PLDC Adopts a Strategic Plan, Amends Rules for Public Hearings

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If public testimony is any indication, the Public Land Development Corporation has swayed none of its major critics by adopting a strategic plan. And recent amendments to the agency’s proposed administrative rules have also quelled no concerns.

Those who already support the agency — the General Contractors Association, renewable energy developers, and their consultants — testified in favor of the PLDC board’s adoption of the plan, its associated flow chart, and the proposed rule amendments at the PLDC’s meeting on October 11.

The critics, while expressing their appreciation for the PLDC’s effort to address community concerns, only stepped up their criticism.

Their main beef with the strategic plan: Its components aren’t reflected in the statute establishing the PLDC or in the agency’s proposed administrative rules. Therefore, the plan has no legal significance.

“The failure to incorporate the strategic plan into your rules renders the strategic plan an empty gesture,” wrote Native Hawaiian Legal Corporation attorney David Kimo Frankel in testimony to the PLDC.

As for the proposed rule amendments, Frankel and others pushed the PLDC to include provisions of some of the environmental regulations the agency is now exempt from. It was a recommendation they had raised during public hearings on the first draft of administrative rules, to no avail.

“[The Office of Hawaiian Affairs] and others submitted a lot of the same language to you before you went to public hearings the first time. You would have saved a lot of heartburn. If they’re not incorporated a second time, you will have a lot of heartache,” Frankel warned.

Public Fears

For months, the staff and creators of the PLDC (including the governor’s office) have been trying to extinguish the public’s fears about an agency that can allow developers of public lands to bypass most of the state’s regulations that protect environmental and cultural resources – regulations that, according to Frankel, have protected O`ahu’s Ka Iwi shoreline and `Ewa beach, Moloka`i’s La`au Point, Hanalei on Kaua`i, Honoli`i on the Big Island, and many other places, from inappropriate development.

Under Act 55, which established the PLDC in 2011, developers working with the PLDC would, indeed, appear to be exempt from all state and county land use laws, so long as the PLDC had “coordinated with” county planning departments and county land use plans, policies, and ordinances.

Such language has not appeased the public or the counties. The Kaua`i and Hawai`i county councils have recently adopted resolutions calling for the repeal of Act 55, something that state House Representative Cynthia Thielen has promised to try to do next legislative session.

Frankel told the PLDC board that the public distrust stems from a lack of candor. To date, the PLDC has not said whether it will comply with statutes regarding the Conservation District, the state Land Use Commission, and the coastal zone management law.

“Will PLDC comply with Chapter 183, 205, 205A? Why don’t you tell the public?” he asked.

“It’s not absurd for the public to have fear” about inappropriate development, Frankel added, since, even without PLDC involvement, the City and County of Honolulu is entertaining a proposal by developer Andy Anderson to build a hotel on city-owned park land in Hale`iwa, on O`ahu’s North Shore.

“There’s litigation over it,” Frankel said.

Just a Conduit

To clarify what the PLDC will do and how it will operate, state Senators Malama Solomon and Donovan Dela Cruz helped PLDC staff develop a strategic plan.

Under the plan, the PLDC now has guiding values, such as “be fair,” “support and aid,” and “facilitate and connect.”

The plan lists nine guidelines, some of which simply restate laws that the PLDC is required to follow. Under other guidelines in the strategic plan, the PLDC promises not to sell land or develop lands eligible for designation as important agricultural lands (IAL). It will also heed conditions imposed on projects by the state or county agency holding title and county conditions on infrastructure connection.

One guideline seems to go beyond what Act 55 allows. It promises to give 85 percent of the state’s share of project revenues to any agency that has title to or management over the underlying state or county lands. The act, however, states that 85 percent of the state’s revenue must go to either the Department of Land and Natural Resources’ special land and development fund or its boating special fund.

The plan lists key components of PLDC projects:

  • Achieve department and agency goals.
  • Have value and significance to the community.
  • Help preserve culture, agriculture, conservation and preservation.
  • Be self-sustaining.
  • Have a positive economic impact.
  • Have long-term value.

At the PLDC’s October meeting, executive director Lloyd Haraguchi stressed that the PLDC’s work will be achieved through partnerships with state and county agencies and non-profits “to create jobs for the public benefit.”

In all cases, he said, the title agency leasing land or transferring management to the PLDC will take the lead.

“They’re driving the bus, we’re the conduit,” he said. “The county has control over water, sewer. Without cooperation by the county … the project stops. This is an effort where the people driving the bus will be the title agency and the county.”

The plan’s flow chart first outlines how project applications will lead to leases or memorandums of understanding between a title agency (i.e., the DLNR) and the PLDC. Once the PLDC gains control over the land, projects can follow one of three tracks — depending on what kind of development/management partner, if any, is involved — eventually resulting in a lease and/or partnership agreement between an applicant and the PLDC.

Under the scenarios set forth in the flow chart, the public will have four to seven opportunities to comment at a public meeting, depending on which track an application takes. (The flow chart misidentifies these as public hearings.) Instances where outside agencies are proposing projects would require seven public meetings, while those where the PLDC is simply taking over management would require four.

“This [addresses] one of the major concerns, that we were providing maybe just one opportunity for public input,” Haraguchi said.

The county and title agency would set project conditions based on an initial project proposal, and compliance with state historic preservation and environmental review laws could occur after the title agency transfers management or issues a lease to the PLDC, according to the flow chart.

‘Not Legally Binding’

Frankel, and representatives of the Hawai`i chapter of the Sierra Club, the Office of Hawaiian Affairs, and Life of the Land asked the PLDC not to adopt the strategic plan until or unless its terms are incorporated into the proposed administrative rules.

Former state deputy attorney general Patricia Talbert (now with Innovations Development Group), however, said she wasn’t sure the plan was meant to be legally binding.

“These things speak to how a board is going to function. Statutes and rules don’t tell you how you’re going to open the doors each day,” she said.

In any case, the strategic plan’s terms don’t quite match up with the proposed administrative rules, OHA’s senior policy analyst Jocelyn Doane told the board.

For example, the plan suggests that the title agency and counties will recommend project conditions based on an initial project proposal. Under the proposed administrative rules, however, such a proposal will only be done if the PLDC’s executive director thinks it’s required.

In written testimony, OHA noted that the administrative rules were unclear how the county would provide comments on infrastructure requirements if the executive director doesn’t require an initial project proposal.

Another inconsistency between the plan and the rules involved the six key components of a PLDC project. The plan simply lists the components without indicating whether a project needs to meet them all or just one. The proposed rules require projects to be either self-sustaining or generate revenue. As for the rest of the key components, a project would need to meet only one of them, under the rules.

Rep. Thielen noted that the proposed rules originally required a project to meet all of the components.

“[T]he word ‘and’ has been replaced with the disjunctive word ‘or.’ This means that in reality, only ONE of these five elements – for example, ‘positive economic impact’ – will be required… EVERY proposed project can be said to have some kind of positive economic impact, even if it ultimately fails on the other five elements,” she wrote.

That the flow chart appeared to allow a title agency to approve projects well before they complete the environmental process worried Frankel.

“The title agency shouldn’t approve a project unless Chapter 343 is done. They will be making a decision without the information it needs. And they will be sued and we will win,” he said.

(According to deputy attorney general Linda Chow, although the flow chart indicates Chapter 343 environmental review will accompany a final project proposal submitted after PLDC has control of the land, the review could be done any time before then. The proposed administrative rules would require that a finding of no significant impact accompany initial project proposals “if applicable to the project at this stage.”)

The strategic plan’s commitment not to develop eligible IAL lands is not mentioned in the rules at all, Doane and others noted.

“Members of the public understand that the strategic plan is not legally binding. If you mean it, put [its provisions] in the rules,” Frankel said. “You say you’re not going to develop important agricultural lands. You don’t say it in the rules. Say it!”

The Sierra Club and OHA argued that the PLDC’s strategic plan and rules should also commit to leaving lands in the county special management area and state Conservation District alone.

“These lands often contain Hawai`i’s most fragile natural and cultural resources, including those that are critical not only to Native Hawaiians’ immediate well being, but to the very survival of our culture and way of life,” wrote OHA CEO Kamana`opono Crabbe in testimony to the PLDC.

“There are certain projects I think we can agree should be off the table. We should agree to that,” added Sierra Club, Hawai`i Chapter, executive director Robert Harris.

With regard to Haraguchi’s earlier comment on the need for the county’s cooperation on water and sewer connections, Frankel argued that Haraguchi had a fundamental misunderstanding of the county’s role in controlling development.

The county’s concern about a particular project may not be with wastewater, but with the traffic it may generate, he said. By limiting the county’s input to certain infrastructure requirements, “it’s deceptive to say the county has this large role,” Frankel said.

Administrative Rules

Rep. Thielen’s comments on the proposed administrative rules also touched on the PLDC’s apparent lack of commitment to follow county plans. She notes in her written testimony that the proposed rules only require that projects be “consistent with county community or development plan for the area, as closely as is practical.”

“[T]he phrase ‘as closely as is practical’ renders this ‘requirement’ purely aspirational,” she wrote.

After the first round of public hearings, the PLDC made several amendments, including expanding the definition of culturally sensitive, requiring an initial project proposal, and deleting sections on financing, among other things.

To Doane, more changes were needed before the board approved a second round of public hearings.

“You’d need to go back again if substantial changes are made again. We are concerned about the lack of provisions to ensure transparency, accountability, and due diligence, and the lack of provisions to ensure the PLDC is able to fulfill obligations regarding cultural sensitivity,” she said.

Frankel asked the board not to assume that the title agency will review PLDC projects “according to the standards it currently operates under when deciding whether to approve a project.”

He argued that the title agency may know nothing about the nature of a proposed project before land is transferred.

“Second, and much more importantly, there are no standards that govern the agency’s decision to transfer development rights to the PLDC,” Frankel wrote in testimony.

Doane, Harris, and Frankel also again tried to get the PLDC to forfeit some of the exemptions granted by Act 55 by incorporating some of the protective language contained in statutes regarding coastal zone management and the Conservation District, among other things. They also tried to get the board to include provisions in the rules to prevent developers with a history of violations from applying for projects.

The board ignored all of their recommendations and approved the amendments to the administrative rules as submitted by Haraguchi.

Teresa Dawson

Volume 23, Number 5 — November 2012

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