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HomeMy WebLinkAboutMIN LAAC 2025/01/21 (2024-2026)Committee on Legislative Approvals and Acquisitions 2°d Session West Hawaii Civic Center 74-5044 Ane Keohokdlole Highway, Building A Kailua-Kona, Hawaii January 21, 2025 CALL TO The regular meeting of the Committee on Legislative Approvals and Acquisitions ORDER: was called to order at 3:45 p.m., in the Council Chambers, Kailua-Kona, by Ms. Heather L, Kimball, Chair. ROT.T CAT1,- Present: Ms. Heather L. Kimball, Chair Mr. Dennis "Fresh" Onishi, Vice Chair Mr. James E. Hustace, Member Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member (came in later) Ms. Jenn Kagiwada, Member Ms. Rebecca Villegas, Member (came in later) Absent & Excused: Mr. Matt Kaneali`i-Kleinfelder, Member Ms. Ashley L. Kierkiewicz, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Damon Ogata: Pat Hurney: (representing HOPE Services) Damien Waikoloa: (representing Hawaii YIMBY (Yes, In My Back Yard)) Res. 51-25 (Comm. 74), in support. Res. 51-25 (Comm. 74), in support. Res. 51-25 (Comm. 74), in support. Justin Clayton: Bill 16 (Comm. 76), comment. (representing the Food Basket, Inc.) LAAC-2 January 21, 2025 Shirley David: Res. 51-25 (Comm. 74), in support. (representing St. Michael the Archangel Catholic Church) ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 51-25: AUTHORIZES THE EXEMPTION OF CERTAIN CODE REQUIREMENTS, PURSUANT TO SECTION 201H-38 OF THE HAWAI`I REVISED STATUTES, FOR THE HUALALAI COURT AFFORDABLE HOUSING PROJECT IN HILO, HAWAPI, COVERED BY TAX MAP KEY: 2-4-028:009 (Area: 3.2920 acres) The Applicant requests an exemption from Single -Family Residential District 7,500 feet zoning requirements, to be replaced with Multiple -Family Residential 1,000 Square Feet requirements, to allow for greater density and an exemption from Sections 5-7-1 and 5-7-3 of the Hawaii County Code regarding permit plan reviews and permit fees to reduce costs for the production of 104 affordable residential rental units, to be located at 364 Hualalai Street in South Hilo. Reference: Comm.74 Intr. by: Council Member Kimball (B/R) (Note: Comm. 74.1, from Housing Administrator Kehaulani Costa dated January 17, 2025, transmitting a PowerPoint Presentation, was circulated.) Motion to Approve: Ms. Kagiwada moved to recommend adoption of Res. 51-25. Seconded by Ms. Galimba. CHR. KIMBALL: With that, we will now have the presentation. For my colleagues, the presentation is available to you in Communication 74.1 in your packets. Alright, you can go ahead and introduce yourself for the record and then provide your presentation. (Note: At this time, Hualalai Court Chief Executive Officer Carlos Morales and Business Manager Demarco Morales came forward and provided a PowerPoint presentation to the members of the Committee. For viewing of the subject presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office, or online at http://hawaiicountA.gov.granicus.com. A copy of the PowerPoint presentation is made a part of the record, see Comm. 74.1.) CHR. KIMBALL: Thank you. I'll send it over to Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. And thank you for this great presentation, Carlos. I know you've been working hard on this with your whole team. I was Page 2 LAAC-2 January 21, 2025 really happy to see that a lot of young people also wrote in support of this; people who are from Hawaii but currently off at college on the continent who would like to come back and see projects like this one as making that possible for them. So, really do appreciate the hard work. I was able to attend one of your community meetings. I really appreciate that you addressed the issues that were brought up by the community after that meeting and I feel like this project is necessary and a good project for Hilo and for this island. So, appreciate it so much. Hoping everybody else can support as well. But just wanted to give that shout out for all those young people who did take the time to write in with their testimony. Appreciate that so much. Thank you. MR. MORALES: Thank you. CHR. KIMBALL: Council Member Onishi. MR. ONISHI: Thank you, Madam Chair. I had two questions. This area wasn't this, where they had a flood zone where there was like possible flooding? MR. MORALES: The property next to us is the site that is. We don't have a flood issue. Our civil engineer was able to execute the NPDES (National Pollutant Discharge Elimination System) permit, which is through the clean water branch at the State of Hawaii which regulates storm water making sure that any potential water flows on the site do not go offsite. But the property that you're referring to is to the side of us and not ours. MR. ONISHL Because that wasn't like the basin where they were —well, because back then I think Mr. Lin. MR. MORALES: I'm sorry? MR. ONISHI: Mr. Lin. MR. MORALES: I don't know. I'm not familiar. MR. ONISHI: Because I think he was the one that owned that property before and then part of his problem was that was about the water. But if you folks have it, like you said that property next to your guy's property is where they have that channel, right, the flood control. MR. MORALES: Correct. Correct. MR. ONISHI: Okay. Second thing is, it's rental units, correct? MR. MORALES: Yes. Page 3 LAAC-2 January 21, 2025 MR. ONISHI: Okay. So, who's going to manage the facility? Are you folks going to be managing it or are you folks going to have a private entity that's going to manage it? MR. MORALES: We have a third -party private company. MR. ONISHI: Right. Okay. What I've seen and I've witnessed because by my parents' house there's a senior apartment building, and what's happening is, you know, seniors are on fixed income, but the cost of expenses rises as the years go on, right? And so, it's assessed to the tenant and so what happens too is that sometimes because of the expense, they cut back on certain services like for example, landscaping, clearing, right. So, I just want to make sure that if I support this that you folks are going to be looking at that like, you know, ten years from now making sure that it still stays affordable, right, because, I mean, depending on what age, get these units, right; because it could be from, you know, younger to older, right? MR. MORALES: Correct. MR. ONISHI: Yeah. And so, the older ones who I want to protect is that they're on fixed income already, right. So, I don't want to see them being, like not overcharged, but you know, they're not going to be able to afford it. MR. MORALES: Correct. MR. ONISHI: And so, just wanted to make it aware that you folks are aware that you folks can kind of make sure that doesn't happen. MR. MORALES: Absolutely. I appreciate the comments, Council Member. You know, a third -party property management team is one of the requirements for lending, as well as the state and how we were competitively judged in our application. And that involves the income verifications to make sure that people that are in that 80 to 100 percent area median income (AMI) are still making that. We hope that our situations where from the cost savings of the rent that they're able to make the savings or have savings to move out, is the hopes, and the property manager has ties to nonprofits for different social services that we're looking into, and there is a required amount of budget that's needed for property management in the upkeep of the property. We are required to be affordable for 53 years, which is a very long period of time. And right now there isn't any new multi -family product in Hilo. So, along with the blessing that we've had with the state and the board and them recognizing, you know, Big Island as a place of needing the finances to bring these projects to fruition in Hilo in particular. We feel that this is going to be a starting point that hopefully will bring in more projects and be the example that leads by example. And so, all the comments you made are valid and we're committed to providing the best quality product for the Page 4 LAAC-2 January 21, 2025 tenants and making sure that it's well maintained, especially for the length of time that, you know, the requirements are for the project and the construction debt which is lined up to be 45 years. And there's going to be a lot of attention to this project from every angle; from us as the owners, the lenders that are lending the money, the state that is putting in the $25.5 million, the County and everybody else that's been involved in the process. So certainly, that will be addressed. MR. ONISHI: Well, you know, everybody talks about affordable, right. I would really like to see like say that 53 years, so you could promise say like 10 years it's going to be set at this rate, right, and then after five years, then it increases like one percent, you know, every so often. Then to me, that's really affordable because expense wise it's always going to be rising. MR. MORALES: Sure. MR. ONISHI: And so, profit wise, because they're in there for profit too, correct? MR. MORALES: Sure. MR. ONISHI: Yeah. And so, that's where I would like to see that be adjusted. MR. MORALES: Absolutely. And then to clarify on the profitability, that's just a matter of being sustainable, to have sustainability so that we can do more projects the centerpiece of our mission, it's driven by giving back to the community with affordable housing. But to your point, it is HUD (Housing and Urban Development) and through the County that are recognizing the levels of rents. It's not us that are setting it. MR. ONISHI: But with expenses like if repairs are going to be needed so you're going to have to get money from somewhere, right? MR. MORALES: Absolutely. And we'll have those reserves saved. But it's an interesting point that you make because when you look at a project that's of this light in 50 years, we can assume that costs are going to go up, right? MR. ONISHI: Right. MR. MORALES: So, rents are going up faster than incomes, and operating expenses for projects like this are exceeding or going up, especially when it comes to insurance. So, when the subject of profitability and the likes come up, there's an unknown factor of 50 plus years, and right now the projector is shooting up, you know. But to the point that you were making earlier, the rents are designated to 80 percent to 100 percent. That's going to be for the 53 plus years, and if we can do that even longer, we would certainly entertain that. And Page 5 LAAC-2 January 21, 2025 then hopes that interest rates as well as operating costs and insurance costs and everything else are able to stabilize so that we can, you know, continue this project. MR. ONISHI: And my last question would be, so are you having or will you be getting for your tenants any subsidies from the County Housing programs? MR. MORALES: That's a great question. When we originally were 100 percent LIHTC (Low -Income Housing Tax Credit) project, we were actually awarded 25 percent of the project units the project -based vouchers. And because there was a conflict between those residents at a 30 to 50 percent AMI and the Tier 2 money being specific to 60 percent to 100 percent AMI, we had to give back those vouchers. MR. ONISHI: Okay. Okay. Thank you. MR. MORALES: Thank you. MR. ONISHI: I yield. CHR. KIMBALL: Thank you, Council Member Onishi. Council Member Galimba. MS. GALIMBA: Thank you, Chair. I just wanted to say thank you to you folks who are like really my heroes doing this. This is not an easy thing that you're doing, threading this needle, putting the puzzle together for the community, and you're teaching your son. That's awesome. Thank you so much for doing this. MR. MORALES: Thank you. CHR. KIMBALL: Alright. Council Member Hustace. MR. HUSTACE: Thank you, Chair. The support for this project is overwhelming. It's amazing to see that and the community come out and support this initiative and really support our workforce and our workforce side of our community and ensuring that people can stay here. And as my colleague mentioned, the young members of our community, they're looking for a place to come back to. They want to come back to the community and work here. So, thank you for taking the lead on this. And congratulations on being one of the four recipients and bringing those dollars here to Hawaii Island. So, thank you for taking the lead on this effort. I'm in full support. Thank you. MR. MORALES: Thank you. Page 6 LAAC-2 Vote on Res. 51-25 (Approved) January 21, 2025 CHR. KIMBALL: Thank you, Council Member Hustace. Any further comments? Alright. Seeing none, all those in favor of approving Resolution 51-25 and forwarding to Council with a favorable recommendation, please say "aye." The motion to recommend adoption of Res. 51-25 was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Onishi, Villegas, and Chair Kimball — 7. Noes: None. Absent: Committee Members Kdneali`i-Kleinfelder and Kierkiewicz — 2. Excused: None. CHR. KIMBALL: We can go on to the next item, please. MR. MORALES: Thank you. Res. 62-25: AUTHORIZES THE DIRECTOR OF FINANCE TO NEGOTIATE A LEASE OF REAL PROPERTY, SITUATED AT KAILUA-KONA, COUNTY AND STATE OF HAWAI`I, IDENTIFIED AS TAX MAP KEY: 7-5-008:027, TO THE ASSOCIATION OF APARTMENT OWNERS OF KAILUA VILLAGE Allows the Association of Apartment Owners of Kailua Village to continue to lease the parcel for Kailua Village Condominium's visitor parking and fire lane access purposes. Reference: Comm.92 Intr. by: Council Member Kimball (B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 62-25. Seconded by Ms. Villegas. CHR. KIMBALL: I'd like to invite Property Manager Hamana Ventura to come up and provide us with some information on this resolution. (Note: At this time, Property Manager Hamana Ventura came forward to address the members of the Committee.) MR. VENTURA: Thank you, Chair. Hamana Ventura, Property Manager. We're asking that the body support this measure. It's been ongoing since the 70's, so we'd like to continue this relationship. However, as we move forward we'd like to always be able to have the ability to evaluate future needs and public purposes that are set aside for the County. Page 7 LAAC-2 January 21, 2025 CHR. KIMBALL: Thank you. Any questions from the body on this matter? Council Member Villegas. MS. VILLEGAS: Yeah. Thank you for being here, Hamana, and testifying in support of it. So, it had been a 50-year lease and now it's going to five so it can be revisited more frequently. Is that what I saw here? MR. VENTURA: This is actually the third amendment, so this will be the fourth amendment. So, it's been a series of five-year amendments over the last 10 years. MS. VILLEGAS: Over the last 50 years. MR. VENTURA: Correct. MS. VILLEGAS: Okay. So, moving forward and yeah, I'm in full support. So, thank you for being here today. I yield. CHR. KIMBALL: Thank you, Council Member Villegas. Any further comments? Seeing none, all those in favor please say "aye." Vote on Res. 62-25: The motion to recommend adoption of Res. 62-25 was (Approved) carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Onishi, Villegas, and Chair Kimball — 7. Noes: None. Absent: Committee Members Kaneali`i-Kleinfelder and Kierkiewicz — 2. Excused: None. MS. KIMBALL: Thank you, Mr. Hamana, for being here. Next item, please. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Page 8 LAAC-2 January 21, 2025 Bill 15: AMENDS ORDINANCE NO. 16-85 WHICH AMENDED ORDINANCE NO. 06-114, WHICH AMENDED SECTION 25-8-33 (CITY OF HILO ZONE MAP), ARTICLE 8, CHAPTER 25 (ZONING CODE) OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED) BY CHANGING THE DISTRICT CLASSIFICATION FROM SINGLE FAMILY RESIDENTIAL — 10,000 SQUARE FEET (RS-10) TO GENERAL COMMERCIAL — 20,000 SQUARE FEET (CG-20) AT WAIAKEA HOUSE LOTS, HAWAI`I, COVERED BY TAX MAP KEY: 2-2-034:066, 078, AND 079 (Applicant: Big Island Candies, Inc.) (Area: Approx. 45,450 square feet) The Windward Planning Commission forwards its favorable recommendation for the applicant's request for an eight -year time extension to Condition C (Time Requirement to Complete Construction) and Conditions D, E, and F (Roadway Improvements) for the development of a production facility, cold storage, and visitor center. The property is located along the makai side of Kekuanao`a Street between Laukapu Street and Hinano Street, Waidkea House Lots, South Hilo. Reference: Comm.75 Intr. by: Council Member Kimball (B/R) (Note: Comm. 75.1, from Council Member Heather L. Kimball dated January 17, 2025, transmitting a PowerPoint Presentation, was circulated.) Motion to Approve: Mr. Inaba moved to recommend passage of Bill 15 on first reading. Seconded by Ms. Galimba. CHR. KIMBALL: At this time, I'd like to invite representatives from the Planning Department as well as any representatives from the applicant, Big Island Candies, to provide their presentation. For members of the body, the presentation for this item is contained in Communication 75.1. (Note: At this time, the applicant's Attorney, Thomas Yeh, came forward to address the members of the Committee.) MR. YEH: Anyway, good afternoon and aloha, Madam Chair and members of the Council. Thomas Yeh, Counsel for Big Island Candies and Alan Ikawa is present, CEO (Chief Executive Officer), Chairman, thank you. CHR. KIMBALL: Thank you both for being here. Our Director over here is in the process of getting the slide deck going, so we'll just wait patiently for that. Page 9 LAAC-2 January 21, 2025 (Note: At this time, Planning Director Jeff Darrow came forward to and provided a PowerPoint presentation to the members of the Committee. For viewing of the subject presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office or online at http://hawaiicounty.gov.granicus.com. A copy of the PowerPoint presentation is made a part of the record, see Comm. 75.1.) CHR. KIMBALL: Thank you, Director. Any questions from the body? Council Member Onishi. MR. ONISHI: I just want to say this is in my district and I haven't received any negative comments about this change of zoning, and so I'm asking my colleagues to help support this project. Thank you. CHR. KIMBALL: Thank you, Council Member Onishi. Anyone else? Alright, seeing none, unless the applicants would like to make any additional comments before we proceed with the vote? MR. YEH: Briefly. Thank you. The Planning Commission and Planning Director's reports are very accurate. I think over the years; Big Island Candies has been able to withstand the challenges of external economic forces and continues to be a very stable economic driver in the community. The idea here is to provide this extensive time to them to tie road improvements to further development of the property to mitigate those improvements, I think it makes sense, and we do appreciate also the recent, I think, from what I understand, policy changes from the Council that kind of tolls the deadlines that are stated herein to deal with issues such as permitting and approvals that are typical of the governmental process. So, really appreciate your consideration and if there are any questions, we're happy to answer them. Otherwise, you're welcome to proceed. Thank you. CHR. KIMBALL: Thank you. Alright. Council Member Inaba. MR. INABA: Thank you, Chair. Just wanted to clarify that Condition C and, you know, this tolling language that we took up, I just want to make sure that the applicant is aware that any requests for tolling needs to be submitted prior to the deadline coming upon, or us reaching the deadline. If not, it is automatic reversion to its immediately prior zoning designation. So, if there comes a time that, you know, we're getting close to the eight -year mark and some County agency or state agency had your applications, please be sure to submit proof of the tolling prior to the expiration. Thank you so much. Chair, I yield. CHR. KIMBALL: Thank you. Alright, seeing no further comments, all of those in favor please say "aye." Page 10 LAAC-2 January 21, 2025 Vote on Bill 15: The motion to recommend passage of Bill 15 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Onishi, Villegas, and Chair Kimball — 7. Noes: None. Absent: Committee Members Kdneali`i-Kleinfelder and Kierkiewicz — 2. Excused: None. MR. YEH: Thank you. CHR. KIMBALL: Thank you to the applicant's CEO for being her today and your patience. Bill 16: AMENDS ORDINANCE NO. 06-28, WHICH AMENDED SECTION 25-8-33 (CITY OF HILO ZONE MAP) ARTICLE 8, CHAPTER 25 (ZONING CODE) OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED) BY CHANGING THE DISTRICT CLASSIFICATION FROM AGRICULTURAL (A -la) TO NEIGHBORHOOD COMMERCIAL (CN-20) AT PONOHAWAI, SOUTH HILO, HAWAPI, COVERED BY TAX MAP KEY: 2-3-036:018 (POR) (Abnlicant: Kristin Frost Albrecht) (Area: 8 acres) The Windward Planning Commission forwards its favorable recommendation for the applicant's request for a ten-year time extension to Condition D (Complete Construction) for the development of the Hawaii Island Agricultural Innovation Park and Food Systems Campus. The property is located on the south side of Ponahawai Street, approximately 1,300 feet east of its intersection with Komohana Street, Ponahawai, South Hilo. Reference: Comm.76 Intr. by: Council Member Kimball (B/R) (Note: Comm. 76.1, from Council Member Heather L. Kimball dated January 17, 2025, transmitting a PowerPoint Presentation, was circulated.) Motion to Approve: Ms. Kagiwada moved to recommend passage of Bill 16 on first reading. Seconded by Ms. Galimba. CHR. KIMBALL: I will invite the Director and if the applicant is available, perhaps in Hilo. There we go. Fantastic. Okay. Director, if you'd like to take us away with the presentation. For my colleagues, the presentation for this item is contained in Communication 76.1, in your packet. Page I LAAC-2 January 21, 2025 (Note: At this time, Planning Director Jeff Darrow came forward to and provided a PowerPoint presentation to the members of the Committee. For viewing of the subject presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office or online at http://hawaiicounty.gov.granicus.com. A copy of the PowerPoint presentation is made a part of the record, see Comm. 76.1.) CHR. KIMBALL: Thank you, Director. I will send it over to Hilo. I know that during the testimony it was mentioned by the Food Basket representative that there was intent to request a postponement. So, if you'd like to elaborate on that before we begin deliberations here. (Note: At this time, Food Basket Representative Justin Clayton came forward to address the members of the Committee.) MR. CLAYTON: Sure. Again, my name is Justin Clayton. I am representing the applicant, Kristin Frost Albrecht, today. And so, I did have some concerns that arose after the Windward Planning Commission's favorable vote. Unfortunately, we were informed of the meeting on Friday, so I wasn't able to get answers or questions to the Planning Office until then. But my concerns, I won't even say they're concerns. Maybe I'll say my questions surround amendments to Condition F and G. And so, given the complexity of the project, funding will dictate which portions of the project are executed and in what stages. And I believe these conditions are standard given the zoning of the property. So, Condition F is that we'll have full frontage improvements along the commercial zoned section of the property, which we are prepared to do. But, again, given the complexity of the project, it's going to be very challenging for us to make these improvements before all of the structures and all the buildings are constructed. At some point we'll have to bring in utilities, sewage lines, and so that may require us to, for a better lack of word, to tear into some of these improvements that are made. And so, the other item is we're limited to a single access point onto the property. And so, given the amount of frontage and the size of the structure itself, we'll likely have to consult with the Fire Department, the Police Department, to see if an additional emergency access points are required. And so, there's some additional things. I didn't want to go into it too much detail before we had a chance to meet with the Planning Director. But essentially, those are my main concerns. I don't think we're asking for special treatment, maybe some flexibility. And so, I'm wondering CHR KIMBALL: I think that has provided us with enough information. What I'll do is offer to the body to ask any questions about the general project, if there Page 12 LAAC-2 January 21, 2025 are any, and if not, take a motion to postpone. I believe the request was to the second meeting in February on the 181h MR. CLAYTON: Yes. CHR. KIMBALL: Okay. Questions on the main motion? Alright, seeing none, Chair Inaba. Motion to Postpone: Mr. Inaba moved to postpone Bill 16 to February 18, 2025. Seconded by Ms. Kagiwada. CHR. KIMBALL: Any discussion on the postponement? MR. HENRICKS: Madam Chair, it's February 181h, yeah? CHR. KIMBALL: February 181h. My apologies. Council Member Kagiwada. MS. KAGIWADA: Thank you. I just wanted to double check with Justin. Thank you, Justin, for that information and for being here. You don't think you could be ready by the Hilo meeting? I just thought that since this is a Hilo proj ect— MR. CLAYTON: Yeah. I think that's a possibility. So, my questions were already submitted to the Planning Department and various County departments. I believe as soon as those are addressed then yes, we could meet with County Council. So, we could try again for I think it's February 4th? MS. KAGIWADA: That's correct. MR. CLAYTON: Yeah. I think that's reasonable. I'm just trying to do my best to accommodate the Planning Department in meeting with us. MS. KAGIWADA: Alright. That sounds good. I just thought since it's in Hilo, it's a Hilo project. MR. CLAYTON: Yeah. I mean, that would be great. That makes since to me. CHR. KIMBALL: Director, do you think you will be able to meet the 4th if we try to push for that? MR. DARROW: I definitely think we can work it out, whatever the issues are. I think it will involve other departments, but we'll just work through it. But great project so we need to kind of move it along. CHR. KIMBALL: Great. Okay. Can I have you withdraw your motion. Page 13 LAAC-2 Withdraw Motion Mr. Inaba withdrew his motion to postpone Bill 16 to to Postpone: February 18, 2025. Vote on Motion Mr. Inaba moved to postpone Bill 16 to February 4, 2025. to Postpone: Seconded by Ms. Villegas and carried by the following (Approved) voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Onishi, Villegas, and Chair Kimball — 7. Noes: None. Absent: Committee Members Kaneali`i-Kleinfelder and Kierkiewicz — 2. Excused: None. January 21, 2025 CHR. KIMBALL: Thank you very much for being here and we'll see you in a couple weeks. And I'm happy to help with any amendments necessary in the interim before the next meeting as well. MR. CLAYTON: Appreciate that. Thank you so much. Bill 17: AMENDS THE STATE LAND USE BOUNDARIES MAPS FOR THE COUNTY OF HAWAI`I BY CHANGING THE DISTRICT CLASSIFICATION FROM THE AGRICULTURAL TO THE URBAN DISTRICT AT `OULI, SOUTH KOHALA, HAWAI`I, COVERED BY TAX MAP KEY: 6-2-001:075 (POR.) ; and Page 14 LAAC-2 January 21, 2025 Bill 18: AMENDS SECTION 25-8-7 (NORTH AND SOUTH KOHALA DISTRICT ZONE MAP), ARTICLE 8, CHAPTER 25 (ZONING) OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), BY CHANGING THE DISTRICT CLASSIFICATION FROM AGRICULTURAL — 1 ACRE (A -la) TO SINGLE FAMILY RESIDENTIAL — 10,000 SQUARE FEET (RS-10) AT `OULI, SOUTH KOHALA, HAWAI`I, COVERED BY TAX MAP KEY: 6-2-001:075 (POR.) (Applicant: Hawaii Island Community Development Corporation) (Area: 14.321 acres) The Leeward Planning Commission forwards its favorable recommendation for this amendment to the State Land Use Boundaries Map and for the requested change of zone, with an amendment to Condition N (Fair Share), which would allow the applicant to subdivide the property into 43 lots. The property is located at the southwest corner of the intersection of Kawaihae Road and Waiula Drive, Kawaihae 2°d-Lanikepu, Waimea, South Kohala. Reference: Comm.77 Intr. by: Council Member Kimball (B/R) (Note: Comm. 77.1, from Council Member Heather L. Kimball, dated January 17, 2025, transmitting a PowerPoint Presentation, was circulated.) Motion to Approve: Mr. Hustace moved to recommend passage of Bill 17 on first reading. Seconded by Mr. Inaba. CHR. KIMBALL: At this time, I'll invite the Planning Director to provide the presentation, as well as the applicants. This presentation is contained in Communication 77.1 in your packet. Director. (Note: At this time, Planning Director Jeff Darrow came forward to and provided a PowerPoint presentation to the members of the Committee. For viewing of the subject presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office or online at http://hawaiicoup.ty.gov.granicus.com. A copy of the PowerPoint presentation is made a part of the record, see Comm. 77.1.) CHR. KIMBALL: Thank you, Director. Mr. Kato, would you like to present anything in addition to what has been presented by the Director? If you can, please? (Note: At this time, Executive Director of Hawaii Island Community Development Corporation Keith Kato came forward to address the members of the Committee.) Page 15 LAAC-2 January 21, 2025 MR. KATO: Hello. My name is Keith Kato. I'm the Executive Director of Hawaii Island Community Development Corporation. This is a project that's been a few years in the making. We received a donation of this land from Lynn and Mark Benioff; it's 440 acres. It's quite an opportunity for us to provide housing for the community here. We are initially coming in with a 43-lot subdivision for 15 acres of land. We intend to do basically self-help housing on this site. Self-help housing is a, you know, process we've been doing all around the island. We've done 400 plus homes in this manner. It's basically for low-income residents. They're basically workforce housing. All the residents have to be able to secure a mortgage, so they need a source of income. They need to have adequate credit, and they also have to be low-income. This is one of the, virtually the only path to homeownership for low-income families. So, you know, the handout that I have, well actually some of it is redundant with what Jeffrey's presented. Just like we did do an archaeological survey of the site and actually toward the bottom of the property, which is at a considerable distance from where we're developing now, they found a burial and an archaeological site that they just felt needed preservation. And along with that there's this long rock wall that runs basically from Kawaihae Road all the way down towards Waikoloa. And that has also been —there's been for preservation from the State Historic Preservation Division (SHPD) Office. I've included some pictures just so you get a sense of who our clients are. They're basically working people. They all have to work together, put up the homes. Men and women are out there doing the work and, you know, this process, virtually, none of them have any construction experience but you know, somehow, they are able to figure it out with the guidance of the construction supervisor, which we provide. And we've been able to get, like I said, more than 400 homes built in this manner. The typical self-help builders, and these are people who have participated in a program, you know, they're like elementary school cafeteria workers, dental assistants, forklift operators, janitors, you know, chiropractor for a clinic, basically patient service types; insurance account representatives, people that work at KTA, HPM. And this last picture, which is actually from our Puna project, basically just sort of gives you a sense of who they are. So anyway, we just thank you for this opportunity. We hope that we can proceed through this process and the subdivision process during this year and get started on the homes next year. CHR. KIMBALL: Thank you very much, Mr. Kato. Taking it now to the body, any discussion? Council Member Hustace. Page 16 LAAC-2 January 21, 2025 MR. HUSTACE: Thank you, Chair; thank you, Director. Mr. Kato, good to see you in person. I've been in conversation with Mr. Kato about the Waikoloa Stream Barrier on the Kona side of the property and possibly providing recreational space to the residents of this project. So, it was kind of ongoing conversations about that. And I'm grateful for you presenting to the Waimea community about this project over time, you and your team, to discuss the opportunities that you're providing for the community. There were initially concerns about this development in terms of like other people would be able to live there and move there because of the affordability of the project, but you assuaged a lot of fears in the community that those individuals have to commit that time to build out their homes in the community before moving in. So, grateful for this other opportunity in providing the Waimea community and the residents of not just North and South Kohala but our Island. So, thank you for being here, Mr. Kato. MR. KATO: Sure. CHR. KIMBALL: Thank you, Council Member Hustace. Council Member Galimba. MS. GALIMBA: Thank you. Thanks for what you do. I have just a couple little questions. One of them is the sites are noncontiguous and sort of out in the middle of the property. So, I'm assuming there's a good reason for that or help topography, but I wanted to ask why that particular spot within the larger parcel? MR. KATO: Yes. Well, when you have a chance to go out on the site, you'll see that there's a lot of angulations in the land. It's just very rolling type terrain. So, you know, after looking at it, we decided that what we would like to do is just to develop the areas that are most suitable for residential use and not have to do a lot of grading to basically make everything contiguous. So, what you see there is actually the two areas that we felt would be simplest to develop at the start of the project. MS. GALIMBA: Thank you. Makes sense. And there's a note on the first page of your presentation, that the scale of the development is dependent on water. Is this all of the water that you have at this time, or do you have other water credits? MR. KATO: Right now, my understanding is we have 58 water coordinates for this site. So, we're not using all of the water we have but we're using a good chunk of it. And we're talking with the Water Department to see how much more water we could get to the site. MS. GALIMBA: Thank you. Those are just the questions I had. Somewhat technical but really appreciate you doing this. I think it's a great way to go about Page 17 LAAC-2 January 21, 2025 creating affordable housing because it gives people that skin in the game and, you know, commitment to their house as well as making sure that it's working folks. So, great model. Thank you very much. MR. KATO: Thank you. CHR. KIMBALL: Thank you, Council Member Galimba. Council Member Villegas. MS. VILLEGAS: Aloha. Nice to see you again. Thank you for coming to meet with us the other week and going through the stack and sharing the vision for this project with us. Very much needed and I think it's going to fill a big need that we have in this area for our workforce housing. Also, mahalo to the Benioff Ohana, Mark and Lynn, for their continued generosity. And happy to see this coming forward because there was a bit of hullabaloo around the property and them buying it all up and whatnot, so I'm really grateful to see this moving through to fruition. During our conversations we had some conversations about the terms of affordability and the number of years, and we were kind of exploring some different potential templates for how to ensure that historically, we have neighborhoods that have affordable housing and then as soon as that time requirement expires, they go straight to market pricing, and they don't serve as an affordable housing inventory anymore. So, I took to heart what you said about in perpetuity because then feel they could never sell. But if there is opportunity to create another paradigm that they could, you know, if they decided to sell after a certain amount of time, let's call that 30 years or whatnot, it doesn't go to market value, it goes to maybe it's 140 percent AMI, so your next, you know, echelon of people, which are still in the affordable bracket, would have the opportunity to purchase. So, I wondered if between our conversations before and now you had any opportunities to explore those potential options? MR. KATO: Well, you know, I think what we indicated was we'd like to be talking with the Council people about this. Right now, our concept going in is this is a 100 percent affordable housing project. And, you know, we are typically shooting for 15 years as an affordability period. You know, we find that that is acceptable to a lot of our clients because you've got to realize again, they're putting in a lot of work. You know, so they're actually part of the production process. You know, we're willing to have further discussions if that's warranted or required. But yeah, that's sort of what we feel. And I think that the key thing that we want to just differentiate between us and any other rezoning that you see is, this is entirely affordable. It's 100 percent affordable. It's not 20 percent affordable. So, I think you're getting a lot, you know, the community is getting a lot more affordable housing out of it. Page 18 LAAC-2 January 21, 2025 MS. VILLEGAS: I respect, and I suppose I humbly disagree. It's 100 percent affordable because the land was free. So, that is what makes that paradigm possible, correct? I just think that as we look at our affordable housing projects, we have to push for longer periods of time. I just don't think 15 years is enough time and I really would like to find a way to include perimeters that keep it within, that it remains affordable housing in some capacity in some way that we don't just lose it after 15 years and then its market rate, and in 15 years we just have another market rate subdivision. So, I think we have this opportunity here. So I know I'm pushing, but now's the time to push and especially when there's an option of such generous land contribution. So, I'm going to be in full support of the project, but I would really just like to push the envelope on that so we're actually looking at more regenerative affordable housing paradigm. So, I yield. CHR. KIMBALL: Thank you, Council Member. Council Member Inaba. MR. INABA: Thank you. Yeah, at our meeting you folks were going to work on some language. So, prior to the Council hearing, you know, now that Council Member Kimball is chairing the committee, usually it would be done with her. I'm happy to work with her office and you folks to put together some proposed language that works, you know, for the concerns that you have but still acknowledges, you know, a longer -term need. And again, you know, what we had shared was if it's sold at 60 percent AMI right now, we don't necessarily need it to stay at 60 percent AMI, but if they sell with in whatever the period it is that we set, it would be at a maximum of 140. So, it just guarantees some level of affordability rather than going out to market rate. So, I'll reach out to you folks and then we can work together to process the amendment with Council Member Kimball, if you folks are amendable to that? MR. INABA: Thank you. CHR. KIMBALL: Council Member Kagiwada. MS. KAGIWADA: Thank you. I'd be very supportive of you looking into that with the Chair and anybody else who wants to work with her on that. I do think that, you know, we just heard earlier a project that was going to be affordable for 53 years. And I think it's really important, especially in some of these areas where we know those market rate units are such in demand. After 53 years in Hilo at an affordable rate, the jump is not going to be like you will see it in Waimea or Kohala. So, I do think that looking at this now is the appropriate time, and I will be in full support of that happening. So, thank you. But thank you for bringing this forward and for your work on this. I think it's a great project. CHR. KIMBALL: Anyone else? Council Member Hustace. Page 19 LAAC-2 January 21, 2025 MR. HUSTACE: Thank you, Chair. Since you've posted the sign on the property along Kawaihae Road, I'm curious on your number of applicants that have come in as a part of the process. MR. KATO: Yeah, I don't have a number for you. I can just tell you that we've received a lot of inquiries. MR. HUSTACE: Okay. MR. KATO: You know, both from putting up the sign, but also just from the announcement that the Benioff's had donated a property, we started getting just a lot more inquiries. MR. HUSTACE: Thank you. I'm just curious of the demand, you know, going forward especially for this sort of bracket and housing projects. And as you look at the future phasing, potentially, just food for thought of the wastewater systems in that area. I know it mentions that there is access to wastewater systems, but can you elaborate on those wastewater systems in that area? MR. KATO: Well, actually there is none in the area. So, we're going to have to be constructing one or installing one. MR. HUSTACE: Okay. In speaking with Administrator (Kehaulani) Costa with Office of Housing, the other affordable and, you know, self-help housing projects and Ouli Ekahi, they kind of need that support and collaboration. So, any sort of system in that area for independent use and kind of across those sectors may be worthwhile to tap in and connect some of the neighboring communities. Just something to consider. Thank you. CHR. KIMBALL: Thank you. Any further comments? I'd like to make two. I'm in support of what my colleagues have been saying about having some defined term of affordability or to offer some alternative suggestions since it is part of the concept about this self-help program is that the families are able to build some personal wealth through homeownership. And so, another consideration may be to limit the annual escalation cost that they could sell it at per the consumer price index, so they would have that initial mortgage that is at a more affordable rate based on the land being subsidized and then in the future they could only sell it as it has gone up from that initial base price. So, they wouldn't be jumping out to that market price as one alternative to a term of affordability. The second would be looking at potential deed restrictions limiting the sale to other local residents in the workforce. So, you know, two folks that say earn 70 percent of their income working within the County of Hawaii, something along those lines. So just food for thought beyond the idea of exclusively a term Page 20 LAAC-2 January 21, 2025 of affordability, those might be some of the other ways I think that we could keep these units over a longer period of time accessible to the community; attainable, right, but also provide the opportunity for those folks developing those units to earn a little bit of personal wealth with that. I am cognizant that, you know, once you subdivide these agricultural lots you don't get to stitch them back together again. And if we support the attainable housing project, which absolutely 100 percent due, but then just have it revert to market rate, then we're going to have to look at other ag lands and subdivide and build affordable housing on it, and that's really just not the trajectory we want to go. So, I will work with you and Chair Inaba to formulate an amendment that we can present at Council, but I'm fine with forwarding this today and having that amendment ready for first reading in Council if that's amenable to everybody else on the board. Looks like I'm seeing some nods, yes. Okay. Any further comments? Seeing none, all those in favor of forwarding Bill 17 to Council with a favorable recommendation, please say "aye." Vote on Bill 17: The motion to recommend passage of Bill 17 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Onishi, Villegas, and Chair Kimball — 7. Noes: None. Absent: Committee Members Kaneali`i-Kleinfelder and Kierkiewicz — 2. Excused: None. CHR. KIMBALL: And Bill 18, may I have a motion? Vote on Bill 18: Mr. Hustace moved to recommend passage of Bill 18 on (Approved) first reading. Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Onishi, Villegas, and Chair Kimball — 7. Noes: None. Absent: Committee Members Kaneali`i-Kleinfelder and Kierkiewicz — 2. Excused: None. CHR KIMBALL: Thank you, Mr. Kato and your team. Thank you, Director, for being here for us today. Seeing no further business on our agenda, this meeting is adjourned. Page 21 LAAC-2 ADJOURN- MENT: Approved: January 21, 2025 There being no further business, Chair Kimball adjourned the meeting at 5:14 p.m. Heather L. Ki ball, Chair Legislative Approvals and Acquisitions Committee HI/tk (Date) Page 22