Potential Fines in the Millions For Owner of Kohala Land

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What’s next for Ahmad Mohammadi?

In October, the Hawai`i County planning director rejected the draft environmental assessment Mohammadi had prepared for clearing, grading and other work he had done two years or more earlier on land he owns in the county-regulated Special Management Area of North Kohala, on the northern tip of the Big Island near the old plantation town of Hawi.

In a letter dated October 12, Chris Yuen, the planning director, stated that the document and accompanying SMA use permit application “are a misrepresentation of the after-the-fact activity that has occurred and are substantively inadequate as submitted.” Yuen’s early rejection of the draft EA stopped further processing of it, including publication of a notice of its availability in the Environmental Notice of the state Office of Environmental Quality Control.

The SMA permit is needed for Mohammadi to stop the daily accumulation of fines for the unauthorized work. The meter, which tolls at $10,000 a day, could run into the millions, if the county’s fines are upheld by a hearings officer.

“This isn’t a trivial matter,” Yuen told Environment Hawai`i, noting that Mohammadi’s fines were for the second SMA violation he had committed. “The first violation involved grading a road down the side of Waipiele Gulch. He was put on notice then that he would need a Special Management Area permit. But then the second violation occurred, which involved the removal of much more material.”

Mohammadi also has run afoul of the state Board of Land and Natural Resources, which last spring found he had violated its rules when he conducted unauthorized grading in the state Conservation District, which runs along the coast of Mohammadi’s land. For that work, Mohammadi had to pay $10,500 in fines and administrative costs. That, too, was the second Conservation District infraction of Mohammadi’s. A year earlier, a violation involving construction of a fence and gate in the Conservation District was resolved through the more informal resolution system the Land Board has established, known as HOAPS (for Hearing Officer Administrative Penalty System). The outcome of that case, settled in June 2004, was a $250 fine, $310 in administrative costs, and a promise to submit an after-the-fact permit application.

A Bad Start
In 2000, E Commerce Enterprises Corporation, a company incorporated in South Dakota and owned by Mohammadi, paid about $900,000 for some 130 acres in North Kohala. He acquired the land from Chalon (now known as Surety Kohala), a Japan-based corporation that purchased most of the former sugar-cane acreage in North Kohala. He soon sold off about 27 acres and began to subdivide the remainder into four 20-acre parcels of agriculture-zoned land and a long, 21.5-acre coastal parcel of mostly Conservation District land, but which includes perhaps five acres of land in the state Agriculture District on which Mohammadi has built a large residence. Other lots in the subdivision have sold recently for $1.95 million.

In early 2003, Mohammadi graded a road from his house straight down a steep slope into Waipiele Gulch, giving him direct access to the rocky Pahoa Beach. The road follows a “trail” easement across a neighboring lot (also owned by Mohammadi), in favor of his house lot. Mohammadi also had parking areas graded near the beach and dug a channel to redirect flows from an intermittent meandering stream. All work was done without a county Special Management Area permit or a state Conservation District Use Permit (required for those actions within the Conservation District).

To resolve the Special Management Area infractions, Mohammadi was ordered in Decmeber 2003 to undertake remedial work (including placement of jute netting on the bare areas), pay a $5,000 fine, and apply for an after-the-fact permit to cover the work done. Mohammadi also was to agree to mow the public access easement, which ran along the eastern boundary of the easternmost lot in his subdivision.

Mohammadi paid the fine in February 2004, but did not satisfy the remaining conditions. In fact, he did even more extensive unpermitted work after receiving the first notice of violation. A Special Management Area assessment application was submitted in the summer, but was rejected as incomplete. And so on September 20, Planning Director Yuen sent Mohammadi a second notice of violation, which included the unsatisfied prior violations, and added a charge of grading a “new, curving twenty-four-foot-wide dirt roadway … carved out of the existing steep northeastern slope of Waipiele Gulch,… a distance of approximately 3/10th of a mile.” The road connected the end of the subdivision’s cul-de-sac to the earlier road that was the subject of the first SMA violation. The new roadway, Yuen wrote, “included massive road cuts of up to twenty-one feet in height in the steep natural slopes of the gulch…. In addition, new grading had been done in the area of the previous violation.”

“We are extremely concerned about the potential for soil erosion from the newly cut and graded areas,” Yuen continued. “You have created very steep cut sections scarring the slope of Waipiele Gulch. This creates the potential for soil that could erode into the ocean in a heavy rain. These cuts are far steeper than would be authorized under the Grading Ordinance.”

Yuen fined Mohammadi $100,000 for four violations: the grading of the new road, the regarding of the previous violation, the grading of a parking lot on the vacant lot, and the grading of a parking lot near the beach area of Mohammadi’s house lot. In addition, he wrote, “we are considering the existence of the road and the cut slopes on the new road … to be a continuing violation … and are levying a separate and additional fine of $10,000/day for each day in which this very serious violation persists. (This violation, and the other 3 violations, are also violations of the previous letter, which told you ‘do not conduct further development.’)” He agreed to suspend the daily fines for a period of 120 days to give Mohammadi time to submit an after-the-fact application for the work. Yuen also warned Mohammadi that he would need to apply for and receive all other permits that may be required, including a grading permit and a Conservation District Use Permit.

Steven Lim, attorney for Mohammadi, filed an appeal of Yuen’s decision before the county Board of Appeals, requesting it “reverse and rescind” Yuen’s orders and “allow E. Commerce to continue to satisfy corrective actions” as outlined in the earlier notice of violation.

The Board of Appeals scheduled a hearing on the appeal of Mohammadi for January 14, 2005. At that time, Lim told the board that he was going to try to work out a resolution with the Planning Department and, “failing that, we would hold a contested case hearing on the fines … and subsequently, if need be, return for further proceedings before the Board of Appeals.”

Enforcement actions were held in abeyance as Mohammadi’s consultant, the R.M. Towill Corporation, prepared a draft environmental assessment in connection with the anticipated SMA permit application.

But when the draft was submitted in early September, Yuen rejected it. “Generally,” he wrote the consultant and the Mohammadis on October 12, “the draft did not provide adequate information to enable a reasoned evaluation of the environmental impact of the proposed action being considered.”

Since then, Yuen has heard received nothing further from Mohammadi or his agents. Lim, says Yuen, “made a legal argument that there had to be a hearing before the fines were imposed, and we agreed to give them a hearing on the fines before a hearings officer. If they wanted to appeal after that, they could take it to the Board of Appeals again.”

“I’ve got to get on my attorneys to schedule that hearing,” he added.

A Pending Permit
The state Department of Land and Natural Resources, meanwhile, is working to get Mohammadi to clear up the violations it addressed last May, when the Board of Land and Natural Resources fine Mohammadi $2,000 and assessed administrative costs of $2,500 for unauthorized work in the Conservation District. (For background, see the “Board Talk” column in the June 2005 issue of Environment Hawai`i.)

In August, Mohammadi submitted an environmental assessment in connection with an after-the-fact Conservation District Use Permit application to address construction of a fence and gate.

Tiger Mills of the DLNR’s Office of Conservation and Coastal Lands, says that Mohammadi’s consultant had not responded by mid-December to the comments that the department received on the application. “After we receive his response, we’ll prepare a staff report and recommendation for action to the chairperson,” she said. “If we don’t get comments by the 180-day deadline for acting on the application, we would have no choice but to recommend the chairperson deny the permit.” The deadline will come up in March, she said.

Access on Hold
Those commenting on the application included the county, which objected to the statement in the CDUP application that “access to the shoreline has been provided by the owners via an adjacent pathway to the shoreline.”

“The owner has been cited for the grading of a roadway down Waipiele Gulch without SMA approval,” Planning Director Chris Yuen informed the DLNR. “Further, the location of the access easement [provided to the DLNR] is not consistent with the map for [the] subdivision.”

Mark Grandoni, president of the community group Kamakani ‘o Kohala Ohana, Inc. (KAKO`O), also commented, noting that the fence and gate blocked lateral shoreline access. In earlier letters to the DLNR, Grandoni had stated that work blocks the “circle-island” Ala Loa Trail, even though the trail’s specific location has been lost.

In considering the subdivision, the county had dismissed Grandoni’s claims of a need to require lateral shoreline access. It did, however, insist on shoreline access through the subdivision – a requirement that Mohammadi has yet to fulfill.

At first, Mohammadi placed an easement for public access across a lot that was not even a part of his subdivision – he had sold it to an elderly Japanese-speaking woman, Miga Takahashi – and then had it continue down the eastern side of Waipiele gulch. But soon after Mohammadi got in trouble for grading the roadway from the cul-de-sac down to the valley floor, he claimed that he was doing it to accommodate public access. In an email to Chris Yuen on September 25, 2004, Mohammadi stated that “in fact, 90% of the 3/10th of a mile clearance that was done in the Gulch is the public access area. I will clear the addl. 10% in the bottom of the gulch to adhere with county requirements…”

Yuen didn’t buy it. “These grading projects appear to implement a plan to create ‘private beach access’ as advertised to lot purchasers,” he wrote in a letter to Lim, Mohammadi’s attorney, in November 2004. The grading shown on a map given to the county “shows that the grading … corresponds with an easement to the ocean in favor of several subdivision lots… The statement in the SMA [application] that the nature of the activity was to ‘clear public access pathway at planning director’s request’ is not correct. The grading does not follow the public access easement for the most part. Rather it follows … a private easement in favor of the lot owner. The planning director did not ask that this grading take place.”

In the meantime, Mohammadi and Ms. Takahashi, owner of the lot over which part of the recorded public access easement ran, had had “disagreements,” according to her attorney, Roy Nakamoto. As a result, in May 2005, she requested through her attorney that the pedestrian public access easement be removed from her property.

As of mid-December, the county was still awaiting submittal of a plan for alternative public access by Mohammadi.

— Patricia Tummons

Volume 16, Number 7 January 2006

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