One of the first actions taken by the new administration of Hawai\u02bbi County Mayor Mitch Roth following his inauguration last December was to soften the county\u2019s stance toward the \u02bbAina Le\u02bba development. The previous administration had been insisting that the developer would need to prepare a new environmental impact statement before being allowed to do further work on the 1,100-acre site in South Kohala where \u02bbAina Le\u02bba is proposing to build more than 2,000 housing units.<\/p>\n\n\n\n
\u02bbAina Le\u02bba challenged this requirement in a lawsuit filed in 3rd<\/sup> Circuit Court and the county corporation counsel vigorously defended the Planning Department\u2019s position \u2013 until last December, when the county and \u02bbAina Le\u02bba filed with the court a stipulation that put the case on hold while the parties attempted to work out a settlement.<\/p>\n\n\n\n In late April, the county appeared to have worked out an agreement with \u02bbAina Le\u02bba to resolve their differences. A Memorandum of Agreement signed by Richard Bernstein, identified as president of \u02bbAina Le\u02bba, Inc., and Mayor Roth, recited many of the conditions in the redistricting order approved by the state Land Use Commission in 1989 and in the county rezoning ordinance, adopted in 1996.<\/p>\n\n\n\n The most recent annual report that the developer filed in March, provides an update on progress toward some of these conditions. \u02bbAina Le\u02bba claims that plans for the intersection with Queen Ka\u02bbahumanu Highway \u201care in final review\u201d by the state Department of Transportation and that it has placed $2 million in escrow to pay for intersection improvements. It also reports that the state Department of Health had approved a decade ago the installation of a membrane bioreactor wastewater treatment system to serve the townhouse development, Lulana Gardens, that has been partly built on a 38-acre parcel within land owned by \u02bbAina Le\u02bba. On that parcel, a total of 432 units are planned, with 385 intended to satisfy the requirement that \u02bbAina Le\u02bba develop at least 385 units of affordable housing, as defined by county guidelines. So far, \u02bbAina Le\u02bba told the county in March, 40 of those units had been completed.<\/p>\n\n\n\n \u02bbAina Le\u02bba is required to donate a school site to the Department of Education. However, specifically with regard to developing the Lulana Gardens parcel, it has asked the county to waive the requirement.<\/p>\n\n\n\n In the annual report, signed by Robert Wessels \u2013 the CEO of \u02bbAina Le\u02bba and its many related companies since 2009 \u2013 Wessels notes that Lulana Gardens \u201chas not reached agreement with the County Planning Department on the amount of \u2018Fair Share\u2019 contribution the Lulana Gardens affordable housing should contribute. Lulana Gardens desires to reach agreement with the Planning Director as quickly as possible defining what will be acceptable \u2018in kind\u2019 and what is required in cash. Lulana Gardens desires to pay the cash portion with the issuance of Certificates of Occupancy for each unit.\u201d <\/strong>(Boldface type is in the original.)<\/p>\n\n\n\n The memorandum of agreement addresses this \u2013 for Lulana Gardens. For the 432 units planned in that increment, the fair-share payment comes to $4,645.29 per unit, for a total of $3.3 million.<\/p>\n\n\n\n In addition to the fair-share payment, Lulana Gardens must pay real property taxes \u2014 something it has failed to do for several years. For the Lulana Gardens parcel alone, the tax bill at press time stood at $335,438. The total property tax owed for all \u02bbAina Le\u02bba parcels, including penalties and interest, stood at more than $812,600.<\/p>\n\n\n\n Outstanding Balance<\/em><\/strong><\/p>\n\n\n\n The unpaid tax bills suggest \u02bbAina Le\u02bba may not be in the pink of financial health. But adding to its woes is a foreclosure lawsuit brought against it by Iron Horse Credit, LLC, the lender of last resort whose $5 million loan allowed \u02bbAina Le\u02bba to emerge from bankruptcy in 2019.<\/p>\n\n\n\n Iron Horse brought the lawsuit in October 2020. A few weeks later, \u02bbAina Le\u02bba responded by adding the County of Hawai\u02bbi and its planning director as third-party defendants, alleging that \u02bbAina Le\u02bba could not pay off the loan because the county had prevented it from fulfilling its obligations under the loan agreement. In other words, \u02bbAina Le\u02bba\u2019s argument went, because the county at that time had refused to approve an environmental impact statement preparation notice, or EISPN \u2014 the first step toward preparing a new environmental impact statement \u2014 \u02bbAina Le\u02bba could not move forward with construction of the buildings that, when sold, would create the revenue stream needed to pay back Iron Horse.<\/p>\n\n\n\n From late November 2020 until late September 2021 \u2014 a period of nearly 10 months \u2014 the county did not respond to \u02bbAina Le\u02bba\u2019s efforts to drag it into the Iron Horse case.<\/p>\n\n\n\n But on September 21, deputy corporation counsel Ryan Thomas asked the court to dismiss the county as a third-party defendant.<\/p>\n\n\n\n \u201c[T]he obligations \u02bbAina Le\u02bba had to pay the Iron Horse mortgage was [sic] not conditioned upon actions of the county, because said obligations did not interfere with the county\u2019s requirement that \u02bbAina Le\u02bba obtain approval of an EISPN. The county\u2019s requirement was excepted from the Iron Horse mortgage as evidenced by the terms of the loan agreement. The loan agreement also showed that the county was not privy to the mortgage,\u201d Thomas wrote.<\/p>\n\n\n\n Then there was this: Ryan told the court that the claims \u02bbAina Le\u02bba was making \u201care presently being litigated in another case\u201d \u2013 the case that the company brought seeking to void the county\u2019s requirement that an EIS be prepared. The same case, that is, where action had been suspended last December by virtue of a stipulation agreed to by both the county and \u02bbAina Le\u02bba, purportedly allowing the county and \u02bbAina Le\u02bba to arrive at some agreement short of requiring an EIS.<\/p>\n\n\n\n The third-party complaint, Ryan wrote, \u201cshould be dismissed because the alleged claims are the same claims that are currently being litigated in Lulana. <\/em>The complaint in Lulana <\/em>was filed against the county on March 10, 2010 [sic], approximately seven months PRIOR to Iron Horse filing their complaint. The claims asserted in the third-party complaint and Lulana<\/em> arise from the same exact set of facts and circumstances. In that case, Lulana <\/em>(organized by \u02bbAina Le\u02bba) moved for partial summary judgment, and the motion was denied. Lulana<\/em> is still active. The claims raised in the third-party complaint should continue to be addressed in Lulana,<\/em> not here, as it is improper.\u201d<\/p>\n\n\n\n The motion to dismiss the county as a third-party defendant will be heard by the court at 9 a.m. November 19 via Zoom. (Zoom conference ID is 610 665 7731.) The Lulana <\/em>case, on the other hand, remains dormant, with no substantive filings with the court since the stipulation was filed last December.<\/p>\n\n\n\n The Mayor and the Sellers<\/em><\/strong><\/p>\n\n\n\n In 2019, then-mayor Harry Kim memorialized a meeting with \u02bbAina Le\u02bba principals in a letter to Wessels dated November 6. In it, Kim reaffirmed the county\u2019s position that \u02bbAina Le\u02bba would be required to prepare a new environmental impact statement. Noting that \u201cthe representations made to me at our meeting on October 14, 2019, appear to be incorrect,\u201d Kim went on to list key elements that the company seemed to mis-understand, including:<\/p>\n\n\n\n The project \u201cis not exempt from environmental review\u2026. There is not a valid accepted Final EIS \u2026 In 2010, the Planning Department previously accepted a final EIS for a larger project that differs from the present proposal for Lulana Gardens. As you know, in 2013, the Circuit Court of the Third Circuit found that the Planning Department should not have accepted that statement because it did not take a hard look at whether the project covered by the 2010 EIS was a segment of a larger project or also whether there were cumulative impacts which were not fully analyzed.\u201d<\/p>\n\n\n\n But the current administration of Mayor Mitch Roth has been actively promoting sales of units in the Lulana Gardens development.<\/p>\n\n\n\n Roth makes an appearance in a video broadcast on Hawaii News Now\u2019s HI Now program, a platform where commercial entities can buy time. The segment is sponsored by Hawai\u02bbi Development Group, a company whose two principals, Kelly Valenzuela and her daughter, Lailan Bento, say they have entered into a partnership with Roth to bring affordable housing to the Big Island.<\/p>\n\n\n\n The program\u2019s narrator claims that thanks to a partnership with Hawai\u02bbi Development Group, Lulana Gardens \u201chas come to life.\u201d<\/p>\n\n\n\n \u201cThe great thing here,\u201d says Roth, making an appearance in the video, \u201cis that they\u2019re going to be providing over 400 rental units.\u201d<\/p>\n\n\n\n The video shows Valenzuela and Bento showing off staged units to the mayor. \u201cThis is really nice,\u201d Roth says.<\/p>\n\n\n\n Another website, ainaleahi.com, would seem to solicit investments in the publicly traded company. \u201cThe Town of \u02bbAina Le\u02bba provides an outstanding opportunity to its partners to acquire a major holding of residential-zoned estate [sic] in the heart of one of the fastest growing luxury neighborhoods, with a proven track record of significant land value appreciation,\u201d reads the text under the \u201cInvestment\u201d and \u201cProgram\u201d tabs of the website. No prospectus for potential investors is offered.<\/p>\n\n\n\n Investment solicitations are highly regulated by both the state and the federal government. There has been no filing with the federal Securities and Exchange Commission since June 22, 2017, when the company announced it had filed a voluntary bankruptcy petition.<\/p>\n\n\n\n — Patricia Tummons<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" One of the first actions taken by the new administration of Hawaiʻi County Mayor Mitch Roth following his inauguration last December was to soften the county’s stance toward the ʻAina Leʻa development. The previous administration had been insisting that 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":[338,489],"tags":[7],"class_list":["post-13987","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-land-use","category-november-2021","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/13987","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=13987"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/13987\/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=13987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}