No one saw it coming.
Not the Hawai`i County Planning Department, which had given its blessing to the 7,500-square-foot house being built by Scott Watson and his partner, mainland attorney Gary Olimpia, on the Pepe`ekeo coast a few miles north of Hilo.
Not Watson, who for years had been served with repeated notices of violations for infractions, large and small, associated with this and two other mansions he had built along the Hamakua Coast – violations settled with penalties that were virtually meaningless in light of the value of the construction.
And certainly not the members of the public who, on September 4, testified before the county’s Windward Planning Commission. On that day, the commission was hearing a request by Watson and Olimpia to amend condition 11 of the Special Management Area use permit issued by the county Planning Commission a decade ago as part of the approval process for the subdivision that includes the lot they own. The application was to change the setback requirement. The existing SMA permit established a building setback of 40 feet from the shoreline as it was certified in 2002, and Watson and Olimpia wanted to change that to 40 feet from the shoreline survey they had had certified in 2010. The change would allow them to continue building the house on the site where foundation work had begun two years ago – but it also would have cleared the way for re-routing the public shoreline access easement away from the narrow slice of land between the lanai of the house and a cliff that marked the shoreline boundary in the 2002 survey.
After receiving public testimony and hearing from Olimpia, Watson, and their attorney, Steve Strauss, commissioner Gregory Henkel made a motion to approve the application. Planning Department director Duane Kanuha stated that his office was taking no position on the application, so the commissioners had no departmental proposal before them to endorse or tweak. “The applicant has submitted language to amend the condition,” Kanuha said. “In addition to that, the applicant has provided several other proposed amendments.”
Henkel’s motion received no second and the commission went into executive session. Back in open session, Henkel made another motion, this time to approve the amendment of the SMA permit “as outlined in Chris Yuen’s memo, with findings and conditions to be worked out after by the planning director and applicant.” Yuen, who was planning director when the original SMA permit was approved, had submitted language to the Planning Department that would have relocated the shoreline access and also allowed Watson and Olimpia to finish building the house as planned. Strauss, however, had indicated in his presentation to the commissioners that his clients wished to add to Yuen’s language, making it unclear whether adoption of Yuen’s proposed solution would satisfy Watson and Olimpia.
In any event, Henkel’s motion received no second. After several moments of dead silence, commission chairman Myles Miyasato announced that the application was denied.
A Forgotten SMA
As Environment Hawai`i has reported over the last couple of years, Watson laid the foundation of the house, which he and Olimpia have named the Pepe`ekeo Palace, well inside the 40-foot setback from the top of the pali, or sea cliff, as it was located when the permit was approved. The Planning Department staffer who supervised Watson’s project, April Surprenant, allowed him to place his house with no more than a 20-foot “sideyard” setback from the much more makai (seaward) shoreline established in the 2010 shoreline survey. Surprenant later said she had been unaware of the existence of the 2004 SMA permit at the time she approved the site plan for the house. (Even if the 2010 shoreline survey placed the seaward boundary of the lot closer to the sea than the 2002 survey referenced in the SMA permit, the 2002 survey still governs development: “No house or other substantial structure shall be built closer to the ocean than 40 feet from the top of the sea cliff … even if the shoreline is later certified at a location makai of the top of the cliff,” the permit states.)
As early as November 2012, Surprenant was questioned about the discrepancy between the SMA setback requirement and her approval of the much smaller sideyard setback. The then-director of the Planning Department, B.J. Leithead-Todd, received a letter from a member of the public in December that also mentioned the original SMA permit conditions that had been ignored by departmental approvals. In early March 2013, the applicants’ attorney, Strauss, even appended a copy of the permit to an amended appeal he was making of a November 29, 2012 notice of violation. Yet a chronology of events related to Watson and Olimpia’s application that was prepared by the Planning Department states that not until April 5, 2013, did the Planning Department send a letter to Watson and Olimpia “clarifying that SMA Permit No. 450 and its conditions were not considered in all previous approvals.”
Both Watson and Olimpia testified that they had no knowledge of the 2004 SMA permit until receiving the Planning Department letter. Olimpia described his due diligence before purchasing the lot. “I went to the title company and spent two-thirds of a day going through the title report with the title officer. The next day, I spent two-thirds of the day at the Planning Department, and was provided with two and a half banker boxes worth of files for the subdivision.
“I went through the preliminary report, the title report, the CCRs. Nowhere is there any document referencing condition 11 of SMA 450. The first time we were aware of it was when the Planning Department sent a letter to myself and Scott referencing 450. I knew nothing about it before then.”
Commissioner Charles Heaukulani, himself an attorney, seemed skeptical. “You were aware there was an SMA in play?” he asked.
“No,” Olimpia replied. “Totally, completely unaware. We knew nothing about SMA 450, and neither did the Planning Department.”
‘End Access’
On the morning of September 8, members of the Windward Planning Commission toured the building site to obtain an idea of the lay of the land, the placement of the house foundation, and the proposed as well as existing shoreline access easements.
After walking down the existing easement from the parking lot to a narrow strip fronting the house foundation, the commissioners were confronted with the word “E N D” spelled out in bright orange spray paint. This, Watson claimed, is a “pinch point,” where the existing access comes to a halt, not allowing any legal access from that point down to the shore.
A little ways further down the slope, yet another bright orange line and the words “END ACCESS” had been spray-painted across the grassy ramp leading down to the landing once used by the Pepe`ekeo sugar mill and now a popular fishing and kayak-launch site. This line, Watson said, marked the end of the public shoreline access easement, with the land between the line and the water being his private property, unencumbered by any easement.
But his claims did not go unchallenged.
In July, Yuen sought to clarify the question of pinched-off access fronting the house site with surveyor Niels Christensen. In an email to Christensen, Yuen referenced a phone conversation he had had with Christensen the previous day. “I wanted to be absolutely sure that I had one thing correct…: that your survey team plotted the metes and bounds of the actual top of pali that lies a few feet makai [seaward] of Scott Watson’s proposed house site, and comparing that top of pali with the metes and bounds of the mauka [inland] side of [the pedestrian easement]… they never cross and the easement is at least 7’ wide if the actual top of pali is taken as the makai side of [the pedestrian easement]. In other words, [the easement] doesn’t ‘pinch’ closed if the actual top of pali is the makai side of the easement.”
Christensen responded, “Yes, that is correct.”
As to Watson’s efforts to close public access to the water, his claim of ownership over the parcel that includes the ramp to the water is not undisputed. As an inducement to have the Windward Planning Commission approve the amendment to condition 11 of SMA 450, Strauss offered to have his clients grant the county a quitclaim to a “minimum 10-foot-wide pedestrian easement” over the parcel, which means only that Watson and Olimpia would not dispute public use of the area – not that they actually own it. Although Watson stated several times on September 4 that he had been informed that he purchased an “oceanfront” parcel, the metes-and-bounds description of the lot does not extend to the water’s edge.
In his testimony, Yuen stated that ownership of the makai area “is quite complicated, and not something that the Planning Commission controls.” Still, he suggested, “it would be good to have a formal easement from this applicant.”
Following the meeting, Environment Hawai`i asked Strauss about what his clients might now do. “The potential loss of improved public access to the shoreline is troubling,” he replied. “No decision has been made yet regarding next steps,” he said, adding: “A motion for reconsideration” before the Windward Planning Commission “is also potentially available.”
“I do believe that my clients are going to keep the temporary public access open while they sort out next steps,” he concluded.
A Tiny Fine for a Helipad
A dozen miles up the coast, near the hamlet of Ninole, Watson and Laurie Robertson built what they called Waterfalling Estate. The property, which included what Watson called the largest private swimming pool in the world, was put on the market last year for $26.5 million. With no buyers nibbling at that bait, they decided earlier this year to sell the house, pool, tennis stadium, and manicured lawn (with several holes of golf) at auction, with no reserve.
When the auctioneer’s gavel fell on March 22, the winning bid was $5.75 million, tendered by an older couple from Kansas City, Missouri. (They have since put the property back on the market for $10 million, stating that they wanted to be nearer to their grandchildren.)
Before the sale could go through, however, there was the matter of an outstanding zoning violation involving the helipad that Watson had built on top of the three-story house.
The Planning Department first notified Watson and Robertson that the helipad violated the county’s zoning code on December 6, 2012, and imposed two fines – one of $500 for violating the zoning code, and another of $10,000 for violating the department’s Special Management Area Rule 9. The homeowners were told to respond by a “deadline date” of January 9, 2013, or otherwise have penalties accruing at a rate of $100 a day for the first three months, $200 a day from the third to the sixth month, $300 a day from the sixth to ninth month, and $500 a day thereafter.
Neither Watson nor Robertson responded. On February 25, Planning Director B.J. Leithead-Todd wrote again. She informed them that accrued fines by that date came to $14,800 and reminded them of the escalating scale. Under the heading, “What happens if you don’t pay the fines?” Leithead-Todd outlined a dire scenario: Under the Hawai`i County Code, she wrote, “fines assessed … shall constitute a lien upon the subject property upon filing of said lien with the Bureau of Conveyances.”
She closed with a warning: “This matter may be referred to the Office of Corporation Counsel for civil remedy and/or the Prosecuting Attorney’s Office for criminal prosecution.”
Br’er Rabbit’s Tar Baby had nothing on Watson and Robertson. So on May 6, 2013, Leithead-Todd again attempted to engage them. “To date, your total fines due have accrued to $23,700,” she wrote. “Resolution of this matter seems to be fairly simple,” she went on to say, asking them to cease and desist from use of the helipad and provide a letter confirming that they have ceased such use. She even offered to reduce the fine to 10 percent of the amount due; “otherwise, after this date, the matter will be transferred … to Corporation Counsel for legal action.” Leithead-Todd copied her letter to William Brilhante in the Office of Corporation Counsel.
Over the next several months, frequent checks in the files of the Planning Department showed no response from Watson or Robertson. In February of this year, Environment Hawai`i asked Brilhante if his office had commenced any action against Watson and Robertson.
Brilhante professed to know nothing about the violation. “Corporation Counsel does not handle issuance of specific Notice of Violations,” he wrote. “That is usually done through the Planning Department. I will follow-up with the Planning Director to see where this matter stands.” Brilhante promised to “get back to you as soon as possible,” but never did.
In April, however, following the auction and while the house was in escrow, it suddenly became important to get the violation resolved. On April 10, Watson came into the Planning Department office with a check for $2,370 and a statement signed by him and Laurie Robertson: “In the future we will not use the rooftop at the subject property … as a heliport, with the exception of usage for public health, safety and welfare in the event of emergencies.”
The payment baffled staffers, who had no knowledge of any negotiations between Brilhante and Watson. One planner emailed Brilhante to inquire what the payment represented. She was told it was a negotiated settlement that was based on 10 percent of the figure cited by Leithead-Todd in her last letter to Watson.
Steve Strauss, attorney for Watson in matters involving the Pepe`ekeo house, told Environment Hawai`i that the settlement of the helipad violation had nothing to do with the sale of the Ninole house, and that the fines had been paid before the house was sold.
Applying the county’s schedule of escalating fines for violation of its rules, from the deadline date of January 9, 2013, to April 10, when Watson settled the violation, total accrued fines for the helipad would have exceeded $150,000.
A Withdrawn Request
The Ninole property is on two separate lots of record. The one nearer the belt highway (the more inland of the two) is just under 1.4 acres. The larger lot, which has the house, pool, and other amenities, is just over 8 acres. Most of the land is in the state Agricultural District, but a small part lies within the state Conservation District.
In 2008, Robertson and Watson sought to have the county approve a parcel consolidation and resubdivision (PCR) – a process by which the boundaries of the lots are redrawn. The number of buildable lots remains the same, but the size of the lots can be adjusted. However, because any division of land within the Conservation District requires the approval of the state Board of Land and Natural Resources, a PCR involving lots with Conservation District lands is difficult. The 2008 effort resulted in the withdrawal of the application.
In February of this year, Watson and Robertson tried once more to effect a PCR on the two Ninole lots, just a month before Waterfalling Estate was to go on the auction block.
On March 11, Planning Director Duane Kanuha returned the application to the surveyor, Niels Christensen. Not only would the process require the owners to submit a Conservation District Use Permit to the Department of Land and Natural Resources, Kanuha wrote, but in addition, the parcels lie within the county Special Management Area and so an SMA Use Permit Assessment application (SMAA) would need to be filed with the county.
On top of all that, Kanuha wrote, “prior to our consideration of an SMAA application, the ongoing Zoning violation(s) must be resolved.”
Editor’s Note: Patricia Tummons testified at the Planning Commission hearing as a private citizen. Her testimony focused on Watson’s history of violations.
For Further Reading:
The following articles are available on the Environment Hawai`i website, [url=http://www.environment-hawaii.org]www.environment-hawaii.org[/url] Click on the “Browse Our Archives” link to be taken to the year and month of publication.
- “Shoreline Easement Lost as Builder Racks Up repeated SMA Violations,” December 2012;
- “Builder Defies Planning Department With Helipad on ‘Sod Farm’ Dwelling,” December 2012;
- “Hawai`i County Sends Violation Notices to Builder Over Construction at 2 Sites,” January 2013;
- “Hawai`i County Is Challenged in Court Over Ability to Determine Coastal Setbacks,” June 2013;
- “A Setback on Setback Dispute,” Page Two item, October 2013;
- “Builder Seeks SMA Amendment to Allow Pepe`ekeo Palace to Be Built as Planned,” July 2014.
Volume 25, Number 4 October 2014
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