Board Talk

Board Revisits Decision To Remove Private Land From Kealia Reserve

On August 13, the state Board of Land and Natural Resources once again removed a 2,400-acre parcel owned by Cornerstone Hawai’i Holdings, LLC, from Kaua’i’s Kealia Forest Reserve. This time around, however, the board’s decision was at least taken in light of an accurate historical record.

A month earlier, at its July 9 meeting, the board voted to remove the parcel from the forest reserve because it had been told by the Department of Land and Natural Resources’ Division of Forestry and Wildlife that there was no documentation the property was ever part of the forest reserve, that the property had never been surrendered to the state, that the state had never managed the area, and that the parcel was erroneously included in the reserve.

But after the July meeting, DOFAW, when questioned by Environment Hawai’i about the history of the private land in the reserve, realized that it was wrong on all counts.

“It has since been discovered that the property was formally surrendered in 1944…. A review of the 100-year-old literature indicates the landowners were in active discussions for the inclusion of this parcel,” DOFAW administrator Paul Conry told the Land Board on August 13. “We did not want you to make your decision based on erroneous information that we provided so we wanted to bring this back before you.”

After the July 9 board decision, Environment Hawai’i found that the owner, Cornerstone Holdings Hawai’i, planned to use the board’s admission of error as leverage to get parts of its land shifted from the Conservation District, where development is strictly limited, to the Agriculture District, where development is less strictly regulated. The plan was to seek a boundary interpretation from the Land Use Commission’s executive director instead of going through the more usual, and more cumbersome, boundary amendment process.

Because the Land Board had determined that the private lands were erroneously included in the reserve, and because the forest reserve boundary was used to determine the Conservation District boundary at Kealia, Cornerstone planned to argue that the Conservation District boundary was erroneous as well. By this means, Cornerstone would be able to avoid the extensive environmental review and full commission hearings that a boundary amendment petition entails.

DOFAW’s August 13 report to the Land Board dispelled the notion that Cornerstone’s land was erroneously included in the reserve. When the Conservation District boundary was fixed in August 1964, Cornerstone’s land, then owned by Lihu’e Plantation, was indeed part of the reserve and had been placed under state management by a surrender agreement, which expired in September 1964, DOFAW wrote.

While admitting its error, DOFAW kept to its July recommendation to remove the land from the reserve and to authorize a request to the governor to modify a 1920 proclamation to reflect the removal. As for Cornerstone’s eventual plans for its Conservation District lands, DOFAW simply stated, “The Division would urge that any change in state land use district undergo a thorough review process to protect important natural resource values.”

Conry added that Sam Lemmo, administrator for the department’s Office of Conservation and Coastal Lands, had asked Land Use Commission staff to give the DLNR an opportunity to comment on any redistricting attempt by Cornerstone.

By all accounts, Cornerstone plans to make full use of its agricultural properties at Kealia. While some of those lands are in the Conservation District, Lee Sichter, a planner with Belt Collins who initiated the removal on behalf of Cornerstone, says that they have long been used for agriculture.

Sichter stated that, according to four former Makee and Lihu’e plantation employees, portions of the forest reserve had been used for sugar production and cattle grazing at least as far back as 1919. In 1969, the LUC recognized some of this use when it redistricted 32 acres of Lihu’e Plantation’s land at Kealia (now owned by Cornerstone) from Conservation to Agriculture.

Initially, Cornerstone planned to remove the forest reserve designation only from the 32-acre ag parcel. “Then we stepped in and looked and said, ‘Why is this entire parcel identified as forest reserve if the current landowner never surrendered it and it has not been surrendered since 1964?'” Sichter told the board in August (although he had earlier insisted that it had never been under surrender agreement). “So we expanded. We were originally thinking [of redesignating ] in one area, but we expanded it to include the whole area because there is no reason why it should be identified as forest reserve. It’s not been surrendered,” Sichter told the board.

When board member Tim Johns noted that the forest reserve designation did not in any way limit Cornerstone’s use of its property, Sichter explained, “It’s an encumbrance on us because in the future, there might be some change in the way the department decided to manage the forest reserves and then we would be faced with an encumbrance, so we want to clean this up.” The forest reserve boundary carried a lot of weight in the 1960s, Sichter said, and keeping it “hangs a cloud over [the land] that the forest reserve still might come back in the future as an important decision making criterion.”

He continued that Lihu’e Plantation did not renew its surrender agreement after 1964 because it wouldn’t have enjoyed any significant tax breaks for Conservation District land.

“There is no incentive for a private landowner to dedicate lands to a forest reserve when those land are zoned Conservation because they don’t bear any tax they don’t get any benefit of a tax relief on conservation land. So the Conservation District adds a double protection for forest reserve lands but that doesn’t exist for Agriculture lands,” Sichter said. (While that may have been true up until the early 1990s, when there was no active market for Conservation land, it is not true today. According to Kim Hester of the Kaua’i County property tax assessment office, undeveloped Conservation lands are taxed at half of their fair market value. This year, Cornerstone will pay about $19,500 in taxes on its forest reserve land, which is valued at $2,053,500.)

In any case, Cornerstone is not interested in surrendering its Kealia lands to the state for conservation, Sichter said. Instead, he intends “to go to the Land Use Commission and take up the question of are there other lands within the private property that are more suitable for agricultural productivity than they are for forest reserve and for Conservation designation.” He did not specify whether he would seek a boundary interpretation or file a petition for a boundary amendment.

Earlier in the meeting, Land Board chair Peter Young summed up why his department supported Cornerstone’s request: “There is no surrender agreement, has not been one for 40 years, and we have a property owner that doesn’t want to have their land encumbered as a forest reserve.”

And, in any case, although Cornerstone’s motive is to make a better case for redistricting its Conservation land, the DOFAW report pointed out redistricting is not the Land Board’s kuleana, but that of the Land Use Commission.

Before the board voted unanimously to approve Cornerstone’s request, Johns asked that the department at some point brief the board on forest reserves, what they mean today, and how they fit into the department’s overall forestry management plans.

“It’s a good question. All the landowners look at [their title] and wonder ‘What’s that FR mean?'” Johns said.

What was meant to be a quick in-and-out mission turned into a month-long nightmare and a $9,500 fine for attorney Bernard Bays. At its August 13 meeting, the Land Board found that Bays, without authorization, had stored construction equipment, graded and grubbed and built a road at Wa’ahila State Park, and had violated a cease-and-desist order.

Late last year, Bays had used about 600 square feet of the park, adjacent to his St. Louis Heights home, as a staging area for boulders and equipment being used to construct a retaining wall on his property. DLNR inspections in December found that Bays was storing two piles of rocks and a bobcat loader at the park, and it appeared that unauthorized grading and road construction had also occurred. On December 23, Bays was given an order to cease and desist any activity on the parkland.

Bays apologized for the violations at the August board meeting.

“This is basically a project that went bad,” he said. “It was supposed to be two, three days, a non-event. It turned into a major event.”

He said that park officials didn’t mind him using the area a little, but rain had halted his wall construction and forced him to leave the rocks at the park for almost a month. He explained that while no grading had been done, the trucks carrying the rocks on and off the property had scarred the ground. After everything was removed, Bays said he had a landscaper do restoration and clean up car parts littering the park.

As an attorney well versed in Conservation District rules, Bays said, he would take whatever penalties the board chose to impose.

Despite any informal agreements between the DLNR’s Division of State Parks and adjacent landowners, board member Kathryn Whang Inouye reminded Bays, “You know, boulders [on conservation land] for even a few days is a violation.”

The board then approved its staff’s recommendation to fine Bays $6,000 for the unauthorized road and storage of the rocks and construction equipment, $2,000 for violating a cease and desist order (he removed things when he was told not to), and $1,500 in administrative costs.

Although board member Johns questioned why the board should fine Bays for illegal storage then fine him again for removing the items, Inouye said the department didn’t want him to do anything before it could assess what should be done. Under the rainy conditions, removing the rocks “could have done damage.”

— Teresa Dawson

Volume 15, Number 3 September 2004