Hawaiʻi County Folds on Demand For New EIS For ʻAina Leʻa Housing

posted in: February 2021, Land Use | 0

Less than a month after the inauguration of Hawaiʻi County Mayor Mitch Roth, his nominee for planning director, Kendo Zern, has reversed the county’s long-standing position that work on the long-stalled ʻAina Leʻa project would not be allowed until a new environmental impact statement was accepted.

In a letter dated December 23 to Robert Wessels, the CEO of ʻAina Leʻa, Inc., Kern stated: “We have reviewed the legal position presented by your attorney, Michael Matsukawa. Based on this position we have determined that the affordable housing project referred to as Lulana Gardens, LLC’s [sic] (37.863-acres) is ‘grandfathered’ from EIS review. We encourage Lulana Gardens, LLC to immediately restart the construction of homes for our local families per the approved building plans.”

Zern’s short letter came on the heels of a six-page letter from Matsukawa to his client dated December 15, in which Matsukawa laid out his position that the stop-work order issued by former county planning director Michael Yee in 2017 was improper. Matsukawa argued that after the county approved in 1996 a zoning change for the ʻAina Leʻa area, subject of a 1989 boundary amendment petition to place 1,000-plus acres in the state Urban land use district, “that act was the last discretionary act that the landowner needed for the affordable housing project.”

In 1996, he goes on to say, the state’s Environmental Policy Act, Chapter 343 of Hawaiʻi Revised Statutes, did not require preparation of an EIS for the affordable housing portion of the development. (One of the conditions the state Land Use Commission placed on the project was that a percentage of the homes to be built in the development be affordable under the county guidelines. That number was determined to be 385.)

Only in 2004 and 2009 did the Legislature and state Supreme Court, respectively, add triggers to the law, requiring an EIS whenever a development proposed building a sewage treatment plant (2004) or an intersection with a state right of way. 

Beginning in 2009, ʻAina Leʻa – then known as DW ʻAina Leʻa, LLC – began work to develop the affordable housing, in the form of multiple apartment buildings in the far mauka portion of the Urban District land. The EIS, prepared for the entire development and not just the affordable housing portion, was challenged in court by the Mauna Lani Resort Association. The judge hearing the case – Elizabeth Strance (now Hawaiʻi County’s corporation counsel) – determined that the EIS had omitted discussion of a joint development plan that ʻAina Leʻa had entered into with Bridge ʻAina Leʻa, owner of 2,000 acres still in the state Agricultural district and surrounding the Urban land on three sides. Strance disposed of the matter by remanding to the county a decision on whether that omission was sufficient to effectively void the EIS.

In his December 15 letter, Matsukawa claims that “the act of remanding the matter to the planning department fell beyond Judge Strance’s authority” – a claim that, in the seven-plus years since Strance’s ruling, was not heretofore raised by any party. Matsukawa bases that claim on the argument that a remand is proper only in an agency appeal – but that the Mauna Lani Resort Association’s challenge sought instead a declaratory judgment from the court, “to declare if the EIS is or is not legally adequate as a matter of law, nothing else.”

Matsukawa’s arguments continue to raise points of claimed error that, in the years since the Mauna Lani litigation concluded, were never raised by any party to the proceeding. In this regard, they echo the arguments that he raised in the lawsuit filed last spring on behalf of Lulana Gardens.

In that case, he argued that the county was wrong to require a new environmental impact statement. The county corporation counsel, in the administration of former Mayor Harry Kim, vigorously argued against those claims and prevailed in a preliminary ruling. However, as soon as the Roth administration took office, a kind of détente was reached between Kern and ʻAina Leʻa, with both parties agreeing to suspend further court action pending the outcome of discussions aimed at a settlement. (Environment Hawaiʻi reported more fully on this lawsuit in our April, August, and December 2020 editions.)

The relief sought by ʻAina Leʻa was a finding by the planning director that the Lulana Gardens portion of the development is effectively grandfathered – or, failing that, a determination that the affordable housing project is not an “action” subject to Chapter 343.

“The planning director could thereby acknowledge the separate, independent status of the affordable housing project that is not part of the ‘action’ to be assessed in the EIS… The planning director’s determination need not be published in The Environmental Notice.”

Like a cheap suit, in three sentences, Zern folded.

Of course, the affordable housing part of ʻAina Leʻa is just a small part of the overall project. How it can move forward without much of the remaining development occurring is at this point unclear. Access to the affordable housing area will require a roadway from Queen Kaʻahumanu Highway and significant (and expensive) intersection improvements, to mention only one of the associated improvements required.

ʻAina Leʻa also faces a legal challenge from Iron Horse Credit, which provided ʻAina Leʻa with the capital it needed to emerge from bankruptcy in 2019.

Meanwhile, Kern’s confirmation as planning director was in doubt as of press time. The County Council Planning Committee met on January 19 to consider Kern’s nomination. Questions from the council members honed in on an apparent mismatch between the qualifications set forth in the county charter and Kern’s own work history. When the vote finally came, it was 4-5 to recommend that the council reject his appointment.

The council itself will be voting on the nomination early this month. The committee membership consists of all nine council members. Unless one or member changes his or her mind, Kern will not be confirmed.

— Patricia Tummons

Leave a Reply

Your email address will not be published. Required fields are marked *