Condo Development Is Proposed for Site With a History of Bitter Controversy

posted in: October 2012 | 0

One will search in vain to find the word Nukoli`i anywhere in the federal lawsuit challenging the Kaua`i charter amendment to limit new hotel rooms. In fact, however, the lawsuit is the latest chapter in a 40-year-long history of litigation and disputes involving powerful political forces over development rights to the coastal property. As early as 1984, a Honolulu Advertiser reporter called it “the most wrenching political issue in Kaua`i’s history;” as recently as 2009, Bob Jones, writing in Midweek, described it as “one of the shadier land deals” in Hawai`i.

“For the few who knew the area in the years just before Nukoli`i became a political battleground, it was called the old Hanama`ulu or Nukoli`i Dairy, referring to an 11-acre operation that passed out of existence in the late 1960s,” write George Cooper and Gavan Daws in Land and Power in Hawai`i. To the north was the county’s Wailua Golf Course; to the south, Hanama`ulu, and just beyond that, Lihu`e, the county seat.

Since the passage of the state land use law (Chapter 205) in the 1960s, the area had been designated Agricultural, although, write Cooper and Daws, “farming would have been hampered by hard onshore winds that blew much of the year.”

In 1973, Masaru “Pundy” Yokouchi, then-Gov. John Burns’ chief aid on Maui, arranged to buy the land from Amfac for $1.2 million “and then organized a hui that became the owner.” Other hui members included Tom Yagi, director of the ILWU’s Maui division (and member of the state Board of Land and Natural Resources), immediate members of the family of Sen. Nadao Yoshinaga, two members of the Maui County Council, and a number of others “in or close to the top leadership of the state government,” Cooper and Daws report.

The following year, the 66 acres purchased by Yokouchi and his friends were recommended for inclusion in the state Urban land use district in the course of the second five-year boundary review mandated by Chapter 205. In its “Report to the People” of 1975, the Land Use Commission advised that it had approved placing 58 acres into the Urban category, while the remainder (extending from the shore to about 150 feet inland) would be in Conservation. (The redistricting was done with the blessing of the Kaua`i Planning Commission – with the caveat that “substantial completion of development [was] to take place within 5 years… Non-performance shall be a basis for reversion to former classification.”)

“[A]fter owning for only about two-thirds of a year, and before the jump in real property tax assessment,” Cooper and Daws write, “the hui was able to resell, to a Hawai`i subsidiary of Pacific Standard Life Insurance Co.” The sales price: $5.25 million.

By 1977, the Nukoli`i parcel was proposed for inclusion in the Lihu`e Development Plan as a resort area, despite initial opposition from the 15-member Citizens Advisory Committee, according to Land and Power. In what was apparently the first show of organized labor in support of a project, the landowner arranged to have “a force of carpenters” attend a County Council meeting where the development plan was to be considered. “This was the first time that construction workers had showed up en masse at a land use hearing on Kaua`i,” Cooper and Daws write. “Their presence led Walton Hong [attorney for the developer] to say: ‘I feel tonight is a turning point. This is the first time we have had the silent majority come out to speak for something.’… Their pension fund three weeks earlier had acquired a passive interest in the Nukoli`i land, though Carpenters Union officials later interviewed … said that had nothing to do with union support for the project.”

Following approval of the development plan, with the Nukoli`i resort designation, appropriate county zoning was proposed in 1978. The final development project approved by the council in 1979 was for a 350-room hotel and 150 condos on just 25 acres of the project.

Even though the development was considerably scaled back from the original proposal, opponents calling themselves the Committee to Save Nukoli`i (CSN) nevertheless successfully petitioned the county to have a referendum to repeal the zoning placed on the November 1980 general election ballot.

The day before the election, the county granted a permit to build the hotel to Hasegawa Komuten, which had purchased the upzoned 25 acres in August of that year. When the final ballot count came in on the rezoning referendum, however, it was two-to-one against the resort.

Because of the already issued building permit, Hasegawa considered itself to have a vested right to develop and continued to work on the site despite the successful referendum. The county immediately sought a determination from the 5th Circuit Court on the zoning questions raised by the vote, asking the court to uphold the county position. In February 1981, Judge Kei Hirano found in favor of the county and the developer.

It took another year and a half for the case to be decided by the Hawai`i Supreme Court, which overturned the lower court ruling. From the time that the county clerk certified the initiative petition up to the vote, the costs that the developer had sunk into the project had been at the developer’s own risk, the justices found. “The building permits stand in the same shadow cast by certification of the referendum and do not create an irrevocable right to proceed with the Nukoli`i project,” they wrote. “Simply stated, the official assurance upon which the developers would have a right to rely in the case could come only from the voters, and they chose to withhold it.” The lower court was instructed to order the county to revoke the building permits and “to restrain any further construction on the Nukoli`i site.”

With the condos completed and the hotel nearly a third built, Cooper and Daws write, “Gov. Ariyoshi’s chief campaign organizer on Kaua`i [Turk Tokita], believing that public opinion was shifting in favor of construction of Nukoli`i, said he got the idea to do a second vote on Nukoli`i, in the form of an initiative.”

Kauaians for Nukoli`i (KFN) got the signatures it needed on a petition to restore the zoning to the site through a referendum, to be voted on in a special election in 1984. “By almost any standard,” Land and Power reports, “the money spent in the 1984 Nukoli`i initiative exceeded anything Kaua`i had ever seen. To take one measure – dollars spent by election winners per registered voter – KFN spent, as measured in 1980 dollars, $7.62.”

The referendum won approval, 58 to 42 percent. There were a few more minor skirmishes in state and federal court over the conduct of the election and costs, but when the dust settled, the buildings remained: a hotel, now the Aqua Kaua`i Beach Resort, and the 350 condominiums known as the Kaua`i Beach Villas.

For a much more thorough discussion of the Nukoli`i development up to 1984, see Gavan Daws and George Cooper, Land and Power in Hawai`i, especially Chapter 11.

Patricia Tummons

Volume 23, Number 4 — October 2012

Leave a Reply