{"id":16217,"date":"2024-11-08T13:55:33","date_gmt":"2024-11-08T23:55:33","guid":{"rendered":"https:\/\/www.environment-hawaii.org\/?p=16217"},"modified":"2024-11-08T15:17:29","modified_gmt":"2024-11-09T01:17:29","slug":"agreement-tied-to-marconi-loan-is-unmet-future-of-ag-historic-structures-are-in-question","status":"publish","type":"post","link":"https:\/\/environment-hawaii.org\/?p=16217","title":{"rendered":"Agreement Tied to Marconi Loan Is Unmet; Future of Ag, Historic Structures Are in Question"},"content":{"rendered":"\n
\"\"<\/a>
The agricultural warehouses at Marconi Point. Credit: Peter Fowler\/Endure Films<\/figcaption><\/figure>\n\n\n\n
\n\n\n\n

The eight agricultural warehouses that stand out like sore thumbs within the Marconi Point Condominums property on O\u02bbahu\u2019s North Shore are massive and, except for one of them, indefinitely empty.<\/p>\n\n\n\n

Whether they will ever start storing the fertilizer, seed, and other agricultural elements they were originally envisioned to hold remains to be seen.<\/p>\n\n\n\n

Most of the warehouses were built with a $7.8 million USDA-backed loan from North Avenue Capital, which stepped in to fund their construction after the initial lender backed out of the project.<\/p>\n\n\n\n

The larger 100-acre agricultural condominium project in which the warehouses \u2014 collectively known as the RCA Trade Center \u2014 are located lies within the city\u2019s Special Management Area and the state and national historic site boundaries of the Marconi Wireless Telegraphy Station. <\/p>\n\n\n\n

Because of the area\u2019s historic designation, when the warehouse project\u2019s developer, RCA Trade Center, Inc., sought the USDA-backed loan several years ago, the project became subject to review under Section 106 of the National Historic Preservation Act.<\/p>\n\n\n\n

In accordance with that act, the USDA Rural Business Cooperative Service determined in March 2020 \u2014 and State Historic Preservation Division concurred the following April \u2014 that based on their location within the Marconi Wireless Telegraphy Station Historic District and potential visual effects to the contributing elements, the proposed agricultural warehouses would have \u201cadverse effects” on the site. (Four buildings \u2010 a hotel, an administration building, a power house, and a manager\u2019s house \u2013 as well as six other minor features are considered to be the district\u2019s contributing structures.)<\/p>\n\n\n\n

During the process to secure the loan, all ground-disturbing work on the first three warehouses stopped \u201cpending the outcome of RCBS\u2019 consultation with the Hawai\u02bbi State Historic Preservation Division and completion of a Memorandum of Agreement to mitigate adverse effects, which would include resumption of construction work in accordance with a SHPD-approved archaeological monitoring plan,\u201d according to the USDA.<\/p>\n\n\n\n

In August 2021, a final MOA was signed by representatives of the USDA, SHPD, the Advisory Council on Historic Preservation, RCA Trade Center, Inc., Marconi Station, LLC, The Marconi Hotel, LLC, North Avenue Capital, and the Historic Hawai\u02bbi Foundation.<\/p>\n\n\n\n

Under the MOA, Marconi Station and The Marconi Hotel, which at the time owned the units containing the contributing historic buildings and features, were required to complete an Interim Stabilization Plan (ISP) and a Historic Preservation and Treatment Plan (HPTP) \u201cfor the contributing resources<\/strong>, including the historic buildings and associated structures and features\u201d (emphasis added).<\/p>\n\n\n\n

The MOA required that the ISP be completed before the city\u2019s issuance of final Certificates of Occupancy for seven of the eight agricultural warehouses.<\/p>\n\n\n\n

The timeline to complete both plans was pretty tight: The Marconi companies were to submit draft plans to SHPD and the Historic Hawai\u02bbi Foundation (a consulting party) within 90 days from the execution of the agreement. SHPD and the consulting parties had 30 days to review and provide written comments on the draft plans. After receiving those comments, the companies had to submit revised plans within another 90 days, and SHPD and the consulting parties had another 30 days to either accept the new plans or provide additional comments. Revised plans, if any, would be submitted to SHPD and the consulting parties for another 30-day review period.<\/p>\n\n\n\n

If SHPD failed to provide the companies with a formal response to \u201cthe entirety of the draft ISP\u201d within 30 days, the agency would be deemed to have accepted the ISP and the companies \u201cmay proceed to complete the final ISP and begin implementation \u2026 when all permits have been issued or exemptions obtained,\u201d the MOA states. The same deadline applied to the HPTP.<\/p>\n\n\n\n

The ISP was required to include the following: 1) a historic structure report, 2) an engineering report, 3) a review of compliance with historic preservation standards and guidelines, 4) identification of required permits, processes and timelines, and 5) a preliminary construction cost estimate and timeline from a general contractor.<\/p>\n\n\n\n

Parties to the MOA signed it in late-July and early-August of 2021. The agreement appeared to have been executed on August 18, which would put the deadline to submit the draft plans at mid-November 2021.<\/p>\n\n\n\n

No draft plans were submitted then, or ever, according to documents provided to Environment Hawai\u02bbi <\/em>by SHPD in response to a Uniform Information Practices Act request.<\/p>\n\n\n\n

Gaps<\/strong><\/p>\n\n\n\n

What communications the Marconi companies had with SHPD following the MOA\u2019s execution is unclear. But on October 27, 2023, Michael Danhour, vice president of Makai Ranch, sent a letter on Marconi Station letterhead to then-SHPD administrator Alan Downer and SHPD\u2019s Stephanie Hacker that included a status update on the MOA.<\/p>\n\n\n\n

Danhour stated that he wrote on behalf of the two Marconi companies, which were both owned by Makai Ranch owner Jeremiah Henderson.<\/p>\n\n\n\n

\u201cThis letter is to inform you that the Property [that contains the historic buildings] was sold on May 11, 2022 to Greystone HI Investments, LLC and to update you as to the status of the MOA from its execution date through date of the sale of the Property to Greystone, the status of the RCA Trade Center, Inc. construction project, and other relevant activities within the MWTS Historic District,\u201d he wrote.<\/p>\n\n\n\n

In accordance with the MOA, the update states, the Marconi companies installed orange mesh construction fencing around the warehouse sites and sent written and photographic verification via email to SHPD on April 22, 2022.<\/p>\n\n\n\n

\u201c[T]he interim protection fencing will remain in place until removal is approved by SHPD in accordance with stipulations detailed in an accepted Interim Stabilization Plan or Preservation Plan,\u201d it states. It also describes the companies\u2019 efforts to ensure proper archaeological monitoring and reporting of all ground-disturbing work done within the warehouse project area.<\/p>\n\n\n\n

Under the Deliverables<\/strong> section of the update, it states that the companies are providing work they completed before the sale to Greystone: 1) a September 8, 2021, Historic Structure Report, 2) a January 14, 2022, Engineering Report, 3) a draft of the permitting list and timelines, and 4) a draft letter from the companies\u2019 contractor regarding construction costs and timelines.<\/p>\n\n\n\n

The update notes, \u201cGreystone was assigned development rights and assumed the obligation in the MOA related to Units purchased including the four historic buildings.\u201d<\/p>\n\n\n\n

\u2018Contributing Resources\u2019<\/strong><\/p>\n\n\n\n

The historic structures report by Professional Real Estate Inspectors found that all four buildings considered by the MOA to be contributing resources were in bad shape. From best to worst: The manager\u2019s residence, the administration building, the hotel, and the power house. The manager\u2019s house still looked like a house, while large sections of the power house had caved in. The hotel\u2019s basement was filled with 4-5 feet of standing water, \u201clikely to be water penetration from the water table on site,\u201d the report states.<\/p>\n\n\n\n

\"\"<\/a>
The power house in 2021 (left). The same building in 2024 (right). CREDIT: HISTORIC STRUCTURES REPORT, PETER FOWLER\/ENDURE FILMS.<\/figcaption><\/figure>\n\n\n\n
\n\n\n\n

\u201cThe general overall condition of all of the buildings was between poor and inaccessible due to falling hazards. There was extensive structural damage observed at primary and secondary structural materials, curtainwalls and interiors,\u201d the report states.<\/p>\n\n\n\n

The 2022 Engineering Report by Structural Focus notes that it was intended to fulfill the MOA\u2019s requirement for an engineering report. (The MOA states, \u201cA Structural Engineering report and plans will be provided by a licensed Structural Engineer considering the existing condition and mitigation requirements to comply with the ISP such as a shoring plan to stabilize all structural elements of the contributing resources, including roof, walls, windows, basements or other areas with stabilization concerns.\u201d)<\/p>\n\n\n\n

Among other things, the report recommended vertical shoring and lateral bracing for all four buildings, installing a sump pump in the hotel basement with an automatic sensor to remove the groundwater, encasing the hotel\u2019s severely damaged concrete chimney to prevent falling, and waterproofing the roofs of the administration building and manager\u2019s residence.<\/p>\n\n\n

\n
\"\"<\/a>
A 2021 survey found that the Marconi hotel\u2019s\nbasement was filled with 4-5 feet of groundwater.\nCREDIT: HISTORIC STRUCTURES REPORT.<\/figcaption><\/figure>\n<\/div>\n\n\n

With regard to the power house, the report states that the walls were \u201cat risk of more damage because of their connection to the partially collapsed roof framing. If the collapse were to progress, the walls connected to the framing could be further damaged as they are \u2018dragged\u2019 down by the weight of the framing.\u201d It recommended bracing with timber or steel struts on temporary footings and attached to a \u201chook\u201d connection on top of the existing concrete walls. In addition, the report states, \u201csteel or timber \u2018straps\u2019 are to be installed on the exterior walls at the corners, anchored to the walls with epoxied bolts and stitched together with steel straps. In addition, the lateral bracing should be installed to stabilize that one area of the western elevation where the concrete wall has significantly failed due to out-of-plane loading (or as collateral damage as a result of the roof diaphragm failure) and leaning toward the interior of the building.<\/p>\n\n\n\n

\u201cImprovements to the waterproofing of this building are not recommended as it would be hazardous to attempt installation.\u201d<\/p>\n\n\n\n

These recommendations never made their way into a draft or final ISP. It does not appear that these reports were provided to SHPD before Danhour\u2019s October 2023 update.<\/p>\n\n\n\n

Even so, Greystone proceeded with work inside the core historic district.<\/p>\n\n\n\n

On January 3 of this year, Civil Beat <\/em>carried an article by Kirstin Downey, “Unauthorized Demolition Occurs At Historic Marconi Telegraph Site On North Shore<\/a>.\u201d<\/p>\n\n\n\n

\u201cCivil Beat<\/em> drone footage captured video of excavators discarding parts of the interior of the original 1914 power station, once the world’s largest wireless communications center,\u201d the subhead reported. The article goes on to note that the Historic Hawai\u02bbi Foundation had received reports in the previous two months of \u201cheavy construction equipment rumbling in and out of the property.\u201d<\/p>\n\n\n\n

Civil Beat<\/em>\u2019s drone footage shows that not only were the historic buildings being worked on, the exteriors, at least, of the hotel, the manager\u2019s residence and the administration building appeared to be fully restored (although the hotel\u2019s chimney is missing). The fragile power house, however, looked like what was left of its roof had fallen in and the building\u2019s interior had been cleared.<\/p>\n\n\n

\n
\"\"<\/a>
The hotel as it stands today. The inset photo shows how it looked in 2021.\nCREDIT: PETER FOWLER\/ENDURE FILMS, HISTORIC STRUCTURES REPORT.<\/figcaption><\/figure>\n<\/div>\n\n\n

A state Department of Land and Natural Resources representative stated that the department, of which SHPD is a part, was investigating and could not comment further.<\/p>\n\n\n\n

Since then, however, the department has not given any hint of its findings or sign that it would be pursuing a violation case.<\/p>\n\n\n\n

The City & County of Honolulu\u2019s Department of Planning and Permitting, however, issued two notices of violation on January 8. One is for renovations and repairs to existing historical buildings without the required building permit and the other is for partial demolition of a historical building and \u201cag exempt structures doing electrical and plumbing without the required building permit.\u201d<\/p>\n\n\n\n

Greystone, owned by tech entrepreneur Sushil Garg, has until December 9 to cure the DPP violations.<\/p>\n\n\n\n

Although Environment Hawai\u02bbi<\/em> asked SHPD for documents relating to its violation investigation regarding the Marconi buildings, the agency provided none. It also did not say by press time whether the division was withholding the documents or whether any even existed.<\/p>\n\n\n\n

It also did not respond to questions about whether SHPD had determined there was ever a final ISP.<\/p>\n\n\n\n

Occupancy<\/strong><\/p>\n\n\n\n

If no interim stabilization plan is ever approved or deemed approved by SHPD, what does that mean for the mammoth multi-million-dollar RCA Trade Center, given the MOA\u2019s condition that no Certificates of Occupancy shall be issued for seven of the warehouses until an ISP is done?<\/p>\n\n\n\n

And how might an ISP apply to the historic structures that already appear to have been restored? Environment Hawai\u02bbi<\/em> awaits SHPD\u2019s response about the ISP determination.<\/p>\n\n\n\n

With regard to the first question, attorney Ross Uehara-Tilton, who represents Jeremiah Henderson\u2019s companies, does not see that the MOA condition is an impediment to occupancy of the warehouses once they are completed.<\/p>\n\n\n\n

To date, except for the first warehouse, the DPP has approved permits to build the exteriors, but not the interiors of the other seven. Henderson\u2019s Marconi-affiliated companies never applied for interior permits, as they are in the midst of a federal lawsuit fighting against the DPP\u2019s determination that further development within the Marconi Point Condominiums requires a Special Management Area review and, possibly, an SMA permit. <\/p>\n\n\n\n

In an email to Environment Hawai\u02bbi, <\/em>Uehara-Tilton identified the DPP\u2019s position concerning the SMA, and not the MOA, as the obstacle. He also appeared to suggest that there need not be a plan to stabilize the historic buildings in order for the warehouses to be occupied. This despite the fact that the MOA states that the interim stabilization plan is for the historic district\u2019s \u201ccontributing resources\u201d. According to Appendix J of the MOA, the contributing resources include only the hotel, the administration building, the manager\u2019s residence, the powerhouse, a reservoir, a well, a chimney foundation, fuel tank foundations, and a guy wire foundation.<\/p>\n\n\n\n

Uehara-Tilton stated that the MOA is \u201cbinding on the entire condominium project, including the historic structures and the agricultural warehouses on Units 20-27 (Unit 20 is completed and Units 21 through 27 are under construction). But since the historic structures are located on other units, most of the compliance obligations will fall to the owners of units containing the historic structures. There are no historic structures to stabilize on our units, so basically our stabilization plan would say that we won\u2019t be touching any historic structures and they will be protected\/stabilized using temporary construction barriers to prevent access to the other units.\u201d<\/p>\n\n\n\n

He went on to state that because his clients don\u02bbt have permits to complete the interiors of the seven remaining warehouses, they have not applied for any Certificates of Occupancy for them \u201cand thus have not completed any final stabilization plan. We do not see the MOA as an impediment and can and will comply with its requirements prior to applying for final Certificates of Occupancy, once we resolve the building permit issue. My clients negotiated and agreed to the terms of the MOA, which was a condition of receiving their construction loan, and so that is always something my clients have always intended to comply with.<\/p>\n\n\n\n

\u201cOne of the basic arguments in our lawsuit against the City is that it was improper for them to fully permit (interior and exterior) construction of the first warehouse, and to permit exterior construction of the remaining 7 warehouses, and then decide after the first warehouse was fully completed and the exterior of the 7 remaining warehouses was completed, that an SMA permit would be required to finish the interior of the remaining 7 warehouses. If an SMA permit was really required, they should have required it before issuing any building permit. Isn\u2019t it strange for the city to say you can build 8 huge warehouses, but after you\u2019ve finished pouring the foundations and building the roof and walls, they say you can\u2019t install any lights on the inside? That is the current impediment\u2014not the MOA.\u201d<\/p>\n\n\n\n

However, earlier this year, counsel for the DPP stated in a motion to dismiss some of Henderson\u02bbs companies\u02bb federal lawsuit claims, that the agency \u201chas always retained the right to require an SMA Permit for the \u2018interior\u2019 permits for the agricultural warehouses. This is especially true because Plaintiffs are planning on building restrooms in the warehouses. Restrooms would necessitate waste water, which is of obvious concern in the SMA. (Empty buildings that have no restrooms would not.) DPP cannot be equitably estopped from requiring an SMA Permit where the nature of the structure would change based upon its interior, even if the exterior structure was allowed without an SMA permit.\u201d<\/p>\n\n\n\n

Attorney Kalani Morse, who represents Greystone, did not respond by press time to questions about what the company has done to meet the MOA obligations and what the effects on the warehouses might be if no ISP is done.<\/p>\n\n\n\n

\u2014 Teresa Dawson<\/strong><\/p>\n\n\n\n

For Further Reading<\/strong><\/p>\n\n\n\n