{"id":15734,"date":"2024-02-11T11:00:19","date_gmt":"2024-02-11T21:00:19","guid":{"rendered":"https:\/\/www.environment-hawaii.org\/?p=15734"},"modified":"2024-02-11T12:22:55","modified_gmt":"2024-02-11T22:22:55","slug":"marconi-developer-amends-complaint-to-revive-bolster-claims-against-dpp","status":"publish","type":"post","link":"https:\/\/environment-hawaii.org\/?p=15734","title":{"rendered":"Marconi Developer Amends Complaint To Revive, Bolster Claims Against DPP"},"content":{"rendered":"\n
\"\"<\/a>
Marconi Point Condominiums property. CREDIT: PETER FOWLER\/ENDURE FILMS.<\/figcaption><\/figure>\n\n\n\n

On January 16, companies owned by developer Jeremiah Henderson III that have steered development at O`ahu\u2019s Marconi Point Condominiums filed an amended complaint in U.S. District Court to bolster their case that the City & County of Honolulu\u2019s Department of Planning and Permitting treated their efforts differently than other similarly situated agricultural condominium property regimes. <\/p>\n\n\n\n

Their amended complaint also provides an expanded list of examples to support their claims that the DPP had improperly denied or held in limbo various building permits and a roadway subdivision application for the 100-acre CPR that lies largely within the city\u2019s Special Management Area and its AG-2 zone, where residential development is restricted. The lands along the shoreline are zoned Preservation and are in the state Conservation District.<\/p>\n\n\n\n

Makai Ranch, LLC; Marconi Farms, LLC; MP Unit 21, LLC, and RCA Trade Center Inc. filed their original complaint<\/a> last May, arguing that various city departments had together stymied development of their lands by taking the position that an SMA permit would be needed, while at the same time taxing their land at a rate that assumed they had full use of their properties.<\/p>\n\n\n\n

In December, U.S. District Judge Jill A. Otake granted in part and denied in part<\/a> the City & County of Honolulu\u2019s motion to dismiss<\/a> the complaint. She found that despite the fact that some of the proposed development is generally considered exempt from needing an SMA permit, the DPP has always had discretion to require one in cases where the development may have significant adverse environmental or ecological effects.<\/p>\n\n\n\n

Judge Otake kept alive the companies\u2019 claims regarding Makai Ranch\u2019s agricultural subdivision application, which they argued should have been automatically approved because the DPP failed to render a decision by statutory deadlines.<\/p>\n\n\n\n

While she dismissed their claims attacking the DPP\u2019s position that building permits and a roadway subdivision application could not proceed without an SMA permit, she allowed the companies to amend their complaint to strengthen their case.<\/p>\n\n\n\n

Warehouses<\/strong><\/p>\n\n\n\n

Development within the Marconi Point Condominiums goes far beyond a handful of farm dwellings. It also includes the renovation of four historic structures and the building of large agricultural warehouses topped with solar photovoltaic panels.<\/p>\n\n\n\n

<\/strong>The Henderson companies have argued that the DPP assured them that no SMA permit would be needed for farm dwellings and other permitted uses.<\/p>\n\n\n\n

In their amended complaint, they devoted much more space to the discussion of their eight agricultural warehouses, which were largely funded by a USDA-backed loan. Only one of the warehouses has been fully constructed and been given a certificate of occupancy by the city. The rest remain unfinished due to the city holding up permits for their interiors.<\/p>\n\n\n\n

The companies point out that an April 22, 2015, letter from DPP stated that \u201cthe agricultural structures would not require a SMA Permit.\u201d And another letter from the department on September 3, 2015, added that the agency had determined that, \u201calthough the proposed rooftop PV system installations will be located in the [SMA], they will not require a SMA (Minor) Permit; they will be considered a utility installation, Type A and will not require a Conditional Use Permit (Minor) (CUPm); and they will not be subject to the maximum building area limitation.\u201d<\/p>\n\n\n\n

The companies argued that these letters constitute DPP\u2019s official assurances that \u201c<\/strong>construction of the agricultural warehouses on the units now owned by RCA Trade Center and MP Unit 21 and installation of the photovoltaic systems would not require an SMA Permit.\u201d<\/p>\n\n\n\n

\u201c[I]n refusing to issue the interior improvement on the basis of the SMA permit, Defendants have reached a conclusive position that the permit will not be issued unless Plaintiffs obtain an SMA permit. Other than pursuing an SMA permit, no avenues remain for the Defendants to clarify or change their position with respect to the interior improvements of the already-permitted agricultural warehouse shells. <\/p>\n\n\n\n

\u201cThe exterior building permits constituted official assurances that Plaintiffs could proceed with construction of the agricultural warehouses\u2014exterior and interior.It makes no sense that Plaintiffs would be allowed to construct the exterior shell of an agricultural warehouse under the Agricultural Use Exemption, but somehow agricultural use transforms into \u2018development\u2019 when Plaintiffs seek to improve the interior of the very same warehouses.\u201d<\/p>\n\n\n\n

“By refusing to allow interior improvements to the already-permitted agricultural warehouse shells, Defendants are effectively denying Plaintiffs\u2019 vested rights to construct the agricultural warehouses. Otherwise, Plaintiffs would be left with an unusable shell, without any utility infrastructure, lighting, restrooms, and other interior improvements,\u201d they stated.
<\/p>\n\n\n\n

Farm Dwellings<\/strong><\/p>\n\n\n\n

With regard to the city\u2019s refusal to approve the construction of more farm dwellings without an SMA permit, the companies\u2019 amended complaint points to the fact that tthe DPP did not object to farm dwellings being built without an SMA permit on two of the more mauka Marconi CPR lots that Makai Ranch sold off years ago. <\/p>\n\n\n\n

\u201cThe Breen and Hu applications were for the same aggregate number of farm dwellings that Makai Ranch anticipated constructing\u2014two farm dwellings per lot on Lot 160-B and Lot E, and one farm dwelling on Exclusion 23\u2014which, consistently with defendants\u2019 treatment of other similar projects, would have been exempt from SMA requirements,\u201d the complaint states.<\/p>\n\n\n\n

With regard to development of Lot E, which contains four structures that make up the historic Marconi Wireless Telegraph Station, Henderson\u2019s uncle, Tim Reynolds, asked DPP\u2019s Ann Asaumi in a September 9, 2013 email how Makai Ranch could avoid having to obtain an SMA permit.<\/p>\n\n\n\n

\u201cAmong the purposes we are considering using these structures are the following: 1) Utilizing all 4 buildings as farm dwellings (a use specifically permitted in the Ag-2 District); 2) Utilizing the structure formerly utilized as the Marconi Hotel and later as the officer\u2019s quarters for Kahuku Air Base as a boutique hotel; 3) Using all 4 structures for a film studio; [or] 4) Using the old power plant structure for a museum and restaurant and the others for administration and dwellings. We would like to avoid an SMA and so are looking for guidance from your department regarding which of the above uses would be SMA exempt.\u201d<\/p>\n\n\n\n

Asaumi replied that the project “may be exempted from the Special Management Area, if these structures are to be treated as dwellings; they would fall under the exemption category pertaining to \u2018structural and nonstructural improvements to existing single family residences including additional dwelling units, where otherwise permissible,\u2019\u201d according to the complaint.<\/p>\n\n\n\n

\u201cIn other words,\u201d the companies argued, “if a property within the SMA already contained an existing dwelling unit, then an additional dwelling unit could be constructed without an SMA permit (if otherwise permitted by zoning laws unrelated to the SMA).\u201d<\/p>\n\n\n\n

\u201cMs. Asaumi\u2019s e-mail constitutes an official assurance that, if Plaintiffs were to treat the existing historic structures as farm dwellings, then the construction of \u2018additional dwellings\u2019 would be SMA exempt if otherwise permissible under other zoning requirements, such as the limitation of two (2) dwellings per zoning lot,\u201d the complaint continues. (The plaintiffs do not, in fact, own any of the historic structures anymore. They were sold in 2022 to Greystone HI, LLC. The company\u2019s recent work on those buildings is under investigation by the state Historic Preservation Division and DPP. It\u2019s unclear whether they are intended to be used as farm dwellings.)<\/p>\n\n\n\n

\"\"<\/a>
The developers of the agricultural lands at Marconi Point argue that if these historic buildings are used as farm dwellings, then at least two additional dwellings could be constructed on the same lot without needing a Special Management Area permit. Credit: Peter Fowler\/ENDURE FILMS.<\/figcaption><\/figure>\n\n\n\n
\n\n\n\n

The Road<\/strong><\/p>\n\n\n\n

With regard to the city\u2019s refusal to approve Makai Ranch\u2019s roadway subdivision application without an SMA permit, the companies pointed out that the DPP had already consented to the roadway development in a decades-old action related to an easement to a public park that was to have been developed by Turtle Bay Resort.<\/p>\n\n\n\n

\u201cThe obligation to improve Marconi Road has been the subject of dispute between Makai Ranch and Kuilima\u2019s successor-in-interest, Turtle Bay Resort, LLC. Makai Ranch maintains that Kuilima and its successors were obligated to widen and improve Marconi Road under the conditions of Kuilima\u2019s SMA permit and under the Turtle Bay Easement. As a means to shirk this responsibility, on October 6, 2017, Turtle Bay Resort, LLC executed a unilateral Notice of Abandonment of the Turtle Bay Easement,\u201d the amended complaint stated.<\/p>\n\n\n\n

\u201cKuilima\u2019s SMA permit was an official assurance that Marconi Road could and would be expanded and improved, regardless of whether the improvement was for the benefit of the public to access Park P-2, for the quid-pro-quo benefit of Kuilima for approval of the other development proposed in the Kuilima SMA Application, or for the benefit of any other person who might make proper use of Marconi Road,\u201d it stated.<\/p>\n\n\n\n

Discretion<\/strong><\/p>\n\n\n\n

While the city maintains, and the court has agreed, that many of the companies\u2019 complaints fail given the fact that the DPP has always had the discretion to require an SMA permit, Henderson\u2019s companies argue that 1) the DPP\u2019s decision making was corrupted, and 2) the agency failed to make proper findings supporting its position that an SMA permit is required.<\/p>\n\n\n\n

The complaint places much of the blame for the DPP\u2019s decision to stop processing permits and to refuse to grant subdivision applications at the Marconi property without an SMA permit on the corrupt influence of consultant William Wong.<\/p>\n\n\n\n

Wong, along with a handful of DPP officials, have been convicted in federal court for their involvement in a bribery scheme regarding the processing of permits. Wong was a consultant hired by Makai Ranch to help expedite the Breen farm dwelling permit.<\/p>\n\n\n\n

“Plaintiffs believe that, when Makai Ranch declined to pay additional consulting fees to Wong or his affiliates for a new [archaeological inventory survey], Wong contacted Calvert Hung, Kanani Padeken, or some other employee at DPP, with whom Wong had a relationship, to cause DPP to stop, delay, or otherwise impede the processing of the Breen permit applications.\u201d <\/p>\n\n\n\n

The amended complaint includes comments made to Henderson in 2017 by DPP official Wendel Ko. \u201cIf you\u2019ve been dealing with Bill Wong then you\u2019re all messed up,\u201d Ko is alleged to have said. <\/p>\n\n\n\n

\u201cPlaintiff believes this intentional delay was just one of many instances of the corrupt \u2018pay to play\u2019 system that has been widely publicized in the news media as plaguing DPP,\u201d the complaint states.<\/p>\n\n\n\n

Even if the DPP\u2019s decision was not influenced by corruption, the amended complaint argues, if the DPP is going to require an SMA permit, then \u201cstatutes require DPP to find that the cumulative impact on the environment would be significantly adverse. DPP did not make any such finding. Its officials decided to require an SMA Permit because of their alliance with William Wong, and Plaintiffs\u2019 refusal to participate in his pay-to-play scheme, not because of any finding that the cumulative impact on the environment would be significantly adverse.<\/p>\n\n\n\n

\u201cAlthough it is not yet known in this case whether any of Defendants\u2019 employees  accepted cash bribes or other favors from William Wong in exchange for their actions on Plaintiffs\u2019 applications, William Wong and Defendants\u2019 employees have been convicted of engaging in such conduct with respect to at least some administrative actions. <\/p>\n\n\n\n

\u201cIn light of the timing of Defendants\u2019 decision to halt processing of Plaintiffs\u2019 applications \u2014 within mere days of Wong\u2019s request to cancel Plaintiffs\u2019 applications, these decisions were not made with the requisite findings necessary to support a valid agency decision. In total, even if Defendants had discretionary authority, they exercised their discretion in a manner that was in violation of the U.S. and Hawai`i constitutions, applicable statutes, upon unlawful procedure, clearly erroneous in light of the evidence, arbitrary, capricious and in abuse of their discretion. <\/p>\n\n\n\n

\u201cIn particular, Defendants\u2019 refusal to issue the interior building permits after the exterior permits for the agricultural warehouses have already been approved, until Plaintiffs obtain an SMA permit, is one example of Defendants\u2019 improper exercise of discretion. By issuing the exterior permits, Defendants have already exercised their discretion to properly determine that no SMA permit is required for the warehouses. Changing course after having already issued the exterior building permits is an unconstitutional exercise of Defendants\u2019 discretion, which is clearly erroneous, arbitrary, capricious, and in abuse of their discretion,\u201d the amended complaint states.<\/p>\n\n\n\n

\u2018Comps\u2019<\/strong><\/p>\n\n\n\n

The original complaint claims that the DPP \u201cintentionally singled out and treated Plaintiffs differently from other owners of similar real property, who own and have successfully pursued similar agricultural development projects, by withholding approval and issuance of Plaintiffs\u2019 building permits and by withholding approval of Makai Ranch\u2019s Roadway Subdivision and Agricultural Subdivision applications.\u201d <\/p>\n\n\n\n

The companies were seeking a court declaration that the DPP violated their equal protection rights, as well as an order forcing the agency to approve the subdivision applications and approve and issue building permits.<\/p>\n\n\n\n

As to comparisons with other subdivisions, the original complaint listed only \u201cthe Waialee condominium project located near Kawela Bay, which like the Property, is located within the SMA, and contains several zoning lots and multiple condominium units, with five (5) farm dwellings.\u201d<\/p>\n\n\n\n

The court agreed with the city\u2019s argument that the project description was too vague to determine its similarities to the proposed development at Marconi Point. The court allowed the companies to add more specifics in their amended complaint.<\/p>\n\n\n\n

In the amended complaint, the companies\u2019 attorneys have fleshed out their position that the DPP treated the development at Marconi Point differently from other condominium property regimes located within the Special Management Area.<\/p>\n\n\n\n

Under the heading, \u201cSimilarly-Situated Agricultural Projects,\u201d the amended complaint presents three projects where the DPP allowed \u201cfarm dwellings” to be constructed without a SMA permit.<\/p>\n\n\n\n

However, a review of city property tax records indicates that the \u201cfarm dwellings\u201d on just one of the three CPR projects were actually built on land zoned for agriculture, the same zoning as most of the Marconi Point CPR. (The strip of land along the shoreline is zoned preservation and is in the state Conservation District). <\/p>\n\n\n\n

What\u2019s more, unlike Marconi Point, none of the projects listed as similar is sandwiched between areas being actively managed for the benefit of native flora and fauna.<\/p>\n\n\n\n

Regarding the Waialee project, officially called Kawela Mauka Ranches, the two CPRs that it consists of were developed with legal help from the Marconi companies\u2019 attorneys, the amended complaint states.<\/p>\n\n\n\n

The original 43-acre oceanfront lot, located less than four miles north of Marconi Point, was subdivided into four lots of 10-12 acres each. On the two larger lots, the owners developed condominium property regimes (Kawela Ranches I and II) with a combined total of 9 units. Although the original complaint stated that five farm dwellings had been built, the amended complaint lists only four: two on Kawela Mauka Ranches I and two on Kawela Mauka Ranches II.<\/p>\n\n\n\n

Kahena Wai Estates in Hau`ula is the second project the companies\u2019 attorneys offered. They note that the 4.76-acre project is a mix of agricultural and residential zones. <\/p>\n\n\n\n

The project, located mauka of the coastal highway, consists of 11 units. The complaint states that units 1, 2, 3, 8, and 9 each have a \u201cfarm dwelling.\u201d However, according to city property tax records, all of those units are zoned residential. Only units 6 and 11 are zoned agricultural.<\/p>\n\n\n\n

The third project listed is Kealia Farms in Waialua. The complaint states that the 4-unit CPR there covers two lots totaling 13.089 acres of Ag-2 zoned land. It also states that farm dwellings were built on units 3 and 4.<\/p>\n\n\n\n

Again, however, city property tax records indicate that only units 1 and 2 are zoned agricultural. Units 3 and 4 are split-zoned agricultural-residential, and the dwellings were built on the residential-zoned parts.<\/p>\n\n\n\n

Next Steps<\/strong><\/p>\n\n\n\n

A scheduling conference has been scheduled for February 21. Also, the deadline for the city to file its anticipated motion to dismiss the amended complaint was extended from January 30 to April 1.<\/p>\n\n\n\n

\u2014 Teresa Dawson<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

On January 16, companies owned by developer Jeremiah Henderson III that have steered development at O`ahu’s Marconi Point Condominiums filed an amended complaint in U.S. District Court to bolster their case that the City & County of Honolulu’s Department of … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":15720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21,521,338],"tags":[3],"class_list":["post-15734","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agriculture","category-february-2024","category-land-use","tag-teresa-dawson"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/15734","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=15734"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/15734\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/15720"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}