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HomeMy WebLinkAboutMIN LAAC 2026/07/07 (2024-2026)Committee on Legislative Approvals and Acquisitions 27th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii July 7, 2026 CALL TO The regular meeting of the Committee on Legislative Approvals and Acquisitions ORDER: was called to order at 12:00 p.m., in the Council Chambers, Hilo, by Ms. Heather L. Kimball, Chair. R OT J , CALL - Present: Ms. Heather L. Kimball, Chair Mr. Dennis "Fresh" Onishi, Vice Chair Ms. Michelle M. Galimba, Member Mr. James E. Hustace, Member Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Mr. Matt Kaneali`i-Kleinfelder, Member Ms. Ashley L. Kierkiewicz, Member Ms. Rebecca Villegas, 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: (There were none.) CHR. KIMBALL: Alright, Mr. Clerk, can you please read in Bill 168. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. LAAC-27 July 7, 2026 Bill 168: REPEALS ORDINANCE NOS. 19-38, 09-50, 09-49, 06-138, 06-137, 95-118, 92-36, 90-10, 86-49, 533 (1980), AND 594 (1973) AND AMENDS CHAPTER 25, ARTICLE 8, SECTION 25-8-3 (NORTH KONA ZONING MAP) AND SECTION 25-8-5 (KAILUA URBAN ZONING MAP), OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), BY CHANGING THE DISTRICT CLASSIFICATION FROM VILLAGE COMMERCIAL — 7,500 SQUARE FEET (CV-7.5) AND MULTIPLE -FAMILY RESIDENTIAL — 2,500 SQUARE FEET (RM-2.5) TO DOUBLE -FAMILY RESIDENTIAL — 3,750 SQUARE FEET (RD-3.75) AND AGRICULTURAL — FIVE ACRES (A-5A) AT HIENALOLI 4Tx� 5 , AND 6TH, NORTH KONA, HAWAI`I, COVERED BY TAX MAP KEY: 7-5-010:013 (Planning Director Initiated) (Area: 6,467 acres) The Leeward Planning Commission forwards its favorable recommendation to revert the current zoning of 3.331 acres from Village Commercial to Double -Family Residential and 3.227 acres from Multiple -Family Residential to Unplanned zoning district. This property is located on the north side of Hualalai Road, approximately 1,000 feet east of its intersection with Kuakini Highway, Hienaloli 4 h and 5t', North Kona. Reference: Comm.937 Intr. by: Council Member Kimball (B/R) ; and Comm. 937.1: From Planning Director Jeffrey W. Darrow, dated May 29, 2026, transmitting a PowerPoint presentation for Bill 168. Motion to Approve: Ms. Galimba moved to recommend passage of Bill 168 on first reading. Seconded by Mr. Hustace. CHR. KIMBALL: Director Darrow. (Note: At this time, Planning Director Jeffrey W. Darrow came forward to address the members of the Committee.) MR. DARROW: Aloha, this is Jeff Darrow with the Planning Department. If I could direct your attention to our presentation. (Note: At this time, Planning Director Jeffrey W. Darrow provided a PowerPoint presentation to the members of the Committee. For viewing of the presentation, see the DVD copy of the proceedings on file in the Clerk's Office, or online at http://hawaiicounty.granicus.com. A copy of the presentation is made part of the record, see Comm. 937.1.) CHR. KIMBALL: Thank you, Director Darrow. I'd like to invite the applicant and the applicant's representative up if there's anything you'd like to add in addition to the Director's comments. Please introduce yourself for the record. Page 2 LAAC-27 July 7, 2026 (Note: At this time, Planning Consultant Daryn Arai and the applicant Andy Xie came forward to address the members of the Committee.) MR. ARAI: Good afternoon. My name is Daryn Arai, I'm the Land Use Planning Consultant residing in Hilo assisting the landowners, represented today by Andy Xie, who's sitting to my left. We appreciate the Director introducing the repeal of the subject ordinance to revert the lands back to its original native zoning designations that pre-existed in the early 1970's. At this time, the applicant does not have any specific development concepts for this property. They're simply awaiting the outcome of the proceedings that commenced a few months ago. And if the repeal is successful, then they will proceed with the proposed development. Right now, again, should the rezoning revert back to Double Family and Agricultural five acres, the project will align with whatever is permitted by those zoning district classifications. For the Double Family zoned area on the makai side of the project site, roughly 38 units can be accommodated on agriculture, as the Director mentioned. One farm dwelling and up to three proposed ADU's (Accessory Dwelling Units). So, that's the concept right now, but again, no specific development concepts have been drawn out. They're simply awaiting the final decision from the Council. So, we stand ready to answer any questions that you may have. CHR. KIMBALL: Thank you, Mr. Arai, to the body starting with Council Member Hustace. MR. HUSTACE: Thanks Chair. Mr. Arai, if you could speak to the intent that was to have a very specialized living kind of system with 104 senior units there. What were some of the challenges through the years to get to this place where that was never acted upon. MR. ARAI: I am personally not aware of all the hurdles. My recollection was that the Senior Assisted Living didn't proceed forward; some of them were contemplating maybe like a hotel on that particular parcel. That never materialized as well. Basically, my understanding was that the original landowners subsequently passed away, and then the property became available when Mr. Xie and his partners stepped in. So, he may have a little more background; if he's able to share? Page 3 LAAC-27 July 7, 2026 MR. XIE: Hello everyone, my name is Andy. Anyway, I do construction for a living. So, we have not planned what to build until the zoning is finally repealed or whatever. And then we'll make a decision. But for sure, we're going to do housing. I have no idea what's going on; I guess the owner passed away, that's why. MR. HUSTACE: Thank you, appreciate that. It's unfortunate to see that specialized living and to these not really carried out and not moved forward. So, hoping to see some —the current intention of those 38 double -family residential projects moved forward. So hopefully, that can undergo. Thanks, Chair. CHR. KIMBALL: Thank you, Council Member Hustace. Council Member Villegas. MS. VILLEGAS: Thank you for being here. So, if I understand correctly, the prior owner of the property passed away and you and your partners then purchased it or you inherited it? MR. XIE: We purchased it. MS. VILLEGAS: I wondered in the Leeward Planning Commission, what did the neighborhood think or what was the surrounding neighborhoods input was? MR. XIE: Basically, no one shows up from the neighborhood. MS. VILLEGAS: Nobody showed up. Okay. I also wondered, and I'm not sure who would be best to answer this, but the difference in property taxes based on this zoning reverting back. MR. ARAI: We haven't investigated the implications of the zoning reverting back and its effect on real property taxes, sorry. MS. VILLEGAS: Okay. And then you mentioned it's 38 units is planned in theory for the makai lot? MR. ARAI: That is correct. The function of 38 was roughly based on unit density, given the RD 3.75 (Double -Family Residential) designation that it would revert to. But obviously, there are site considerations that ultimately will determine how many units. There are a total of 50 water units available to this property, which suggests up to 50 units could be stood up. But again, with site considerations, setback considerations, and parking allocation. There is the Kuakini Wall and archeological features there with buffers already established. They have to work around all of that. Page 4 LAAC-27 July 7, 2026 So, in the end, Mr. Xie and I were just talking outside; looks like it'll be little bit less than 38. That final number is not really known yet. But those site constraints are ultimately going to determine. And he is looking at keeping it at a one-story type of project, right? MR. XIE: I have not made a decision. MR. ARAI: But it's going to be a low-lying, Double -Family zoning. So, it's basically, like duplexes. So, the concept; a series of duplex -type of configurations. MS. VILLEGAS: Okay, and they will be rentals, I'm taking it? MR. XIE: Yes, all rentals. MS. VILLEGAS: I don't know how familiar you are with Hualalai Road, but it is a very narrow windy road that recently during the Kona Low flooded out, and there was no access. You had to go back up and down another way. So, I'd be interested, and it's going to be challenging for you moving forward. I mean, I can see the zoning change. I can't think of anything that really gives me a red flag here. But I'll just be honest with you moving forward, are you familiar with Kona? Have you lived here for a long time? MR. XIE: I lived on the island from 2017. I spent about six to nine months at a time on the island. MS. VILLEGAS: Per year and then you go. Okay, so you're familiar. And familiar with Kona? MR. XIE: Yes, I lived there for four years already. MS. VILLEGAS: Okay, so you're familiar with our traffic challenges and smaller roads, and all that kind of stuff. So, you know, we need housing. So, I do really appreciate this opportunity to put in more rental homes. But the infrastructure and all the necessary resources that it would take to support this and connect to sewer or septic; you have a very dynamic project ahead for you. think that's all my questions for now. Thank you. CHR. KIMBALL: Council Member Inaba. MR. INABA: Thanks Chair. Director, a question. Since this is reverting back to the original zoning designation, there wouldn't be or would there be an affordable housing requirement? Page 5 LAAC-27 July 7, 2026 MR. DARROW: Typically, when there's a reversion of a change of zone, all conditions are wiped out. MR. INABA: Okay, so, one of them is going from Multi -Family to Ag; and the other one is going from Village -Commercial to Double -Family Residential. And for the Double -Family Residential parcel, do you have the unit count that would be allowed to be built there? MR. DARROW: Thirty-eight. MR. INABA: Okay. That might be an area we can tap into as part of this, Bill 168, looking at Affordable Housing requirements for this. Because I'm not sure if there were with all the different ordinances over time, what type of Affordable Housing requirements were placed on either of these properties. But there's a request before the Council at this point, so we'll be double checking to see if it would be appropriate to apply the Affordable Housing component to the parcel that is going to Double -Family Residential between now and first reading. Mr. Arai, any comment? MR. ARAI: Sure. The action before you today is a repeal of all the ordinances that basically changed the original Legacy zoning of RD-3.75 (Double -Family Residential) and Ag-5A. And that extends all the way back to the early 1970's. And that original Legacy zoning was established by the zone district map, North Kona, meaning that the zoning was established by adoption of the map with no accompanying conditions or requirements. So, that is the request before you today. So, the applicant's understanding when we made the request of the Director, was that all the subsequent ordinances be repealed and the zoning goes back to the way it was already established by the zone district map that was adopted probably in 1967, or there about with no conditions. MR. INABA: No, I understand that. But the applicant purchased the parcel that has history. And now that we're going back and there's potential for 38 residential units to be constructed there, you're here asking the Council to revert back. So, what I'm saying is that we're going to review and maybe have a discussion with an amendment before us at first reading to decide whether or not there might be an Affordable Housing requirement because there's a request before the Council. So, we need affordable housing, and we're going to look at that between now and first reading. Thank you. CHR. KIMBALL: Before I go to Council Member Kagiwada, I did want to draw everyone's attention to Section 4, which is typically in a rezoning ordinance where we would have the conditions. This one doesn't have any conditions, as mentioned, because we're reverting. I think we need to hear from Page 6 LAAC-27 July 7, 2026 Corporation Counsel about our ability to put conditions on what they might be at this stage. But I did want to identify that there is that boilerplate location. And we have been asked by LRB (Legislative Research Branch) to remove it if we're not going to add any conditions. So, that's the amendment that you have before you. But thank you for bringing that up. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Director, can you explain a little bit about how your recommendation for these changes fits with the priorities in the General Plan and just Planning in general for what I understood to be more housing and density in some of these Urban areas in places that do have water credits and access to roads and things. MR. DARROW: So, with a request to repeal, that's basically, what it is. They're asking —and typically, you don't see a repeal with 10-plus ordinances, right? It's usually one ordinance. So, somebody at some point came in, changed the zoning. Usually, I would say, almost always, it's higher density and conditions are placed on that allowance. You're receiving additional density, therefore you have these additional conditions for infrastructure, affordable housing, fair share, so on and so forth. When we repeal, we strip away everything and come back to its original zoning. Back to that time when it had no conditions, and that was the zoning. We, as the Planning Department as far as I can remember, maybe there was one case where I remember one with the Council and one with the department, that tried to do things differently where they tried to request a different zoning. One example was in North Kohala near Kawaihae where they were trying to revert the zoning back to, I believe RA (Residential and Agriculture) five acre, and the Council wanted to revert it to RA-15 acre. And there was a lot of discussion between Corporation Counsel and the Council Members saying that would initiate a taking —that it was right for a taking. The other one was, and this was in response to a condition in the South Kohala CDP (Community Development Plan) to preserve a Pu`u (a hill, peak, mound, or ay round protuberance) in Waimea, and I believe the zoning was like Ag-1 and things. The director proposed an amendment reverting or changing the Ag-1 to Ag-800, I think. It was quite large. So that Pu`u is preserved based on the CDP (Community Development Plan). I believe I can't recall correctly if the landowner was in support of it. I think there was a little friction there, but overall, I think it ended up working. In this particular case, I don't ever recall a situation where there was a condition placed on a repeal. MS. KAGIWADA: Director, thank you for that information. But my question is more to as a Planning expert, as somebody who is looking at the overall direction Page 7 LAAC-27 July 7, 2026 that our County is going in with Planning and need for affordable housing; and housing for our residents. Does this kind of reversion go in line with that vision? MR. DARROW: I would say the RD portion does. The Ag-5 is reverting back to unplanned, which now is Ag-5. It's still Urban; it still opens the door to allow for future rezoning if they choose to. The Planning Director can initiate rezoning, but typically they don't, just because of the fact that you're going against the request of the landowner to revert back to its original zoning. But it does say if you read the language in a lot of these of the director. Usually it's based on noncompliance, right? They haven't complied with the conditions in the ordinance. The director can revert back to its original, or more appropriate zone. In this case, it wasn't non-compliance. Well, I mean, they weren't going to comply but they came in and just requested that it be reverted. MS. KAGIWADA: Okay. So, just to be clear, your recommendation for passing this, as it went to the Planning Commissions and is before us, is based on —there's no reason for you to not recommend it. It isn't necessary for you saying that this is the best planning and the best use of this land in your opinion as Director. It's just following the procedures. I just want to be clear about that. When you do the recommendation, it's not about what you think is the best way forward with this property, but you're just following the way that the laws are and you don't see any reason to object to it. Is that correct? MR. DARROW: Correct. And again, just for clarity, I don't feel that the director should —I'm not saying that anyone else could recommend that. But I don't feel when a request is coming in to revert back to its original, unless there's collaboration and consistency with the request moving forward, it would end up I think, and again I've never been in this situation, but it would seem like we'd be in that battle again that I'm doing something other than what the landowner is requesting or even wanting. MS. KAGIWADA: Okay, thank you for that. It's good information. Also interested in some of the implications around the taxes and what this means. I think what we see so often is that, you know, these properties just sit and nothing happens to them for long periods of time for decades. And land is valuable and needed for things like housing our residents. So, we prefer not to see that happen. So, thank you for your time. I yield, Chair. CHR. KIMBALL: Thank you, Council Member. Council Member Kaneali`i- Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you. I just wanted to note, because I found this in my district as well. The Legacy zoning really was willy-nilly, like they just did it. There was no Subdivision Code in place yet, correct Mr. Darrow? This was pre-1972? Page 8 LAAC-27 July 7, 2026 MR. DARROW: There was the Planning and Traffic Commission which did subdivisions. It isn't the current Subdivision Code we have now, but there were codes in place back then that they operated under. MR. KANEALI`I-KLEINFELDER: Okay, agreed, but the Subdivision Code we look at now wasn't in place. MR. DARROW: That was in the 1980's MR. KANEALI`I-KLEINFELDER: Even the Subdivision Code we have now, I think we can all agree, needs a little bit of updating. MR. DARROW: We're working on it. MR. KANEALI`I-KLEINFELDER: Which you are working on, thank you. So, the Legacy Zoning —I'm not saying yes or no. I'm just saying the Lagacy Zoning didn't always and doesn't always apply. Especially, 50-60 years later. So, I'm just making that note. But I appreciate that being brought forward, and interested to see where this goes. Thank you. CHR. KIMBALL: Thank you, Council Member Kdneah'i-Kleinfelder. Anyone else? Council Member Hustace. MR. HUSTACE: Thank you, Chair. There was a question on the Multi -Family area, units of water of 50 there, is that correct? MR. ARAI: That is correct. Twenty-eight units of water have been already purchased and secured. They were able to secure an additional 22 units of water by paying an annual water commitment fee. So, combined, it's 50 units of water currently available. MR. HUSTACE: For just the makai portion? MR. ARAI: For the whole property. MR. HUSTACE: For the entire parcel. Got it. And so then, this intention of 38 units would meet that standard there for that use, but their balance remain on the Ag parcel mauka then for water commitments and water credits? MR. ARAI: It could. MR. HUSTACE: Because the intent here is to have four buildings on the Ag parcel, correct? Page 9 LAAC-27 July 7, 2026 MR. ARAI: That is correct. And if you equate the residents to 400 units a day; and then the 380 use for each of them, 400 units per day. But that doesn't take into account any irrigation needs that the applicant may want to pursue. As you're well aware, before Department of Water Supply will finalize things, whether there's conditions in an ordinance or not, the landowner is compelled to comply with all of those procedures and processes. So, I would imagine that a water demand calculation will be required by the Department of Water Supply once they have plans set up for the use of the properties, and the Water Supply will determine the actual number of units necessary to support all intended uses. If there's excess water units that are not being utilized, then the landowner will have to decide whether they will continue to pay those commitments to secure them for future use or simply abandon those units. MR. HUSTACE: Okay, thank you, Mr. Arai. Director Darrow, in terms of a future subdivision use, with the potential 38 units there, what is that plan approval in terms of the condition of the road as Council Member Villegas talked about the drainage in that area and the narrowness and access there. MR. DARROW: So, typically, in RD zoning, if you come in to request to do units, I don't think they're thinking subdivision, correct? MR. ARAI: That is correct. It would just be duplex units throughout the entire property. MR. HUSTACE: It would be a plan approval for the property. MR. DARROW: Correct, it would be a plan approval for the duplex units. MR. HUSTACE: Access to the mauka portion as well then. MR. DARROW: We would end up requesting comments from Public Works, and they would provide comments. It's not like a condition in an ordinance. But we definitely based on, you know, whatever comments we get back. We will have to try to work with the applicant to incorporate that. It probably won't go to the extent of placing left turn lanes or widening the roadway. But it could do enhanced access type improvements meeting the requirements of DPW (Department of Public Works). MR. HUSTACE: Okay, thank you, Director. MR. ARAI: Council Member Hustace, can I elaborate to help with the discussion? MR. HUSTACE: Yes, please. Page 10 LAAC-27 July 7, 2026 MR. ARAI: The ordinance that was last amended in 2019, I think it was, had a series of conditions that was built around supporting 104 units senior assisted complex. And all the traffic and impacts associated with that project. When Mr. Xie and his partners purchased the property, they were well aware that the project concept was not viable in their minds, and they felt that the currently proposed 38 units plus four additional was an appropriate scale. They took into account many factors. Things like the process of going through an amendment of the existing 2019 Zoning Ordinance; some of the concerns that were raised by Council Member Villegas regarding traffic. All that got played into their decision. And ultimately, where they landed was 38 units plus four on the Ag side is good enough. And they were still able to provide housing rental opportunities on the property. Granted, if you go through all of the conditions within the 2019 ordinance, it speaks to a host of compliance. And much of them are check boxes. So, like, don't forget to do this and that. But some of them offered mitigating requirements based on the original 104 unit development concept. That again, as part of the repeal action will all go away. But a lot of those requirements will still remain in place, because they're government approvals, government processes, right? But some of the things like affordable housing, fair share, all of those things generally goes away with the repeal of the enabling ordinance. But the applicant as recited within the Director's background report, the landowners recognize the need for certain improvements along Hualalai, which is why even though it's not a requirement, it was as part of the original 104 units. They are still willing to carve up a widening along Hualalai Road to at least provide some level of improvements recognizing the traffic flow demands along Hualalai Road. CHR. KIMBALL: Alright, anyone else. Go ahead, Council Member Kagiwada. MS. KAGIWADA: Thanks, just one quick thing. Could the rental units be Short Term Vacation Rentals? MR. DARROW: Not at this time. MS. KAGIWADA: What do you mean, not at this time? MR. DARROW: So, the current zoning is for Resort, CV (Village Commercial), and CG (General Commercial), I believe. Unless these types of residential units are found within the General Plan Resort Note area. This is, as we mentioned through the presentation, medium density. So, it wouldn't work there. And in the proposed bill, I do not believe RD is one of the permitted uses. If you can give me one sec, I'll make sure. Page 11 LAAC-27 July 7, 2026 MR. ARAI: While we're waiting for the Director, I just confirmed with Mr. Xie that no Vacation Rentals are proposed for this project. MS. KAGIWADA: Sure. I just want to know what's allowed; not to sweat their thinking over. MR. DARROW: Okay, so, it would allow a B&B, a Bed and Breakfast. But for an STVR (Short -Term Vacation Rental), it's proposed to be an RMV (Multi - Family Residential), CG (General Commercial), CN (Neighborhood Commercial), CD (Census Designated Place), and CDH (Downtown Hilo Commercial). There's been changes to that; to take out RM and CN. So, no RD. MS. KAGIWADA: Okay, thank you so much. Appreciate it. I yield. CHR. KIMBALL: Thank you, Council Member. Anyone else? Just going to ask the body. Council Member Inaba, since you raised it, should we keep the section in there and wait on this amendment to remove the conditions section until first reading? Alright, given that, we will proceed. All those in favor please say "aye." Any opposed? Vote on Bill 168: The motion to recommend passage of Bill 168 on first reading (Approved) was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, and Chair Kimball — 8. Noes: None. Absent: Committee Member Villegas — 1. Excused: None. CHR. KIMBALL: Bill 168 is forwarded to Council for first reading. Thank you. Alright, the time it 12:37 p.m. Seeing no further business, we are adjourned. ADJOURN- There being no further business, Chair Kimball adjourned the meeting MENT: at 12:37 p.m. Approved: T � �F >� �/./ :le Ms. Heather L. Kimball, Chair Legislative Approvals and Acquisitions Committee HK/dt i (Date) Page 12