Scheuer, commission chair, continued. \u201cKapulu, that\u2019s a shame thing to have. This project has been kapulu from the start, but I have no intention of having this proceeding go forward in a sloppy manner.\u201d<\/p>\n
With that, Scheuer laid down conditions under which the parties to the commission\u2019s proceedings \u2013 landowner Waikoloa Highlands, Inc., the Hawai\u2018i County Planning Department, and the state Office of Planning \u2013 would be continuing to argue their respective positions on the LUC\u2019s Order to Show Cause (OSC) issued to Waikoloa Highlands in July. The order requires Waikoloa Highlands to plead its case to the commission as to why the commission should not revert the 731 acres it owns near the village of Waikoloa, in the Big Island district of South Kohala, to the state Agricultural land use district from the Rural district.<\/p>\n
Back in 2008, the LUC conditionally approved the request of the landowner at the time, Waikoloa Mauka, LLC, to shift the land from Ag to Rural, which was a condition of a rezoning ordinance passed by the Hawai\u2018i County Council. One of the conditions the LUC imposed required completion of \u201cbackbone infrastructure\u201d needed before the first residential lot could be sold within 10 years of the date of LUC approval, a date that passed in June.<\/p>\n
Some of the more contentious issues that emerged during the LUC\u2019s hearing, held in Kona on October 24 and 25 were:
\n\u2022 A dispute over whether Waikoloa Highlands (WHI) had satisfied the affordable-housing condition included in the LUC approval;<\/p>\n
\u2022 Testimony by representatives of WHI as to its corporate structure and ownership that conflicted with exhibits WHI had entered into the LUC record;<\/p>\n
\u2022 An effort by the project manager for WHI to influence individual members of the commission through disallowed ex-parte communication;<\/p>\n
\u2022 Concerns over the availability of funds to complete the project;<\/p>\n
\u2022 The potential threat of litigation over violation of due-process and equal- protection claims by the landowner\u2019s attorney.<\/p>\n
By the close of the October hearing, Scheuer and other commissioners had set forth a list of topics that they wanted to have briefed before the commission\u2019s next scheduled meeting on the Big Island on November 28. Among other things, the commission seeks clarification of ownership and corporate structure from the landowner and, from the county, clarification of the affordable housing matter and explanation of the county\u2019s zoning procedures. In addition, it desires to have the parties brief the commission on legal questions relating to how the commission\u2019s original 2008 order should be interpreted.<\/p>\n Within moments of the hearing having opened, the first foreshadowing of the messiness \u2013 kapulu \u2013 occurred. Commissioner Nancy Cabral made a disclosure. \u201cI want to let you know for the record, I do know Joel LaPinta,\u201d Cabral said, referring to WHI\u2019s project manager. \u201cI received an unsolicited phone call from him last week. He said he was calling on behalf of the Waikoloa matter and made statements about the ownership of the property, that the current ownership is distinguishable from the former.\u201d<\/p>\n \u201cHe impressed on me the need for Hawai\u2018i to have additional affordable housing … and that this project should be able to move forward. I repeatedly instructed him he should contact LUC staff. I would also indicate that I should not have discussed anything with him. I\u2019ve informed Mr. Orodenker\u201d \u2013 Daniel Orodenker, executive director of the LUC \u2013 \u201cand want to bring this to the attention of the commission.\u201d Cabral insisted that the communication would have no influence on her eventual decision in the case.<\/p>\n Scheuer then directed his comments to Steve Lim, the attorney representing WHI, rather than to La Pinta, seated directly to Lim\u2019s right. Noting the state law and LUC\u2019s own rules that prohibit ex-parte communication, Scheuer said: \u201cI will note for the record that a member of your management team communicated with a commission member, in violation of Hawai\u2018i Revised Statutes and administrative rules, with the intention of providing the commissioner with information to influence her vote. …<\/p>\n \u201cYou need to advise your clients to avoid any contact with the commission. All communication should be through the commission\u2019s executive director or staff.\u201d \u201cUnderstood,\u201d Lim responded.<\/p>\n The first witness Lim called was Valery Grigoryants, who had traveled from Moscow to attend the hearing. Although Grigoryants understood and spoke some English, for the sake of accuracy, he testified in Russian, with his responses translated by Irina McGriff, a court-certified Russian interpreter from Honolulu.<\/p>\n Grigoryants identified himself as vice president of Arch, Ltd., \u201cand the company Arch is owner of Waikoloa Highlands,\u201d then, apparently correcting the translator, clarified: \u201cwas the owner.\u201d According to an exhibit labeled \u201cCorporate Structure of Waikoloa Highlands as of October 11, 2018,\u201d submitted by Lim, Arch itself is a Bahamian-registered company that is wholly owned by Davies Partners Limited, which in turn is wholly owned by Vitaly Grigoryants. According to Valery Grigoryants, Vitaly is his brother.<\/p>\n \u201cThe company Arch at this time is no longer owner of Waikoloa, but this is just a different story,\u201d he continued. At present, he said, the Vitoil Corporation owns Waikoloa Highlands. The same exhibit on corporate structure shows that Vitoil is itself wholly owned by Arch.<\/p>\n The problems with developing Waikoloa Highlands, Grigoryants claimed, can be traced back to the fact that he and his brother placed too much trust in Stefan Martirosian, who until 2017 was the public face of the project with authority to enter into contracts. Grigoryants said he met Martirosian in the late 1990s. Just \u201clike Jewish people help Jewish people,\u201d he said, \u201cArmenian people help Armenian people.\u201d Martirosian \u201cseemed to me and my brother as a very intelligent, smart man,\u201d Grigoryants testified. \u201cOver time, we developed a trustful relationship, like brothers. Our relationship became so close that when his mother passed away, we came to the funeral, flying 13 hours, and when my mother passed away, he flew all the way from Los Angeles to Moscow for the funeral.\u201d<\/p>\n<\/div>\n Lim questioned Grigoryants on rumors that his company was involved in criminal acts. \u201cOne of the other issues has been the suspicion that this Russian company came to Hawai\u2018i to buy land with a lot of money and because of that they must be Russian gangsters or illegal money.\u201d<\/p>\n \u201cYou know, I often hear this,\u201d Grigoryants replied. \u201cOn the one hand, I get angry, on the other I start to laugh, because this is just typical stereotype. You know, I\u2019d like to tell you at the beginning of the 1990s, my brother and I started business by selling shoes. Then we started to sell alcoholic drinks, then other things, all different types of things. We started to open stores. And then we were lucky to have the opportunity to be introduced to [the] oil business.\u201d<\/p>\n Grigoryants insisted that the balance sheet of Arch, for the last 20 years, \u201ceverything was clean. Each year of the Arch company, from the auditor in London. It\u2019s not a problem to provide documents. That\u2019s why I\u2019m smiling. I\u2019m not a bandit.\u201d<\/p>\n He went on to list some of Martirosian\u2019s betrayals: \u201cFor example, without having authority from us he applied for money by putting land as collateral. And he took pocket money. There were many cases like this in California and the U.S. Virgin Islands as well. We have some land there, too.\u201d<\/p>\n \u201cIn summer of 2017, we started to have concerns about him and we stopped trusting him,\u201d Grigoryants told the commission. Companies controlled by him and his brother have now filed lawsuits against Martirosian in Armenia, in 2017, and California, this summer. Martirosian was tried in absentia in Armenia, with a guilty verdict issued in October 2017. When he flew into Moscow shortly afterward, he was arrested at the airport and held for extradition. According to Grigoryants, Martirosian was extradited to Armenia in July, where he is now in prison. More lawsuits may be forthcoming, Grigoryants said.<\/p>\n As for Martirosian\u2019s role in Waikoloa Highlands, Inc., Grigoriants stated that \u201cMr. Martirosian was never owner of the company or any other companies in the United States as well as abroad. He was just a hired manager… And now he is fired from all the positions.\u201d<\/p>\n Commissioner Gary Okuda wanted to know more about Valery Grigoryants\u2019 own place in the corporate hierarchy. The chart outlining corporate structure indicates that Vitaly Grigoryants is the \u201cultimate beneficial owner\u201d of all the entities, from Waikoloa Highlands up through Davies Partners, Ltd.<\/p>\n \u201cAre you the ultimate beneficial owner or is your brother?\u201d Okuda asked.<\/p>\n \u201cThe owner as you can see is my brother. We have a separate agreement where we make all the decisions together,\u201d Grigoryants replied.<\/p>\n \u201cI\u2019m trying to determine the accuracy of Exhibit 28,\u201d Okuda said, referring to the corporate ownership outline. \u201cIs the first block at the top, which indicates Vitaly Grigoryants as ultimate beneficial owner \u2013 is that first block completely accurate or is there additional information that needs to be added?\u201d<\/p>\n \u201cNo, everything is correct. No additional information needs to be added,\u201d Grigoryants answered.<\/p>\n Commission chair Scheuer also pursued a line of questioning about ownership.<\/p>\n \u201cI want to make sure I heard you correctly earlier. You testified that Mr. Martirosian has no ownership in any of these entities? Is that correct?<\/p>\n Grigoryants affirmed his statement.<\/p>\n \u201cSo I\u2019m trying to understand the exhibit,\u201d Scheuer said, \u201cthe May 9, 2016, resolution signed by Aykaz Ovasafyan as well as Mr. Martirosian appointing Ms. [Natalia] Batichtcheva as director for Waikoloa Highlands, Inc.\u201d The exhibit shows that Martirosian signed as a shareholder of Vitoil, which apparently held a 20 percent ownership in Waikoloa Highlands. Ovasafyan signed as the shareholder representative of Arch, which was listed as owner of an 80 percent share of Waikoloa Highlands.<\/p>\n \u201cI see what you mean,\u201d Grigoryants responded. He went on to describe Ovasafyan as \u201cdirector of Arch company. And also he\u2019s nominal [sic] of Arch, but beneficial owner of Arch is Vitaly.\u201d<\/p>\n Scheuer asked for an explanation of the difference.<\/p>\n \u201cThere is a trust agreement between Vitaly Grigoryants and Ovasafyan where Ovasafyan is the nominal owner, where he keeps his shares in the trust for the benefit of Vitaly,\u201d Grigoryants said. Scheuer asked that the trust agreement be entered into the record.<\/p>\n<\/div>\n AsfarasMartirosian\u2019sapparentownership interest in Vitoil, spelled out on the exhibit, that, too, was a mistake. Per Grigoryants, Martirosian \u201cnever had any interest and still now he doesn\u2019t have any interest.\u201d<\/p>\n Scheuer: \u201cSo, regarding Exhibit 5, it was given to us as an exhibit by you, as a basis for decision making, but you state now it is erroneous as regards Martirosian\u2019s ownership and role?\u201d<\/p>\n Grigoryants: \u201cYes. And I can explain. We give you what we have. There\u2019s a mistake… We give it to you. We didn\u2019t make any changes on that document.\u201d<\/p>\n Scheuer then asked Grigoryants if he was listed in any of the documents provided. \u201cI see your brother\u2019s signature and name, but not yours. Are you pointed to anywhere in these documents?\u201d<\/p>\n Grigoryants identified a letter on Arch Limited letterhead, signed by Ovasafyan and dated October 12, stating that Vitaly Grigoryants \u201cis holding position of the president and Valery Grigoryants is holding position of the vice-president of Arch. Ltd.\u201d<\/p>\n Additional documents submitted by Waikoloa Highlands show there are in fact two directors of Arch listed in corporate papers filed with the Bahamian government: Ovasafyan of Moscow and Roberto Rodriguez Bernal, of Panama.<\/p>\n Commissioner Okuda then questioned Grigoryants about his understanding and intentions regarding the land purchased in Hawai\u2018i.<\/p>\n \u201cI would say we had the intention to develop, but we didn\u2019t know where to start, how to start at that time just because we didn\u2019t have any experience of development in the United States,\u201d Grigoryants said. Martirosian then retained the services of planning consultant and former Hawai\u2018i County planning director Sidney Fuke to help with the process. \u201cSo the role of Mr. Fuke was to guide us, to explain. He was supposed to tell, advise Stefan on what<\/p>\n<\/div>\n stages to go through and then Stefan was supposed to inform us.\u201d<\/p>\n Okuda:\u201cBut in any event, you understood that certain approvals and certain things would have to be done with government entities to proceed, correct?\u201d<\/p>\n Grigoryants: \u201cEverybody knows. It\u2019s common knowledge.\u201d<\/p>\n Okuda: \u201cAnd you agree that if the people working for your company have made promises to any of the government entities here in Hawai\u2018i your company is supposed to live up to those promises, correct?\u201d<\/p>\n Grigoryants: \u201cI don\u2019t evade any responsibility. I accept full responsibility. I just regret that we discovered things too late.\u201d<\/p>\n Another issue that concerned the commissioners was financing. A document provided to the commission indicated that an Armenian bank wholly owned by Valery\u2019s brother Vitaly Grigoryants had committed $45 million to Arch and had agreed to allow those funds to be transferred from Arch to Waikoloa Highlands, which would use the funds to develop the project.<\/p>\n \u201cYou say you have authority to make decisions,\u201d commissioner Dawn Chang said in her questioning of Grigoryants. \u201cWhat are you doing different now to ensure that the development proceeds that you didn\u2019t do when Mr. Martirosian was in charge?\u201d<\/p>\n Grigoryants noted that there was a new director, Natalia Batichtcheva, in place. \u201cSecondly, we hired in project manager [Joel] La Pinta. We secured financing… We are planning, since we are not local, to invite a local developer for mutual cooperation.\u201d<\/p>\n \u201cIn 2008,\u201d when the LUC issued its approval for the project, \u201cwe didn\u2019t know about the subdivision, that we had to make the project,\u201d Grigoryants said.<\/p>\n Under further questioning, Grigoryants said that in 2010, his company did have $92 million available for financing the project, but invested in the movie industry instead. \u201cIf we knew, we could have invested into this project.\u201d<\/p>\n Chang probed further: \u201cThis 45 million dollars set aside for or committed by your brother\u2019s bank, if you have different opportunities, other than this Waikoloa development, will you withdraw that money for this project?\u201d<\/p>\n Grigoryants said that wouldn\u2019t happen.<\/p>\n \u201cWould you put that money in an escrow account to ensure it goes to this project?\u201d Chang asked.<\/p>\n \u201cIt\u2019s not a business approach,\u201d Grigoryants answered. \u201cNobody would approve 45 million in escrow for 10 years. We don\u2019t need 45 million every year.\u201d<\/p>\n La Pinta provided additional testimony on Waikoloa Highlands\u2019 capital needs. Asked by Edmund Aczon whether he had a financial plan for the project, La Pinta said he did. \u201cIt is my responsibility,\u201d he said. \u201cI did the financial modeling.\u201d<\/p>\n How much will the project cost? Aczon asked. \u201cIs 45 million enough?\u201d<\/p>\n \u201cActually, it\u2019s way more than we need,\u201d La Pinta said. \u201cWhat happens is, this is done in increments. As increments go forward, we sell lots, which reduces capital costs. This particular model here, the peak capital during the entire sell-out of the project toward development costs comes to $15.8 million.\u201d<\/p>\n Under the scenario outlined by Lim in statements to the LUC and by La Pinta, the lots should be able to be sold before any actual \u201cbackbone infrastructure\u201d \u2013 roads, water lines, other utilities \u2013 are developed. After the county grants tentative approval to a subdivision plan, Waikoloa Highlands will register the lots with the state Department of Commerce and Consumer Affairs (DCCA). That paves the way for the DCCA to issue a preliminary order of registration, which allows the developer to enter into contracts for sale of lots. Eventual installation of infrastructure is assured through the posting of a completion bond.<\/p>\n La Pinta elaborated: \u201cYou wouldn\u2019t subdivide and put streets in for 398 lots,\u201d he said. \u201cYou do it in increments. Each increment is done as sales occur. Proceeds from sales would come back to help fund the project. So when I described that number\u201d — $15 million \u2013 \u201cit was based on a certain rate of sales, a certain rate of doing development incrementally.\u201d<\/p>\n Chang asked La Pinta whether he was confident Waikoloa Highlands could proceed on the existing environmental studies that were completed more than a decade ago. \u201cYou are confident those studies are still relevant and pertinent to today?\u201d she asked.<\/p>\n \u201cYes,\u201d La Pinta replied.<\/p>\n The sufficiency of environmental studies was a theme picked up by Scheuer as well, who noted that since the LUC approved the original docket, the State Historic Preservation Division had revised its rules.<\/p>\n Regarding water, Scheuer asked if La Pinta knew how much the water demand for full build-out would be.<\/p>\n \u201cI only focused on the first phase,\u201d La Pinta replied. \u201cWe would have to execute an extension agreement\u201d with the private water company now expected to serve the development.<\/p>\n \u201cDo you know which aquifer the water comes from?\u201d Scheuer continued.<\/p>\n \u201cWe rely on West Hawai\u2018i Water Company. It\u2019s not within the purview of our work,\u201d La Pinta said.<\/p>\n \u201cSorry,\u201d Scheuer said. \u201cI understood as an expert in development, you\u2019d be able to testify as to water for the entirety of the project.\u201d<\/p>\n Was La Pinta aware of the sustainable yields of the aquifer that the project would draw on? Scheuer asked.<\/p>\n No.<\/p>\n \u201cAre you aware the [state] Water Commission is going to go out with revised numbers for those aquifers?\u201d<\/p>\n No.<\/p>\n \u201cAre you aware that the Water Commission is preparing to revise downward the sustainable yields for the two aquifers in this area?\u201d<\/p>\n No, La Pinta answered.<\/p>\n \u201cAre you aware the downward revision of sustainable yield could result in designation of these areas as groundwater management areas?\u201d<\/p>\n La Pinta said he was aware of that, but acknowledged he did not know much about it.<\/p>\n Scheuer then asked if La Pinta was familiar with Unite Here v. City and County of Honolulu<\/em>, the Hawai\u2018i Supreme Court case decided in 2010 that addressed the question of the shelf life of environmental disclosure documents.<\/p>\n La Pinta acknowledged he was not familiar with it.<\/p>\n A condition of the LUC approval of the petition to reclassify the land from Agricultural to Rural was that the developer satisfy Hawai\u2018i County conditions for an affordable housing contribution. Chapter 11 of the county code describes how those contributions are to be calculated. For the project anticipated by Waikoloa Highlands, the developer needs to earn affordable housing credits equal to 20 percent of the total number of residential lots in the project. With 398 residential lots planned, that number comes to 80. Generally, one affordable unit equals one credit.<\/p>\n<\/div>\n As Environment Hawai\u2018i<\/em> reported in September, the county\u2019s Office of Housing and Community Development (OHCD) signed off on a deal where some 11.7 acres of land owned by Waikoloa Highlands was transferred to a for-profit company, Plumeria at Waikoloa, which in turn resold it to a third company, Pua Melia, which is in talks with the county to develop affordable housing and a commercial center on the site.<\/p>\n But because of a drainage channel that cuts through the property, at most just 32 units of affordable housing can be built by Pua Melia, far short of the 80 credits required by the county\u2019s affordable housing law.<\/p>\n Although the OHCD administrator gave Waikoloa Highlands a release from further need to comply with affordable housing conditions in July 2017, the county has now taken the position that Waikoloa Highlands has not yet fulfilled the affordable housing condition. In connection with challenges to the sufficiency of the affordable housing agreement, representatives of Waikoloa met on October 19 with the OHCD to discuss the possibility of conveying another three or four acres to an entity that would develop low-cost housing.<\/p>\n The county\u2019s statement of position on the show-cause order, drafted just days before the LUC hearing, states: \u201cThe county has concerns about the affordable housing agreement and affordable housing release, but believes petitioner [WaikoloaHighlands] is engaging in good faith negotiations to fulfill its affordable housing obligations. The affordable housing agreement was supposed to be in compliance with Chapter 11, article 1 of the Hawai\u2018i County Code and required the land to be conveyed to a nonprofit corporation. … and that the land be sufficient to accommodate the number of affordable homes the developer would have needed to build.<\/p>\n \u201cAlthough the affordable housing release was premised upon the land being conveyed to a nonprofit, the land was conveyed to Plumeria at Waikoloa LLC. This entity does not appear to have been a nonprofit entity and subsequently sold the land to another entity for a reported $1.5 million. That entity has submitted an application for affordable housing project to OHCD but this project will not accommodate the number of affordable homes that the developer would have needed to build. A nonprofit entity has expressed interest in a project to build more affordable homes than required if it had sufficient land.\u201d<\/p>\n At the commission meeting, La Pinta described a recent meeting with the OHCD. \u201cThey asked us to come and meet with them to acquire more land to accommodate 80 affordable units on the site. … We would like to accommodate them. They\u2019re taking about working with a nonprofit. They like to do the 80 town-homes as affordable rentals. … We ended it with, we\u2019re willing to work with them,\u201d La Pinta said.<\/p>\n Commissioner Edmund Aczon raised the matter of Waikoloa Highlands\u2019 ultimate responsibility to comply with the affordable- housing requirement, suggesting that conveying the land to Plumeria at Waikoloa didn\u2019t necessarily absolve Waikoloa Highlands from its responsibilities. \u201cThe petitioner is responsible to make sure the conditions are met,\u201d he said.<\/p>\n La Pinta responded by saying that after the transfer, \u201cthe county agency is in charge from that point on to work with developers.\u201d<\/p>\n Aczon: \u201cI beg to differ.\u201d<\/p>\n Jeff Darrow, planning program manager for the county Planning Department, was questioned by Lim on the sufficiency of the affordable housing agreement entered into by the county\u2019s Housing Office and its subsequent release of Waikoloa Highlands from the housing condition.<\/p>\n \u201cWhy was this release agreement executed by the county?\u201d Lim asked.<\/p>\n \u201cI can\u2019t answer that question,\u201d Darrow replied.<\/p>\n When asked who might be able to,Darrow identified the housing administrator, Neil Gyotoku, and the deputy corporation counsel advising his office, Amy Self.<\/p>\n Darrow went on to say that at the time the housing agreement was signed and the release granted, \u201cit was the understanding that that agreement would satisfy the affordable housing requirements\u201d imposed both by the LUC and by the county\u2019s own rezoning ordinance, last updated in 2013.<\/p>\n \u201cWhy the change of position?\u201d Lim asked.<\/p>\n \u201cA question has arisen on the transfer of the 11.7 acres to an entity that was not considered a nonprofit entity.\u201d<\/p>\n Lim pursued the topic: \u201cThe only issue the county had with the method of satisfying the affordable housing requirement was that the conveyance was made to a for-profit company rather than a nonprofit?\u201d<\/p>\n The county attorney, Ron Kim, objected at that point, stating that Darrow wasn\u2019t the person who could answer that.<\/p>\n Lim: \u201cThe petitioner is concerned. We had an agreement. Now the county says you didn\u2019t do what you needed. We\u2019re trying to determine what, exactly, they want us to do.\u201d<\/p>\n \u201cThe position that we have is that currently, in looking at the release agreement and looking at Chapter 11, which is the housing code, is that there is a conflict and that needs to be resolved,\u201d Darrow said.<\/p>\n Commissioner Okuda asked Kim whether he could detail how WH has not satisfied the affordable housing condition.<\/p>\n \u201cThe main factual problems with the agreement are that it doesn\u2019t comply with its own terms or the county code. The county cannot contract to trump its own code,\u201d Kim replied. The code requires \u201cthat if the developer is to donate land to either a nonprofit or county in lieu of developing it itself, the conveyance must be to either the county or a nonprofit. In this case, the conveyance was to a for-profit, which turned around and sold the property for a reported $1.5 million.<\/p>\n \u201cAnd the other problem with the property that was conveyed is that it is not supposed to have any unusual characteristics that would make it difficult to develop. Yesterday, Mr. La Pinta testified to the substantial drainage easement that made it difficult to develop, and also the unusual shape. Finally, the land donated is supposed to be sufficient to accommodate the number of affordable housing units which the developer is required to build, and in this case the actual owner now of the property is saying he can only build \u2013 I believe the number we had yesterday was 32 affordable housing dwellings. So those are the problems I see. Also, by its own terms, the housing agreement claimed Plumeria at Waikoloa was a nonprofit, which was not true.\u201d<\/p>\n<\/div>\n \u201cI think we have a different understanding than the petitioner,\u201d Kim concluded, \u201cbut if we could go through with negotiations to donate an addition three acres, then it sounds like the petitioner would be able to meet the affordable housing requirement.\u201d<\/p>\n When Okuda raised the matter of estoppel \u2013 the idea that the county could be barred by raising a claim of a violation when its own agency had signed off on the proposal \u2013 Kim replied that this was not an issue. \u201cThe county can\u2019t be bound by estoppel,\u201d he replied, arguing that the agreement was an \u201cultra vires<\/em> act\u201d \u2013 that is, the housing agency exceeded its legal authority when it signed the agreement and release.<\/p>\n Okuda: \u201cSo, even if the petitioner might have been misled into believing it had complied with the affordable housing agreement, because the county wasn\u2019t authorized to take the action, then its kind of the petitioner\u2019s tough luck.\u201d<\/p>\n Kim noted that the county code was a public document, easily obtained. \u201cIf the petitioner had read the code,\u201d he said, \u201cthey would understand that they had not fulfilled the code.\u201d<\/p>\n Even so, the county\u2019s position supports as appropriate the current LUC classification of the land as Rural.<\/p>\n Much of the questioning of Darrow was focused what might happen if the LUC reverted the land to Agricultural.<\/p>\n Darrow outlined some of the hoops the landowner would need to go through to develop the land in a fashion similar to that already proposed. There would need to be a zone change, since the property is now in the county\u2019s rural zone, conforming with the LUC designation. The one-acre zoning for rural residences would need to be changed to Family Ag, one-acre, or FA 1a. However, Darrow added, \u201cIn the record, it shows the actual agricultural significance of this land is minimal.\u201d<\/p>\n Commissioner Chang observed that even if reversion occurred, \u201cThere is still potential use of this property,\u201d so long as the landowner\u2019s plans were consistent with county zoning and its General Plan.<\/p>\n And, in any case, the same requirement of Chapter 11 for affordable housing contributions would apply, Darrow noted.<\/p>\n The current zoning ordinance expired in March, he said, so even if the LUC did not revert the land, Waikoloa Highlands would still need to get the zoning ordinance of 2013 \u201crefreshed,\u201d as he put it. If reversion did occur, then things would be more complicated, requiring an amendment to the General Plan.<\/p>\n Chang also noted another option if the LUC ultimately voted to revert: Restarting the boundary amendment process before the commission.<\/p>\n Lim had a final question for Darrow: If the commission reverted the land \u201cthis month\u201d and the county processed the General Plan amendment required to accommodate the development on Agricultural land, how many years would it take from today to complete the general plan amendment?<\/p>\n \u201cJust a guess, but several years,\u201d Darrow replied.<\/p>\n \u201cIn excess of three years?\u201d Lim asked.<\/p>\n<\/div>\n \u201cCould be.\u201d<\/p>\n \u201cRezoning, how long does that take?\u201d Lim asked.<\/p>\n \u201cNormally six months to one year.\u201d<\/p>\n Lim: \u201cSo the processing time for as re- do of the project might be a minimum of four years.\u201d<\/p>\n Darrow: \u201cIt very well could be.\u201d<\/p>\n Hawai\u2018i County did not object to keeping the Waikoloa land in the state Rural land use district, but did list a number of conditions, in addition to that of affordable housing, that it claimed Waikoloa Highlands had yet to fulfill.<\/p>\n The state the Office of Planning, on the other hand, did not object to reversion to Ag. The requirements for traffic management improvements, affordable housing, archaeological preservation, Civil Defense measures, failure to file notice of changes in ownership, and failure to file annual reports were among the unfilfulled conditions that Dawn Apuna mentioned in explaining the office\u2019s position.<\/p>\n In addition she said, there had been \u201cno substantial commencement of the use of the land … No document draws the connection between Martirosian\u2019s bad acts and the failure to move forward. It is unclear why the project has not substantially commenced since Martirosian was removed two years ago.\u201d<\/p>\n The Office of Planning had no witnesses to call, although Apuna was accompanied by Rodney Funakoshi, administrator of the OP\u2019s planning program.<\/p>\n Lim attempted to have Funakoshi called as a witness, even though Apuna had not offered him as one.<\/p>\n \u201cIf the Office of Planning is going to rely on written testimony, then we have the right to question the witness who supports it.\u201d<\/p>\n \u201cWe\u2019re in a show-cause proceeding,\u201d Lim said. \u201cThe petitioner wants to prove<\/p>\n the similarity or dissimilarity with other show-cause proceedings.\u201d After a short executive session, Scheuer rejected Lim\u2019s request. \u201cWhen you were explaining the nature of your inquiry, I said they went to argument more than to specific questions required of a witness from the Office of Planning. I clarified that we would be providing an opportunity for all parties to still present closing argument as well as briefing.\u201d<\/p>\n Lim: \u201cFor the record, we believe the testimony of Mr. Funakoshi would assist the petitioner\u2019s argument that the present order to show cause proceeding is subject to potential claims for violation of due process and equal protection as compared to other similarly situated properties. The only way I can prove that is through the Office of Planning witness.\u201d<\/p>\n \u201cYou\u2019ve stated that on the record,\u201d Scheuer noted. He added, however, \u201cI would clarify that for now, the possibility that Mr. Funakoshi could be called hasn\u2019t been closed.\u201d<\/p>\n As the meeting drew to a close, commissioners described the nature of materials that they wanted the parties to file briefs on. The county was asked to provide written documentation of its position on affordable housing and to describe the county\u2019s planning process.<\/p>\n Okuda requested briefs on what, in light of a court case brought by Bridge \u2018Aina Le\u2018a against the state, constitutes \u201csubstantial commencement of the use of the land.\u201d In addition, he asked for \u201cpresentation of legal authority … as to whether the internal management of the petitioner is relevant to this proceeding.\u201d<\/p>\n Chang, on the other hand, suggested the Bridge \u2018Aina Le\u2018a case wasn\u2019t germane to the Waikoloa situation. \u201cI would like the parties to brief, in looking at this decision and order, whether \u2013 what is the standard of review in light of condition number 2 and condition number 3.\u201d Condition 2 defines completion of the project: \u201cpetitioners … shall complete buildout of the project,\u201d going on to define it as \u201ccompletion of backbone infrastructure to allow for sale of individual lots.\u201d Condition 3 allows for reversion in the event of failure. \u201cI don\u2019t even know whether \u2018Aina Le\u2018a even applies, since in this case, the decision and order itself defines failure,\u201d Chang said.<\/p>\n Commissioner Cabral: \u201cIn addition to all the other homework assignments, I would like to ask the petitioner if we could get clarification, a written statement or clarification, of the items that are different from what was previously reported in writing.\u201d<\/p>\n The briefs and additional information are due by November 19, eight days before the next scheduled hearing. The Land Use Commission posts materials it receives from the parties on its website: luc.hawaii.gov.<\/p>\n \u2014 Patricia Tummons<\/strong><\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":" “There’s a Hawaiian word, kapulu,” Jonathan Scheuer noted near the end of a two-day hearing of the state Land Use Commission on the stalled Waikoloa Highlands project. Scheuer, commission chair, continued. “Kapulu, that’s a shame thing to have. This project has … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":10488,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[442],"tags":[7],"class_list":["post-10741","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-november-2018","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/10741","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10741"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/10741\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/10488"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/environment-hawaii.org\/wp-content\/uploads\/2018\/10\/IMG_2165.jpeg\")
<\/a>The Opening Shot<\/h4>\n
<\/a><\/p>\nFrom Russia, With Smile<\/h4>\n
Who\u2019s Who<\/h4>\n
<\/a>The Money Trail<\/h4>\n
Affordable Housing<\/h4>\n
<\/a><\/p>\nIn the Event of Reversion<\/h4>\n
<\/a><\/p>\n\u2018Due Process\u2019<\/h4>\n