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L37-89-'87 13:02 FROM-SLN9TONE REALTY 8t~8-523-9696 T-599 P603/884 F-645 The Honorable Pete Hoffman July 2007 Page 2 of 3 affordable housing. On Apri120, 2007, after almost two years of litigation, SunStone obtained approval of its Special lvlanagement Area Use Permit Application for the development of 289 multiple family residem:ial units, commercial improvements and related parking and landscaping improvements ("SMA OS-005"). See Findings of Fact, Conclusions of Law, and Decision and Orde:;, approved by the Planning Commission on March 16, 2007, and filed Apri120, 2007 (the "D&O"). Prior,lo the Planning Commission's filing of the D&O, on February 13, 2007, Corporation Counsel, oe1 behalf of Planning Director Christopher Yuen, and SunStone, had stipullated to a proposed Findings of Fact, Conclusions of Law, and Decision and Order Recommending Approval of Special Management Arca Use Application (SMA No. OS-005) (c'Sfrpulated D&0"). In light of our negotiations with Mr. Yuen and the County over SMA OS-005, Sunstone was :hocked to read Mr, Yuen's letter transmitting Bill 112 to the Hawaii County Council dated Apri120, 2007, the same date Mr. Yuen sent us a copy of SMA OS-005. Apparently the entire time SunStone was negotiating in good faith on SMA OS-005, the County was plotting a new affordable housing scheme. Had SunStone known of the County's intention to exact affordable housing from previously rezoned and entitled property, it would have entered an affordable housing agreement as part of its negotiations with the County over SMA OS-005. SunStone belie ves the County's actions vis a vis SMA OS-005 and Bill 112 have been arbitrary and capricious, resulting in a violation of SunStone's Constitutionally protected rights of due process and equal protection. SunStone also believes it is unfair to apply Bill 112 to the Property because SunStone has spent a substantial sum of money in reliance of Ordinance 87-47, SMA OS-005, and the County's official assurance, pursuant to the Stipulated D&O and SMA 05-005, that SunStone tnay proceed with development. On all fronts SunStone has proceeded in good faith, and has every right to rely on SMA OS-005 as the County's final discretionary permit required before development of the Property. 13aving spent approximately $500,000 in processing and negotiating SMA 05-005, plus :financing and soft costs, SunStone has the right to develop the Property without complying with Hawaii County Code, Chapter 11, and as it maybe amended by Bill 112. SunStone has a vested right to develop the Property. Unless Bill 112 is revised to take SMA. OS-005 into accocmt, passage of Bill 112 will result in an unconstitutional interference with SunStone's real property rights. Under Bill 112 as currently drafted, projects exempt Chapter 11 include: (i) those for wlrich the County has previously agreed as to the specific means of satisfying the affordab4: housing requirements (1-lawaii County Code Secflon 11-17(a)); and (ii) any preliminary map for condominium property regime which has received tentative approval as of the eflective date of'the passage of Bill 1 ] 2, or any plan approval for which the application has been received and a.eknowledged prior to the effective date of the passage of Bill 112, or any condominium property regime or plan approval within an area which had affordable housing requirements that have been previously fully satisfied. (Bill ] 12, Section 11-17(b)). Although these exceptions address certain claims of vested rights, no exception is readily applicable to SunStone, holder of a valid SMA Permit. A landowner acquires a vested right to proceed with land development when the landowner has in good faith relied on, or changed position because of, some governmental act or