A 30-Year History of Failure and Litigation

posted in: May 2018 | 0

The land at issue in the Bridge ‘Aina Le‘a litigation was placed into the Urban district in 1989. A succession of owners failed to develop it, and in 1999, a subsidiary of Bridge Capital, a company now headquartered in the Commonwealth of the Northern Mariana Islands, purchased the Urban land as well as another 1,940 or so acres surrounding it on three sides – all of which had been proposed for development into six “golf course villages” at the time the original redistricting occurred.

Bridge teamed up with DW ‘Aina Le‘a, LLC, to move forward with development, including construction of the 385 affordable housing units required to satisfy a condition imposed by the LUC in 2005. The condition had been sought by Bridge, which wanted to be relieved of the far more onerous affordable housing conditions that were approved as part of the original redistricting order. The deadline for completing the affordable units was set at November 2010.

By 2009, it was evident that the affordable-housing condition was not going to be met. In August of that year, the LUC told Bridge and DW ‘Aina Le‘a that at least 16 affordable units would need to be completed by March 31, 2010, in order to avoid having the land be reverted to the Agricultural district.

Soon after that deadline passed, the LUC conducted a site visit and found just one eight-unit building was mostly complete. Four more buildings had been put up, but were still unfinished. There were no paved roads to the building site; the required intersection improvements with Queen Ka‘ahumanu Highway were not begun; electricity to the building was supplied by a generator, water came from a tank, and wastewater flowed into an unpermitted septic tank.

In January 2011, two months after the deadline passed for completion of all 385 affordable units, the LUC voted to revert the Urban land to Agricultural. In April, it formally adopted the decision and order effectuating the reversion.

Immediately, both DW ‘Aina Le‘a and Bridge appealed in state Circuit Court, naming the LUC and all individual commissioners as defendants. They won a judgment in June 2012 that the LUC had, indeed, acted improperly when it reverted the land without going through all the hoops required in the usual redistricting process.

When the Hawai‘i Supreme Court ruled on the matter, in November 2014, it agreed that the LUC had not followed the correct process for reversion in this case, since Bridge and DW ‘Aina Le‘a had “substantially commenced use of the property.” It disagreed with the lower court, however, on the matter of what was required for the LUC to revert land: “The express language of HRS § 205-4(g) and its legislative history establish that the LUC may revert property without following those [redistricting] procedures, provided that the petitioner has not substantially commenced use of the property in accordance with its representations. In such a situation, the original reclassification is simply voided.”

In 2011, almost as soon as Bridge and DW ‘Aina Le‘a had brought suit in circuit court, the state sought to remove the case to federal court. But that litigation was put on hold pending the outcome of state litigation.

After the state Supreme Court decision favorable to Bridge’s claim of a taking was issued in November 2014, the stalled litigation in federal court resumed.

— Patricia Tummons

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