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HomeMy WebLinkAboutCOM 0879.000 2006-2008 ~~tv os N~ Harry Kim Christopher J. Yuen Mayor Director Brad Kurokawa, ASLA LEEDO /~7 ,L of AP (gounfij of Puf raii Deputy Director PLANNING DEPARTMENT 101 Pauahi Street, Suite 3 • Hilo, Haw" 96720-4224 (808) 961-8288 • FAX (808) 961-8742 November 19, 2007 z O c ~ Alan M. Okamoto, Esq. ev 1` Nakamoto, Okamoto, Yamamoto 187 Kapiolani Street f7 :3 Hilo, HI 96720 G as X Dear Mr. Okamoto: t~+ Change of Zone Ordinance No. 06-105 Applicant: Hiluhilu Development, LLC Request: Open and A-3a to Project District Subject: 2007 Annual Progress Report Tax Map Key: 7-2-5:1 This is to acknowledge receipt of your annual progress report dated October 16, 2007 in compliance with Condition SS of Change of Zone Ordinance No. 06-105. We appreciate the thoroughness of the report. The next annual progress report is due on or before July 17, 2008. We will forward a copy of the report to the Hawaii County Council and the Planning Commission for their information. Condition J refers to the Planning Director's November 29, 2006 letter. Please refer this letter and submit the additional information as requested by the Planning Director to complete compliance with Conditions J and M. If you have any questions, please feel free to contact Jeff Darrow at 961-8288, ext 259. Sincerely, CH HER J. Planning Director JWD:smn P:\public\wpwin60\Jef \Ley ers\AnnuaI Reports\LOkamoto-APP2007-REZ05-010.doc cc w/ copy of report: awaii County Council Planning Commission Kona Planning Department O Comm. No. Ref. To: Ref. Dote AFC 1_7 ~p_ Hawaii County is an Equal Opportunity provider and Employer. NAKAMOTO OKAMOTO & YAMAMOTO ATTORNEYS AT LAW, A LAW CORPORATION ROY K. NAK OTO 187 KAPIOLANI STREET TELEPHONE (808) 961-0641 ALAN M. OKAMOTO HILO, HAWAII 96720 FAx (808) 935-3872 JEREL I. YA OTO HENRY T. NARANOTO jerel@noyhawaii.com October 16, 2007 Mr. Christopher Yuen Planning Director Planning Department 101 Pauahi Street, Room 3 Hilo, Hawaii 96720 Re: Ord. No. 06-105 Hiluhilu Development, LLC TMK (3) 7-2-005: 001 Annual Report Dear Mr. Yuen: Pursuant to Condition SS of Ordinance No. 06-105 which rezoned the above identified property to Project District, Applicant Hiluhilu Development, LLC, submits this annual report. Applicant reports on the status of the conditions of the rezoning as follows: A. The applicant, successors or assigns shall be responsible for complying with all of the stated conditions of approval. Applicant, its successors or assigns shall comply with all stated conditions of approval. B. The applicant shall comply with all conditions of approval of the State Land Use Commission's Decision and Order (Docket No. A03-744) dated May 19, 2005. Applicant will comply with this condition. Attached hereto as Exhibit "A" and by reference made a part hereof is the Second Annual Report and exhibits that have been submitted by Applicant to the State Land Use Commission. ~J $a J 1 C. The applicant shall comply with the conditions as set forth in the Water Agreement between K-W Ka'u, LLC and the Water Commission of the County of Hawaii dated June 15, 1999. Applicant will comply with this condition. Applicant, Department of Water Supply and Kohanaiki Shores, LLC signed an agreement in 2007 to develop water systems and to transfer water rights. This agreement amends the 1999 Water Agreement between K-W Kau (Applicant), the Water Commission of the County of Hawaii, Applicant and K-W Kohanaiki (Kohanaiki Shores LLC), successors in interest to the terms of said agreement. The 2007 agreement identified the work to be done which included completing the pumping stations and outfitting the Kau Well 1, building storage and transmission water system from those well through the Petition area and across State lands to connect to the northern end of the Department of Water Supply's water main along Queen Kaahumanu Highway. A copy of the 2007 Agreement is Exhibit "Y' to the LUC Second Annual Report. D. The project shall consist of a maximum of 725.2 acres for single-family and multi-family residential, commercial uses, hotel, university and public school facilities, dry forest preserve, archaeological and cave preserve areas, active and passive parks, a trail system and supporting infrastructure. Applicant will comply with this condition. E. The maximum number of residential units allowed shall be 1,116 units, including the on-site affordable housing units. Applicant will comply with this condition. F. The maximum number of hotel rooms shall be 120. Applicant will comply with this condition. G. Commercial spaces for medical, office, retail, classrooms and health related uses and hotel shall be limited to 102 acres. Applicant will comply with this condition. H. Active and passive parks (Open, Park and Preservation) shall be developed on a minimum of 177.8 acres. A "Constraints Area" which includes the approximately 55-acre dry forest preserve, archaeological sites/cave and park areas, shall be set aside in the project area. 2 Applicant will comply with this condition. Although Applicant revised its plans and will not construct a golf course, a 20 acre active park will be provided to the County Department of Parks & Recreation. There will be baseball and/or soccer fields and associated facilities. These facilities will benefit the entire Kona community. I. The uses allowed in the Project District shall be all permitted uses allowed by right in the RS, RM, CN and CV zoned districts, and related facilities. Uses allowed by Use Permit in the CV district, other than golf courses, may be allowed by use permit. Applicant will comply with this condition. J. A detailed Master Plan of the Project District, which includes the location and number of residential lots and units, hotel, university and public school facilities, commercial uses, parking, open space and recreational areas and other related improvements on the property, shall be submitted to the Planning Director within two (2) years from the effective date of the Project District Ordinance or prior to submission of plans for plan approval or subdivision approval, whichever occurs first. Applicant will comply with this condition. A detailed Master Plan of the Project District has been approved by the Planning Director by letter dated November 29, 2006. A copy is enclosed as Exhibit B. IC. Substantial construction of the proposed development shall commence within five (5) years from the effective date of the Project District Ordinance. "Substantial construction" means the actual start of construction of project infrastructure under a bona fide contract of not less than ten million dollars ($10,000,000.00). Prior to construction, the applicant, successors or assigns shall secure Final Plan Approval for the proposed development from the Planning Director in accordance with Section 25-2-70, Chapter 25 (Zoning Code), Hawaii County Code. Plans shall identify proposed structures, fire protection measures, paved accesses and parking stall, and other improvements associated with the proposed uses. Applicant will comply with this condition. 3 L. The following design standards shall apply: 1. Landscaping for the development shall comply with the Planning Department's Rule No. 17, Landscaping Requirements. Landscaping rules, such as the screening of single-family residential from commercial areas, shall be applied according to the actual uses. 2. The height limit for structures within the project area shall not exceed the following: a. Single-family residential development: 35 feet b. Multiple-family residential and hotel developments: 45 feet c. Office and retail commercial development (not more than 3 stories): 45 feet. 3. The minimum off-street parking and loading space requirements of Chapter 25, Hawaii County Code shall be complied with, including compliance with the American Disabilities Act (ADA) requirements. Applicant will comply with all requirements of this condition. M. The variances from Chapters 23 (Subdivision) and 25 (Zoning), Hawaii County Code, as presented in Planning Department Exhibit 2 (Applicant's November 21, 2005 letter with attached Tables pages 1 to 6 related to Variance Requested from Sections in Subdivision and Zoning Codes, and Applicant's Figure 2 - Conceptual Character of Town Center/Residential Village Center, Figure 3a - Residential Village Center Alternative: 4,000 SF Lot, Figure 3b - Residential Village Center Alternatives: 6,000 SF Lot, Figure 4a - Conceptual Plan: Roadway Concepts - Dedicable, Figure 4b - Conceptual Plan: Roadway Concepts - Nondedicable, and Figure 5 - Residential Village Center Alternatives: Zone Lot Line Concepts) shall be allowed under the Project District. The applicant shall submit detailed plans to the Planning Director showing street designs and cross-sections, and adjacent building designs, with the Master Plan. The Planning Director may require modifications to the street sections to provide sufficient on-street parking where the plans do not provide adequate off-street parking (such as the 4,000-square foot lots with a one-car garage and insufficient setbacks to allow parking in driveways), and may require further changes necessary for public safety and convenience. All roads built with the variances allowed under this condition will be non-dedicable. With regard to the requested zero line building setbacks, the applicant shall conform to the current Hawaii County Building Code requirements. As part of the Master 4 Plan, the applicant shall submit plans for pedestrian movement through the project district, which shall identify areas where sidewalks will be included to permit safe pedestrian access to the Town Center and other important points in the development. Applicant will comply with this condition. N. To ensure that the project is developed according to its stated goal of creating a mixed use residential community, the project must include residential development. The project shall have at least one residential unit for every 600 square feet of nonresidential development (under roof). Space used by the University shall not be included in the calculation of nonresidential space. There is no minimum requirement for the nonresidential development. Applicant will comply with this condition. 0. The permitted hotel, designated as the "University Inn and Conference Center," shall function as a business hotel and in conjunction with University operations. It shall not be operated under a time-share plan or other arrangement that provides for shared ownership of individual units on the basis of time intervals, or club membership allowing periodic use. Applicant will comply with this condition. P. Occupancy of the hotel shall not be granted until the construction of the Queen Kaahumanu Highway, Phase 11 widening improvements to four lanes from Kealakehe Parkway to the Kona International Airport at Keahole has been secured by the State entering into a construction contract for the improvements, or until construction has commenced on the 20,000 square foot University building, or the building's completion has been assured by bond or other security acceptable to the Planning Director, whichever comes first. Applicant will comply with this condition. Q. No retail commercial structures may be located closer than 1,500 feet from the Queen Kaahumanu Highway right-of-way. Applicant will comply with this condition. 5 R. To ensure that the commercial development corresponds with the applicant's representations regarding neighborhood-scale commercial development, no single retail establishment shall have more than 45,000 square feet of developed area under roof. Applicant will comply with this condition. S. Total retail space (not including restaurants) shall not exceed 75,000 square feet under roof until the construction of the Queen Kaahumanu Highway, Phase II widening improvements to four lanes from Kealakehe Parkway to the Kona International Airport at Keahole has been secured by the state entering into a construction contract for the improvements. The square footage of improvements leased or given to the University of Hawaii shall not count against this limit. Applicant will comply with this condition. T. The applicant shall set aside a "Constraints Area" including the approximately 55-acre dry forest preserve, archaeological sites/cave and park areas on the project site. Applicant has had the "Constraints Area" inventoried and surveyed. An inventory map is attached to the LUC Report as Exhibit "H". The preservation areas in the "Constraints Area" have been fenced off and are clearly visible. Also, the fire break around the dry forest preserve has been completed. U. The applicant shall develop one 20 acre active park site prior to occupancy of the first residential unit on the property. The 20 acre active park site shall include two playing fields which may be one baseball field and one soccer field, or two baseball fields or two soccer fields, parking lot and restrooms, with the specific requirements to be determined in consultation with the Department of Parks and Recreation. The 20 acre active park shall be constructed to county- dedicable standards, and the county shall accept dedication. Applicant will comply with this condition. V. There shall be an 800-foot setback from the Queen Kaahumanu Highway. No structures, other than those allowed under Condition No. 7 of the Land Use Commission's Decision and Order, shall be allowed within the 800-foot setback area. A copy of the metes and bounds description for this open space area, and proposed covenant(s) shall be submitted to the Planning Director for review and approval 6 prior to receipt of Final Plan Approval or land alteration activities, whichever occurs first. The approved covenant(s) shall be recorded in the Bureau of Conveyances prior to the issuance of Final Plan Approval, or land alteration activities, whichever occurs first. A copy of the recorded covenant(s) shall be provided to the Planning Department. Applicant has recorded in the Bureau of Conveyances as Document No. 2007-006828 the 800 foot setback area. A copy of the document recorded in the Bureau is Exhibit "I" in the LUC Report. W. All project utilities shall be underground. Applicant will comply with this condition. The only pre-existing overhead line will be HELCO line. X. The applicant shall construct the following roads to access other properties and the regional road system: 1. Project access road from the Queen Kaahumanu Highway to the eastern boundary of the project. (Road "1" on attached map Exhibit "B"): Road "1" shall intersect with the Queen Kaahumanu Highway at a location approved by the State Department of Transportation, and shall connect with Makalei Drive at the eastern (mauka) end. The road shall be constructed on an 88-foot wide right-of-way, as a two-lane road, to county-dedicable standards as a collector road, from the Queen Kaahumanu Highway to the intersection with Road "Y'. From Road "Y' to the intersection with Makalei Drive, Road "1" shall be constructed to county-dedicable standards as a minor street, except that design standards shall be varied to permit the connection with Makalei Drive without encroaching into the Lowland Dry Forest Preserve. The connection with Makalei Drive shall be designed to not encroach into the Lowland Dry Forest Preserve. The grade shall not exceed 10%, except near the connection with Makalei Drive. At the Queen Kaahumanu Highway, the intersection shall be improved in accordance with one of the following two options: (a) If a grade separated interchange is available to connect Road 1 to Queen Kaahumanu Highway when Applicant is ready to construct Road 1, Applicant will connect Road 1 to such interchange and in such case, Applicant will contribute $1,500,000 to the Department of 7 Transportation. (b) If a grade separated interchange is not available to connect Road 1 to Queen Kaahumanu Highway when Applicant is ready to make the connection, Applicant shall improved the intersection at its expense as required by the Department of Transportation, but shall include, at a minimum, a deceleration and an acceleration lane on Queen Kaahumanu Highway, a left-turn lane on Queen Kaahumanu Highway, a refuge lane for vehicles turning left into Queen Kaahumanu Highway, and a dedicated right-turn and left-turn lane from the Road "1" to Queen Kaahumanu Highway. If warranted, at the request of Department of Transportation, the applicant shall install traffic signals and a second left-turn lane from the main project access road to the Queen Kaahumanu Highway. 2. "Mid-Level Road" from Road "1" to Kaiminani Drive (Road "2" on Exhibit "B"): The applicant shall construct the mauka half-section of a 120-foot wide right-of-way to county-dedicable standards as a collector road. The applicant shall construct the intersection at Kaiminani Drive meeting with the approval of the Department of Public Works, but the intersection shall include a left-turn lane on Kaiminani Drive. 3. A north-south collector road at approximately the 600-foot elevation (Road "3" on Exhibit "B"): The north-south collector road shall be designed to function as a portion of a collector road (Road "4") connecting Highway 190 with Road "l"and the Queen Kaahumanu Highway. Road "3" shall be constructed to county-dedicable standards as a 60-foot wide collector road with an 88-foot wide right-of-way. The applicant shall construct the intersection between Road "3" and Road "1" meeting with the approval of the Department of Public Works. 4. New Connector Road to Mamalahoa Highway Project (Road "4" on attached Map Exhibit "B"). The Applicant shall construct Road "4", at the sole expense, as a two-lane 60' wide county-dedicable collector road, including shoulders and swales, within an 88' right-of-way. The final design and maximum grade of road "4" shall be determined by the Director of Public Works after consultation with the Planning Director. The Applicant shall not be required to install 8 streetlights, except at the intersection with Highway 190, or utilities. If another private developer is required to participate in building Road "4" as a condition of land use approvals, the Applicant's share shall be limited to the portion of Road "4" on the Applicant's property or on State land. The County Of Hawaii shall obtain the necessary right-of-way outside of the applicant's property. 5. A road to connect south to the future extension of Holoholo Street - Nana Street (Road "5" on Exhibit "B"): The applicant shall build Road "5" within the project area to county-dedicable standards as a minor street, and it shall intersect with Road "1". 6. The Planning Director may require other local streets within the project to provide local connections to the adjoining property to the north and south as a condition of subdivision approval or plan approval. 7. At the western (makai) end of Makalei Drive, the applicant shall provide safety improvements necessary to make a safe transition to Road "1", which may include, but are not limited to, rumble strips and establishing superelevation for the curve, as required by the Department of Public Works. 8. The following road improvements shall be completed before a certificate of occupancy is issued for any portion of the subject property, or completion of any single-family homes, whichever comes first: (a) Road "1", at least from the Queen Kaahumanu Highway to the intersection with the Mid-Level Road (Road "2"); (b) the intersection of the main project access road with the Queen Kaahumanu Highway; and (c) the Mid-Level Road (Road "2) from the main project access road to Kaiminani Drive, and the Kaiminani Drive intersection. 9. The following road improvements shall be secured by bond or other surety meeting with the approval of the Planning Director to guarantee that the improvements will be completed within two (2) years after the issuance of a certificate of 9 occupancy for any portion of the subject property or completion of any single-family homes, whichever comes first: (a) the remaining portion of Road "1 (b) Road "Y', and (c) Road "5." 10. (a) The Applicant shall complete Road "4" no later the six years after the effective date of this ordinance, except as may be allowed under Condition "UU". The Applicant shall assure the completion of Road "4" by bond or other security accepted by the Planning Director no later than the issuance of a certificate of occupancy for any building, other than the University or DOE building, or final subdivision approval for any subdivision creating single-family residential lots. Certificate of occupancy for any building, other than the University or DOE building shall not be issued, and final subdivision approval for any subdivision creating single-family residential lots shall not be granted, until the necessary right-of-way for Road "4" has been obtained from any other private landowner. 11. Makalei Drive is a "minor road" and will not be open to the public until the collector Road 4 is open for public use. Applicant will comply with all of these conditions. Applicant has obtained the approval of the Department of Land & Natural Resources (DLNR) to the alignment of Road 2 on Exhibit "B" to the rezoning ordinance. Applicant has secured a right of entry from DLNR to conduct planning, land survey, engineering and environmental studies for Road 2 and a waterline and reservoir within State land. Construction plans for Road 2 are currently being reviewed by the County Department of Public Works. The State Department of Accounting & General Services issued a finding of no significant impacts for the Environmental Assessment covering Road 2 on the State land. Applicant has submitted an amendment to the Environmental Assessment to cover the realignment of a portion of Road 2 and to cover the construction of waterlines and a 1,000,000 gallon water storage tank. This assessment is currently being reviewed by DLNR. 10 Applicant is having on-going discussions with DLNR and Lynch Investments regarding the alignment and construction of Road 4. Additionally, Applicant is having an updated traffic study done for review by the State Department of Transportation. Y. There shall be no direct access from individual lots to collector streets. Applicant will comply with this condition. Z. Construction vehicles shall not utilize Makalei Drive. Applicant will comply with this condition. AA. No vehicular security gate shall be installed within sixty (60) feet of any proposed county road and a turnaround gate shall be provided within the private road or property on the county road side of the gate. Applicant will comply with this condition. BB. All development generated runoff shall be disposed of on-site and shall not be directed toward any adjacent properties. A drainage study shall be prepared and submitted to the Department of Public Works prior to issuance of any construction permit. Drainage improvements shall be constructed, meeting with the approval of the Department of Public Works, prior to issuance of a certificate of occupancy for any buildings, or final subdivision approval for any subdivision creating single-family residential lots. Applicant will comply with this condition. Drainage studies have been completed and approved by the required County and State agencies. Drainage plans have been approved by the State Department of Health. CC. A Solid Waste Management Plan shall be prepared and submitted for approval to the Department of Environmental Management prior to submitting plans for Plan Approval review. Approved recommendations and mitigation measures shall be implemented in a manner meeting with the approval of the Department of Environmental Management. Applicant will comply with this condition. Applicant is discussing the same with the State Department of Health and the County. 11 DD. A wastewater treatment system shall be constructed, meeting the approval of the State Department of Health and/or Department of Environmental Management, whichever is applicable. All wastewater shall be treated at an approved wastewater treatment plant, to a minimum of secondary treatment, with R-1 effluent, unless a greater level of treatment is required by the Department of Health. Wastewater shall be used for irrigation of landscaping or other beneficial reuse to the maximum extent feasible. Applicant has obtained approval from the State Department of Health for the proposed treatment plan design. Construction documents are being prepared and will be submitted for review and approval. A copy of the letter approving the Wastewater facilities plan is attached as Exhibit "D" in the Second Annual Report to the LUC. EE. University of Hawaii Condition. Applicant shall provide the following to relocate the University of Hawaii operations: 1. Connectivity with the University of Hawaii 500 acre site. Applicant shall allow the University of Hawaii to connect with its wastewater and water supply systems. Applicant shall also allow the University of Hawaii to connect electrical and telecommunication systems to facilities installed within the project. These connectivity sites shall be to the University's satisfaction and located along its northern boundary on Road If1ff. 2. Build Applicant's wastewater treatment system to handle the wastewater from the initial University of Hawaii building and design the wastewater treatment system to accommodate future expansion for wastewater from future expansion of the University of Hawaii academic operations. 3. Construct an initial classroom and administration building of 20,000 square feet, with associated parking at Applicant's expense. If the University of Hawaii's design results in the cost of design and constructing the building and associated parking exceeding $5,000,000, Applicant shall have be responsible for the first $5,000,000 and the University shall be responsible for the balance. The building shall be constructed on the State land designated for University use. Construction on the building shall commence as soon as the University has required the necessary consents and approvals. If the necessary consents and approvals cannot be obtained by the State, the University shall have the right to lease from Applicant 12 appropriate space to house University of Hawai'i at West Hawaii until the necessary consents and approvals are obtained at comparable lease rates now being paid by the University of Hawai'i until the 20,000 square foot building can be constructed on the State land at Applicant's expense. Applicant shall commence construction of the building, or assure its construction by a bond or other security accepted by the Planning Director and the Chancellor of Hawaii Community College, before the issuance of a certificate of occupancy for any building, other than the DOE building, or final subdivision approval for any subdivision creating single- family residential lots. Applicant shall complete construction of the University building no later than two (2) years after the issuance of a certificate of occupancy for any building, other than the DOE building, or final subdivision approval for any subdivision creating singe-family residential lots. The location and design of the building (interior and exterior) and related improvements will be on terms determined by the University of Hawaii. The University of Hawaii shall consult on design of said building with Applicant. Applicant will comply with all of these conditions relating to the University of Hawaii. Applicant has developed a detailed conceptual plan for a building complex which would comply with this condition and has submitted the same to the University for comment and approval. A copy of the letter and conceptual plan of the building complex is attached as "B" to the LUC Report. Applicant submitted a draft for the extension of the Memorandum of Understanding which covered joint planning opportunities with the University. The extension agreement was sent to the University's General Counsel's office in January 2007. The Board of Regents has not yet taken action on the extension. Pending approval, Applicant will continue discussions with the University on the new building complex. FF. The Applicant shall enter into an agreement with the DOE, in accordance with the terms of the State Land Use Decision and Order (Docket No. A03-744) dated May 19, 2005. If the Applicant's agreement with the DOE is later amended, the Applicant shall file a copy of such amendment with the Planning Department and shall comply with the terms of the amended agreement. The applicant shall contribute to the DOE an 5,000 square-foot building within the project site to use for a period of twenty (20) years, subject to the following conditions: 13 1. No rent or common area maintenance fees will be charged to the DOE. 2. The building will be used as instructional and office space for the school complexes located in West Hawaii. 3. The building will meet DOE facility standards, with finished classrooms, workshops and offices. 4. The Applicant will collaborate with the DOE on the requirements of the building in order to develop building plan subject to DOE approval. 5. The finished building will be available to the DOE within two (2) years of the issuance of a certificate of occupancy for any multifamily residential building, or within two (2) years from the completion of any single-family residential building within the development, whichever comes first. 6. Following the initial twenty (20) year period when the building will be made available to the DOE, the building will be made available to the DOE for additional years, at the prevailing rental rates. 7. If the DOE and the Applicant determine that despite good efforts, a building cannot be provided, or DOE no longer needs the facility and its design has not been completed, the Applicant will make an equivalent school fair-share cash contribution in an amount to be determined by the DOE. This cash contribution shall be expressly reserved for use within the Kealakehe complex of schools. 8. The value of the building and its use is meant to be credited against any DOE requirements under the State Land Use Decision and Order. Applicant will comply with all of the requirements of this condition. Applicant has discussed the terms of an Agreement with the Department of Education Staff and the West Hawaii Complex Superintendent. A draft agreement has been circulated but a final agreement has not been reached. 14 GG. An Emergency Response Plan shall be submitted to the Civil Defense Agency for review and approval, prior to the issuance of a certificate of occupancy. Applicant will comply with this condition. HH. To ensure that the Goals and Policies of the Housing Element of the General Plan are implemented, the applicant shall comply with the requirements of Chapter 11, Article 1, Hawaii County Code, relating to Affordable Housing Policy. This requirement shall be approved by the Administrator of the Office of Housing and Community Development prior to receipt of Final Plan Approval and/or Final Subdivision Approval for any subdivision creating single-family residential lots, whichever occurs first. The reduction in minimum lot sizes and the increase in density permitted by Section 11-8, Hawaii County Code, for affordable housing built on-site shall not apply to this project district because the reduction in minimum lot sizes has already been incorporated into the conditions of this project district zoning, and the limit on residential units stated is meant to include affordable units built on-site. Applicant shall satisfy its affordable housing requirements by on-site construction of units, and not utilize any affordable housing credits generated off-site. Applicant will comply with this condition. Applicant has had initial discussions with the County Office of Housing & Community Development on the scope of the housing agreement. Applicant anticipates building affordable units incrementally on the site. Once Applicant determines the desired mix of affordable housing units, it will present a draft agreement to the Office of Housing & Community Development and will address any concerns that arise. Once an agreement is finalized, it will be submitted to the County Housing Agency for review and approval. II. Should any unidentified sites or remains such as artifacts, shell, bone, or charcoal deposits, human burials, rock or coral alignments, pavings or walls be encountered, work in the immediate area shall cease and the Department of Land and Natural Resources-Historic Preservation Division (DLNR-HPD) shall be immediately notified. Subsequent work shall proceed upon an archaeological clearance from the DLNR- HPD when it is found that sufficient mitigation measures have been taken. Applicant will comply with this condition. 15 JJ. The applicant shall implement the Integrated Natural Cultural Resource Management Plan (INCRMP) dated May 19, 2005, for the Lowland Dry Forest Preserve (Exhibit "D" and "F" to the INCRMP). Preservation actions, with fire control as a priority, shall begin no later than six months after the effective date of this ordinance. Applicant will comply with this condition. All preservation areas have been inventoried and fenced. A fire break around the dry forest preserve has been established and is being maintained. The data recovery plan was approved by the State Historic Preservation Division. The Preservation Plan received interim approval from the division. Discussions are ongoing with the State DLNR and non-profit groups regarding the management and stewardship of the Lowland Dry Forest preserve. The Palamanui Dry Forest Working Group has been formed and is composed of Dr. Pat Hart, Lisa Hadway of DLNR, Thomas Lee, Roger Harris and Susan Cordell. This group met four times in the last year. This group has also had discussions with the North Kona Dry Land Forest group about cooperative efforts to preserve the native dry land forest. KK. The applicant shall protect all uhiuhi and `aiea trees, and shall use best efforts to preserve the major stands of wiliwili trees. Applicant will comply with this condition. LL. The applicant shall implement the INCRMP for the cave areas (Exhibit "E" to the INCRMP). Applicant will comply with this condition. MM. The applicant shall implement the Archaeological Preservation Plan (Exhibit "C" to the INCRMP), along with any amendments and modifications thereto as approved by the State Historic Preservation Division. Applicant will comply with this condition. NN. The Planning Director may approve modifications to the INCRMP conforming to the general purposes of the INCRMP, after consultation with the DLNR-DOFAW. 16 Applicant will comply with this condition. 00. To ensure that the property will be developed as an integrated project, the applicant shall establish covenants to all deeds to any parcels, except parcels to be conveyed to individual residents, that require a master association to administer the development of the project district in accordance with the conditions of land use approvals. The covenants shall give notice that the various parcels are subject to an overall zoning that requires coordinated development. Until the master association is formed, the applicant shall be responsible for ongoing duties such as the management of the Dry Forest Preserve Area and other stewardship duties, and for contingent project responsibilities. After the formation of the master association, those responsibilities, except for offsite infrastructure requirements, shall be transferred to the master association. Applicant will comply with this condition. PP. The applicant shall make its fair share contribution to mitigate the potential regional impacts of the property with respect to parks and recreation, fire, police, solid waste disposal facilities and roads. The fair share contribution shall become due and payable on the sale or lease of residential units subject to such contribution. The fair share contribution shall have a maximum combined value of $6,411.25 per multiple family residential unit ($9,991.20 per single family residential unit). The total amount shall be determined with the actual number of units according to the calculation and payment provisions set forth in this condition. The fair share contribution per multiple family residential unit (single family residential unit) shall be allocated as follows: 1. $3,162.49 per multiple family residential unit ($4,817.93 per single family residential unit) to the County to support park and recreational improvements and facilities; 2. $99.95 per multiple family residential unit ($232.42 per single family residential unit) to the County to support police facilities; 3. $307.46 per multiple family residential unit ($459.06 per single family residential unit) to the County to support fire facilities; 4. $137.04 per multiple family residential unit ($200.98 per single family residential unit) to the County to support solid waste facilities; and 17 5. $2,704.31 per multiple family residential unit ($4,280.82 per single family residential unit) to the County to support road and traffic improvements. The fair share contribution shall be waived for the affordable housing units. In lieu of paying the fair share contribution, the applicant may contribute land and/or construct improvements/facilities related to fire, police, and solid waste disposal facilities and roads within the region impacted by the proposed development, subject to the review and recommendation of the Planning Director, upon consultation with the appropriate agencies and approval of the County Council. With respect to the fair share contribution for parks and recreation, that contribution for all residential units will be satisfied when Applicant completes and offers for dedication all of the land facilities for the active use park described in Condition "U" above. The fair share contribution for roads will be satisfied upon completion of the Mid- Level Road (Road "2"), Road "3", Road "5" and Road "4". Applicant will comply with this condition. QQ. Should the Council adopt a Unified Impact Fees Ordinance setting forth criteria for imposition of exactions or the assessment of impact fees, conditions included herein shall be credited towards the requirements of the Unified Impact Fees Ordinance. Applicant will comply with this condition. RR. Comply with all other applicable County, State and Federal laws, rules, regulations and requirements. Applicant will comply with this condition. SS. An annual progress report shall be submitted to the Planning Director prior to the anniversary date of the approval of this Project District Ordinance. The report shall include, but not be limited to, the status of the development and the extent to which the conditions of approval are being satisfied. This condition shall remain in effect until all of the conditions of approval have been satisfied and the Director acknowledges that further reports are not required. Applicant will comply with this condition. TT. An initial extension of time for the performance of conditions within the ordinance, except for the six-year time limit in Condition X.10, may 18 be granted by the Planning Director upon the following circumstances. 1. The non-performance is the result of conditions that could not have been foreseen or are beyond the control of the applicant, successors or assigns, and that are not the result of their fault or negligence. 2. Granting of the time extension would not be contrary to the General Plan or Zoning Code. 3. Granting of the time extension would not be contrary to the original reasons for the granting of the Project District. 4. The time extension granted shall be for a period not to exceed the period originally granted for performance (i.e., a condition to be performed within one year may be extended for up to one additional year). 5. If the applicant should require an additional extension of time the Planning Department shall submit the applicant's request to the County Council for appropriate action. Should any of the conditions not be met or substantially complied with in a timely fashion, the Planning Director may initiate rezoning of the subject area to its original or more appropriate designation. Applicant will comply with this condition. UU. The Planning Director may permit an extension of the six-year time limit to complete Road "4" in Condition X.10, provided that the requirements of Condition "TT" are met, and, in addition, the new deadline for the completion of Road "4" is not more than two (2) years after the completion of any building, including single-family residential buildings, other than the University building or the DOE Building. Applicant will comply with this condition. 19 +ill~~l IYY11~ rWO~1~I~Y1111 If you have any questions, please feel free to contact our office. Very truly yours, A4 J4~ Alan M. Okamoto AMO:jht Enclosures cc: Guido Giacometti w/o encl. Roger Harris w/o encl. Guy Lam w/o encl. Thomas Lee w/o encl. Alan Ong, w/o encl. Abe Mitsuda, Off. State Planning w/ encl. Anthony J. Ching, Exec. Off, Land Use Comm. w/ encl. Amy Self, Deputy. Corp. Counsel w/ encl. Bryan Yee, Deputy Atty. Gen. w/ encl. 20 Of Counsel: NAKAMOTO, OKAMOTO & YAMAMOTO ATTORNEYS AT LAW A LAW CORPORATION ALAN M. OKAMOTO 1826 ROY K. NAKAMOTO 850 JEREL 1. YAMAMOTO 2807 187 Kapiolani Street Hilo, Hawaii 96720 Telephone No.: (808) 961-0641 Attorney for Petitioner HILUHILU DEVELOPMENT, LLC BEFORE THE LAND USE COMMISSION OF THE STATE OF HAWAII In the Matter of the Petition ) DOCKET NO. A03-744 of ) HILUHILU DEVELOPMENT, ) SECOND ANNUAL REPORT; LLC ) EXHIBITS A - J; > CERTIFICATE OF SERVICE To amend the Land Use District ) = Boundary of Certain Lands ) situated at Kau, District ) of North Kona, County ) of Hawaii, Island of Hawaii, ) State of Hawaii. ) SECOND ANNUAL REPORT HILUHILU DEVELOPMENT, LLC ("Petitioner") submits its Second Annual Report as required by the Findings of Fact, Conclusions of Law, Decision and Order filed on June 13, 2005. z1c%fi,Rr/ Q DEVELOPMENTS SINCE PREVIOUS ANNUAL REPORT Rezoning Application With The County of Hawaii Was Approved The rezoning application of Hiluhilu Development, LLC was approved by the County Council of the County of Hawaii and by the Mayor effective July 17, 2006. Attached as Exhibit A is Ordinance No. 06-105. As part of the rezoning, Petitioner agreed to: (I) build a 20,000 square foot building for the University of Hawaii on the State lands designated for the university; (2) build new roadways north of the Petition area over State land and private land to connect to Mamalahoa Highway; (3) provide twenty (20) acres of land for a regional park containing soccer and baseball fields to the County of Hawaii. University Building on State Land Petitioner agreed with the County Council to Condition EE3 of the rezoning ordinance. The condition provides that Petitioner will build a 20,000 square feet of building with parking for the University on the State land which is adjacent to the Petition area. The condition resulted after discussions with Chancellor Rockne Freitas, The siting and building features are subject to the approval of the University of Hawaii. The condition is also subject to a cost limit of $5,000,000.00. If the 20,000 square foot building with parking costs more than $5,000,000.00, the University can decide whether it wishes to reduce the area or provide additional funds to cover the difference between the actual cost and the $5,000,000 limit. The University's West Hawaii operations are presently using 12,000 square feet of lease space in Kealakekua. The University building will be provided with access to the water, electrical and wastewater systems that are being building within the Petition area. Petitioner developed a detailed conceptual plan for a one story, 20,000 square foot building complex which would comply with the rezoning condition. The conceptual plan was sent to the University on August 16, 2007. A copy of that conceptual plan and letter are attached hereto as Exhibit B. Under the conceptual plan, the building complex would be located on the corner of the connector road between the Petition area and Kaiminani Drive and the main mauka-makai road (designated as Road 1 in the rezoning ordinance). This location will provide university staff and students access from Kaiminani Drive to the south and through Road 1 to Queen Kaahumanu Highway to the north. This access will allow access to the university site without having to go through the Queen Kaahumanu intersection with the Kona Airport road. When the new collector road is built, there will an additional access to Mamalahoa Highway. Petitioner will be discussing the conceptual plan with the University to see if the location and the building design concept are acceptable. University Memorandum of Understandine Petitioner has had a non-binding Memorandum of Understanding (MOU) covering joint planning with the University. The MOU was extended twice. Petitioner submitted a document for an additional extension for 2007 and 2008 to the University's General Counsel's Office in January 2007. Petitioner also forwarded some background information relating to the project and the North Kona area. The University Board of Regents has not taken any action on the extension. Pending such action, Petitioner will continue communications with the University on the new building complex. mmeu\ennum reW I'll 00` 1v is 3 Construction of Road 4 Exhibit B to the rezoning ordinance show a new road designated as Road 4. The south end of that road will joint the midlevel road through the Petition area which is designated as Road 3. Road 4 extends through the State lands that abut the Petition area to the north and continues into the privately owned lands of Lynch Investment. The mauka end of Road 4 within the Lynch land will intersect with the Mamalahoa Highway. That intersection is north of the Makalei Drive Mamalahoa Highway intersection. Condition X4 of the rezoning ordinance requires construction of Road 4 as well as Roads 1 (mauka-makai collector), 2 (collector road to Kaiminani Drive), 3 (mid-level collector road), and 5 (stub out road to the southeast corner of the Petition area for further connection to other land). Petitioner had discussions with the Department of Land & Natural Resources and with Lynch Investment representatives about the construction of Road 4. The responses from the State and Mr. Lynch were positive and Petitioner concluded that the right of way would be available for Road 4. A copy of Peter Lynch's letter is attached as Exhibit C. In order to minimize adverse impacts to Makalei Estates residents of through traffic, the County Council provided that Road l will not connect to the bottom of Makalei Drive until Road 4 is built. Exhibit B to the rezoning ordinance is a conceptual layout of the road system providing access through the Petition area. Petitioner's proposed road system is consistent with the conceptual map in the rezoning ordinance. 4 Regional Park Petitioner will comply with Condition U of the rezoning ordinance which requires a 20 acre regional park. Status Report on Commission's Conditions of Approval As to the Conditions of Approval in the Commission's Decision and Order of June 13, 2005, here is a status report on compliance. 1. Affordable Housinp- Petitioner shall provide affordable housing opportunities for residents of the State of Hawaii to the satisfaction of the County, acting in accordance with the County's Ordinance No. 05-23, Affordable Housing Policy For the County of Hawaii. Petitioner shall provide no less than 100 onsite affordable units in accordance with the Petitioner's representations to the Commission or whatever number of affordable units is deemed acceptable by the County in accordance with the County's Ordinance No. 05-23, Affordable Housing Policy For the County of Hawaii, whichever is greater. The location and distribution of the affordable housing units or other provisions for affordable housing shall be under such terms as may be mutually agreeable between the Petitioner and County. Petitioner will work with the County of Hawaii to satisfy its requirements consistent with Ordinance No. 05-23, Affordable Housing Policy for the County of Hawaii. All affordable housing units will be built within the Petition area. There will be not less than 100 affordable housing units. Petitioner has had initial discussions with the County Office of Housing & Community Development on the scope of the housing agreement. Petitioner anticipates building affordable units incrementally on the site. Once Petitioner determines the desired mix of affordable housing units, it will present a draft of a housing agreement to the Office of Housing and will address any concerns that they have. Thereafter, Petitioner will submit the finalized agreement for approval by the County Housing Agency. mnmw~,,.e croon zram~w, zJ 2. Public School Facilities. Petitioner shall contribute to the development, funding and construction of public school facilities as determined by and to the satisfaction of the DOE. Petitioner shall enter into an agreement with the DOE covering the specific terms of such contribution prior to final subdivision approval and file such agreement with the Commission and the County. Petitioner has discussed the terms of an agreement with DOE staff and the West Hawaii Complex Superintendent. A draft agreement was prepared and circulated under which Petitioner proposed to provide the DOE with the rent free use of 8,000 square feet building for 20 years to satisfy this condition. A final agreement has not yet been reached. 3. Wastewater Facilities. Petitioner shall design and construct its wastewater disposal system in compliance with the requirement of the County and the DOH. Petitioner has obtained approval from the State Wastewater Division of the Department of Health for the treatment plant design. Attached hereto as Exhibit D is a copy of a letter approving the Wastewater facilities plans of Petitioner. Construction documents are being prepared. 4. Wastewater Agreement For Underground Injection Offsite. Prior to final subdivision approval, Petitioner shall provide the Commission and the County with a copy of the executed agreement to inject wastewater underground offsite and above the UIC line on the adjacent State- owned land to the south of the Petition Area, or with other such landowner and location as approved by DOH. Upon further review of the situation for the back up Underground injection well required by the State Department of Health for the sewer treatment plant, Petitioner determined that the well could be located within the Petition area. The State Department of Health concurred. Imma,.'. „za.osiwz a. 6 5. Traffic Impacts and Mitigation. Petitioner shall fund, design and construct its share of local and regional transportation improvements as determined by the SDOT and the County, which includes but is not limited to: a. Midlevel connection with Ka'iminani Drive. Petitioner shall provide at its sole cost and expense a two-lane roadway between the Petition Area and Ka'iminani Drive in an alignment approved by the County and the University and acceptable to any other State agency with a property interest in the land on which the two-lane roadway is located. This is also a condition of the County Rezoning. The alignment of the road (designated Road 2 on Exhibit B to the rezoning ordinance) was approved by the State Department of Land & Natural Resources. Petitioner obtained a right of entry from the Department of Land & Natural Resources to conduct planning, land survey, engineering and environmental studies for Road 2 and a waterline (Exhibit E). Construction plans for this road are currently under review by the Department of Public Works of the County. The Department of Accounting and General Services issued a finding of no significant impacts for the Environmental Assessment covering Road 2. An amendment to the Environmental Assessment to cover the realignment of Road 2 and to cover construction of waterlines and a 1,000,000 gallon water storage tank on the State lands has been completed and is currently being reviewed by the Department of Land & Natural Resources. nnamrowiaw 11e0111 7 b. Mauka-Makai Connector Road. A mauka-makai connector road providing public access between Queen Kaahumanu highway and the Mamalahoa Highway shall be provided at Petitioner's sole cost and expense. Said mauka-makai connector road shall connect through such connector road to Mamalahoa Highway as Petitioner and the County may agree. Petitioner will comply with this condition. The County of Hawaii zoning conditions concerning the connector roads between Queen Kaahumanu Highway and Mamalahoa Highway were covered in a prior section of this Report. The collector road system to accomplish the connection will be via what is marked as Roads 3, 4 and a portion of Road 1 makai of its intersection with Road 3. Once Road 4 is built, Petitioner will connect Makalei Drive and Road 1. C. Right-Of-Way for An Alternative Mauka-Makai Connector Road. Petitioner shall reserve a right-of-way along the east (mauka) portion of the Petition Area to support the possible future connection to the Mamalahoa Highway. Petitioner shall construct at its sole cost and expense all portions of said future road that is within the Petition Area. Any proposed road construction plans and associated utility easements which may impact the Lowland Dry Forest Preserve shall be subject to prior review and approval of the Commission and shall include consultation with the County, such that County engineering standards or other County requirements do not adversely impact the Lowland Dry Forest Preserve. Petitioner's plans include rights-of-way that will allow connection to a new connector to Mamalahoa Highway. (Road 4 on Exhibit B to the rezoning ordinance) Petitioner will be responsible for the costs of the road within the project which will provide that connection. Petitioner found that the right of way to connect to the new road going to Mamalahoa Highway was best done in the alignment shown on Exhibit B of the rezoning ordinance as Road 3. The advantages of that location are that it avoids the dry land forest preserve, avoids the native dry land forest remnants on the adjacent State lands through which Road 4 would have to pass and it allows a better road design from the standpoint of grades. Petitioner has had ongoing discussions with the State and with Lynch Investments on the alignment of Road 4. Attached hereto as Exhibit C is a copy of a letter dated June 16, 2006, from Peter Lynch expressing their willingness to convey an 88 foot right of way for said roadway. A tentative alignment corridor has been determined. Additional permits and approvals are being sought. d. Request to Limit Vehicle Traffic on Portions of Makalei Drive. In the event that the maaka-makai road connector road utilizes Makalei Drive, then to promote greater traffic safety, Petitioner shall prior to final subdivision approval, use reasonable efforts to petition the County to limit motor vehicle traffic on Makalei Drive as a through street, as it transverses Makalei Estates, to only those vehicles that have a gross vehicle weight of less than 10,000 pounds. The dedication of the roads within the Makalei Estates Subdivision to the County has been delayed for technical reasons. When the dedication goes through. Petitioner will also ask that the County adopt an ordinance that limits motor vehicle traffic speeds and limit the vehicles using Makalei Drive to less than 10,000 pounds gross vehicle weight as required by this condition. The construction of Road 4 is expected to reduce the potential through traffic on Makalei Drive. Since Road 4 will have better grades and will be opened to heavy truck traffic, there will be little reason for heavy trucks to go through Makalei Drive. 6. Integrated Natural Cultural Resource Management Plan (INCRMP). Petitioner shall implement the revised INCRMP including completion of all plans (with appropriate approvals), covenants and easements required under the revised INCRMP. Such implementation shall include, but not be limited to the following-. Petitioner has been implementing this condition. Petitioner is drafting Master Covenants that will apply to the Petition area. The covenants will include the provisions described in the Integrated Natural Cultural Resource Management Plan (INCRMP). Petitioner is also drafting Master Design Guidelines which will apply to development within the Petition area. The design guidelines cover preservation of culturally significant views, use of native vegetation for landscaping and preservation of certain landforms. Petitioner will also be preparing Conservation Easements to cover the preservation access described in the INCRMP. Drafts of the documents will be circulated to the Land Use Commission and the County Planning Department. The Cultural Advisory Committee has met and will be meeting again later this year. Petitioner obtained the following additional studies which were attached to the First Annual Report hereto as Exhibits B, C, D, and E respectively. Exhibit B is an Updated Biological Study done by Dr. Patrick Hart. Exhibit C is a study done by Robert Peck regarding insects and invertebre in the Project Area. Exhibit D is a survey done by Dr. Patrick Hart regarding the Hawaiian Hawk (lo). Exhibit E is a study done by Marcos Gorresen and Kathryn Turner in November 2005 regarding the Hawaiian Hoary Bat in the Project Area. Robert Rechtman has completed the data recovery plan which has been approved by the State Historic Preservation Division. An inventory map, a copy of which is attached as Exhibit I, showing all preservation sites is currently being finalized. All preservation areas have been fenced so they are clearly visible. Petitioner finished the fire break area around the dry land forest "W.11 ."'~2....m,re" 10 and continues to monitor it. Petitioner is in the process of contacting prospective cultural monitors. a. Preservation of Significant Historic, Cultural and Natural Resources. Petitioner shall preserve all of the identified significant historic, cultural, and natural resources on the Petition Area as represented by the Petitioner to the Commission. Petitioner will comply with this condition. As reported above, these sites have been identified and marked. They will also be shown on the Inventory Map. b. Historic Preservation Mitigation Plan. Petitioner shall submit data recovery plans and preservation plans to the SHPD and obtain approval of those plans within one year of the issuance of this Decision and Order. If said plans as approved vary from those incorporated into the revised INCRMP, Petitioner shall amend the revised INCRMP to reflect SHPD's recommendations and submit the amended revised INCRMP to the Commission for its approval prior to final subdivision approval. The State Historic Preservation Division has approved the Data Recovery Plan and given interim approval to the Preservation Plan. The approval letter was previously submitted. There are no changes to these plans which were incorporated into the INCRMP. Pursuant to the above approval, Petitioner has completed the data recovery as outlined in the approved Data Recovery plan. The Preservation Plan is awaiting final approval from the Historic Preservation Division. N1,1d,1- ,.1,-12 111151) r- 1 1 C. Preservation of Lowland Dry Forest. Petitioner shall permanently protect the Lowland Dry Forest Preserve. Any proposed road construction plans, irrigation well sites and proposed access and utility easements which may impact the Lowland Dry Forest Preserve shall be subject to prior review and approval of the Commission. Petitioner will comply with this condition. As reported above, a fire break around the perimeter of the dryland forest has been established. Petitioner has the additional information from the updated biological study. Potential corridors and sites for roads, irrigation wells, access and utility easements have been identified. Because of the elimination of the golf course, Petitioner is reassessing the irrigation wells and their placement within the Petition area. d. Coordination of Lowland Dry Forest Preservation Efforts. Petitioner shall use reasonable efforts to coordinate its preservation of the Lowland Dry Forest Preserve with the State of Hawati i Department of Land and Natural Resources as the Lowland Dry Forest Preserve extends in some places onto the neighboring state-owned property. Such coordination shall include, but not be limited to: sharing information regarding updated biological surveys; coordinating the development of a fire prevention plan; establishing appropriate firebreaks; and exploring contingencies for using the Project's irrigation systems to control brush fires. Discussions are ongoing with the State DLNR, and non-profit groups regarding the management and stewardship of the Lowland Dry Forest Preserve and possibly some of the forest area on the State lands. Firebreaks have been established around the Palamanui dry forest preserve. The Palamanui Dry Forest Working Group has been formed and is composed of Dr. Pat Hart, Lisa Hadway from the State Department of Land & Natural Resources, Thomas Lee, Roger Harris and Susan Cordell. This group has met four times 12 in the last year. This group has had discussions with the North Kona Dry Land Forest Group about cooperative efforts to preserve the native dry land forests. Petitioner and the Working Group have met with other interested community groups about participating in the management of the preserve and forest preservation. e. Preservation of Flora Outside of Lowland Dry Forest. Petitioner shall preserve all flora that are federally listed as Endangered Species throughout the Petition Area. Petitioner shall to the extent practicable, preserve flora identified as non-endangered indigenous and Species of Concern by incorporating such plants into the Project's landscaping and exclusionary fenced areas. Petitioner will comply with this condition. f. Unidentified Archaeological Finds. If any burials, archaeological or historic sites such as artifacts, marine shell concentrations, charcoal deposits, or stone platforms, pavings or walls are discovered during the course of construction of the Project, then all construction activity in the vicinity of the discovery shall stop until the issuance of an archaeological clearance from the SHPD that mitigative measures have been implemented to its satisfaction. Petitioner will comply with this condition. g. Preservation of Native Hawaiian Gathering and Access Rights. Petitioner shall preserve and protect any established Native Hawaf'ian traditional and customary rights exercised for subsistence, cultural and religious practices on the Petition Area. Petitioner will comply with this condition. h. Updated Biological Survey. Petitioner shall submit an updated biological survey of the Petition Area to the Commission before construction of the Project begins. The updated biological survey shall include but not be limited to, detailed information M,,,nuµxnnuN 1,I III 16Q„" 13 pertaining to any significant invertebrates and Hawaiian Hoary Bats within the Petition Area. Petitioner has submitted the additional studies in its last annual report regarding updated biological study, insects and invertebre, Hawaiian Hawk and Hawaiian Hoary bat. Based on the presence of a specimen of the aiea (host tree for the moth) in the Petition area, Robert Peck's study indicated that there was a probability of locating the Blackburn's sphinx moth in the Petition Area. Since the time of the study, Petitioner's botanist Patrick Hart has been in the area of that tree but did not see any moths. Dr. Hart will continue to inspect those areas to see if there are signs of the moth. Gorresen and Turner's report recommended preventing tree cutting or grubbing in forested areas during September through May during the breeding season of the Hoary bat. Petitioner will be conducting construction activities during the breeding season of the bat, but most of the construction will be in open areas where there are very few standing trees and no forested areas will be affected. Petitioner will implement the following safeguards to protect the bat: a) Prior to the start of construction in forested areas, Petitioner will have the bat biologists go through the area where roads and waterlines will be constructed and do a reconnaissance for any Hoary bats; b) Petitioner will have the bat biologists do inspections at construction sites for the bat in September and December. If bats are sighted in a construction area during breeding season, the biologist will be immediately consulted on mitigative measures to prevent harm to the Hoary bat and those measures will be implemented. ~oa,o 14 i. Cultural Monitor for Grubbing and Grading Activities. Petitioner shall retain the services of an appropriate number of qualified cultural monitors such that all grubbing and grading activities within the Petition Area are duly monitored. Petitioner will comply with this condition. Prospective cultural monitors have been contacted about serving and a list will be prepared. 7. Open Space Buffer. Petitioner shall maintain an open space buffer on the Petition Area along Queen Kaahumanu Highway with a minimum width of 800 feet. The only man-made structures allowed in this open space buffer shall be the Northern Project Access Road, the Project's wastewater treatment plant, limited portions of the Project's golf course, and a groundwater monitoring well - as represented by the Petitioner to the Commission. Petitioner shall appropriately screen such uses to maintain the visual continuity of such buffer. Petitioner has complied with this condition. An Open Space Buffer notice has been recorded in the Bureau of Conveyances as Document No. 2007-006828. A copy is attached hereto as Exhibit I. 8. Civil Defense. Petitioner shall, on a fair-share basis, fund and construct adequate civil defense measures as determined by the State and County Civil Defense Agencies. Petitioner will comply with this condition. 9. Air Ouality Monitoring. Petitioner shall participate in an air quality-monitoring program as specified by the DOH. Petitioner will comply with this condition once construction activity in the project is scheduled to begin. 10. Noise and Avigation Easement. Petitioner shall notify all prospective buyers and future occupants of the Petition Area or portions of the Petition Area that over flights can occur from „~11-1 - 15 aircraft using KOA Airport. Petitioner shall grant to the State an avigation (right of flight) and noise easement in the form prescribed by the SDOT on any portion of the Petition Area subject to noise levels exceeding 55 Ldn. Petitioner will comply with this condition. 11. Notification of Potential Nuisances - Agricultural. Petitioner shall notify all prospective buyers and future occupants of the Petition Area or portions of the Petition Area of potential odor, noise and dust pollution if there are any lands in the Agricultural District surrounding the Petition Area. Petitioner will comply with this condition. Documents for this purpose will be developed in conjunction with Petitioner's sales and leasing documents. 12. Notification of Potential Nuisances - HELLO. Petitioner shall notify all prospective buyers and future occupants of the Petition Area or portions of the Petition Area of the potential noise and air quality impacts associated with the existing use and proposed improvements to Hawaii Electric Light Company, Inc.'s Keahole Generating Station and Airport Substation. Petitioner will comply with this condition. Documents for this purpose will be developed in conjunction with Petitioner's sales and leasing documents. 13. Hawai'i Right to Farm Act. Petitioner shall notify all prospective buyers and future occupants of the Petition Area or portions of the Petition Area that the Hawaii Right to Farm Act, Chapter 165, HRS, limits the circumstances under which pre-existing farm activities may be deemed a nuisance if there are any lands in the Agricultural District surrounding the Petition Area. Petitioner will comply with this condition. 14. Drainage Improvements. Petitioner shall fund the design and construction of drainage improvements required as a result of the development of the Petition Area to the satisfaction of the appropriate State and County agencies. Petitioner will comply with this condition. 16 Drainage studies have been completed and approved by the required County and State agencies. Drainage plans have also been approved by the County Department of Public Works and the State Department of Health. 15. Integrated Solid Waste Management Plan. Petitioner shall cooperate with the DOH and the County to conform to the program goals and objectives of Chapter 342G, HRS, and the County's approved integrated solid waste management plans in accordance with a schedule and timeframe satisfactory to the DOH. Petitioner shall, in coordination with appropriate State and County government agencies, assist in the planning and promotion of solid waste recycling facilities for the Project. This condition shall be included in the Project's CC&Rs. Petitioner will comply with this condition and is discussing the same with both the State DOH and County. 16. Groundwater and Near Shore Water Monitoring. Petitioner shall participate in the coastal water-monitoring program with the SDOT Airports Division. Petitioner shall conduct groundwater monitoring from a monitoring well to be located at the makai end of the Petition Area. Monitoring programs and mitigation measures shall be approved by the DOH. Petitioner will comply with this condition. Petitioner has had discussions with State Department of Transportation Airports Division engineers have agreed that monitoring of that will be coordinated with Airport monitoring programs. Petitioner will construct subject monitoring well by December 31, 2008. A final agreement has not yet been reached. Since a golf course will not be constructed, Petitioner believes that the risk of contamination of ground water from fertilizers or other chemicals has been substantially reduced. 17 17. Water Service. Petitioner shall fund and construct adequate water source, storage, and transmission facilities and improvements as represented to the Commission and as required by the County Department of Water Supply to accommodate the Project. Petitioner will comply with this condition. Petitioner, County Department of Water Supply and Kohanaiki Shores, LLC signed an agreement to develop water systems, and transfer water rights. This agreement amended a 1999 Water Agreement between the Department of Water Supply and the predecessors in interest to Petitioner (K-W Kau) and Kohanaiki Shores, LLC (K- W Kohanaiki). The agreement concerns work needed to complete the pumping station and outfitting of the Kau Well 1, building the storage and water transmission system from those wells, through the Petition area and across State land to connect to the northern end of the Department of Water Supply's water main along Queen Kaahumanu Highway. The result of this construction will be to make potable water available for the Petition Area and for the Kohanaiki Shores property (the Kohanaiki property). The agreement results in Petitioner obtaining an additional 875 units. When combined with the 262 units that Petitioner has for the construction of the Kau Well 2, Petitioner will have 1,137 units. The completion of the water improvements will also provide the Department of Water Supply with a 1,000,000 gallon storage tank above Queen Kaahumanu Highway which will relieve the demands of the Kahaluu Shaft in Kailua- Kona. Under the Agreement, Petitioner may negotiate with Kohanaiki Shores, LLC to buy additional water unit systems that will provide water to the project sites and the 1-1 ~11 .11-1~'.,~'- 18 adjacent State land which is designated for the University of Hawaii. A copy of the Amended Water Agreement is attached hereto as Exhibit J. Design and engineering construction plans have been submitted and are . currently under review by Petitioner, Kohanaiki Shores, LLC, the Department of Water Supply and appropriate government agencies. Petitioner still plans to develop brackish water wells for irrigation. Because there will not be a golf course, the placement and capacity of those irrigation wells is being reassessed. 18. Best Management Practices. Petitioner shall implement best management practices to reduce or eliminate soil erosion and groundwater pollution and implement dust control measures during the development process in accordance with DOH guidelines. Petitioner will comply with this condition. 19. Water Conservation Measures. Petitioner shall implement water conservation measures and best management practices, such as use of indigenous and drought tolerant plants and to the extent possible, use Species of Concern and Endangered Species, and incorporate such measures into common areas landscape planning, and shall incorporate low flow fixtures into the construction of all residential and commercial units. Petitioner will comply with this condition. The covenants and design standards for Palamanui will require owners to use a list of plants which will include indigenous and drought tolerant plants common to the area. Low flow fixtures will be part of the design standards as well. 20. Energy Conservation Measures. Petitioner shall incorporate solar energy and energy conservation techniques where feasible into design of all residential and commercial units. 19 Petitioner will comply with this condition. 21. Hazardous Materials. Storage and/or disposal of hazardous materials on the Petition Area_ shall comply with all applicable DOH requirements and all necessary permits shall be obtained. Petitioner will comply with this condition. 21 Golf Course. Petitioner shall comply with the principles of the DOH's "Guidelines Applicable to Golf Courses in Hawaii" (July 2002, Version 6). Petitioner shall develop and maintain the golf course in accordance with the Audubon International's Signature Silver Program standard. To the extent practicable, the Petitioner will utilize R-1 recycled wastewater to irrigate the golf course. During the rezoning application, Hiluhilu revised the project and will not construct a golf course. Since there will be no golf course, many of the potential impacts such as leaching of fertilizers and pesticides arising from the operation of a golf course will be lessened. Petitioner will be using the treated wastewater for irrigation. The wastewater will be treated to produce waters of R-1 quality. The treated wastewater will be used for irrigation of landscaped portions of the road, the 20 acre active park area, passive parks and for landscaping of the common areas. The treated wastewater will also be available for irrigation of larger areas such as the hotel site and for use in the plant propagation activities for native Hawaiian plants. Although the elimination of the golf course lessens the recreational opportunities for golfers, the changes also included the 20 acre active park area. The ?0 baseball fields and soccer fields with associated facilities will benefit the entire Kona community. The County Parks & Recreation Department had expressed the need to these recreational opportunities in Kona. 23. University Inn and Conference Center. As represented before the Commission, the Project shall include an approximate 120-unit University Inn and Conference Center, which shall serve as a business hotel and provide accommodations in conjunction with University operations. The University Inn and Conference Center shall not be designed and operated as resort-type hotel or be used for time-share purposes. Petitioner will comply with this condition. 24. Compliance with Representations to the Commission. Petitioner shall develop the Petition Area in substantial compliance with the representations made to the Commission. Failure to so develop the Petition Area may result in reversion of the Petition Area to its former classification, or change to a more appropriate classification. Petitioner will comply with this condition. However, during the rezoning process, Petitioner had to modify the plans which were presented to the Commission. After the approval of the Petition, there was a dramatic increase in fuel costs which created a corresponding increase in the cost of electricity. This increased the projected operating cost of the golf course for pumping irrigation water to the point that it would have had to operate at a substantial loss. Since there are no indications of when or whether electrical costs will decline, Petitioner could not saddle owners of Palamanui with such a loss and the golf course had to be dropped. There was also a dramatic increase in material and labor costs. Petitioner did not want to increase the housing prices; thus this was further justification not to develop the golf course. 21 During the rezoning process, Petitioner was asked to cover a number of costly off-site capital improvements. These included $5,000,000 for the university building on State land and the construction of Road 4. Petitioner also had to comply with the new affordable housing requirements which greatly increased the requirements and its attendant costs. In order to partially offset the increased costs, Petitioner discussed an increase in the number of residential units for Palamanui. The rezoning ordinance authorized a maximum of 1,116 units which is 271 more units than the original plan. The main constraint on the actual number of units that can be built will probably be the water units available. The supporting infrastructure for Palamanui, even with the increased residences will be more than adequate. Access to Palamanui will be from three points: Queen Kaahumanu Highway, Kaiminani Drive and Mamalahoa Highway. A fourth access through Makalei Drive will allow those residents convenient makai access. Petitioner is having an updated traffic study prepared for review by State DOT. The data from the updated study shows that the planned road and intersection improvements will be adequate for Palamanui. Although there will be no golf course, Petitioner will be using open space areas for stormwater management. Attached hereto as Exhibit E is a copy of the Grading Permit obtained. Attached hereto as Exhibit G is a copy of the NPDES Permit from the State Department of Health. w.ro,n row.,,,," 22 25. Notice of Change of Ownership. Petitioner shall provide notice to the Commission of any intent to sell, lease, assign, place in trust, or otherwise voluntarily alter the ownership interests in the Petition Area, prior to development of the Petition Area. Petitioner informed the Commission by letter dated July 12, 2007, that Petitioner was transferring ownership of the property to Palamanui Global LLC. This was done to allow the original development team to bring in additional equity partners and financing. Mr. Lam will retain his equity interest and will be actively involved in management. Mr. Schwab will also retain his equity interest. The addition of Hunt Development with its background in housing development will facilitate the next phase of Palamanui. Hunt Development will also work with Mr. Lam in the management of Palamanui. 26. Annual Reports. Petitioner shall timely provide without any prior notice, annual reports to the Commission, OP and the County in connection with the status of the subject Project proposed for the reclassification area, and Petitioner's progress in complying with the conditions imposed. The annual report shall be submitted in a form prescribed by the executive officer of the Commission. The annual report shall be due prior to or on the anniversary date of the approval of the Petition. This report is being submitted in compliance with this Condition. 27. Release of Conditions. The Commission may fully or partially release the conditions provided herein as to all or any portion of the Petition Area upon timely motion and upon the provision of adequate assurance of satisfaction of these conditions by the Petitioner. Petitioner is not seeking to be released from any conditions imposed at the present time. 23 28. Notice of Imposition of Conditions. Within seven days of the approval date of the Petition, the Petitioner shall (a) Record with the Bureau of Conveyances a statement that the Petition Area is subject to conditions imposed herein by the Commission; and (b) File a copy of such recorded statement with the Commission. The Notice of Imposition of Conditions was recorded in the Bureau of Conveyances on June 23, 2005, as Document No. 2005-123996. 29. Recordation of Conditions. Petitioner shall record the conditions imposed herein by the Commission with the Bureau of Conveyances within sixty days after the receipt of the Decision and Order pursuant to Section 15-15-92, HAM The Conditions contained in the Decision and Order was recorded in the Bureau of Conveyances on September 7, 2005, as Document No. 2005-178780. Dated: Hilo, Hawaii, October 16, 2007 Respectfully submitted, Alan M. Okamoto Jerel I. Yamamoto Attorneys for Petitioner Hiluhilu Development, LLC 24 COUNTY OF HAWAII STATE OF HAWAII BILL NO. 224 Draft 9 ORDINANCE NO. 06 105 AN ORDINANCE AMENDING SECTION 25-8-3 (NORTH KONA ZONE MAP), ARTICLE 8, CHAPTER 25 (ZONING CODE) OF THE HAWAI'I COUNTY CODE 1983 (2005 EDITION), BY CHANGING THE DISTRICT CLASSIFICATION FROM AGRICULTURAL (A-3a) AND OPEN TO PROJECT DISTRICT (PD) AT KAU, NORTH KONA, HAWAI'I, COVERED BY TAX MAP KEY 7-2-5:1. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Section 25-8-3, Article 8, Chapter 25 (Zoning Code) of the Hawaii County Code 1983 (2005 Edition), is amended to change the district classification of property described hereinafter as follows: The district classification of the following areas situated at Kau, North Kona, Hawaii, shall be Project District (PD): PARCEL "A": Beginning at the northwest comer of this parcel, being also along the east side of Queen Kaahumanu Highway (Project No.: 19 BC-01-71), the coordinates of said point of beginning referred to Government Survey Triangulation Station "AKAHIPUU", being 9,071.21 feet North and 23,751.69 feet West and thence running by azimuths [treasured clockwise from true South: I. 291 ° 46' 30" 5726.03 feet along the Kukio-Ooma Government Tracts; 2. 17° 56' 2314.09 feet; 3. 115° 03' 36" 5449.47 feet along the Government Lands of Makaula; 4. 189° 19' 55" 2044.65 feet along the east side of Queen Kaahumanu Highway (Project No.: 19 BC-01-71) to the point of beginning and containing an area of 274.861 Acres. EXHIBIT "A" PARCEL "B": Beginning at the northwest comer of this parcel, being also along the south side of Kukio-Ooma Government Tracts, the coordinates of said point of beginning referred to Government Survey Triangulation Station "AKAHIPUU", being 6,947.06 feet North and 18,434.23 feet West and thence running by azimuths measured clockwise from true South: 1. 2910 46' 30" 784.96 feet along the Kukio-Ooma Government Tracts; 2. 2800 28' 22" 2806.44 feet along the Kukio-Ooma Government Tracts; 3. 2900 55' 24" 3323.43 feet along the Kukio-Ooma Government Tracts; 4. 170 14' 2844.54 feet along Lots 36, 37, 38, 44, 15, 14, 13, 12, 11, 10 and 9 of Makalli Estates - Phase 2 (File Plan 2294); 5. 1009 15' 30" 1838.50 feet along the Government Lands of Makaula; 6. 1150 03' 36" 5137.19 feet along the Government Lands of Makaula; 7. 1970 56' 2314.09 feet to the point of beginning and containing an area of 450.343 Acres. All as shown on the map attached hereto, marked Exhibit W' and by reference made a part hereof. SECTION 2. In accordance with Section 25-2-44, Hawaii County Code 1983 (2005 Edition), the County Council finds the following conditions are: (1) Necessary to prevent circumstances which may be adverse to the public health, safety and welfare; or (2) Reasonably conceived to fulfill needs directly emanating from the land use proposed with respect to: (A) Protection of the public from the potentially deleterious effects of the proposed use, or (B) Fulfillment of the need for public service demands created by the proposed use. 2 A. The applicant, successors or assigns shall be responsible for complying with all of the stated conditions of approval. B. The applicant shall comply with all conditions of approval of the State Land Use Commission's Decision and Order (Docket No. A03-744) dated May 19, 2005. C. The applicant shall comply with the conditions as set forth in the Water Agreement between K-W Kau, LLC and the Water Commission of the County of Hawaii dated June 15, 1999. D. The project shall consist of a maximum of 725.2 acres for single-family and multi- family residential, commercial uses, hotel, university and public school facilities, dry forest preserve, archaeological and cave preserve areas, active and passive parks, a trail system and supporting infrastructure. E. The maximum number of residential units allowed shall be 1,116 units, including the on-site affordable housing units. F. The maximum number of hotel rooms shall be 120. G. Commercial spaces for medical, office, retail, classrooms and health related uses and hotel shall be limited to 102 acres. H. Active and passive parks (Open, Park and Preservation) shall be developed on a minimum of 177.8 acres. A "Constraints Area" which includes the approximately 55-acre dry forest preserve, archaeological sites/cave and park areas, shall be set aside in the project area. I. The uses allowed in the Project District shall be all permitted uses allowed by right 3 in the RS, RM, CN and CV zoned districts, and related facilities. Uses allowed by Use Permit in the CV district, other than golf courses, may be allowed by use _ permit. J. A detailed Master Plan of the Project District, which includes the location and number of residential lots and units, hotel, university and public school facilities, commercial uses, parking, open space and recreational areas and other related improvements on the property, shall be submitted to the Planning Director within two (2) years from the effective date of the Project District Ordinance or prior to submission of plans for plan approval or subdivision approval, whichever occurs first. K. Substantial construction of the proposed development shall commence within five (5) years from the effective date of the Project District Ordinance. "Substantial construction" means the actual start of construction of project infrastructure under a bona fide contract of not less than ten million dollars ($10,000,000.00). Prior to construction, the applicant, successors or assigns shall secure Final Plan Approval for the proposed development from the Planning Director in accordance with Section 25-2-70, Chapter 25 (Zoning Code), Hawaii County Code. Plans shall identify proposed structures, fire protection measures, paved accesses and parking stall, and other improvements associated with the proposed uses. L. The following design standards shall apply: L Landscaping for the development shall comply with the Planning Department's Rule No, 17, Landscaping Requirements. Landscaping rules, such as the screening of single-family residential from commercial areas, shall be applied according to the actual uses. 2. The height limit for structures within the project area shall not exceed the following: 4 a. Single-family residential development: 35 feet b. Multiple-family residential and hotel developments: 45 feet c. Office and retail commercial development (not more than three stories): 45 feet. 3. The minimum off-street parking and loading space requirements of Chapter 25, Hawaii County Code shall be complied with, including compliance with the American Disabilities Act (ADA) requirements. M. The variances from Chapters 23 (Subdivision) and 25 (Zoning), Hawaii County Code, as presented in Planning Department Exhibit 2 (Applicant's November 21, 2005 letter with attached Tables pages 1 to 6 related to Variance Requested from Sections in Subdivision and Zoning Codes, and Applicant's Figure 2 - Conceptual Character of Town CenterlResidential Village Center, Figure 3a - Residential Village Center Alternative: 4,000 SF Lot, Figure 3b - Residential Village Center Alternatives: 6,000 SF Lot, Figure 4a - Conceptual Plan: Roadway Concepts - Dedicable, Figure 4b - Conceptual Plan: Roadway Concepts - Nondedicable, and Figure 5 - Residential Village Center Alternatives: Zone Lot Line Concepts) shall be allowed under the Project District. The applicant shall submit detailed plans to the Planning Director showing street designs and cross-sections, and adjacent building designs, with the Master Plan. The Planning Director may require modifications to the street sections to provide sufficient on-street parking where the plans do not provide adequate off-street parking (such as the 4,000-square foot lots with a one-car garage and insufficient setbacks to allow parking in driveways), and may require further changes necessary for public safety and convenience. All roads built with the variances allowed under this condition will be non-dedicable. With regard to the requested zero line building setbacks, the applicant shall conform to the current Hawaii County Building Code requirements. As part of the Master Plan, the applicant shall submit plans for pedestrian movement through the project district, which shall identify areas where sidewalks will be included to permit safe 5 pedestrian access to the Town Center and other important points in the development. N. To ensure that the project is developed according to its stated goal of creating a mixed use residential community, the project must include residential development. The project shall have at least one residential unit for every 600 square feet of nonresidential development (under roof). Space used by the University shall not be included in the calculation of nonresidential space. There is no minimum requirement for the nonresidential development. 0. The permitted hotel, designated as the "University Inn and Conference Center," shall function as a business hotel and in conjunction with University operations. It shall not be operated under a time-share plan or other arrangement that provides for shared ownership of individual units on the basis of time intervals, or club membership allowing periodic use. P. Occupancy of the hotel shall not be granted until the construction of the Queen Kaahumanu Highway, Phase 11 widening improvements to four lanes from Kealakehe Parkway to the Kona International Airport at Keahole has been secured by the State entering into a construction contract for the improvements, or until construction has commenced on the 20,000 square foot University building, or the building's completion has been assured by bond or other security acceptable to the Planning Director, whichever comes first. Q. No retail commercial structures may be located closer than 1,500 feet from the Queen Kaahumanu Highway right-of-way. P. To ensure that the commercial development corresponds with the applicant's representations regarding neighborhood-scale commercial development, no single retail establishment shall have more than 45,000 square feet of developed area 6 underroof. Q. Total retail space (not including restaurants) shall not exceed 75,000 square feet under roof until the construction of the Queen Kaahumanu Highway, Phase 11 widening improvements to four lanes from Kealakehe Parkway to the Kona International Airport at Keahole has been secured by the state entering into a construction contract for the improvements. The square footage of improvements leased or given to the University of Hawaii shall not count against this limit. T. The applicant shall set aside a "Constraints Area" including the approximately 55- acre dry forest preserve, archaeological siteslcave and park areas on the project site. U. The applicant shall develop one 20 acre active park site prior to occupancy of the first residential unit on the property. The 20 acre active park site shall include two playing fields which may be one baseball field and one soccer field, or two baseball fields or two soccer fields, parking lot and restrooms, with the specific requirements to be determined in consultation with the Department of Parks and Recreation. The 20 acre active park shall be constructed to county-dedicable standards, and the county shall accept dedication. V. There shall be an 800-foot setback from the Queen Kaahumanu Highway. No structures, other than those allowed under Condition No. 7 of the Land Use Commission's Decision and Order, shall be allowed within the 800-foot setback area. A copy of the metes and bounds description for this open space area, and proposed covenant(s) shall be submitted to the Planning Director for review and approval prior to receipt of Final Plan Approval or land alteration activities, whichever occurs first. The approved covenant(s) shall be recorded in the Bureau of Conveyances prior to the issuance of Final Plan Approval, or land alteration activities, whichever occurs first. A copy of the recorded covenant(s) shall be provided to the Planning Department. 7 W. All project utilities shall be underground. X. The applicant shall construct the following roads to access other properties and the regional road system: I . Project access road from the Queen Kaahumanu Highway to the eastern boundary of the project. (Road "I" on attached map Exhibit "B"): Road "1" shall intersect with the Queen Kaahumanu Highway at a location approved by the State Department of Transportation, and shall connect with Makalei Drive at the eastern (mauka) end. The road shall be constructed on an 88- foot wide right-of-way, as a two-lane road, to county-dedicable standards as a collector road, from the Queen Kaabumanu Highway to the intersection with Road "Y. From Road "Y to the intersection with Makalei Drive, Road "1" shall be constructed to county-dedicable standards as a minor street, except that design standards shall be varied to permit the connection with Makalei Drive without encroaching into the Lowland Dry Forest Preserve. The connection with Makalei Drive shall be designed to not encroach into the Lowland Dry Forest Preserve. The grade shall not exceed 10°1o, except near the connection with Makalei Drive. At the Queen Kaahumanu Highway, the intersection shall be improved in accordance with one of the following two options: (a) If a grade separated interchange is available to connect Road "1" to Queen Kaahumanu Highway when Applicant is ready to construct Road "1", Applicant will connect Road "1" to such interchange and in such case, Applicant will contribute $1,500,000 to the Department of Transportation. (b) If a grade separated interchange is not available to connect Road "1" to Queen Kaahumanu Highway when Applicant is ready to make the 8 connection, Applicant shall improve the intersection at its expense as required by the Department of Transportation, but shall include, at a minimum, a deceleration and an acceleration lane on Queen Kaahumanu Highway, a left-tum lane on Queen Kaahumanu Highway, a refuge lane for vehicles turning left into Queen Kaahumanu Highway, and a dedicated right-turn and left-tum lane from Road "1" to Queen Kaahumanu Highway. If warranted, at the request of Department of Transportation, the applicant shall install traffic signals and a second left-turn lane from the main project access road to the Queen Kaahumanu Highway. 2. "Mid-Level Road" from Road "1" to Kaiminani Drive (Road "2" on Exhibit "B"): The applicant shall construct the mauka half-section of a 120-foot wide right-of-way to county-dedicable standards as a collector road. The applicant shall construct the intersection at Kaiminani Drive meeting with the approval of the Department of Public Works, but the intersection shall include a left-turn lane on Kaiminani Drive. 3. A north-south collector road at approximately the 600-foot elevation (Road "3" on Exhibit "B'): The north-south collector road shall be designed to function as a portion of a collector road (Road "4") connecting Highway 190 with Road "I"and the Queen Kaahumanu Highway. Road "3" shall be constructed to county-dedicable standards as a 60-foot wide collector road with an 88-foot wide right-of-way. The applicant shall construct the intersection between Road "3" and Road "I" meeting with the approval of the Department of Public Works. 4. New Connector Road to Mamalahoa Highway Project (Road "4" on attached Map Exhibit "B"). Applicant shall construct Road "4", at its sole expense, as a two-lane 60-foot wide county-dedicable collector road, including shoulders and swales, within an 88-foot right-of-way. The final 9 design and maximum grade of Road "4" shall be determined by the Director of Public Works after consultation with the Planning Director. Applicant shall not be required to install streetlights, except at the intersection with Highway 190, or utilities. If another private developer is required to participate in building Road "4" as a condition of land use approvals, Applicant's share shall be limited to the portion of Road "4" on Applicant's property and on State land. The County shall obtain the necessary right-of- way outside of Applicant's property. 5. A road to connect south to the future extension of Holoholo Street - Nana Street (Road " 5" on Exhibit "B"): The applicant shall build Road' 5" within the project area to countydedicable standards as a minor street, and it shall intersect with Road "1". 6. The Planning Director may require other local streets within the project to provide local connections to the adjoining property to the north and south as a condition of subdivision approval or plan approval. 7. At the western (makai) end of Makalei Drive, the applicant shall provide safety improvements necessary to make a safe transition to Road "I", which may include, but are not limited to, rumble strips and establishing superelevation for the curve, as required by the Department of Public Works. 8. The following road improvements shall be completed before a certificate of occupancy is issued for any portion of the subject property, or completion of any single-family homes, whichever comes first: (a) Road "1", at least from the Queen Kaahumanu Highway to the intersection with the Mid-Level Road (Road "2"); 10 (b) the intersection of the main project access road with the Queen Kaahumanu Highway; and (c) the Mid-Level Road (Road "2) from the main project access road to Kaiminani Drive, and the Kaiminani Drive intersection. 9. The following road improvements shall be secured by bond or other surety meeting with the approval of the Planning Director to guarantee that the improvements will be completed within two (2) years after the issuance of a certificate of occupancy for any portion of the subject property, or completion of any single-family homes, whichever comes first: (a) the remaining portion of Road "I", including any necessary improvements to the lower portion of Makalei Drive; (b) Road "Y', and (c) Road "5." 10. Applicant shall complete Road "4" no later the six (6) years after the effective date of this ordinance, except as may be allowed under Condition "UU". Applicant shall assure the completion of Road "4" by bond or other security accepted by the Planning Director no later than the issuance of a certificate of occupancy for any building, other than the University or the State Department of Education (DOE) building, or final subdivision approval for any subdivision creating single-family residential lots. Certificate of occupancy for any building, other than the University or DOE building shall not be issued, and final subdivision approval for any subdivision creating single-family residential lots shall not be granted, until it the necessary right-of-way for Road "4" has been obtained from any other private landowner. 11. Makalei Drive is a "minor road" and will not be open to the public until the collector Road 4 is open for public use. Y. There shall be no direct access from individual lots to collector streets. Z. Construction vehicles shall not utilize Makalei Drive. AA. No vehicular security gate shall be installed within sixty (60) feet of any proposed county road and a turnaround gate shall be provided within the private road or property on the county road side of the gate. 1313. All development generated runoff shall be disposed of on-site and shall not be directed toward any adjacent properties. A drainage study shall be prepared and submitted to the Department of Public Works prior to issuance of any construction permit. Drainage improvements shall be constructed, meeting with the approval of the Department of Public Works, prior to issuance of a certificate of occupancy for any buildings, or final subdivision approval for any subdivision creating single- family residential lots. CC. A Solid Waste Management Plan shall be prepared and submitted for approval to the Department of Environmental Management prior to submitting plans for Plan Approval review. Approved recommendations and mitigation measures shall be implemented in a manner meeting with the approval of the Department of Environmental Management. DD. A wastewater treatment system shall be constructed, meeting the approval of the State Department of Health and/or Department of Environmental Management, whichever is applicable. All wastewater shall be treated at an approved wastewater 12 treatment plant, to a minimum of secondary treatment, with R-1 effluent, unless a greater level of treatment is required by the Department of Health. Wastewater shall be used for irrigation of landscaping or other beneficial reuse to the maximum extent feasible. EE. University of Hawai' i Condition. Applicant shall provide the following to relocate the University of Hawaii operations: 1. Connectivity with the University of Hawaii 500 acre site. Applicant shall allow the University of Hawaii to connect with its wastewater and water supply systems. Applicant shall also allow the University of Hawaii to connect electrical and telecommunication systems to facilities installed within the project. These connectivity sites shall be to the University's satisfaction and located along its northern boundary on Road "1". 2. Build Applicant's wastewater treatment system to handle the wastewater from the initial University of Hawai'i building and design the wastewater treatment system to accommodate future expansion for wastewater from future expansion of the University of Hawai'i operations. 3. Design and construct an initial classroom and administration building of 20,000 square feet, with associated parking, at Applicant's expense. If the University of Hawaii's design results in the cost of design and constructing of the building and associated parking exceeding $5,000,000, Applicant shall be responsible for the first $5,000,000 and the University shall be responsible for the balance. The building shall be constructed on the State land designated for University use. Construction on the building shall commence as soon as the University has required the necessary consents and approvals. If the necessary consents and approvals cannot be obtained by the State, the University shall have the right to lease from Applicant appropriate space to house University of Hawai'i at West Hawai'i until 13 the necessary consents and approvals are obtained at comparable lease rates now being paid by the University of Hawaii until the 20,000 square foot building can be constructed on the State land at Applicant's expense. Applicant shall commence construction of the building, or assure its construction by a bond or other security accepted by the Planning Director and the Chancellor of Hawaii Community College, before the issuance of a certificate of occupancy for any building, other than the DOE building, or final subdivision approval for any subdivision creating single-family residential lots. Applicant shall complete construction of the University building no later than two (2) years after the issuance of a certificate of occupancy for any building, other than the DOE building, or final subdivision approval for any subdivision creating singe-family residential lots. The location and design of the building (interior and exterior) and related improvements will be on terms determined by the University of Hawaii. The University of Hawaii shall consult on design of said building with Applicant. FF. Applicant shall enter into an agreement with the DOE, in accordance with the terms of the State Land Use Decision and Order (Docket No. A03-744) dated May 19, 2005. If Applicant's agreement with the DOE is later amended, Applicant shall file a copy of such amendment with the Planning Department and shall comply with the terms of the amended agreement Applicant shall contribute to the DOE an 8,000 square foot building within the project site to use for a period of twenty (20) years, subject to the following conditions: I. No rent or common area maintenance fees will be charged to the DOE. 2. The building will be used as instructional and office space for the school complexes located in West Hawaii. 3. The building will meet DOE facility standards, with finished classrooms, workshops and offices. 14 4. Applicant will collaborate with the DOE on the requirements of the building in order to develop building plan subject to DOE approval. 5. The finished building will be available to the DOE within two (2) years of the issuance of a certificate of occupancy for any multifamily residential building, or within two (2) years from the completion of any single-family residential building within the development, whichever comes first. 6. Following the initial twenty (20) year period when the building will be made available to the DOE, the building will be made available to the DOE for additional years, at the prevailing rental rates. 7. If the DOE and Applicant determine that despite good efforts, a building cannot be provided, or the DOE no longer needs the facility and its design has not been completed, Applicant will make an equivalent school fair-share cash contribution in an amount to be determined by the DOE. This cash contribution shall be expressly reserved for use within the Kealakehe complex of schools. 8. The value of the building and its use is meant to be credited against any DOE requirements under the State Land Use Decision and Order. GG. An Emergency Response Plan shall be submitted to the Civil Defense Agency for review and approval, prior to the issuance of a certificate of occupancy. HH. To ensure that the Goals and Policies of the Housing Element of the General Plan are implemented, the applicant shall comply with the requirements of Chapter 11, Article 1, Hawaii County Code, relating to Affordable Housing Policy. This requirement shall be approved by the Administrator of the Office of Housing and Community Development prior to receipt of Final Plan Approval and/or Final 15 Subdivision Approval for any subdivision creating single-family residential lots, whichever occurs first. The reduction in minimum lot sizes and the increase in density permitted by Section 11-g, Hawaii County Code, for affordable housing built on-site shall not apply to this project district because the reduction in minimum lot sizes has already been incorporated into the conditions of this project district zoning, and the limit on residential units stated is meant to include affordable units built on-site. Applicant shall satisfy its affordable housing requirements by on-site construction of units, and not utilize any affordable housing credits generated off-site. Il. Should any unidentified sites or remains such as artifacts, shell, bone, or charcoal deposits, human burials, rock or coral alignments, pavings or walls be encountered, work in the immediate area shall cease and the Department of Land and Natural Resources-Historic Preservation Division (DLNR-HPD) shall be immediately notified. Subsequent work shall proceed upon an archaeological clearance from the DLNR-HPD when it is found that sufficient mitigation measures have been taken. A. The applicant shall implement the Integrated Natural Cultural Resource Management Plan (INCRMP) dated May 19, 2005, for the Lowland Dry Forest Preserve (Exhibit "D" and "F" to the INCRMP). Preservation actions, with fire control as a priority, shall begin no later than six months after the effective date of this ordinance. KK. The applicant shall protect all uhiuhi and 'aiea trees, and shall use best efforts to preserve the major stands of wiliwili trees. LL. The applicant shall implement the INCRMP for the cave areas (Exhibit "E" to the INCRMP). MM. The applicant shall implement the Archaeological Preservation Plan (Exhibit "C" to 16 the INCRMP), along with any amendments and modifications thereto as approved by the State Historic Preservation Division. NN. The Planning Director may approve modifications to the INCRMP conforming to the general purposes of the rNCRMP, after consultation with the DLNR-DOFAW. 00. To ensure that the property will be developed as an integrated project, the applicant shall establish covenants to all deeds to any parcels, except parcels to be conveyed to individual residents, that require a master association to administer the development of the project district in accordance with the conditions of land use approvals. The covenants shall give notice that the various parcels are subject to an overall zoning that requires coordinated development. Until the master association is formed, the applicant shall be responsible for ongoing duties such as the management of the Dry Forest Preserve Area and other stewardship duties, and for contingent project responsibilities. After the formation of the master association, those responsibilities, except for offsite infrastructure requirements, shall be transferred to the master association. PP. The applicant shall make its fair share contribution to mitigate the potential regional impacts of the property with respect to parks and recreation, fire, police, solid waste disposal facilities and roads. The fair share contribution shall become due and payable on the sale or lease of residential units subject to such contribution. The fair share contribution shall have a maximum combined value of 56,411.25 per multiple family residential unit ($9,991.20 per single family residential unit). The total amount shall be determined with the actual number of units according to the calculation and payment provisions set forth in this condition. The fair share contribution per multiple family residential unit (single family residential units) shall be allocated as follows: 17 1. $3,162.49 per multiple family residential unit ($4,817.93 per single family residential unit) to the County to support park and recreational improvements and facilities; 2. 599.95 per multiple family residential unit ($232.42 per single family residential unit) to the County to support police facilities; 3. $307.46 per multiple family residential unit ($459.06 per single family residential unit) to the County to support fire facilities; 4. $137.04 per multiple family residential unit (5200.98 per single family residential unit) to the County to support solid waste facilities; and 5. $2,704.31 per multiple family residential unit (54,280.82 per single family residential unit) to the County to support road and traffic improvements. The fair share contribution shall be waived for the affordable housing units. In lieu of paying the fair share contribution, the applicant may contribute land and/or construct improvements/facilities related to fire, police, and solid waste disposal facilities within the region impacted by the proposed development, subject to the review and recommendation of the Planning Director, upon consultation with the appropriate agencies and approval of the County Council. With respect to the fair share contribution for parks and recreation, that contribution for all residential units will be satisfied when Applicant completes and offers for dedication all of the land facilities for the active use park described in Condition "U" above. The fair share contribution for roads will be satisfied upon completion of the Mid-Level Road (Road "2"), Road "3", Road "5" and Road "4". QQ. Should the Council adopt a Unified Impact Fees Ordinance setting forth criteria for imposition of exactions or the assessment of impact fees, conditions included herein 18 shall be credited towards the requirements of the Unified Impact Fees Ordinance. RR. Comply with all other applicable County, State and Federal laws, rules, regulations and requirements. SS. An annual progress report shall be submitted to the Planning Director prior to the anniversary date of the approval of this Project District Ordinance. The report shall include, but not be limited to, the status of the development and the extent to which the conditions of approval are being satisfied. This condition shall remain in effect until all of the conditions of approval have been satisfied and the Director acknowledges that further reports are not required. TT. An initial extension of time for the performance of conditions within the ordinance, except for the six-year time limit in Condition X.10, may be granted by the Planning Director upon the following circumstances. 1. The non-performance is the result of conditions that could not have been foreseen or are beyond the control of the applicant, successors or assigns, and that are not the result of their fault or negligence. 2. Granting of the time extension would not be contrary to the General Plan or Zoning Code. 3. Granting of the time extension would not be contrary to the original reasons for the granting of the Project District. 4. The time extension granted shall be for a period not to exceed the period originally granted for performance (i.e., a condition to be performed within one year may be extended for up to one additional year). 19 5. If the applicant should require an additional extension of time the Planning Department shall submit the applicant's request to the County Council for appropriate action. Should any of the conditions not be met or substantially complied with in a timely fashion, the Planning Director may initiate rezoning of the subject area to its original or more appropriate designation. UU. The Planning Director may permit an extension of the six-year time limit to complete Road "4" in Condition X.10, provided that the requirements of Condition "TT" are met, and, in addition, the new deadline for the completion of Road "4" is not more than two (2) years after the completion of any building, including single-family residential buildings, other than the University building or the DOE building. SECTION 3. In the event that any portion of this ordinance is declared invalid, such invalidity shall not affect the other parts of this ordinance. SECTION 4. This ordinance shall take effect upon its approval. INTRODUCED BY: UNCIL M BER, CO HA I Hilo , Hawaii Date of Introduction: June 5, 2006 Date of 1st Reading: June 21, 2006 Date of 2nd Reading: July 7, 2006 Effective Date: July 17, 2006 REf4R AM Lamm. 6 $ L L. 20 N A-700 OPEN A-59 PEN (0) TO A,* w PROD CT OISTRIC- T (Poll 6.831 ACRES s A-SOgr ~ 94751.1111 071.11 N w A-59 I "AWINIPMr.' 6,9.7.06N Ay OPEN 16,43427w y r, ~~1Y'a "AIUwPW _ - - _ , r OPEN Awo A-59 f ` - ay A lx i AGRICULTURAL (A-38) TO PROJECT DISTRICT 0 450.313 ACRES A•9 A- A-51 tiff R jo OPEN A%% M ' i a I OPEN A-b 1 - r 6 is . r a - _ " OPEN - AJ# A:L ,,AS•1 1YI9 f~ 0 1.9p 8.999 9~ u= IA'H^ Y1 AMENDMENT TO THE ZONING CODE AMENDING SECTION 25-8-3 (NORTH KONA ZONE MAP) ARTICLE 8, CHAPTER 25 (ZONING CODE) OF THE HAWAII COUNTY CODE 1983 (2005 EDITION), BY CHANGING THE DISTRICT CLASSIFICATION FROM AGRICULTURAL (A-3a) AND OPEN (O) TO PROJECT DISTRICT (PD) AT KAU, NORTH KONA, HAWAII PREPARED BY: PLANNING DEPARTMENT COUNTY OF HAWAII 74-005001 DaUP: NoveerA>,r 30 EXHIBIT "A" (NILUMILU DEVELOPMENT. LLC'1166) \ N i - ro t ~t 1~S m t 0 t tl-- I I 11 « - SS= IT ~13'r. Ii r i 11 ' `l - _ 'Sl ,".ILL Mlles p p.6 1 2 3 ROADWAY ALIGNMENTS - CONCEPTUAL Date: January 11, 2006 EXHIBR "B" (MLUHILU DEVELOPMENT, LLG) OFFICE OF THE COUNTY CLERK County of Hawaii Hilo, Hawai'i - Draft 5 Introduced By: Stacy- K. Riga "''R S L L VOTE Date Introduced: June 5, 2006 AYES N 6 £X First Reading: June 21, 2006 Amkaki Published; June 30, 2006 Higa Hoffmann X REMARKS: Holschuh X June 5, 2006-Drafts 1,2,6 3 postponed Ikeda x to June 21, 2006 Council Meeting Isbell X Jacobson X Pilago X Safarik X B 1 0 0 Second Reading: July 7, 2006 To Mayor: July 11, 2006 (Draft 9) ROLL CALL VOTE Returned: July 17, 2006 AYES NOES ABS EX Effective: July 17, 2006 Published: July 21, 2(106 Amkaki X Higa x REMARKS. Hoffmann x Holschuh X Ikeda X Isbell x Jacobson x Pilage X Safarik X 6 2 1 0 I DO HEREBY CERTIFY that the foregoing BILL was adopted by the County Council published as indicated above. APPROVED AS TO FO AND LEGALITY: COUNCIL CHAIRMAN DY=PL" CORPORATION CO SEL COUNTY OF HAWAII JUL 14 W COUNTYCLERK Date 224 (Draft 9) Bill No.: i1 Reference: C-6B7.95/PC-73 pprove sapproved this day 4)ROrd No.: U6 105 , ' OF HAWAII FILE COPY PALAMM14UI August 15, 2007 Rockne Freitas, PhD Chancellor Hawaii Community College Hilo, HI 96720 Subject: Hawaii Community College and The Universtiy of Hawaii Center at West Hawaii Phase I Design Dear Dr. Freitas: We are pleased to enclose here a set of conceptual plans for the initial phase of the new campus to be built at Kalaoa, North Kona just mauka of the Kona International Airport. As you know, Palamanui is developing the land adjacent to the campus site, and will construct the first phase of improvements for the new campus at no public expense. We look forward to meeting with you and your staff to review these plans and to make the needed adjustments to allow us to start final design and permitting. I understand that the first meeting will be at your Hilo campus office on August 16, 2007. All of the Palamanui staff remains excited about this project, and seeing it materialize on the University site. Thank you for your continued commitment to this joint effort. We look forward to working with you and your staff in a new beginning for the Community College and University facilities in West Hawaii. Please contact me at any time with your thoughts or questions. Sincerely, / V Guy Lam Cc: Chairperson Kitty Lagarreta & Members of the Board of Regents President David McClain, UH Honolulu Chairperson Laura Thielen, Board of Land and Natural Resources Andy Smith, Governors Liason, West Hawaii EXHIBIT "B" ~4 3T ~ V Nfi~yt t k. t~on •~4 t ,i l' vh ke y} TY. - rt ~ Z - s v 'yY' k w g rY lD 1 c ~a -ter-; Ir I~ ll qy i7 Y4 11 a ~ ,mss ~ P., #x9Yw n e m t ~ ~ e i 71,177, 1 i kn'r"• x g ro i rn rt ~ i n x u -IT f%NL 4 1* y 7' `((LL}~.~.3~~t..i.'.'• ~T ~ 3-~ x `,-I ` 1 c ,a Ay,.: "r~F^* y fi d F~ -71 q4- a F O g ~N 9 9 i e - a', 1-n i -~Y June 16, 2006 Council Chairman Stacy Higa Hawaii County Council County of Hawaii 25 Aupuni Street Hilo, Hawaii, 96720 RE: Contribution of Land for portion of New Mauka/Makal Roadway Within TMK (3) 7-2-6:009 Dear Chairman Higa: Pursuant to our meeting held on June 7, 2006 in your office between you, myself and Tom Yamamoto of my office, this will confirm our willingness to give the County a right-of-way (approximately 88' wide) for the mauka/makai road within our property identified as TMK (3) 7-2- 6:0099. As we understand it, the most mauka section of the proposed road would connect to Mamalahoa Highway and wind makai through State lands and then through the Hiluhilu development to Queen Kaahumanu Highway. We understand the benefit this brings to the Kona community as well as the entire island as a network of highways are planned and built. We are prepared to make this contribution without payment from the County. However, should any future development occur on our property we ask that the value of this contribution be credited to any fair share contributions that may be assessed against our development. Several connections to the roadway may be required due to the roadway bisecting the property as it winds up the slope maintaining acceptable grades. Also, certain portions of the land now zoned A-1 a will need to be relocated to make way for the proposed alignment. We are currently working with Hiluhilu regarding the alignment as well as preparing archaeological, cultural, botanical and other related studies necessary to complete an environmental assessment for the roadway. Once the studies have been completed, the right of way identified and designed, we will make the right of way available to the County or to another entity for construction which will subdivide and dedicate the roadway to the County. EXHIBIIT "C" Council Chairman Stacy Higa June 16, 2006 Page 2 We look forward to a continued cordial relationship over the coming years as we all work toward completion of a much needed regional road. Aloha, :Ykalei, LLC Peter Lynch 4P1'e`959`~ LINDA LINGLE CHIME LEINAALA FUKINO, M.D. GOVERNOR OF HAWAII DIRECTOR OF HEALTH ¢P•BP3GPP~STATE OF HAWAII DEPARTMENT OF HEALTH P.O. BOX 3370 In reply, please Teter to'. HONOLULU, HAWAII 96601 EMD/WB 575 - Palamanui wwtp-1 August 1, 2007 Mr. Stephen J. Herbert, P.E. 74-5606 Pawai Place #203 Kailua-Kona, Hawaii 96740 Dear Mr. Herbert: Subject: Palamanul Wastewater Treatment Works Plans Kau, North Kona, Hawaii TMK: (3) 7-2-005: 001 File No. 575 Thank you for providing us with responses to our letter dated April 25, 2007 regarding the Palamanui Wastewater Treatment Works engineering report. The Department of Health (DOH), Wastewater Branch staff has reviewed the responses submitted for compliance with applicable provisions of Chapter 11-62, Hawaii Administrative Rules and the Guidelines for the Treatment and Use of Recycled Water, May 15, 2002. Our review indicates that the report complies with the applicable provisions of Chapter 11-62, Hawaii Administrative Rules and the Guidelines for the Treatment and Use of Recycled Water, therefore, plans for the subject facility are approved and construction of the facility can proceed. In addition to our "Approval to Construct", please be informed that in accordance with Section 11-62-23.1(e), prior to the "Approval to Operate", the treatment facility must be inspected and approved to writing by the DOH. The following will be required prior to the "Approval to Operate" being granted: 1. The injection wells will need to be permitted by the Safe Drinking Water Branch. A water reuse plan will be required prior to the use of R-1 water for irrigation; 2. At the completion of the project construction, it is your responsibility to inform the DOH and arrange for a joint final inspection. The inspection of the completed facility is to verify information provided in the plan; and 3. In addition, in accordance with Section 11-62-50, you must apply for general permit coverage at least 90 days prior to operation of your facility or apply for an individual permit at least 180 days prior to operation of your facility. Application forms can be downloaded from our web page at: www.hawail.gov/health/environmental/Water/Wastewateriforms.htmi EXHIBIT "D" Mr. Stephen J. Herbert August 1, 2007 Page 2 of 2 Please contact Gayle Takasaki of our office if you have any questions regarding the processing of the permit. Should you have any questions or concerns, please feel free to contact Tomas See or Sina Pruder of our Branch at 586-4294. Sincerely, HAROLD K. YEE, P.E. Chief, Wastewater Branch SP/mt R LINDA LINf.LE 11• ALLAN A. SMITH p,: OO 111.0R OFHAWAII FAj y196B ''7/ IVItiRAtc WNWI-ASON Ni „=~v'14ry~,,'/ ()O.V{fI JF LWD A'vn UAItiRN. NiSOUItf E.~ '{Sjj rONAIL9aION ON WnI'LR RE OIIItCT .\I.N'.\UITt LEI" 3~ * ROBERT K. MI UDA J`Land and Nary; ~s - j,; OEVUrr rnaecrJR ,c d n PETER T. YOUNG L'CVLT'DLC[[ip0..\v,\ItR _ dVOATIC (LLiSOVACGS p' mx . .\ILu:.A000~EAN' Y"C.1uV STATE OF HAWAII .w D B?U OF COWFANC tv)MNli SION OV W r\NA RLSWACEMANna',F\II.NT UN'SLRVATIO.V'ID RF'OUKCG LNRA' L}11 NNF DEPARTMENT OF LAND AND NATURAL RESOURCES ',r N5RMa "fate of FIdWS\ nml Rtl.'V.L6E POST OFFICE BOX 621 4nsroas PRESEAVnTau ICJIWL\IVE ouL'D IILSERVE N\IMIS>bV HONOLULU, HAWAII 96809 L-V STIMIMKI May 11, 2007 Mr. Roger Harris Hiluhilu Development, LLC P. O. Box 9007 Kailua-Kona, HI 96745 Subject: Request for Right-of-Entry to Hiluhilu Development, LLC, onto Unencumbered State Lands at Makaula-Kalaoa, North Kona, Hawaii. Tax Map Keys: 3Od/ 7-3-10: 42 & 44 Dear Mr. Harris: In reference to your letter of March 27, 2007, Hiluhilu Development, LLC, requested a right-of-entry onto unencumbered State lands at Makaula-Kalaoa, North Kona, Hawaii, Tax Map Key: 3Fd/ 7-3-10: 42 & 44. Purpose of this right-of-entry is to allow Hiluhilu Development to conduct surveys and other studies necessary to prepare an environmental assessment, to construct a connector road along the boundaries of the abutting State parcels. The current plans are to extend the Ane Keohokalole Street (formerly known as the Mid- Level Road) from Kaiminani Drive to a its planned Palamanui subdivision to the north. This roadway would be utilized to provide accesses to the inner portions of State lands approved for set aside to the University of Hawaii for its proposed West Hawaii Campus. The proposed roadway will be constructed to county dedicable standards using private fiords, then later transferred to the County of Hawaii. Pursuant to the authority granted the Chairperson of the Board of Land and Natural Resources at its meeting of September 28, 2001 (Item D-4), Hiluhilu Development, LLC, its consultants, contractors and/or persons acting for or on its behalf (hereinafter referred to as Permittee) is approved a right-of-entry onto State-owned lands at Makaula-Kalaoa, North Kona, Hawaii. Purpose of this right-of-entry is to allow Permittee to conduct surveys and studies necessary to prepare an environmental assessment for its proposed road construction. This right-of-entry, under the terms and conditions cited above, which are by this reference incorporated herein and further subject to the following: PA ;MANUI DATF ' EXHIBIT "E" 3L AO PP PL) TW Hiluhilu Development Survey -,e Page 2 May 11, 2007 rMK: P/ 7-3-10: 42 & -14 1. The term of this right-of-entry shall be for one year, commencing on May 1, 2007 and expiring on April 30, 2008, or upon completion of the survey/ studies, whichever is the sooner. Additional extensions may be granted by District Agent should a need arise; 2. Perrrrittee, its consultants, contractors and/or persons acting for or on its behalf shall procure at its own expense, and maintain during the entire period of this right-of- entry, from an insurance company or companies licensed to do business in the State of Hawaii, a policy or policies of comprehensive public liability insurance in an amount acceptable to the Department ($300,000 per incident/$500,000 aggregate) (or minimum limits of $1,000,000 for bodily and property and $500,000 for fire) insuring the State of Hawaii against all claims for personal injury, death, and property damage; that said policy shall, cover the entire right-of-entry area or premises, including all improvements and grounds and all roadways or sidewalks on or adjacent to the said right-of-entry area or premises in the control or use by Permittee, its consultants, contractors and/or persons acting for or on its behalf. Permittee, its consultants, contractors and/or persons acting for or on its behalf shall furnish the Department with a certificate(s) showing the policy(s) to be initially in force, keep certificate(s) on deposit during the entire period and furnish a like certificate(s) upon each renewal of the poticy(s). The procuring of this policy shall not release or relieve Permittee, its consultants, contractors and/or persons acting for or on its behalf of its responsibility under this right-of-entry as set forth herein or limit the amount of its liability under this right-of-entry; 3. Permittee, its consultants, contractors and/or persons acting for or on its behalf shall be responsible for restoring the area or premises to a condition satisfactory to the Department of Land and Natural Resources upon completion of the project. All demolition debris and other materials shall be removed from the area or premises; 4. Permittee, its consultants, contractors and/or persons acting for or on its behalf shall indemnify, defend, and hold the State of Hawaii, Department of Land and Natural Resources harmless from and against any claim or demand for loss, liability, or damage, including claims for bodily injury, wrongful death, or property damage, arising out of or resulting from: (1) any act or omission on the part of Permittee, its consultants, contractors and/or persons acting for or on its behalf relating to Permittee, its consultants, contractors and/or persons acting for or on its behalf use, occupancy, maintenance, or enjoyment of the right-of-entry area or premises; (2) any failure on the part of Permittee, its consultants, contractors and/or persons acting for or on its behalf to maintain the right-of-entry area or premises and areas adjacent thereto in Permittee, its consultants, contractors and/or persons acting for or on its behalf use and control, and including any accident, fire or nuisance, owing out of or Hiluhilu Development Survey Page 3 May 11, 2007 CNIK: 3"/ 7-3-10: 42 & 44 caused by any failure on the part of Permittee, its consultants, contractors and/or persons acting for or on its behalf to maintain the area or premises in a safe condition; and (3) from and against all actions, suits, damages, and claims by whomsoever brought or made by reason of Permittee, its consultants, contractors and/or persons acting for or on its behalf non-observance or non-performance of any of the terms, covenants, and conditions of this right-of-entry or the rules, regulations, ordinances, and laws of the federal, state, municipal or county governments; 5. All equipment shall be placed within the right-of-entry area or premises described on the attached map; 6. No alcoholic beverages will be served or permitted in the right-of-entry area or premises. 7. Permittee, its consultants, contractors and/or persons acting for or on its behalf will be responsible for providing security for the right-of-entry area or premises. 8. At your option, you may hire an officer of the Division of Conservation and Resources Enforcement (DOCARE). Please deal directly with the DOCARE office by contacting: Mr. Sandy Sugiyama, at 887-6196 to make the necessary arrangements. 9. Perrittee and its consultants, contractors and/or persons acting for or on its behalf shall supply to Land Division a name and local telephone number of the contact person who can be reached at any time around the clock. 10. Permittee, its consultants, contractors and/or persons acting for or on its behalf shall not cause or permit the escape, disposal or release of any hazardous materials except as permitted by law. Permittee, its consultants, contractors and/or persons acting for or on its behalf shall not allow the storage or use of such materials in any manner not sanctioned by law or by the highest standards prevailing in the industry for the storage and use of such materials, nor allow to be brought onto the right-of-entry area or premises any such materials except to use in the ordinary course of Permittee, its consultants, contractors and/or persons acting for or on its behalf business, and then only after written notice is given to the State of Hawaii, Department of Land and Natural Resources of the identity of such materials and upon the Department's consent which consent may be withheld at the Department's sole and absolute discretion. If any lender or governmental agency shall ever require testing to ascertain whether or not there has been any release of hazardous materials by Permittee, its consultants, contractors and/or persons acting for or on its behalf, then the Permittee, its consultants, contractors and/or persons acting for or on its behalf shall be responsible for the cost thereof In addition, Permittee, its consultants, contractors and/or persons Hiluhilu Development Survey . Page 4 May 11, 2007 TNIK: P/ 7-3-10: 42 & 44 acting for or on its behalf shall execute affidavits, representations and the like from time to time at the Department's request concerning Permittee, its consultants, contractors and/or persons acting for or on its behalf best knowledge and belief regarding the presence of hazardous materials on the right-of-entry area or premises placed or released by Perrittee, its consultants, contractors and/or persons acting for or on its behalf. 11. Permittee, its consultants, contractors and/or persons acting for or on its behalf agree to indemnify, defend and hold the State of Hawaii, Department of Land and Natural Resources harmless, from any damages and claims resulting from the release of hazardous materials on the right-of-entry area or premises occurring while Permittee, its consultants, contractors and/or persons acting for or on its behalf is/are in possession, or elsewhere if caused by Permittee, its consultants, contractors and/or persons acting for or on its behalf. These covenants shall survive the expiration or earlier termination of this right-of-entry. For purposes of this right-of-entry, "hazardous material" shall mean any pollutant, toxic substance, hazardous waste, hazardous material, hazardous substance, or oil as defined in or pursuant to the Resource Conservation and Recovery Act, as amended, the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, the Federal Clean Water Act, or any other federal, state, or local environmental law, regulation, ordinance, rule, or by-law, whether existing as of the date hereof, previously enforced, or subsequently enacted. 12. Permittee, its consultants, contractors and/or persons acting for or on its behalf in the exercise of this right-of-entry shall use appropriate precautions and measures to minimize inconveniences to surrounding residents, landowners, and the public in general; 13. Permittee, its consultants, contractors and/or persons acting for or on its behalf shall not store any personal belongings in the right-of-entry area or premises during the effective period of this right-of-entry; 14. All costs associated with the construction within the right-of-entry area or premises shall be the sole responsibility of the Permittee, its consultants, contractors and/or persons acting for or on its behalf, 15. In the event any unanticipated sites or remains such as bone or charcoal deposits, human burials, rock or coral alignments, pavings or walls are encountered, Permittee, its consultants, contractors and/or persons acting for or on its behalf in the exercise of Itiluluhl Development Suivey Page 5 May 11, 2007 RAK: 3'a( 7 3-10 42 & 44 this right-of-entry shall stop work and contact the State Historic Preservation Division in Kapolei at (808) 692-8015 immediately; 16. Permittee, its consultants, contractors and/or persons acting for or on its behalf shall comply with all of the requirements of all municipal, state, and federal authorities and observe all municipal, state and federal laws applicable to the premises, now in force or which may be in force; 17. All disputes or questions arising under this right-of-entry shall be referred to the Chairperson of the Board of Land and Natural Resources for a determination and resolution of the dispute or question. The Chairperson's decision shall be final and binding on the parties herein; 18. This right-of-entry is revocable and terminable at anytime for any reason in the sole and absolute discretion of the Chairperson; 19. This right-of-entry or any rights hereunder shall not be sold, assigned, conveyed, leased, let, mortgaged or otherwise transferred or disposed; and 20. The Department of Land and Natural Resources reserves the right to impose additional, but responsible terms and conditions, as it deems necessary while this right-of-entry is in force. Pursuant to the Land Board's delegation of authority to me to issue rights-of-entry, I am authorized to waive rent for rights-of-entry where no entity involved intends to profit monetarily from its use. As your project meets this requirement, I hereby waive the rent. Should you agree to the above terms and conditions, please sign in the space provided below and submit a copy of the signature page to the Hawai'i District Land Office at 75 Aupuni Street, Room 204, Hilo, Hawai'i 96720. Hiluhilu Development Survey Roe Page 6 May 11, 2007 TMK: 3rd/ 7-3-10: 42 & 44 If you have any questions or concerns regarding this matter, please contact Wesley Matsunaga of the Hawai'i District Land Office at (808) 974-6203, or fax (808) 974-6222. Very truly yours, ALLAN A. S1 ITH -Interim Chairp rso ACCEPTED: j Hiluhilu Development, LLC By Its: Dated: 12007 Hiluhilu Development Survey Page 7 May 11, 2007 'I:MK: 3rd/ 7-3-10: 42 & 44 ' 1 1- ~ hl I r i ~ -i A. ~ I ..d e,'py\°~1 M51-r- t. I ry ~ 'I 4t %4 i i i /mow I z ~ ~ ~ ! ° 1 0 ~ x a i Ji~ a i ~ X11 AIRPO T"1 I _ c I d - ~ - qtr, s ~ I 7 i 2 vie n Hiluhilu Development Survey tKoe Page 3 May 11, 2007 IMK: P/ 7-3-10: 42 & 44 ay 4 _ M1 ~ . I/ E. TAW 51TE .•v j r.._QMix7`~__~____----I •A'gn114"l [I ` II` r^y7 h f' I• of F_.rii:.-y I" ap ?ejgmn,ui I Wi K: (3.) 7- n- W 19, 42 <a~. North Kanu le~crd 0 '-Inwoli, Hzwcii SISF. t" - T;.Oi _;Ia0 B 20an. From ;TP,TF Hle' es.rv.;tlull 802 692 0'020 T-40G P-002/G02 F 4io ~ Ccunry o' Hcwnb: n C~-D3 DEPARTMENT OF PUBLIC Ti (31: kS 4 GRADING PERMIT NO. Owner;HilUhi1u Development LLC Address-P-0- Bo:: 9007 _ Phone: 325-0199 Kailua-Kona, Hl 967x5 Civil =ng. /Surveyor Triad Engineering Address:73-4578 Old Mamalahoa Htdphona: 325-1874 David A. Grenier 1:ailua-Kona, HT 96740 License. No.! 63530 Contractor:Keauhou Kona Constr. CorpA,ddress: P-0. Box 9007 Phone: 325--6199 License No.: ABC-15060 Kai lux-Kona T-TT 96_745 - ocatio i One mile north of Keahole Tax Map Key: (3) 7=2-0u1 Cut(CY):t « Rona Airport - Mauka Area Graded (acre): /625!4t- AC Oispoojsal sit _ - - _ Estimated Starting Date: 3O O'1 Estimated Completion Data:p Od Fill (CY): 3 _020 (minimum 2 working days afte issu nca date) Borrow site: N/A Remarks' Mass grading for backbone infrastructure and town center for Palamall ro act. Conforms to project district zoning ordinance. FCo.1,' X Phone: 327-3690 Fax: 327-3693 t. 14 STATE CLNR•,{-- HIISTO I ESERVATION DIVISION +roved: ReceiveaB~7~//0/~B 1e Date: II~Ib(t` :fisted OR t tr i National Register of Hisiorlc Platys 19 PLANNING DEPARTMENT tttt t~ Approved: Received ey: oata:NV 1' 2 A r/ 2DO5 Date: l) 3 ® DEPARTMENT OF PUBLIC WORKS 9 Apr for Permit Issuance: Received a n14* Date: Y.JAN 2 ,mill Cato: .!7 O I horoby certify t at all work as requested above I confornn to S Chal 10 o t V C upty Code. o~ ACTIN AS °1`` GC {.GA OWNERS f~~' OW `t~1 ~ l7 6 Date: the Department of Public Works, Engineering Division, upon completion of work, n ate'. (DP,N Inspector / engineer) Ceunry of Hnwai, i; :n Equal Oppoim,,uy F ov.dtt or~d EnplnYCr EXHIBIT "Frr 1.1/272006 13:99 ilERUHOU KONR CONSIRUC7ION CORP 4 32Y6S66 u,_,o", OS 1E:52 OOc-928029 - -IS/20 N0v-1e-2008 3:04M Frum-STATL static Preservation 808 692 602 T-381 P-002/002 F-378 Sb,;,vq`j~, v'14:MflL5ttr WfJ~P Ti :,J.NU u.1: NnTN4•L41"/JU2Cff y LiNUA LN6LC M1~r :Y 8D '+*q ekOM1!vA~u,a~uw<°mnu,emra,i conmms, .]vr~~. ,oaa xnLeut q: ~q~t~. lOByRr tiM,1'SULw - nr~rrnwvina.Ivn t nj~,Y frni:AliO U• 'R,; ` f~ .+CIIIp lryr~fiYlIDtu~iuk..V.: raY 'i •.°.~wmF~°' mnrbc~lmay.uv.acanwn GLREM1V qCtlMw1~'/~IS O VtiLp,MnSMlvM1,l•0.,us~!v'G AUtv.N. `!~T STATE OF IJAWAiI c4na mutt w.ve +WrnLV o+ csAL4'/nnaN n~ bnvwa'h ua, u x~vnuXf mas+wo DEPARTMENT OIF LAND AND NATURAL RESO RCES ,.M NANkVE~0a0.¢•E2M 'RIDR OnOh~" WM3Z $TATt: HISTORIC rRESERvA'nON DIVISION 60t KAMOKILADOULEVA10. ROOM 3!5 KAPOLI, HAWAII 96707 November 16, 2006 Mr. Roger Harris LOGNO: 2006.3181 Hiluhilu Development, C.LC_ DOC NO: 0611 AJ10 p.0. Box 9007 Archaeology Kailua-Kona, Hawai'i 96745 Deax Nis. Hams: SDB•1MCT; Chapter 69-42 Historic Preservation Review - Request for Grading Permit Approval - Falamann Project Kau Ahupi x'a, North Kona District, Island of Hs ai4 TIMIL: 3 7-2-005:001 We are in receipt of your County of Hawaii - Department of Publi Works mass grading permit. We received your fax containing the subject grading permit and a short er letter on November 13, 2006. The proposed undertaking involves mass grading of 124.5-acres for backbone infrastructure and town center for the Palnanui project. The preservation plan for the subject property (Rechtman. R. 2006. A chaeologieo! Preservation F107 for Nenry-Two Sites within the Palamanul Development Area TiKK 3 7-2-05, 1 por.) is currertdy under review. Based on November 16, 2006 consultation between Dr. Mel ssa Kirkendall, SHPD Maui Wand Archaeologist, and Dr. Robert Rechtman of Recbtrnan Consulting C, it is our understanding that all twemy-two preservation sites am currently protected by 100-foot Inte im buffer zones, marked by orange construction fencing, as called .for in the Recbtman (2006) preservatio plan. Also, it is our understanding that data recovery of eighteen (18) site located on the subject property is currently on-going and that all data recovery sites not currently bean worked on are prctacred by a 35- foot buffer zone, marked by orange construction fencing. Therefore, because it is our understanding that all interim prot tive measures for the twenty-two prese varion sites, and eighteen (18) data recovery sites are in p e, we behove that The proposed undertaking will have "no adverse cffcctr' on historic properties. Pleasc contact Mr. Adam Johnson at (808) 6924015 if you have a y gmestions or concerns about this letter. Aloha+11anic 2L '0-~ 1 hinon, Ad ministrator oric Preservation Division Al: y4~. \ 1,59 lr/ LINDA LINGLE ~g, s sy CHIYOME L. WKINO, M.D. GOVERNOR OF HAWAII ItIII DIRECTOR OF HEALTH ~ R E?VE® STATE OF HAWAII p,UG p 1 2007 DEPARTMENT OF HEALTH In reply. please refer to P.O. BOX 3378 p n Ar,~u r I.LCi EMDICwe HONOLULU, HAWAII 96801-3378 pp,LA 07077PDCL.07 July 27, 2007 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7005 1820 0005 8414 2148 Mr. Frederick Guy Lam Managing Member Hiluhilu Development, LLC P.O. Box 9007 Kailua-Kona, Hawaii 96740 Dear Mr. Lam: In accordance with the provisions of the Clean Water Act; Hawaii Revised Statutes, Chapter 3421); and Hawaii Administrative Rules, Chapters 11-54 and 11-55; the Department of Health (DOH) has reviewed the following application for a National Pollutant Discharge Elimination System (NPDES) permit to discharge storm water run-off associated with construction activity: Facility/Site NPDES Permit No. Palamanui - Phase 1 HI 5000110 A public notice of our proposed action to issue the Permit was published in the West Hawaii Today on June 18, regarding the above facility/site. The DOH made formatting changes to pages 1 & 5 and corrections to citations on pages 4 & 6. After consideration of the expressed views of all interested persons and agencies, pertinent Federal and State statutes and rules, the DOH hereby issues the enclosed NPDES Permit for the discharge referred to above. There were no comments received during the comment period. This action does not constitute a significant change from the tentative determination set forth in the public notice. This Permit will take effect on July 27, 2007. EXHIBIT "Ge Mr. Frederick Guy Lam July 27, 2007 Page 2 You may request an opportunity to appeal any of the conditions of the issued permit and to appear before the Director of Health (Director). Such requests must be submitted within 20 calendar days after receipt of this letter, and whether such requests are granted is within the Director's discretion. Appeals to court regarding the Director's decision on permit conditions or other matters are governed in HRS, Chapter 91. Should you have any questions, please contact Mr. Darryl Lum or Ms. Leanne Watanabe of the Engineering Section, Clean Water Branch, at (808) 586-4309. Sincerely, THOMAS E. ARIZUMIEnvironmental Management Division DCL:cu Enclosures: 1. Final Permit 2. Filing Fee Receipt No. 24004 c: Water Division (WTR-5), CWA Standards and Permits Office, EPA, Region 9 (w/enclosure No. 1) Ms. Nancy Nakata, DHO-Kona (w/enclosure No. 1) [via e-mail only] Mr. Clifford Furukado, DHO-Hilo (w/enclosure No. 1) [via e-mail only] PERMIT NO. HI S000110 AUTHORIZATION TO DISCHARGE UNDER THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES) In compliance with the provisions of the Clean Water Act, as amended, (33 U.S.C. § 1251 et seg; the "Act"); Hawaii Revised Statutes, Chapter 342D; and Hawaii Administrative Rules (HAR), Chapters 11-54 and 11-55, Department of Health (DOH), State of Hawaii; HILUHILU DEVELOPMENT, LLC (hereinafter PERMITTEE), is authorized to discharge storm water associated with the construction activities from the Palamanui - Phase I project site in Kailua-Kona, Hawaii to the receiving water named the Pacific Ocean, a Class AA, Marine Water, at the following coordinates: Latitude 19°44'59"N and Longitude 156°01'39"W, in accordance with the general requirements, reporting requirements and other conditions set forth herein, and in the attached DOH "Standard NPDES Permit Conditions," dated December 30, 2005. All references to Title 40 of the Code of Federal Regulations (CFR) are to regulations that are in effect on July 1, 2004, except as otherwise specified. Unless otherwise specified herein, all terms are defined as provided in the applicable regulations in Title 40 of the CFR, This permit will become effective on July 27, 2007. This permit and the authorization to discharge will expire at midnight, July 26, 2012. Signed this 27`^ day of July, 2007. (For) Director of Healil Final Permit July 27, 2007 i I I ~ I ! I ~ K33nD I I t\NtlvoNyV - tiV MHOVA 1 z I ~ 6~9 I ~ I I fit ¦ L ( I Q ~ 3 ~L C cc) y m ~ ~A it I x-' as~~se~a• ~ s ~ em~_ OOOOOM 1u AAAAAD~mO m - r~ j g ooooci;°szlm~ 3 I i aimr~u °~OOmm ~ 6 Y I OWpm G)CM, a, tE%x , lOmpZ EI~Ri~ €tC C!_~ 1 cyl I - f Afp Mo [ i C ~ C3 1 I fi g s §s € 1 I EXHIBIT "H" _•,r poc 2007-008828 JAN 12, 2007 08;02 AM LAND COURT SYSTEM REGULAR SYSTEM Return by Mail (X) Pickup ( ) To: Nakamoto, Okamoto s Yamamoto (AMO) 187 Kapiolani Street Hilo, HI 96720 TITLE OF DOCUMENT: DECLARATION OF COVENANTS PALAMANUI (OPEN SPACE) Affects: TMK [3] 7-2-005-001 This document contains 9 pages. hiluhilutrezoninglCovennnts(Open .Space)010507 EXHIBIT "I" DECLARATION OF COVENANTS PALAMANUI (OPEN SPACE) HILUHILU DEVELOPMENT, LLC, a Hawaii limited liability company whose address is P.O. Box 9007, Kailua-Kona, Hawaii 96745 (hereafter "Declarant"), hereby establishes the following restrictive covenants relative to the use of the lands within the Palamanui Project at Kau, North Kona, County of Hawaii, State of Hawaii, comprising an area of 31,Tsg acres, more or less ("Open Space Area") as more particularly described in Exhibit A, attached hereto and incorporated by reference herein and as shown on the map, attached hereto and incorporated by reference herein as Exhibit B. Declarant wishes to establish and record the restrictive covenants herein in order to comply with Condition 7 of the Findings of Fact and Conclusions of Law and Decision and Order for a State Land Use District Boundary Amendment in State Land Use Commission Docket No. A03-744 approved on May 3, 2005, notice of which was recorded by the Declarant on June 23, 2005 as Document No. 2005-123996 in the Bureau of Conveyances, State of Hawaii and to comply with Condition V of County of Hawaii County Council Ordinance 2006-105. Declarant was the Petitioner in this proceeding. Condition 7 of said Findings of Fact and Conclusions of Law and Decision and Order provided: "7. Open Space Buffer. Petitioner shall maintain an open space buffer on the Petition Area along Queen Kaahumanu Highway with a minimum width of 800 feet. The only man-made structures allowed in this open space buffer shall be the Northern Project Access Road, the Project's wastewater treatment plant, limited portions of the Project's golf course, and a groundwater monitoring well - as represented by the Petitioner to the hduhdu\ rezoningiOpen Space Area Covenants 2 Commission. Petitioner shall appropriately screen such uses to maintain the visual continuity of such buffer." Condition V of said Ordinance 2006-105 provided: "V. There shall be an 800-foot setback from the Queen Kaahumanu Highway. No structures, other than those allowed under Condition No. 7 of the Land Use Commission's Decision and Order, shall be allowed within the 800-foot setback area. A copy of the metes and bounds description for this open space area, and proposed covenant(s) shall be submitted to the Planning Director for review and approval prior to receipt of Final Plan Approval or land alteration activities, whichever occurs first. The approved covenant(s) shall be recorded in the Bureau of Conveyances prior to the issuance of Final Plan Approval, or land alteration activities, whichever occurs first. A copy of the recorded covenant(s) shall be provided to the Planning Department " Subsequent to the approval of the Findings of Fact Conclusions of Law and Decision and Order by the State Land Use Commission, Declarant dropped plans for development of a golf course within Palamanui, rendering the provisions relating to the golf course in Condition 7 inapplicable. Declarant submitted a copy of this Declaration of Covenants together with the metes and bounds description for the Open Space Area to the County of Hawaii Planning Director and received approval as to said document and metes and bounds description. Declarant hereby declares that the Open Space Area as described on Exhibit A shall be subject to these covenants, conditions and restrictions. hduh,U rezoninglOpen Space Area Covenants 3 1. Open Space Buffer. Petitioner shall maintain an open space buffer within the Open Space Area. The only man-made structures allowed in the Open Space Area shall be the Northern Project Access Road, the Palamanui wastewater treatment plant, and a groundwater monitoring well - as represented by Declarant to the Commission. Declarant shall appropriately screen such uses to maintain the visual continuity of such buffer." 2. These covenants shall remain in effect until amended or rescinded by the Declarant, its successor or assigns, with the prior written consents of the State Land Use Commission and the County Council of the County of Hawaii. Said amendment or rescission shall not take effect without such written consents and until recordation of the appropriate amending or rescinding document in the Bureau of Conveyances of the State of Hawaii. 3. Covenants to Run with Land. All of the foregoing restrictive covenants shall run with the Open Space Area and any Deed, Mortgage, Agreement of Sale or Lease shall state that the land described in any such document is subject to these restrictive covenants. 4. Enforcement. Jurisdiction may be taken by the Declarant, its successors and assigns, the State Land Use Commission, or the County of Hawaii to restrict or prevent by injunction, mandatory or restraining, any violation or threatened violation of any of these covenants without prejudice to the right of the Declarant, its successors and assigns or any other owner of land to adopt or pursue any other remedy thereafter for the same breach or failure, or for any subsequent breach or failure, or to adopt or pursue suitable process to recover damages for any such breach or failure. hduhilm rezoninWopen Space Area Covenants 4 5. Attorney's Fees, Liquidated Damaees. Should the owner of the Open Space Area in an action for equitable relief or damages be found by any court to have violated these covenants, conditions, and restrictions, said offending lot owner shall pay all costs of the action and reasonable attorney's fees to the prevailing party in the action. Dated: ( 2-1f -V' 2006. HILUHIILU DEVELOPMENT, L~LC By: /'r--t/ C, IN Its Manag By: ' w'm Its Manager Declarant The foregoing Declaration of Covenants has been reviewed by and approved under Conditio V of Ordinance 2006-105. 7 Plannmg Director County of Hawaii Approved as to form Depu orporation Counsel hiluhilu\rezoning\Open Space Area Covenants 5 STATE OF HAWAII ) SS: COUNTY OF HAWAII ) On this 12 day of DecQm,tccr 200 , before me appeared -Fki2 -Petc^C)eA to me personally known, who, being by duly swom, did say that he the Manager of HILUHILU DEVELOPMENT, LLC, a Hawaii limited liability company, and that the instrument was signed on behalf of the company, and said Manager acknowledged the instrument to be the free act and deed of the company. ~.fUTARY q2 1 OL * PUBLIC Notary Public State of Hawaii n My commission expires: STATE OF HAWAII ) SS: COUNTY OF HAWAII ) On this I?- day of ),DQ~ trYtt~Pl l' 200__ p , before me appeared cif i Ca,G (%AQ Lq rA, to me personally known, who, being by duly swom, did say that a the Manager of HILUHILU DEVELOPMENT, LLC, a Hawaii limited liability company, and that the instrument was signed on behalf of the company, and said Manager acknowledged the instrument to be the free act and deed of the company. P NEW W W Q I V R.IiUrV~ NOTARY 92 Notary Public k PU60G State of Hawaii 4 ~3y ~QS~ ` My commission expires: - k9, 201 p htluhdu\ rezoning\open Spate Area Covenants 6 STATE OF HAWAII ) SS: COUNTY OF HAWAII ) On this day of-~L~5e-' 200f,2-, before me appeared (2 5 7DI''6~AF- ;7 c/ C--t-- , to me personally known, who, being by duly sworn, did say that he is the L-/~+y~l~•?cs 44cevro,~1- of the Planning Department of the COUNTY OF HAWAII, a municipal corporation of the State of Hawaii, that the seal affixed to the foregoing instrument is the corporate seal of said County of Hawaii; that the foregoing instrument was signed and seated in behalf of the County of Hawaii; and said ON, ilf doh er . Au e r7 acknowledged said instrument to be the free act and deed of said County of Hawaii. mac'.-rC ~~~G PAT ICIA A KOLA Notary Public State of Hawaii My commission expires: hduhilu\ rezoningloven Space Area Covenants EXHIBIT A OPEN SPACE BUFFER (800 FEET WIDE) Affecting Lot 46 of M.W. Estate, - Phase 2, Same Bring a Portion of Royal Patent 8265, Mabel. Aa ed 13-B to Paafoa (Certificate of Boundaries No. 191) At Kau, North Kona, Island of Haaaµ Harass beginning at a spike (found) at the north comer of thin buffet, being also along the cast side of Queen Kaahiutnmu Highway (Ptoj. No. 19 BC-O1-71), the coordinates of said point oFbeginning referred to Government Sutvey Tm.gulauon Slanon"AKAHIPUU" being 194.43 fm Nonh and 19,564 98 fen W ev and thence running by asamuth, measured clockwise from nut South. 1. 291' 46'3S" 819.25 feet along the Kukio-Ooma Government Tracts; 2. 9' 19' 55" 2093.34 Feet; 3. 115.03' 36.5" 831.12 feet along Parcel 9, sam< lusting a portion of Govetmncnt Lnnds of Makauh (H.S.S. Plat 319) to a'/a" pipe (find); 4. 189. 19'55" 2044.60 feet along the east side of Queen Kaahncnanu Highway (Prof. No. 19 BC-01-71) to the point of bcg..ung and conniving so area of 37.998 A., M. EUZ {F51 6,~ Dexdptian Pmpated by. ? l1CEN9F0 PF0~,52AWµ R. M. TOWILL CORPORATION VHO Ir M. &YOq his. 10059 111I,,11,At~~~~~~ - ~ y7K',11 V°'P A.IARhI lNJ Aia47J'~ 4/30(08 73.5574 Maui Street, Suits I I R7an7 pv%ism Date KeAus-Kaoa, Ffaaau 96817 Lccaced Professional Land Sutveynr December 7, 2006 Certificate Number 10059 I ,AwWnib4 % It p{ywY SW an ng,wrry NoMLNw WnJWt Fm.uwnW L,irw ' t mow: mill R. M. TOWILL CORPORATION =c - .oN fold lL-1O-je 61 N ~.yMH9w nl~• ~Z SS 6LfiY{ ~ ~ppva) S9tpt l ~y,~ox~ 09 \ a s^Gi' 1 I~w ~Ir~,Mw ~ig 9- W X _ y~uL6 a 1f"C~Z $ rx ~ t ~ n ~ ammt I I C E C 4 d I y I w. !y~'n-j0,.rs+ w'w"r ail 9 r.W~~~ ~°I I I 09 Aul~, w;»~~ wW~JIII 1 • N 1 P v u - 4 O P'A ?t C C~ ~bv INF tt 9 Q I~ p 0 OVg s a 1i u NI& n ~ 1qy~ T o (b a t: 3 a 3! Cj UDa K i~, 3• p o 31 ZZ 0 W -w I s I. co ,g s~ ~g 8~ II to :10 EP 14 N m o`~ 1 p- `Idf~1l F E ,t4 O ~p O 1 t~~° S rt~'I 18M55 - p00 NL O 1714' ,AN ` C.A SS= FIRST AMENDMENT TO WATER AGREEMENT This First Amendment to Water Agreement (the "Amendment") is made as of J u A,., b ry y k , 2006by and between HILUHILU _ DEVELOPMENT, LLC, a Hawaii limited liability company, ("Hiluhilu"), whose address is P.O. Box 9007, Kailua-Kona, Hawaii 96745-9007, KOHANAIKI SHORES, LLC, a Delaware limited liability company, ("Kohanaiki"), whose address is c/o Rutter Development Corporation 18012 Cowan, Suite 200, Irvine, CA 92614735563 and the Water Board of the County of Hawaii ("Water Board"), whose address is 345 Kekuanaoa Street, Suite 20, Hilo, Hawaii 96720. RECITALS The Amendment is made in reliance on the following facts: A. On June 15, 1999, K-W KAU, LLC, K-W KOHANAIKI, LLC and the WATER COMMISSION OF THE COUNTY OF HAWAII entered into the Water Agreement (the "Water Agreement") concerning, among other matters, the following: (a) responsibilities regarding the development of the Kau Water System and the Kohanaiki Water System (jointly referred to as the Water Systems) including Well l (State No. 4458-01) and Well 2 (State No. 44580-02); (b) granting water rights to K-W Kau LLC for the property described as TMK (3) 7-2-5-1 and referred to in the Water Agreement as the "Kau Property;" and (c) granting water rights to K-W Kohanaiki LLC for the property described as TMK (3) 7-3-9-3 and 16 and referred to in the Water Agreement as the "Kohanaiki Property." B. Hiluhilu is the successor in interest to the rights of K-W KAU LLC under the Water Agreement. When the Water Agreement was executed, the Kau Property was comprised of approximately 1,002.6 acres of land. Since the Water Agreement was executed the Kau Property has been subdivided into two parts: the upper portion has been subdivided in the lots that comprise the Makalei Estate subdivision, roadways and the two well sites described in the Water Agreement as Well #1 Well Site and Well #2 Well Site and such properties are referred to herein as the "Makalei Property." The lower portion of the 1,002.6 acres, being approximately 725.2 acres, has been reclassified to State Land Use Urban and is being rezoned to Project District and is referred to herein as the "Palamanui Property." The Makalei Property and the Palamanui Property are jointly referred to as the "Kau Property. C. Kohanaiki is the successor in interest to the rights of K-W KOHANAIKI LLC under the Water Agreement. Kohanaiki is now developing the Kohanaiki Property. D. The Water Board is the successor in interest to the former Water Commission of the County of Hawaii. E. The parties desire to enter into the Amendment to amend the Water Agreement as forth below. The Water Agreement as amended by the Amendment shall be referred to as the "Amended Water Agreement." EXHIBIT "J" 1101)06 NOW THEREFORE, in reliance on the aforesaid facts and in consideration of the terms and provisions set forth below, the parties agree that the Water Agreement is amended as follows: 1. Successor Parties. Hiluhilu is the successor in interest to K-W KAU LLC under the Water Agreement and all references in the Water Agreement to K-W KAU LLC are amended to refer to Hiluhilu. Kohanaiki is the successor in interest to the rights of K-W KOHANAIKI LLC under the Water Agreement and all references in the Water Agreement to K-W KOHANAIKI LLC are amended to refer to Kohanaiki. The Water Board is the successor in interest to the Water Commission of the County of Hawaii under the Water Agreement and all references in the Water Agreement to the Water Commission of the County of Hawaii are amended to refer to the Water Board. 2. Amendment of Subparaeraph 4.1.1. b. Subparagraph 4.1.1.b is amended and restated in full to read as follows: "b. Construction of improvements, meeting the DWS's Standards, to transmit water to the Kohanaiki Property through the Palatrtanui Property with appropriate storage tank or tanks for the Palamanui Development, and a storage tank or tanks near the makai end of the Palamanui Property or State of Hawaii land if available, at an elevation specified by the DWS, and extension of a pipeline from the storage tanks down to and along Queen Kaahumanu Highway or through State land if available, to the DWS water system on Queen Kaahumanu Highway. This route will involve installations along roadways that will be dedicated to the County of Hawaii, and easements and rights over and across the Palamanui Property, and if State land is available, through State of Hawaii land." 3. Amendment of Paragraph 4.2. Paragraph 4.2 is amended and restated in full to read as follows: "4.2 Facilities Charges; Capital Assessment Fee. The Kohanaiki Commitment shall be provided by the Water Board upon payment of facilities charges in accordance with Rule 4-6 of the Department of Water Supply Rules and Regulations (Eff. October 21, 2004) in exchange for the conveyance to the Water Board of the Kohanaiki Water System. The Capital Assessment Fee is waived because of the development of the water source by Kohanaiki." 4. Amendment of Paragraph 5.1 and Paragraph 5.2. Paragraph 5.1 including Subparagraphs 5.1.1. and 5.1.2 is deleted in full and intentionally left blank. Paragraph 5.2 including Subparagraphs 5.2.1 and 5.2.2 is amended and restated in full to read as set follows: "5.2. Hiluhilu's and Kohanaki's Election to Complete Wells. "5.2.1 Well No. 2. Hiluhilu has elected to complete Well #2 and has substantially completed the improvements for Well 42. Hiluhilu has obtained a bond guaranteeing the completion of Well 42 in a form and an amount satisfactory to the Water Board, from a bonding company qualified and licensed to do business in the State of Hawaii with a rating of not less than B+. Said bond names the Water Board as an M27!1omv 110906 obligee. Hiluhilu shall have the exclusive right to complete Well No. 2 subject to the Water Board's right to complete construction of the improvements as provided in Paragraph 5.3. "5.2.2 Well No. 1. Kohanaiki has elected to complete Well 41. Kohanaiki shall have the exclusive right to complete Well No. 1 subject to the Water Board's right to complete construction of the improvements as provided in Paragraph 5.3." 5. Amendment to Paragraph 7.1. Paragraph 7.1 is amended by adding the following at the end to read as follows: "Notwithstanding anything in this Agreement to the contrary, prior to completion of the Water Systems, Kohanaiki shall have the right, upon prior written notice to and the approval and consent of the Water Board, to assign its rights and interests, or portions thereof, in the Kohanaiki Commitment and the Water Agreement, as amended, to Hiluhilu but only for the benefit of, and used only in connection with the Palamanui Property (and the Palamanui Development)." 6. Paragraph 10 is amended by replacing "American Arbitration Association for Commercial Disputes" with "Dispute Prevention and Resolution, Inc. of Honolulu, Hawaii", and by replacing Chapter 658, Hawaii Revised Statutes" with "Chapter 658A, Hawaii Revised Statutes." 7. Hiluhilu represents and warrants as follows: Hiluhilu (as the successor of K-W KAU, LLC) is entitled to a Water Commitment of 343 equivalent units ("EU") from Well #2 (the "Kau Commitment"). Of the EU from the Kau Commitment, Hiluhilu has allocated 81 EU to the lots in the Makalei Property which Hiluhilu developed. Other than those 81 EU, Hiluhilu has not allocated, assigned or transferred any EU in the Kau Commitment to any other person or entity or for the use or benefit of any land and that it will not make any future allocation, assignment or transfer without complying with Paragraph 7.1. of the Water Agreement, as amended. 8. Kohanaiki represents as follows: Kohanaiki (as the successor of K-W KOHANAIKI, LLC) is entitled to the Kohanaiki Water Commitment of 1907 EU (1125 EU from Well #1 and 782 EU from Well #2). Kohanaiki has not allocated, assigned or transferred any EU in the Kohanaiki Commitment to any other person or entity or for the use or benefit of any land and that it will not make any future allocation, assignment, agreement or transfer without complying with Paragraph 7.1. of the Water Agreement, as amended. 9. Effect of Amendment. Except as specifically amended above, the Water Agreement dated June 15, 1999 shall remain in full force and effect. In Witness Whereof, the parties hereto have executed the Amendment as of the day and year first above written. 3- :71w,V 110406 HILUHILU DEVELOPMENT, LLC KOHANAIKI SHORES LLC By: KS DEVELOPERS LLC By: Its Managing Member By: KS INVESTORS, LLC Its Managing Member By: RUTTER DEVELOPMENT CORPORATION Its Man RECOMMENDED APPROVAL: WATER BOARD OF THE COUNTY OF HAWAII By: By: anDepartment of Water Supply Its Chairman APPROVED AS TO FORM AND LEGALITY: Deputy Corporation Counsel County of Hawaii -4- 1 10906 STATE OF HAWAII ) SS. COUNTY OF HAWAII ) On this Wj)~ day of o3 au , 200 "1 'before me appeared Teyi zvd. 6(Av L61v%. , tome personally known, who, being by duly sworn, did say that he is the mekkrt4i nA WQ.&0e1z of HILUMLU DEVELOPMENT, LLC, a Hawaii limi ed liability company, and that the foregoing instrument was signed in behalf of said company; and said he- acknowledged said instrument to be the free act and deed of said company. 0PP N 4 NOTARY 9Z PUBUC Notary Public y of N?~ State of Hawaii My commission expires: STATE OF HAWAII ) SS: COUNTY OF HAWAII ) On this 34h day of Febrc a,-u , 2007 , before me appeared Th oM . Ga , to me personally known, who being by me duly sworn, did say that 'he is the of the WATER BOARD OF THE COUNTY OF HAWAII and that the seal affixed to the foregoing instrument is the seal of the Department of Water Supply of the County of Hawaii, and that the instrument was signed and sealed in behalf of the Water Board by authority of said Water Board, and said Thomas S. Goy, acknowledged the instrument to be the free act and deed of the Water Board. 8 , Notary Public - 'Do reAn Sheata State of /-j&wa; My commission expires: 719/a of o -6- M,~ ; i W90e STATE OF SS. COUNTY OF IVA" ) On this i/~'d day of f ft CAVN , 200 , before me appeared [)Ayl? "L>lE , to me ~ ersonaUy known, who, being by duly sworn, did say that he is the H el - G)(CC-C,11VE Ql'l!ICE'~- of RUTTER DEVELOPMENT CORPORATION a California corporation, Manager of KOHANAIKI SHORES, LLC, a Delaware limited liability company, and that the foregoing instrument was signed in behalf of said company; and said QFf16Ej?.j acknowledged said instrument to be the free act and deed of said company. MONU& RAMIREZ Co'"' N 1503006 - NotaryVubNc . COWomlo Orange courNy Notary Public MyCanm.EYpYNJu12l,2000 State of C&tt I ~"IJIA My commission expires:'JDdo t~, Zug 7- 1 1 AGREEMENT TO DEVELOP WATER SYSTEMS AND TRANSFER WATER RIGHTS This Agreement to Develop Water Systems and Transfer Water Rights (the "Development Agreement") is made as of September 14, 2006 by and between HILUHILU DEVELOPMENT, LLC, a Hawaii limited liability company ("Hiluhilu" whose address is P.O. Box 9007, Kailua-Kona, Hawaii 96745-9007 and KOHANAIKI SHORES, LLC, a Delaware limited liability company ("Kohanaiki"), whose address is c/o Rutter Development Corporation 18012 Cowan, Suite 200, Irvine, CA 92614. RECITALS The Development Agreement is made in reliance on the following facts: A. On June 15, 1999, K-W KAU, LLC, K-W KOHANAIKI, LLC and the WATER COMMISSION OF THE COUNTY OF HAWAII entered into the Water Agreement (the "Water Agreement") concerning, among other matters, the following: (a) responsibilities regarding the development of the Kau Water System and Kohanaiki Water System including Well 1 (State No. 4458-01) and Well 2 (State No. 44580-02); (b) granting water rights to K-W Kau LLC for the property described as TMK (3) 7-2-5-1 and referred to in the Water Agreement as the "Kau Property;" and (c) granting water rights to K-W Kohanaiki LLC for the property described as TMK (3) 7-3-9-3 and 16 and referred to in the Water Agreement as the "Kohanaiki Property." B. Hiluhilu is the successor in interest to the rights of K-W KAU LLC under the Water Agreement. When the Water Agreement was executed, the Kau Property consisted of approximately 1,002.6 acres of land. Since the Water Agreement was executed the Kau Property has been subdivided into two parts: the upper portion has been subdivided into lots that comprise the Makalei Estate Subdivision, roadways and the two well sites described in the Water Agreement as Well #1 Well Site and Well #2 Well Site and such properties are referred to herein as the "Makalei Property." The lower portion of the 1,002.6 acres, being approximately 725.2 acres, has been reclassified to State Land Use Urban and is being rezoned to Project District and is referred to herein as the "Palamanui Property." The Makalei Property and the Palamanui Property are jointly referred to as the "Kau Property. C. Kohanaiki is the successor in interest to the rights of K-W KOHANAIKI LLC under the Water Agreement. Kohanaiki is now developing the Kohanaiki Property. D. The Water Board of the County of Hawaii (the "Water Board") is the successor to the former Water Commission of the County of Hawaii. E. The Water Agreement provides in part that upon construction and conveyance to the Water Board (as the successor to the Water Commission of the County of Hawaii) of the Kau Water System (as described in the Water Agreement) and the Kohanaiki Water System (as described in the Water Agreement), jointly referred to as the "Water Systems," Hiluhilu (as the successor of K-W Kau LLC) is entitled to a water commitment of 343 equivalent units ("EU") from Well #2 (the "Kau Commitment") and Kohanaiki (as the successor of K-W Kohanaiki LLC) is entitled to a water commitment of 1907 EU allocated 1125 EU from Well #1 and 782 l02M99N-8 EU from Well #2 (the "Kohanaiki Water Commitment"). Hiluhilu has allocated 81 EU from its Kau Commitment to the Makalei Estate Subdivision. F. As described below, to date, Hiluhilu (and its predecessor) has partially constructed the Kau Water System and the Kohanaiki Water System and such construction is referred to as the "Pre-Development Agreement Completed Work." The Pre-Development Agreement Completed Work consists of the following: (i) the drilling, casing and testing of two (2) wells for the development of potable water, designated as Well No. I (State No. 4458-01) and Well No. 2 (State No. 4458-02); (ii) built the pump house for Well No. 2 and related improvements for Well #2 Well Site; (iii) outfitted Well No. 2 with a 700 GPM submersible pump and motor (including motor controls, telemetry, chlorination, control building and other appurtenances designed and constructed to the DWS's Standards) designed to deliver water to the DWS's existing 0.30 MG Puukala Tank; (iv) constructed transmission pipeline from Well #2 to Puukala Tank; and (v) obtaining a bond guaranteeing the completion of the Kau Water System naming the Water Board (or its predecessor) as an obligee. G. The parties desire to enter into the Development Agreement to provide for the completion of the design and construction of the Water Systems, the conveyance of the Water Systems to the Water Board, the transfer of water rights among the parties and the modification of the Water Agreement. NOW THEREFORE, in reliance on the aforesaid facts and in consideration of the terms and provisions set forth below, the parties agree as follows: 1. Amending Water Agreement. The parties agree to use their best efforts and do all acts required to amend the Water Agreement on substantially the terms set forth in the proposed First Amendment to Water Agreement (the "First Amendment to Water Agreement") attached as Exhibit A. Upon execution of the Development Agreement, the parties agree to jointly request the Water Board to enter into the First Amendment to Water Agreement in the form of Exhibit A attached. Each party agrees to provide the Water Board with all appropriate information requested by the Water Board. If on or before November 1, 2006, the Water Board does not agree to accept the First Amendment to Water Agreement on the terms set forth in Exhibit A or on such other terms agreed to by both parties, then either party may terminate the Development Agreement by written notice of termination delivered to the other party by registered mail at the address set forth above and neither party shall have any further obligations or rights under the Development Agreement. 2. Agreement to Assign Water Rights. Subject to and conditioned upon satisfaction of the conditions set forth in Paragraph 2.1 below and at the request of Hiluhilu, Kohanaiki agrees to assign to Hiluhilu from the Kohanaiki Water Commitment in the amount of 359 EU from Well #1 and 516 EU from Well #2 or a total of 875 EU and agrees to do all acts required by the Water Agreement, as amended, to make the assignment effective including signing and delivering to Hiluhilu an Assignment in the form of Exhibit B attached and notifying the Water Board of the Assignment. 2.1. Conditions to Assignment of Water Rights. Kohanaiki shall not assign the water rights as set forth above, unless and until the following conditions are satisfied: 2 302]3399!0.8 (i) execution of the First Amendment to Water Agreement by Kohanaiki, Hiluhilu and the Water Board; (ii) executing of the Escrow Disbursement Agreement described in Paragraph 6.1.1 and either (a) prior to the creation of the Approved Budget (as defined in Paragraph 5.2), deposits into escrow pursuant to the terms of the Escrow Disbursement Agreement a letter of credit for $5,500,000 or such other security approved by Kohanaiki, or (b) after the creation of the Approved Budget, Hiluhilu, deposits into escrow pursuant to the terms of the Escrow Disbursement Agreement a letter of credit in the amount set forth in the Escrow Disbursement Agreement or such other security approved by Kohanaiki. 2.2. Termination of Right to Transfer Water Rights. The right of Hiluhilu to have Kohanaiki assign water rights as set forth above, shall terminate if the conditions in Paragraph 2.1 have not been satisfied within ninety (90) days after Kohanaiki gives notice that it is proceeding to construct the Kohanaiki Water System as set forth in Paragraph 6.1.2. 3. Design of Water Systems Improvements. Hiluhilu has provided an initial layout of the Water Systems and the improvements required for the Water Systems which will take water from Wells 1 and 2 over the Hiluhilu land to be connected to the Department of Water Supply's water system on Queen Kaahumanu Highway to provide water to the Kohanaiki Property. Those improvements include pipelines, water storage tanks and other improvements to provide water for the Kau Property and the Kohanaiki Property. The initial layout is shown on the diagram attached as Exhibit C and has been approved by Kohanaiki. After the signing of the Development Agreement, Hiluhilu will continue with design of the water system improvements, including consultation with the Department of Water Supply on the sizing of pipelines and water storage tanks and other design features. Each party shall pay its own engineer for the cost of the design of the water system until such time as the Department of Water Supply agrees on the basic design of the water system improvements i.e. the size of pipelines and water tanks and other basic design features and such costs shall not be part of the Water System Cost as defined in Paragraph 5.1. Once the Department of Water Supply agrees on the basic design of the water system improvements, all additional engineering and design costs shall be a Water System Cost. Hiluhilu will keep Kohanaiki informed as that work progresses and all changes to the design set forth on Exhibit C are subject to the approval of Kohanaiki. The final design of water system improvements must be approved by the Department of Water Supply. 4. Construction Plans and Construction Contract. 4.1. Construction Plans. Upon completion of the design work described in Paragraph 3 above, as approved by the Development of Water Supply, Hiluhilu will have plans and specifications produced for the construction of the Water Systems and shall submit such plans and specifications to Kohanaiki for their approval. The plans and specifications for the Water Systems approved in writing by Kohanaiki shall be referred to as the "Approved Plans." There shall be no changes in the Approved Plans except with the written approval of both parties. The parties recognize that they need to consult with and obtain the approval of the Department of Water Supply and the Water Board in order to finalize the plans and 3 eom3vaw-e specifications for the construction of the Water Systems. Hiluhilu will also prepare and submit to Kohanaiki, for its review and approval, a construction schedule which will include a final completion date. The construction schedule approved in writing by Kohanaiki shall be referred to as the "Approved Construction Schedule " There shall be no change in the Approved Construction Schedule without the written approval of both parties. 4.2. Construction Contractor. Upon obtaining Approved Plans and Approved Construction Schedule, the parties shall mutually select a contractor and enter into a contract with the selected contractor to construct the Water System in accordance with the Approved Plans and Approved Construction Schedule. In this regard, Kohanaiki is aware that one of the principals of Hiluhilu also owns Keauhou Kona Construction Company. Hiluhilu and Kohanaiki will attempt in good faith to negotiate a construction contract with Keauhou Kona Construction Company that is acceptable to Hiluhilu and to Kohanaiki. If agreement on a construction contract with Keauhou Kona Construction Company cannot be reached, the parties shall mutually select and enter into a contract with one or more other contractors to construct the Water System. The construction contract shall be on terms agreed upon by both parties and shall include a deadline for final completion consistent with the Approved Construction Schedule and required a completion bond. The construction contract shall include work that are classified as Additional Cost (as defined in Paragraph 5. 1), only if Hiluhilu deposits a letter of credit in accordance with Paragraph 6.2. 4.3. Conveyance and Use of Land for Water Systems. Hiluhilu agrees to allow access to the Kau Property for construction of the Water Systems. Hiluhilu also agrees to convey to the Water Board such Kau Property, including Well #1 Well Site and Well #2 Well Site that is required to be transferred to the Water Board as provided in the Water Agreement, as amended. There shall be no compensation paid to Hiluhilu for the conveyance of a portion of the Kau Property as set forth above and/or for the use of the Kau Property for construction of the Water Systems. 5. Water Systems Cost. 5.1. Initial Budget. Within sixty (60) days of the signing of the Development Agreement, Hiluhilu will provide to Kohanaiki a project budget setting forth the estimated costs to construct the Water Systems (the "Water Systems Cost"). The Water Systems Cost will include all design costs, construction costs (including bonding, construction management, insurance, labor and materials) for all Water Systems improvements, including outfitting of Well No. 1, the pump house for that well, pipelines, valves, water storage tanks and other water system improvements, fees and charges payable to the Water Board of the County of Hawaii, if any, and the cost to acquire easements or other real property interests for land that is not Hiluhilu Property. The Water System Cost shall include a reasonable estimate for contingencies. Provided, however, The Water Systems Cost do not include the following which are being provided by Hiluhilu, at no charge to this development venture: (a) the value of Kau Property that is used and/or conveyed to the Water Board for the well sites, pump house, water storage tanks, pipelines or other Water Systems improvements, and (b) the costs for the Pre- Development Agreement Completed Work done by Hiluhilu. The project budget shall also identify the work and costs required for delivering water to the Department of Water Supply's water system on Queen Kaahumanu Highway to provide water to the Kohanaiki Property which portion of the work and costs shall be referred to as the "Base Cost" and the balance of the work 4 3OM399\V-B and costs to deliver the water to the Kau Property (with connectivity to the University of Hawaii land to the south) shall be referred to as the "Additional Cost." The initial project budget described above shall be referred to as the "Initial Budget." 5.2. Approved Budget. After completion of the design and construction plans and specifications and before entering into the construction contracts to build the Water Systems, the parties shall mutually agree upon modifications to the Initial Budget which approved modified project budget shall be referred to as the "Approved Budget." The Approved Budget shall set forth all Water Systems Cost including a reasonable contingency reserve and shall also identify which Water Systems Cost are Base Cost and which are Additional Cost. The parties by mutual agreement, may, from time to time modify the Approved Budget. 6. Payment of Water Systems Cost. 6.1. Payment of Base Cost. Kohanaiki shall each pay fifty four percent (54%) of the Base Cost and Hiluhilu shall pay forty six percent (46%) of the Base Cost. Each party shall pay its share of the Base Cost in a timely manner prior to the due date as set forth below. 6.1.1. Escrow Disbursement Agreement. Prior to execution of the contracts for construction of the Water Systems, the parties shall enter into an Escrow Disbursement Agreement on terms mutually agreeable to both parties, to provide for the payment of the Base Cost and shall mutual select an Escrow Company to administer the Escrow Disbursement Agreement. The Escrow Disbursement Agreement shall require each party to provide a letter of credit from a bank and on terms approved by the other party, in the amount of each party's share of the Base Cost shown on the Approved Budget which can be drawn upon to pay the Base Cost as the work is completed and money becomes due or such other security agreeable to the other party. The Escrow Disbursement Agreement shall also provide that prior to obtaining an Approved Budget, Hiluhilu may deposit into escrow a letter of credit in the amount of $5,500,000 from a bank and on terms approved by Kohanaiki or such other security approved by Kohanaiki to secure its obligations under Paragraph 6.1 to pay forty six percent (46%) of the Base Cost. If Hiluhilu does elect to deposit such $5,500,000 letter of credit prior to obtaining an Approved Budget, then upon obtaining an Approved Budget, such $5,500,000 letter of credit shall be replaced by a letter of credit in the amount required by the Approved Budget. 6.1.2. Hiluhilu's Failure to Deposit Letter of Credit. Upon obtaining an Approved Budget, Kohanaiki may send Hiluhilu written notice (the "Notice") to deposit with the Escrow Company pursuant to the terms of the Escrow Development Agreement the letter of credit required by Paragraph 6.1.1. If Hiluhilu fails to deposit with the Escrow Company said letter of credit or such other security agreed to by Kohanaiki in writing, in its sole discretion, within ninety (90) days after Kohanaiki sends Hiluhilu the above Notice, then Kohanaiki may elect to pay for and construct the Kohanaiki Water System itself by sending Hiluhilu written notice at the address above of such election. If Kohanaiki elects to pay for and construct the Kohanaiki Water System by itself, then Hiluhilu's right to compel Kohanaiki to assign to it a portion of the Kohanaiki Commitment as provided in Paragraph 2 shall terminate but Hiluhilu's obligations and responsibilities under the Development Agreement shall remain in full force and effect except for its obligation to pay one-half of the Base Cost as set forth in Paragraph 6.1. 5 30273399N 8 6.2. Payment of Additional Cost. Hiluhilu shall be responsible for and pay in a timely manner all Additional Cost. The work represented by the Additional Cost shall be part of the construction agreement with the selected contractor only if Hiluhilu deposits with the Escrow Holder pursuant to the terms of the Escrow Disbursement Agreement a letter of credit from a bank and on terms approved by Kohanaiki in the amount of the Additional Cost as set forth in the Approved Budget. 7. Right of First Refusal between Hiluhilu and Kohanaiki. If Hiluhilu acquires 875 EU of the Kohanaiki Water Commitment as provided in Paragraph 2 above, the transfer by Hiluhilu and/or Kohanaiki of a portion of their respective Commitment for other than their respective development (the Palamanui Development for Hiluhilu or the Kohanaiki Development for Kohanaiki) shall be subject to following right of first refusal: the parry who wishes to transfer a portion of its Commitment (the "Offering Party") shall first send the other party (the ("Receiving Party") a written notice setting forth the number of EUs being offered for sale, the purchase price and the terms of sale; within 10 calendar days after the Receiving Party receives the Offering Party's written notice, the Receiving Party may purchase the EU's for the price and on the terms set forth in the Offering Party's written notice by delivering to the Offering Party written notice of election to purchase the EUs and complying with the terms of the Offering Party's written notice; and if the Receiving Party fails to send its written notice of its election to purchase or fails to pay the purchase price and comply with the terms set forth in the Offering Party's notice, then for a period of up to six months, the Offering Party may sell the EU's offered for sale in the Offering Party's notice to a third party for the price and terms set forth in the Offering Party's written notice. The right of first refusal set forth in this Paragraph 7 shall not be effective if Hiluhilu fails to acquire the 875 EU pursuant to Paragraph 2. 8. Governing Law. The Development Agreement shall be governed by the laws of the State of Hawaii. 9. Successors and Assigns. Each party respectively binds itself and its partners, successors, assigns and legal representative to the other party hereto and to partners, successors, assigns and legal representatives of the other party in respect to covenants, agreements and obligations contained in the Development Agreement. Neither party may assign its rights and obligations under the Development Agreement except as otherwise specifically provided in the Development Agreement or agreed to in writing by the other party. 10. Entire Agreement. This Agreement is the entire agreement of the parties and supersedes all prior agreements or understandings regarding the subject matter of this agreement. 11. Counterparts; Facsimile Copies. The Development Agreement may be executed in counterparts. Each counterpart shall be executed by one or more of the parties to the Development Agreement and the several counterparts shall constitute one document to the same effect as though the signature of all the parties were upon the same document. Facsimile copies shall be deemed to be originals. 6 1oz]J199w-n In Witness Whereof, the parties hereto have executed the Development Agreement as of the day and year first above written. HILUHILU DEVELOPMENT, LLC KOHANAIKI SHORES LLC By: KS DEVELOPERS LLC By: Its Managing Member By: KS INVESTORS, LLC Its Managing Member By: RUTTER DEVELOPMENT CORPORATION Its Mana 7 101]llnnN 9 In Witness Whereof, the parties hereto have executed the Development Agreement as of the day and year first above written. HILUHILU DEVELOPMENT, LLC KOHANAIKI SHORES LLC By: KS DEVELOPERS LLC By: G~ Its Managing Member By: KS INVESTORS, LLC Its Managing Member By: RUTTER DEVELOPMENT CORPORATION Its Manager 7 ~~~ss+wlaourana.eo ra ?.It o.m~o a s,{~ala sw 0=419 low f HHWAN Davelopmalk LLC P.O. Box 9007 Wo-Konm6 Hawai196745 Novamba 9, 2006 K ohmalm Sbaft . LLC olO RVITEK D6 AXAVMMa CORPORATION 18Ot2 CQwa4 StM 2o0 bviw Cdltaala' 2614 RE: DevWopmm:AraemeneExtmstm Darr Kob@=W S %om: I am writb 910 txmBem I m HHuMW Dwdopemg. LGC and KohmnaW Sbona, LLC bm armA 1 o exumd o0lovember 1, 2006 am in pumpq Y 1 of dw AGRUMMfWr 10 DBVEIAP WATER SYSTIEMS AND TRANSM WATSK RtGkM betwesr dram from November 1, 2006 to Febrw y 1. 2007. SlocvdY. nn us Mana6a Fxomsbn A. l }vV+' `e(~~~~15~?..Ie r2:l?~+~.4. 54u.as I IC . Darn: govesb~ r Si. 2006 M/CA 3Wcl 3kW yML11 6016E90646 WLT SNUIT/It BEFORE THE LAND USE COMMISSION OF THE STATE OF HAWAII In the Matter of the Petition ) DOCKET NO. A03-744 of ) HILUHILU DEVELOPMENT, ) CERTIFICATE OF SERVICE LLC ) To amend the Land Use District ) Boundary of Certain Lands ) situated at Kau, District ) of North Kona, County ) of Hawaii, Island of Hawaii, ) State of Hawaii. ) CERTIFICATE OF SERVICE I hereby certify that the foregoing SECOND ANNUAL REPORT; EXHIBITS A - J were duly mailed, postage prepaid to the following on this 161h day of October. 2007 Mr. Anthony Ching Mr. Lou Zitnik, Interim Director Land Use Commission UH Center at West Hawaii P.O. Box 2359 81-964 Halekii Street Honolulu, HI 96804-2359 Kealakekua, HI 96750 Mr. Abe Mitsuda Mr. Milton Pavao Office of State Planning Department Of Water Supply 235 S. Beretania, 6th Flr. 345 Kekuanaoa St., Suite 20 Honolulu, HI 96813 Hilo, HI 96720 rvn.num,m .c~zo.oeism ~ l Mr. Bruce C. McClure Christopher J. Yuen, Department of Public Works Planning Director County of Hawaii County of Hawaii 101 Pauahi Street, Suite 7 Planning Department Hilo, HI 96720-4224 101 Pauahi Street, Suite 3 Hilo, HI 96720 Mr. Maynard Young Rockne Freitas Director of Capital Improvements Chancellor University of Hawaii Hawaii Community College Auxiliary Services Building MC 378 1951 East-West Road 200 West Kawili Street Honolulu, HI 96822 Hilo, HI 96720-4091 Amy Self, Esq. Bryan Yee, Esq. Dept. of Corporation Counsel Deputy Attorney General Hilo Lagoon Ctr. 425 Queen Street 101 Aupuni St., Ste. 325 Honolulu, HI 96813 Hilo, HI 96720 Alan M. Okamoto Jerel 1. Yamamoto ,non.m,edi....<m..xnso re. ~M7r or jarry Kim Christopher J. Yuen Mayor Director Brad Kurakawa, ASIA LEEM AP (90untu of ~Ntxf Taff Depury Director PLANNING DEPARTMENT 101 Pauahi Street, Suite 3 • Hilo, Hawaii 96720-3043 (808) 961-8288 • FAX (808)961-8742 November 29, 2006 . Mr. Roger Hams Hiluhilu Development LLC P.O. Box 9007 Kailua-Kona, HI 96745 Dear Mr. Hams: Palamanui Master Plan Project District Ordinance No. 06-105 TMK: 7-2-5:1 We have reviewed the Palamanui Master Plan submitted on November 14, 2006, as required by Condition J of Project District Ordinance No. 06-105. While the conceptual layout of the various land uses is okay, we would appreciate the submission of more detailed plans for the small lots and multiple-family residential areas. Condition M of the ordinance also state that detailed plans shall be submitted with the Master Plan, showing street designs and cross-sections, and adjacent building designs. Condition M also states "As part of the Master Plan, the applicant shall submit plans for pedestrian movement through the project district, which shall identify areas where sidewalks will be included to permit safe pedestrian access to the Town Center and other important points in the development." With regard to the "mixed use area," please be informed that Condition Q states that "No retail commercial structures may be located closer than 1,500 feet from the Queen Kaahumanu Highway right-of-way." Should you have any questions regarding the comments above, please contact Norman Hayashi or me at (808) 961-8288. Sincer f; f C STOPHER Planning Director P;wpwin60\pc\]ettas\2006\harris palainanui mp 11-29-06 - - - cc: Planning Department-Kona 1 '1 >,,A, LX1 ~ai'i County is an Equal Opportunity Provider and Employer. EXHIBIT B