Hawai'i County Is Challenged In Court Over Ability To Determine Coastal Setbacks

posted in: Development, June 2013 | 0
A developer who has a history of flouting conditions of permits issued by the Hawai`i County Planning Department has now taken the county to court. At issue are the conditions of a Special Management Area permit governing a luxury, gated subdivision along the Hamakua Coast, about 10 miles north of Hilo.
In essence, Steven D. Strauss, attorney for builder Scott Watson, is challenging the county’s very ability to establish setbacks for developments in coastal areas.

The origins of Watson’s dispute with the county go back more than a year, when he began seeking approvals for plans to build a house he is calling the Pepe`ekeo Palace on a 1.8-acre lot near the old Pepe`ekeo sugar mill. When the mill was active, the site of his house was heavily used by its workers and the mill itself. A communal pig pen and several warehouses dotted the site now owned by Watson and a San Jose attorney, Gary L. Olimpia.

As part of receiving county approval for the house as well as a planned swimming pool and tennis court, Watson was required to get the blessing of the State Historic Preservation Division. In doing so, Watson agreed to avoid “all of the concrete foundations and structural remains, with the exception of the large storehouse foundation, which will be converted into a tennis court.” He also agreed to document all of the foundations and concrete features with photographs, narrative descriptions, and measurements before beginning any construction work. A large storehouse and stairway was to be left intact.

Watson began work in mid-year without fulfilling SHPD’s requirements. By late November, SHPD had received complaints about Watson’s work. Theresa Donham, archaeology branch chief for SHPD, informed the county that Watson had not complied with the mitigation measures he had agreed to, asking the county to order him to stop work “so that we can determine the extent of damage … and recommend revised mitigation measures.”

Separately, the Planning Department had already fined Watson for work he had done on the site that was contrary to other permit terms. No sooner had he paid the county $8,000 to settle those violations, in mid-November, than the Planning Department began to receive complaints from hikers over blocked public access on the pedestrian easement running along the makai (ocean) side of his 1.81-acre lot.

On November 29, the Planning Department notified Watson and Olimpia that they were to cease all work on the site, survey the shoreline and the top of the pali (cliff) that fronted the property, obtain SHPD’s approval of work done to comply with a historic site mitigation plan, and relocate all new construction to within county-approved setbacks. The Planning Department also imposed a $20,000 fine.

Through his attorney, Watson filed an appeal with the county Board of Appeals on December 31.

Moving Setbacks
As Environment Hawai`i reported in our December 2012 cover article, the Planning Department had allowed Watson to build up to 20 feet from the edge of his property, invoking the side-yard setback distance. The Special Management Area permit for the subdivision that includes Watson’s lot calls for minimum 40-foot setbacks along the entire coast.

The November 29 notice of violation stated that the foundation for an exterior wall of Watson’s house was 19 feet from the property boundary. The open-space requirement for side yards is 14 feet, the NOV stated. Watson had also encroached on this setback as well, the county claimed, with the grand lanai extending nine feet into the setback. The roof overhang was going to project three more feet, leaving just 8 feet of open space in the “side yard.”

The county inspector also determined that the construction encroached into the 50-foot shoreline setback.

On February 3, the county planning director, Bobby Jean Leithead-Todd, amended those numbers on the basis of a December 10 inspection, increasing the setback encroachments by one foot. The county inspector had also noticed that an area south of Watson’s lot had been filled and graded without approval from the county and without any silt fence to stop the fill from eroding into the ocean.

That wasn’t the end of it, however. On April 5, Leithead-Todd wrote Strauss again: “After further research of our files, we realize that we inadvertently failed to take into consideration the conditions of approval of SMA No. 450” – the Special Management Area permit governing the entire subdivision – when the county issued its permit for Watson’s house.

Those conditions state that “no fence, wall, structure, or landscaping shall be installed that impedes usage of the public access easement,” and that “no house or other substantial structure shall be built closer to the ocean than 40 feet from the top of the sea cliff.”

The side-yard setback of 20 feet and the temporary blocking of public access that the Planning Department had earlier allowed “are both contrary” to the conditions of SMA No. 450, she stated. She closed by noting that Watson and the owners of the 10 other lots in the subdivision could ask the Planning Commission to revise the SMA conditions but that she lacked the authority to override those conditions.
Strauss did not respond directly to the county’s April 5 letter. Instead, eight days before the Board of Appeals was scheduled to hear Watson’s appeal, he filed a complaint in 3rd Circuit Court against Leithead-Todd, the Planning Department, the chairman of the Planning Commission, and the County of Hawai`i itself.

Usurped Authority
The complaint alleges a wide array of improper actions by the county, but the most critical is that the county usurped state authority by imposing a 40-foot setback on the makai boundary of the lot.

Strauss argues that only the state Department of Land and Natural Resources can establish and enforce shoreline setbacks. He cites the Hawai`i’s Coastal Zone Management Act, Chapter 205A, which states that shoreline setbacks are to be no less than 20 feet and no more than 40 feet from the shoreline.

Legal definitions of shorelines, Strauss notes, do “not include ‘top of cliff, ‘top of sea cliff’ or ‘top of pali,’ all terms that agencies of defendant County of Hawai`i have used in place of the statutory definition of ‘shoreline.’”

In fact, the setback imposed on Watson was not a shoreline setback per se, but rather the setback from a property line, since there is another lot of record that lies between Watson’s lot and the ocean. However, Strauss maintains that the long, skinny lot that lies between all the lots in the subdivision and the ocean is only a “remnant” lot and may not be used to trigger setbacks. By treating this lot as a parcel that can be used for setting setbacks, he states, the Planning Department “exceeded its authority.”

In short, Strauss argues, the SMA permit for the subdivision “adopts a definition of shoreline, and certification thereof, contrary to that provided for [in the CZM law] and is thus void, unlawful, and unenforceable as presently written.”

The complaint asks the court to provide “declaratory relief” by estopping the county from holding to the conditions in SMA No. 450 and to grant “temporary, preliminary and permanent injunctive relief” by prohibiting the county from applying definitions of shoreline and shoreline setback that are inconsistent with state law and from using the coastal lot as a trigger for setbacks.

On May 10, more than a week after the lawsuit was filed, the Board of Appeals met. Watson’s petition was on the agenda. After a lunch-break discussion involving Strauss, Watson, Leithead-Todd and Amy Self, the county deputy corporation counsel representing the Planning Department, Strauss informed the board, “There has been an agreement reached between the landowner and the Planning Department.

“That agreement,” he went on to say, “includes as a condition a continuance of the Board of Appeals appeals…. We’ll keep the board apprised of developments in that case, because continuance is pending resolution by other agencies.” Neither he nor anyone else mentioned the lawsuit.

* * *
The Helipad and the Three Kitchens

In addition to the infractions the county found at Watson’s Pepe`ekeo worksite, the county also cited him for unauthorized improvements at two other houses he has built on the Hamakua Coast.

In one case, Watson and his real estate agent had advertised a house in Pauka`a, just north of Hilo, as having three kitchens. It had been permitted as a single-family residence, with just one kitchen allowed. In a letter dated April 10, Leithead-Todd stated that the violation had been resolved to the county’s satisfaction and the civil fine of $500 “has been waived due to full compliance.”

The matter of a public access easement over that same property to a pool in Pauka`a Stream has not yet been resolved. The county has not issued any notice of violation in connection with Watson’s failure to comply with that condition of his permit to develop the lot.

Then there is the case of the helipad atop a house that Watson finished building last year in Ninole, around 20 miles north of Hilo. The Planning Department sent a notice of violation to Watson and co-owner Laurie Robertson about the helipad on December 6.

Watson did not appeal the county’s findings. On February 25, Leithead-Todd notified Watson and Robertson that their right to appeal had expired and that, as of that date, total fines came to $14,800, “based on initial fines of $500 for a zoning violation, $10,000 for a Special Management Area violation and daily fines of $4,300.” The daily fines began to toll on January 9, the day following the deadline for appeal or resolution.

A schedule of fines included in the letter showed that for the first three months following a notice of violation, daily fines accrue at a rate of $100 a day. From the fourth to the sixth month, they rise to $200 a day, topping out at $500 a day the ninth month and thereafter.

Watson and Robertson were given until March 27 to pay the fine and cease the violation. Should that not happen, Leithead-Todd wrote, “the matter will be transferred from the Planning Department to Corporation Counsel for legal action.”

That deadline passed without event.

On May 6, Leithead-Todd sent a “Follow-up Letter #1” to Watson and Robertson. She stated that the amount of fines due on that date came to $23,700.

But instead of following through on the threat to turn the case over to corporation counsel if the March 27 deadline for resolution was unmet, Leithead-Todd offered Watson yet another deal: “If you resolve this matter by the deadline date of May 23, we will consider reducing the fine to 10 percent of the amount due, otherwise, after this date, the matter will be transferred … to Corporation Counsel for legal action.”

According to the Planning Department inspector, having heard nothing from Watson, he shipped the matter over to the corporation counsel on May 23. Now into the fourth month of the infraction, fines are accumulating at a rate of $200 a day. By the end of the month, the total stood at more than $28,000.

Volume 23, Number 12 — June 2013

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