Loading...
HomeMy WebLinkAbout2020-08-20 Leeward Exh C (AMEND REZ 2004-024 & AMEND REZ 2004-025) LEEWARD PLANNING COMMISSION COUNTY OF HAWAII HEARING TRANSCRIPT AUGUST 20, 2020 A regularly advertised continued hearing on the applications of SUFFOLK INVESTMENT LLC (AMEND REZ 2004-000024) and PUAA DEVELOPMENT LLC (AMEND REZ 2004-000025) was called to order at 1:19 p.m. via livestream online meeting, with Chairperson Nancy Carr Smith presiding. COMMISSIONERS IN ATTENDANCE: Nancy Carr Smith, Perry Kealoha, Max Newberg, Mark Van Pernis, Michael Vitousek and Faith "Faye" Yates ALSO IN ATTENDANCE: J Yoshimoto, Esq. (Counsel for the Commission), Michael Yee (Planning Director), John Mukai, Esq. (Counsel for the Planning Director), Christian Kay (Planner), Maija Jackson (Planner), Jeff Darrow (Planning Program Manager), Alex Roy (Planner), Tracie-Lee Camero (Planner), Rachelle Ley (Secretary to the Planning Director), Kim Tanaka(Board and Commission Secretary) and Noriko Sauer (Leeward Planning Commission Secretary) APPLICANT: SUFFOLK INVESTMENT LLC (AMEND REZ 2004-000024) Continued hearing on an application to amend Condition B (Time to Pay Water Deposit), Condition C (Time to Complete Construction), Amend Condition D (Delete Rental Housing Restriction), Amend Condition E(Delete Requirement for Supplemental TIAR), Amend Condition F (Roadway Improvements), Amend Condition H (Location of Spine Road within Project Site), Amend Condition I(Kuakini Highway Improvements), Amend Condition U(Requirement of a 5-acre School Site & Improvements), Amend Condition V (Fair Share), Amend Condition X(Affordable Housing Requirement& Change Housing Program Approving Authority), and Amend Condition Z (Administrative Time Extension) of Ordinance No. 05-113. Ordinance No. 05-113 reclassified the 14.872-acre property from Agricultural-5 acres (A-5a) to Multiple-Family Residential-2,500 square foot(RM-2.5) in 2005. The subject property is located west(makai) of Queen Ka`ahumanu Highway and east(mauka) of Kuakini Highway and the Kahakai Estates Subdivision, approximately 2,200 feet north of the Queen Ka`ahumanu Highway - Kuakini Highway intersection, Puapuaaiki 1st North Kona, Hawaii, TMK: (3) 7-5-017:019. APPLICANT: PUAA DEVELOPMENT LLC (AMEND REZ 2004-000025) Continued hearing on an application to amend Condition B (Time to Pay Water Deposit), Condition C (Time to Complete Construction), Condition E(Delete Requirement for Supplemental Traffic Study), Condition F (Roadway Improvements), Condition H (Location of Spine Road), Condition I (Kuakini Highway Improvements), Condition V(Requirement for a 5-Acre School Site and Improvements), Condition W (Fair Share Contribution), Condition Y (Affordable Housing Timing), Condition Z (Housing), and Condition BB (Administrative Time Extension) of Ordinance No. 05-115. Ordinance No. 05-115 reclassified the 14.973-acre property from Agricultural-5 acres (A-5a) to Neighborhood Commercial-20,000 square feet(CN-20) in 2005. The subject property is located west(makai) of Queen Ka`ahumanu Highway and the Pualani Estates Subdivision, and 1 EXHIBIT C about 1,400 feet north of the Queen Ka`ahumanu Highway - Kuakini Highway intersection, Puapuaaiki 1st and Puapuaanui 1st, North Kona, Hawaii, TMK: (3) 7-5-017:001. Secretary's Note: "- - -" indicates that there were technical and/or internet difficulties, which made the conversation inaudible. CARR SMITH: We are moving on to Agenda Items 4 and 5 of which I will read into the record. We know these are long: Agenda Item No. 4, the applicant is Suffolk Investment LLC. It's AMEND REZ 2004-000024. This is a continued hearing on the application to amend Condition B, Time to Pay Water Deposit; Condition C, Time to Complete Construction; Amend Condition D, Delete Rental Housing Restriction; Amend Condition E, Delete Requirement for Supplemental TIR, TIAR; Amend Condition F, Roadway Improvements; Condition H, Location of Spine Road within the Project Site; Condition I, Kuakini Highway Improvements; Condition U, Requirement of a 5-acre School Site and Improvements; Condition V, Fair Share; Condition X, Affordable Housing Requirement and Change Housing Program Approving Authority; and, Condition Z, Administrative Time Extension. This is all of Ordinance No. 05-113, which reclassified the 14.872-acre property from Agricultural-5 acres to Multi-Family Residential-2,500 square feet in 2005. Subject property is located west of Queen Ka`ahumanu Highway and east of Kuakini Highway and the Kahakai Estates Subdivision, approximately 2,200 feet north of the Queen Ka`ahumanu Highway-Kuakini Highway intersection, Puapuaaiki 1st, North Kona, Hawaii. TMK is (3) 7-5-017:019. Agenda 5, the item agenda No. 5 is the applicant Puaa Development LLC. This is AMEND REZ, Rezone, 2004-000025. This is a continued hearing on an application to amend Condition B, Time to Pay Water Deposit; Condition C, Time to Complete Construction; Condition E, Delete Requirement for Supplemental Traffic Study; Condition F, Roadway Improvements; Condition H, Location of Spine Road; Condition I, Kuakini Highway Improvements; Condition V, Requirement for a 5-Acre School Site and Improvements; Condition W, Fair Share Contribution; Condition Y, Affordable Housing Timing; Condition Z, Housing; and, Condition BB, Administrative Time Extension, of Ordinance No. 05-115. This ordinance reclassified the 14.973-acre property from Ag-5 to Neighborhood Commercial-2,000 [20,000] square feet in 2005. Subject property is located west of Queen Ka`ahumanu Highway and the Pualani Estates Subdivision, and about 1,400 feet north of the Queen Ka`ahumanu Highway-Kuakini Highway intersection, Puapuaaiki 1st, North Kona, Hawaii. TMK is (3) 7-5-017:001. Okay. Before we get into the staff presentation, I want to take a moment to mention a concern that I have; we received written testimony from Commissioner Van Pernis that caused me to think that the Commissioner could have a conflict of interest in this case. Mr. Van Pernis, do you feel that you can be fair and impartial in this case? VAN PERNIS: I don't know what conflict of interest you are referring to. I'm sure I could be fair and impartial. If you are referring to the deposition of Mr. Cook that I took, I took that on behalf of [inaudible]Watson. I did not represent Mr. Cook, would not represent Mr. Cook. I saw first Mr. Cook at that time. That was five or ten years ago. So, I, there's certainly no conflict of interest here. 2 EXHIBIT C CARR SMITH: It seems - - - VAN PERNIS: - - - can be fair and impartial. CARR SMITH: It seemed like you had already made up your mind about the applicant— VAN pplicantVAN PERNIS: Well, maybe CARR SMITH: prior. VAN PERNIS: —other Commissioners have made up their minds, too. But I submitted what I submitted at the direction of this Department; the Department got the opinion of legal counsel, and then it went out. If CARR SMITH: speaking of that, J Yoshimoto, our corp. counsel, could you weigh in on this, please? YOSHIMOTO: Okay, thank you, Madam Chair. Mr. Van Pernis is correct; he had asked to, for the best method to distribute his thoughts regarding this particular matter. And so, you know, initially, he had talked about, as I understand it, wanting to bring this with him and pass it out to the members, but because we were having a virtual meeting, he suggested an email. And I said that was okay as long as there is no back-and-forth of discussions regarding this matter in the email, I mean, excuse me, yeah, in the email, so in other words just a one-way transmission. Mr. Van Pernis, is that your understanding? VAN PERNIS: That is my understanding. Thank you. YOSHIMOTO: Okay, and then, so, I do have one concern, or a couple of concerns, to raise with the Commission. With respect to the second point in Mr. Van Pernis's email, his written position, he talks about following up with Mr. Rapoza after receiving testimony. And I want to raise this to the Commissioners' attention because under the Administrative Procedures in Chapter 91 of the Hawaii Revised Statutes, this Commission, when it receives evidence, it receives evidence as a body, as a whole; in other words, no particular commissioner should be going out and doing any kind of independent following-up even with good intentions. And so, it sounds like—and, you know, Mr. Van Pernis can speak to this issue but it sounds like, you know, he did contact Mr. Rapoza regarding something related to this matter, and that's not appropriate. And so if that is the case, you know, my recommendation to the Commission would be either to have a motion to strike that portion because really when you look at it, it's, it's a, again, it's going outside of the scope of what the Commission acts as a body. Anyway, that's, that's pretty straightforward, but I'll be happy to answer any questions regarding that point. CARR SMITH: Commissioners, would you like to weigh in on this? Mr. Vitousek, go ahead. 3 EXHIBIT C VITOUSEK: Sure. My question for corp. counsel is in regards to the first paragraph of Commissioner Van Pernis's email to the Commission, indicating that a line of questioning for an applicant related to a previous deposition in regards to a judgment against his client. YOSHIMOTO: Okay, go ahead. VITOUSEK: It seems to me as though that could create a conflict of interest, if you are using a seat on the Commission in order to get information about previous - - - VAN PERNIS: I do not represent Mr. Watson, deceased now, have not represented him for many years, have retired. I've taken no further action against Mr. Cook who I knew before and after the deposition. And I knew him because we both lived in Kona. And I have not used any information inappropriately - - - intention. If you - - - strike that portion, I have no objection. But I made comment on it- - - CARR - -CARR SMITH: Mr. Vitousek, are you still on? Go ahead. VITOUSEK: Yeah, I just wondered if that's something that corp. counsel could weigh in on. YOSHIMOTO: Okay, so, Mr. Vitousek, you are asking a question as far as whether that representation in the first paragraph in and of itself constitutes a conflict of interest? VITOUSEK: Yes, that's my question. YOSHIMOTO: Okay, you know, my reading of that is that, you know, we, in consideration of what Mr. Van Pernis just represented, I believe that he would have initial burden to say whether he has a conflict. Now, we've just heard him say that he doesn't have a conflict, but he is willing to have that stricken as far as the record for this written portion. It doesn't change the fact that he can still state it for the record as a commissioner, as all of you can in terms of your thoughts, so I mean that might be a way to address it. But if the Commissioners believe that there is a conflict of interest, or if any Commissioner has, is unable to be fair and impartial, then, you know, the Commission can make a motion, you know, after doing its due diligence in terms of establishing a basis. So that's always an option. But I do believe, you know, because Mr. Van Pernis offered to have that stricken, that's an option, too, as well. The large issue of a conflict of interest, Mr. Van Pernis already represented that he doesn't believe there is one, and he can be fair and impartial. But, you know, the Commissioners can follow up with him since, you know, this is an issue that's before the Commission at this point. KEALOHA: So, to be clear CARR SMITH: Perry. KEALOHA: to be clear, it's not corporation counsel's view that there is a conflict. YOSHIMOTO: I don't have an opinion on that right now because I haven't had a chance to talk to Mr. Van Pernis. So in all fairness, you know, we would have to, you know, basically go into the issue—and I see Mr. Van Pernis is raising his hand—because really initially whether someone can 4 EXHIBIT C be fair and impartial, the - - -process begins with the person themselves, right? You yourself would be able to articulate they don't have a conflict of interest. And if people believe otherwise, like I said, the Commission has the ability to address the issue, and if the Commission disagrees, and the Commission could make a motion to have someone recuse because, you know, there is a conflict and they can't be fair and impartial. CARR SMITH: Thank you, J. Any other comments? Go ahead, Mark. VAN PERNIS: First of all, this write-up was a result of the meeting becoming virtual. You may recall that at the prior meeting we were all told this meeting would be live. So I wasn't going to present anything one way or the other at the live meeting other than my opinion stated at that time, at this meeting. Then I was informed that this meeting was virtual, and I inquired how do I communicate with these other Commissioners, will you give me their emails? And the answer was no. So I said, well, then get corporation counsel tell me how to communicate with them. And I said I did not want to have any response or exchange or conversation,just my information. And I followed those directions. So if somebody feels I did it wrong, they could talk to corporation counsel or Noriko, because I asked for their instructions. Secondly, I don't think that the Planning Commission, or Commissioners, are to shut their eyes and not be, and their memories as to anything that happens outside the meeting. For instance, it involves traffic matters. Are we not to talk about our experiences or observations? Are we to act in isolation? Thirdly, I don't think when and if a decision is made by a commissioner, an inquiry has to be made when did you form this opinion, or when did you change your opinion, or that sort of thing. So, I think I acted properly in these matters, and I regret the Chair[inaudible]. CARR SMITH: Okay, thank you. Mr. Newberg, go ahead. NEWBERG: Hi, thank you, Chair. I would just like to state the obvious that beyond this Commission, which I feel personally is honored to be a part of, one, I would hope that as we are a body together that this doesn't happen again. It's imperative that the community at large that we hopefully serve the best of our capacity knows, without a boundary of doubt that we are on all the same playing field here. And furthermore, I think it points to what we all do as a profession outside of this voluntary position that, that I don't care to be part of anything that tarnish anyone's reputation personally or endanger the trust of the community at large of what we are here to do. And I, my hope isI don't know what we can do to regain that—but my hope, and I think this goes without saying, these communications don't have. Thank you. CARR SMITH: Thank you, Max. VAN PERNIS: - - -point out nobody saw this but the Commission. CARR SMITH: I didn't understand what you said. 5 EXHIBIT C VAN PERNIS: Nobody saw what you are talking about this email but the Commissioners and the staff. CARR SMITH: It became a part of the package, and then it becomes public record, so. VAN PERNIS: That was the choice of the staff and the counsel. CARR SMITH: Right, well, but it is a fact. So I have some comments. Having said that, the email in my opinion shouldn't have been sent to us, but, but the decision was made to send it, and I respect that. But I feel like this was testimony, and from a commissioner, I feel that this type of testimony should be made at a meeting as opposed to outside of a meeting. When Mr. Van Pernis decided to share why he sought the bankruptcy information in the February meeting, I think it became clear that there was a personal issue here, and it seemed that that caused you to continue, based on your behavior in that meeting and the subsequent June meeting, that your mind was made up and you wanted us to understand where you were coming from. That raises a lot of concerns for me about fairness and impartiality. In your email, you are trying to convince us that we need to vote this down. You talked about the application, the applicant not being the applicant, I think that's inappropriate. It's not your responsibility to conduct your own investigations, and that talks to Mr. Rapoza's situation as well. It's not up to you to conduct your own investigation. The Rules stateI'm not done, Mark, hold on the Rules state that if we are going to be investigating things, we decide as a board, as a group, that, you know, you go out and do this, you go out and do that. And that wasn't the case; you took that upon yourself. The part about the traffic study, I don't think that you are an expert in traffic studies, so I don't think it was appropriate for you to push that subject home hard like you did. And I just,just the fact that you are trying to tell us how to vote on this makes me really uncomfortable; it doesn't seem ethical to me. And all of that puts aside the fact that I don't like applicants being treated poorly. That's not why we are here. And I, like Max said, I hope this doesn't happen again. And I, so I continue to question whether you can be fair and impartial. VAN PERNIS: Fair and impartial, and which I point out that I believe it was Mr. Vitousek who raised the issue who the real applicant was and it was difficult to discuss the matter without knowing who the true applicant was. And this matter was also raised by Mr. Fuke. Secondly, you yourself in one of the proceedings here indicated how you were going to vote and why, in one of the earlier proceedings today - - - members, too, as well. I think our job is to tell people what we think and try to convince them to go one way or other- - - isolation - - - everybody guess at the last minute CARR SMITH: I think our job is to — 6 EXHIBIT C VAN PERNIS: I can be fair and impartial, and the information in this write-up was all contained, all contained, all the facts were contained in the information submitted by the applicant- - - etcetera. I don't think it's improper for me to say I drive these streets and this is what I observe. Other people here have talked about what they have experienced in Waikoloa. I think that our job is to represent the people of Kona, not the developer. CARR SMITH: The developer is also a resident of Kona. I don't think that's the issue here. And maybe it's not, even if it's not,property owners have rights. And so I think our job here is to listen to the staff recommendation, listen to the applicant, listen to public testimony and make a decision based on that, not, not based on an email from you outside of the meeting. Mike, go ahead. VAN PERNIS: I am a commissioner, I think I'm entitled to my opinion CARR SMITH: You are, within the VAN PERNIS: —and express it. I sought expertise from the staff and counsel on how to disseminate at virtual meetings - - - CARR - -CARR SMITH: - - - VAN PERNIS: - - -virtual meeting. It wouldn't have happened, if this meeting was live - - -virtual - - -this at a live meeting. I handed it out to save time at a real meeting. VITOUSEK: This CARR SMITH: Go ahead, Mike. VAN PERNIS: - - - VITOUSEK: I just want to say that, Commissioner Van Pernis, I personally don't have an issue with the method in which the information was distributed to us. I think, you know, getting it run by corporation counsel and sending an email with your opinions in advance of the meeting, I don't, I personally don't have a problem with that aspect of it. My concern is the content of the material. And, you know, I would be comfortable moving forward, if that were stricken from the record, the material relating to your private investigation call with Mr. Rapoza and, you know, the information about the previous deposition on a previous judgment; I don't think that material is appropriate to discuss with Commissioners. I don't mind you sharing your opinion via email. To me, it's about the content, and I don't think that content is appropriate. VAN PERNIS: I think I- - -to investigate, but I would agree to have stricken two, that those portions be stricken. I - - - asked Mr. Rapoza whether he would be here so I could talk to him or question personally; he said he was putting it on record, and he said he was not going to be here. So how else was I to get it? 7 EXHIBIT C VITOUSEK: Again, I think the attorney, our corporation counsel, has made it pretty clear that we are to receive information as a whole, so we can't go out and seek information individually; we have to be receiving it as a whole in compliance with Sunshine Law. VAN PERNIS: I appreciate that, Mr. Vitousek, and I stand corrected. Nobody told me that before I was a commissioner. But, again, Mr. Rapoza was not going to appear so all you folks could hear what he had to say. So I've repeated what he said to me. But if you feel that's inappropriate, the only way is get somebody in front of you guys. I'll agree with it being stricken. CARR SMITH: I'm not an attorney, but I believe that become hearsay. I mean unless it's at our meeting and presented to all of us, it's, it has no value in my opinion. Anybody else? VAN PERNIS: It's your opinion. I think others - - - entitled to opinion. CARR SMITH: Well, my opinion, Mr. Van Pernis, also is based on your February performance for some reason that's the word that comes to mindI think you should have recused yourself then. But you didn't, and that's neither here nor there at this point. But I don't think it was appropriate. And so here we are. So what are we going to do about this, Commissioners? YOSHIMOTO: Madam Chair? CARR SMITH: [Responding to Mr. Fuke raising his hand to speak]Yeah, I'm not sure it's appropriate yet, Sid, for us to hear from you, thank you. YOSHIMOTO: Oh, no, this is J, Madam Chair. CARR SMITH: Oh, well, Sid was waiving at me. I can't see you, you are too far away - - - YOSHIMOTO: - -YOSHIMOTO: Okay, I just want to take the matters one at a time. So my understanding is that- - - I made a suggestion, and Mr. Van Pernis was agreeable to them [audio issue]there you go. So if we can have a, if the, if the Commission wants to make a motion to strike the portions of concern, then we can get that out of the way. And then we can move on with whatever else the Commission wants to proceed. VITOUSEK: I would make the motion to strike those two items from the testimony: the first regarding the previous deposition and the second regarding the discussions with Mr. Rapoza. KEALOHA: I will second that. CARR SMITH: All right. There is a motion to strike paragraph one and Item 2, is that correct, from Mr. Van Pernis's email? Do I have that right? VITOUSEK: Yes. VAN PERNIS: - - -parentheses refers to the deposition. The reference to Mr. Rapoza is in No. 3 in my memo. 8 EXHIBIT C CARR SMITH: Number 2. VAN PERNIS: And there is a number of things in that section, I think no, it's not- - - CARR - -CARR SMITH: I have the email in front of me, and it looks as though it's paragraph, the paragraph that's numbered "2,"Mark. VAN PERNIS: Number 2. CARR SMITH: The one that says, "The applicants are not the real applicants,"then talks about your conversation with Mr. Rapoza. VAN PERNIS: Okay, so we are strikingI got it—we are striking the reference to Mr. Rapoza, my conversation with him CARR SMITH: We are striking Item No. 2. VAN PERNIS: that would be the first sentence and the CARR SMITH: What is the motion VAN PERNIS: —last sentence. CARR SMITH: Excuse me, Mark VAN PERNIS: First and last sentences of No. 2 and all of the unnumbered in parentheses section beginning with the words, "Some Commissioners." - - -by the way CARR SMITH: - - -that's your input, let's see VAN PERNIS: —one of the commissioners asked me that question. CARR SMITH: Mr. Vitousek, what's your intention on the motion,please? VITOUSEK: The intention of the motion is to strike any discussion on the previous deposition between Commissioner Van Pernis and Mr. Cook, and also to strike any reference to discussions and/or investigation outside of the scope of the Leeward Planning Commission, or reference to Mr., discussion with Mr. Rapoza. CARR SMITH: All right, so that's all of the first paragraph on the email, and on Item No. 2-1 don't know where that ends, unless we just say Number 2 that we strike. You guys have the email in front of you? KEALOHA: I do, and my second was to the assumption that 1 and 2 be stricken. 9 EXHIBIT C CARR SMITH: Not 1 and 2 but the first paragraph and then the next item that's No. 2. Is that what you mean? KEALOHA: Correct. CARR SMITH: Okay. Mike VAN PERNIS: - - - last sentence VITOUSEK: Yeah, I just called that up and that will work for me. CARR SMITH: Okay. All right— VAN ightVAN PERNIS: Am I correct, it's the first sentence and the last sentence CARR SMITH: No VAN PERNIS: of Paragraph 2 is being stricken? CARR SMITH: No, we are talking about striking the entire first paragraph of your email VAN PERNIS: Yes. CARR SMITH: —and Item No. 2 in whole for ease. VAN PERNIS: But Item No. 2, only two sentences refer to my conversation CARR SMITH: But it's too hard to tell where it ends. VITOUSEK: That's, that's the motion. The motion is the first paragraph and No. 2. CARR SMITH: Yeah, okay, that's, that's the motion VAN PERNIS: striking all of Paragraph 2? CARR SMITH: Yes, we are, yes. VAN PERNIS: That's not based on conversation with Mr. Rapoza. VITOUSEK: I mean, that's the motion, I mean I feel like the information contained in there is information gained from the conversation that I believe is outside of the scope of the Commission. So that's the motion that I made, and I think that's what Commissioner Kealoha seconded. CARR SMITH: Okay. Is this the all-in-favor kind of vote? Whoever is going to 10 EXHIBIT C VAN PERNIS: Well,just,just let me say that Spring Development itself testified that it was going to be the developer. CARR SMITH: That's fine, because that's in our minutes. It's VAN PERNIS: And Mr. Vitousek brought up it was difficult to negotiate without knowing who the real developer was. CARR SMITH: All right, so we've got a motion on the table. Is this a roll call vote or—would staff or somebody help me? Corp. counsel, what kind of vote am I taking? YOSHIMOTO: Madam Chair, I would recommend a roll call vote. KAY: I'm prepared to do that, Madam Chair. CARR SMITH: Thank you, Christian. Go ahead. KAY: All right. Commissioner Vitousek? VITOUSEK: Aye. KAY: Commissioner Kealoha? KEALOHA: Aye. KAY: Commissioner Newberg? NEWBERG: Aye. KAY: Commissioner Van Pernis? VAN PERNIS: No. KAY: Commissioner Yates? YATES: Aye. KAY: And Chair Carr Smith? CARR SMITH: Aye. KAY: Thank you. Madam Chair, motion carries, five-one. CARR SMITH: Thank you. So, with some of the testimony stricken, are the Commissioners completely comfortable with Mr. Van Pernis being a part of this case going forward? Anybody have any objections, I guess I should say? 11 EXHIBIT C KEALOHA: I will say I was uncomfortable when I read it as well; however, in listening to corp. counsel and the, Mr. Van Pernis about having sought corp. counsel's advice, I'm comfortable once the two items are stricken. The original email felt like testimony to me. CARR SMITH: Thank you. Anybody else? NEWBERG: Yeah, I would echo that as well. I trust corp. counsel in this regard, and, you know, let's stay within Sunshine and observe all the regulations as a group. CARR SMITH: Okay. I guess we will proceed then. Mr. Van Pernis, I would just like to let you know that I'm not comfortable; I do think that you have a conflict, I think that you've got a personal issue here, and I don't really like the way it's come across so far. I'm just going to remind you that the code of ethics requires fair treatment and then all people be treated in a courteous, fair and impartial manner, and if I feel like that's not happening or that you go out that boundary, then we'll deal with that, okay? Can you acknowledge VAN PERNIS: I believe I follow those instructions while we are representing the people of Kona. CARR SMITH: I don't know what instructions you are talking about. VAN PERNIS: The Board of Ethics rulings. CARR SMITH: It says—never mind, that's a whole other thing. Okay. Did you understand what I just said, though? VAN PERNIS: Well, if you would restate it, please? CARR SMITH: I said that I personally feel like, still feel like you have a conflict, and it's based on the way you acted and spoken to the applicants in the previous hearings. So I just wanted to mention that in the code of ethics it says that all people shall be treated in a courteous, fair and impartial manner. And if I feel like you are not doing that, then I will take action at that point. Do you understand that? VAN PERNIS: I understand that, but— CARR utCARR SMITH: Okay. VAN PERNIS: I do not believe that applied to asking questions of the various witnesses. CARR SMITH: Your line of questioning will be determinedwe'll, you need to, you need to be courteous. That's why we are all here; we are all here to help the community, okay? So we are not here to help certain people. All right, enough of all that. Let's proceed. 12 EXHIBIT C All right, Christian and Maija are going to give us a presentation, and hopefully, it's, we've, we've seen it a couple of times already, so if you can give us un update,please, and let us know about anything new that has transpired. KAY: Sure, so I'm going to share my screen. This is basically just a status update. Can everybody see the screen and hear me? Okay, great. Again, not going to go into the particulars of the application, again, since we've heard this a couple of times, I just want to give you an update on what has taken place since we last met in June. We scheduled a meeting with the applicants and Spring Capital on July 6h. That meeting was postponed till July 16'h at the request of the applicant due to scheduling conflicts. The reason I'm mentioning this is I just wanted to let it be known that we were working on finding a good time for everybody to be involved very quickly after the last meeting, so we weren't dragging our feet; so even though we were about a month since the hearing that we were finally able to meet, it was all done in good faith. Prior to the meeting, Spring pardon me the applicant asked us to essentially provide a kind of what it is that we would need to get to a favorable recommendation. And, basically, we provided a couple of things. So the purpose of that in our mind was to develop the Kahului-Puapua`a Neighborhood TOD to closely conform to the Goals, Policies, Actions and Guidelines of the Kona CDP while not requiring Project District zoning, which in our unfavorable recommendation, we offered as an alternative to the amendments to these two zoning designations. In addition, we made a few requests. The first was to rezone the Suffolk property, and that's TMK 7-5-017:019, that's the one that's currently a Multiple-Family Residential, to Neighborhood Commercial to match the Puaa project—pardon me the Puaa property. The purpose for that was to, in order to kind of develop this TOD as the CDP envisions, making the zoning the same would allow for a greater density and expand the permitted uses, and that's going to help better facilitate the development of that, again, mixed-use, walkable Neighborhood TOD, as we, as the CDP envisions. The next was we requested that the applicant develop a master plan in close conformance with the requirements outlined in the CDP to be the basis for new conditions of approval. Again, this is a requirement of the CDP to have a TOD developed under a master plan, and because there were still a lot of questions and a lot of requested amendments, we didn't really feel comfortable moving forward without really kind of a well-thought-out comprehensive master plan upon which conditions could be placed in order to move forward the development of a TOD. And then the third, we requested that the draft master plan be developed prior to this body acting on the amendments requests, or acting on whatever came out of that, in order to have it be vettedoh, and also to have it be vetted by the Kona CDP Design Center to ensure conformance with the intent of the Kona CDP as is laid out by the CDP. Ultimately, this is again what we would feel comfortable with moving forward to ensure that we could get to where we needed to be in developing this project as a whole; we were not being very rigid and saying, okay, you've got to go Project District, which is 50 acres, which would trigger a State Land Use Boundary Amendment, and things like that. Again, hearing from the Commission saying take the time you need to try and get to a positive, or favorable, recommendation, working with the applicants. During that meeting the Department and the applicants were able to agree to some of the requirements, for instance, the applicant agreed to rezoning the Suffolk property as long as it could be done quickly, as just a letter to the Department requesting the change and not having to go 13 EXHIBIT C through a full rezone process. The Director agreed to that. And also, they agreed to develop a master plan, but something that would have to be done as a condition of these rezone amendment requests and something that would ultimately be implemented through Plan Approval. And also, throughout the meeting and even before the meeting, it was very clear that the driving force from the applicants was getting to hearing at the PC in August or September and getting to the County Council as quickly as possible. So ultimately, at the end of that meeting we were unable to come up with an agreement based on what we needed to feel comfortable moving forward and the applicants' desire to really move this forward very quickly. After the meeting, the applicant sent an email with an updated site plan and a draft transect plan, which was submitted to you in the applicant's August 3rd transmittal, and it's what they called a master plan. They thought this would satisfy the requirement for a master plan. In our initial request, we asked, we were very clear on what the components of a master plan, the minimum requirements for the components of a master plan would entail; they thought that these two maps essentially would constitute that. They also requested that that the Design Center complete and expedite review by the end of July 2020. So they got this to us on the 16'; it would have given the Design Center about two weeks to review the two documents they provided. On July 21"the Director responded to the applicants' request, determining that the updated site plan and draft transect map did not meet the minimum requirements that we laid out ahead of time to warrant Design Center review, and asked them to submit a draft master plan more consistent with the CDP requirements with the intent to reach a more mutually acceptable outcome as was requested by the Commission at their June meeting. Instead, the applicant was very clear that anything that was going to take more time was unacceptable and requested that we conduct today's meeting to have the PC consider updated draft favorable recommendations and associated conditions for both rezone amendments that were supplied to you in their August 3rd submittal. So at this point I think we have, we are going to lay out some next steps. There are a couple of options that the Commission has. As the parties were unable to come to an agreement on how to move forward with a favorable recommendation that you requested, the Commission has the following options to consider: The first is to forward an unfavorable recommendation to the County Council either based on the Director's recommendation or for other reasons that the Commission may articulate; or, the second is to forward a favorable recommendation to the County Council, providing appropriate justification, as well as recommended conditions of approval, that can be a favorable recommendation that's based on what the applicant has submitted or it can be, you know, other reasons that the Commission may have to move this forward, and appropriate conditions. The applicant has submitted those, the body of a favorable recommendation, as well as conditions, proposed conditions of approval. Should the Commission desire to forward a favorable recommendation to the County Council based on those, the Planning Department would like to propose amendments to some of those conditions as proposed to ensure they are consistent with agency recommendations that we received to this point, as well as to make sure they are consistent with our standard condition language. With all that, I want to say, so we had some discussion about Mr. Van Pernis's email, there were the two transmittals, a letter from the Planning Department and a transmittal from the applicants, and the finally, yesterday you should have received an email from the Pacific Resource Partnership 14 EXHIBIT C testimony in opposition to the amendments that was sent out by email. So at this point that's the entirety of the additional correspondences that we've received. With that, I'm happy to answer any questions the Commission may have. One last thing, I also have pardon me—also added the updated site plan, as well as the transect map that the applicant supplied, if we want to, you know, reference that in our, in our discussion. With that, I'm happy to answer any questions the Commission may have. CARR SMITH: Thank you, Christian. Could you perhaps hide your screen for the moment? KAY: Sure. CARR SMITH: Thank you. Great. Commissioners, do you have any questions for staff? Max, go ahead. NEWBERG: So, is the request in exemption for the affordable component still in place? They are asking to not provide any affordable housing through the project? KAY: I believe that their conditions that they were initially asking relief from, they've gone back and put those conditions back in. So in terms of the Suffolk proposal, the requirement that the housing, the rental housing for 20 years was put back in, as well as the representation that at least 20 percent would be, of the units would be at 80 percent AMI and then the remainder would be at 120 percent AMI. So those two initial requests to remove those conditions have been put back to the way the conditions initially read. NEWBERG: Thank you. CARR SMITH: Thank you. Anyone else have questions? Mr. Van Pernis? VAN PERNIS: Yes, Christian, does that affordable housing requirement require construction of affordable housing, or does it provide the opportunity for some sort of substitution of land or credits or whatever so that affordable housing is not integrated into the project? KAY: I believe that the housing condition requires actual housing be built on site and does not allow for the use of kind of affordable housing credits. So I do believe that their requirement to build on site is, was part of the original condition, and as that is going to be retained, that, or now proposed to be retained, that would be incorporated. CARR SMITH: Anyone else? Mike. VITOUSEK: - - - sorry, is the, so the application that the applicant is putting in the revised recommendation is maintaining the existing RM zoning? KAY: That's correct. Maija has got her hand raised, Madam Chair. CARR SMITH: Hi Maija, go ahead. 15 EXHIBIT C JACKSON: - - - KAY: - -KAY: Maija, we can't hear you. CARR SMITH: Unmute. KAY: You are still muted. JACKSON: Thank you. So I just want to offer one point of clarification. The current housing conditions for Suffolk and Puaa are different. Only the Suffolk ordinance currently requires the 20 percent at 80 percent AMI. The Puaa condition currently does not have that requirement, so if this condition would stay in place as it is, they would just have to comply with the housing code requirements for the Puaa property, which is zoned CN, which they are proposing 100 housing units on it at this time. CARR SMITH: Thank you, Maija. Commissioners? Mr. Van Pernis. VAN PERNIS: Point of clarification—two points, actually. We are treating these two applications as one, so, should the affordable housing apply to both? And secondly, when is this affordable housing supposed to be done; in other words, how long of an extension do they want? Do they want the 25 years, or what? KAY: At this point, Commissioner Van Pernis, they have removed the request for the administrative time extension, and they are asking for a, the timing of the completion of construction is five years to begin construction and ten years to substantially complete construction. We don't have an idea of the definition of substantial completeness, it's, so there could be some subjective interpretations of what that might mean, so it would be good to nail that down. And secondly, there is a condition in the Puaa, the commercial zone property that ties the requirement of the provision of housing, not necessarily affordable housing, outside of these housing code requirement,prior to certificate of occupancy for any of the commercial; so I believe its 50 units need to be under construction and then need to be essentially bonded to complete construction prior to CO for any portion of the commercial, and then if it goes beyond a certain square footage of commercial, then another 50 units would need to meet that same requirement. The timing requirement for Suffolk would be, you know, have to do with the five years to start, ten years to complete, as substantially represented within that ten years. Anything beyond that would then have to come back to the Planning Commission and County Council for additional time if necessary, as is, as is proposed by the applicant. To your question as to, or your thought about how this is being treated as one project, we kind of have been doing that, but to be clear, these are two separate ordinances that have conditions, on each of those ordinances that the applicant is asking you to consider proposed changes to. As commissioners, if you feel like the conditions should apply to both ordinances, you have the opportunity to propose that. 16 EXHIBIT C VAN PERNIS: So in essence you are saying they are asking for up to 25 years from the original KAY: No, sir, what I'm saying VAN PERNIS: —original— KAY: yeah, I'm, I'm telling you what they are asking for right now moving forward. Where we are at right now is we accepted the applications for time extension and we are where we are at. So from 2004 to here, 2020, they are asking for an additional ten years to complete, for substantial completion of construction. VAN PERNIS: And what happens, if they don't meet their requirement? KAY: Then they have an opportunity to come back and ask for additional time, or the Planning Director has an opportunity to start proceedings for a reversion or change it to a more appropriate zoning as the condition allows. CARR SMITH: Thank you, Christian. Are there any more questions for staff? All right, very good, thank you, Maija and Christian. Let's move on to the applicant's presentation. I'm trying to see who we have on here. Sidney Fuke is here. Ken Van Bergen, are you on? Randall Okaneku, you are here. Yes? OKANEKU: Yes. CARR SMITH: Thank you. Do you have anyone else, Sid, that's part of your group? I don't know who this one phoned. Somebody is calling in that's from a 557 number. Is that part of your group? FUKE: That's—can you hear me? CARR SMITH: Yes. FUKE: Yeah, that's probably Ken Van Bergen calling in, because he had to leave, and then so he mentioned that if there is a need for his verbal testimony CARR SMITH: Okay. FUKE: - - - CARR - -CARR SMITH: Okay, and is Brian Cook here today? FUKE: Yeah, Brian is over here sitting in front of me, yes. CARR SMITH: Oh, he's with you, okay, all right. All right, so all of you involved, I'd like to swear you in all together,please. Anyone who is going, planning on speaking, raise your right hand. Do you swear or affirm to tell the truth in this matter before the Leeward Planning Commission? 17 EXHIBIT C REPRESENTATIVES: I do. CARR SMITH: Thank you. All there, thank you. Okay, go ahead and begin your presentation, your update,please. Mr. Fuke, I assume you are starting. FUKE: Can you hear me? CARR SMITH: Yes. FUKE: Okay. Thank you very much, Madam Chair and Members of the Commission. I'd like to go on record to note that- - -we heard the discussion regarding Commissioner Van Pernis. And from the applicants' perspective, we cannot help but feel like this is like a personal bias against Mr. Cook, and so that in and of itself should be justification for a recusal from this hearing of these applications. In the alternative—and I know the decision had been made, and we accept his participation then we would respectfully request the Chair direct his questions or commentary to on a one-person basis, and so that's what we are asking for CARR SMITH: Sorry, what do you mean by the one-person basis? FUKE: I'm sorry? CARR SMITH: What do you mean by that? Just so - - - FUKE: - -FUKE: Yes, specifically, like if you, you know, look at his email and, you know, there are two portions that the Commissioners had decided to - - -. The first portion, if I were Mr. Cook, I'd feel kind of like rather- - -was a personal thing saying that, you know, he was kind of- - -bankruptcy and his only income was Social Security, so on and so forth, you know. I don't think they really have much relevance to the nature of the applications. What you are considering right now is a land use application; you are not screening on Mr. Cook being a member on the board- - -regulatory agency. So I think those kind of- - -uncalled for. Comments relating to, you know, the traffic impacts, so on and so forth, they are definitely germane, you know, to the application. And we would ask that the Chair make sure that the comments are limited to the nature of the application and not necessarily who the applicant was or is. CARR SMITH: Understood and agreed. Thank you. FUKE: So, inasmuch as like, you know, I had to - - - listening to Christian's presentation because I got kind of like - - -there is a lot of- - - information, and planners have been devoted to do this application. And we are at the stage where kind of like making our final oral arguments to this panel, this panel of judges, the Commission. Before I summarize, I, you know, I had—Ken was on the phone, and I think he is going to be back on—but basically, he was, you know, going to commit that on behalf of his client, Spring Capital, that they stood ready, willing and able, you know, to do the project, subject to the outcome of the pending request. We also have Mr. Cook and Randall Okaneku standing by in the event that there are questions that are needed for him to, for them to answer. 18 EXHIBIT C And the August 3rd letter I submitted, I hand-delivered the applicants' position and proposed recommendation and, with conditions, and that pretty much like summarize our position. And I'll kind of like just highlight what I noted in that. And first of all was that the time extension is consistent with the General Plan and the Community Development Plan. This is kind of like, you know, beating a dead horse; we know that the, when the Council considered the General Plan and the Planning Director considered the CDP and the General Plan on extensions, everybody else concluded it was consistent. The plans haven't changed. And yet today we have the current planning director to say, hmm, stop, it's not consistent. So it kind of like boggles our mind in terms of why now, and, where we have documents that have not changed, but now you can take a position contrary. We've also, I also kind of pointed out in that brief letter that this project provides much needed infrastructure in terms of having a new mauka-makai road, and also provides much needed affordable housing - - - more detail, and not to say provides much needed construction, as well as post-construction employment. And I think that we are at the stage, you know, when you deal with the COVID pandemic, I kind of implore in the decision-making like this to kind of like look at the consequences of your decision relative to the message, which you communicate to the broader development community. We also heard at the last two Commission meetings, the Commissioners had expressed concern about the need for affordable housing. As a result, in the August 3rd letter, what I kind of wanted to point out- - - affordable housing. In the beginning what the developer wanted to do was to delete all references to affordable housing obligation that, obligations that were committed to back in 2005. And one of the reasons why was we were saying that just, you know, there is now an affordable housing code which was not present back then. So why don't you have that code be the guiding force? And that was, you know,predominant position on the part of the applicant. However, what was represented then obviously is substantially more than what the code, if you, if the code were strictly applied, what the code would require. The code currently, housing code currently requires 20 percent of the units to be, you know, you need to generate 20 percent affordable housing credit for your total density. Now, that affordable housing credits can be generated in one of three ways: One, it can be on site; two, it can be off site; and, three, if you have credits, you can purchase those credits and use those credits. Now, on this particular property, Mr. Cook already has 40 affordable housing credits that's - - - for this property. He has chosen, and the conditions have also clearly indicated that, number one, you cannot use those credits; number two, you cannot go off site; number three, you are back to square one, you have to development all of your housing, you have to satisfy all of your housing obligation on site. Now, relative to that, in the beginning on the Suffolk, as I think, you know, the staff had mentioned, the existing conditions call for at least—the project is going to be rental housing on Suffolk, it's clear, it's going to be rental housing you've got to rent it for 20 years, and of these units at least 20 percent of those units would have to be targeted at 80 percent of AMI, the balance would be whatever the housing - - -. On the Puaa property, the original request was to say, okay, let's not talk about any housing obligation over there, but the existing condition already called for having a minimum of 50 housing units on the Puaa site, which is a commercial site; we are saying, fine, restore that, you know. The Commissioners have raised concern about the need for affordable housing in this particular area. They've responded, like coming back and saying, look, we'll do it, we will not, we will not seek any relief from whatever was represented - - -. 19 EXHIBIT C Now, we've submitted and, for the Director's consideration, what we call the master plan. I think Christian had shown what we have done, you know. We had Michael Riehm prepare what is called, you know, this transect map and also this master plan, kind of revised master plan, basically showing, you know, where your connectivity is, you know, connection orientations, so on and so forth, they are there. The Director had summarily rejected that; he said like, no, you know, I'm sorry, it doesn't pass the master, so you've got to go back to the drawing board. So, ultimately, what happens is that the Director's position was that we plan to have like a master plan before we can even come before this Planning Commission. Now, I ask yourself this, you know, like I think that's - - - for the applicant is that it gives the Planning Director an enormous amount of discretionary - - -. We can submit a new plan, and he can reject it. We can resubmit again, and they can reject it. When will it end? That's the question, you know. When will it end? And how long is it going to take? So, such that, you know, what we are fearful of is that it may come to a point where this Commission may never see this application - - -, if we had agreed to that condition, Now, the developer, or the applicant, is concerned like, you know, we wanted to have it processed and met two criteria: One was it's got to be transparent; and, two, it's got to be fair, it's got to be - -. So we had thus proposed—and it's shown in Condition X in Suffolk's and Condition Z in Puaa, you know, which was transmitted in my October [sic] 3rd letter—what we had proposed was that we are not dismissing the idea for need for master plan. We recognize, we know what the Planning Director's saying. We are not, we are not saying it's not important. We are saying it's important. But consider this: We are saying that we are having a master plan prepared, this is going to include both properties. Now, this condition, you know, two ordinances, okay, you have a master plan that includes both properties and addresses all of the elements that you are calling formix-uses, walkable community, housing, phasing, whatever have you. So we need to still develop the master plan that incorporates both plats, then to also consider that this is a Neighborhood TOD, Transit Oriented Development, that's the master plan. Now, we are also proposing as a condition that there is a three-day review period by the Design Center, and not like an interminable period; you'll never know once you submit, when you come out. You know, there's got to be that kind of- - - in terms of decision-making. And then, thirdly, then once you have this master plan reviewed, vetted, and that would serve as a basis for Plan Approval. And let me tell you why you want to have it tied into Plan Approval. Plan Approval is a process that basically enables the Planning Director to look at the plan and make sure that it conforms with the General Plan, Community Development Plan, make sure it conforms with the Zoning Code in terms of the setback, the height, the parking, so on and so forth. And if there are any - - - conditions of rezoning approval, then they all have to be addressed. That's your Plan Approval. So the Planning Director has to review that and then make a decision. You know the beauty behind that process? Two things: One is that it gives transparent and equitable—first of all, there is a 45-day time limit from the time the application is filed and the decision-making - - -; two is that if the decision is adverse to the applicant, you know what happens, at least the applicant can appeal the Planning Director's decision to say like it's arbitrary, capricious, it's an abuse of discretion, so on and so forth. If you were to assume the Director's original position of saying we want to have an approved master plan before we can appear before you guys, where is the equity? Where is the, where is the liberty to say, no, we want to come back and see - - -with you, Planning? But we don't have that opportunity. So what we are proposing here is a process that address to see your master plan requirement, but at the same time,provides for transparency, provides for minimal of abuse by the Planning Director. This is absolutely not at all to suggest that 20 EXHIBIT C Planning staff or the Planning Director behave that. But, nevertheless, the applicant has, has concerns, and they just want to make sure that the process is fair to all. Finally, you know, we heard like, too, whether it's to this application or other applications, Planning Commission, you know, like they don't necessarily want to have these administrative plans because, you know, it can go on and on and on. And you want to be able to, you know, to look at the situation, being that I was doing a time extension for Kona Country Club, the residential project by the gold course, and I think Commissioner Vitousek raised an issue, what about the SMA because they want to seethe project and not just kind of like let it go very reasonable. So we are proposing to say like, no, it's not going to be any administrative extensions such that if it cannot comply with the conditions, then it's got to come back to public review through the Planning Commission and the County Council. Who makes a decision in determining substantial plan compliance? The Planning Director has the authority. He can review it untilI know, I just view that, you know, you're having only like there is some kind of nails in the project,that's not substantial they can make that, and we are going to have to make our case before this body to say, yes, it is substantial, no, it's not substantial enough. So, I guess like the bottom line is saying that knowing that, you know, like the what we are doing, we've kind of like restored back the affordable housing condition, all of the phase, and we are saying that we are going to do a master plan, and we've eliminated administrative decision[sic]. From our standpoint, the applicants' standpoint, I think that we've addressed as much as we can, reasonably can, you know, all of the concerns raised by the Department, as well as the Commission throughout the hearings. We are kind of hoping that the Planning Commission would look at the proposed recommendations and conditions that we prepared, the favorable one, and, you know, - - - at the end of the day vote to recommend its approval. I realize that if you take the position and accept the Director's, accept the applicants' position on the conditions, as well as some of Planning's, that there may be a need to make some editorial things, and if it comes to that, we would have no objection to having - - -the stuff,just to make sure that these editorial kind of comments on both the conditions and the Planning's - - - are kind of like consistent with the final action of the Commission. Thank you very much. CARR SMITH: Thank you, sir. Question? Mr. Vitousek. VITOUSEK: Yes, for Sid, my question is if the applicant would be willing to consider the rezoning as proposed by the County, the Neighborhood Commercial. FUKE: - - - one property is proposed like, the existing, the Puaa property is currently zoned CN, and the Suffolk property is currently zoned RM. So, are you suggesting if the applicant would have any objection to having the designation on the Suffolk property changed from RM to CN? And if that's the question, the answer is no. We - - -not having to go back to square one. VITOUSEK: It seems FUKE: If it could be done, you know, like right now, then that would be, you know, we would have no objection, and all of the conditions can still be the same. 21 EXHIBIT C VITOUSEK: And, is that something that can be done at the Commission - - - approval? Is that a question for our Planning staff? FUKE: I have an opinion, but I think I would defer to the staff- - - CARR taff- - -CARR SMITH: Can you repeat that, Mike? VITOUSEK: Yeah, so my question because I tend to agree with Christian that the zoning would be appropriate to - - - development in a Neighborhood Commercial for both properties, and just trying to figure out if there is a way that that can be accomplished here. It seems like the County is willing to do an administrative approval to allow it to be a more simple process. CARR SMITH: Jeff, go ahead. DARROW: Thank you. It's a tough question. There is a process as you go through a Change of Zone application, including the submittal of metes and bounds, creating an ordinance, creating a map that changes the zoning. So it's not something that can be done just by a letter or something; there is a process that has to happen. It, it can happen fast; we can get the ordinance prepared fast, we can get the metes and bounds—we already have them for the RM—but there still needs to be that process done prior to us being able to go forward in approving it. I've never seen it done outside of that in its manner. I don't know if Sid has, but I've never seen it before. I know that we, you are creating an ordinance to be able to change that property to a particular zoning, which, it had been done just by a letter. VITOUSEK: But would it be possible for us to add that as a condition here? If, let's say, if we were going to approve the application that the applicant has submitted, can we say that we are approving this with a condition that a Neighborhood Commercial zoning be sought for the currently RM property? DARROW: Isorry, Sid, real quickI have seen something like that, and that actually occurred in the Waikoloa, Waikoloa Mauka project where they made it a condition to have the applicant go back to the Land Use Commission. With the understanding in this case that the applicant would have to go you've got to make it clear, do you want that CN zoning done before they go to Council at this point or do you want them to go to Council, get approval, and come back and go through the whole process again? So there's, there's some questions that would be to be addressed. CARR SMITH: Go ahead, Sid. Thanks, Jeff. FUKE: - - - CARR - -CARR SMITH: Sid, unmute, please. There you go. Go ahead. FUKE: Jeff had indicated, I'm familiar with the Waikoloa Highlands project when, you know, when that I was listening in to earlier discussion on - - - item yes, you know, that property was originally zoned Ag-I by the County, and subsequently, when they went in for a time extension, there was a requirement that the applicant subsequently change, you know, submit separate zone for 22 EXHIBIT C - - - one zoning. So there is precedent to that. So the way I would look at it is that if there is a condition, for example, an added condition to require the applicant to submit a rezoning application maybe within 60 days after Plan Approval of the, you know, like the standing application, that can be done. And I would think it can be done. And such that, if the CN zoning ends up like in this quagmire that we have right now, then, you know, like, it can be denied. But nevertheless, the applicant has the basic right to proceed based on the current RM zoning. CARR SMITH: Thank you, Sid. Anybody else? Hi Faye, go ahead. YATES: - - - meetings, etcetera, that they went through, and there were some revisions or some changes that they wanted to have made that they said, no, they weren't willing to do it. Does that matter? Or was that, or did I misunderstand that? Based on what Christian had said about making some changes, but, what you call, they said that they could not or would not or. I'm a little confused about that. KAY: I'm sorry, Commissioner Yates, can you repeat the question? I didn't quite catch the first part. YATES: Yeah, well, you said that there were some changes or some suggestions on the, you know, on the Commissioners' part to, they are making some changes or revising some changes, and they said they could not or would not. Or did I misunderstand that? CARR SMITH: - - -, yeah. KAY: Yeah, if I understand your question, at the June meeting there was a motion to move forward with, to try and have the County and the applicants, as well as the prospective buyer, try to come to a mutual agreement to move forward with a favorable recommendation. As part of that process, the applicant asked us to kind of lay out what we would need as the County to move forward with a favorable recommendation, to move from our unfavorable, which was based on our analysis of the General Plan, the CDP, and all the other reasons, we went unfavorable, to try and get to a favorable. During that time we did lay out those three steps, one of which was to rezone the Suffolk property to CN, to develop the master plan and the conditions based on that master plan, the master plan being consistent with what the CDP asked for in a master plan, and third being that the master plan be vetted by the Design Center prior to coming back to the Planning Commission. It was on that point, or the, essentially, the points that would take more time beyond August or September of this year, the applicants seemed very uncomfortable, or did not want to move forward with those suggestions. Based on that, we were headed impasse, and those were the things that I was saying the applicant wasn't willing to do. And I think Sid just kind of confirmed that in his testimony before based on his reasoning. YATES: Okay—excuse me but the other previous conditions that, or concerns that we had as a Commission, all those have been addressed KAY: Um, the 23 EXHIBIT C YATES: you know, something about, something about schools, something about the roads, you know, those kinds of things. Those all are to be addressed or have been addressed? KAY: So the applicant in their most recent proposed favorable recommendations have asked, have gone back from asking for relief from a lot of those—affordable housing questions and issues like that. So, I think with the school, the condition there is, their request there is to still delete the school-related condition, and no, nothing else beyond that,just a deletion of that. And the justification was in I believe the applicants' previous, or the original application, or their previous favorable recommendation,probably the original application. But you want to have, Sid might be able to reiterate the reason behind that. At any rate, several of the conditions they were asking relief from, they've gone and put those back in in their latest favorable recommendation. If that answers the question I think you are asking. YATES: Okay, thank you. CARR SMITH: Did you want to respond to that? YATES: Yeah, my concern is still regarding traffic because, you know, that area is so terrible and, you know, that's where I'm concerned, you know, how are they going to address that? CARR SMITH: Well, maybe that's an appropriate time to finally let Randall speak. He's the traffic expert on this. And you were with us all last two meetings and didn't get to say words. Do you want to address what your findings were? OKANEKU: Thank you, Madam Chair. My name is Randall Okaneku. I'm with the Traffic Management Consultant, and I prepared the traffic impact analysis report for the Pualani Makai. And the traffic impact analysis report was prepared in accordance with the Hawaii County Code concurrency requirements. And the concurrency requirements say specific guidelines for preparation of the report. Among those are traffic mitigation for any onset unacceptable level of service, you know, within a five-year period. The traffic study has recommended mitigation measures that would improve the level of service to acceptable levels within a five-year period, and we estimate those mitigation measures to maintain those acceptable levels through a ten-year period. Beyond that, the 20-year forecast would require a major rezone type of improvements to bring back the level of service to acceptable level. And there's, there's several projects that the traffic impact analysis report points to, none of which are within a five-year period, maybe not even a ten-year period, but they are on the books, one by the County and one by the State. But in any case, we've attempted to meet the County Code's concurrency requirements as far as mitigation at the intersection of Queen Ka`ahumanu Highway and Puapua`anui Street. There were comments about traffic congestions along the Queen Ka`ahumanu corridor. I went back to take a look at my traffic video, and I did identify, you know, queuing, which are basically outside of the study area; in the morning there was queuing north of Hualalai Road, which I could see on the video backing up, but it never reached Puapua`anui Street; similarly, in the afternoon, there was some backed queuing that appeared to start at Lako Street and kind of backed up to Kuakini, Kuakini Highway intersection, but again, never reached Puapua`anui Street, as far as queuing is concerned. So a lot of these concerns are in my opinion all outside our study area. And, so I didn't restudy 24 EXHIBIT C those intersections, so I can't tell you what—not recently anywayI can't tell you what causes were; it could have been an accident, it could have been, you know, some malfunction of the traffic signals, it could be mistiming of the traffic signals. But in any case, like I said, at least within our study area, we had attempted to mitigate the primary access both Queen Ka`ahumanu Highway and Kuakini Highway. Now, if you have any specific questions on the traffic study, I can, you know, go directly to them. CARR SMITH: Okay, thank you. Mr. Van Pernis. VAN PERNIS: I have serious questions for Mr. Okaneku regarding his traffic study submitted by the applicant. If any of these questions are offensive, please let me know, I'll restate it. Mr. Okaneku, what was your assignment? OKANEKU: My assignment was to prepare a traffic impact analysis report for the Pualani Makai. VAN PERNIS: And were you instructed to study any particular intersections? OKANEKU: No. VAN PERNIS: How did you select the three intersections you did study? OKANEKU: Well, the study area is based upon the size of the development. Typically, for a smaller project, we would just analyze the access intersection that I've done, and for a larger project, we'll take one intersection north and then one intersection south of the project site. VAN PERNIS: Just one intersection each way. OKANEKU: Yes. It could go larger, you know, if we were talking about something like a major resort, you know, we'll go further out. But again, this is just a neighborhood commercial center, with an occupying residential, so I guess in my opinion the study area was sufficient. VAN PERNIS: Okay, your opinion, even though this project would have more people driving in and out than a resort. OKANEKU: Which resort? VAN PERNIS: Any resort that you based your decision on. OKANEKU: Well, I don't know what, how you compare this with another resort. What resort are we talking about? VAN PERNIS: Okay, forget it. Why was Henry Street intersection not studied? OKANEKU: Can you repeat that? Which intersection? 25 EXHIBIT C VAN PERNIS: Henry Street and OKANEKU: Henry Street. VAN PERNIS: —Queen Ka`ahumanu. OKANEKU: Well, generally, in traffic, as you get further from the site, traffic tends to dissipate, so when it reaches a level where the percentage drops down to insignificance, you know, we don't, we're not studying the whole island because one car is going to go to Hilo, you know what I'm saying? So that's basically VAN PERNIS: - - - OKANEKU: - -OKANEKU: - - - and cost, of course, you know, we can't be studying the whole west side of Hawaii, the Big Island, for, you know, every project. So VAN PERNIS: - - - OKANEKU: - -OKANEKU: I did not go to Henry Street because it's located quite a distance from this particular intersection, site. VAN PERNIS: You selected the intersection of Queen K and Kuakini, correct? OKANEKU: Yes. VAN PERNIS: Isn't that further away from the proposed site than Henry Street intersection with Queen K? OKANEKU: Oh, no, I don't think so. The first intersection south is, gee, within a mile. The first major intersection I think north of our study area would be Nani Kailua. That, I think, is the bottleneck that resulted in the queue that I saw in the morning. VAN PERNIS: Isn't Henry Street-Queen K intersection close to the project than the intersection of Kuakini-Queen K? OKANEKU: Oh, no, I thought, that's quite ways away. VAN PERNIS: How far away is Henry Street? OKANEKU: Hang on, I'll, I'll go over that for you. CARR SMITH: Henry Street is pretty far away. VAN PERNIS: The Henry Street-Queen K intersection. CARR SMITH: There are other intersections between there and the project. 26 EXHIBIT C VAN PERNIS: Is the Queen K-Kuakini intersection source of traffic onto Queen K to the project site? OKANEKU: Okay, going back to your earlier question, Henry Street is about two miles away from Puapua`anui Street. VAN PERNIS: And what's the street at the Queen K intersection? OKANEKU: And if you want to look at— VAN tVAN PERNIS: Please tell me. OKANEKU: Kuakini Highway intersection is about 0.6 mile south of Puapua`anui Street, so it's quite - - - VAN PERNIS: When traffic comes down Palani Road and reaches the intersection with Henry Street and Ane Keohokalole Highway, doesn't all the traffic turn left onto Henry Street? OKANEKU: From Palani? Palani Road? VAN PERNIS: Palani Road, yes, sorry. I should revise my prior questions. Isn't Palani Road- Queen K intersection further away from the subject property than the Henry Street-Queen K intersection? OKANEKU: Yes, it is. Yes, it is. VAN PERNIS: Why was the Henry Street intersection not studied? OKANEKU: Again, it's located two miles away from the site. CARR SMITH: What's the relevance here, Mark? VAN PERNIS: The relevance is they selected the road that does not have left-turn traffic at the intersection. Palani Road-Queen K intersection does not significantly contribute traffic to Queen K going south. Isn't that true, sir? OKANEKU: I haven't studied that intersection recently, so I can't say definitively. VAN PERNIS: How about at the time of the traffic study? OKANEKU: The traffic study did not include that intersection in the study area. VAN PERNIS: Traffic study did not include Palani and Queen K? OKANEKU: No. 27 EXHIBIT C VAN PERNIS: All the traffic from North Kona coming down Palani Road that goes south on Queen K turns onto Henry Street, correct? OKANEKU: I believe some of them goes into Kailua town. Some of them hit toward back for the airport. CARR SMITH: Mark, I'm not sure what this line of questioning is accomplishing. People, traffic comes from all directions, all kinds of streets, lefts, rights. I don't understand why we are - - - VAN PERNIS: - - -you may not understand but I drive those roads every day. CARR SMITH: I drive in a lot, too. It doesn't- - - VAN PERNIS: There's two left-turn lanes on Palani Road and Henry Street, correct? OKANEKU: I think there's a single, single left-turn lane from Palani onto Henry Street. VAN PERNIS: You don't believe there's two left-turn lanes from Palani going, turning left onto Henry Street? CARR SMITH: There is one. OKANEKU: Yeah, I think there's a single left-turn lane here. CARR SMITH: And then there's two from Henry onto Queen Ka`ahumanu. What is this VAN PERNIS: There's one turning lane on Palani at Queen K. There's two at Palani at— CARR tCARR SMITH: Okay VAN PERNIS: —Henry Street— CARR treetCARR SMITH: - - -with that, so VAN PERNIS: All right, let me ask this question: Do you know where the Walmart is located? OKANEKU: Sure. VAN PERNIS: What street? OKANEKU: Off of Henry Street- - - Safeway. Hang on VAN PERNIS: Do you know where the latest shopping center in Kona is located? - - - CARR - -CARR SMITH: Mark - - - 28 EXHIBIT C VAN PERNIS: - - -Niumalu? CARR SMITH: Sorry - - - OKANEKU: - -OKANEKU: - - - store? CARR SMITH: Sorry, I'm - - - OKANEKU: - -OKANEKU: I don't know the name - - - CARR - -CARR SMITH: It doesn't matter. VAN PERNIS: It does CARR SMITH: No, it doesn't— VAN oesn'tVAN PERNIS: proposing, they are proposing CARR SMITH: Move on to your next question,please. VAN PERNIS: I think it's important to know where the CARR SMITH: At the point we are at right this minute, it doesn't matter what street Walmart is on. VAN PERNIS: - - -next to the first one they propose development. CARR SMITH: Okay, what's your next question, Mark? VAN PERNIS: How many streetlights are presently on Henry Street from Queen K to Palani? OKANEKU: From Queen K to Palani? One intersection there VAN PERNIS: From Queen K OKANEKU: —one signal. VAN PERNIS: to Palani and Henry Street, how many lighted intersections are there? OKANEKU: One at Palani, one at Henry Street. VAN PERNIS: There's one at Malulani Drive. OKANEKU: Is that the Home Depot— CARR epotCARR SMITH: That's on Queen K. 29 EXHIBIT C OKANEKU: or Lowe's. CARR SMITH: Mark, move forward,please. VAN PERNIS: I think I'm entitled to elicit information from this witness - - - interrupted. CARR SMITH: Not- - - VAN PERNIS: - - - CARR - -CARR SMITH: - - -we are wasting time on senseless things. VAN PERNIS: It may be senseless to you but not senseless to people of Kona. CARR SMITH: Well, I'm running this meeting, and I feel like we are wasting time. I would like you to move forward VAN PERNIS: What is the condition CARR SMITH: this line of questioning. VAN PERNIS: What is the condition of Henry Street, Palani Road, Queen K? Is this a LOS "D" or a LOS "E" or something else? OKANEKU: I don't have the information. VAN PERNIS: You didn't study Henry Street. OKANEKU: No, I did not. CARR SMITH: Okay, we are going to move VAN PERNIS: Why not? CARR SMITH: another, we are going to stop right here and move on to another commissioner. Max. NEWBERG: I don't really have any further questions. I just wanted to add, although I'm a bit surprised maybe with the traffic report, I do trust the expert and his opinion, his traffic study. Thank you. CARR SMITH: Thank you. Anybody else? Sid. FUKE: - - - 30 EXHIBIT C CARR SMITH: Unmute, Sid. FUKE: Am I unmuted? CARR SMITH: Go ahead. Oh, yes, you are. FUKE: - - - CARR - -CARR SMITH: Unmute. Sid, you are muted. There you go. Go ahead. FUKE: I think Christian is playing - - -no. I wanted to come back to a couple of these questions, you know, about the five-acre school site, like that, I think that's a very germane issue. And I want to share with the Commission some of the background, you know, on that. When the property was originally rezoned back in 2005, there was a lot of negotiations back and forth- - -the Council - - - time the Council has suggested, or encouraged, the applicant, "Would you consider setting aside five acres of land for a public school?" - - -worked out in the - - - charter school. Meantime, that kind of like fizzled out and the charter school kind of moved on. But nevertheless, the five-acre area was proposed to be set aside on - - -portion of the Suffolk property and - - - area. Now, between the first and the second Planning Commission meeting, I did get the chance to talk to the Planning Director and said like the applicant is willing to set aside this five-acre area and donate it to the County for a park and, or whatever use that the County deems the appropriate, and in so doing it would help kind of like make a so-called more cohesive master plan, because now you would be embracing not only the Suffolk and Puaa property but also maybe a four- or five-acre portion property on the makai side, and it would be a little bit more complete development. So, the Director didn't accept that, you know, for different reasons, but I'd like to kind of point out to Commissioner Yates and Members of this - - -that offer is still there. And so if the Commission wants to amend Condition U, or Condition V, you know, related to the school site, it will basically read like, "Prior to issuance of a building permit for any residential or commercial structures on the site, the applicant has to subdivide and dedicate or cause the dedication of five acres of land within the Suffolk property or the property immediately makai." So, that condition can be made, you know, as part of, you know, the Commissioners' recommendation, or if you want the applicant to so represent, that can be a presentation made on the part of the applicants. CARR SMITH: - - - NEWBERG: Madam Chair, you need to unmute. CARR SMITH: Sorry about that. Go ahead, Mark. VAN PERNIS: Mr. Fuke, is the fair share going to be paid? Fair share per the original ordinance? FUKE: - - - VAN PERNIS: Did you hear the question? CARR SMITH: Repeat the question, Mark. 31 EXHIBIT C VAN PERNIS: Is the fair share per the original ordinance, or - - -pay redetermined? FUKE: - - - CARR - -CARR SMITH: Unmute, Sid. Here you go. FUKE: Okay, yeah, so as far as the fair share, what is proposed is, it's not just the fair share, it's pretty much like - - - all about the fair share requirements, like they were just going to adjust it- - - fair share per unit, and also to allow for fair share credits for certain improvements, such as the new mauka-makai road, and also to exempt any - - - on the site would be exempt from the fair share requirements, which I understand is current policy at this point in time. So we are not asking for any further exemptions from fair share requirements, no. CARR SMITH: Thank you. VAN PERNIS: - - -been made? CARR SMITH: Repeat that, Mark. VAN PERNIS: Can you answer yes or no whether a fair share payment is included in the proposal? FUKE: I thought I answered the question. A short answer to the question is, yes; there is a fair share component in the proposed amendments. VAN PERNIS: And the traffic study, why was Lako Street, Henry Street, Sunset Drive and several other intersections, Seaview Circle, Kam, why were they not considered even though they are closer to the subdivision, or the proposed development, than the roads that were selected by Mr. Okaneku? CARR SMITH: Randall, you want to respond? You want to unmute your—yeah, go ahead. OKANEKU: Oh, am I okay? Oh, as I, you know, stated earlier, that we need to make a limit to the study area because of the cost involved, basically. And generally what I do is to consult with the State Department of Transportation to kind of give them a heads-up of what I'm doing, and they would advise me on the study area, which intersections they want to see looked at. And that, that's how we determined the size of the study area for this particular traffic study. Like I said earlier, the traffic dissipates as it goes further away from the site; there is a network of streets where the traffic would tend to just flow, so the percentage gets smaller and smaller as you get further and further away. VAN PERNIS: Lako Street closer than the other streets you indicated? OKANEKU: Lako Street is south of Kuakini Highway. CARR SMITH: So, we've been told what- 32 hat32 EXHIBIT C VAN PERNIS: - - - CARR - -CARR SMITH: we've been told what area was in the study, and it's front of us, so let's accept the study and move on. Are there any other VAN PERNIS: I have a question for Mr. Fuke. CARR SMITH: Yes, Mark, go ahead. VAN PERNIS: Since, from prior testimony in prior hearings, I understand that development is not going to take place for many years. I also understand that the applicant LLC, Suffolk and Puaa, is not going to develop. So what's the rush? - - - Mr. Kay, getting everything done by July 31st and/or getting, going to the Land Court right away. Why can't you take the time to do those things? CARR SMITH: Go ahead, Sid. FUKE: Yeah, I don't understand the Land Court question, but all I know is that the applicant already has a very solid buyer in terms of solid, Spring Capital, and understandably, no potential buyer would want to purchase a property, if entitlement is not there. And that's the reason why Ken was here earlier and, you know, he would have attested that, yes, you know, subject to the approvals, that Spring Capital, you know, its plan would be, you know, stand ready and willing and able to do the project. Now, in terms of when actually the project can be shovel-ready, it's obviously not going to be within a year, you know, from now because there are so many premise that are required; they have to update the drainage plan, although they did have one; they have to kind of prepare and update the construction drawings for the new mauka-makai highway, I mean roadway, within the project area; let alone like having to come up with a master plan that's going to be vetted and approved by the Planning Director. So there are like a number of steps, so, you know, I think it would be remiss on myself or anybody else to represent that next year this time the project is going to be shovel-ready. But I think what's important is like the message that this Commission is sending up to say it's a, it's a desirable project, it'll provide - - -you know, like, much needed infrastructure and community service vis-a-vis in terms of affordable rental housing, those kind of things, and it makes it a little bit more palatable for existing or future investors to look at this island as seeing that, yes, we have a relatively developer-friendly island. VAN PERNIS: Is it because the applicants, Suffolk and Puaa, is not going to be the developer? FUKE: I think we made it clear that, yes, Puaa and Suffolk are not in the position right now to do the development. It's, it's a project that's too large for them, and also given the age of the owners, they don't want to, you know, carry on a, you know, financial commitment that's going to stretch, you know, an excess of ten years. Somebody like - - - development- - - like Spring Capital would be in a better position to do it. If not Spring Capital, some other developer. VAN PERNIS: Do you agree that conditions have changed and infrastructure needs are increased - - - of the project, since the original approval in 2005? - - -need the next ten or 20 years? 33 EXHIBIT C FUKE: I think I would respond in two ways: One is that the traffic study prepared by Mr. Okaneku was reviewed and approved by the State Department of Transportation not in 2005 but in conjunction with the application before you, so it's fresh; and the other thing, too, is like, you know, we've seen a lot of development residential activity on the south side, and so the whole idea behind this project is to have people move closer to town such that you minimize the long commute that a lot of these people have. VAN PERNIS: You think traffic, or do you think people are going to live closer to town? FUKE: Closer to town, I think that that's what the CDP was talking about- - - housing more in a cohesive area- - - kind of sprawled out; if you have it all sprawled out, what- - - exacerbate the traffic condition. But I think- - - a little bit more - - -that supposedly would represent- - - VAN PERNIS: - - - CARR - -CARR SMITH: Thank you. VAN PERNIS: - - -traffic - - - CARR - -CARR SMITH: Mark, we are taking another break from you and hearing from other commissioners. VAN PERNIS: Well, - - - longer, let me finish - - - questioning. CARR SMITH: - - -you are not- - - VAN PERNIS: It's only one more question. CARR SMITH: Okay, do your one more question. VAN PERNIS: Isn't the traffic study dependent on the widening of the highway and/or the construction of the Alii Drive bypass? OKANEKU: No, it is not. CARR SMITH: Here you go. Okay VAN PERNIS: Well CARR SMITH: Mr. Vitousek, you are next. VITOUSEK: Yes, I was just wondering if we did take a close look kind of item by item at the proposed conditions and see if those conditions or if we can add conditions, that would then satisfy the County's concerns and lead to us to moving forward with this one way or another. 34 EXHIBIT C I, you know, I agree with Christian's approach with the three items that are needed. I think having the Commercial, Neighborhood Commercial zoning makes the options a lot more open, considering that we don't know who the actual developer is going to be. You know, we are hopeful that it will go through and work out with Spring Capital and all that, but we have to take this application at its face of what the existing zoning is, what's best for the area, and I agree with Christian that the Neighborhood Commercial zoning is probably the most appropriate and most conformant with the Transit Oriented Development. I also agree that having a detailed master plan is crucial, and having a review by the Kona Community Development Plan Action Committee, make sure that it's aligned with the Kona Community Development Plan. To me, those three things are crucial, right? I agree, I agree, I think the County - - - long way, they stooped down at the table, and they opened up and said this is what we need in order to make this a favorable recommendation. You know, whether we can accomplish that through conditions or whether that has to be an actual outright negative recommendation and have them come back with those three things in hand, I would love to have opinions from County staff on if we can accomplish that now and lead to a favorable today. CARR SMITH: Go ahead, Christian. KAY: I think at this point it's important to understand that if the Commission decides to go favorable, it will be a favorable coming from the Commission and not the County, based on whatever analysis and conditions that you place on it. I think we are prepared to speak to some of the conditions that we see are somewhat problematic, but at this point if that's the way you choose to go, then we would have an opportunity to address those as we go along. VITOUSEK: Please do so, Christian,please let me know what, what conditions that are being proposed you think are problematic. KAY: Okay. There are a few. Condition B for both the Suffolk and Puaa ordinances, the condition as proposed is not consistent with the Planning Department's standard condition for rezones and doesn't consider recommendations provided by the Department of Water Supply memo dated January 8h. So we suggest replacing the language that is proposed with the following: "Prior to the issuance of a water commitment by the Department of Water Supply, DWS, the applicant shall submit the anticipated maximum daily water usage calculations as prepared by a professional engineer licensed in the State of Hawaii, to the DWS. A water commitment deposit shall be paid to the DWS within 180 days from the effective date of this ordinance in accordance with Rule 5 of the Department of Water Supply's Rules and Regulations. The applicant is responsible for maintaining valid water commitments to support the proposed use until such time that the required water facility's charges have been paid in full." So that would be the language for the first, our, our suggested language for the Condition B for both. CARR SMITH: Go ahead, Mike. VITOUSEK: Sid, are you okay with the suggested revised language? FUKE: We have no objection. It's fine. The only thing to be mindful of is that the property already has the X number of water commitments, 510 water commitments, and so that's the reason why we had included the term "if applicable,"because it provides flexibility that if you have the 35 EXHIBIT C commitments, then you don't have to do it. The language that Christian has provided normally would be, on the face of it, no problem, you know, assuming that you don't have your required water commitments, and then you have to purchase. But, if to, you know, modify the Department's, you know, Planning Department's concern, you want that language, - - - I think we can kind of work around it. KAY: Yes, I, and I'll just point out that the reason that that language is suggested is because specifically in Water Supply's comment letter, they required the payment of water commitments. So to be consistent with what the department is asking for, that's why we added that. FUKE: That's fine. VITOUSEK: Yeah, that sounds, that sounds good to me. And it seems like the applicant is okay with that. Can we move on to the next condition item that you guys have a concern with? KAY: So, it's really Condition C, and this is the timing component. You know, the, this isn't consistent with our standard condition for rezones; the start within, or commence within five years and substantially complete within ten. The applicant has indicated that projects of this size take longer to develop than the standard rezone because the applicants' Suffolk Development and Puaa Development project is one project referred to as Pualani Makai; however, as we talked about before, the ordinance approving the zoning were separate for the properties, which can be developed independent of one another, and at the same time. Therefore, I think, We think the five years is sufficient time to develop each independent property because the proposed project size is smaller than other rezones for which five years is provided to complete construction. So we suggest replacing it with our standard condition language that says, "it shall be completed within five years from the effective date of the ordinance," and, you know, requiring Plan Approval, and so on and so forth. If the Commission decides that the, you know, the ten years is more appropriate, we would like to have some kind of definition of what substantial completeness means, because that is very subjective; the applicant's definition of substantial completeness could be very different from what the Department, or the County's definition of substantial completeness is. At any rate, that's, that's our initial thought. CARR SMITH: What is the County's definition of it? KAY: Well, when we talk about completeness, we talk about what's being proposed, so the proposed development. This gets into a little bit of a tricky area because once, once entitlement is granted, the applicant or subsequent owner could develop something that is permitted in that zoning district. So, so we stay away from contract zoning; it's hard to lock them down to what's proposed. So there is a lot of wiggle room in substantial completeness, a lot of wiggle room in what can be built. So that's, I would say that, you know, if they are proposing to develop 226 units of affordable housing on the Suffolk property and 60,000 square feet of commercial and 100 units which, again, there's somewhat of discrepancy between what's in writing and what's on their site planI think it's like 160 units for the Puaa property, then that should be complete within that time frame. I would defer to, or I'd like to understand what the applicant's definition of substantial completeness is. And that's why I'm asking for, to come to a more specific agreement as to what that looks like. 36 EXHIBIT C CARR SMITH: Sid, did you want to respond to that? Just a second, Max. Go ahead, Sid. FUKE: Am I back on? CARR SMITH: Yeah. VITOUSEK: Yeah. FUKE: Oh, okay. The whole idea is like, you know, substantial completion is like it's a point of no-return; if you are developer and you are going to have like,just like a residential home, if you have the rooftop and pretty much all you have to do is kind of like interior improvements, putting in the sink and all that stuff, it's a point of no-return,you are going to end up completing it. So likewise, for this project here, we are just saying that substantial completion, I would imagine that you can tie it into having the mauka-makai road because that's a lot of investment that's got to be made by the developer, not the County, but it's got to be made by the developer. And the way the conditions are structured, no occupancy can be issued until the roadway is completed. So if you have a lot of, if you expend, almost like a one-third, maybe one-half, of your investment money on just putting in to basic infrastructure for the roadway and drainage system, and at that point in time you are not going to give up; you're going to see the project through. So, I can't really say whether like substantial completion is like having, like, you know, - - - of the project- - - or whatever have you, but if you want to tie it down for maybe like substantial completion meaning, for example, like having completed all of the required drainage system and new mauka-makai road, even if the project doesn't, you know, doesn't start up in terms of residential construction or commercial construction, you know what happens, you know who wins? The public wins; they've got a new road, and they've got improved drainage system. So if you want to tie it to that, that's fine. The other thing, too, is like, you know, the five-year to commence construction. I think that for those who understand and have gone through development process know how long it takes to get the required archeological clearances, know how long it takes to get construction plan reviewed and approved, you know, we have to put in all that at time. And so, as I mentioned earlier in the testimony for the public portion not public—in my testimony, that it'll be foolish on my part to say, yeah, next year this project will be - - - security and simple we need to go through all of the other permitting. CARR SMITH: Okay. I want to let Max ask his question and make his comment, and I want Mike to go back to his train of thought on taking us forward. Go ahead, Max. NEWBERG: And I don't want to interrupt Mike who was making - - -trying to work this out. For myself, Madam Chair, I would make a motion, and should I be able to get a second, I look forward to stating my reasons. CARR SMITH: Uh NEWBERG: I'd like to, I don't know where we were at with this thing; if it were allowed to motion at this time. 37 EXHIBIT C VITOUSEK: Yeah. NEWBERG: In regards to Suffolk Investment LLC, I move that an unfavorable recommendation be forwarded to the County Council on the applicant's proposed amendments for Change of Zone Ordinance No. 05-113, based on the Planning Director's recommendation, which shall be adopted. And, regarding Puaa Development LLC, I move to make an unfavorable recommendation be forwarded to the County Council on the applicant's proposed amendments to Change of Zone Ordinance No. 05-115, based on the Planning Director's recommendation, which shall be adopted. And again, I look forward to giving my reasons. VAN PERNIS: I second those motions on which I'll comment. CARR SMITH: Hold on, hold on, hold on. NEWBERG: First and foremost, the reason why - - - come - - - conclusion at this point is that ultimately, we are talking about precedent, and that precedent being that this is five years old already on a property that hasn't been begun. The amount of exemptions, the reluctance to creating any sort of real conversation and even now that it's five years old,just shows me we are in a bad place with this. That's my reasoning. On a side note, the prospective buyer who has been a part of these conversations and I believe deserves to be recognized, Spring Capital's last project in Kona is in the new industrial area; the storage facility that was shut down by this County because they proceeded with a mainland contractor that was not licensed. And I think that just shows all in all a lack of disregard for how to follow County mandates. And while I'm reluctant to come to this conclusion, I think it's the only way we can proceed. CARR SMITH: Mark, go ahead. VAN PERNIS: I'm seconding those motions. CARR SMITH: Right— VAN ightVAN PERNIS: And I want to that it's not five years delinquent; it's 15 years delinquent. And with no excuse for delinquency and they are asking for another ten years, of no one structure contributions of significance. Now, that saves millions of dollars for whoever is selling to Spring Capital. Now, I also want to point out that in the time period that's gone by while these plans, or while these applicants abandoned this project, electric cars have become prominent. It's anticipated that they will go up ten percent a year - - -ten years - - - 50 percent electric vehicles. That's - - - trucks as well as cars. And it's a lot less expensive to put in electric charging stations now than the retrofit. Other places have, in Kona, have done that. I would think the developer would want to do that, too, as a service to the community, increasing the value of its property. We are so far behind the curve in this application that it hasn't been discussed yet. I'd like to have Ms. Yates, the other Kona person here, or rather Kailua-Kona person here, maybe North Kona, her being South Kona, comment on the situation. This is the worst traffic jam in Kona 38 EXHIBIT C CARR SMITH: Okay VAN PERNIS: involving from Henry Street to Puapua`anui, Lako, Kam III intersections, none of which, or two, two of which were studied by this traffic study. CARR SMITH: Thank you. Any other Commissioners like to comment since we are in the discussion phase here with the motion on the table? Faye, did you want to say something? YATES: Yes, I agree, you know, I really, really am concerned about that more than anything else [inaudible]I don't know, but, yeah, I'm concerned about people who live there, bad condition, and, you know, overall I just, it just kind of seems congested the way it is. So, I go along with the favorable [sic]recommendation. CARR SMITH: Thank you. Perry? Do you have anything? KEALOHA: Yeah, I will say that this is difficult for me because I respect the people involved in the project. But 15 years is a long time, and another ten, a lot hap-you know, it's a, 25 years is a generation. And we've already seen multiple CDPs. A lot has changed within our community. And I don't feel we are being asked to approve a development or proposed development; I feel like we are being asked to make a positive, affirmative recommendation on a real estate sale. And I have a hard time tying up property entitlements for an entire generation for the purpose of a real estate sale, and it's difficult for me. CARR SMITH: Thank you. Mike. VITOUSEK: Yeah, I mean I totally get where everybody is coming from on this. You know, the 15, ten, 15-year, or ten-year timeline is a long time when we don't, when the applicant isn't willing to take another few months upfront to do the very reasonable request that the Planning Department has asked. So, to me, if we were going to make a decision today as it is, I would also be on the side of unfavorable ruling based on the discussion today. CARR SMITH: Yes, Mark. VAN PERNIS: I want to make one thing clear. I respect Mr. Fuke. I admired his work when he was planning director. I can send my clients there to be represented by him. But as planning director, I don't think you would ever, ever approve this project, with all these waivers and delays and - - - I think it's a blight on his record. I think that Mr. Fuke should be embarrassed about asking for approval of this project. I deeply respect his past work - - - CARR - -CARR SMITH: - - - okay. Mike, did you have something? VITOUSEK: Yes, I just wanted to—well, first off, disagree with the previous statement and leave it at that—but, keeping it on subject, you know, the purpose of what we are reviewing here is zoning application, right? We have a stale ordinance for zoning, and when an ordinance becomes stale, it's the Commission's job to figure out what is the most appropriate zoning type in that location, given the current situation. I think that the Planning Department has offered their suggestion on what the 39 EXHIBIT C current, what the most appropriate zoning is. So my question is, is the Planning Department then going to initiate a zoning change to a zoning that's more appropriate? CARR SMITH: Christian? KAY: I would defer to the Director on that question. CARR SMITH: Is the Director still with us? There he is. Did you hear the question, Michael? YEE: Yes, I did. CARR SMITH: Okay. YEE: That's, I can't give you a definitive, yes, I would initiate action right away. Political realities is there are, there are priorities that I have to take care of between now and December. And so I can't give you a definitive answer on that. VITOUSEK: But, I mean, this, the follow-up, and you know, I understand we are all on a timeline - - -that, but the next step generally would be to proceed towards the zoning that's more appropriate with the stale ordinance, right? So it'll either be the Planning Department or the owner coming back and applying for a zoning that's more appropriate. Is that correct? YEE: Correct. VITOUSEK: Okay. And we, and I agree with the Planning Department; Neighborhood Commercial zoning is appropriate for that location. CARR SMITH: Sid. FUKE: - - - KAY: - -KAY: Unmute. CARR SMITH: You are muted. Sid, you are muted. FUKE: - - - so, if the requests are ultimately denied when we are at the County Council, then, you know, like, there are several options, you know: They could kind of like, the applicant could kind of go back again and request to have a, do the same thing, you know, the same process; the other option is the applicant could submit an application to revoke the existing ordinances. If we revoke the existing ordinances, then you have the underlying zoning, which is Ag-5. So this is my, my point, and so then, given the frustration and, you know, of the owners, and given their age, then the easiest option for them is to just kind of withdraw, I mean, you know, like, not withdraw, submit an application to nullify these two ordinances, go back to Ag-5, they have these remaining, you know, three parcels, going for a typical five-acre lot subdivision, get in and out, sell it for like a high-end residential lot, Agricultural lot at the subdivision. Sad thing about it is that subsequent to the General PlanI realize you're talking about time—but subsequent to the General Plan - - - and the 40 EXHIBIT C CDP was reviewed, and they made that expressed policy commitment that this is your best place to have a TOD. So if—but it requires the participation and cooperation of the landownerso, what happens, if you have the property all, you know, go back to Ag-5, I don't want to have any more headache and just chop it up into a five-acre lot subdivision based on the distinct zoning, then it frustrates the ability to do something that the CDP wanted to have accomplished. CARR SMITH: And no more mauka-makai road, no improved drainage necessarily, no neighborhood store for the Pualani community and all of that, so, I understand the frustration. VITOUSEK: And then a question to the County on that. Is there County involvement in that? Now that the zoning ordinance is stale and, you know, the condition for Planning Director initiating a more appropriate zoning seems all the more relevant, given the statement from the applicant about the reversion to Agricultural-5. So, is there a plan that we can address to maintain this Transit Oriented Development in this location? CARR SMITH: Go ahead, Christian. KAY: Yeah, I would say that the request to revert would still have to go through this process; it would be a rezone back to Agricultural-5 acre and State Land Use Boundary Amendment back to Agricultural from Urban. So like we did in this case, we would look at consistency with the General Plan, we would look at consistency with the CDP, and our other analysis against criteria for granting those ordinances. In this case, it's unlikely, because of the General Plan and the CDP, that reversion back to Ag-5 and State Land Use Ag would be appropriate in this area, as it is now. CARR SMITH: Mike. VITOUSEK: So that reversion would have to come back to the Commission and the Council for it to go through. KAY: That's correct, because it would be a Change of Zone. CARR SMITH: Sid. FUKE: - - - CARR - -CARR SMITH: Unmute. FUKE: Okay, so here is a dilemma. So the property right now is what you call a zoning in limbo; you can't do anything with the land. But you have to still pay taxes based upon the higher and best use value, which is a commercial and multiple-family. So, even that then, I would you know, I'm not an attorney but I would suspect that if you were to file a suit against the County for an inverse condemnation of the propertybecause you can't use the land, you can't use the land. And so now if he comes in and rezones the land, it's an applicant initiated, to Ag-5, and if you were to deny it, then the question is like what are you rezoning it to? Are you going to keep that existing CN and the RM zoning? Where you can't do anything? Then that- - - I think a litigation - - - 41 - -41 EXHIBIT C VITOUSEK: - - - I mean I feel like the, what they would be rezoning it to was already stated, a Neighborhood Commercial zoning, which they think is more appropriate. CARR SMITH: Are you going to say something, Sid? FUKE: I guess they could do it, but, you know, I haven't seen a situation where you have like an inverse, stuff like that, eminent domain or inverse condemnation of land use, in essence that the County zones the property and the developer saying, no, no, no, no, I don't want to do that, or the landowner saying, no, no, no, I don't want to do that. I've seen like inverse condemnation in terms of acquisition of property where ultimately the County buys it. But now you have the private owner, you know, the landowners, you know, being forced to do something that the government wants to have done through the zoning, I think that- - - legally questionable. CARR SMITH: Jeff. DARROW: So this, this is a unique situation in which we find ourselves here. We had a lengthy discussion with the Planning Commissions regarding projects that have, that come back before the Commission and Council with a time extension when the project basically stopped some time previously. So the direction of the Commissions were different, but the Leeward Planning Commission was very clear that they wanted to see something change, and it sounded like the change they wanted to see was instead of granting a time extension, they wanted to see the project come back, almost to be resubmitted as a new project, so that they could evaluate the entire project again as a brand new project. In this particular case, since this was originally approved till this time, there's been a massive change, and that was the Kona CDP in which identifies this property as one of the, in the center of one of the TODs. So that has been a big change when we are looking at this particular project. And again, you asked for compromise, the Director to work with the applicant, and I think it is agreeable that going forward with this amount of land area at this time would be a CN zoning, looks like it would meet the intent of what we are trying to get to. But still, the Commission has the opportunity to vote in the way it is; we have an unfavorable recommendation that's being brought before the Commission to be voted on. That could happen with any project. It, you know, that just happens. If that happens, then the project goes up to the County Council with an unfavorable recommendation, and it's addressed at the Council. It's just the way it is, unfortunately. CARR SMITH: Mr. Newberg. NEWBERG: Just wanted to add that I do stand by my motion, and I think it's hard, you know, don't want to get into personal reasons; I was raised that the only person I can control ourselves is ourselves. You were granted what you requested in 2005, which was an incredible peak in the construction industry, and unfortunately, that wasn't taken advantage of by the owners. CARR SMITH: Things, life changes; we don't have control over everything, but. Mr. Van Pernis. VAN PERNIS: Let me say that the project was abandoned for 15 years, so they have no one but themselves to blame - - - 42 EXHIBIT C CARR SMITH: Thank you - - - VAN PERNIS: - - - our job is to represent the people of Kona, all people stuck in a traffic jam every day, once the virus is gone, all people who live in the area who are all jammed up on a serious, serious basis, unacceptable, lights changing, traffic not moving - - - could tell you that I can, too, because I, takes me hours to get to Kealakekua off of Henry Street. And we are supposed to represent all the people of Kona, or maybe courteous developers, but we are not here to try to find some way of making it work for the developer, for a multi-millionaire developer, to make more money. And I also want to say that— CARR hatCARR SMITH: Not appropriate, Mark. It doesn't matter how much money a person has or if they are going to make a profit or they are going to take a loss VAN PERNIS: Then CARR SMITH: - - - VAN PERNIS: strike those comments. CARR SMITH: - - - it's not why we are here. VAN PERNIS: We are here to represent the people of Kona and try to protect them from things like traffic jams, which exist now. CARR SMITH: Okay VAN PERNIS: We are not here to make things work at the expense of people of Kona. There's been today even an endorsement of a negative decision, and the Windward Planning Commission has done several times, which is supposedly popular with some people, of applications, and we should not hesitate to do it here. CARR SMITH: Anybody else? Did you have your hand up, Mike? No? Yes. Go ahead. VITOUSEK: Yeah, I just would say that, you know, in the event that this motion is carried on, the applicant is more than welcome to come back with a revised proposal that includes the appropriate zoning, the Neighborhood Commercial zoning, as was outlined, and the master plan and the Kona Community Development Plan. That shouldn't take very long; that should take, you know, a few months tops really to do all that legwork, and that would barely be eating into their 15-year timeline or ten-year timeline for construction. So I just want to say that, no, nothing against the projector anything, I'd be happy to hear it again under different set of conditions. CARR SMITH: Thank you. I agree, I support what you just said, echo that. All right. Are we finished talking about this and ready to move toward a vote? I think so. All right, Christian, please? 43 EXHIBIT C KAY: Okay, again, we'll this one at a time. I've got a motion by Commissioner Newberg and a second by Commission Van Pernis to forward an unfavorable recommendation to the County Council, and this is for Puaa Development LLC, amendments to REZ 04-025. Commissioner Newberg? NEWBERG: Aye. KAY: Commissioner Van Pernis? VAN PERNIS: Aye. KAY: Commissioner Kealoha? KEALOHA: Aye. KAY: Commissioner Vitousek? VITOUSEK: Aye. KAY: Commissioner Yates? YATES: Aye. KAY: And Chair Carr Smith? CARR SMITH: Aye. KAY: Thank you. Madam Chair, motion carries, six-nothing. Same motion and second for Suffolk Investment LLC, and then this is for amendment to REZ 04-024. Commissioner Newberg? NEWBERG: Aye. KAY: Commissioner Van Pernis? VAN PERNIS: Aye. KAY: Commissioner Kealoha? KEALOHA: Aye. KAY: Commissioner Vitousek? VITOUSEK: Aye. KAY: Commissioner Yates? 44 EXHIBIT C YATES: Aye. KAY: And Chair Carr Smith? CARR SMITH: Aye. KAY: Thank you. Madam Chair, motion carries, six-nothing. CARR SMITH: All right, very good. Thank you, Sid, for hanging in with us on these various hearings. Back to life, we hope we hear again under different conditions. I did want to mention for the record that Christopher Delaunay from Pacific Resource Partnership had sent in testimony against this agenda, these two agenda itemsI failed to mention that earlier. All right. Thanks, you guys. The hearing was adjourned at 3:50 p.m. Respectfully submitted, Noriko Sauer, Secretary Leeward Planning Commission 45 EXHIBIT C