Board Talk: Deferred Decision on Unauthorized Hanalei B&B

posted in: Board Talk, May 2014 | 0
Later this month, the Board of Land and Natural Resources is expected to decide whether Lance Laney, husband of Public Utilities Commission chair Hermina “Mina” Morita, violated Conservation District rules when he built two dwellings without a Conservation District Use Permit and used them as vacation rentals.
Although Kaua`i County records state that the property is owned by Lance and Hermina Laney, the Department of Land and Natural Resources’ Office of Conservation and Coastal Lands report to the Land Board names only Lance as the landowner.

At the request of Laney’s attorney, Harold Bronstein, the Land Board deferred the matter on March 28, to give Bronstein time to review the Department of Land and Natural Resources’ files on the case.

The DLNR’s Office of Conservation and Coastal Land had recommended that the Land Board impose a $15,000 fine for unauthorized construction and another $15,000 fine for unauthorized short-term vacation rentals. The OCCL also recommended that the board assess administrative costs of $1,000 and order the unauthorized structures to be removed.

In a letter delivered on January 3, the OCCL asked both Mr. and Mrs. Laney to immediately cease vacation renting of their “Hale Li`i “and “Hale Nui” and to seek direction from the office about the possible removal of the unpermitted structures.

Weeks later, Laney informed the OCCL that the vacation rentals were continuing and even asked that future renters who had put down a deposit be allowed to stay, the OCCL’s report to the board states.

At the Land Board’s March 28 meeting, Bronstein testified that the rental activity ceased two months ago. He added that he disagreed with the OCCL’s conclusions regarding the structures. He said the property is a nonconforming one that allows residential use.

“The issue [now] is the structures and how they came about,” he said.

After Hurricane Iniki, the DLNR granted the Laneys permission to rebuild their non-conforming home that had existed before Conservation District designation in 1964. Single-family residences otherwise are not allowed in the Protective subzone, which Laney’s entire lot falls within.

Although Conservation District rules allow the construction of accessory structures within the Protective subzone, the OCCL must approve a site plan first. In this case, none of the new structures received OCCL approval.
Having been hired less than a week before the board’s meeting, Bronstein said, he was not prepared to argue the matter that day.

“They’ve been on notice for two months plus. Now you’ve just been retained this past week. What were they doing [in the meantime]?” at-large Land Board member David Goode asked.

“I can’t answer that. … I’m not sure,” Bronstein replied.

OCCL administrator Sam Lemmo said his office sent its Land Board report and recommendations to the Laneys three to four before the March 28 meeting.

Dan Purcell, a member of the public, testified that it would have been nice if Morita had been present to answer the Land Board’s questions. (In addition to being the head of the PUC, Morita was a state representative for 15 years and a former board member of Environment Hawai`i.)

“I would discourage you from deferring this…. She holds a very important public trust position in the state. … To not be here to answer your questions I think is unfortunate,” he said.

In the end, the Land Board voted to defer the matter for 45 days.

The Breach
Before the board’s decision, Terry Lilley, a marine biologist from Hanalei, attempted to tie the Laneys’ unauthorized construction to a 1995 breach of the Hanalei River bank that occurred at or near their property. Lilley also argued that the resulting mud discharge killed about four thousand corals in the area.

“I went up the Hanalei river to find the source of the mud. I found four. One of them is in front of Lance Laney’s and Mina Morita’s B&B.” He suggested that they had built on swamp land.

“This illegal development in the wetland is currently violating the Endangered Species and the Clean Water Act,’ he said.

To these claims, Land Board chair William Aila said simply, “You made the assertion and we’re looking into it.”

Lemmo said he was not prepared to discuss the breach.

In an interview with The Garden Island last October, Aecom’s Bryan Dick, consulting for the DLNR, said “definitively” that the breach was not a natural event. However, at the Land Board’s meeting, Carty Chang, head of the DLNR’s Engineering Division, said, “We believe it was a natural event” and that rivers normally create new paths. He also said his department doesn’t have any proof of any unnatural cause. (Aerial photos of the Laneys’ property show that all of the structures are located far from the river bank.)

Because the breach has restricted water flow, however, “it’s critical we repair this,” Chang said. “If it continues to widen, there will be less flow in the normal path of river and into the [U.S. Fish and Wildlife Service] refuge.”

He said expected a contractor would be able to start repairing the breach this summer.

Other Violations?
The Laneys appear to have operated their “Taro Patch Hale” vacation rentals for the past several years, charging $130 to $140 a night, according to a now-defunct website. The online news site Hawai`i Reporter noted in March that Morita did not report income from the business to the State Ethics Commission while she was a legislator. Also, a review of Kaua`i County property tax information shows that only their main 1,200-square-foot residence and a 1,400-square-foot parking area received a building permit. Finally, the Laneys have been paying property taxes at the Homestead rate, the lowest of all property classes, reserved for lands used exclusively for residential purposes. The tax rate for Vacation Rental properties is more than twice the Homestead rate.

* * *
Hoku Kai Biofuels Wins Entry Permit to Shell Site

Energy entrepreneur Charles Barker III won a reprieve of sorts last month. The Land Board unanimously granted his request for a right-of-entry onto state property along Hilo Harbor to conduct environmental studies and to begin some initial cleanup of the old Shell Oil asphalt facility. The board also gave its approval, in concept, to a 65-year lease to Hoku Kai for use of the former asphalt pipeline that runs across state and county property and into the former Shell site.

As of press time, Barker was in the thick of a U.S. District Court fight with his mainland investment partners who he alleges stole his ideas, spent nearly $200,000 in company money without his knowledge, and failed to raise promised funds for the purchase of the Haina Mill in Hamakua for a biomass plant, among other things. Barker is seeking $29 million in restitution.

The case was dismissed without prejudice last October, but U.S. District Judge Leslie Kobayashi had yet to rule on a motion to dismiss his amended complaint by press time.

As head of Hoku Kai Biofuels, LLC, Barker plans to eventually pump vegetable-based biofuels from cargo ships in Hilo Bay to the facility. Barker told the board at its March 28 meeting that the old asphalt pipeline needs to be inspected, cleaned, and tested, and the heating lines around it removed. His company also plans to conduct baseline soil sampling along the pipeline, and complete all actions called for in a recent Phase 1 environmental site assessment.

Barker said Hoku Kai is also seeking perpetual access to 700 or so square feet of county land that the pipeline traverses, as well as an agreement with the state Department of Transportation to use a strip of land where the pipe crosses under Kalanianaole Highway.

Initially, fuels will be transferred twice a month for six hours, Barker said.

“The Shell site is unique in that it was the only opportunity to be able to own a storage tank facility [that] would take an enormous time to build it from scratch,” he said.

At-large Land Board member Sam Gon noted that Barker appeared to be very experienced with regard to biofuels and asked whether he had existing operations in Hawai`i. Barker said only that he has plans for a mill – presumably the Haina Mill – and that he hopes to make use of the island’s biofuels. Barker did not mention his involvement with any of eight or so energy, land, and topsoil companies he has been a principal of in the past; none is currently in good standing with the Department of Commerce and Consumer Affairs.

* * *
Board Amends Agreement for `Ewa Feedlot Development

On April 11, the Land Board once again amended the development agreement for renewable energy facilities on the former feedlot at Campbell Industrial Park. The original agreement, approved by the Land Board in November 2010, was between the state and West Wind Works (3W) and was to have terminated at the end of last year.

After accruing more than half a million dollars in unpaid fees, 3W eventually assigned its interest in the agreement to Investricity Ltd. and its subsidiary, PSP III, LLC, which agreed to pay 3W’s delinquency in four installments.

Under the version of the agreement approved by the Land Board last year, if the companies met certain benchmarks (i.e., forged a power purchase agreement with Hawaiian Electric Company) and paid all fees owned to the DLNR, they would get a 25-year lease for 100 acres on which to build a 30-megawatt solar park.

On April 11, however, Investricity/PSP sought to amend the agreement to reduce the size of the facility from 30 MW to 20 MW, to increase the lease term from 25 years to 65 years, and to extend payment and performance deadlines. The companies also asked to insert a condition allowing them to terminate the agreement if the fair market value of the lot is appraised at more than $30,000 per acre.

Maui Land Board member Jimmy Gomes asked DLNR Land Division administrator Russell Tsuji whether any other entities had expressed interest in leasing the property.

“There’s been a lot of interest, but the size of the property, it’s difficult to get one guy to take it all. It’s not all developable,” Tsuji said.

“The short answer is, no one serious,” Land Board chair and DLNR director William Aila added.

Attorney William McCorriston, representing Investricity/PSP, testified that his client had already signed a draft agreement that included the new proposed terms. In the end, the Land Board unanimously approved them.

* * *
Board Approves Legacy Land Projects

“This is a really choice collection this time,” at-large Land Board member Sam Gon said of the four Legacy Land projects approved on March 28. In total, board authorized the expenditure of $4.6 from the Legacy Conservation Fund, which collects a percentage of conveyance taxes.

The highest-ranked project was the purchase of 47 acres in Kuamo`o, Kona, site of the famous battle between Kamehameha II and Chief Kekuaokalani over the future of the old Hawaiian belief system.

The Trust for Public Land and the non-profit Mohala Hou Foundation requested the funds, which account for 74 percent of the property’s total cost. Additional funds will come from the Hawai`i County open space fund, the Office of Hawaiian Affairs, and private sources.

“The property is site of a significant transition in Hawaiian history, the Battle of Kuamo`o, fought in December 1819 (also known as ‘Kaua `ai noa’ or the battle of free eating) regarding the traditional kapu system. Kekuaokalani, nephew of Kamehameha I, and his wife, Chiefess Manono, are said to be buried on the property along with many of their warriors,” a DLNR Division of Forestry and Wildlife Report to the Land Board states. Burial mounds, heiau, farming and habitation sites, and portions of the Ala Kahakai National Historic Trail exist on the property.

Mohala Hou seeks to restore the old battle site, which now sits between a golf course and the Hokulia development, Kamana Beamer told the board. Beamer’s father, Kapono, is Mohala Hou’s artistic director.

The DOFAW report notes that county funding may result in the county holding an easement over the property. A legislative amendment to the state Legacy Land law in 2012 allowed the state to also hold easements over lands purchased under the program. However, at the Land Board’s meeting Legacy Land program manager Molly Schmidt asked that the board simply to stick to imposing deed restrictions.

Gon said he was pleased to see people taking advantage of the Legacy Land program to acquire a property of such huge cultural significance.
“This [battle] is one of the most pivotal … in our history,” he said.

Hakipu`u Lo`i Kalo
Taro lands in Hakipu`u, O`ahu, long-farmed by the Fukumitsu family, are headed toward perpetual protection along with surrounding coastal lands. On March 28, the Land Board approved a Legacy Land grant of $350,000 to the Trust for Public Land and the non-profit Ka Huli O Haloa for the purchase of 1.5 acres there.

TPL and Ka Huli O Haloa are seeking matching funds of $687,000 from the City and County of Honolulu’s Clean Water Natural Lands Program, which, like Hawai`i County, routinely requires a conservation easement for projects that receive funds.

According to a DOFAW report, Ka Huli O Haloa plans to keep the lo`i in active cultivation and partner with area schools, including the Hakipu`u Learning Center, to provide educational opportunities.

“The lo`i on the property are some of the only remaining lo`i kalo in Hakipu`u,” the staff report states. “Ka Huli O Haloa will preserve the lo`i kalo ecosystem so that it may continue to provide the staple food of the traditional Hawaiian diet, support fertile habitat for native wildlife, and serve its many watershed functions.”

Kalihi Valley
TPL and Kokua Kalihi Valley (KKV) Comprehensive Family Services have received approval of a $900,000 Legacy Land grant to cover about half of the purchase price for 11.44 acres in Kalihi Valley that includes the overpass across Likelike Highway. KKV is seeking matching funds from the City and County’s Clean Water and Natural Lands program.

KKV plans to rehabilitate the land, which, according to KKV clinical director Laura Devilbiss, has “fallen into a criminal element.”

“Kokua Kalihi Valley wants to take back the land for the benefit of the community and forest,” Devilbiss told the Land Board. KKV already organizes native forest and cultural site restoration, community farming, and public recreation activities on the state’s 100-acre Kalihi Valley Nature Preserve, known as Ho`oulu `Aina.

The new project, Ho`oulu Ola, will be managed similarly and will “transform the site into a safe and healthy place for Kalihi Valley residents and the broader public,” a DOFAW report states. It will also connect the two parcels via the overpass.

KKV plans to work with hunters to control feral pigs and eliminate dirt biking “to create safe and healthy public access, open space for public enjoyment, and public outdoor recreational and educational opportunities where none previously existed,” the report states.

“I remember the days when the other property was just starting and now it’s just amazing to go there. … You feel you’re a part of Kalihi. It makes you proud to see what’s happening there,” Gon said of Ho`oulu `Aina, which KKV leases from the state.

Helemano
DOFAW itself is seeking $10 million to buy 1,613 acres of forest and recreational lands in Helemano, O`ahu, from Dole Food Company. DOFAW’s acquisition of these lands would secure a critical access to the Poamoho section of the `Ewa forest reserve.

At is March 28 meeting, the Land Board approved a grant for only $350,000. DOFAW’s Sheri Mann told the board that her division is seeking federal Forest Legacy program funds and county money to cover the balance.

“DOFAW and the public currently have limited access to these private lands via an agreement with the current owner; however, this agreement is likely to be terminated upon sale of the property to an owner other than DOFAW,” a DOFAW report states.

* * *
County to Take Over Mauna Kea State Park

The Mauna Kea State Recreation Area is on track to become a county park. On March 28, the Land Board authorized its chair to negotiate and sign a memorandum of agreement with Hawai`i County to transfer management authority over portions of the area. The board also approved the concept of withdrawing the area from the state forest reserve and giving it to the county.

The DLNR’s Division of State Parks has managed the handful of cabins in the area since the 1950s. State Parks administrator Dan Quinn told the Land Board that the biggest constraint to managing the area is the lack of water.

“The source [nearby springs] has continued to decrease down to a point it’s just a couple hundred gallons per day … which is why we’ve decreased the use of the cabins and severed lines to everything except toilets,” he said.

Maui Land Board member Jimmy Gomes noted that in 1965, the springs were producing 20,000 gallons of water a day. He asked whether the decrease was the result of the Pohakuloa Training Area taking more water.

Quinn responded that the PTA has actually ceased taking water from the source. The decrease appears to be the result of climate change, he said.

Hawai`i County Mayor Billy Kenoi testified that the county has committed $300,000 toward immediate upgrades of the area. He added that he plans to ask the county’s Department of Water Supply to drill a well to meet water needs of the park.

“All we’d like to do is to help upgrade maintain and operate and provide a wonderful recreational areas for residents and visitors alike,” Kenoi said.

He pointed out that the county has purchased the coastal lands at O`oma and Kawa to protect them in perpetuity.

“Hawai`i is committed to protecting open space. Our number one priority is parks,” he said.

Hawai`i Island board member Rob Pacheco noted that he had “gotten an earful” of arguments against the proposal from hunters who use use the cabins the most and want to maintain the current situation, from people who are concerned that the county will commercialize the area, and from people worried that PTA has contaminated the area with depleted uranium.

“This is kind of an opening for them to air their issues with PTA,” he said.

* * *
Senate Approves New Members for Hawai`i, Kaua`i Seats

Robert Pacheco, having served two full terms as the Land Board member representing Hawai`i Island, leaves the board next month and will be replaced by attorney and former Land Use Commission member Stanley Roehrig. The long-vacant Kaua`i seat, last officially held by architect Ron Agor, will be filled by former DLNR land agent Tommy Oi.

Conservationist member Samuel Gon and at-large member David Goode are both at the end of their terms, as well, although Goode is eligible to serve another four years.

Gov. Abercrombie had not announced his nominees for their seats by press time.

 

Teresa Dawson

 

Volume 24, Number 11 — May 2014

 

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