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HomeMy WebLinkAboutPD RECOMMENDATION (REZ 04-025)RPuaaDev-AmendREZ04-025.jwd 02-14-20 COUNTY OF HAWAII PLANNING DEPARTMENT RECOMMENDATION PUA'A DEVELOPMENT,LLC AMENDMENT TO CHANGE OF ZONE NO. NO. 05-115 (REZ 2004-000025) Upon careful review of the request, the Planning Director is recommending that an unfavorable recommendation of the amendment requests for conditions of Change of Zone Ordinance No. 05-115 be forwarded to the County Council. Since this recommendation is made without the benefit of public testimony, the Director reserves the right to modify and/or alter this position based upon additional information presented at the public hearing. This unfavorable recommendation is based on the following findings: The applicant, Pua'a Development, LLC,has submitted an application to amend numerous conditions of Change of Zone Ordinance No. 15-115, which was originally approved on August 5, 2005 to change of zoning from an Agricultural (A-5a) to a Neighborhood Commercial (CN-20) district for 14.973 acres of land. Concurrently, Ordinance No. 05-114 was approved to change the State Land Use Boundary designation from Agricultural to Urban. As the subject Change of Zone Ordinance No. 05-115 has time performance and infrastructure obligation conditions that the applicant has not met or reasonably fulfilled, the applicant is requesting time extensions as well as amendments to certain conditions of the ordinance, specifically Conditions B, C, E, F, H, I, V, W, Y, Z and BB of Change of Zone Ordinance No. 05-115. These amendments are to the following conditions: Condition B: (Time Extension to Pay Water Deposit) Condition C (Time Extension to Complete Construction) Condition E (Delete Requirement for Supplemental TIAR) Condition F (Modify/Delete Already Implemented Portions of Roadway Improvements) Condition H (Modify Requirement for Location of Spine Road within Project Site) Condition I (Modify Required Location of Kuakini Highway Intersection) Condition V(Delete Reference to Fair Share In-Lieu Credit for School Site and Improvements) Condition W(Modify Fair Share Provision) Condition Y(Delete Housing Requirement) Condition Z (General Plan—Affordable Housing) Condition BB (Modify Condition to Allow Administrative Time Extension The applicant originally proposed to develop a neighborhood commercial shopping center to primarily serve residents of the neighboring residential subdivisions and was not intended to be a regional shopping center. The original proposal included a 93,600 square-foot complex which would house varied commercial uses, such as financial institutions, restaurants, grocery store, office space and possibly a gas station. Also proposed was 500+parking stalls with appropriate accessibility requirements. According to the applicant, the shopping center project concept is part of this current proposal but includes a proposed reduction in the size of the commercial project from 93,600 square-feet to 72,600 square-feet. Also included in this current proposal is the inclusion of a"transit hub" in the form of a public bus transfer station, as well as the addition of 100 multiple-family residential units. There were several reasons cited for the amendment requests. According to the applicant, one of the reasons for not completing the project within a timely manner is that due to the global economic meltdown that occurred over a decade ago, securing the required financing to initiate and complete the project as represented was too difficult to obtain and thus they decided to prioritize exploring alternative uses of the property, and exploring sources for construction financing. The applicant believes that the current economic outlook is amenable, however time is still needed for the applicant to address the various conditions of approval, to incorporate and finalize plans, and to secure the required financing. Another reason given is that they have worked on compliance for several conditions, including the conveyance of a 5-acre site for a future school as required by Condition V, but it ultimately did not get approved. The subdivision of the school site from the subject parcel received tentative approval, however final approval was contingent upon making substantial infrastructure improvements that would be feasible only if the commercial and residential project were developed simultaneously. Lastly, although there has been no physical construction that has occurred, the applicant states that they have expended a considerable amount of"soft"funds. These funds include nearly$1 million spent for more detailed land use planning and the preparation of infrastructure construction plans for this project, as well as the adjoining residential project proposed by Suffolk Development, LLC. While the proposed requests meet the Urban Expansion LUPAG designation and are in an area served by existing infrastructure, several primary factors necessitate this unfavorable recommendation. First, the zoning of the subject property is not consistent with the goals, policies, and actions of the Kona Community Development Plan(CDP) and the General Plan. Second, the retention of the existing zoning would not result in an appropriate land use pattern at this time, therefore the Planning Director believes that a Project District zoning designation is more appropriate. Additionally, the Director feels that the requested time extension and amendment requests would support the continuation of a speculative entitlement of the subject property for the purpose of resale. The zoning of the subject property does not conform to the goals,policies, and actions of the Kona Community Development Plan and the General Plan and would not result in an appropriate land use pattern at this time. In considering time extension and other amendments to change of zone ordinances, the Planning Director must determine how the requests conform to applicable goals, policies, standards and courses of action of the current General Plan and adopted Community Development Plans. The subject change of zone ordinance was approved by the County Council on August 5, 2005,just over three (3) years prior to the adoption of the Kona CDP on September 25, 2008. The County Council also recently approved a slate of interim amendments to the Kona CDP September 18, 2019. The Land Use section of the Kona CDP serves as policy guide for County decisions regarding physical development in Kona. It establishes a suggested framework for future growth by identifying the County's major policies concerning the type and location of future development in order to meet the goals and objectives of the Kona CDP, which was created and approved with a tremendous amount of community input and involvement. The subject property is situated within the Kona Urban Area(UA) as designated by the CDP. Within the UA, growth is to be directed to compact villages located along proposed transit routes or to infill areas within, or adjacent to, existing development into the Transit-Oriented Developments (TODs). The CDP identified general locations of TODs within floating zones that are to become fixed pursuant to a Project District Rezoning process. The CDP identifies two (2)types of TODs based on type of urban core articulated for the area: 1) Regional Center which is intended to encompass larger population centers intended for a mix of residential, retail, commercial, employment and/or regional one-of- a-kind civic facilities like Kailua Village, Makaeo, and Honokohau and 2)Neighborhood Village, which are smaller in scale predominately residential, public/civic uses, or small- scale neighborhood- oriented commercial uses. The subject property and adjacent lands are situated within the Kahului-Puapua'a Village TOD, designated as a neighborhood village. CDP Policy LU-2.1 recommends that TODs be developed as compact,mixed-use villages, characterized by a village center within a higher-density urban core,roughly equivalent to a 5-minute walking radius (1/4 mile), surrounded by a secondary mixed- use, mixed-density area with an outer boundary roughly equivalent to a 10-minute walking radius from the village center(1/2 mile). As previously stated, the suggested location of a TOD is fixed through a Project District(PD) Rezoning Application. According to the Zoning Code, the project district development is intended to provide for a flexible and creative planning approach rather than specific land use designations,for quality developments. It will also allow for flexibility in location of specific uses and mixes of structural alternatives. The planning approach would establish a continuity in land uses and designs while providing for a comprehensive network of infrastructural facilities and systems. A variety of uses as well as open space,parks, and other project uses are intended to be in accord with each individual project district objective. A project district is an amendment to this chapter which changes the district boundaries in accordance with the individual project district. Furthermore, the PD zoning allows for the flexibility to develop any uses permitted either directly or conditionally in the RS, RD, RM, RCX, CN, CG, CV or V districts provided, that each of the proposed uses and the overall densities for residential and hotel uses are contained in a master plan for the PD and in the PD enabling ordinance. According to the CDP, the PD application process should further include the development of a conceptual master plan to comprehensively address a mix of permitted uses and density; street layout and standards, transit routes and facilities, and bike and pedestrian pathways; village center public facilities; infrastructure requirements and timing; neighborhood park and public space standards; a phasing plan; and calculation and treatment of density transfer area, if any. Additionally, the Project District would allow for an increase of permitted uses and densities versus the limitations of the existing zoning. The CDP also suggests the use of Village Design Guidelines (VDGs) as a guide to the development of the conceptual master plan(s). The intent of VDGs is to ensure that the TOD is comprehensively developed as a compact, mixed-use, pedestrian oriented development intended to increase transit use and manage traffic congestion. The VDGs encourage residences, shopping, employment and recreational uses located within close proximity with each other and efficiently organized to provide for the daily needs of the residents. The VDGs consider a range of housing types and affordability within pedestrian-oriented,human-scale neighborhoods, incorporate natural features, open space, and cultural features, provide efficient circulation systems for pedestrians, non- motorized vehicles, and motorists and motorists that serve to functionally and physically integrate various land use activities; and promote strong neighborhood identity and focus. The applicant has argued that the existing land use plans submitted with the amendment requests for the subject property and RM zoned property(Suffolk Investments LLC) adjacent to the west (makai) reflects the TOD concept by incorporating a transit center on the subject commercially zoned property, providing roadway connectivity, providing housing, addressing drainage and providing goods and services to the proposed and immediately surrounding communities. Since the adoption of the CDP, single-district zoning(e.g. RM/CN) is not appropriate for development within a TOD. The CDP identifies the Project District zoning district as the mechanism to achieve the mix of land uses and required densities to support a Transit Oriented Development. Thus, retaining the existing zoning will not allow the integrated approach required to develop the compact, walkable, mixed-use village-style development recommended by the CDP for neighborhood village TODs. The recommended use of the Project District application process and development of an associated conceptual master plan in accordance with the Village Design Guidelines is the only way to fully achieve with the preferred development pattern of the Kahului- Puapua'a Village TOD articulated in the CDP. The applicant also stated that conditions of approval of the requested rezone amendment ordinance could further implement the TOD concept. First, the applicant suggested a condition of approval could designate the project area as a"Neighborhood TOD" site, which would act as a policy statement guiding the development of adjacent parcels should they ever request an entitlement change. A second condition of approval would require plans for Plan Approval to comply with the Village Design Guidelines articulated in the CDP. According to the applicant, these proposed conditions would allow the Planning Department to guide the gradual development of the TOD with multiple owners, without the need of a master developer or master plan. The Director feels that the CDP has already identified the property and surrounding areas as a Neighborhood TOD, so this does not need to be done through conditions of approval of individual rezone ordinances. Furthermore, this scheme would unnecessarily create a new development process through separate zoning ordinances, when a more appropriate, community-vetted, comprehensive master planning process has already been established in the CDP for development within a TOD. Additionally, the proposed process would shift the burden to the County to act as a de facto project manager for development across multiple parcels by having to monitor implementation conditions of multiple rezone ordinances rather than one Project District ordinance and associated master plan as recommended by the CDP. Furthermore, the existing CN-20 zoning limits density to 1,250 square-feet per residential unit and to 20,000 square feet per building site for commercial uses. Therefore, the mixed-uses and densities recommended for TOD cores cannot be established under the current zoning. Finally, the applicant indicated that the requirement of a Project District is unworkable as the combined size of parcels making up the project area is approximately 29.85 acres (14.872 acres for Suffolk Investments, LLC and 14.973 acres for Pua'a Development, LLC respectively), which is less than the minimum 50 acres required by code for a Project District. Based on a review of County Real Property Tax (RPT) and State Department of Commerce and Consumer Affairs (DCCA) records, the subject 14.973-acre property is owned by Pua'a Development, LLC. Pua'a Development, LLC is also the only listed managing member of Suffolk Investment, LLC, which owns the adjacent property. Pua'a Development, LLC also owns all the properties immediately surrounding the subject property, including TMK: 7-5-017:023, TMK: 7-5-017:026 and TMK: 7-5-017:039, which totals 46.87 acres. Adding the land area of the subject parcel would create a total of 61.74 acres between parcels owned by these two connected entities. As further discussed below, the Director feels that given the shared ownership interest of the subject and surrounding parcels, there is sufficient land area to accommodate the minimum land area required for Project District zoning. Another negative factor for this unfavorable recommendation is the past segmentation of this are in securing planning entitlements. Subdivision No. 7814 was approved in 2004, to create a five (5)-lot subdivision, in which four(4) of the lots resulted in an area just under 15 acres in size. Please note, the State Land Use Commission rather than County Council must approve State Land Use Boundary Amendments for properties 15 acres or more in size. In 2005,both Pua'a Development, LLC and Suffolk Investment, LLC applied for and received approval for a State Land Use Boundary Amendment from an Agricultural to an Urban designation for their respective properties. At the time of processing, these applications did not go to the Land Use Commission as they were represented by the applicants as separate entities and were under 15 acres in size. The Land Use Commission commented that while they had no specific objections to the proposed project, they had strong objections to the manner in which they were being processed under HRS §205-3.1 (Amendments to district boundaries). They believed that both the Village Center(Pua`a) and the rental housing project(Suffolk) were part of the same Pualani Makai master planned community and the permitting was deliberately incrementalized to evade the jurisdiction of the Land Use Commission. Although the original 2005 boundary amendments were approved in an incrementalized manner, in order to implement the TOD concept and Project District Zoning recommended by the CDP, the applicant will be required to seek a State Land Use Boundary Amendment from an Agricultural to an Urban district for the surrounding properties that under joint ownership from the State Land Use Commission. The proposed time extension and amendments do not comply with General Plan Policy 14.3.5.7.2 of the Land Use—Commercial Development section, which states, Controls to prevent speculative practices on commercially zoned lands may be established" In the case of the subject, CN-zoned parcel, the applicant has gone well beyond the time performance requirements of the existing ordinance, which required completion of the development within five(5) years (by August 5, 2010). The applicant did not apply for an additional five (5) years through an administrative time extension,but if they had been granted such an extension construction of the proposed project should have been complete by August 8, 2015. The applicant waited over four(4) years to attempt to revive their stale ordinance and is only doing so now to either sell the property or secure a development partner for this and the adjacent commercial development. The applicant is now requesting to amend Condition C to require construction to commence within five (5) years to be complete within ten(10)years of the effective date of the amended ordinance. In addition, the applicant is requesting the inclusion of our standard administrative time extension condition, which would effectively double the applicant's construction commencement timeframe to ten(10) years and completion timeframe to twenty(20) years. For both properties, the Planning Department requested that the applicant provide a detailed development timeline and plan for how they intend to complete construction within the extended timeframe requested, including any proposed phasing or trackable benchmarks. In response, the applicant provided the name and website of a potential development partner for the projects but did not provide the detailed documents requested. Although the applicant has developed some engineering plans for drainage and roadways over a decade ago, there has been no recent demonstrated performance of other conditions of approval, such as developing archaeological mitigation plans, finalizing highway access approvals, completing a sewer study and solid waste management plan, flooding/drainage improvements, water system improvements (or paid outstanding water commitments for 142 units), and executing an affordable housing agreement. Based on past these performance deficiencies and a lack of the requested development timeline, the applicant has not demonstrated, to the Director's satisfaction, the ability to develop the property in a timely manner. Based on the preceding, the Director feels that the requested time extension and other amendment requests without any trackable benchmarks would support the continuation of a speculative entitlement of the subject property for the purpose of resale. Based on the Kona Community Development Plan, which was approved with a tremendous amount of community input and involvement and to achieve consistency with the broad goals of the General Plan and the more specific regional goals identified in the Kona Community Development Plan, the Planning Director does not believe retention of the current zoning is appropriate in this area and is recommending that the applicant(s) pursue a State Land Use Boundary amendment for the remaining two adjacent properties and submit a Change of Zone to a Project District for the approximately 60-acre area to establish the Kahului-Puapua'a Village Neighborhood Transit-Oriented Development. Based on the preceding findings, the Planning Director recommends that an unfavorable recommendation for the applicant's amendments to Conditions B, C,D, E, F, H, I, U, V,X and Z of Ordinance No. 05-115 be forwarded to the County Council.