For a House in Lanikai, The Fourth Time's a Charm

posted in: September 1990 | 0

“Lanikai Hale,” the name Ralph and Betty Engelstad have given their proposed house on Conservation District land, maybe loosely translated as house of the heavenly sea. The controversy that has surrounded it, however, can fairly be described as hellish.

In 1969, Engelstad, a Las Vegas hotelier, and his wife acquired 76 acres of steep-sloped Conservation District land (subzone Limited) in the hills above Lanikai, a small community in Windward O`ahu. Purchase price was reported to be about $1,000 an acre.

In 1982, the Engelstads, represented by attorney Jack Schweigert, filed a Conservation District Use Application to build a residence. Plans showed a 260-foot-long, 32,000 square foot house that would include a recreational pavilion, a conference room, two living rooms, two kitchens, three fireplaces, a “bar pool” as well as a swimming pool, five baths and a four-car garage. A driveway a fifth-mile long and 22 feet wide (not counting shoulders) would connect the house to the top of Po’opo`o Place.

The Office of Conservation and Environmental Affairs, which reviews CDUAs for the Board of Land and Natural Resources, recommended denial, noting: the hazards construction would pose to nearby residents; the inconsistency of the proposed development with the objective of the specific Conservation District subzone in which it would be built; and the planned house’s two kitchens, which made it ineligible for consideration as a single-family residence. Accepting staff recommendations, the Board voted February 11, 1983, to deny the CDUA.

Four months later, the Engelstads filed again. This time, they sought to have two acres brought into the General subzone (where the Board has almost always approved residential CDUAs), and permission to build the house (with only one kitchen now) on the rezoned land.

Engelstad also evidently thought a little political pressure might help The then-governor of Nevada Richard H. Bryan, wrote to then-Gov. George Ariyoshi and then-Honolulu Mayor Eileen Anderson, describing Engelstad as “a well respected member of the Las Vegas Business Community and a credit both personally and professionally to the state of Nevada.” “I hope that you will give Mr. Engelstad every consideration in his application to build a home in Hawai’i,” Bryan said.

On September 8, 1983, at a public hearing on the boundary change, an agent for the Engelstads requested that the subzone change be deleted from the CDUA so as to avoid preparation of an Environmental Impact Statement. The CDUA was so amended. On December 16, 1983, however, the Board once more denied the CDUA, citing two of the three issues raised before; the hazards to nearby houses and the incompatibility with the objectives of the Limited Conservation District subzone.

Less than three months later, the Engelstads filed their third CDUA – this time with a new attorney, Wayne Minami. Again, they asked for a subzone change, seeking now to upzone to General an “island” of 4.36 acres within their larger parcel of Limited subzone land. This time, they had an EIS prepared in advance of filing. The 180-day deadline for Board action was extended twice – by a 90-day extension, and again by a 60-day extension. With those extensions, the Board was looking toward making a decision by January 8, 1985.

In late November 1984, Lanikai flooded. People who lived downslope of the Engelstads faced rampaging waters and mudslides. On December 24, 1984, Minami, the Engelstads’ attorney, asked to withdraw the CDUA from the Board’s consideration. The Board so allowed.

More than two years passed before the Engelstads returned in late June 1987 with a fourth CDUA (and a third law firm: Ukishima, Matsubara, Lee, and Kotake). What they were seeking was identical to the previous CDUA. This time, information accompanying the CDUA stated that building of the residential structure would actually reduce the amount of erosion that naturally occurs on the property and “will improve the drainage and erosion problems in the area” (emphasis added).

The claim of an environmental benefit resulting from making 1.4 acres of land impermeable (the “footprint” of the house and driveway) was ridiculed by Lanikai residents. Among the governmental organizations that also expressed skepticism about the environmental benefits of “Lanikai Hale” were the Department of Planning and Economic Development, the Department of Agriculture, the City and County of Honolulu (various departments), and the Kailua Neighborhood Board. If anything, opposition to the Engelstad proposal was stronger, more sophisticated, and from more diverse quarters than ever before.

But two developments soon set this CDUA apart. First, the 180-day expiration date, fixed by the department at January 30, 1988, was in the first week of December advanced to December 21, 1987. Second, the staff recommendation to deny, which in the past had centered on environmental concerns, turned its back on those issues and instead recommended denial based on an arcane (and spurious) legal point.

The 180-day expiration date of January 30 had been set by the Department staff; reckoned on an acceptance date of August 3, when all the required fees had been paid. For four months, the applicant raised no challenge to the assigned expiration date.

But then in early December (according to documents filed in court by the BLNR), “the Land Department staff mistakenly revised the 180-day deadline when [the Engelstads’ attorney] advised the staff that the commencement date should run from the date the Land Department received the application [June 24]… The Land Department’s staff mistakenly accepted this interpretation and advised the Land Board accordingly.” (Roger Evans, who was responsible for bringing the CDUA to the Board at its December 18, 1987 meeting, told Environment Hawai`i that he cannot recall what happened at the time.)

As to the staff recommendation, prepared by Evans himself, the argument for denial was no longer based on environmental considerations. Rather, it centered on the argument that approval would constitute a legally contestable instance of spot zoning. To quote from Evans’ statement to the Board December 18, 1987: “the real issue had not surfaced [in hearings and public comment]: spot zoning… We felt that were we to recommend an approval with this issue staring us in the face,… staff could be viewed as acting arbitrarily and capriciously… As such, and only because of the spot zoning issue, we are recommending denial of the application.” Matsubara’s challenged the spot-zoning argument at the meeting. Spot zoning by definition places the surrounding landowners at a disadvantage, he noted, but the Engelstads are not just the owners of the “island” that would be spot zoned, but also of all the surrounding land.

At that December 18 meeting, five of six Board members were in attendance. One of those five excused himself because of a conflict of interest. That left just four Board members to vote. Because four is the number also needed for a majority, the vote would have had to be unanimous in order to be considered a valid Board action.

The Board did not reach unanimity. John Arisumi, Board member from Maui, stated he was confused as to why “a guy that owns 79 acres” couldn’t be allowed to build a house, and so he cast his vote against the motion for denial, effectively granting the applicant’s request by default.

Evans had evidently been acting to this point on the legal advice of the applicant’s lawyer, but after that meeting (according to the BLNR’s statement in court records), “the Chairperson requested the Attorney General to review the issue of the 180-day deadline. The Attorney General advised the Land Department that the original expiration date of January 30, 1988, was correct,” based as it was on the date all CDUA fees had been paid.

On January 21, 1988, the Board took up the Engelstad CDUA again, and this time the motion to support the staffs recommendation for denial passed with four votes.

The Engelstads appealed the Board’s decision in state circuit court, challenging not just the Board’s reconsideration of the case but also the staff recommendation. The spot-zoning argument, Engelstads’ lawyers said, especially when coupled with the staff’s suggestion that the Engelstads petition the Land Use Commission to have their land rezoned urban, was neither “rational nor logical.”

On March 20, 1989, Judge Robert Klein ruled in favor of the Engelstads. The 180-day clock for Board action began running in June, he found. (The challenge to the spot-zoning argument was made moot by the judge’s decision. However if Judge Klein had sided with the state on the matter of the 180-day expiration date, the Engelstads’ lawyers still would have had a sharp arrow in their quiver with which to take aim at the Board decision.)

On June 19, 1981, William Paty, Chairman of the Board, wrote Matsubara informing him that the CDUA “is hereby granted.” Approval, Paty said, “is subject to compliance with all pertinent conditions-guidelines” in the rules. “In this regard,” he added, “the one-year time frame for initiating all work and/or construction… is set per the date of Judge Klein’s signed ruling at March 20, 1989.” Since then, the only activity at the Engelstad property has been a battery of site characterization studies.

Evans told Environment Hawai`i in mid-July that he seemed to recall Engelstad “came in with building plans.” When Environment Hawai`i later requested to see the plans, however, we were informed that no plans had been submitted.

One might conclude that the Engelstads’ apparent failure to submit plans and have them approved by now means they have forfeited their permit. Don Horiuchi, the OCEA planner to whom the Engelstad case is now assigned and to whom Evans referred further questions, stated that one could just as easily argue that because some work had been done on the site, the Engelstads could be said to have met condition 15 in the rules (requiring construction to commence within a one-year period of the permit’s issuance). However, if what has occurred at the site is in fact deemed to be construction, with no plans having been approved, this would seem to place the Engelstads in violation of DLNR Rules (since no construction can occur without prior plan approval). When this was brought to his attention, Horiuchi said that the Attorney General’s office would be reviewing everything before any further move was made by the staff.

Asked how long that might take, Horiuchi said he did not know, but indicated it might well take months.

Volume 1, Number 3 September 1990

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