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HomeMy WebLinkAbout2020-12-17 Leeward Exh B (AMEND SMA 388) LEEWARD PLANNING COMMISSION COUNTY OF HAWAII HEARING TRANSCRIPT DECEMBER 17, 2020 A regularly advertised continued hearing on the application of DPM ACQUISITION LLC DBA DIAMOND RESORTS INTERNATIONAL (FORMERLY PACIFIC MONARCH RESORTS, INC.) (AMEND SMA 388)was called to order at 9:56 a.m. via live-stream online meeting, with Chairperson Nancy Carr Smith presiding. COMMISSIONERS IN ATTENDANCE: Nancy Carr Smith, Barbara DeFranco, Perry Kealoha, Max Newberg, Mark Van Pernis, and Michael Vitousek ABSENT AND EXCUSED: Faith"Faye" Yates ALSO IN ATTENDANCE: Malia Hall, Esq. (Counsel for the Commission), Zendo Kern (Planning Director), John Mukai, Esq. (Counsel for the Planning Director), Jessica Andrews (Planner), Jeff Darrow (Planning Program Manager), Tracie-Lee Camero (Planner), Rachelle Ley (Secretary to the Planning Director), and Noriko Sauer(Leeward Planning Commission Secretary) APPLICANT: DPM ACQUISITION LLC DBA DIAMOND RESORTS INTERNATIONAL (FORMERLY PACIFIC MONARCH RESORTS, INC.) (AMEND SMA 388) Application to amend condition No. 2 (Time to Complete Construction) of Special Management Area Use Permit No. 388, which was issued in 1998 to allow the development of a commercial/condominium complex and related improvements on 76,739 square feet of land. The property is located on the makai side of Alii Drive bounded by Alii Drive and Kahakai Road, south of Royal Kona Resort and north of Kona Reef Condominium, Pua`a 3rd, North Kona, Hawaii, TMK: (3) 7-5-018:011. Secretary's Note: "- - -" indicates indiscernible speech due to internet/technical difficulties or simultaneous talk. CARR SMITH: Agenda item number 2, the applicant is DPM Acquisition LLC dba Diamond Resorts International, formerly Pacific Monarch Resorts, Incorporated. AMEND SMA 388, application to amend condition 2, time to complete construction, of Special Management Area Use Permit number 388, which was issued in 1998 to allow the development of a commercial/condominium complex and related improvements on 76,739 square feet of land. The property is located on the makai side of Alii Drive bounded by Alii Drive and Kahakai Road, south of Royal Kona Resort and north of Kona Reef Condominium, Pua`a 3rd, North Kona, Hawaii. The TMK is (3) 7-5-018:011. Jessica, are you ready to provide us with an update of — I EXHIBIT B ANDREWS: Yes. Hi, good morning, Commissioners. I was first going to ask Commissioners and Chair Carr SmithI wasn't planning to present the entire presentation for their application once again,just to,just to provide an update—is that agreeable to everybody or is there anybody who would like to view the presentation? CARR SMTIH: I would guess that we are all good for an update. Is that correct? Can I have some thumbs up? Or down, if you feel differently. (No audible response) Okay, I think we are good for an update. Thank you, Jessica. ANDREWS: Okay, thanks. Just give me a second here; I'm going to pull my presentation up, and I'll forward it to the last slide, so bear with me for just a minute here. Okay, let me know if you see the presentation screen. Everybody good? (No audible response) Okay. CARR SMITH: Looks good, thank you. ANDREWS: Okay, I'm just going to advance through, so you'll get asorry, it seems it's not working here, actually, I think I can jump forward, here we go you'll get a very fast review here. Okay, so the planning director is recommending approval with conditions on this application. And there was a submittal that the commissioners should all have received recently from the applicant, and I'll just summarize here on the screen what was included in the applicant's statement. The applicant acknowledges the Planning Commission's comments and responds to the request for information as follows: The applicant intends to construct a building consistent with the 2017 approvals, which was 46 three-bedroom units, but with added value engineering and design modifications to make the design more cost effective; there will be no retail component at this time. The applicant intends to build the proposed building within the five-year time frame in accordance with the following schedule—and, again, this is the applicant's statement of the schedule—so it would be resubmittal to the Planning Department for final plan approval in 2023; submittal for building permit approvals in 2023 or 2024; construction to be completed before the end of 2025. The applicant is considering the following options for ongoing site maintenance: A primary point of contact for management and maintenance of the property; regular maintenance of fencing and scrim as necessary; and, cleaning of graffiti from all walls as necessary. And I believe the applicant could further clarify how those will be, will happen, or any further questions about this, but this was proposed by the applicant after the last Planning Commission meeting. Are there any questions? I see Commissioner DeFranco. DEFRANCO: So CARR SMITH: Yeah, go ahead, Barbara. DEFRANCO: So my question is in their response, "the applicant is considering the following options"; what does that mean? That means that they are thinking about this, they are committed to doing this? What does that mean? 2 EXHIBIT B ANDREWS: Yeah, you might want to clarify with the applicant, but my guess is DEFRANCO: Okay ANDREWS: this is their proposal. DEFRANCO: Okay, thank you, I'll wait. Thank you. CARR SMITH: I can't see all the commissioners, so ANDREWS: I see Commissioner Van Pernis. CARR SMITH: Go ahead, Mark. Jessica, you can pull down the screen. ANDREWS: Yeah, I think CARR SMITH: Thank you. ANDREWS: Yes, I can stop sharing I'm sorry, that is probably blocking your view. CARR SMITH: There you go. Thank you. Go ahead, Mark. VAN PERNIS: - - - ANDREWS: - -ANDREWS: I think he is muted. CARR SMITH: Mark, you are muted. There we go, try that. VAN PERNIS: - - - CARR - -CARR SMITH: Noriko, there might be something wrong with the microphone. (Pause—technical issue) ANDREWS: I think we are working on the sound issue. CARR SMITH: Yeah, that's fine. ANDREWS: Yeah. CARR SMITH: It seems like the camera moved in Kona, too, unless Mark moved his chair. I think Noriko is alone, though, sooh, there we go. ANDREWS: Yeah, we've just been in touch with the Kona side and are trying to fix the issue now. 3 EXHIBIT B CARR SMITH: No problem. You guys want to take a five-minute break? (No audible response) Okay, let's do that. It's 10:05, we'll be back at 10:10. Thank you. (Chair Carr Smith called a recess at 10:05 a.m. She called the hearing back to order at 10:14 a.m.; however, the technical issue with Commissioner Van Pernis's microphone was not resolved.) CARR SMITH: Okay, we are going to move forward with the applicant's presentation. I believe we have Sidney Fuke here, Kim Yoshimoto, and Evan Oue. Is that correct? (No audible response) All right, thanks, you guys (technical issue–echo). ANDREWS: I think on Kona side we are getting a feedback, so, need to shut off the microphone. CARR SMITH: Very good. The three of you, please raise your right hand. Do you swear or affirm to—Evan, thank you—do you swear or affirm to tell the truth on this matter before the Leeward Planning Commission? OUE: I do. FUKE: I do. YOSHIMOTO: I do. CARR SMITH: Thank you. So whoever is going first, please state your name, area of residence, and elaborate on your November 13'h letter and respond to any concerns raised by testifiers, please. Go ahead. FUKE: Got it. Good morning, Madam Chair, Members of the Commission. My name is Sidney Fuke. I'm a planning consultant. I reside in Hilo, Hawaii. I don't know whether—you've already acknowledged the presence of Ms. Kim Yoshimoto and Mr. Evan Oue, the applicant's attorneys, so they may testify specifically as it relates to questions that relate to ownership; I mean I know one of the testifiers had raised the question as far as the validity of the applicant being, you know, whomever it is, so if the commissioners find the, a response to that question is relevant, I'm sure that they are prepared to respond to that. What I would like to do is like, you know, during the course of my re-presentation, is to - - - some of the other concerns or comments raised by the two testifiers. But before doing so, however, or in conjunction with that, I'd like to kind of initially reconfirm the applicant's acceptance of the staff's background report and their proposed recommendation, and more specifically now to respond to the Commission's request for additional information as provided in the, as we provided in our November 13'h letter. Essentially, you know, there are, several questions were, you know, relating to the nature of the project, timetable, and also the issue relating to the graffiti and homelessness on the property, so I'd like to kind of address all three. 4 EXHIBIT B First of all, in terms of the nature of the project, Ione of the testifiers said that the, you know, the plans that accompanied the notices were like somewhat different from the 2017 plan; it is true, but, you know, it's not necessarily significantly different. What was provided was the plans that were originally approved, and generally, the plans that were approved in 2017 under the plan approval, were not significantly different in terms of the size and the scope, so on and so forth. Related to that was the question about, well, you know, in 2000-you know, when the initial estimate was granted, it was supposed to be for a residence as opposed to like a timeshare. At that time when it, what, the proposed use was going to be a condominium. Now the most recent iteration is to have a timeshare. But, nevertheless, what we are talking about is the form of ownership; you know, a condominium is owned by one, multiple, whereas like the timeshare, you have multiple ownership, nevertheless, it's one unit that's being now considered. So the plans in concept were approved. The more detailed plans were approved in 2017. And essentially, that is, the current thought of the applicant right now is to proceed with a plan that generally follows along those lines. Those plans were found in the applicant's, you know, submittal I think dated November 13''. But, and they were also found in the Planning Department's Exhibit number 7, you know, off your report. So if you want to see a little bit more details as far as what was approved back in 2017, I think those are your two primary references. Essentially, those plans kind of reflected a four-story, no higher than 45-foot structure, 46 three-bedroom units. The original plan called for like 48 two- and three-bedroom units. So what it amounts to right now is the approved plans in 2017 approved plans reflect like a two-unit reduction. I think the other thing to consider is that the approved plan now does not contain a 7,000-square foot retail, commercial retail area, whereas like the original plan called for like a retail kind of component, so you would have like traffic from the surrounding neighborhoods visiting, you know, the site, sort of like the, how the King Kamehameha shopping center, you know, the King Kamehameha Hotel is now operated by the Marriot, you know, you would have like a shopping area where it's not only caters to the occupants of the hotel but also visitors from outside. There may be like a small little sundry area for occupants of the project, but at this point in time they have abandoned the thought of having like a commercial area for, that would be geared for outside people coming into the complex. The approved plan back in 19, 2017 rather, you know, reflected 119 parking spaces; the minimum required for, you now, 48, or 46-unit condo is essentially only 58, but what they are proposing is 119. So essentially, they are having 60 more stalls. And, you know, as we pointed out at the last public hearing on this matter, you know, the applicant is going through like a value engineering, and they are trying to see like whether they really can construct the building as was approved back in 2017, and they are doing that right now. And they are going to make some adjustments to it, you know, based upon the value engineering, and nevertheless, they are going to have to come back again to the county Planning Department for recertification or new approval on a plan approval. So this relates to the second question that the commissioners had raised; that's the issue of the timetable. So based on the staff's recommendation, you know, they have a five-year window to complete. Now, obviously, they are going to do their best to complete it, because, you know, within that window, because they do not wish to reappear before this Planning Commission and, you know, like face also the, any adverse public or agency kind of comment relating to the project. They have an obligation to complete it, and that's, that's their goal right now. You know, like, we have to add a little bit of qualifier in terms of like the specific timetable, I mean, you know, the applicant's attorney did 5 EXHIBIT B provide a specific timetable, but we don't know exactly like what the impact of the pandemic and the overall condition of the global economy we'll have in terms of project financing, and, which could affect the development schedule. But, notwithstanding those situations, this is where the applicant is coming from, their hope. Their hope is to secure like a final plan approval by the end of next year or maybe the first quarter of 2022, but definitely no later than 2023, because they have to work backwards in terms of having it completed by December of 2025. So they are kind of like working backwards from that. So if you assume that they can get your final plan approval maybe by the first quarter of 2022, then the building permit would be secured by the end of 2022 or earlier part of 2023. They would begin construction in 2023 but definitely no later than the start of 2024 because, you know, you are looking at maybe a good, you know, 12-to 18-month construction window because their deadline is to have it completed by December of 2025. The last issue I think was raised, you know, specifically in regards to the onsite maintenance, and it's a concern that the owners are very aware of, I mean, like everybody, I mean I would feel the same way, if I were a resident of the Kona Reef condo or any of the surrounding areas. So even like C. J. Kimberly, you know, who is a good friend of mine as well, you know, I would have some concern of, you know, having this homelessness or this litter, the graffiti. So, what, what they would like to do is like you know, what was contained in the letter is just saying like this is how (technical issue–echo)you know, we would address it by having maintenance security to address like graffiti, the grass, the litter, fence, the homelessness—so what we would like to do is, you know because I think one of the commissioners mentioned about like, well, what specifically are you referring to, so I can understand that because the letter was not necessarily clear—what we would like to suggest is that the condition, I'm sorry, that the Commission impose an added condition that requires the applicant to provide a site maintenance program, you know, to the Planning Department so that it gets reviewed and approved by them, and that maintenance program would have to address things like how you are going to secure the site, who is the contact information, and how long it's going to last, what's your implementation timetable, so on and so forth, you know, and that gets provided and approved by the county Planning Department, and once it gets approved, then, you know, they can start to really begin to aggressively address this issue. If there is any infraction on that, then there would be cause for the Planning Commission to bring this whole permit up again, you know, for consideration for - - - comply it with the appropriate condition. So, that is a condition that we would like to suggest to the Commission that you, you know, strongly consider just to specifically address the issue of homelessness and maintenance. It is a concern to the applicant, too, because they've tried to secure as best as they can, you know, to prevent the area from homeless people from coming in, but as one of the testifiers, or probably I think Commissioner Van Pernis, noted that people were kind of like squeezing in, you know, like through the gates. Other situation they've kind of like broken the gate, you know, like through, finally, you know, somehow find their way to get into that area. So it requires the aggressive maintenance, aggressive security, and that's the idea; to have a program submitted to the county, let them approve it, and then you have, you know, a very legitimate enforcement program. Other than that, I mean, you know, if you have questions to whatever I presented or questions of either of the attorneys, we are more than happy to respond. 6 EXHIBIT B CARR SMITH: Thank you, Sid. Kim, go ahead. YOSHIMOTO: Sorry,just quickly—Commissioner, I know you have a questionI just wanted to also state that they are currently contracted with a security company; they are not professionals. They want the best advice as to how to control all of the issues that have been brought up in testimony and that the neighbors have experienced. And they are also under contract with a vendor. So this isn't I know, I apologize that it's a, consider there is a commit- there is a strong commitment, as Sidney brought up first. CARR SMITH: How long has the security company been under contract? YOSHIMOTO: I, I don't know, but it's been relatively recent. CARR SMITH: Okay. YOSHIMOTO: Yeah, following the recommendations and the discussion we had at the last hearing. CARR SMITH: Okay, very good. Evan, did you have anything to add at this point. OUE: Nothing to add at this point. CARR SMITH: Thank you. All right, we'll move on to questions from commissioners. Mr. Van Pernis. VAN PERNIS: Yes. The system has failed over here. I'm using Noriko's personal computer, so let me know if there is a problem. I would like to ask some questions of the staff first before I ask Mr. Fuke some questions. The questions that I was unable to ask the staff. CARR SMITH: Go ahead. VAN PERNIS: Thank you. Did the staff investigate or consider whether or not the entity applying for this extension existed at the time? CARR SMITH: Jessica, did you understand the question? ANDREWS: No, I'm sorry, could you repeat the question? VAN PERNIS: Did the department investigate whether or not the entity was registered and existing at the time the application was made? ANDREWS: The entity, the VAN PERNIS: I'm sorry I can't hear you. ANDREWS: I'm sorry. Did you say the entity? What entity? 7 EXHIBIT B VAN PERNIS: The applicant. The entity that is the applicant. CARR SMITH: And were they the owners when they applied for this? Is that what you are saying? I'm not following you. VAN PERNIS: If the entity existed CARR SMITH: If the entity exists VAN PERNIS: —some public testimony that the entity did not exist as of 2011. ANDREWS: I don't have anything to add on this, I'm sorry, I don't have any answer for you, but I wonder if maybe the applicant's agent can address your question. VAN PERNIS: The answer is the staff or the department did not look into that, correct? ANDREWS: That was not an issue that we looked into. VAN PERNIS: And the SMA that's involved here has expired. Is that correct? ANDREWS: No, it was not expired when they submitted the application. VAN PERNIS: But it's expired now. ANDREWS: It has since expired through the course of the review process, but they did submit the application prior to expiration date. VAN PERNIS: Thank you. CARR SMITH: All right, thanks, Jessica. Let's VAN PERNIS: I have some questions of Mr. Fuke also CARR SMITH: Sure, go ahead. VAN PERNIS: Mr. Fuke, the traffic situation at the site has changed over the last 22 years, correct? FUKE: (Inaudible—muted) Oh, I'm sorry yes, I would imagine so. It has changed like the rest of the island. VAN PERNIS: Has any traffic study ever been done for this area? FUKE: I think like, as I noted earlier in the initial presentation on this matter back in October, that as part of the SMA review process a traffic study is not required or is not needed, you know, 8 EXHIBIT B unless you can show a direct bearing between the traffic as it relates to coastal zone management objectives, you know, and that was pursuant to the Topliss versus county Planning Commission decision that was rendered by the state Supreme Court, or the Intermediate Court of Appeals. So, you know, given that, then there was like no traffic study done. If they were, if this were like a rezoning time extension, then very definitely pursuant to the concurrency provision of the zoning code, a traffic study would have been required. So the short answer to your question is that no traffic study was done in conjunction with the original, neither for this current time extension request. CARR SMITH: I think we heard that last time as well. Mark, you are not I can't hear you. You are muted, I guess. VAN PERNIS: (Inaudible—muted) HALL: Can Rachelle unmute him? CARR SMITH: It's, it's Noriko's deal. VAN PERNIS: Can I be heard now? CARR SMITH: Yes, go ahead. VAN PERNIS: Thank you. CARR SMITH: Go ahead, Mark. VAN PERNIS: All right, thank you. The letter of Mr. Oue and Mr. [sic] Yoshimoto, I've written this kind of letters, too, as an attorney, and this is a way to avoid a commitment; it says the applicant will consider or intend, but there is no commitment. Will the applicant commit to taking care of the homeless problem,putting it to—look, they are not going away—will the applicant commit, not consider or intend, but commit, to dealing with the homeless problem immediately? CARR SMITH: On the property. VAN PERNIS: That's a question for Mr. Fuke. YOSHIMOTO: Oh CARR SMITH: Well, you, you were referring to the attorneys' letter, so let's let Kim or Evan respond, please. YOSHIMOTO: Sure VAN PERNIS: I'm asking—all right, then let me ask other questions — 9 EXHIBIT B CARR SMITH: Mark, Mark, Mark, let's not get confused. You had a question; let's have them respond, okay? VAN PERNIS: Okay. CARR SMITH: Thank you. Kim or Evan, please. YOSHIMOTO: Yes, I can respond. Thank you, Chair, and thank you, Commissioner, for your question. I know you were having some sound issues, so earlier I said, and you are correct, it shouldn't, the letter shouldn't have said consider; there is a commitment, and Sidney offered an actual condition that would require us to do that within a period of time. So with regard to "immediately,"there needs to be some planning put into it, and, you know, a full plan created. But we are committed to, to the condition that Sidney put forth within the time frame that is specified. VAN PERNIS: What time frame? YOSHIMOTO: I'll let Sidney - - - FUKE: Sure. I have a proposed language, and it probably, you know, it can be modified or adjusted as the Commission or the staff might, might deem appropriate. But it would read something along these lines: "The applicant shall provide a site maintenance program to the Planning Department within 90 days of the effective date of this third amendment to address the site's maintenance and security, which shall include an implementation timetable and contact information of the responsible person or company. This program shall be in force until physical construction of the project commences." VAN PERNIS: So there is no immediate dealing with the problem; it's at least 90 days-plus away. FUKE: Well, I think, as Ms. Yoshimoto had indicated, the applicant has already retained the services of a maintenance company, you know, to address that issue, so, that's kind of like ongoing, but that may not necessarily be a comprehensive program as maybe envisioned by either the Commission or the Planning Department. And so the idea is to submit the program and have it vetted and essentially approved by the county so that there would then be subsequently or moving forward a basis for the enforcement. VAN PERNIS: So the security of the site is up to the Planning Department rather than the owner themselves? YOSHIMOTO: The plan is going to be presented to the Planning Department. Your question is what's happening right now. As, you know, commission- one of the commissioners brought up earlier, there was some breaks in the fence, that's trespass onto the property, we were aware of that, there was fencing around the entire property. So these are people trespassing. And there are actions being taken right now to close the fence and to deal with trash and graffiti. So, but, it's not part of a comprehensive plan. What we are offering is a comprehensive plan submitted 10 EXHIBIT B to the Planning Department, based on recommendations from a professional security company, which would be best practices, as opposed to us just try to react to every, you know, on a case-by-case basis. I hope that answers your question VAN PERNIS: But you are not dealing with the problem now. YOSHIMOTO: I think Chair - - - CARR - -CARR SMITH: There are many - - - forward, Mark. Okay, any more questions VAN PERNIS: Let me ask, will you commit to a date by which the existing concrete monstrosity will be demolished? FUKE: I think that, as I mentioned earlier, like the current plan that was approved, the 2017 plan that was approved, call for the retention of the partially completed structure, and moving forward I think what the value engineering, you know, consultant is trying to do is like to seek the appropriateness of retaining it or modifying it, and, you know,pursuant to a similar or like a modified design. So at this point in time it would be premature for the developer, you know, to affirmatively state that that structure will be removed or destroyed, because if it can be salvaged and incorporated into a design that's generally pursuant to the 2017 plan approval, they'll proceed and retain it. CARR SMITH: Very good, thank you VAN PERNIS: Regardless of the legal maze of these, will the owner volunteer to conduct a traffic study after 22, 23 plus five years, regardless of whether he technically was required to do so then - - - CARR SMITH: Sid? FUKE: Yeah, I'm sorry I didn't quite understand the question, Mark. CARR SMITH: He wants you to commit to a traffic study. VAN PERNIS: Regardless of the legal maze CARR SMITH: He's asking you if you will. FUKE: No, I don't think that the applicant can make the commitment right now. You know, there are like mitigation requirements in accordance with the staff's recommendation, I mean, improving that portion of Walua Road and Alii Drive fronting, you know, the subject property, but over and beyond that, having a traffic studyI don't know, I,personally, I would not recommend that the applicant make that commitment. CARR SMITH: Thank you, Sid. Max 11 EXHIBIT B VAN PERNIS: But you CARR SMITH: do you have a—Mark, Mark, I'm going to move on to another commissioner just so we can keep everybody involved here. Go ahead, Mr. Newberg. NEWBERG: Thank you, Madam Chair. I apologize, Mr. Van Pernis, if you have more questions. Forgive me I'm going to use first names, but Kim, Evan, or Sid, is there anyone on this meeting today that can speak for the owner? Is there anyone here that has that authority to commit or not to commit to any of our proposals? YOSHIMOTO: It depends on the proposal. With regard to traffic study, they would be disinclined to do one; they are not legally required to. And I'd also like to point out, and I think Jeff Darrow brought this up in the last hearing, it's very unusual to have condition number 4, which is the Alii Drive and Kahakai Road improvements. The Planning Department doesn't normally require that, but we are willing to do it, notwithstanding the fact that this is very atypical. So while we would be disinclined to do a traffic study, there is a commitment to dealing with these types of improvements that we think would help movement in the area. CARR SMITH: Did you NEWBERG: I appreciate thesorry, Madam Chair? CARR SMITH: Did you have something else? NEWBERG: I just wanted to know if there is going to be proposals made or requests made, if there is anyI would assume, you are here today, I was kind of hoping to see maybe, not only attorneys and Sidney as the consultant, but maybe somebody that could speak, you know, for Michael, the owner of Diamond Resorts, or, you know, I realize you folks are a very large organization. I don't know if this is a situation where we are going to make any amendments. It seems great that we've made a step forward, and there is commitment to secure the property, to have a local contact for those that are neighbors to the property established. I'm just curious of, you know, beyond that, if there is any proposals made, are you able to accept or speak on behalf of the owner? FUKE: Maybe I can just kind of answer. Yeah, I think your question is very germane, Commissioner Newberg. I think that the attorneys are in the position to agree to certain concessions, but areas that they cannot agree with, you know, like for example, I would not have recommend, you know, going along with a traffic study, but other things relating to for example like on the maintenance program, you know, if there are other languages that the commissioners may have, I believe like the attorneys would be in the position to speak on behalf of the owner and make that commitment. So it's really like the nature of task. CARR SMITH: Very good, thank you. NEWBERG: Fair enough. The only question I have, if I may ask one more, and I would assume that maybe the attorneys that would be appropriate to ask, I know in dealings in the State of 12 EXHIBIT B Hawaii with international resorts and timeshare companies; is Diamond Resorts willing to commit to using local labor force from the State of Hawaii, as they build this construction proj ect? YOSHIMOTO: I, I don't think, I don't think they can commit today. That can't be a condition to this, but I'm sure they are open to conversations in the future. I work with,just,just so you know, I work with several unions here locally, and that question was posed to me, and that's certainly a discussion that's going to happen at some point, but I don't think we can make a commitment today. But just so you know, I have had discussions with, with a number of different unions. NEWBERG: To be clear, it wasn't a union question at all, and YOSHIMOTO: I was just wonderingI'm sorry. NEWBERG: I do appreciate the sentiment. YOSHIMOTO: Thank you. CARR SMITH: Thanks, Max. Mike, go ahead. VITOUSEK: Can everyone hear me? (No audible response) Okay, thanks. I do want to echo Commissioner Newberg's concern about the lack of the developer here, you know, that was one of the specific things that we requested in the previous meeting, because we do want to ask questions about the feasibility of the development and then the noncompliance with the previous conditions. Has there been any answer to the question that was asked in the previous meeting about when the feasibility study was conducted? FUKE: You mean in terms of the, in terms of the value engineering? Yeah, my understanding VITOUSEK: Yes, the FUKE: Yeah. VITOUSEK: Go ahead. FUKE: Yeah, so after the 2017 plan approval was issued, then, you know, they began to look more aggressively in now coming up with your building plans, because, you know, as you are aware, that the normal permitting progression, you know, you start from, you know, like the SMA or the zoning, and then you apply for your plan approval, and you get the plan approval, then you theoretically now are in the position to prepare your construction plans for your building permit. So prior to the development of the specific plans for the building permit to see whether they are going to utilize or not utilize the existing improvements, so on and so forth, they, in the process of doing the value engineering. And my understanding is that as they were doing that, then of course like they had some,just overall, like there was some, you know, 13 EXHIBIT B financial issues about whether it was feasible or not feasible, you know, to actually proceed with any project or not. That's kind of like my general understanding, Commissioner Vitousek. To answer your other question about the unavailability of the owner himself, itself rather, or the owner's representative, the owner's representative is watching the whole proceedings online. And so if there is a need for specific communication within, I'm sure that one of, you know, the three of, one of us can probably get a hold of the owner, owner's representative. His name is Larry Oleck. He is currently based in Florida at this point in time. But he is, you know, definitely engaged in the ongoings of today's proceedings. VITOUSEK: Okay, awesome, I'd love for him to join, if he is available. So, you know, again, moving back to the original point about the feasibility study, so we are in a situation where the developer has designed a project that was then received plan approval in 2017, and then subsequently they realized that, wow, we can't actually afford what we designed, and that's the justification given for noncompliance with the timing of the condition. So, again, to me that indicates that the noncompliance with the timing is not the result of factors that cannot be foreseen by the developer but rather by the developer designing a structure that they can't afford. FUKE: Well, I think that if you look at like,just like any residential construction, you know, you have your home designed and maybe developed by,plans drawn by an architect, and then you send it out to bid, and like, oops, I can't afford it. So what have you got to do? You've got to go back and make some adjustments. And I think this is a little bit bigger project, and it's a similar situation. I, you know, if you just VITOUSEK: Right, but it's a project that they've had 20 years to develop and to understand the idea behind and the fact that, you know, they put forward the plan approval in 2017 when the development window closes in 2019 doesn't give them a lot of time to make those adjustments that are needed. So, again, it's, it's the fault of the developer alone; it's not someone acting on the outside that impacts the developer's ability to design their own project. You know, I think that's, that's important that we consider moving forward. But I do want to continue you know, there has been a lot of discussion about the, you know, litter removal from this structure, but I want to make it very clear that in my opinion this structure is litter on the entire community, that this derelict building that has stood here for 15-plus years is detrimental to the overall Kona community. So, to me, the most important thing that we can do now is finding a way to cure that, and if this developer is able to cure that within this amount of time, then I would be in support of that. I have concerns because I don't believe that they have shown the ability to do that to date. I also have concerns with the schedule that's being proposed. I think that by waiting to 2000 and, or 2023, to submit for final plan approval, I think you are backloading the schedule and you are putting yourself in a situation where it will be impossible to complete, because the timing that's going to take to get plan approval will be months, and then after that the timing to get the building permit, especially for a structure of this size the way that things are going now with the county, a simple home takes about a year to get a building permit. So at that point you put yourself in a situation where you want to start and finish construction of a 46-unit timeshare in less than a year, which I personally don't believe is feasible. 14 EXHIBIT B So, to me, if, if we are going to make a meaningful effort to cure this area of the derelict structure and complete something, we need to have a much stricter timeline whereby plan approval will be applied for within a year, which I think is reasonable given the commitment in the letter that the building will be consistent with the 2017 plan approval. So if we can commit, as a condition, that plan approval will be applied for in one year, and within one year of securing plan approval, or even less maybe, six months within securing plan approval, building permits will be submitted for, and then construction will be commenced within one year of receiving the building permits. And if any one of those conditions is not met, I would recommend that the permit be revoked; so if you do not apply for final plan approval within one year, the permit is revoked and over; if within six months of receiving plan approval you do not submit for final building permit, the permit is revoked and over; if, within one year or less of receiving the building permit, if you don't commence construction, SMA permit is revoked and over. Is that something that you guys can commit to on behalf of the developer? FUKE: I can't, like, Mr. Vitousek, I can't necessarily commit to that, but, you know, from my perspective, a couple of things, I think. First of all, I kind of indicated that, you know, the letter that you saw, and it was provided by the attorneys' office, but basically saying that they'll have the plan approval no later than 2023, but if you listen to what I initially articulated, I would say that the hope is to secure final plan approval by the end of 2021 or the first quarter of 2022, and then the building permit to be secured by the end of 2022 but no later than, you know, 2023. I hear what you are saying, you know, there should be a little bit more specific timetable relative to the process. You know, I, I would think that that's kind of like reasonable; what needs to be more specifically addressed, however, if like the timetable between, what you are suggesting between final plan approval and submittal of a building permit, six months - - - absolutely too, too short. VITOUSEK: Okay, what do you feel about a year between final plan approval and submitting for building permits? I feel as though a year should be plenty of time to get the design together. FUKE: Well, as far as like, you know, completing the value engineering and coming up with the plans for plan approval, you know, by the end of next year or the first quarter of 2022, from my personal observation in dealing with other projects, I would say that that's kind of like reasonable to ask. If you kind of like roll back the clock now, you know, if you have like the deadline of December 2025 to have the building completed—and Mr. Newberg knows very well from the construction standpoint approximately how long, you know, when do you have to begin—well, begin, and I agree with you, you can't begin in January of 2025 and expect it to be completed in 12 months thereafter. So probably, you then, you know, roll it back to say, you know, construction to begin maybe no later than maybe mid-2024. It can begin earlier, but definitely no later than that. I mean like it's more like how do you break it up within that five-year window, you know, to provide a realistic milestone, realistic and achievable milestone. VITOUSEK: And to me, that's why having the developer here is entirely material to the discussion because they are the ones who are going to be selecting the contractor, selecting the architect, determining the duration of time for design, and all that. And with respect to you, you 15 EXHIBIT B know, Mr. Fuke, and to the attorneys, you know, you guys are, that's not your area of expertise with this development. FUKE: Well, if YOSHIMOTO: Can I just look at—sorry, Sid—can I just speak a general comment? You know, I think—and I mentioned this in the last hearing—everybody wants this thing to get built, right? I mean that's the goal; we all have the same goal. And I want to be able to do what we need to do to set up, set the developer up for success. As we've all seen, sometimes there are delays. I wanted to get this thing through in the beginning of 2019. I couldn't get a hold of SHPD for 11 months and needed to, you know, have Jeff and Jessica help me. That was totally out of our control, and that happens, anybody who does development, that happens very consistently. So I suspect that's why this is backloaded. Because you have to be able to anticipate delays; if we don't allow for that sort of buffer, we are setting—so then it's revoked, and we have to come back, and then that building sits here then, I mean, like this a lot likely. It's just the reality. People hate that excuse, but it's the reality. So I just wanted to offer that. You are right, I'm not an expert in this, I defer to Sid in terms of timing,but I do think whatever comes out of today should set this project up for success. VITOUSEK: And I believe that this project has been given 20 years in which you could have succeeded, and so in order to move forward it needs to be on an extremely short leash with conditions met in certain periods of time, and if that can't be done, then once and for all we will know that this developer cannot do it, and they'll have to get off the pot. CARR SMITH: So thank you—is there any reason, Evan, Kim, or Sid, that this gentleman that's watching online, is there any reason that he can't join us? I think the commissioners would like to have the developer present. Is that possible? We can take a 15-minute break and have him join in the call? FUKE: Kim—I'll defer to Kim. YOSHIMOTO: I can ask, I mean I know he's do-you know, you know what is with Zoom, you are monitoring things while doing other things, but I can make that asked. Can we take a break? CARR SMITH: The Commission has been asking for that for a bit, so maybe we'll take a little break, you can find out whether that is possible. Would that work? YOSHIMOTO: Sure. CARR SMITH: Okay, thank you. It's 10:57. Let's come back in 10 minutes, and then we'll see where we go from there. Thank you. (Chair Carr Smith called a recess at 10:57 a.m. She called the hearing back to order at 11:12 a.m.) 16 EXHIBIT B CARR SMITH: All right, I'm going to call the meeting back to order. It's 11:12. All right. Can the applicant share with us if you've learned anything new about the developer joining us? FUKE: Sure. I, we had like a, Ms. Yoshimoto and I, had a conversation with Larry Oleck. Larry Oleck is the senior vice president of development, based in Florida, and he was watching, you know, like through YouTube the whole operation, and he had to leave because he had an 11 o'clock—well, our time 11 o'clock—commitment. But he said that he was agreeable to having a specific breakdown in terms of timetable, and he essentially deferred it to us in terms of like trying to establish what would be those major benchmarks, you know, essentially wanting to, you know, like make sure that the concerns are properly addressed, especially, you know, what Commissioner Vitousek mentioned about, you know, the unsightly condition and so on and so forth. So long story being short, he asked us and said go ahead and you have my blessing to have the specific construction, you know,permitting window, but—he all just kind of deferred to us. So after we hang up, then we talked about the different scenarios, and based on my experience with permits, I would kind of like recommend a condition along these lines then: that a plan approval be submitted no later than March 30, 2022, which essentially from this point in time, give you like one year and a quarter to a window within which to complete your value engineering and do all of your necessary design plan approval normally from the time of submittal, you know, takes you like about at maximum maybe 60 days to get approval then, so if you assume like March, April, May, you know, to get plan approval, then you get authorization to start your, you know, with your building permit plans then; then, so then to say that the building permit shall be submitted no later than June 30, 2023; and the starting of construction to begin no later than June 30, 2024. So, essentially, you know, if you look at that window, then that gives you like a one-year window from the time the building permit is applied for and hopefully secured, but I would think that it would be kind of like an earlier period than that, but this is kind of like a no-later-than, so it becomes very clear in terms of the enforcement capability whether you have or have not submitted. So, you know, given that kind of like construction timetable window, Mr. Oleck said just go ahead, and he'll accept a condition along these lines. Now, he knows that, obviously, you already have a condition that the project has to be completed by, you know, like the approval of this SMA extension, so, which if, the day would be like December 18'', or 16'', of 2025; that's the deadline construction window. CARR SMITH: Thank you, Sid. Mike, did you want to respond to the adjusted times? VITOUSEK: Sure. Just so that I understand it, we are looking at March 2020 being the deadline for resubmitting the plan approval? FUKE: March 2022. VITOUSEK: 2022, sorry, yes, yeah, March 2020 is over and gone. So, March 2022, that seems like a long time given that they've already stated that they are going to be going with the similar plan approval as what's been presented in 2017. 17 EXHIBIT B FUKE: The only thing, you know, to which I would say that, you know, they haven't really like incorporated the value engineering aspect into the design, so, you know, they kind of like worked a little bit`okole backwards, you know, in the sense that they did the design, and then they got the plan approval, and then they started to do the value engineering to see like whether, you know, it becomes, you know, like workable, and that's when their hands were thrown up and said no it's not workable. So this is why now they are doing the value engineering and using the value engineering as a basis to come up with the plan approval. VITOUSEK: Okay, and so they are thinking that that's going to save them time on the design of the actual construction plans? FUKE: I'm just kind of like providing a little bit more leeway, but, you know, if you are very aggressive, probably it would be you know, if I were the developer, I would want to kind of fast-track it, much more than kind of like waiting until the last minute, because if the market— VITOUSEK: arketVITOUSEK: Yeah FUKE: —and, you know, you have all of the thing out there, you know, you just as soon - - - and build it, because otherwise you just have vacant property; you are paying real property taxes on it, and that's generating no revenue. VITOUSEK: Yeah, so basically, with the schedule that you just told us, they are going to be ready to commence construction in June of 2024. Is that right? FUKE: Start no later than June 30, 2024, because, again,just working backwards, it's probably going to be like, you know, like 12 to 18 months construction window. VITOUSEK: Yeah, yeah, so that's giving them 17 months to complete construction? FUKE: Yeah. VITOUSEK: That, I mean, that's going to be really tight with a project of this size. You know, I feel like if we can condense it on the front end a little bit, that would make me feel a lot better. The idea being that once that they, once they get substantially moving and going, I think that there should be a little more leeway, you know, if that's partially completed, I don't see us pulling the plug on, or wanting to pull the plug on it, making a derelict structure grow to being a bigger derelict structure. So I would want to have a little more leeway in completion of the construction and a little less leeway in planning in the amount of time it would take so that if we can't meet those upfront deadlines, we can finally move forward FUKE: Okay VITOUSEK: —and I do want to take this opportunity to also discuss alternatives or how we can move forward in the event that we don't make compliance with any schedules or if we determine at this meeting that it's been long enough. I want to ask if the county has considered a similar condemnation proceedings as was done on Honl's Beach Park where there was an existing SMA 18 EXHIBIT B that dragged out too long and had tremendous community opposition, and the county ended up condemning that, acquiring that, for use. There is currently not a good parking situation for Honl's Beach Park, and this seems like it would be an ideal location to serve Honl's Beach Park, as well as the Kailua Village area. So I just want to see if there has been any analysis or discussions about the county condemning this property for public use. CARR SMITH: Jeff, if you would like to chime in, go ahead. DARROW: Thank you, Chair Carr Smith. Aloha, Chairman and members of the Planning Commission. In response to Commissioner Vitousek's question, I am not aware of any, you know, action or even consideration of this particular property being, you know, thought of as being used for a parking lot or for a condemnation action. Normally, when the county addresses or looks at a condemnation, there is usually a nexus of a public use that it's benefitting, and a majority of times that use may already be in effect, such as an existing public access that has been closed by a private owner, or if there is a particular segment of a roadway that the county is looking at it that it needs for connectivity and it's been identified in long range plans and there is a particular property that it needs to be able to fulfill that connection, they'll consider a condemnation action. In this particular case, this would be very difficult because there is quite a large existing structure there that would have to first be removed, which would cost quite an exorbitant amount of money, and then to be able to improve the lot as a parking lot, I would, I wouldn't say that it's impossible, but I would say that it would be highly unlikely that they would consider that, especially, having to go through a condemnation action when the applicant is ready to proceed with constructing this particular project. VITOUSEK: Right, and the question is just about planning for contingencies in case the applicant continues to be unable to carry out the commitments. And it's been identified by the surrounding neighbors as a health and safety issue, which is a nexus for a condemnation, and a similar situation has occurred less than a couple hundred yards away with the Honl's. So, for me, again, ideally, ideal world, this developer is able to pull it together and complete this project in the amount of time that we will allot them to do. If they can't, which they've given us every indication that they can't, I think we need to be ready with an alternative so that we are not stuck with this derelict structure for another 20 years. And that's why I recommend that the county would consider this; I'm not recommending that they move forward with it in any way at all, but just that it be considered as an alternative going forward. CARR SMITH: Thank you, Mike. Jeff, go ahead. DARROW: Thank you, Chairman Carr Smith. So what we can do is make contact with the Department of Public Works, as well as the Department of Parks and Recreation, because this would involve both of actions through their department. ThereI do recall the Sobay case and the whole action there—whenever that does occur, there is, it's not as if the county gets this for free; they do have to pay for that. And, again, this comes with quite a large existing structure that may or may not be used in the use of a parking lot. But we will reach out to them and get their thoughts on that. Thank you. CARR SMITH: Thank you. Go ahead, Sid. 19 EXHIBIT B FUKE: - - - CARR - -CARR SMITH: Can't hear you, Sid. FUKE: Okay, I'm sorry CARR SMITH: There you go. FUKE: muted. Yeah, in response to Commissioner Vitousek's question, I think two things. One is like, you know, on the straight condemnation issue, it doesn't preclude like the public or whoever, government agency, you know, to make a request of the public access open, you know, the PASH, open space access commission, and see if this can be on their list. And, you know, that's, that's a long process. And if at some point in time whether wherever the developer is, you know, relative to its development plans, if the Commission decides that this property should be acquired for the public good, for open space, whatever have you, then they'll go ahead and, you know, do the appropriate condemnation process and eventually acquire the property. The other point about like in terms of your timetable, as you were speaking, then I kind of like adjusted the dates; I think that, and especially since Mr. Oleck has given us the liberty to make any internal adjustments, we feel like that that's reasonable. And I think what—now hearing your comment I think what could be reasonable would be to have like plan approval no later than January 30, 2022, as opposed to March, and building permits submitted no later than January 30, 2023, as opposed to June, and so if you assume like a one-year review approval process of the building permit in 2023, then you can start construction no later than January 30, 2024, essentially giving you almost like two years for the construction period. CARR SMITH: Sounds good. Thank you, Sid, thanks for that clarification. Barbara, go ahead. DEFRANCO: Anyway, I thank you, Mike, Mr. Vitousek, for all of your input. I agree with you, and I agree with Sid, that we have to find something that is actually achievable. And when I read the timeline, I didn't think the timeline that they offered us was real. So I like that we are adjusting this timeline so that we can make this project work. Thank you. CARR SMITH: Thank you, Barbara. Go ahead, Mark. VAN PERNIS: Can you hear me? CARR SMITH: Yes. VAN PERNIS: Mr. Fuke, is the developer willing to commit to immediate building of an inexpensive temporary asphalt sidewalk on Kahakai and Alii to alleviate the increased pedestrian traffic there? FUKE: As I mentioned earlier like, you know, I, again, it's unfortunate Mr. Oleck is not here, but, you know, I'm not at liberty or neither is, I think, Ms. Yoshimoto or Mr. Oue can make that 20 EXHIBIT B commitment on behalf of Mr. Oleck, you know, the developer. He has that condition, you know, condition number 4, specifically calling for improvements to both Kahakai and Alii Drive, curb, gutter, sidewalk, you know, the whole nine yards. Whether you want to make, you know, have that prematurely constructed, I would recommend no, largely because as you do the construction, then, you know, you are going to destroy all whatever you constructed previously. So, that's, that would be my recommendation to the developer. VAN PERNIS: Mr. Fuke, I'm talking about a temporary inexpensive asphalt sidewalk, not condition number 4. FUKE: On Kahakai or Alii Drive? VAN PERNIS: Both. CARR SMITH: You mean as it surrounds the property perimeter. Is that what you are talking about, Mark? And VAN PERNIS: Yes. CARR SMITH: you are talking about between now and when they start construction, that would be the benefit? VAN PERNIS: Immediately is when I would want that done. FUKE: I guess my question then is what is the, what is the purpose behind VAN PERNIS: Can you answer my question first? CARR SMITH: Well, he—Mark, let him speak. FUKE: I think I mentioned earlier that I cannot make that commitment, you know, because, you know, we are not authorized to do that. I mentioned also that if that were like a request, then it's something that I would probably not recommend,you know, that the owner accept. Now, alternatively, I've asked, what I wanted to find out was, you know, and maybe the owner might consider, but the question is the nature of the request; why is that request being made? Is there a lot of foot traffic in that area that's being created by the project, or the existing condition that the developer has created, create this kind of safety hazard? CARR SMITH: Mark, would you like to respond? VAN PERNIS: (Inaudible—muted) CARR SMITH: You are muted. VAN PERNIS: Can you hear me now? 21 EXHIBIT B CARR SMITH: Yes. VAN PERNIS: In response to your question, let me say that the developer has done nothing for the public for 23 years, and now asked for another five years. The public walks in front of this project both tourists walking in the town and locals walking out to the beach. And it's a liability issue for the county because there is no safe walkway there. They can't walk on the other side of the road because of the existing walls and lack of setbacks. So this is a small contribution to the public while the developer has done nothing for 23 years. And I think you'd know that, if you didn't live in Hilo or were familiar with Kailua-Kona. And I note that the developer has not produced a single person or entity to testify in favor of this project while there is lots and lots of public testimony universally against it. So my to answer your question, yes, there is a problem there, and that's why condition 4 was included. And I'm just asking for a temporary inexpensive asphalt driveway [sic] that can easily be destroyed once construction starts. And FUKE: Okay, I, Commissioner Van Pernis, I think I have better understanding. I would like to only like suggest that, you know, we are already proposing a condition that the developer submit a site maintenance program to address like the homelessness, the litter, the graffiti, so on and so forth, and if it ties in, like, if the need to get like a good maintenance program, I mean the security and otherwise, if that program calls for like making that interim improvements, then so be it. It's something that has got to be reviewed by the owner and eventually vetted and accepted by the county. CARR SMITH: Thank you, Sid VAN PERNIS: So the answer is, no, you are not willing to commit now. CARR SMITH: That's FUKE: Yeah, I cannot make the commitment on,now, on the other hand if that is like, you know, if the condition that we are proposing about the applicant coming forth with a site maintenance program to address the homelessness, security, so on and so forth, if one of the mitigations that they accepted, or that's required by the county Planning Department in its review of the applicant's site maintenance program calls for like interim improvements, then that is the thing that they have to do. VAN PERNIS: You are asking this Planning Commission for certain things right now, but you are not willing to commit to give the public any benefit right now. Is that right? FUKE: All I'm saying is that, you know, like neither Ms. Yoshimoto nor myself can make that commitment for the owner as far as making that interim sidewalk improvement. We are not saying, however, that that cannot be part and parcel of the eventual site maintenance program that gets reviewed and vetted by the county Planning Department. VAN PERNIS: I'm talking about separate from the maintenance program. So let me ask FUKE: Well, because it's tied in-the maintenance program is tied into security and safety. 22 EXHIBIT B VAN PERNIS: Well, the homelessness problem is not going away; it's not going away at this location, and it's an expense on the county and that's a taxpayers - - -. Let me ask you, what in 23 years has the developer or its predecessor done for the public of Kona other than create a useless concrete monstrosity, which defalcates a value of Kailua-Kona? CARR SMITH: Okay, thank you, Mark. Not very productive, but let's move forward. I wanted to ask the applicant. Is there any reason why you cannot provide the site maintenance plan with the security and the contact within 30 days? I mean, why does it take 90 days to provide that to the Planning Department? FUKE: Just giving the applicant maximum time to prepare, like even the holidays. But on the other hand it's a concept. If the Commission—like, you know, earlier, you know, relating to the discussion as far as a specific construction timetable, if that has to be adjusted, then, you know, I kind of like came back and then made some suggested changes to the construction timetable—if the Commission wants to, you know, decrease the amount of time required to submit the maintenance program from 60, I mean from 90 to 60 or 90 to 30 days, then, if that's the term, then that's the term. CARR SMITH: Okay, thank you. Max, did you have something? NEWBERG: Thank you, Madam Chair. I just wanted to clarify for the record my earlier request to the owner's representatives, Ms. Yoshimoto mentioned union labor, it was not at all my request. I just wanted to note again, want to clean the record that neither was that stated nor my request, and also implore to the attorneys, Sid Fuke, and also the owner of Diamond Resorts that—we realize these are difficult times for hoteliers, resorts, and also our community here. While all areas, all countries have been decimated by this pandemic, our workers aren't able and when I say "our,"I mean the residents here of the State of Hawaii—aren't able to travel anywhere to work. And I would just implore a resort and hotelier of the nature and magnitude of Diamond Resorts to consider that; that when we look at all these projects, we truly want it to fit within our community. And the reason that I make that request of international resort, which seems to have properties on every continent, also a cruise service, membership, and they are well healed, that we are dealing with someone coming into our community, we are hopeful that you are committed to building this site, and for that reason we wanted to move forward. But to clearly state that you cannot commit to using workers within the State of Hawaii is troublesome. And it's also troublesome to not be able to have Larry Oleck here. It's also troublesome to keep hearing, "I cannot commit to that, and we'll have to speak with the owners." So I just wanted to clear the record and make that statement. Thank you. CARR SMITH: Thank you for that, Max. Go ahead, Kim. YOSHIMOTO: Thank you. Thank you, Commissioner, for those comments. I appreciate them. To be clear, I wasn't saying we can't commit to local workers. I think that is the full intention. It was just that, you know, we can't commit right now to use union labor as part of the conversation, so I guess I thought that perhaps that was the request. I'd like to say that we do use 23 EXHIBIT B local workers and union labor on other—well, Diamond does anyway—on other projects on Oahu and elsewhere. So, but thank you for your comments. NEWBERG: Thank you for that, Mrs. Yoshimoto. And to be clear, I would never request that union labor be used. Thank you. CARR SMITH: All right. Perry, did you have any questions? KEALOHA: No, I think I have comments on CARR SMITH: Yeah KEALOHA: testimony. CARR SMITH: —sure, go for it. KEALOHA: You know, so I share the same theme with everyone else, you know, 20 years is a long time. And this is a reoccurring theme; it's not just this developer, but it's, it seems to be everyone that comes before us for over the last few years, it's all properties that have been acquired or, and sat for 20 years, 30 years, and now they are coming in for extensions. I feel the most important thing is if we can add some language that if it's not completed in this next five-year extension, that no further extensions would be granted, so just make it clear that it's either, you know, get it done or get out. You know, a lot changes. Twenty-five years is a life, you know, is a generation, and we just can't keep extending; there's too much changes over that period of time. And I think the best way to resolve the community issues with homelessness you know, homelessness is not a property issue, it's a community issue, but this being the weakest link at the time, getting this project moving forward is the best way to resolve it from the area. CARR SMITH: Is that everything, Perry? (No audible response) okay, thank you for your comments. Go ahead, Kim. YOSHIMOTO: Thank you, Commissioner Kealoha. I think that's totally reasonable, and we would be amenable to it. CARR SMITH: Mike, go ahead. VITOUSEK: I just want to say that I agree with Commissioner Kealoha, and that, again, I don't think that our condition should be specific to the five-year completion; I think that it should be to each phase of completion where if they don't make the first phase, it's done, and we are moving forward already; if they don't make, if they don't make application for building permits, that it's done and it's over. The one caveat that I would have on where an extension could be allowed is after substantial completion of the project; if they are over 50 percent or something completed on the project by the deadline, I think they should come back for the opportunity to have an extension to finish construction of the project and not leave a partially constructed project. So, to me, that is the only time where I think the possibility of extending beyond the five years is 24 EXHIBIT B reasonable, is after substantial completion where they need time to finish construction. Do you agree with that, Commissioner Kealoha? KEALOHA: Again, I agree with the spirit of the request. I'm less concerned about the details as intention VITOUSEK: Yeah. KEALOHA: —like we've seen too many people come before us, kind of just sat on (indiscernible–noise)the other hand, if this doesn't go through, that eyesore is going to remain indefinitely and the issues around that at the property will remain indefinitely. So I hear a lot of comments about let's just end this now, while there is no fix; this is going to stay, you know, the current state will be the state for the conceivable future. VITOUSEK: Right, and which is why I believe that the county needs to look into the alternative of condemnation - - - health and safety concerns for public HALL: Excuse me VITOUSEK: - - - as the alternative HALL: —Mafia Hall. If we are going to move into discussion, I think we need a motion, please. Thank you. CARR SMITH: Thanks, Malia. KEALOHA: That's what I was waiting on, thank you. CARR SMITH: Okay. All right. Mr. Van Pernis. VAN PERNIS: Question of the attorneys. What standing does the applicant have? Can't even go forward if the applicant does not exist legally, as public testifiers have indicated. What can you tell us about that? YOSHIMOTO: I don't think that the testifier said that the applicant doesn't exist legally. There is no way that this company could have acquired the property, if they didn't exist legally. He was referencing something in Nevada, which I don't have any information on (indiscernible– noise) news to me VAN PERNIS: The testifier said that the LLC, which is the applicant, was dissolved and doesn't exist as of 2011; therefore, legally we can't act on the application in any manner. Do you agree to defer this matter until we find out whether the applicant exists or has any standing? Because the only evidence we have, the only evidence is that it was dissolved in 2011. CARR SMITH: Okay, Mark, thank you. The county has accepted this application that's before us. We are the county Planning Commission, and we are going to act on this agenda item. 25 EXHIBIT B So, it's my understanding that we have six conditions before us now, we want to add the whole time frame for approvals and construction, we want to add the site maintenance plan, and what else? So I need to be clear. Mike, since you took the lead on that, the time frames—Sid had offered up a revision—can you respond what you think it should be? Go ahead, Mike. VITOUSEK: If it's okay with the Chair, I'll make a motion. CARR SMITH: Okay. VITOUSEK: Okay, so, before making a motion I just want to state that I have definitely heard and considered the concerns of the members of the public who testified today and in writing. I agree with them that it's been too long, that the structure is an issue in the community. I personally believe that the fastest way for us to move forward with curing this issue is for the current owner to develop it in compliance with the existing conditions; I think that's what's going to solve the problem fastest. So for that reason, I'll be making a motion to grant the applicant's request for a time extension, as recommended by the director, with the following conditions in addition to the conditions already imposed: Number I is a site maintenance and security program to include an analysis of the construction of temporary sidewalks, you know, with, to be submitted to the county within 45 days for review and acceptance and, you know, any other, or the language that Sid would like to include in there from the previous motion that I left out can be added in discussion; number 2, that the project follow a timeline where plan approval will be by January of 2022, by the end of January 2022, the building permits will be submitted by the end of January 2023, and the construction will commence prior to, or commence after January 2024, prior to—excuse me will commence prior to January 2024 CARR SMITH: On or before VITOSUEK: if any of these conditions are not met, the permit will be rescinded. If—and then, so, following, the completion of the project will be December of 2025. Now, the only opportunityI think it should be included—the only opportunity for time extension would be for after the project has been commenced and construction is—what will we say, 50 percent completed? And then, if in a case that construction is commenced and 50 percent completed, then the project can apply for an additional time extension after that, but they'd have to come back to the Planning Commission to explain. CARR SMITH: All right, there's, that's a motion. VITOUSEK: So, again, you know, my words may not be the exact condition applied into the regulation. I hope that they can be summarized a little better than I can do off the top of my head when they have the time, but if the intent of that can be captured as a condition, then I would support moving forward with Diamond Resorts International completing the project as requested. 26 EXHIBIT B CARR SMITH: Thank you. Is there a second? Would any commissioner like to make a second for that motion? VAN PERNIS: I'd like to make a comment. CARR SMITH: Okay, Mr. Van Pernis has the second. All right— VAN ightVAN PERNIS: No, I did not second it. I said I'd like to make a comment. CARR SMITH: Okay, well, I'm looking for a second, so I'm not looking for comments at this point. Max? NEWBERG: I'd like to second that. Thank you, Madam Chair. CARR SMITH: Thank you very much, appreciate that. All right, any additional discussion to refine any of this? FUKE: Madam Chair? CARR SMITH: Yes, Sid, go ahead. FUKE: I, you know, as Commissioner Vitousek was talking, and even prior to that, I kind of got as far as like what the intentions were, what his intent was, and I'd like to just provide a language, you know, along those lines, not so much as it relates to the site maintenance program but the schedule. So if you look at condition 2, condition 2 says that"Construction of the proposed development shall be completed within 5 years from the effective date of this third amendment." Then if you can just kind of like continue to say that in accordance with, you know, "shall be completed within five years from the effective date of this third amendment," and now the new portion would be, "in accordance with the following schedule: Plan approval submitted no later than January 30, 2022; building permits submitted no later than January 30, 2023; begin construction no later than January 30, 2024," and then period, "Failure to comply with this timetable shall result in the automatic nullity of this permit, except that if the project is substantially constructed but not completed, it may be extended by the Leeward Planning Commission." I would suggest leaving substantial to the discretion of the Commission, rather than 50 percent or any remark, because it's kind of hard to determine. But if you can see, you know, any reasonable person would say like, yeah, you know, you are pretty much done already, you know, so rather than saying 50 percent or whatever, you know, because they can say like, well, you never finished inside, and all that, you know, so you don't want to get involved in that, so leave it to the discretion of the Commission. VITOUSEK: I just say that I believe that captures the intent, so I'm okay with that. CARR SMITH: Sid, what's your definition of substantially completed? Just generally speaking. FUKE: I mean, if you see the construction workers all out there and, you know, you have the framing and, you know, all of the walls and everything else, like, all done, and maybe the only 27 EXHIBIT B thing that remains would be essentially like having all of the interiors kind of completed, you know, the furnishing and, you know, the soft things, I think like you know, it's like when you build a house; when you build a house, you have the house all kind of like completed, I mean, you know, like the basic frame and all the things in, but it'll take you a long time to put in the cabinets and all that stuff, sometimes half as long as like the whatever you've got. So I think use those kind of like, you know, like lenses to determine substantial. CARR SMITH: Yeah, very good, thank you - - - ANDREWS: - -ANDREWS: Can I chime in? CARR SMITH: Jessica, sure. ANDREWS: I don't know if you want it to be, if you want to consider in the assessment of substantial completion tying it to inspections, construction inspections, that are done through the course of the construction process; there is framing inspection, there is foundation inspection. So I don't know if that would be anything CARR SMITH: Did you have a suggestion? ANDREWS: I mean, foundation inspection is—well, that's been done actually—so maybe framing or—frame inspection would be one step to tie it to. CARR SMITH: That's not substantial enough in my opinion. ANDREWS: Yeah, yeah, that I mean there is certainly, between there is framing inspection, framing inspection and final inspection, there is actually series of, you know, electrical, plumbing inspections, so. CARR SMITH: Okay, all right, so what Sid has recommended is that we add that language to item number 2, condition number 2, correct? VITOUSEK: Yeah, and I think that the point about having framing inspection be the cutoff for that 2025 date is reasonable CARR SMITH: Really? VITOUSEK: I think the developer can get behind that, and I think that's reasonable and definitive where after framing inspection, if they still have more finish work to do, and perhaps they can have a time extension to do that, but without framing that will hold them to it— although, talthough, you know, we do want to be careful and not make a big problem into a bigger problem. But I think, you know, I don't know, I'm inclined to leave it to the discretion of the Commission and indicate that, you know, substantial completion, and if they can look at it, and if the developer can come in and convince the Commission that they are doing what they said they were going to do and its definitive proof that there's people working on the project, to me that 28 EXHIBIT B would be good enough, that they are working to finishing it. So I think perhaps leaving it as substantial completion should be good enough, as Mr. Fuke suggested. CARR SMITH: I'm fine with substantial; I was just wondering, I was curious as to what his idea, what that meant. Mr. Van Pernis. VAN PERNIS: Two things. First, substantial completion legally could mean it's already got substantial completion because the foundation is in. We need to have specific language, not the word "substantial completion"because that allows the developer, Mr. Fuke, or whoever speaks at the next Planning Commission meeting to say there is substantial completion. I would say we need to be specific; the roof has to be on, and the framing has to be done. Can you imagine a framing without a roof abandoned at that time? That's the first issue. The second issue is, with all due respect to the chairman, the submission of the application by a non-existent entity invites litigation to cancel this permit either by Kona Reef or someone else. And I think that it's incumbent upon the applicant to prove they exist. Let me give you an analogy: Let's say an individual files an application before the expiration, and then he dies, the application becomes moot. And the fact that the Planning Department accepted this—well, "accepted" is a strange word, but—accepted this application but, as was testified today, did not look into at all the issue CARR SMITH: Okay, Mark, I feel like we are being repetitive here; we've already talked about this, and we've moved past this VAN PERNIS: Well, we haven't— CARR aven'tCARR SMITH: so we are working on the VAN PERNIS: I think that— CARR hatCARR SMITH: Mark VAN PERNIS: the applicant— CARR pplicantCARR SMITH: Mark VAN PERNIS: this application is CARR SMITH: Noriko, can you mute him,please? Thank you. Malia, go ahead. HALL: Sorry,just for clarification, we are using two different terms right now. Are we talking about substantial commencement or const—because that's different from substantial completion—so I just want to make sure you guys at least get that wording right in your, the intention of your condition. 29 EXHIBIT B And also, to the testifier, the word was that the, they weren't active; they weren't, they didn't use the word, "dissolve." So if you all have questions about whether the, what they were testifying to, the word was they weren't listed as active at the time, but there was no discussion of the corporation being dissolved. VAN PERNIS: At the time - - - CARR - -CARR SMITH: - - - clarification. Mike, go ahead. VITOUSEK: And I believe that the application lists DPM Acquisition dba Diamond Resorts International. There is plenty of information on the interweb about Diamond Resorts International being an active developer, so I don't, I'm not a corporate lawyer, I don't know that, but if they are doing business by Diamond Resorts International covers the - - - LLC that doesn't have their annual filing completed, I think that should pretty much justify their- - -project, and I think that we can move forward. Going back to the completion issue, commencement isI don't want to talk to commencement. I don't want to have to have the start of commencement be the end. I think we have to figure out language that everybody is comfortable with, including the developer, saying that the project is moving forward to a point where we all agree that it will be completed, and whether, if that language is too vague and if we need to - - -with framing inspection, that is what I think we need to figure out right now. I don't know, is it possible to poll on who would prefer to have it be substantial completion and who would rather have it as framing inspection? CARR SMITH: Yeah, who, okay, so, Commissioners, which of you likes substantial completion versus, substantial completion versus a specific time frame? I'm kind of like this. VITOUSEK: Is there a recommendation from our attorney on which would be a better term to use? CARR SMITH: Malia? HALL: Sid, could you please read the last part? Because you basically said that it was substantial commencement, the last part, substantial commencement with FUKE: Yeah CARR SMITH: Go ahead, Sid. FUKE: Sure, okay. So it would be, "except that if the project is substantially constructed but not completed, it may be extended by the LPC [Leeward Planning Commission]." The reason why I kind of like prefer the substantial approachment is that, you know, you already have on the record, based on today, like how do you, you know, like intuitively define "substantial,"you know. So if there is any question by, you know, like the commissioners back in, you know, in 2025, for example, when this comes up for the Planning staff to determine what is substantial or not, I mean I would go back to the record to see like what was the intent. And I think the basic 30 EXHIBIT B intent is that you at a stage where there's a point of no return where it's just not going to, you know, I just cannot finish it by December of 2025, but you know that it's going to be completed eminently. So I think it's like how do you, how do you codify commonsense? VITOUSEK: Yep. FUKE: I mean, you know, and so I would just say leave it as substantial and go back to the record. VITOUSEK: And it's, it's substantial construction is the language, instead of substantial completion versus commencement. And I'm okay with that language. CARR SMITH: Are you okay with that language, Malia? HALL: Yeah, that's actually what I was trying to capture was because, you know, when you say completion, that means a project is done, you know what I mean, it's the sequence issue, stuff like that. So I think that's the part where I was just getting a little confused in whole, but I think substantial construction actually the better, the better of the two terms, yeah. CARR SMITH: Okay, very good. Commissioners, are we good? Substantial construction? (No audible response) okay. All right, good, so that's being added to condition number 2, along with the recent language. Is that right? So, Mike, on your motion, we were having the time frame for the site maintenance was an additional condition, is that right? VITOUSEK: Yes, that was, that would be the condition 3 that was presented, but it would be instead if you want to take a stab at rewording my effort into, you know, capturing the intent of what being offered, we are shortening to 45 days and allowing for a consideration of the sidewalk as requested by Commissioner Van Pernis into the plan that would be submitted to the county. FUKE: Madam Chair? CARR SMITH: Yes, Sid, I'm sorry FUKE: I'm kind of like trying to work on that— CARR hatCARR SMITH: waiting for you, Sid FUKE: perhaps like maybe you can answer, I mean, Commissioner Van Pernis has something, comments to make, so. CARR SMITH: Okay, while you do that, sure. FUKE: Yeah. CARR SMITH: Mr. Van Pernis, do you have a question? 31 EXHIBIT B VAN PERNIS: Why not include the roof, along with the framing? CARR SMITH: We are not being specific to anything. VAN PERNIS: Wasn't I, I didn't see any vote taken on the language. I would like to see a roof, as well as framing. And Mr. Vitousek, with all due respect, is not correct that the applicant is Diamond Resorts; that's a trading, the name only. The applicant is DPM Acquisition LLC - - - doing business as merely trading. I think that if we are gong to go forward with this, we need to have a condition that the Planning Department, or the planning director, will determine whether or not the applicant exists (indiscernible–noise) before the CARR SMITH: Kim, can you mute,please? VAN PERNIS: before the, this vote is effective CARR SMITH: Okay, all right, Mark, we VAN PERNIS: both the lawyer and the county don't know. And whether they were existing at the time of initial filing is not important; the question is do they exist now when we are to vote CARR SMTIH: Okay, I think the question has been asked, and the answer was already given, so we are not going to talk about— VAN boutVAN PERNIS: - - - CARR - -CARR SMITH: Mike. VITOUSEK: Well, I mean, to me I don't think it's harmful to include a condition that the applicant verify that their business is in good standing, or with- - - Hawai`i we have business registration requirements, annual business registration requirementsI don't know if that's a stan- a normal thing or what, but if that's a condition that's being proposed by Commissioner Van Pernis that the business be required to be in good standing, then that's not a, not a harmful thing to include in there as a condition. CARR SMITH: Jeff Darrow, are you available? KERN: I'm here, Madam Chair, Zendo. CARR SMITH: Okay, go ahead, Zendo. KERN: So typically, you know, the planning,property taxes are paid, we get a tax clearance certificate, which shows that they are 32 EXHIBIT B DARROW: Aloha. KERN: Hi Jeff. CARR SMITH: Hold on. KERN: I would caution us to do that, because what I'm seeing here is a hearsay from a testifier that hasn't been substantiated that would then be moving into a condition; that would put us in a pretty funky place. Besides that, I think, very reputable you know, Sidney, attorneys—it would be pretty poor business practice for the landowner to, to have an issue with their entity. If they do that, that will be on them. So I would caution us on that side of it. We do look at it on our end, and they provide the officers' records, etcetera. Jeff, you can fill in any more on that? CARR SMITH: Thank you, Zendo. Go ahead, Jeff. DARROW: I agree that I don't think this is an area that the Planning Department should be getting into and monitoring. CARR SMITH: Nor should the Commission. DARROW: Correct. CARR SMITH: Thank you. VAN PERNIS: What CARR SMITH: We are not going to talk about it anymore, Mark. Go ahead, Max. NEWBERG: Thank you, Madam VAN PERNIS: I've been cut off NEWBERG: I don't know if CARR SMITH: Mark NEWBERG: Barbara was ahead of me or not— VAN otVAN PERNIS: Mr. Kern CARR SMITH: It's okay VAN PERNIS: is not correct— CARR orrectCARR SMITH: Noriko, can you mute him,please? Thank you. Go ahead, Max. 33 EXHIBIT B NEWBERG: Thank you, Madam Chair. I'm not sure if I was ahead of Barbara or not. I just wanted to add clarity. I know we are trying to make a clean proposed motion here, and I know in discussion it was mentioned that this would be the last SMA approval on this property, but I'm not sure if it was included in the motion by Mr. Vitousek. I just want to add that if there was clarity on that. CARR SMITH: Okay, good. NEWBERG: Yeah. FUKE: Yeah, if I can add to that, Commissioner. You know, like it would read, "Failure to comply with this timetable shall result in the automatic nullity of this permit." That means if you - - - action, if you don't meet the timetable, you are out. The only exception is if you are kind of like close to finishing, then, you know, you are substantial-you know, substantially constructed but not completed, then you still need to have an extension by the Planning Commission. And substantial would be pretty much as generally defined by like this dialogue today. CARR SMITH: Thank you very much. Barbara? NEWBERG: Thank you. DEFRANCO: Hi, yeah, my question is along those lines, too,just to be clear. So let's say that we go along, and they haven't met the timeline, so if it becomes nullifiedI'm going back to some of Mike's, Mr. Vitousek's comments—so it's nullified, and then there is this big cement slab there. Are they responsible to remove anything that they've done, if it doesn't happen? What, what is, what happens then? Is there a way to tie that to their non-completion is the responsibility of giving it back to the county in some usable forms? That's my question. CARR SMITH: Thank you, Barbara. Who wants to answer that? Go ahead, Sid. FUKE: I would, yeah, I would think that, you know, if they haven't really started and, for example, they fail to submit plans for plan approval by whatever the date was, you know, like if they fail to submit plans, you know, for plan approval, then the permit, if it gets approved today, is automatically nullified. And then there's really like no incentive for the developer to do anything but just leave the property as it is. So ifI would think that ideally, you would hope, right, the developer has the wherewithal and the desire to complete the project within the schedule. And having it completed within the schedule would mean like a lot of the issues that were raised today would actually go away. If any of the permits get nullified, then there is really like no incentive for the developer to do anything other than just leaving it as it is. The alternative option I think is what Commissioner Vitousek raised about like perhaps the government should condemn and buy it. Then I would recommend under that basis that there is a strong tension for wanting to have this property become public, then use the, you know, PASH route, public access open space, and petition the county and the commission to put this on the list of possible acquisition. So even if the project is like midway through it, and then the 34 EXHIBIT B commission, you know, decides to put it on their acquisition list, and the Council, County Council agrees to acquire the property, then the property gets acquired. CARR SMITH: So the concern is if they do not substantially construct and they end up walking away from the property, who is responsible for the mess? So, does anyone want to weigh in on maybe their experience maybe ever had that happen before where you had to add a condition that made them responsible for taking the property - - -? Go ahead, Jeff. Jeff, go ahead, thanks. DARROW: Can you folks hear me? CARR SMITH: Yeah. DARROW: Yeah? The only similar situation that I recall that can be applied is that there be some sort of violation issued, and there is a time frame that's given to clean up a particular situation; if they don't comply within a timely manner, fines begin accruing, and then it's actually deferred to our Corporation Counsel who then takes it to court, and the end result is there could be a possible lien on the property until that's resolved, then there could be a judgment from a judge where they order that the property be cleaned up, and as part of that, again, the money goes, it's put, a lien is put on the property, and that's part of the, when that property is sold or changed ownership, that's resolved through that process. But it can be a long, drawn-out, difficult process. CARR SMITH: Go ahead, Barbara. Thanks, Jeff. DEFRANCO: So, so there is no time where at this point when we are, you know, making this motion and these concessions that we tie it to it, that if they didn't meet their benchmarks, they would be responsible to clean up their mess? No? You don't ever do that? It's a question. I don't know. CARR SMITH: Go ahead, Jeff. DARROW: (Inaudible–muted) CARR SMITH: You are muted, Jeff. Jeff, you are muted. DARROW: Thank you. The one permit that we normally do have a kind of a cleanup condition is in our quarry permits, and in that is that when the quarry operations are done, they have to submit a plan of how they are going to—it's kind of like a plan that they restore the land into a somewhat safe type of resolution they have to clean up the area, make sure that any areas of unsafety are taken care of. I mean I don't want to suggest that for this particular application, but the Planning Commission has utilized those types of conditions in the quarry permits. Other than that, I don't recall of any type of Planning Commission permit where if it's not constructed in a particular time, you have to clean it up and tear it down. CARR SMITH: And just for my recollection, Jeff, this property has not had any violations put against it, against that what is constructed there sat there all these years? No? 35 EXHIBIT B DARROW: Not to our knowledge. CARR SMITH: Okay. DARROW: I mean there may have been complaints to other agencies, but we are not aware of any for the Planning Department. CARR SMITH: Okay, thank you. Mike. DARROW: Thank you. VITOUSEK: Isa question for our attorney—is there a legal precedent? Is it legal for us to request as a condition that if whatever reason the conditional timing is not met, the improvements - - - and any public health and safety requirements be updated at the time? Is that legal for us to ask? HALL: Is it legal for you to askI would say that you can ask, but I don't think it's legal for you guys condition it in the sense that the landowner is, has the right to, you know, do with their property as they see fit within the confines of the permit, so after the permit is removed, then your jurisdiction basically is removed, right? So, yeah, I think that you would be going beyond your jurisdiction to enforce them to do something to the property after the permit is nullified. VITOUSEK: Okay. CARR SMITH: Thank you, Malia, makes sense FUKE: Madam Chair, to which I would like to just kind of add to that— CARR hatCARR SMITH: Go ahead, Sid. FUKE: specifically, like, you know, the situation that Jeff had mentioned, you know, on the quarry, in that situation the permit has already been exercised; they've used the permit, and so this is a condition of the permit. Now, in this situation even if you have a condition that they remediate the property, if they do not utilize the permit, then what is your enforcement ability? You know, your enforcement ability is only insofar as the developer implementing or utilizing the permit. So my, my only thought is like, it's like a situation where you might have a neighbor having like a yard with, you know, full of junks or whatever have you, then, you know, make, create like a health hazard, then there may be other regulations that govern that to force the landowner to do the remediation, whether it's removal of the junks or whatever have you. But I don't think the appropriate tool, you know, especially if the permit has not been exercised, you know, you can kind of tie it into, to that permit. CARR SMITH: So perhaps we can trust that other agencies would step in and take care of that. Go ahead, Barbara. 36 EXHIBIT B DEFRANCO: Yeah, thank you for answering my question. I believe the project is going to move forward. I'm trying to do that, I'm just trying to understand exactly what we can ask at this point to make it pono for the whole community that has suffered that for so long. CARR SMITH: Yeah, thank you, Barbara. So, Sid, you were going to work on that language for the timeframe. Did you get to that? FUKE: Yes, I have. So it would read you know, kind of like a modified version of what I had first suggested but following up on Commissioner Vitousek's comment—so it would read something along these lines: "The applicant shall provide a site maintenance program to the Planning Department within 90 days of,"I mean, "within 45 days of the effective date of this third amendment to address the site's maintenance and security, which shall include an analysis of the need for an interim pedestrian walkway fronting the road frontages of the property; implementation timetable; and contact information of the responsible person or company. This program shall be in force until physical construction of the project commences." So, in conjunction with the maintenance program,you know, they probably would need to address some of the things that have been raised in terms of what are you going to do, like, are you going to remove the structure now or later on, you know, they are going to have to have those kind of timetable kind of articulated. CARR SMITH: So, that didn't include security at all. FUKE: No, because the overall, the maintenance program is designed to address the site's maintenance and security. CARR SMITH: Okay, can—it would be, I would feel better if it said that. FUKE: Yeah, so it reads, if I, you know, Madam Chair, it will say, like, within 45 days of the effective date of this third amendment to address the site's maintenance and security, which shall include an analysis of the roadway frontages, implementation timetable, and the contact information. At least you'll have the program has to address three items, minimum of three items. CARR SMITH: Thank you. Mike. VITOUSEK: Is it possible to include consultation with the surrounding property owners, not, you know, formal official capacity, but that there will be consultation with you know, we had a lot of testifiers from the Kona Reef—if you can consult with the Kona Reef condominium association in the development, that would be terrific. FUKE: I mean, like, I,personally, I think it would be, would be good, you know, because, as neighbors, you want to be good neighbors, and I think it's good to have that kind of reach-out. I think if this is going to be a mandated consultation, however, I would suggest like, you know, given the holidays and all that stuff, rather than 45 days, give them two months, 60 days. 37 EXHIBIT B VITOUSEK: I'm okay with doing 60 days with consultation with the surrounding property owners and including in the condition that there will be language for consultation. FUKE: Okay. VITOUSEK: That way, they can be involved in the process, and instead of having to rush to put together a plan that doesn't serve the needs of the neighbors, the neighbors can be involved in creating a collaborative plan that really addresses their needs. It maybe take a little longer but I think we'll get a better product. KERN: Madam Chair? CARR SMITH: Yeah, go ahead. KERN: Thank you. Because this will be coming to the department to review, is there clarity on that consultation? Is that—in so many feed, so many people, the notice, there's something in that regards so we kind of know which direction it's supposed to go as it comes in. CARR SMITH: It seems like a hard thing to define to me. KERN: So, reasonable VITOUSEK: Yeah, reasonable, yeah, I mean, like I said, I don't want to make it one of those requirements where everything has to be notified in writing; that's going to take a long, long time. I want them to make a reasonable and good faith effort to consult with the surrounding property owners and the department. KERN: Okay, great. And I feel like through this conversation there is a lot of intent that everyone is on the same page with, so some of the details may not be totally worked out, but I feel like the intent is certainly, certainly there. Thank you. YOSHIMOTO: I would put CARR SMITH: Go ahead, Kim. YOSHIMOTO: Just a quick question on consultation, because we are in COVID, so obviously it can't be in person. And I think there are hundreds of owners. So I'm just trying to think through, how is that going to work? Is it better to put together a written report and submit it to everybody that we submit, you know, these notices to and ask for written responses? I'm just trying to think through the logistics, because it's, I mean, it's a lot of people. CARR SMITH: Yeah, I think so, and I'm sure that you should be required to get response. VITOUSEK: Yeah, I, again, I think a reasonable and good faith effort to consult. I feel like consulting directly with the resort association, rather than every individual condominium owner, and give them the opportunity to build consensus. I think that you make the effort, you know, 38 EXHIBIT B there's a lot of people who have submitted testimony, you know, you can reach out to them via email, see what their concerns are. Obviously, you don't need to do any in-person meetings, we don't need to do formal correspondence for the everything, but we have a lot of information on who are the concerned parties. You can reach out to them directly and build this plan collaboratively. CARR SMITH: And perhaps - - - as simple as giving a report, like you said, Kim, an update as to what's been, what will be agreed to here today and providing them with that information. I don't know that they are, should be required to ask for consultation from the owners or ask for input; it's just more like this is what we are going to do. I mean, if you start asking for input from thousands of people, I'm not sure if that's going to make it very (indiscernible—noise). Barbara. DEFRANCO: That was exactly what I was going to say, too. - - - COVID, how, how would you achieve this? And I think you are right; I think it's just telling them what's happening. I think that's why we have the Commission so that input can come from the community, and we recognize what it is. But I think that open more discussion might be a frivolous time-consuming effort, although I always want to give voice to the people. It isn't from that place that I'm coming and saying this; it's just that we are in a different time right now. CARR SMITH: Yeah, and like you said, the Commission hearing does provide that opportunity. FUKE: Madam Chair? CARR SMITH: Yeah, go ahead, Sid. FUKE: Yeah, I, I kind of get the gist, and I, and I think that a reasonable way to do it is like giving the applicant at least some time to prepare a draft, and then that draft of that mitigation program be sent or email to all of those who had commented, you know, on the application, and testified, or testified, as well as to the various homeowners' association but not individual condo owners. And that minimizes the number of, you know, contacts. And then you give them a certain window in terms of like response time, and we can make adjustments, and then submit the report to the county, you know, Planning Department for further review, approval. But at least like, you know, there'll be that kind of iteration, you know, you develop a draft, have them comment on that, and then you make some modification and then submit that modified version to the Planning Department. CARR SMITH: And that should plan within 60 days. FUKE: I would think so. So, you know, logically, I would think probably in about a month that they would have to develop such a plan, email it to a various homeowners' association and all, you know, the list of those who had testified and give them a 15-day, you know, window or so, and give us chance to readjust and submit it to Planning. CARR SMITH: Very good, thank you. Barbara. 39 EXHIBIT B DEFRANCO: Yeah, I think if the community actually sees something being done in the neighborhood, that action is being taken, then their ability to react is going to be quite different. I think just sending them a letter saying something else is going to be done, that's not going to sit as well as if you combine it at the same time with actually taking action and making it better for the neighborhood. It's just my opinion. CARR SMITH: Thank you. All right, anyone else? (No audible response) so DARROW: Yeah. CARR SMITH: —where are we on this? Jeff. DARROW: Thank you, Madam Chair. I'm just guessing that we are kind of winding up the discussion on the amended conditions. What I don't know if we need to take a short recess but what I would suggest, staff is having a very difficult time trying to figure out exactly what those amended conditions are, it would be good if we get clarity on those before we vote on the motion so that everybody is exactly on the same page with the final amended conditions. I don't know if that's a collaboration between the applicant and the Commission, or if the Commission has it already. We've tried to keep up with it, but I think we got lost somewhere along the way. CARR SMITH: So, Mike, is that something you would want to do in lieu of lunch? Since you made the motion, would you be able to perhaps go with Sidney's recommendations, assuming you are fine with them? It seems like discussion said that you were VITOUSEK: Yeah. Yes. CARR SMITH: Okay. VITOUSEK: Yes, I think, I think Sidney captured the intent for the motion, so I would, I'd like to move forward with the vote on that. DARROW: Thank you. CARR SMITH: You want to move forward with the—did you hear what Jeff said, though, Mike? VITOUSEK: No, sorry. CARR SMITH: Okay. Jeff was recommending that we take a lunch break so that we can clarify what the motion is. Staff is having a hard time understanding exactly what the motion is. So maybe we take a lunch break, and you can clarify your motion. VITOUSEK: Sure,just to clarify it right now, staff, my motion is that we approve the time extension as recommended subject to the conditions stated by Mr. Fuke. And I - - - FUKE: - - - language that- - - 40 EXHIBIT B CARR SMITH: Is that clear, excuse me, is that clear enough, Jeff? Or there has been a lot of discussion, I understand why you guys are confused. DARROW: We can move forward and amend that, and then we reviewed the transcripts and make sure that we capture exactly. But basically, if you folks feel comfortable going forward with what's been stated, we can capture it in the transcripts and be able to put it down - - - CARR - -CARR SMITH: Okay. Mr. Van Pernis. VAN PERNIS: I would object to the motion (indiscernible–noise) CARR SMITH: - - - I can't hear you, Mark. VAN PERNIS: Can you hear me now? CARR SMITH: Yeah,just speak as clearly as you can. VAN PERNIS: I would object to the motion referring to Mr. Fuke's statements, because - - - Mr. Fuke to—who represents the applicant—to fill out the motion. I would like to see the motion to have specific language. It may incorporate what Mr. Fuke said, but I think it should have specific language. Secondly, I want to state now that I intend to vote against the motion, not because it's unreasonable but because, number one, there has been no testimony by the attorneys or Mr. Fuke or the Planning Department that the applicant is existing at this time, thus the motion would be void, and the permits are voided, and there could be litigation in that regard; secondly, the applicant has done nothing for the public for 25 years and is asking for another five years. And CARR SMITH: Okay. VAN PERNIS: they already closed the traffic study where Mr. Fuke acknowledges that pedestrian and vehicular traffic has deteriorated badly in the twenty-some years. So for all these reasons—and also, there is no reason beyond the control of the applicant to justify this application; everything they talk about is within their control financially CARR SMITH: Okay, thank you, Mark VAN PERNIS: bad precedent to set to approve of entity's own financial decisions as a justification for extension. CARR SMITH: Okay, great, thank you, Mark. Okay, I think Sid is typing in the language into the Chat box, and—is that correct? 41 EXHIBIT B YOSHIMOTO: Actually, Sid and I are texting. He is typing it out now, and I have suggested maybe he could send it to Malia or somebody. I don't know if they can share screen; that way, it would just be clear on the screen for everybody to see. CARR SMTIH: Sure. It can be sent—is Jessica still here, or to Malia? Malia, what do you prefer? HALL: I would just, you know—do all the commissioners at this time understand what was read out by Mr. Fuke as the condition? And if that satisfies both Mr. Vitousek's intent and the rest of the Commission, then we can go ahead and take a roll call vote now. And then that language can be submitted into, you know because it was all heard, everybody heard it, it was read out. So at this point if you are ready for the vote, we can vote. CARR SMITH: Okay. Mike. VITOUSEK: I believe it captures my intention, and I believe that's the standard practice in the Commission hearing. So I think we are ready to vote. CARR SMITH: Okay, very good. We were holding up because staff asked us to. Okay, Jessica, we are ready for a roll call vote, please. ANDREWS: Okay, I have a motion by Commissioner Vitousek that was seconded by Max Newberg, Commissioner Newberg. Okay,just wanted to make sure I had those correct. CARR SMITH: Yeah. ANDREWS: So the vote is to approve with conditions as amended, as stated by Commissioner Vitousek and Sid Fuke. Okay? CARR SMITH: Correct. ANDREWS: Commissioner Vitousek? VITOUSEK: - - - aye ANDREWS: Sorry, Commissioner Vitousek? VITOUSEK: Aye. ANDREWS: Commissioner Newberg? NEWBERG: Aye. ANDREWS: Commissioner Kealoha? KEALOHA: Aye. 42 EXHIBIT B ANDREWS: Commissioner DeFranco? DEFRANCO: Aye. ANDREWS: Commissioner Van Pernis? VAN PERNIS: No. ANDREWS: Commissioner Yatesoh, I'm sorry, she's absent. Chair Carr Smith? CARR SMITH: Aye. ANDREWS: Motion passes, five to one. CARR SMITH: Very good, thank you. So you folks will get our decision in writing. We'll watch for clarification as well through our minutes as to what the language is, but I think we all feel good about moving forward. And thank you for your patience here. YOSHIMOTO: And Madam Chair and Commissioners, I just want to say thank you so much. This has been a long process, and it has taken a lot of your time. I appreciate your service, and I thank you just personally. CARR SMITH: Thank you. The hearing ended at 12:37 p.m. Respectfully submitted, Noriko Sauer, Secretary Leeward Planning Commission 43 EXHIBIT B