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Honorable Angel Pilago, Chair April 7, 2008 Page 2 the numerous legal defects with the proposed Downzoning mean that the Council cannot comply with the Planning Director-Initiated Downzoning at this time. The Downzoning is illegal for the following reasons: (a) it amounts to a taking without compensation; (b) it is a violation of Kohala's rights of substantive due process; (c) it is a violation of Kohala's rights of procedural due process and possibly in violation of Kohala's rights to equal protection under the laws; and (d) it contravenes Hawaii's Environmental Protection Act, Chapter 343, Hawaii Revised Statutes. 1. Taking Without Compensation Currently Kohala has the right to develop 50 single family lots on the Subject Property. Under the Downzoning, Kohala would be able to develop no more than 7 single family lots. In other words, in enacting the Downzoning the Council would make Kohala suffer an 85% reduction in the number of permitted lots, a huge taking of Kohala's property interests. This matter is best explained by Professor David L. Callies, property law professor at the William S. Richardson School of Law and published author of numerous books and articles on the law of takings. Please see Professor Callies' letter to me, dated March 25, 2007, enclosed herein as Exhibit A. II. Substantive Due Process Violations The right of substantive due process (protected under the U.S. and Hawaii State Constitutions) means that an individual is protected from unfair and arbitrary governmental action. Governments cannot be discriminatory and apply laws with an "evil eye" or "an unequal hand." The Downzoning smacks of bias; it is unfair, irrational and arbitrary, and if passed will give rise to Kohala's claim for denial of its rights of substantive due process.] Why is Kohala being targeted as the sole landowner to face such an involuntary downzoning? The County simply does not do this. In fact, over the past 8 years, the County has not processed any involuntary downzonings. According to the Planning Director, the last involuntarily downzonings occurred in 1982, more than 25 years ago, and even those 1982 downzonings were in response to the General Plan amendment in 1979. This history is more fully described in my letter of March 18, 2008, to Chairman Rodney Watanabe and copied to you. Since Kohala's first appearance in front of the Planning Commission in July 2007, we have been asking "why Kohala LLC?" Seven months later, with the benefit of a lot more research into the Planning Department's files, we still do not understand why the Planning Director has decided to make Kohala LLC the sole target for the Downzoning. i A very recent Ninth Circuit decision made clear that property owners have independent causes of action with respect to takings claims and due process claims. In other words, Kohala is free to file an action on its takings claim (taking of property without just compensation) separate from any due process claim (victim of irrational and arbitrary land use regulations). See Crown Point Development, LLC v. City of Sun Valley, 315 F.3d 851 (9th Cir. 2007).