The on-again, off-again Kohala development known as the Villages of `Aina Le`a is on again. In August, the state Land Use Commission gave new life to the project when it backed away from the action it took last April to have the 1,060 acres of Urban land revert to the Agricultural classification.<\/p>\n
\tWhy the turnaround?<\/p>\n
\tFor one thing, the commissioners seemed swayed by arguments of DW `Aina Le`a Development, LLC, which has taken over the project from landowner Bridge `Aina Le`a, that it could raise the money necessary to kick-start the affordable housing component of the project. Robert Wessels, the \u201cW\u201d in DW, gave the commission copies of construction contracts and architectural drawings that he said showed DW `Aina Le`a\u2019s commitment and ability to have the affordable units ready for occupancy by the November 17, 2010, deadline that since 2005 has been a part of the Land Use Commission\u2019s conditions on urbanization of the parcel.<\/p>\n
\tFor another, the Hawai`i County planning director, Bobby-Jean Leithead-Todd, insisted that the new developers had the backing of the administration of Mayor Billy Kenoi. \u201cMy instruction from the mayor is, if I\u2019ve got viable projects, I\u2019m to work overtime to make sure approvals go through so the guys can start construction,\u201d she said. Although last spring she had given the developers a 50-50 chance at best of meeting the November 2010 deadline for affordable units, by the time the August meeting rolled around, she put the odds at 85-15 in favor of the developer.<\/p>\n
\tAnd so, on a motion of six to three, commission members voted to rescind the previous order that the developer show cause as to why the land should not be reverted. Two conditions were attached to the motion: one, that the developer complete construction of at least 16 affordable housing units by March 31, 2010; and two, that the Hawai`i County Planning Department provide the LUC with quarterly progress reports on the project. (The motion itself was later determined to have been technically flawed. A re-do was scheduled for the LUC\u2019s meeting in late September.)<\/p>\n
A Clean Slate<\/b><\/i><\/p>\n
The very fact that the developer has changed seemed also to play into the commissioners\u2019 more accommodating views. Relations between Bridge `Aina Le`a personnel and the commission had become frayed, to say the least, in a series of fractious meetings over the last year. In February, Bridge signed an agreement with DW `Aina Le`a to have it take over development. (DW had a walk-on role developer in 2007, but that earlier development agreement fell through. According to documents given to the LUC, to settle disputes that arose back then, resulting in DW losing a $1,000,000 non-refundable down payment, Bridge agreed to sell in installments to Relco, a company owned by Wessels, the 1,062 acres of land reclassified to Urban, with Relco then agreeing to assign the purchase agreement over to DW, in which Wessels also holds a considerable stake.)<\/p>\n
\tThree weeks after the LUC voted to have the land revert to Agricultural, DW `Aina Le`a asked that it be given status as a \u201cco-petitioner\u201d with Bridge in the LUC case and that the commission stay enforcement of the reversion order. In June, the commission agreed to grant the stay, re-open the show-cause hearing, and allow a one-day hearing for DW to submit additional evidence why the land should not revert.<\/p>\n
\tThat hearing occurred August 27 at the Marriott Waikoloa hotel, just a few miles from the land in question.<\/p>\n
\tAlthough in the end the commissioners agreed to give DW `Aina Le`a a shot at developing the land, beginning with the affordable units, it faces a number of possibly insuperable obstacles. Among other things, over the next 13 months, DW must not only build the affordable units themselves \u2013 planned to be in two dozen 16-unit blocks on some 60 acres \u2013 but also provide access from Queen Ka`ahumanu Highway, figure out and build some way of dealing with sewage from the occupied units, and install water lines and other utility services to the project.<\/p>\n
\tAlan Okamoto, the attorney for DW, questioned Wessels about several of these issues when arguing DW\u2019s case at the August hearing. When asked about how wastewater would be handled, Wessels responded, \u201cWe are putting in our own package plant on this first phase. It\u2019s a cartridge plant. The supplier feels like they\u2019ve done it before, that the Department of Health can give fairly quick approval.\u201d<\/p>\n
\tWessels also mentioned that the plant would likely be put on land in the state Agricultural District, prompting Commissioner Lisa Judge to point out that while such plants are an allowed use in the Urban district, \u201cit\u2019s not a permitted us on Ag land, which will necessitate additional permits from the county.\u201d<\/p>\n
\t\u201cIs there a reason you\u2019ve chosen the longer path?\u201d she asked Wessels.<\/p>\n
\t\u201cWe certainly didn\u2019t want to choose the longer path,\u201d Wessels replied, adding it was mostly a matter of aesthetics. \u201cThe manufacturer of the package plants says you can hide it, bury it, but you still have to have ponds. Our desire is to have it as far away from the residential area as possible.\u201d<\/p>\n
\tFor intersection improvements, which involve use of state lands, an environmental impact statement will almost certainly have to be prepared. In 2007, an EIS preparation notice was published in anticipation of revamping the entire `Aina Le`a development as a project district, a move that would ease permitting and zoning issues at the county level. No draft EIS has been released yet.<\/p>\n
\tAccording to planner Sidney Fuke, now working for DW `Aina Le`a, studies for the EIS are nearly all complete and the draft document will probably be released mid-November. \u201cSo, if the [state] Department of Transportation requires an accepted EIS before intersection improvements are made, it could be signed off in the first part of next year,\u201d he said. But he insisted that building permits for the affordable units would not have to await completion of the EIS, and Leithead-Todd backed him up on this. The only project that might be delayed by the need to have a completed EIS was the package sewage treatment plant, she said. But, she added, \u201cI don\u2019t think we have a problem getting the EIS submitted and accepted, and getting the package site completed.\u201d<\/p>\n
\tWessels was even more sanguine about the potential delays that could be associated with compliance with Chapter 343, the Hawai`i environmental disclosure law. When asked by Bryan Yee, deputy attorney general representing the Office of Planning, whether in his view the EIS approval was required before the project road could be connected to the Queen Ka`ahumanu Highway, Wessels replied, \u201cI don\u2019t believe the connection to the highway requires an EIS.\u201d<\/p>\n
\tYee: \u201cYou think you can connect up this road, part of the Villages [of `Aina Le`a] project before the EIS is completed?\u201d<\/p>\n
\tWessels: \u201cI believe we can, yes.\u201d<\/p>\n
Financing<\/b><\/i><\/p>\n
One of the first points brought up by Okamoto in presenting DW\u2019s case before the LUC was that of financing. He mentioned specifically \u201ca recent press release concerning funds from Singapore relating to this project,\u201d and asked Wessels to elaborate.<\/p>\n
\tWessels described how the Capital Asia Group in Singapore \u201cacts almost like a bank. They have agreed to provide and have actually sent money to Hawai`i escrow to fund construction on the affordable [housing] site.\u201d<\/p>\n
\tLeithead-Todd also praised the Singapore investors, noting that she and Mayor Kenoi had joined them for dinner recently when about a dozen of them were visiting the island. \u201cThey were real people, not a fictitious offshore bank,\u201d she said. \u201cI was very impressed.\u201d Leithead-Todd later told Environment Hawai`i<\/i> that she and Kenoi did not pay for their meals, at a restaurant at the Mauna Kea Beach hotel, but that she believed Sidney Fuke picked up the tab. She had no clear idea of the cost of her meal, but said she remembered her entr\u00e9e was $28, \u201cso I\u2019d put a value of at least $100 on it.\u201d<\/p>\n
\tAsked if the subject of the `Aina Le`a development came up, Leithead-Todd said it did not arise in her conversations. \u201cMy conversations were more about what they did, their medical backgrounds,\u201d she said. \u201cI was intrigued by the fact that they all spoke English\u2026. They invited us to have dinner with them. It was not so much a business-type meeting as a social gathering.\u201d<\/p>\n
\tAccording to the press release referred to by Okamoto, Capital Asia Group pledged $62 million to the affordable housing portion of the overall project. The group\u2019s website (www.capitalasiagroup.com) suggests, however, that they are not using investment capital already on hand as a source of the funds, but are rather soliciting investors to purchase shares, at $9,600 each, in the land itself. Ten shares purchase \u201cone investment lot,\u201d with 432 such \u201cinvestment lots\u201d available. Liquidity is not a problem, evidently, with CAG promising an \u201cassured exit\u201d within 30 months and a 30 percent return on investment. Maps on the web page describing the \u201creal estate projects\u201d are lifted from the schematic diagrams prepared for the `Aina Le`a development, showing the proposed subdivided lot for the affordable housing in the context of the larger Urban land as well as a site plan for the blocks of townhouse units.<\/p>\n
\tOn August 29, just two days after the LUC hearing (less than 24 hours, if the international date line is taken into account), Capital Asia Group offered a seminar on \u201cHawai`i Real Estate Participation \u2013 The Villages of `Aina Le`a\u201d at the Pan Pacific Hotel in Singapore. \u201cYou own the land, we build on it,\u201d the invitation read.<\/p>\n
\tWessels confirmed that the investors would actually be taking an undivided interest in the land on which the affordable housing is to be built. Capital Asia Group \u201cis selling undivided shares, that\u2019s correct,\u201d he told Environment Hawai`i<\/i> in a telephone interview. \u201cBecause of the nature of many Asian investors, rather than do financing with interest, they actually take title and enter into a joint venture, then they sell. They buy a fractional interest, then they [enter into] a joint venture with the builder, then when the project is completed they sell it, with the builder. They enter into a sales agreement at the same time they do the purchase. It\u2019s a kind of unique financing, but it fits the Asian culture.\u201d<\/p>\n
\tWill individual investors then have their ownership recorded? \u201cYes,\u201d replied Wessels. \u201dThat will be recorded in the Bureau of Conveyances.\u201d<\/p>\n
\tAt the August LUC meeting, Wessels said that his company was poised to take title to the land slated for affordable housing just as soon as the LUC had voted to allow the project to go forward. As of press time, however, the matter was still in escrow. By phone, Wessels told Environment Hawai`i<\/i> that he expected the deal to close by the end of September.<\/p>\n
— Patricia Tummons<\/p>\n
Volume 20, Number 4 October 2009<\/p>\n","protected":false},"excerpt":{"rendered":"
The on-again, off-again Kohala development known as the Villages of `Aina Le`a is on again. In August, the state Land Use Commission gave new life to the project when it backed away from the action it took last April to … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[168],"tags":[450],"class_list":["post-1218","post","type-post","status-publish","format-standard","hentry","category-october-2009","tag-aina-lea"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/1218","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=1218"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/1218\/revisions"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}