Tropic Land, LLC has failed to persuade enough members of the state Land Use Commission to approve a boundary amendment allowing for the company’s proposed light industrial park in Lualualei Valley in West O`ahu.
On April 21, the LUC voted 5-3 to approve Tropic Land’s petition to change the district boundary of 96 acres in the valley from Agriculture to Urban. Six votes are needed for a boundary amendment.
The decision came a day after the Honolulu Planning Commission concluded its public hearings on proposed revisions to the Wai`anae Sustainable Communities Plan, including a recommendation by the city Department of Planning and Permitting to place the proposed industrial site in the urban zone. The commission promised to vote on the plan this month, after commissioners have had a chance to review all written testimony.
Tropic Land has not yet decided whether it will file a motion with the LUC for reconsideration, company attorney, William Yuen said late last month.
During final arguments to the LUC, Yuen stated that the company’s proposal met the LUC’s criteria for Urban designation and that the Leeward Coast’s productivity would suffer without more industrial land.
With regard to cultural impacts on the area, which is held to be the birthplace of the Polynesian demigod Maui, Yuen noted that testimony by witnesses for the Concerned Elders of Wai`anae spoke mainly about the general landscape’s cultural significance. Although the land was said to provide pathways to other significant cultural sites, none was ever identified.
“We’re not in a position where we know we have to set aside a certain path,” Yuen said.
Whether or not the land is suitable for farming was a subject of great debate throughout the hearings. Tropic Land representatives argued that the land was too rocky and that the last farmers who cultivated the land produced mediocre crops and struggled to make money.
On April 8, Yuen reiterated, “This is not the greatest land in the valley.” He later reminded the commission that the land is currently zoned for golf course development.
(Tropic Land has already agreed to provide a local non-profit organization with about eight acres of land in the valley — with similar soils — for an agricultural incubator that would provide training for homeless families in the area.)
Dawn Takeuchi-Apuna, corporation counsel for the Department of Planning and Permitting, offered only one recommendation to the commission should it decide to redistrict the land: before the city rezones the parcel, Tropic Land must have a signed agreement with the U.S. Navy for access along Lualualei Naval Access Road.
She also noted that there is no guarantee that the city council will approve the Wai`anae Sustainable Communities Plan as proposed.
Bryan Yee, the deputy attorney general representing the state Office of Planning, also had no objection to Tropic Land’s proposal, but listed several outstanding issues that would need to be resolved for the project to proceed.
First was the issue of access. Yee noted that the narrow, winding Hakimo Road, which currently provides the only legal access to the parcel, is not suitable for the truck traffic that is expected to be generated by the baseyard. Although Tropic Land’s Traffic Impact Assessment Report for the project is based on the assumption of access along Lualualei Naval Access Road, as of the LUC’s April 8 meeting, the company was still negotiating with the Navy on a long-term easement.
The OP has suggested that the LUC approve the boundary amendment with the condition that Tropic Land secure a long-term easement for at least 30 years before applying to the city for a zone change and within five years of the LUC’s decision.
The OP also recommended that, if a long-term easement is issued, the currently unimproved road be maintained to city or state standards, something Tropic Land has argued against.
With regard to the upgrading and maintenance of the road, Yee noted the OP’s concern that Tropic Land had also failed to reach an agreement with other landowners that have access easements with the Navy.
“There are talks, but no agreement,” Yee said. One possible sticking point is the cost. Yee noted that Tropic Land’s estimated $57,000 in annual maintenance costs is higher than the existing license fees paid by the road’s tenants, which include the PVT construction and demolition landfill and waste recycler Pine Ridge Farms.
Yee continued that Tropic Land has also failed to agree with the state Department of Transportation on who should pay for road improvements at the intersection of Farrington Highway and the Navy road. Tropic Land has argued that since the DOT is already working on similar improvements along Farrington and because they’re needed with or without the baseyard, the company should be required to pay only its fair share of costs. The DOT, however, has taken the position that Tropic Land is obliged to pay all costs for improvements at the intersection.
Finally, the OP recommended that Tropic Land’s proposal be consistent with the Wai`anae Sustainable Communities Plan within five years of the commission’s decision.
If Tropic Land failed to meet the deadlines proposed by the OP, “[r]eversion should remain a real option. The petitioner says they’re close. If they are, great. These conditions shouldn’t be a problem,” Yee said.
The Concerned Elders of Wai`anae, which opposed the petition, feared that allowing the light industrial park to be built would encourage the urbanization of the surrounding area and be used to justify a landfill at Nanakuli B, according to their attorney Marti Townsend.
Townsend pointed out that the PVT landfill and Pine Ridge Farms — two industrial operations that Tropic Land, the city and the OP have used to justify the redistricting of the Tropic Land parcel — are similar examples of urban spot zoning.
Despite Yuen’s argument that the project fits within the Urban designation, Townsend argued that property is not remotely “city like,” since it’s relatively isolated and surrounded by agricultural land.
She continued that the Tropic Land parcel is more than twice the size of PVT and Pine Ridge combined.
“[This] would be a significant addition of industrial land,” she said, adding that increased industrialization would change the quality of stormwater runoff entering Ulehawa Stream, possibly impacting those who gather fish and limu where the stream empties into the sea. She also argued that the project’s cultural assessment was inadequate.
Finally, she suggested that Tropic Land’s characterization of the farming that occurred on the land was inaccurate, referring to evidence that the last farmers there, the Arakis, were highly productive and would have continued farming had the rent not been raised and the land sold to a golf course developer.
When it came time to deliberate, the commissioners seemed less concerned about the cultural, food sustainability, and urban-creep issues raised by the Concerned Elders and focused almost exclusively on access to the Navy road.
The lack of a long-term easement from the Navy and a maintenance agreement with the road’s tenants, as well as a failure to resolve the DOT’s traffic concerns had convinced commissioner and Maui developer Charles Jencks that a boundary amendment was not warranted.
“It seems to me this commission shouldn’t be in the business of awarding boundary amendments to projects with issues like this,” he said as he made a motion to deny the petition.
Ronald Heller, who seconded the motion, added, “It’s premature to start defining all of the other conditions [of the boundary amendment] until the petitioner gets access. I’m not saying it should be denied forever, but they need access first.”
Townsend told Environment Ha
wai`i that even if the LUC approves the Tropic Land petition with OP’s recommended conditions, nothing prevents trucks from using Hakimo Road. One landowner in the area erected a gate to block vehicles from cutting through her property from Hakimo to the Navy road, but the gate has been repeatedly cut by trespassers. Building something that will drive more traffic to the Navy road will only make things worse, Townsend said.
While Jencks and Heller voted in favor of the motion, Nicholas Teves, Duane Kanuha, Kyle Chock, and chair Vladimir Devens opposed it. Commissioners Lisa Judge and Thomas Contrades did not attend the meeting. Commissioner Normand Lezy, who had expressed concern about access in previous meetings, did not arrive in time for the vote.
Given that a unanimous decision by all six commissioners present on April 8 was needed to decide on the petition, the commissioners made no further motions and decided to try again on April 21.
One Vote Shy
On April 21, when Teves asked what progress had been made toward acquiring access, Yuen reported that the Navy now wants to turn its road over to the city, if and when Tropic Land and other easement holders upgrade the road to city standards. City ownership of the road would provide permanent access, he said.
Takeuchi-Apuna said she could not comment on the city’s position was since this was the first she had heard of the Navy’s new proposal. Townsend objected to the information being allowed into the record, since the evidentiary portion of the hearing had closed weeks ago.
In the end, after an executive session, Devens recommended that the commissioners not consider Yuen’s statements that day in their deliberations.
Kanuha made a motion to approve the petition on the condition that, before rezoning by the city, Tropic Land secure a long-term agreement for use of the Navy road. He also included several other conditions regarding stormwater management, energy conservation, and access rights, among other things. Teves seconded the motion.
Lezy warned the commission that making something as fundamental as access a condition of approval could become a nightmare if it’s not met and the commission decides to revert the property to the Agriculture District.
“I don’t think we need to look any further than the next docket matter [the Villages of `Aina Le`a] to understand the Pandora’s box that’s opened when the most viable option is to revert …,” he said. “I would ask any commissioner inclined to support the motion as stated to provide me with some explanation why I should take comfort … that this is going to work.”
Jencks said he might support Kanuha’s motion if the deadline to get access was cut to two years. Although Kanuha said he was not opposed to that, he did not amend his motion.
When it came time to vote, Kanuha, Devens, Chock, Contrades, and Teves voted in favor of the motion; Lezy, Jencks, and Heller opposed it. Commissioner Lisa Judge did not attend the meeting.
Over `Aina Le`a Reversion
“If you don’t [reverse your decision], you’re going to leave half-built buildings on the hillside like tombstones,” Kona real estate agent Gretchen Lambeth told the LUC on April 8.
Lambeth was one of several members of the public who testified that day in support of the Villages of `Aina Le`a housing project, which was in danger of losing for good its Urban land use designation because its developers had, among other things, failed to build 385 affordable units units by November 17 of last year.
They argued that the project would generate construction jobs and provide much-needed homes and recreational space for families in the area. And with regard to missing deadlines, Lambeth, who helped build developments at Waikoloa and Hokuli`a, said, “That’s the big joke in the construction industry.”
But it wasn’t a joke to the LUC, which voted in January to revert the 1,060-acre site to the Agriculture District and on March 11 accepted proposed Findings of Fact, Conclusions of Law and Decision and Order supporting that decision. The decisions came after years of broken promises by the project’s various developers and more than 20 years after the land had been placed in the Urban District.
Landowners Bridge `Aina Le`a and DW `Aina Le`a Development, LLC immediately sought to stay that decision, filing objections with the LUC on March 24.
“Regardless of how much bad blood has been spilled in this proceeding, there remains one last opportunity to resolve this dispute amicably, in the best interests of the citizens of west Hawai`i,” Bridge’s attorneys wrote in their objections.
But on April 7, before the LUC had a chance to rule on their objections, the companies filed appeals in Circuit Court, Bridge in the First (Honolulu) and DW in Third (Hawai`i island). In addition to the LUC, the companies included each other and the state Office of Planning as defendants. DW also named the County of Hawai`i Planning Department.
On April 21, the LUC denied motions by DW `Aina Le`a to amend conditions of its Urban designation and reconsider its decision to revert the property. It also voted to accept its final FOF, COL, and D&O.
In their filings to the LUC and the courts, DW and Bridge made several similar arguments, mostly that the LUC made numerous procedural errors in its initiation of an Order to Show Cause why the land should not revert and in its eventual decision to place the land back in the Agriculture District. They challenged the commission’s ability to set deadlines on the completion of the affordable units, as well as to revert the land with only five votes. (Six votes are normally required for a boundary amendment.)
Not only did the OSC proceeding hinder DW’s ability to obtain financing, they continued, the LUC’s decision to revert the property will have an impact on construction financing on all future projects subject to LUC decisions.
Bridge added that the commission was treating the Villages of `Aina Le`a differently from similar projects, pointing out that in at least seven other LUC dockets that required the construction of affordable housing, the petitioner has failed to build a single unit. They include developments at Kohanaiki, Royal Kunia Phase II, Kaloko Heights, Wailani, Honua`ula, Waikoloa Heights, and the Kuilima Resort expansion.
DW stated that it has spent more than $26 million on construction and infrastructure, “including 40 affordable housing units, purchasing the wastewater treatment plant system, preparing necessary engineering plans, grading and grubbing …”
Although the units lack basic infrastructure such as water and electricity, Bridge pointed out that, with regard to 16 units that had to be completed by March 2010, the LUC’s condition did not define the term “complete.”
Despite the arguments made, DW president Robert Wessels was apologetic at the LUC’s meeting on April 8.
He noted that the LUC had allowed his company to try to meet its deadlines, even though some commissioners were skeptical. “We did not have enough control over the items to complete … our commitments,” he admitted.
His attorney, Alan Okamoto, added, “We’ve learned to be very careful about promising too much.”
Bridge’s attorney, Bruce Voss, on the other hand, began with a warning that the LUC’s decision would stop construction financing. He later added that the decision would also place a huge liability on the state at a time when it can hardly afford it.
“The only question is what the final price tag will be,” he said, adding that it would probably be in the eight-figure range.
Referring to the LUC’s position that it did not need six votes because it was voting on an OSC, not a boundary amendment petition, Voss said, “If you call a pig a goat, that doesn’t make it a goat. It’s still a pig. … Does the proposed Decision and
Order comply with the statute? No. The plain truth is, it doesn’t even try to.”
Finally, he asked the commission to think about whether the point it was trying to make about the importance of following conditions was worth the “financial catastrophe” it would cause.
On April 21, commissioner Duane Kanuha made a motion to amend the condition related to affordable housing so that the developer no longer had to provide certificates of occupancy for its completed units. He noted that the county rezoned the land as urban in 1993 and argued that the county, and not the LUC, should take the lead in determining when and how affordable units should be built.
“This is clearly in the county’s ballpark,” he said.
Commissioner Ronald Heller, on the other hand, believed that it was the commission’s responsibility to enforce conditions it places on boundary amendments.
“If we give it all to the county .. we [land use commissioners] should all go home,” he said.
Kanuha’s motion failed 3-5, with Kanuha, Charles Jencks, and Nicholas Teves the only members voting in support. A subsequent motion by Heller to deny DW’s motion to reconsider passed, 5-3, with commissioners voting along the same lines.
When it came time to vote on whether to accept the final FOF, COL, and D&O, Voss interjected, requesting that chair Vladimir Devens recuse himself from voting because Devens’ law firm – Meheula and Devens, LLC — had represented Hale Wailani Partners, LP, which sued Bridge `Aina Le`a in 2001. Voss specualted that the litigation, which ended in 2003, probably resulted in some $200,000 in fees for the firm.
“The chair received direct financial benefit,” Voss said.
Lezy asked Voss to explain how Devens had a “personal pecuniary interest” in the reversion of the land for failure to meet a 2005 condition of the Urban designation.
“All of the dealings you discussed occurred prior to that,” Lezy said.
When Voss suggested that it was a thin read of the state’s ethics rules and statutes to make a distinction between past and future benefits, Lezy said, “I guess I disagree on what a ‘thin read’ is.”
After an executive session, Devens said it did not appear he needed to recuse himself. He said he had called his firm’s office and it didn’t appear that Hale Wailani is a current client. Devens added that Voss should have raised his concerns before the commission voted on the other motions.
“If I thought for a second that I could not remain impartial … I would have recused myself,” Devens said. Yee and Takeuchi-Apuna, as well as the rest of the commissioners, expressed no concern about Devens’ participation.
Heller then made a motion to approve with several amendments reflecting the fact that the 385 affordable units were supposed to have been built in the petition area and that no offsite units were to have been credited against that total.
Contrades said he was supporting the motion because, from his very first meeting as a commissioner until now, members of the public repeatedly testify in support, citing job and housing opportunities, the commission gives the developer another chance to make good on its projections, and nothing happens.
“There comes a time when you have to decide when something is right and something is wrong. … I personally cannot continue to say I support it,” he said.
With Teves switching sides at the last moment, Heller’s motion passed, 6-2.
After the vote, Hawai`i County planning director Bobby Jean Leithead-Todd said the property owners will likely be consulting with their attorneys.
Volume 21, Number 11 May 2011