2006-01-13 Pepeekeo Coal Burning Power Plant Would Council be in legal jeopardy of a takings claim if tried to stop the re-opening of power plant

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!'"111 1104 Fred C. Holschuh, M.DIM"Clouncilmember January 13, 2006 Page -3- formula" for determining when 'justice and fairness' require that" compensation be paid for alleged takings. "Indeed, we have frequently observed that whether a particular restriction will be rendered invalid by the government's failure to pay for any losses . . . depends largely upon the particular circumstances in that case." Penn Central, 438 U.S. at 124. For discussion purposes, to broadly summarize the foregoing, takings claims have been asserted in many contexts where government regulation has blocked development or commercial uses. Success of such claims depends on the courts' weighing of various factors such as the foregoing. Generally speaking, rezoning has not been considered taking. However, any regulation which destroys all economically beneficial use, or actually invades property, will likely be considered a per se taking, requiring compensation. II. Zoning Estoppel or Vested Rights Aside from takings claims, the Council should also consider whether an attempted rezoning or other change in land use entitlements could be challenged as unfair and inequitable, after the powerplant operator has invested substantially, in reliance upon existing county zoning and permitting. Such claims are called "zoning estoppel" or "vested rights" claims. The Hawaii Supreme Court has recognized such claims. Basically, once an investor has made "substantial expenditures" in "good faith" reliance on "official assurances" of rights to develop or use the land in the intended way, courts will block the government's attempts to change the rules to the detriment of the investor. "Official assurances" may be in the form of zoning or permit approvals, if they are the "last discretionary action" on the specific project. County of Kauai v. Pacific Standard Life Insurance Company. Committee to Save Nukoli'i, 65 Haw. 318 (1982). Here, we understand generally that the County Planning Department's position is that the Pepe'ekeo powerplant already has all required zoning and permits, including an HRS Chapter 205 special permit. Thus, if the operator can prove substantial investments made in good faith reliance on such land use entitlements, the operator may well challenge in court any Council attempts to change any such entitlements. The Hawaii Supreme Court has held that the remedy for such zoning estoppel claims against the government is not monetary damages, but that the developer should be allowed to go forward. See, Allen v. City and County of Honolulu, 58 Haw. 432 (1977). However, bear in mind that in the Kelly v. 1250 Oceanside Partners case in Kona, State Circuit Court Judge Ibarra awarded substantial attorneys' fees and costs against the County, based on the County's role in zoning and permitting.