Hawai`i County Wants to Reconsider Approval of Final EIS for `Aina Le`a

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Hawai`i County wants a do-over.

That, at least, is what it has told Judge Elizabeth Strance of the 3rd Circuit Court, who is hearing a challenge to the county’s acceptance of a final environmental impact statement prepared for the Villages of `Aina Le`a. The project is proposed for about 1,000 acres in West Hawai`i, just mauka of the Mauna Lani resort.

The Mauna Lani Resort Association, represented by attorney Randy Vitousek, argues that the EIS was flawed procedurally and substantively: procedurally, since it described a project with a different scope, ownership, and configuration than the one outlined in the EIS preparation notice, and substantively, since it represents an improper and illegal effort to segment the planned development of a much larger area. It is asking the court to invalidate the EIS and enjoin the developer from any further work at the site.

During a court hearing on December 3, Judge Strance expressed dismay over the county’s failure to take a hard look at the applicant’s statements in the EIS. Less than two weeks later, on December 13, county deputy corporation counsel William V. Brilhante Jr., filed a motion asking the court to remand the matter to the Planning Department, in light of “new” evidence that it did not have when it accepted the final EIS in November 2010.

According to Brilhante’s brief, the final EIS should have included the Joint Development Agreement (JDA) between developer DW `Aina Le`a Development, LLC, and Bridge `Aina Le`a, LLC, which owns most of the area proposed for development as well as some 2,000 acres in the Agricultural District surrounding it. The FEIS did include as an appendix a purchase agreement between the two parties that referred to the JDA, but the JDA itself was not included.

Now that the county has seen the development agreement, Brilhante argues, the county wants to reconsider its acceptance of the EIS. The JDA “clearly brings into question the continued or ongoing relationship between DW and Bridge,” Brilhante’s motion states. As described by him, the JDA provides for modifications to the master plan and it references “coordinated development” of land in both the Urban District as well as the Agricultural District land.

“Unfortunately, a copy of the JDA was never attached to [the purchase agreement] in the FEIS, and was never submitted to the county,” Brilhante states. “Not until December 11, 2012, following numerous request [sic] by legal counsel for the county, was a copy of the executed JDA provided to the county.”

In light of this “new” evidence, he goes on to say, “the county hereby request [sic] the court to remand this case back to the county” so it can require the applicant to comply with state rules regarding environmental impact statements.

Jerel Yamamoto, attorney for DW `Aina Le`a Development and Relco Corp., which holds a major stake in the developer, asked the court for the same remedy as the county, “if the court finds deficiencies in the FEIS.”

Belated Curiosity

Until December 3, however, no one at the county seemed to show much interest in the content of the JDA, a point Judge Strance noted in the course of the hearing.

“Candidly, Mr. Brilhante, … both the county and DW `Aina have taken the position that the joint development agreement is irrelevant,” she stated. “And yet, if at the time of the application or during the course of the application, agreements were reached for the development of the three thousand acres, what was the obligation of the county to evaluate … whether the project was … part of something bigger?….”

“[I]t begs the question … which is, what is Bridge doing? And what is the relationship of DW `Aina to Bridge? And is DW `Aina there to facilitate approval of a reduced project in order … for Bridge to complete the development of the remaining three thousand acres?”

Brilhante as much as admitted he had no knowledge of the scope of the JDA, prompting this sardonic response from Strance:

“So it is the county’s position that you see who’s the applicant, and then you put on blinders, like a horse walking down a path, where you don’t look beyond the blinders to figure out what the impact is?”

According to the brief filed by DW `Aina Le`a’s attorneys on December 14, the county requested the JDA only on December 11. Although Brilhante has stated in his brief that the JDA should have been made a part of the EIS, a public record, when Environment Hawai`i asked to see the agreement, he did not release it. The document was obtained via legal discovery, he said, and was a private agreement between Bridge and DW `Aina Le`a. Although, “yes, it should have been made a part of the EIS,” he said, it was not his to disclose at this point. In 2010, when the Planning Department accepted the EIS without the JDA, “it was an oversight not to request this,” he added. Environment Hawai`i was seeking to obtain the agreement by means of a formal request under the state Uniform Information Practices Act. It had not been provided by press time.

The County’s Obligation

Brilhante and Yamamoto attempted to downplay the role of Bridge and its plans for the surrounding 2,000 acres in the Agricultural District, but Judge Strance was having none of it. When she was considering the various motions for summary judgment in advance of the December hearing, she said, “I actually sat down with the agreements and maps and started color-coding the rights reserved in certain lots, and it really is quite a bit of crossover,” she said. “And it’s not clear what it means. And you know, issues about water and groundwater out on that part of the island, I think, are significant, long-term considerations. And if it really is part and parcel of this development, then the environmental impact statement needs to say what it is….

“I think for this particular development, given the crossover and given the evolution of it, I think that the county needed to do something more than it did. When I read through … the county’s brief, and the constant focus on the applicant, the image that came to mind was a workhorse in a field, and you put the blinders on the workhorse to get the field plowed. And so does the county really have an obligation to look outside of that? And I think that it does.”

* * *

Ownership

Who exactly owns the property that is proposed for development?

Judge Strance expressed confusion on this point.

“I have some questions,” she stated in the December 3 hearing. “One of the material disagreements of fact, it appears that the final environmental impact statement says that DW Aina owns one thousand ninety-two acres. And” – addressing Vitousek – “you argue in your brief that that’s in fact not true. DW Aina owns about sixty acres.”

“They don’t own any,” Vitousek replied. “That sixty acres is owned by `Aina Le`a, LLC, and eight hundred and eighty-nine individuals.”

Strance then posed the same question to Brilhante, who attempted to defer the question to attorneys for DW `Aina Le`a. Strance wouldn’t allow it. “Well, you’re the representative of the county,” she told Brilhante. “Who’s the owner of the property?”

Brilhante stated that when the application came in, it stated that DW owned all the thousand-plus acres that the development would cover. “Now,” he added, “what happened from that point in time to where we are now, the county is not really aware. … [W]hat they may have done is, they may have sold ownership interest, or they may have put out ownership interest in the project to independent investors… I’m not sure what transpired.”

Strance pressed the point: “But do you disagree that the county has an independent obligation to evaluate who the applicant is?”

Brilhante insisted that, at the time the application came in, that is exactly what the county did.

Strance: “Well, I’m not talking even about the application. If it was at the time of the application, and it changed by the time the final statement came out, then that – does the county have an obligation to make that correction or see that correction is made in the final environmental impact statement?”

Brilhante acknowledged that this was “a legitimate issue that, you know, at this time I’m not able to answer that correctly or clearly…. I’m not sure what the ownership interest [was] at the time that the final EIS was published … I’m not sure.”

Any doubts about who owns what – whether it’s Bridge, DW `Aina Le`a, the 900 or so Asian investors, or a subsidiary of DW `Aina Le`a called `Aina Le`a, Inc. (ALI) – were clarified in a December 31 filing with the Securities and Exchange Commission.

According to that filing, by the publicly traded `Aina Le`a Inc., “other than the … 61.37 acres” – where some 400 affordable units are being built – “the remaining property comprising The Villages of `Aina Le`a is currently owned by an unrelated entity, Bridge `Aina Le`a, LLC.”

The filing goes on to state that last June, DW `Aina Le`a, which is described as the “majority shareholder” in `Aina Le`a, Inc., assigned to ALI its option to purchase the 1,000 acres of Urban District land where the development proposed in the EIS is to be built.

Of the 61.37-acre parcel now being developed with the affordable housing, even that is not owned outright by either ALI or DW `Aina Le`a. Rather, a land trust that holds the shares owned by Asian investors owns 58.4 percent of that parcel.

Finally, the SEC filing describes a somewhat different development on the 1,000-acre Urban land than that described in the EIS. According to the SEC filing, the development will include “construction of a medical campus, an executive office campus, a golf facility for internationally televised golf tournaments, luxury and local community shopping, an entertainment center, and 1,945 luxury home sites.”

In the EIS, no mention is made of a medical campus or executive office campus. In addition, the total number of market-rate housing units and lots comes to 1,837 (1,047 multi-family residences and 790 lots for single-family houses).

Another PUD

The lawsuit, which was filed in January 2011, has gained some urgency given the Planning Department’s approval last June of a planned unit development (PUD) proposed for about 23 acres on the 61-acre parcel owned by `Aina Le`a and its many Asian investors.

In July, the Mauna Lani Resort Association appealed that approval to the County of Hawai`i Board of Appeals. One of the reasons for the appeal is the pending lawsuit challenging the EIS for the larger project. “The Planning Department should not consider the pending application [for the PUD] until the challenge to the EIS is resolved,” Vitousek wrote to Leithead-Todd in October.

Since then, the Board of Appeals has not held any hearings on the resort association’s appeal, pending the outcome of the litigation in 3rd Circuit Court.

* * *

A Golf Course Lost?

From the earliest petitions with the state Land Use Commission, golf has been an important part of the various proposed developments. The first petition, from Signal Puako, outlined six “villages,” each centered around a golf course. The most recent plan, outlined in the EIS, calls for just one golf course, which would be built pursuant to a Use Permit approved by the county Planning Commission in 1991.

But that permit appears to have expired more than a year ago.

When originally approved in 1991, the permit allowed Nansay Hawai`i to build six golf courses on the 3,000 acres it owned. The time frame for initiating construction was short: final plan approval for the first three golf courses was to be in hand within 18 months of the permit’s issuance (December 1991), with construction to begin within a year of final plan approval.

In September 1996, after a series of delays and time extensions, the Use Permit was amended to give the landowner 15 more years in which to complete construction of the first three golf courses.

One condition of the original permit that was not affected by the 1996 amendments was the requirement for “an annual progress report” to be submitted on the anniversary date of the permit. This condition – Number 20 – “shall remain in effect until all of the conditions of approval have been complied with.”

In Planning Department files, the most recent annual report was dated April 28, 2006.

Condition 21 of the permit allows for time extensions, but none has been requested. It also provides that, “should any of the conditions not be met or substantially complied with in a timely fashion, the [Planning] Director shall initiate procedures to revoke the permit.”

— Patricia Tummons

Volume 23, Number 8 February 2013

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