Pflueger Company Is Fined $4 Million
\nFor Reef Damages at Pila\u2018a Bay, Kaua\u2018i<\/b><\/p>\n
In the end, even having a powerful state senator as its attorney couldn\u2019t save Pila\u2018a 400, LLC \u2013 a company established and run by maverick developer and former Honda magnate James Pflueger \u2013 from being slapped June 30 with a $4 million fine, the largest ever levied by the state Board of Land and Natural Resources.<\/p>\n
Honolulu attorney Wesley Ching, who with state Sen. Colleen Hanabusa repre sented Pila\u2018a 400 in the contested case hearing leading to the fine, says he was disap\u00adpointed with the Land Board\u2019s decision, and \u201cshocked that they would almost double the hearing officer\u2019s recommendation [of $2.8 million].\u201d Ching told Environment Hawai\u2018i<\/i> that he planned to file an appeal in Fifth Circuit Court on Kaua\u2018i before July 30.<\/p>\n
Pila\u2018a 400 currently owns the cliffside property overlooking north Kaua\u2018i\u2019s Pila\u2018a Bay. Under Pflueger\u2019s direction, the land had undergone massive grading and con\u00adstruction, without permits, over the last several years. Although some portion of the work had been done when another Pflueger company, Pflueger Properties, owned the land, Pila\u2018a 400 was the owner of record on November 26, 2001, when untold tons of mud, loosened by a heavy rain, broke from the unstable plateau, smothered the beach and reef, and killed coral and other marine life in the bay\u2019s sheltered waters.<\/p>\n
In August 2003, the Land Board tried to fine Pila\u2018a 400, Pflueger, and Pflueger Prop erties $5.8 million \u2013 or $1,000 per square foot of damaged coral at Pila\u2018a. Attorneys for the Pflueger parties requested and were granted a contested case hearing, during which Pflueger and Pflueger Properties were dropped from the enforcement action, leav ing only Pila\u2018a 400.<\/p>\n
The case pitted state, university, and private experts in oceanography, coastal geology, coral reef, algae, and other aquatic areas against one another. It also delved into the murky waters of environmental eco nomics, as both sides tried to assign dollar values to a coral reef ecosystem and damages to it.<\/p>\n
After a year of hearings, Mike Gibson, the hearing officer assigned to the case, recommended last December that the board fine Pila\u2018a 400 $2.3 million, and that the fine be held in trust and used to remediate the company\u2019s property. Deputy attorney gen eral Bill Wynoff, representing the DLNR, vigorously challenged Gibson\u2019s recommen\u00addations when the Land Board heard final arguments last March. Pila\u2018a 400 should pay to fix its own property and not be allowed to use the fines to repair it, he argued.<\/p>\n
Wynhoff\u2019s arguments carried the day on June 30, when the Land Board took final action on the case. In its decision, the Land Board concluded that Pila\u2018a 400 alone was responsible for the condition of its property and for preventing runoff from it. When it failed to prevent such runoff, $3.333 million in damages was done to state Conservation District land in Pila\u2018a Bay. In addition to paying for those damages, the Land Board ordered Pila\u2018a 400 to pay $630,000 in moni toring costs ($63,000 a year for 10 years) and roughly $70,000 in administrative costs, for a total fine of about $4,033,000. The fine is to be paid into the state Special Land and Development Fund.<\/p>\n
\u201cUnder the circumstances of this case, the Hearing Officer\u2019s recommendation as to the amount of damages is too lenient to reflect the BLNR\u2019s duty to protect this valu\u00adable natural resource under constitutional and statutory law,\u201d the board\u2019s decision and order states.<\/p>\n
For Pflueger, the incident has proven costly. As a result of this fine and other liabilities that have resulted from work his companies have done on the land, he and his companies may end up spending mil lions more than what they paid to purchase the land in the first place. Pflueger Proper ties bought the 400-acre hillside in 1997 from the Mary Lucas Trust for $6.4 million. In 2001, James Pflueger signed as the seller, buyer, and lender (being a trustee of the Mary Lucas Trust) when Pila\u2018a 400 as\u00adsumed Pflueger Properties\u2019 mortgage and acquired the parcel. Pflueger or Pila\u2018a 400 have already paid roughly $550,000 in state and county fines related to illegal grading, construction and Clean Water Act viola tions stemming from work on the property. And according to the Land Board\u2019s findings of fact, the Pflueger parties have also spent approximately $1 million on emergency sediment control measures and will spend between $3 million and $5 million on Con ceptual Remediation Plans to further mini mize erosion of the property. A civil suit, filed by Pila\u2018a residents whose beachfront homes were damaged by the mudslide, is pending. Ching, who is representing Pflueger in that case, says a tentative trial date has been set for May 2006.<\/p>\n
During the contested case, Pila\u2018a\u2019s attor neys argued that because the state had no administrative rules or laws that spelled out how the Land Board should calculate fines for damages, the Land Board had no au thority to assess them. Both deputy attor ney general Wynhoff and hearing officer Gibson, however, believed the board could consider whatever factors it deemed appro priate in determining a fine.<\/p>\n
In the end, the Land Board rejected Pila\u2018a 400\u2019s arguments and incorporated a broad range of factors into its fine.<\/p>\n
\u201cEconomic and use (market) values alone cannot and do not capture the full value of Pila\u2018a,\u201d the Land Board\u2019s June 30 order states. (Pila\u2018a is popular among Kaua\u2018i resi\u00addents for limu-gathering.) \u201cEconomic valu ation alone understates the true social loss from natural resource damage.\u201d<\/p>\n
Based on evidence presented during the case, the Land Board determined that 26,750 square meters of state and Conserva tion District land had been impacted by the mudflow. In addition to the many values of Pila\u2018a Bay (including existence value, cul tural value, commodity value, and use value), the board also considered reef resto\u00adration costs ($550 to $10,000 per square meter of destroyed coral), coral reef expert Paul Jokiel\u2019s estimate of decreased live coral coverage, beach cleanup cost estimates ($390,000 for 5,000 cubic yards of sand), and compensation for interim losses.<\/p>\n
<\/p>\n <\/b><\/p>\n A case involving the second-largest fine ever levied by the Land Board, against Big Island loggers fined $1.5 million for log ging state land without a license, has hit a snag: On June 9, the Land Board dismissed without prejudice a contested case hearing over the amount of the fine. (Dismissal without prejudice means the matter can be brought back to the board if legal conditions change.)<\/p>\n Two years ago, the Land board fined Steve Baczkiewicz, his company Steve\u2019s Ag Services, Ltd., and Wesley and Raymond McGee of Contract Milling, LLC, for cut ting nearly 400 koa and kolea trees from a 169-acre state parcel in South Kona without a license. Attorney William Chikasuye, rep resenting the loggers, argued at the time that the state\u2019s property boundaries were possibly inaccurate and asked that the log gers be allowed to do their own damage assessment. When the board instead voted to fine the loggers, Chikasuye requested a contested case.<\/p>\n During the case hearings that followed, attorneys for the loggers contended that the land the state claimed did not really belong to the state, and that it was actually a part of land owned by Damon Estate at the time the logging occurred \u2014 and is now part of Hawai\u2018i Volcanoes National Park. The state argued that surveying mistakes made dur ing the sales of adjacent government land to private landowners resulted in a 169-acre strip of land being un-conveyed into private ownership. So by operation of law, the state argued, that land belongs to the state.<\/p>\n In January, hearing officer Benjamin Matsubara decided \u201cthe preponderance of the available evidence does not establish State ownership of the subject parcel and there is a genuine dispute as to the existence and legal ownership\u2026A determination that the state or some other third party has title to the subject parcel would be tantamount to a ruling quieting title,\u201d he wrote in his recommendation to the board. But quiet ing title is not within the Land Board\u2019s legal jurisdiction, and can only be done by circuit court, Matsubara noted. He recommended that the Land Board dismiss the case with out prejudice until legal ownership has been properly determined.<\/p>\n On June 9, the Land Board adopted Matsubara\u2019s recommendations. On July 11, the loggers filed an appeal of the Land Board\u2019s decision in Third Circuit Court, asking the court to reverse the board\u2019s ac tions, determine that the case should have been dismissed on the basis of lack of juris diction, determine and order that because the state did not prove ownership of the parcel the case should be dismissed with prejudice, and order just and appropriate relief.<\/p>\n Wynhoff, the deputy attorney general for the DLNR, says the department is still \u201cthinking about what we are going to do,\u201d with regard to the appeal as well as the Land Board\u2019s decision.<\/p>\n Damon Estate Restoration<\/i><\/b> In 2003, the Land Board fined the Damon Estate roughly $480,000 for allowing Steve\u2019s Ag and Contract Milling to log Conservation District land owned by the estate without a permit from the board. The Land Board allowed the estate to restore the land in lieu of paying the full fine, so long as the estate posted a bond for the full amount while a restoration plan was implemented.<\/p>\n Shortly after the board\u2019s action, Damon Estate sold its Kahuku Ranch, which includes the affected area, to Hawai\u2018i Volcanoes National Park, which it then partnered with to implement the restoration plan.<\/p>\n At the June 24 Land Board meeting Damon and HAVO representatives presented their final report on the plan\u2019s progress. Division of Forestry and Wildlife staff had already reviewed the report and recommended that the board release the bond.<\/p>\n \u201cIt exceeded what we\u2026 hoped to see over the course of this project,\u201d DOFAW forester Michael Constantinides told the board in June.<\/p>\n Attorney Linnel Nishioka, representing Damon Estate, said the estate spent more than $200,000 on the \u201clemons-to-lemonade\u201d project, which included 10 miles of fencing, ungulate control and helicopter services, and monitoring. HAVO resource manager Tim Tunison told the board the aerial hunts were key to the plan\u2019s success.<\/p>\n \u201cSince 2003, the ungulates have been kept at remnant levels,\u201d he said. According to the estate\u2019s final report, 212 mouflon and 56 goats were removed from the project area. \u201cThe area has been monitored three times and there are now thickets of a`ali`i (a native hardwood). We saw rare natives never seen in Hawai\u2018i,\u201d Tunison said, adding that some of the new koa saplings are nearly head high, and there are lot of them.<\/p>\n Tunison noted that the park\u2019s acquisi tion of Kahuku Ranch came with no staff and no money to manage the new acreage, and it was Damon Estate\u2019s contribution that made for a \u201csuccessful model for ungu late control on a large landscape.\u201d<\/p>\n \u201cIt seems in this case, the restoration was more effective than [just getting] the money,\u201d said Maui Land Board member Ted Yamamura.<\/p>\n <\/p>\n <\/b><\/p>\n It was the kids who made it so hard for the Land Board to decide to end Makua Lani\u2019s kayak tour at Makua Bay, on O\u2018ahu\u2019s Wai\u2018anae Coast. The young, tan, earnest local boys who pleaded with the board in June to keep their company\u2019s commercial operating permit alive spoke glowingly about how much they were learning about their culture and how much they loved and needed their work.<\/p>\n After hours of testimony by those both for and against the issuance of a new permit to Makua Lani, the Land Board voted to deny the company\u2019s request. But the vote was not unanimous. While Makua Lani, a non-profit kayak tour company that caters to Japanese tour ists, provided an opportunity for its em ployees to learn Hawaiian chants and the hula, \u201cThey also need to learn that life is not all-or-nothing,\u201d board chair Peter Young said at the June 24 meeting where the board made its final vote. Young was responding to Makua Lani executive director Richard Holland\u2019s claim that Makua was the one and only place they could operate success fully.<\/p>\n On June 9, with only five members in attendance, the Land Board had deadlocked on a State Parks recommendation to deny a new permit to Makua Lani, whose trial revocable permit was set to expire June 30. Young decided to rehear the item two weeks later hoping the full board could come to a decision. Many members of the Wai\u2018anae community showed up at both meetings to oppose the permit, citing the operation\u2019s incompatibility with the Makua\u2019s cultural sacredness, local dolphin population, and fishing activities. Some testifiers offered to help Makua Lani\u2019s local employees find new jobs.<\/p>\n Makua is \u201ca very important cultural, sacred area. That\u2019s a difficult thing to fight,\u201d said outgoing O\u2018ahu board member Kathryn Whang Inouye. Last year, the Land Board had approved the issuance of a revo cable permit to test whether a commercial operation at Makua State Park was appro priate. \u201cThe test didn\u2019t work,\u201d she said.<\/p>\n After the Land Board\u2019s vote, Young en couraged Holland to work with his depart ment and offered his personal commitment to help find a new place for the company to <\/p>\n <\/b><\/p>\n While upgrading its Sand Island Waste water Treatment Plant over the last few years, the City and County of Honolulu has discovered PCBs \u2013 polychlorinated bi phenyls \u2013 on its property, and suspects they may have been tracked onto adjacent state land, according to a June 24 Land Division report to the Land Board.<\/p>\n On November 27, 2000, the DLNR issued a right-of-entry to the city over 16 acres of state land to use as a staging, stockpiling, and dewatering area. The land is part of a 45-acre parcel slated for develop ment as an industrial park.<\/p>\n The right-of-entry was to have expired on June 30, 2005, but because the state property may now be contaminated with hazardous waste from the city\u2019s construc tion activities, the Land Division recom mended an extension to allow the city to properly clean the land. However, to make sure the city remediated and returned the land quickly, staff also recommended that the Land Board authorize its chair to charge the city $16,000 a month \u201cfor any period in which the city continues to occupy the ROE site or in which the site remains con taminated after the expiration of the ROE. This fee is consistent with the revocable permit rent being charged \u2026 for an adja cent 10-acre parcel,\u201d the report states.<\/p>\n The city expects to complete work on its WWTP in October, and complete PCB remediation by next June, the Land Division report states.<\/p>\n The Land Board approved the exten sion, but rejected the Land Division\u2019s rec ommendation to charge the city $16,000 a month for continued occupation or con tamination of the property.<\/p>\n \u201cLet\u2019s continue to work with the city without the hammer,\u201d board member Tim Johns suggested.<\/p>\n — Teresa Dawson<\/p>\n Volume 16, Number 2 August 2005<\/p>\n","protected":false},"excerpt":{"rendered":" Pflueger Company Is Fined $4 Million For Reef Damages at Pila‘a Bay, Kaua‘i In the end, even having a powerful state senator as its attorney couldn’t save Pila‘a 400, LLC – a company established and run by maverick developer and … 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":[133,13],"tags":[],"class_list":["post-1481","post","type-post","status-publish","format-standard","hentry","category-august-2005","category-board-talk"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/1481","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=1481"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/1481\/revisions"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nLoggers Seek Dismissal
\nOf $1.5M Violation Case<\/div>\n
\nIn a separate case related to logging by Steve\u2019s Ag and Contract Milling, the Land Board
\nfound on June 24 that Damon Estate has met its obligation to restore Conservation District land damaged by illegal logging on its property. The board also voted to release the $480,000 bond the estate had posted to ensure adequate restoration.<\/p>\n
\nNo More Permits
\nFor Makua Lani<\/div>\n
\n\u201cI\u2019m not comfortable with taking jobs away from kids,\u201d said Ted Yamamura of Maui, the only member to vote against the motion to deny.<\/p>\n
\noperate. (Separately, the 2005 Legislature overrode a governor\u2019s veto to enact a law calling for a moratorium on commercial permits for the entire Wai\u2018anae Coast. This is covered more fully in a separate article on legislative action that appears in this issue.)<\/p>\n
\nCity Needs Time To Remediate
\nPCBs From Sand Island Property<\/div>\n