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on how big a facility you can make in the State Land Use Ag District. I think most people are aware there have been a lot of concerns over what is the scale of what you can do in the Ag District under a special permit versus going through the rezoning route, either through the State Land Use Commission or the County zoning route. So the Planning Commission, with the Planning Department favorably recommending it, approved a concept which involved 13 hales, each hale would have three rooms for guests and one faculty staff room, which we agreed not to count against the 40-person limit. And at least from the Department’s point of view, what was being approved was a project that was still geared toward short-term guests seeking retreat lodging, and that the faculty staff rooms would be occupied by individuals who were teaching a particular course, or staff for a particular course. Then it later came to our attention that Kalani Kai was promoting this and selling memberships in a way that, well, then they proposed a change in the design of the units, which as Jeff described we agreed to where there’s a main hale and then four cottages, one of them still being the faculty staff cottage. So you still had 39 units plus 13 faculty staff units, but in detached structures. We considered, although different from what was presented to the Commission, we thought that was essentially consistent with the Commission. What caused the problem and what we’re here to discuss today is that Kalani Kai has been circulating an investment prospectus to people to buy into Kalani Kai. And it’s a little bit complicated, but the gist of it is that as an investor you put in a certain amount of money to construct one of these, you can construct one unit, you can construct a full cluster, meaning three guest units and one faculty staff unit, there are different options. But you construct a cluster and you have the exclusive right to one of the units, which is an issue for us, and you can also have the units rented out. Now there are two issues that we see in what’s being presented. One is that we see a project that is being promoted to investors as a long-term residential opportunity, more like a retreat residential opportunity within the Kalani Kai Project, rather than what we feel was presented to the Commission and the Department as a visitor-oriented facility.So we did not have a special permit for a group of people to establish more homes than are allowed by zoning and State Land Use Law. We did not do that; and that’s not the special permit that we established. And the first promotional material actually referred to retreat home ownership specifically as what you were getting; and I think the term home ownership has been removed. But it still involves the right to own a unit and reside in it full time, as far as we can tell, long-term. The second issue has to do with the form of ownership and the fact that the promotional materials appear to give somebody exclusive right to an area of land. And to explain why this is a problem, we have to go back and talk a little bit about subdivision law and the law of the ownership of the land. And let’s talk about things that you clearly can’t do. Okay, if you own say a one-acre lot in Paradise Park that is zoned Ag-1a, you cannot go out and sell somebody the back half of your lot, say a half acre from your lot and say that is yours, now you own it, and give them a deed to it. That’s called a subdivision. If you sell somebody a piece of ground that’s not recognized already as a lot, that’s called a subdivision. So in the case of the example I just gave you, you could apply to the Planning Department for subdivision but you couldn’t get it because it would be contrary to the zoning. All right? So the purpose of a lot of zoning, for example, is to zone to a smaller lot size so that you can subdivide. So that’s clearly one thing that you can’t do, you can’t sell somebody a half of your lot. You can’t also sell them, if you EXHIBIT C 3