PD BACKGROUND REPORT (PL-PDI-2022-000004)

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February 13, 2020 Page 3 Shortly after KHR's acquisition of the Property, the intensive development plans originally proposed by KDC were abandoned to shift the focus to forest conservation, restoration, and stewardship, in addition to pursuing low -impact agricultural opportunities and activities. In its quest to pursue this new vision for the Property, KHR worked closed with the Department of Land and Natural Resources ("DLNR") and State Forest Stewardship Advisory Committee ("SFSAC"), and through the assistance of the U.S. Forest Legacy Program, KHR voluntarily recorded a Deed of Conservation Easement and Restriction of Development Rights in favor of the State of Hawaii for over 9,017.97 acres (the " 2011 Conservation Easement") of the approximately 11,185 acres of land rezoned by Ord. No. 98-63. See Exhibit B - Deed of Conservation Easement and Restriction of Development Rights (Doc. No. 2011-100084). The 2011 Conservation Easement area is largely comprised of the land area currently identified as TMK: (3) 8-2-012:001 ("Parcel 001 " or Lot 1-A-2). The 2011 Conservation Easement includes all of the A-8000a and A-200a zoned land designated under Ord. No. 98-631 as well as large areas of existing A-3a zoning and a portion of A-1 a zoning along the makai boundaries of Parcel 001. The 2011 Conservation Easement does not include the existing A-255a zoned area within Parcel 001, as due to the historical structures present in this area, the Forest Legacy Program deemed the area incompatible with the easement and the program purposes. As for the additional acreage in this parcel, KHR's successor -in -interest, Kealakekua Mountain Reserve LLC ("KMR"), is currently making use of these lands for growing native seedlings and processing sustainably harvested wood, thus furthering the objective of utilizing the Property for less impactful agricultural uses. The remaining A-1a and A-3a zoned lands are located within TMK: (3) 8-2-012:012, 014, and 015, and these largely vacant pasture lands were excluded from the 2011 Conservation Easement. An important component of the 2011 Conservation Easement is that it guarantees that no residential development activities or other more intensive uses can occur within its boundaries, while also restricting intensive commercial forestry and other impacts that could adversely affect the existing forest ecosystem. The 2011 Conservation Easement specifically: (i) eliminates subdivision or partitions, (ii) meaningfully restricts, under State approval and oversight, construction of temporary or permanent structures, including but not limited to buildings, barns, sheds, parking lots, antennas, and satellite dishes, (iii) eliminates the construction of dwellings, (iv) restricts the alteration to the land, including but not limited to the excavation or removal of soil, sand, gravel, rock, lava, peat or sod, (iv) controls erosion or water pollution; (v) restricts the alteration of water courses (vi) eliminates waste disposal, (vii) limits the construction of new utilities, (vii) prohibits mining (viii) limits signage, and (ix) controls the introduction of non- native invasive species or non -naturalized plant or animal species, with the exception of those plants and species approved by the State of Hawaii. ' The 2011 Conservation Easement also includes approximately 400 acres of land with pre-existing A-20a zoning (Exclusion 1) not subject to Ord. No. 98-63. Exclusion I is located immediately adjacent and north of TMK: (3) 8- 2-012:013. 4838-4873-1016.6.065938-00001