For years, the various owners of land in South Kohala where the \u02bbAina Le\u02bba development is proposed have struggled to move forward with their plans. The problems they have faced related to permitting and entitlements, but also to finances.<\/p>\n\n\n\n
The current owners of the 1,100 acres in the state Urban land use district that are at the heart of the development are all subsidiaries of \u02bbAina Le\u02bba, Inc. That company, headed up by Robert Wessels, has gone through several metamorphoses since Wessels first came onto the scene more than 10 years ago.<\/p>\n\n\n\n
In August 2019, \u02bbAina Le\u02bba emerged from bankruptcy, thanks largely to a loan from Iron Horse Credit, secured by the property. But since June, Iron Horse alleges in a 3rd<\/sup> Circuit complaint filed October 13, \u02bbAina Le\u02bba has been in default. \u201cAs of October 1, 2020,\u201d the complaint says, \u02bbAina Le\u02bba \u201cowed plaintiff the sum of $5,429,772.97,\u201d with additional amounts \u201ccontinuing to accrue.\u201d The loan agreement states that interest has been prepaid, but \u02bbAina Le\u02bba will still pay 8 percent annual interest on the principal balance of the loan. If the loan goes into default, the interest rate jumps to 18 percent.<\/p>\n\n\n\n The complaint also names as defendants three parties known to hold superior mortgages: Romspen Investment Corp., Bridge \u02bbAina Le\u02bba, LLC, and Libo Zhang, a Chinese national.<\/p>\n\n\n\n On November 29, \u02bbAina Le\u02bba filed its response. Among other things, argued its attorney, Mike Matsukawa, \u201cthe circuit court may lack subject matter jurisdiction\u201d because the federal bankruptcy court retained jurisdiction \u201cover certain subjects and issues that pertain to or are related to the bankruptcy plan\u201d referred to in the Iron Horse complaint.<\/p>\n\n\n\n In the main, the defense comes down to blaming the county. \u201cThe Defendants\u2019 inability to fully perform their obligations for the loan and the defaults that the Plaintiff has asserted \u2026 are the result of and caused by the County of Hawai\u02bbi and the Planning Director, Department of Planning for the County of Hawai\u02bbi\u2019s failure and refusal to perform the obligations on their part to be performed under the bankruptcy plan, which performance conditions the Defendants\u2019 obligations to the Plaintiff\u2026,\u201d the brief states.<\/p>\n\n\n\n As Environment Hawai\u02bbi <\/em>reported in 2019, when \u02bbAina Le\u02bba was emerging from bankruptcy, the company claimed that it possessed all necessary permits to move forward with construction of 385 units of affordable housing and other projects it had dangled before investors.<\/p>\n\n\n\n Yet even then, the county Planning Department put the company on notice that it was still required to prepare an environmental impact statement, as the county had earlier determined that one prepared more than a decade ago was inadequate. That determination followed a legal challenge to the EIS brought by the Mauna Lani Resort Association, which owns property that lies between \u02bbAina Le\u02bba\u2019s property and the ocean.<\/p>\n\n\n\n But earlier this year, Lulana Gardens, LLC, one of the companies \u02bbAina Le\u02bba established to develop the affordable housing project, filed a complaint against the county and Michael Yee, its planning director, asking the court to find that that earlier EIS is sufficient, notwithstanding the county\u2019s determination.<\/p>\n\n\n\n Third Circuit Judge Robert Kim heard arguments in July on Lulana Gardens\u2019 motion for partial summary judgment, and ruled against it on August 24.<\/p>\n\n\n\n Since that ruling, there have been no additional documents filed in that litigation.<\/p>\n\n\n\n Perhaps recognizing that they would need to prepare a new EIS after all, last month, representatives of \u02bbAina Le\u02bba met with Planning Department staff to discuss what was needed to get the department to accept an EIS preparation notice for the development. Once the EISPN is accepted by the county, the county can then forward it to the state Office of Environmental Quality Control for publication in its bi-monthly Environmental Notice.<\/p>\n\n\n\n In the normal course of events, the EISPN triggers a range of comments from the public and interested agencies, which comments are then used in developing a draft EIS. The draft EIS is once more considered by county planners before being forwarded for publication in the OEQC\u2019s Environmental Notice. Following a comment period, a final EIS is prepared and published. If no legal challenge is brought, the way is cleared for the county to issue the necessary permits.<\/p>\n\n\n\n From the time an EISPN is published to final, unchallenged acceptance of an EIS can take a year or more.<\/p>\n\n\n\n Bridge \u02bbAina Le\u02bba Seeks Cert<\/em><\/strong><\/p>\n\n\n\n In July, Bridge \u02bbAina Le\u02bba, which once owned the \u02bbAina Le\u02bba project site and which still owns about 2,000 Agricultural acres wrapping around the Urban land on three sides, appealed a 9th<\/sup> Circuit Court decision to the U.S. Supreme Court. That appellate court ruling earlier this year had the effect of denying Bridge compensation that it says was owed to it by the state when the Land Use Commission reverted the Urban land \u2013 now owned by \u02bbAina Le\u02bba \u2013 to the state Agricultural District. The reversion was effected in 2011 following Bridge\u2019s failure to complete construction of at least 16 affordable housing units by March 31, 2010 \u2013 the deadline set by the LUC following years of delay in fulfilling conditions set in the redistricting order.<\/p>\n\n\n\n That reversion was overturned in state court but Bridge has claimed that it nonetheless is owed compensation for the period of time in which the reversion was in effect.<\/p>\n\n\n\n Bridge filed its petition for a writ of certiorari on July 17. Since then, a host of organizations and individuals have filed amici curiae briefs in support of Bridge, including the Pacific Legal Foundation (joined by the Cato Institute and New England Legal Foundation), University of Hawai\u02bbi law professor David Callies with three other \u201ctakings\u201d scholars, the National Association of Home Builders, the Owners\u2019 Council of America, the National Association of Reversionary Property Owners, and Reason Foundation. <\/p>\n\n\n\n No one has stepped forward as an amicus of the state.<\/p>\n\n\n\n On September 30, however, the outside legal counsel retained by the state filed his request to extend the deadline for the state\u2019s response. It was filed on November 25.<\/p>\n\n\n\n \u201cThe extension is warranted because the undersigned counsel \u2026 was recently retained as counsel of record and must familiarize himself with the issues and record,\u201d he wrote in the request, which was granted by the court.<\/p>\n\n\n\n That undersigned counsel? None other than Neal Katyal, the former acting solicitor general of the United States, but perhaps better known for his frequent appearances on MSNBC, where he is the resident legal analyst.<\/p>\n\n\n\n — Patricia Tummons<\/em><\/strong><\/p>\n\n\n\n For Further Reading<\/em><\/p>\n\n\n\n Over the years, Environment Hawai\u02bbi <\/em>has written numerous articles on the ups and downs of this proposed development. All articles may be viewed free of charge on our website, www.environment-hawaii.org<\/a>. For a full list, readers may wish to use the search engine in the upper right corner of the home page.<\/p>\n","protected":false},"excerpt":{"rendered":" For years, the various owners of land in South Kohala where the ʻAina Leʻa development is proposed have struggled to move forward with their plans. The problems they have faced related to permitting and entitlements, but also to finances. The … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":7162,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[476,338],"tags":[7],"class_list":["post-13126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-december-2020","category-land-use","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/13126","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=13126"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/13126\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/7162"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}