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DLNR and DHHL both went through a formal multi-year process of gathering community input, publishing Requests for Proposals, and competitively selecting the preferred developer. Both state agencies chose Jacoby Development, Inc, and agreed that their adjacent parcels of land could be developed in a master-planned mixed-use project. This process culminated in a master lease with DHHL in January 2004 and a development agreement with DLNR in November 2005. As per these agreements, a master development plan, a core infrastructure plan and a draft EIS are due by this November. DHHL and DLNR based their land use plans on the County's General Plan which designated these lands "Urban Expansion Area," "Resort," and "Open" before it was amended last February 2005. DHHL and DLNR also based their plans on the Keahole to Kailua Development Plan, which designated this area for an expanded harbor complex, a connector road, a shoreline park, and a new regional urban center for Kona, relieving the pressures of urbanization on Kailua Village. Both the DHHL lease and the DLNR development agreement include hotel and timeshare land use as essential components in the mix of land uses envisioned for this area. Both agreements prohibit permanent residential on these lease lands. This harbor-front commercial village with retail, commercial, transient accommodations, and marina- support industrial activities will be able to provide the necessary financing of the project's substantial community infrastructure, including a new harbor, a major connector road, a major shoreline park, community areas, and other infrastructure. This mix of uses will also provide a stable employment base close to residential growth areas planned for Kona. These mix of land uses in this new commercial village are all consistent with General Plan provisions for an area designated as "Urban Expansion Area." The specifics of the mix of uses and density are matters that would need to be decided during the zoning application process. This zoning application can be submitted only after the completion of the Environmental Impact Statement being prepared for the project. The draft EIS is projected for completion by November 2006. Using smart growth design principles, this collaborative project of DHHL, DLNR and Jacoby Development, Inc. intends to create a community-friendly place for residents and visitors alike, that uses the best in transportation planning, environmentally-sensitive and energy-efficient design. Mahalo for your consideration of this request to pass Bill 309, Amendment E-4 so that planning for this project can move forward and it can be a part of the solution to the many growth-related challenges being faced by the Kona community today. Tarnas testimony on Bill 309 p. 2 of 2