Board Talk

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DLNR Eats $230,000 Remediation Bill for Contaminated North Kona Property

It’s not unusual for the Department of Land and Natural Resources to request permission from the Board of Land and Natural Resources to write off uncollectible accounts. Rarely does the amount owed exceed five figures. Last month, though, the DLNR’s Land Division asked the board to write off a whopping $227,131.85 owed by Franklin Hulce, a former revocable permit holder in Pu`u Anahulu, North Kona.

Perhaps as shocking as the amount owed is the length of time it took for the matter to come to the board. Hulce’s permit for residential and agricultural use was terminated more than a decade ago, in November 2001.

Hulce, who held a revocable permit on the eight-acre site starting in 1991, was required by his permit to leave the land in good condition. However, a DLNR inspection of the property that was made a month after his wife notified the Hilo land office that she would be moving to California and wished to terminate the RP, found considerable environmental contamination, the kind more often found at an industrial site. In addition to various types of debris, the inspection found possible paint contamination, spilled chemicals, an abandoned gas pump and storage tanks, diesel tanks, conveyor systems, vehicles, and “numerous smaller materials spread throughout the property and overgrown by the grass,” according to a May 2002 letter from land agent Gordon Heit to Hulce.

When Hulce failed to respond to the division’s request that he clean the property, the division remediated the property itself, incurring costs of nearly $230,000, with the bulk of the cost relating to dismantling buildings on the site that had been built when lead-based paint and asbestos were in common use.

Over the next six years, the department sent regular letters to Hulce, informing him of his liability for clean-up costs. This past February, the Civil Recoveries division of the Department of the Attorney General approved the Land Division’s request to write off the account.

At the Land Board’s April 12 meeting, without a word from the public, Land Division staff, or any board members, the Land Board agreed to let the case go.

Failed Oversight

The Hulce case brings to the forefront a worrisome chapter in the history of the Land Division’s Big Island office. Up until the early 1990s, Glenn Taguchi was the Hawai`i Island land agent; his tenure is remembered mostly for all that he left undone. Inspections of DLNR properties were rare and, when done at all, were haphazard. Correspondence piled up in his office, with few letters ever receiving acknowledgement.

After Taguchi left, two DLNR staffers were sent over from Honolulu to try to clear up the backlog of correspondence. One of the letters they found was from Frank Hulce, who, in October 1993, had written Taguchi to ask if he might be able to lease the site when the existing lease on the property, to one Woodrow Miller, expired the following year.

“As you know from my previous visit with you,” Hulce wrote Taguchi, “we have been subleasing this property from the Miller Family Trust for the last 14 years.” If Taguchi was indeed aware of this, then he should also have known that Hulce’s occupancy of the property was something requiring the Land Board’s blessing. However, Taguchi appears not to have brought this to the attention of anyone at the Land Division.

Hulce was also concerned that he was using the property – since 1978 – in a manner not sanctioned by lease terms. It had come to his attention “that the property was to be used for agricultural purposes only,” he told Taguchi. “We believe that our present use as a baseyard and shop for our construction company is not in compliance with the intended use and would like to request a change in use for this property.” Also, he notes, “for most of this time” – 13 years – “I have personally lived in the house that was the teacher’s cottage.” (The Pu`u Anahulu land had once been the site of a two-room schoolhouse and housing for its teacher.)

Not until two years later – in August 1995 – did the Land Division attend to the matter of Hulce’s occupancy of the land. Hulce’s son, Robin, had approached the division once more to try to straighten things out. In a meeting on the site with acting Hawai`i District land agent Sam Lee, Robin Hulce agreed to give the department in writing his thinking on how best to resolve the situation.

According to a memo that Lee forwarded to Mason Young, Land Division administrator in Honolulu, Frank Hulce was interested in continuing to stay on the land as a tenant, but the character of use would need to be changed – from apiary usage to construction baseyard and residential.

The Land Board approved an RP in 1995, with both Frank Hulce and Robin Hulce as named permittees. Rent was set at $610 a month.

Three years later, Robin Hulce wanted his name taken off the permit.

On January 15, Charlene Unoki of the Honolulu Land Division, who was preparing the revised permit documents for board approval, received a phone call from the Hilo office, informing her that it had some “concerns about Hulce.” In a site visit with Robin Hulce, Robin was informed that he was to remove and clean the property of any construction debris. Also, he may have been renting [out] the house. Dad [i.e., Frank Hulce] was not living there.”

Despite the concerns, Robin Hulce was removed from the RP, and although Frank Hulce had by then relocated to the mainland, his wife continued to occupy the larger and newer of two single-family residences on the property.

Demolition and Debris

In October 2001, Beverly Hulce informed the Land Division that she, too, would be leaving Hawai`i and requested that the RP be cancelled. In response, the DLNR notified Hulce that he was responsible for “ensuring the premises and improvements are in a clean, sanitary and orderly condition.” If the DLNR had to incur charges to bring the property into that condition Hulce would be liable for them.

When the DLNR agents conducted their inspection in mid-November, they found that the house Beverly Hulce had been living in was “cleaned and ready for occupancy,” but other structures were problematic. “The warehouse was left open and appears to have been pilfered. Gas pump and underground storage tank should be removed. Two tanks at front of property appear to be diesel tanks… Property is littered with debris consisting of miscellaneous construction material and equipment, abandoned vehicles, conveyors.”

The second house, which was occupied by a tenant who was apparently renting from Hulce, “is heavily congested with a wide variety of materials, including vehicles, boats, pipes, cages, various animals and small engines, larger engines.” The tenant told the DLNR staff that “all property belonging to him will be removed by end of November.”

In a letter mailed out on May 7, 2002, Hulce was given 30 days to let the department know what his intentions were regarding cleaning up the site. By then, he was living with another relative, Phyllis Hulce, in Meeker, Colorado, who signed for the certified letter.

With no response from Hulce, the DLNR proceed to hire contractors to evaluate the site, clean up the unregistered underground storage tank, and remove weeds to reveal the full extent of debris on site. Preparing a plan to demolish the asbestos- and lead-paint contaminated structures fell to the DLNR’s Engineering Division.

By January 2006, the plan was done and the DLNR began receiving bids on the work. That phase of the work alone accounted for $204,205 of the final clean-up tab of $228,961.85.

Giving Up

When all the bills were in, the DLNR’s Fiscal Office subtracted from the total the $1200 security deposit made by Hulce and a rental overpayment of $610. The total owed came to $227,151.85. The DLNR sent the bill to Hulce on February 20, 2008.

Finally, the DLNR received a response – not from Hulce, but from former Hawai`i attorney general Michael A. Lilly, now counting Hulce among his clients. “Mr. Hulce has asked me to inquire about the attached bill,” Lilly wrote. “He does not understand the basis for any claim against him… He hasn’t lived in Hawai`i for many years. What is the basis of the claim?”

The DLNR provided Lilly with a history of Hulce’s tenure on the property, as well as copies of the bills, reports, and other documents prepared in connection with the remediation work. No further communication from Lilly appeared in the DLNR files that Environment Hawai`i was able to review.

Over the next two years, the DLNR’s Fiscal Office continued to send monthly bills to Hulce by certified mail. The amount was always the same – no interest or other fee was tacked onto the amount. Occasionally, the statements would be returned unopened, marked unclaimed or unable to deliver by the U.S. Postal Service. More often, they were signed for by Hulce himself or Phyllis Hulce.

On October 26, 2010, Heit asked Fiscal to turn the delinquency over to collectors. Nearly two and a half years later, deputy attorney general Steve Bumanglag approved the Land Division’s request to remove the delinquency from the DLNR’s books. We asked the deputy attorney general for the department whether the state had attempted to recover any part of the amount owed through the services of a collection agency. No response was received by press time.

Apart from the size of the bill, there is the question – not addressed in any of the DLNR files we reviewed – of the extent to which Hulce should be held accountable for the cleanup costs. As the photographs in DLNR files make abundantly clear, Hulce did lay waste to state land. However, the schoolhouse and teacher cottage were built long before Hulce occupied the site, and he almost certainly had nothing to do with the presence of lead-based paint and asbestos in construction materials used for those buildings.

Restoration Group Gains
Access to Royal Fishpond

“This is a pretty historic day for us,” Chris Cramer said, anticipating the Land Board’s approval. After multiple attempts over the past several years, his nonprofit has finally been granted access to an ancient Hawaiian fishpond at the edge of Maunalua Bay.

On February 22, the Land Board granted the Maunalua Fishpond Heritage Society a two-year right of entry to a beachfront property and adjacent fishpond known as Kalauha`iha`i, which were once part of the summer home of Queen Ka`ahumanu and King Kamehameha.

Two decades ago, the state Department of Transportation inadvertently damaged the pond’s fresh water source while widening a highway. Over the years, the pond has deteriorated.

“That area saw a huge change in the ecosystem,” says Cramer, president of the fishpond society. The pond, once filled with mullet, aholehole (flagtail), awa awa (milkfish) and prawns, became dominated by tilapia, Cramer stated in a piece he wrote in 2010 for The Moloka`i Dispatch.

At the time, the DOT, which had condemned the property, wanted to auction off the Kalauha`iha`i property as well as another property attached to the nearby Kanewai fishpond, which the society had been restoring. The society appealed to the state Legislature and then-Governor Linda Lingle, who eventually blocked the sale with Act 210. The act prohibits the sale of government-owned Hawaiian fishponds.

Because the state was no longer able to sell the land, the Department of Land and Natural Resources sought to lease it to a non-profit for a nominal fee, but needed federal approval since federal funds were used to condemn the property. (Although the DOT condemned the property, the land was conveyed not to the DOT, but to the state of Hawai`i. As a result, the DLNR has the authority to lease the property.)

“We were able to get the green light for that and we do have an applicant willing to take this on,” DLNR Land Division administrator Russell Tsuji told the Land Board in February.

Tsuji recommended granting a right-of-entry to the Maunalua Fishpond Heritage Society, which has proposed restoring the pond and turning the now dilapidated house into a heritage center for the community. The Land Board unanimously approved the recommendation.

Already, sewer repairs done about a year and a half ago by the City and County of Honolulu have somehow restored some fresh water flow to Kalauha`iha`i, Cramer says.

“Rupia [a native sea grass] came back, smaller invertebrates. … The water level went up quite a bit,” he told Environment Hawai`i. He told the Land Board that he had recently spotted an awa awa in the pond.

With its right-of-entry, the fishpond society plans to study the pond to determine what more can be done to restore it. Eventually, it plans to seek a lease for the site.

“The dream is to restore the fresh water,” Cramer says. His organization has already completed engineering studies and received estimates of how much it would cost to tap into the lava tube that had once fed the pond.

“It’s a really short area, from one side of the road to the other,” he says.

Farmland, Natural Areas
Receive Funds, Protection

It was a first, and possibly a reflection of the state’s goal to reduce its dependence on imported food. On March 3, the Land Board approved Legacy Land program funding mostly for agricultural projects. The board unanimously approved its staff’s recommendation to grant a little more than $3.3 million to the following projects:

    • $1.146 million to help the state Agribusiness Development Corporation and the Trust for Public Land buy 456 acres of agricultural land in Whitmore Village, O`ahu, from Dole Foods, Inc. The total acquisition cost is estimated at around $10.2 million, and additional funding is expected from the Navy and Army buffer programs, as well as the City and County of Honolulu’s Clean Water and Natural Lands Fund. (For more on this, read our February article, “ADC Board Supports Intent To Buy Whitmore Village Lands.”)
  • $1 million for a 3.44-acre buffer around Windward O`ahu’s Ulupo heiau, located on the edge of Kawainui Marsh. The DLNR’s Division of State Parks is expected to get another $1 million in private funds to acquire the property.
  • $1 million for a 254.517-acre conservation easement to protect agricultural lands and open space on property owned by Vipassana Hawai`i in North Kohala, Hawai`i. Total project cost is over $4 million.
  • $198,707 for a 265-acre conservation easement to protect agricultural lands on Hamakua Springs Country Farm, also on Hawai`i island. Total project cost is $802,328.

The Natural Resources Conservation Service’s Farm and Ranchland Protection Program is providing funds for both Hawai`i island projects, which were proposed by the Hawaiian Islands Land Trust.

These projects were the first ones to be subject to regulations passed by the 2012 Legislature requiring agencies receiving Legacy Land funds to provide an easement or deed restriction or covenant to the DLNR, the ADC, the Public Land Development Corporation or the Department of Agriculture. In response to the new law (Act 284) the Legacy Land program developed a new consultation process, which requires applicants to run their projects by the four agencies before submitting a formal application for funds.

“[T]he four consulting agencies had the opportunity to request a conservation easement prior to the review of the project by the [Legacy Land Conservation] Commission. No such requests were made by the consulting agencies,” states a DLNR Division of Forestry and Wildlife report to the Land Board.

FWS Grant

In addition to winning funds for its Hawai`i projects, the HILT will receive $500,000 from the DLNR to acquire and protect 12 acres of estuary adjacent to the Kilauea Point National Wildlife Refuge on Kaua`i’s north shore. The funds are part of a $1 million grant from the U.S. Fish and Wildlife Service to the DLNR’s Division of Forestry and Wildlife (DOFAW) to acquire and restore Kaua`i wetlands.

DOFAW’s larger goal is to protect 200 acres of wetland and upland bird habitat in Kilauea that provide resting and nesting habitat for thousands of seabirds, as well as the endangered Hawaiian goose, or nene.

Board Adds Ko`olau Lands
To O`ahu Reserve System

The Land Board recently approved the first two natural area reserves to be located in O`ahu’s Ko`olau mountain range. On the windward side is Kaluanui, a 376-acre stretch of steep mountain ridges above Sacred Falls State Park. On the leeward side is the 1,500-acre Poamoho reserve, just above the Schofield Barracks Military Reservation.

Kaluanui includes one of the island’s few unaltered streams, supporting “the full assortment of native fishes,” a DOFAW report states. What’s more, nearly 30 rare species, including an endangered damselfly, have been documented in the reserve. The reserve falls within federally designated critical habitat for 12 plant species.

“The inclusion of this area into the NARS would increase the representation of O`ahu’s lowland wet and wet cliff ecosystems, which are found in only tiny sections of existing O`ahu reserves,” the report states.

On March 8, the Land Board unanimously approved the new reserve, which was originally proposed by damselfly expert and former DLNR Division of Aquatic Resources administrator Dan Polhemus.

On April 12, the Land Board approved the removal of 1,500 acres from the `Ewa forest reserve for the creation of the Poamoho NAR. The reserve includes two dozen rare or endangered plant and animal species not found in Kaluanui. The U.S. Army leases most of the reserve (1,300 acres) as part of its Kawailoa Training Area, but plans to restrict its activities to those allowed under NARS rules. Recommendations on lease amendments to make sure Army activities are consistent with NARS rules are expected to come to the Land Board for approval soon.

Spreckelsville Groins
May Slow Beach Erosion

Dumping vast amounts of sand on a beach isn’t the only way to preserve it. In March, the Stable Road Beach Restoration Foundation, Inc., made up of seven beachfront property owners, received Land Board approval to install a series of rock groins along 600 feet of coastline in Spreckelsville, Maui.

Under its new Conservation District Use Permit, the foundation may install four 100- to 135-foot-long rock groins along the beach. The groins will replace ones made of degradable sand bags that the foundation installed in 2010 to slow the erosion of the beach.

“The reason this is an interesting project is … this project demonstrates there are different ways to approach beach restoration,” DLNR Office of Conservation and Coastal Lands administrator Sam Lemmo told the Land Board at its March 8 meeting.

The groins, which will jut out from the beach like fingers (one of them curved), will be buried by sand at their mauka ends and will slope downward into the sea.

According to Lemmo, the groins will fill with sand and allow excess sand to move around.

“It slows the lateral movement of sand. It doesn’t stop it,” he said.

“These guys have done a tremendous job. They’ve done their due diligence. They’ve done a really professional job … without consultants, which is fascinating,” he added.

At the time of the board’s meeting, the foundation had yet to obtain approvals from Maui County, the U.S. Army Corps of Engineers, the state Department of Health, and the Coastal Zone Management Program.

“I’m comfortable moving forward … and show[ing] other agencies they’ve got our authorization,” Lemmo said.

Land Board Amends, Transfers
Renewable Energy Agreement

The troubled 110-acre, 20-megawatt renewable energy complex proposed for Campbell Industrial Park has been scaled back in both size and output. It’s also got new developers: O`ahu Renewable Energy Park (OREP), and International Energy Power, LLC (IEP).

After months of negotiating with the DLNR, OREP and IEP agreed at the March 8 Land Board meeting to post a performance bond covering the $528,125 in unpaid fees that West Wind Works, LLC (3W) had incurred under its 2010 development agreement with the DLNR. They also agreed to post a bond to cover future development fees of $53,318 a year. In exchange, the Land Board would transfer the development agreement from 3W to OREP and IEP. (OREP is an affiliate of 3W.)

The Land Board approved the transfer of the development agreement as well as several amendments, including a repayment schedule for 3W’s debt. Under the amended agreement, IEP-OREP will pay $132,031 now, and the rest in increments — when the companies are placed on Hawaiian Electric Company’s short list of bidders for its renewable energy request for proposals, when they sign a power purchase agreement with the utility, and when they secure financing.

“[A]ll future development agreement fees would remain dependent on IEP-OREP obtaining other discretionary approvals, two of which are not expected to occur until 2015, including BLNR’s issuance of a lease to IEP-OREP, LLC for the project site,” a DLNR Land Division report states.

OREP and IEP plan to build up to two 5 MW biomass plants on about 17 acres. Feedstock will come from West O`ahu’s PVT landfill, which accepts construction and demolition waste.

Volume 23, Number 11 May 2013

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