For several years now, many residents of Waimanalo have been protesting what they say are noxious odors emanating from a waste processing facility called Unisyn. The smells are far worse than the usual odors associated with dairies and piggeries, residents say. On one occasion last spring, a state employee investigating their complaints about Unisyn’s smell was overcome with nausea.
Still, efforts to get state or county regulators to impose more stringent conditions on Unisyn’s operations have so far borne little fruit.
In recent months, however, many Unisyn critics have had rising expectations that their complaints could be addressed as Unisyn sought state and city permits for its operation. At one point, members of the Waimanalo Neighborhood Board and others were hopeful that the Land Board would be asked to approve an extension of Unisyn’s sublease, giving residents hope that the Land Board might listen to their complaints and impose stricter conditions on the facility’s operation. Even earlier, the Department of Land and Natural Resources gave notice it was requiring Unisyn to prepare an environmental assessment, which was to be a prerequisite to the company’s obtaining city permits to operate a waste-processing facility on agricultural-zoned land.
In both instances, the DLNR failed them. In an unusual twist, the DLNR reversed its earlier finding that an EA would be required. And on the renewal of the sublease, the DLNR agreed with attorneys for Unisyn that terms of the sublease did not give the Land Board the right to approve or reject Unisyn’s extension of the sublease.
A Stalemate
Unisyn began operations in the mid-1980s. At the time of its construction, the DLNR apparently held that the activities Unisyn was undertaking signified a departure from past agricultural practices on the site and so required the company to prepare an environmental assessment. (State law requires that any new activity on state land undergo an environmental review, by preparation of an environmental assessment or an environmental impact statement.) That 1985 EA anticipated processing of 85,000 gallons a day of feed lot waste — mostly manure — from the adjoining Foremost Dairies. The waste would be digested, with the end products being methane (which would fuel generators used by the facility) and algae. Liquid from the digester would be used in a hydroponic tomato greenhouse.
The facility lies on more than 20 acres of land that is under lease to the adjoining dairy. The sublease between Unisyn, a corporation based in Washington state, and Foremost was executed in 1984 and approved by the Land Board in February 1985. It provides that Unisyn can use the premises for an animal waste conversion plant and “associated functions,” which at the time the sublease was executed were anticipated to relate mainly to the growing of algae and hydroponic crops (up to 2 million pounds of tomatoes a year).
The hydroponic and algae production did not work out and appears to have been abandoned by the end of the 1980s. By early 1995, the Unisyn operation embarked on plans for a major expansion. It would now receive food waste from restaurants, hotels and supermarkets, grease, and refuse from a fish auction house. In addition, it would receive green waste from landscapers, farmers, and tree-trimmers — all in addition to the waste generated by the dairy next door. According to a draft environmental assessment prepared by Unisyn in 1996, the facility grows landscape plants (grasses, palms, and ground cover) for sale to homeowners or landscapers; it sells cut foliage; and it also sells a compost product to farmers and landscapers.
So, in 1995, not only did the volume of waste increase, the nature of the waste changed dramatically. So, too, did the odors and complaints of residents to the Department of Health. In July 1995, the Department of Health warned Unisyn that it had found evidence that Unisyn was violating its DOH solid-waste permit, although the DOH stopped short of issuing a notice of violation.
A few days later, on August 9, 1995, the City and County of Honolulu Department of Land Utilization did issue a notice of violation to Unisyn — this time for failure to have a state Special Use Permit (since its operations do not appear to conform with allowed uses in the state Agricultural District) and a county Conditional Use Permit, Type 2. (The Honolulu Planning Commission decides whether to issue the SUP. If it does, then the DLU decides on the application for the conditional use permit.)
Unisyn was given six months to resolve the violation, but has so far failed to do so. Since February 9, 1996, fines for non-compliance have been accumulating at the rate of $50 a day.
A Stalemate
Because Unisyn is on state land, the DLNR agreed that an environmental assessment would need to be prepared before any permit application could be processed. The DLNR thus processed the paperwork needed to announce the availability of a draft environmental assessment in the Office of Environmental Quality Control’s Environmental Notice. The announcement was carried in the April 8, 1997, Notice.
But by August 1997, the DLNR’s position had changed. On August 26, in a letter signed by DLNR deputy director Gil Coloma-Agaran on behalf of Director Mike Wilson, the state asked city Director of Land Utilization Jan Sullivan to make the determination as to whether a full environmental impact statement would be required. “Being that the environmental assessment is required in order for Unisyn … to process a Conditional Use Permit, Type II, for a major composting facility from the City and County Department of Land Utilization, please make the determination whether a full Environmental Impact Statement must be filed at this point or a Negative Declaration processed at this time.”
Within the DLNR, meanwhile, questions were being raised as to why the state became involved in the first place. On September 12, the Board of Land and Natural Resources was asked to consider approval of the assignment of the lease held by the dairy (now owned by Borden/Meadowgold) to Southern Foods Group. Dean Uchida, head of the DLNR’s Land Division, announced to the board that the Unisyn environmental assessment had been prepared, but that it had been an error for the DLNR to agree to be the accepting authority. “There’s no trigger for us to accept it,” he said. “The DLNR does not normally file any type of environmental assessment for our tenants. The city should have been the accepting authority. We’re in the process of informing the city and the OEQC of this right now.”
The very next day, Uchida drafted a memo to Cecil Santos, the O`ahu district manager for the Land Division. “After the board meeting yesterday,” Uchida wrote, “I could not help but wonder how we got into the situation we are in with Unisyn’s EA.”
Santos, whose duties include monitoring the Unisyn sublease — and who had first-hand experience of the potency of Unisyn’s odors — responded on September 16. The Unisyn operation represented “a major change in the disposition of state land,” Santos wrote. “The first environmental assessment for Unisyn [in 1985] did not cover the processing of outside food waste at Unisyn. It dealt with the processing of animal waste from the Waimanalo Dairy.”
Santos reminded Uchida that “whenever we send something down for the Chairperson’s signature, it is routed to you.” The letter that the DLNR sent to the OEQC in March 1997 “came back from you in the usual manner and we sent it down to the Chairperson [Wilson] for signature,” Santos said. “Prior to sending this letter down for signature, I saw you and said that we were processing the EA because of the reason cited above. By you sending the EA memo back to us for the Chairperson’s signature, I thought this process was acceptable.”
Ten days after Santos’ memo, Wilson sent a second letter to city DLU Director Sullivan. “The Department of Land and Natural Resources will not continue to process the environmental assessment for Unisyn Biowaste Technology due to our assessment that an environmental assessment has already been processed for this operation,” Wilson wrote, apparently referring to the 1985 EA.
Sullivan responded to both of Wilson’s letters three days later. The DLU is not the accepting agency, she said, and therefore it would not be determining whether an EIS would be required. She urged the DLNR to reconsider its decision to halt further processing of the EA, so as “to allow the project to continue with required permit processing.”
“As I understand it,” Sullivan wrote, “it is your department’s position that DLU should assume responsibility … because of the permits required by the projects. However, in and of themselves, these permits are not Chapter 343 ‘triggers.’… It is the fact that the project is using state land that has caused the EA to be prepared and why DLNR was appropriately listed … as the accepting agency.” (Chapter 343 is the state’s environmental disclosure law, which sets forth a list of actions that trigger preparation of an EA or EIS.)
Apparently relying on the DLNR’s determination that no EA is required, or, if it is, the requirement has been fulfilled by the 1985 EA, the Department of Land Utilization has indicated it will not be asking Unisyn to complete the environmental assessment begun last year.
A source within the DLU said that while Unisyn has not yet filed a formal application for the Special Use Permit (granted by the Planning Commission) or the Conditional Use Permit (granted by the DLU), the department was expecting to receive applications very soon.
A Third View
The matter of the requirement of an environmental assessment may not yet be settled, however. The state attorney general is looking into the matter. Among the legal questions posed by the Unisyn case is whether an agency issuing a discretionary permit (such as the SUP or CUP, in this case) has the authority and the responsibility to require an environmental assessment for activities on state land, even if the agency is not a state agency. In other words, although the process of applying for a Special Use Permit with a county agency does not trigger Chapter 343, when state land is involved, that trigger may nonetheless be set off by the application process.
County agencies have traditionally not been the ones requiring preparation of environmental assessments for the use of state land. Still, there would seem to be nothing in Chapter 343 to prevent or preclude this.
The matter may not await the outcome of the attorney general’s review. Joseph Ryan Jr., whose Waimanalo stables lie just 300 yards from the Unisyn boundary, believes that it may be necessary to go to court over the issue by February 1. That is the 120-day deadline set in Chapter 343 for court appeals of any state action held to be in violation of the environmental review law.
Ryan feels that that deadline may have been triggered when the state Department of Health issued a renewal of Unisyn’s solid-waste processing permit on October 1, 1997. Although no EA is required as a condition of such a permit, Ryan wants to make sure that his ability to challenge Unisyn’s operation is not foreclosed by this deadline passing without action.
The DOH Permit
The permit that was renewed on October 1 contained several conditions. The first milestone on two conditions, intended to address the odor problem, were to have been completed within 90 days. According to John Harder of the Department of Health’s Office of Solid Waste Management, Unisyn was to submit within this time “conceptual plans” for mitigating odors from the intake and harvest tank, and odors from the lagoon. After the plans were approved, Unisyn would have 90 more days to complete design documents and construction plans. Only then would the company be required to initiate construction.
Harder said the company had prepared plans, since approved by the DOH, for containing the tank odors. But plans for containing odors from the 4-million gallon lagoon have been delayed, with the consent of Harder’s office. “We’re going along with their request for an extension,” he said. “From our standpoint, they have to quit putting effluent in the lagoon or set up a treatment for the whole lagoon.” Now, however, Harder said, the company was considering a proposal for setting up some form of a biological treatment system for the whole lagoon, involving activated enzymes. More time is needed to determine the feasibility of this approach, he said.
The permit renewal is also hinged on Unisyn obtaining all other necessary permits, including the state Special Use Permit and the county Conditional Use Permit. However, Harder acknowledged, “I don’t think there’s any time limit as far as obtaining those permits. If the city ever denies them, then our permit becomes invalid.”
The Sublease
As indicated above, Unisyn uses about 21 acres of state-owned land that is under lease to a dairy. Until about six months ago, several people involved closely with administration of the dairy’s lease and Unisyn’s sublease believed that the sublease would be expiring on July 19, 1997. Should Unisyn desire to renew the sublease, they felt, approval of the extension by the Board of Land and Natural Resources could be contingent on the imposition of more stringent conditions on the facility’s operation.
A year earlier, the question had arisen within the DLNR as to whether Unisyn might not be in violation of its sublease, inasmuch as its character of use had changed from that originally anticipated in the 1984 document. Instead of processing waste generated only by the adjacent dairy, Unisyn was now processing waste trucked in from off-site.
On July 23, 1996, however, deputy attorney general Linnel Nishioka had put an end to these efforts. “The only issue is whether the current operation violates the character of use provision in the sublease because the operation uses waste products from sources located outside of the leasehold,” Nishioka wrote. “The 1984 sublease defines the character of use as: ‘Sublessee may use the premises for an animal waste conversion plant and associate functions which shall include the cultivation and processing of crops and the processing of waste materials.’ The term ‘waste material’ is not defined in the lease but from the context of the provision it does appear that the term is not limited to cow manure produced at the Meadow Gold dairies location… Therefore, we conclude that Unisyn’s operation does not violate the character of use provision in the sublease.”
In May and June of 1997, O`ahu District land agent Cecil Santos spent a substantial amount of time responding to complaints from Waimanalo residents that intolerable odors were coming from the Unisyn plant. Santos made a log of the complaints, noting the times they came in and the persons complaining. He also noted in his work diary his visits to Unisyn and Meadow Gold. Altogether, Santos made 25 trips to Waimanalo. About a third were in response to complaints, but most were made at random. On eight trips, Santos wrote in a report dated July 3, 1997, he “experienced an odor from Unisyn. On one trip the odor was very heavy and on another trip the odor was so heavy and penetrating that it caused the District Agent to become nauseated.”
Santos appears to have been sympathetic to the complaints of residents that Unisyn’s operations represented a nuisance. He responded with what might be considered a two-pronged approach: first, he attempted to get the approval of his superiors to send a notice of default to Meadow Gold, on the basis that the nuisance caused by Unisyn constituted a breach of Meadow Gold’s lease. Second, in the belief that the Unisyn sublease was to expire on July 19, 1997, Santos wanted to have the DLNR put Meadow Gold on notice that the Board of Land and Natural Resources would approve an extension of the sublease only if the food waste disposal operation — the chief source of the foul odors — was completely stopped.
All this was outlined in Santos’ July 3 report. Attached to that was a letter Santos had drafted to Meadow Gold’s operations manager, Bud Keister. Santos described the nuisance as a violation of a condition of the general lease that prohibits “any waste, nuisance, improper or offensive use of this leasehold.”
“Only after the food waste disposal operation is completely terminated and the lease default for the offensive and nuisance use is cured will the Land Division recommend a sublease extension to the Board of Land and Natural Resources…. We will also require that an additional provision be placed in the sublease that will prohibit the processing of food waste at the Unisyn Facility.”
Santos did not receive permission to send the letter to Meadow Gold. In fact, it is not clear that his report, directed to Mike Wilson but routed through Land Administrator Dean Uchida, was ever forwarded to Wilson by Uchida, who is Santos’ immediate supervisor.
Still, on July 18, Santos hand-delivered to Meadow Gold’s offices in Waimanalo a letter requesting written notice of Meadow Gold’s intentions with respect to renewal of the Unisyn sublease, which, Santos noted, was to expire the following day.
Too Late
On August 12, the attorney for Meadow Gold, C. Michael Hare, responded to Santos’ July 18 letter. “The Unisyn sublease did not expire on July 19, 1997, because it had already been extended to July 19, 2014, with all requisite consents of the state,” Hare wrote.
The sublease, Hare noted, allows Unisyn and the lessor to extend the term of the lease without notifying the state should the term of the general lease ever be extended beyond July 19, 1997. “On October 25, 1988,” Hare wrote, “the State agreed to the extension of the General Lease from July 19, 1997 to July 19, 2014. Under §3 of the sublease, that extension of the General Lease gave Unisyn a right to extend the sublease to July 19, 2014. Unisyn exercised that right by letter dated December 30, 1990.”
The state, Hare continued, “by consenting to the provision of the sublease … and by consenting to the extension of the General Lease, effectively consented to the extension of the sublease at the option of the sublessor. No further consent by the state was necessary when the sublessee exercised its legal option to extend the sublease.”
Hare’s letter was forwarded by the DLNR to deputy attorney general Sonia Faust on August 28. An accompanying memo from Wilson notes when the state consented to the sublease, it did so on condition that, “should there be any conflict between the terms of said General Lease No. S-4101 and the terms of said sublease dated July 19, 1984, the former shall control, except as hereinabove set forth; and that no further sublease of said General Lease No. S-4101 shall be made without the prior written consent of the Board of Land and Natural Resources.”
Meanwhile, the sale of the Meadow Gold dairy to Southern Foods was occurring. As part of the transfer of assets, the state Board of Land and Natural Resources had to approve the assignment of Meadow Gold’s lease of the Waimanalo dairy land (which included the Unisyn sublease).
This was on the board’s agenda for its September 12, 1997, meeting, but was deferred until November 20. In the staff report prepared for the board’s consideration on November 20, land agent Gary Martin recapped the history of the lease, noting that the deferral had been made “for a determination by the Department of the Attorney General on the necessity of the board’s consent to the extension of the sublease… The Department of the Attorney General has subsequently opined that the Board’s consent to the said sublease extension is not required.”
And, despite the opinion of Santos and many members of the community that Unisyn’s operation constituted a nuisance — and thereby a breach in the general lease — Martin informed the board that the lessee was in compliance with all conditions of the lease.
In the end, the Land Board approved the lease, on the motion of Maui board member Willie Kennison and the second of at-large board member Colbert Matsumoto.
Unisyn Takes Over A State Reservoir
One additional consideration in the Unisyn debate has been raised recently by Joseph Ryan Jr. Since 1989, Unisyn has been using an irrigation reservoir owned by the state Department of Agriculture to impound its liquid waste. The use of the Wing King reservoir for this purpose was not noted in the 1985 environmental assessment Unisyn prepared, Ryan wrote in a December 15, 1997, letter to Gary Gill, head of the Office of Environmental Quality Control.
“Were the ‘use of state lands’ (in, surrounding, or under the Wing King Reservoir and the state irrigation ditches) or the ‘use of state funds’ (Department of Agriculture administration of the Wing King Reservoir and irrigation scheduling) by Unisyn … ever subjected to an environmental assessment?” Ryan asked Gill. “I hereby request your office to … require an environmental assessment of the aforesaid uses of state lands and state funds.”
Ryan was scheduled to address the full Environmental Council at its meeting on January 21.
Volume 8, Number 8 February 1998