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Home My WebLink AboutCOM 0465.003 2006-2008 07-89-'87 13:82 FROM-SLNSTONE REALTY 8t~8-523-9696 T-599 I'002/804 F-645 ,6a,n SunStone Kona LLC Honorable Pete Hoffmann July 9, 2007 Chair and Presiding Officer and bQembers of the County Council ; : COUNTY COUNCIL r= 333 I:ilauea Avenue, Srcond Floor Hilo, Hawaii 96720 SUB.IECT: COMMENTS TO BILL 112, PROPOSED AMENDMENT TO CHAPTER 11. HAWAII COUNTY CODE. RE AFFORDABLE HOUSING Dear Chair Hoffmann and Members of the County Council: I am wriring to ;rou as the managing member of SunStone Kona, LLC ("SunStone"), owner of approximately 46.3 acres of land in Kahului 2nd, North Kona, Island and State of Hawaii, located at Tax ]flap Key Nos.: (3) 7-5-019: 011, and approximately 1.089 acres of roadway improvements located at TMK No.: (3) 7-5-020: 001 (per.) (collectively the "Property"). SunStone is concerned about the aossible effect of County of Hawaii Bill Number 112 ("Bill 112"1 on SunStone's develoament of the Proaerty due to the fact that 11igS:ounty of llswaii recently entered into a stipulated SMA aereement reeardinp the property which would be violated by the passin¢ of Bill 112 in its current form. SunStone reser?es the right to altea its position and supplement its arguments upon consultation with legal counsel. As Currently drafted, Bill 112 appears inconsistent with Hawaii law on equitable estoppel and vested rights. In relevant part, Bill l l2 proposes to amend Hawaii County Code, Chapter 11, to impose affordable housing requirements on: All final map approvals for a condominium property regime where residential uses are allowed, including farm dwellings, and the units are less than five acres in siu; [and] All plan approvals for buildings which allow residential uses. Bill 112, Section 11-4(2)(6),(7). Application of Bill 112 to the Property will have a devastating economic effect on SunStone, most likely precluding <levelopment of the Property. The Property wsis rezoned under Ordinance No. 87-47, effective May 11, 1987, subject to numerous conditions (Coonditions A through N), none of which included an obligation to provide ] 001 Bishop Street Psuxhi Tower Suite 1240 Honolulu, HI 9ti813 Phooe: (808) 523.9881 Fa~x:/(808) 513-9696 Comm. No._ _`~s•3 Ref. To: ~r~MM ~ tlylc i ! ;tef. Date JUL_ 10.,2007 L37-89-'87 13:02 FROM-SLN9TONE REALTY 8t~8-523-9696 T-599 P603/884 F-645 The Honorable Pete Hoffman July 2007 Page 2 of 3 affordable housing. On Apri120, 2007, after almost two years of litigation, SunStone obtained approval of its Special lvlanagement Area Use Permit Application for the development of 289 multiple family residem:ial units, commercial improvements and related parking and landscaping improvements ("SMA OS-005"). See Findings of Fact, Conclusions of Law, and Decision and Orde:;, approved by the Planning Commission on March 16, 2007, and filed Apri120, 2007 (the "D&O"). Prior,lo the Planning Commission's filing of the D&O, on February 13, 2007, Corporation Counsel, oe1 behalf of Planning Director Christopher Yuen, and SunStone, had stipullated to a proposed Findings of Fact, Conclusions of Law, and Decision and Order Recommending Approval of Special Management Arca Use Application (SMA No. OS-005) (c'Sfrpulated D&0"). In light of our negotiations with Mr. Yuen and the County over SMA OS-005, Sunstone was :hocked to read Mr, Yuen's letter transmitting Bill 112 to the Hawaii County Council dated Apri120, 2007, the same date Mr. Yuen sent us a copy of SMA OS-005. Apparently the entire time SunStone was negotiating in good faith on SMA OS-005, the County was plotting a new affordable housing scheme. Had SunStone known of the County's intention to exact affordable housing from previously rezoned and entitled property, it would have entered an affordable housing agreement as part of its negotiations with the County over SMA OS-005. SunStone belie ves the County's actions vis a vis SMA OS-005 and Bill 112 have been arbitrary and capricious, resulting in a violation of SunStone's Constitutionally protected rights of due process and equal protection. SunStone also believes it is unfair to apply Bill 112 to the Property because SunStone has spent a substantial sum of money in reliance of Ordinance 87-47, SMA OS-005, and the County's official assurance, pursuant to the Stipulated D&O and SMA 05-005, that SunStone tnay proceed with development. On all fronts SunStone has proceeded in good faith, and has every right to rely on SMA OS-005 as the County's final discretionary permit required before development of the Property. 13aving spent approximately $500,000 in processing and negotiating SMA 05-005, plus :financing and soft costs, SunStone has the right to develop the Property without complying with Hawaii County Code, Chapter 11, and as it maybe amended by Bill 112. SunStone has a vested right to develop the Property. Unless Bill 112 is revised to take SMA. OS-005 into accocmt, passage of Bill 112 will result in an unconstitutional interference with SunStone's real property rights. Under Bill 112 as currently drafted, projects exempt Chapter 11 include: (i) those for wlrich the County has previously agreed as to the specific means of satisfying the affordab4: housing requirements (1-lawaii County Code Secflon 11-17(a)); and (ii) any preliminary map for condominium property regime which has received tentative approval as of the eflective date of'the passage of Bill 1 ] 2, or any plan approval for which the application has been received and a.eknowledged prior to the effective date of the passage of Bill 112, or any condominium property regime or plan approval within an area which had affordable housing requirements that have been previously fully satisfied. (Bill ] 12, Section 11-17(b)). Although these exceptions address certain claims of vested rights, no exception is readily applicable to SunStone, holder of a valid SMA Permit. A landowner acquires a vested right to proceed with land development when the landowner has in good faith relied on, or changed position because of, some governmental act or 07-09-'87 13;82 FROM-SINSTONE REALTY 8t~8-523-9696 T-599 P61~4/004 F-645 The llonorable Pete Ho:Ffman July 9, 2007 Page 2 of 3 omission. David Callies, (belly, edJ Zoning and Lond Use Controls, Ch. 52D, Vested Rights at 52D.p1 and .02. Cn Hawaii, rights vest following issuance of a final discretionary permit, such as a SMA permit. County of Kauai v. Pacific Standard Life Ins. Co., 65 Haw. 318, 328, 653 P.2d 766,'774 (1982). SunStone should be able to deaelop the Property under the conditions set forth in Orduiarrce No. 87-47 and SMA OS-005, and not be subject to Bill 112 because SunStone negotiated SMA OS-005 with the County in good faith reliance on the County's representations. SunStone has spent substantial sums of money in connection with SMA OS-005 and has the right to proceed with development of the Property, i.e. ,construction of multiple family resi3ential units. commercial improvements and related parking and landscaping improvements, without having to comply with Chapter 11, or Bill l 12, both of which are unlawful as applied to SunStonc. Should the (:ounty wish to erode SunStone's vested rights, it should seek to acquire the Property and pay SunStone just compensation. For these reasoner and aursuant to Hawaii Countv Charter Section 13-18. we stron:g_y~tr¢e the Council to reject Bill 112, or, in the alternative, to make a further amendment to Bi11112 to clarify that, "Projects subject to valid SMA uermits. the reco¢nized final discretionary permit In Hawaii. are exemat from Chanter 11." Thank you for your assistance in this matter. Very truly yours, SunSton ~ LLC By: Curtis D. DeWeese Its Managing Member cc: Casey Jarman, County Clerk I-tarry ICim, Mayor, County of Hawaii Lincoln S.T. As:hida, Esq., Aepartment of Corporation Counsel, County of I-lawaii 07-89-'87 13:01 FROM-SL!NSTONE REALTY 808-523-9696 T-599 P001/009 F-645 `~1 f'V~a~a,. w,, SunStone Realty Group LLC r~ '1 }OU I Bishop 3t Pauaiu Towa[, Sutte 12A0 ~,er4~~e tenn l'ro^lT~wnJvl,~wc'I Honolulu, Hawaii 96813 ~inColw ~S~:OCa~ C9~~d~~`~ (ao~{r{ Tel: (808)523-9881 Fax: (808)523-9696 TO; ~u~ C er~:.~ CaSe~ Ja~nuc.~ DATE: 7 ~ COME'ANY: nog,.. O~ at,)alt FAX NO: 461-6sS3 FROM[: C • ~E UIPeS e TOTAL PAGES: Oa~iaa~ co.Q sn~> MESSAGE OR CONIIvff?NTS: f ~ I N Go ~.I l CJtJnL~ ~ w,eW-~srS . M~-KLo . - ,'i v c. c-