State Supreme Court Hears Arguments Over Supplemental Review of Kuilima Expansion

posted in: March 2010 | 0

 At the state Land Use Commission’s February 4 meeting, the state Office of Planning and representatives of Kuilima Resort Company briefly discussed their recent efforts to reach some kind of agreement over how the company’s proposed expansion of north O`ahu’s Turtle Bay Resort should proceed.

The Office of Planning has spoken out in recent years about the need for time restrictions on the LUC’s redistricting orders. The commission has been struggling with a number of cases where it granted entitlements to developers decades ago, only to have the project languish and the promised public benefits – affordable housing, and the like – never materialize as the property passes from one owner to the next. The Kuilima expansion is one of these cases.

While Kuilima Resort Company seems open to entering into some kind of agreement to address the community’s and the OP’s concerns about the timing, density, and location of certain components of the expansion, it has postponed any further discussion with the OP pending the decision by the state Supreme Court on whether its EIS for the project is still valid.

When the Honolulu City Council voted in 1986 to approve a Unilateral Agreement granting development rights to KDC’s predecessor, Kuilima Development Company, the council left out any completion deadlines for the proposed five new hotels, employee housing, and resort condominiums. None of those major components have been built, and when KRC revived the project in 2005, community groups challenged the company’s ability to do so.

On December 17, attorneys for KRC, the City and County of Honolulu, and the community groups Keep the North Shore Country and the Sierra Club, Hawai`i Chapter presented final arguments to the Supreme Court on whether a supplemental EIS is required before KRC can proceed.

Kuilima’s attorneys have argued that under administrative rules, a developer must first make a significant change in the size, scope, location, use, or timing of a project before the city can decide whether a SEIS is required. But even if any of those changes are made, Kuilima has argued, a section of the state’s environmental review law, Chapter 343-5(g), conflicts with administrative rules implementing that section and, therefore, those rules are invalid.

In his argument before the court, Rory Wicks, representing parties calling for an SEIS, countered those claims, pointing out the state Environmental Council has been implementing the SEIS rules it adopted in 1985 and “in the last 24 years, the Legislature has not banned SEISes.”

Justice Simeon Acoba noted that case law suggests rules can’t exceed the scope of the statute. Because SEISes are not mentioned in Chapter 343, he asked, is the rule addressing an SEIS invalid?

Wick noted that the Hawai`i Environmental Protection Act is modeled after NEPA, which also doesn’t mention SEISs.

Congress created a neutral body, the Council on Environmental Quality, to implement NEPA, he said, and federal regulations provide for SEISes. In Hawai`i, he continued, the Legislature gave the Environmental Council the authority to adopt rules. In Chapter 343-5(e), the Legislature gave to agencies the authority to consider previous environmental assessments and impact statements and incorporate them by reference, in determining whether a statement is required. “That would include an SEIS,” he said. “That statement is a clear indication that Legislature intended there could be SEIS,” he said.

When Acoba asked whether a statute of limitations applied here, Wicks said a 2006 letter from the city Department of Planning and Permitting to Defend O`ahu Coalition’s Ben Schaefer, stating that the city was not going to require an SEIS, started the clock running on the statue of limitations.

“This case was filed on 120th day after that letter,” he said.

Wick said a project can be “modified” if the environmental impacts have changed. A key trigger is a change in intensity, which he said refers to the severity of environmental impacts. If one defines a project to include its environmental impacts, those impacts can change depending on changes in the surrounding community or circumstances, argued.

If the court requires an SEIS, Wicks said, completing one shouldn’t be too much of a time burden.

He conceded that the city didn’t impose a rigid time frame on the project. “However, in every area of the law there is a rule of reason. It has been 24 years. Traffic studies only projected impacts to the year 2000,” he said. According to more recent data, he said, the project will result in 2,050 more cars on Kamehameha Highway on Saturdays. What’s more, he noted, federally protected turtles and monk seals are visiting Kuilima’s beaches more often.

The project has likely changed in intensity as well, Wick said, noting that the original plan to build 1,500 hotel rooms and 2,000 condo units has been changed to 2,500 hotel rooms and 1,000 condos. Hotel rooms, he said, generate 2.5 times more traffic than condo units.

Sharon Lovejoy, representing Kuilima Resort Company, said that the court’s decision will affect other projects throughout the state. In this case, she said, there have been many opportunities for the public to participate, but it was not until 2005, when KRC submitted a subdivision application to the city, that anyone objected to the project. She pointed out that the city adopted the Ko`olauloa Sustainable Communities Plan in 1999, and it prominently featured the Kuilima resort expansion — 14 years after the project received its entitlements and just six before the challenge to the EIS. Also, in July 2003, Kuilima prepared an environmental assessment for a Special Management Area use permit for the proposed resort condos. That was a very public process that relied heavily on the old EIS, she said, adding that the EA stated that its intent was to support the 1986 master plan for the project.

“Entitlements and buildout are two different things,” she said, noting that West O`ahu’s Ko Olina, Kaua`i’s Princeville , and Hawai`i’s Mauna Lani developments were never built out to full development potential.

Lovejoy concluded that if an SEIS is required, there are no regulations to guide its preparation. She added that its impacts on the project are questionable, given that “a long, arduous fight in court” would likely follow. “The SEIS would face a number of challenges. Any DPP determination would be subject to challenge,” she said.

When Justice Paula Nakayama asked how a delay of more than 20 years was not a substantial change in timing, Lovejoy responded that it was undisputed that the project was not qualified by timing.

“Is it limitless, then?” Nakayama then asked.

To which Lovejoy said, “You have to go back to what the rules actually say. There is no shelf life [for an EIS].”


Teresa Dawson


Volume 20, Number 9 — March 2010


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