LUC approves Hale Mua project

The Maui News
Saturday, January 20, 2007
By HARRY EAGAR, Staff Writer

MAKENA - The Hale Mua affordable housing project in Waiehu was close to crashing and burning Friday, but at the last minute - actually, an hour past the last minute - it won the Land Use Commission boundary amendment it needs to keep moving. Maybe.

The commission passed a version different from the proposal that the County Council passed in 2005 under the state's 201G fast-track process for affordable housing projects. The changes are potentially substantive enough to force developer Sterling Kim back to an earlier stage in the authorization sequence. He indicated that his costs are mounting so quickly that more delays could kill the project.

When Commissioner Kyong-su Im said it would not be a big deal if Kim had to resubmit his application for preliminary subdivision approval, Kim corrected him.

"Our capacity to carry on this project" is stretched thin, he told Im, saying the delays have cost him nearly a million dollars already. Additional delays may make it "impossible for us to continue with this."

Mayor Charmaine Tavares said later Friday that she didn't see any reason for delays from the county side.

Kim had two concerns. One, that he would have to start over with his subdivision application. Two, that because the land reclassifications are now different from what the County Council approved, he might have to restart his 201G application all over.

Deputy Planning Director Colleen Suyama told the commission she did not believe the subdivision application would be affected, as long as the boundaries of the application do not change, which they haven't.

Tavares, who was on the council when the 201G application was approved, said she did not see why it could not move forward as long as the numbers of affordable and market-price houses have not changed.

"The numbers haven't changed," she said, "so it's not obvious why it would be kicked back."

Discussions before the commission at its two-day meeting at the Maui Prince Hotel left the panel uncertain that third parties won't object to the change, or whether the council would want to revisit its approval if they did.

Randy Piltz, the commission member from Maui, crafted a lengthy proposed findings of facts and conclusions of law leading to a decision and order, but at first he could not get enough votes to pass it.

There were two big items in Piltz's recommendation that acreage be kept in agriculture:

1. Whether the project will have to pay "fair share" school impact fees to the Department of Education for all 466 units or just the market-price houses. Kim had testified that the school fees would have to be added to the selling price of the affordables. The adopted decision merely states that Hale Mua will make a contribution to the DOE's "satisfaction." It is silent about whether the affordables will be assessed.

However, Kim and the department have been discussing whether a 12-acre lot (near the intersection of Waiehu Beach Road and Kahekili Highway) would be contributed for an elementary school. No agreement has been reached, but if the lot is donated, the question of assessing the affordables will be eliminated.

2. Whether 19 large lots along the upper boundary of the 240-acre parcel should be kept in agriculture or classified urban. The large lots are intended to buffer the small lots from surrounding uses, which include the two-acre Wailuku Country Estates development and other properties still in the agricultural zone.

Much of the area, like Hale Mua itself, is former macadamia nut orchard. The land is rated prime, although there has been no active farming on the former Wailuku Sugar fields for a generation.

The large lots, from two to 25 acres, resulted from the county's sliding scale for agricultural subdivisions, designed to keep big owners from chopping up land into innumerable two-acre "fake farms," as Piltz called them.

It was not entirely clear why the question of the classification of the large lots became such a hot topic.

The Planning Department wanted to preserve as much prime ag land as possible. However, Kim offered to draw up a unilateral agreement to prevent further subdivision without coming before the LUC again, and to put that in the deeds.

On the other hand, Kim said he would price the large lots the same whether the state land classification were ag or urban. He was, in part, concerned that obnoxious ag uses would make it harder to sell the 10,000-square-foot market lots that are to pay for all the required improvements, including Imi Kala Street extension, and cover losses on the affordable-priced units. (See related story.)

The state Office of Planning sided with Kim for many reasons. One was, said Deputy Attorney General Brian Yee, that if the LUC didn't reclassify the land, it had no authority to put any conditions on it.

The council, in accepting the 201G application, had acquiesced in urbanizing the large lots. That carried weight with Commissioner Nicholas Teves Jr., who observed that the council is elected, while the Planning Department, which opposes urbanization, is not.

Deputy Corporation Council Jane Lovell cautioned Teves that the council was presented the whole 201G as a take-it-or-leave-it proposition, so the members might really have preferred to leave the large lots in ag but swallowed urbanization to get the affordable housing.

Three commissioners - Teves, Thomas Contrades and Duane Kanuha - were unpersuaded and announced they would not vote for Piltz's proposal.

"It's not fair," said Contrades, who noted that Kim had asked to urbanize the land and was told by the council that was acceptable.

The commission was rushing to adjourn by 2 p.m. Friday so the off-island members could make their planes, but Chairman Lisa Judge held on, calling several recesses so members could think about a compromise. Kim offered one of his own - he would give up urbanization if he could have restrictions on some kinds of ag use (such as fertilizer spraying and animal noise and odors).

His lawyer, Martin Luna, pulled a face on that. The County Council passed an ordinance forbidding restrictions on farming in the ag zone at the behest of then-member Wayne Nishiki, who was outraged that developers cutting up agricultural land were putting covenants on their ag lots forbidding farming.

After an executive session, at which the possibility of restricting farming may have been discussed, Kim offered a second compromise: He would give up urbanization on 18 of the lots, but he wanted the 19th urbanized.

That is the potential school lot, and he believes schools are not allowed on ag land. Losing that would cost him his bargaining chip with DOE. Judge said later that the commission was informed that schools can be put in the ag zone, with a special permit.

The three nay votes did not budge, even when Piltz pleaded for them to say what would change their minds. Although Piltz was attached to keeping the large lots out of urban, he also said he didn't want to see the meeting close without action, because he also wanted the affordable housing.

Kim started to say something about having to live with ag. He didn't quite get it all said, but that - or something - caused Teves to change his mind. The trio could have blocked action, because the LUC requires six votes to reclassify land, and one of the nine members was absent.

Once Teves broke, Contrades and Kanuha switched, too, and Piltz's proposal passed 7-1. Reuben Wong voted no, after trying and failing to get the motion deferred.

Kim rushed off to his own airplane after the vote, saying only, "You know what's in my mind."

He has been unhappy with the time it has taken to get his fast-track project moving, blaming the commission in part.

LUC Executive Officer Anthony Ching said earlier that the commission's hands were tied. When a group of Hawaiians challenged Kim's title to the land, the LUC was halted until that was settled. The judge ruled in Kim's favor, and the LUC process got going in August.

Ironically, the commission spent hours Thursday and Friday arguing about how to guarantee that Kim will proceed promptly with his project. Yee said the Office of Planning is concerned about "stale projects" that are authorized but never get built.

The commission put in a condition that Kim must have at least 77 affordables past final building inspection within five years of the certification of the LUC order. Kim testified he could do it in two years or less, if the government would get out of his way.