A Short History of ‘Aina Le‘a Development

posted in: March 2019 | 0

Efforts to develop about 3,000 acres of land in South Kohala go back decades. The most recent chapter in the land’s history starts in 1987, when Signal Puako, a subsidiary of Signal Landmark Properties – itself a subsidiary of The Henley Group – petitioned the Land Use Commission to put around 1,100 acres of the parcel it owned along Queen Ka‘ahumanu Highway into the Urban land use district.

The urbanized land would form the center of a larger planned community, including the 1,900 acres of surrounding land still in the Agricultural district. The project would include 2,700 housing units, with 30 percent of them to be made affordable to families earning from 80 to 120 percent of the area median income and 30 percent more affordable to families with incomes from 120 to 140 percent of the median income. In other words, 60 percent of the units would be classified affordable by Hawai‘i County standards.

Final approval of the redistricting petition was given by the LUC in January 1989. With the exception of a 40-acre buffer running alongside Queen Ka‘ahumanu Highway, the parcel was now in the Urban land use district, opening the door to development of a full-blown community.

In July 1991, a new owner – Puako Hawai‘i, a partnership of Signal Puako and Japan-based Nansay Hawai‘i, Inc. – obtained an amendment to the original plan. Now there would be two golf courses and fewer homes: 970 apartments and around 580 lots intended for single-family residences. At least 1,000 units would still have to be affordable under the amended LUC order.

The collapse of the Japanese “bubble” in the early 1990s sank Puako Hawai‘i’s plans to develop the Kohala property and several other Nansay ventures around the state.

In 1999, Bridge acquired the 3,000 acres for $5.2 million. Six years later, it asked the LUC to ease the affordable housing requirement, which the LUC did, reducing it to 20 percent of the total number of housing units built – but requiring, in light of the stalled development – that the 385 affordable units be completed and ready for occupancy by November 17, 2010. At the time, Bridge stated that it was likely the units could be finished in three years but, in an excess of caution, the LUC gave it five years.

As the deadline approached, the LUC was growing concerned that the deadline would not be met. In late 2008, with no work having begun on the housing, the commission voted to issue an order to show cause (OSC) to Bridge, requiring the company to set forth its plans to comply with the housing condition or risk losing the Urban land use designation.

In early 2009, Bridge introduced to the LUC DW ‘Aina Le‘a Development, LLC (DWAL), which it said would be developing the affordable housing. The LUC backed off the order to show cause, giving the new company a chance to show a good-faith effort to move forward on the project by completing at least 16 units of the affordable housing by March 31, 2010.

DWAL took title to 61 acres of the Urban-designated land in a remote corner of the property and proceeded to pour concrete pads and start work on several multi-unit buildings.

When the March deadline rolled around, though, the 16 units were nowhere near complete. A few had interior finishes and one had been decorated as a display unit for prospective purchasers. But even the finished units were a far cry from inhabitable. There was no approved wastewater disposal system. Electricity was from gen- erators, not power lines. Water came from tanks. No paved road linked the buildings to the highway.

The LUC then reinstated the OSC and on March 10, 2011, issued its order to revert the 1,060 acres of Urban land to the Agricultural land use district.

Since then, the decision has been the subject of multiple lawsuits.

— Patricia Tummons

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