has nothing to do with the Balthazar lease or efforts to establish an access to the reserve.

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After Board Orders Seawall Removal,

Landowner Agrees to Easement Terms

Four years after seeking an easement for encroachments on state property, California resident Tom McConnell seems ready to sign.

On May 25, the Land Division of the state Department of Land and Natural Resources recommended rescinding an April 27 Board of Land and Natural Resources decision to require McConnell to remove a seawall, a fence and filled land fronting a Niu beach property owned by his company, TLM Partners, or face stiff fines. The division also recommended dismissing or allowing for the withdrawal of TLM’s request for a contested case hearing.

On May 11, through his attorney, McConnell agreed to four payment triggers proposed by the Land Division. If he signs it this time, McConnell will have a 55-year, non-exclusive easement for the encroachments, but will have, at most, ten years to pay for it.

Taking a Stand

“Personally, my feeling is we’re being jerked around. I don’t like being jerked around,” Jerry Edlao said. And the Maui Land Board member wasn’t alone.

Edlao’s comments came as the board was meeting on April 27, when it voted, 6-1, to order the removal of the encroachment, which McConnell had discovered while preparing to rebuild his house.

Although the Land Board had approved TLM’s easement request in 2008, McConnell later balked at its final terms and refused to sign it. In May 2010, he asked for his money back, roughly $135,000. In January, a majority of the Land Board agreed to return the money with a stipulation that should McConnell and the DLNR fail to perfect an easement document within 30 days, the DLNR would pursue an enforcement action.

Back then, Kaua`i board member Ron Agor had suggested that the DLNR grant TLM an easement and secure payment by means of a first mortgage on the property.

That suggestion became a point of contention over the ensuing negotiations between Land Division administrator Russell Tsuji and McConnell’s attorney, Greg Kugle.

Kugle’s position was that the Land Board had endorsed Agor’s suggestion with no additional conditions. Tsuji disagreed, arguing that additional terms were necessary to ensure the DLNR would receive payment for the easement in a reasonable time frame. Tsuji had insisted on a deadline for payment in case TLM never sells its property. Kugle argued that the Land Board did not impose any deadline.

In March, Tsuji informed the Land Board that he and Kugle could not agree on easement terms and that he would be pursuing an enforcement action.

On April 27, Tsuji asked the Land Board to order TLM to remove the encroachments, which include the seawall, a wire fence, and the filled lands, within 180 days, and pay administrative costs of $4,295.

Should TLM fail to meet the deadline, Tsuji recommended that it be fined $1,000 a day per violation commencing on the date of the board’s order.

“It’s simply unprecedented to have an easement without actual payment,” Tsuji said.

Tsuji said he had proposed various triggers for payment, which would need Land Board approval, but McConnell preferred to stall.

“I told him, ‘You are no longer an easement holder. You are encroaching on state land. If you’re not going to agree to an easement, you leave us no choice but to go to the board to remove,’” Tsuji said.

Tsuji had proposed that payment be required if the property is sold, 10 years pass, or if TLM gets either a shoreline certification or a building permit.

Devil’s Advocate

At the April meeting, O`ahu board member John Morgan asked Tsuji to respond to several issues McConnell’s attorneys had raised in recent correspondence.

First, there was the issue of fairness. The seawall fronting McConnell’s property spans several lots in Niu Beach. So why was only McConnell’s portion being targeted?

Tsuji said his division is aware of the encroachments along Niu beach lots and that applications for easements on some of them have been pending for years.

“We will be moving them,” he said, “This is the first one we’re bringing to the board where the owner is refusing to get an easement.”

Morgan noted that there has been a lot of debate whether the encroaching land was filled or accreted. If it is accreted land, it belongs to McConnell.

Tsuji admitted that proving the land was filled will require experts and expensive borings that may not yield a definitive answer. Even so, the DLNR is prepared to litigate that point, he said, adding that all of the department’s land and coastal experts believe the land was filled.

“The filled land is five feet above the submerged lands. There’s no way it was accreted,” Tsuji said.

Morgan then asked if there was any record of how these shoreline properties got expanded beyond their boundary lines.

“Each lot would need to be looked at and studied thoroughly,” Tsuji said, noting that there have been many instances in last year and half where extra areas have been added to county Tax Map Key maps for shoreline properties without any legal justification. Kugle can’t show McConnell legally acquired the land fronting his property, he added

“At the end of the day, there was no evidence. We honestly tried to find something [to prove] these property owners legally acquired the additional lands. We couldn’t,” Tsuji said.

Finally, he reminded the board that it was TLM’s own consultant who applied for the easement. The board approved it, money changed hands, then, “lawyers got involved,” he said, drawing a chuckle from the room.

Morgan asked about the due process concerns McConnell’s attorney had raised. In an April 26 letter to the board, attorney Christi-Anne Kudo Chock pointed out that the DLNR had not served TLM with a notice of violation or any written notice or proof of the department’s claims.

“Placement of a vague request on the Land Board agenda, with no personal service upon TLM, also constitutes a deprivation of due process,” she wrote, adding that TLM is entitled to a contested case hearing.

Tsuji disagreed, noting that McConnell and his attorneys have known since January that the case could become an enforcement action if they failed to reach an agreement with the DLNR within 30 days. He added that he had been trying to coordinate a meeting with the Land Board for months, but had been continuously put off by McConnell.

Morgan noted that McConnell agreed to appear at the Land Board’s May 11 meeting and suggested deferring the matter until then.

But Tsuji was clearly fed up.

“We didn’t come to terms on an easement. We have to do an enforcement … unless you, the board, tell me that these terms are unreasonable,” he said, adding, “Nobody gets these kinds of terms. Why? Because he lives in Niu Beach lots and has a $5 million home?”

Big Island Land Board member Rob Pacheco, who had opposed returning TLM’s money, also preferred to press on.

“At the January meeting, it was very clear, the cat was out of the bag [that there was an encroachment]…. Four months later, we don’t have an agreement. I wasn’t interested in the lien concept. I’m not inclined to defer this,” he said.

Edlao added that he had warned McConnell that if he didn’t get an easement, there would be an enforcement action and that the only guys making money would be the lawyers.

Kudo Chock noted that McConnell has actually agreed to most of Tsuji’s recommended payment triggers.

If that were true, Edlao said, “I suspect he would have been here to end this. … I’m tired of this. I don’t want to defer this. If you want to contest this, then fine.”

In the end, the board members (except for Morgan) approved a motion by at-large member David Goode to accept staff’s recommendation and ask it to continue easement negotiations up until a contested case hearing is granted.

Nothing regarding the easement was scheduled for the Land Board’s May 11 meeting, although Kugle submitted a letter that day agreeing to the four triggers.

— Teresa Dawson

Volume 22, Number 11 June 2012