HomeMy WebLinkAboutRECOMMENDATIONRDPMAmendSMA388jma 09-24-20
COUNTY OF HAWAII PLANNING DEPARTMENT
RECOMMENDATION
DPM ACQUISITION LLC, dba DIAMOND RESORTS INTERNATIONAL
FORMERLY PACIFIC MONARCH RESORTS, INC.)
AMENDMENT TO SPECIAL MANAGEMENT AREA USE PERMIT NO. 388
Upon careful review of the applicant's request against the guidelines for approving
amendments to a Special Management Area Use Permit, the Planning Director is
recommending that the request be approved by the Planning Commission. Since this
recommendation is made without the benefit of public testimony, the Director reserves the right
to modify and/or alter this position. This approval recommendation is based on the following
findings:
The applicant is requesting a five-year time extension to comply with Condition No. 2
time to complete construction) of Special Management Area Use Permit No. 388, which
was approved on December 14, 1998,to allow the development of a
commercial/condominium complex, with 7,007 square feet of retail space, forty eight
48)2-bedroom condominium units and related improvements on approximately 76,739
square feet of land. Final Plan Approval for the project was issued on June 6, 2007. On
September 19, 2008, the Planning Commission granted a five-year extension of the time
to complete construction. On May 15, 2014, another amendment was approved to allow a
five-year time extension or until May 15, 2019, to comply with Condition No. 2. The
most recent Plan Approval, dated May 22, 2017, approved four levels of timeshare resort
units above an existing concrete parking garage. The proposed development will consist
of forty six(46) 3-bedroom units with 119 parking stalls and perimeter landscaping.
Previously, the total combined area of 76,739 square feet consisted of parcel numbers 11,
16, 26, 78, and 80, and portions ofproperty(parcel numbers 11, 78 and 80)were used for
a mini golf facility. Since that time, the parcels have been consolidated into one parcel
totaling 76,739 square feet. Condition No. 2 states:
Construction of the proposed development shall be completed within 5 years
from the effective date of this amendment."
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The applicant cites the reasons for the delay since the approval of the previous
time extension amendment request, which include fiscal challenges with the previously
proposed design of the project that make it impossible to meet the current deadline to
complete construction. After assuming ownership of the property in 2013, Diamond
Resorts had the opportunity to conduct a feasibility study to determine the current
actual cost for the original design of the project. The study revealed that the actual cost
exceeded the budget allotted for the project by a range of 20 to 30 million dollars. The
applicant has stated that the design is currently being modified to make it economically
feasible for build out and completion. The redesign effort has caused significant delays
that have led to this time extension request.
Several building permits have been issued and final inspections completed for
construction of retaining walls, structural columns for the foundation and an elevated
concrete slab. An electrical permit was issued and final inspection completed for the
installation of empty electrical conduit. Construction is currently on hold pending the
approval of the amendment request to SMA Use Permit Condition No. 2 for a time
extension to complete construction. Additionally, the applicant states that the design is
currently in the process of being modified. Final plan approval stipulates that there
shall be no modifications to plans without prior written approval of such changes by the
Planning Department. The current plan approval expired on May 21, 2019.
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 are
not the result of their fault or negligence. According to the applicant, there were
numerous reasons for the delay, which include fiscal challenges with the previously
proposed design of the project that make it impossible to meet the current deadline to
complete construction. After assuming ownership of the property in 2013, Diamond
Resorts had the opportunity to conduct a feasibility study to determine the current
actual cost for the original design of the project. The study revealed that the actual cost .
exceeded the budget allotted for the project by a range of 20 to 30 million dollars. The
applicant has stated that the design is currently being modified to make it economically
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feasible for build out and completion.et'on The redesign effort has caused significant delays
that have led to this time extension request. Therefore, the non-performance was a result
ofconditions that could not have been foreseen by the applicant and are not the result of
the applicant's fault or negligence.
Granting of the time extension would not be contrary to the General Plan,
Kona Community Development Plan or Zoning Code. The General Plan designation
for this area is Resort Node, which allows for a mix of visitor-related uses such as hotels,
condominium-hotels (condominiums developed and/or operated as hotels), single-family
and multiple-family residential units, golf course and other typical resort recreational
facilities, resort commercial complexes and other support services. Only Major Resort
Areas are identified as Resort Nodes on the LUPAG Map. The property is zoned Resort-
Hotel District(V-.75). The Kona Community Development Plan(CDP), adopted in
2008, includes the subject property in the Urban Area. The granting of the time
extension would not be contrary to the objectives and policies of General Plan, the Kona
CDP or the Zoning Code.
Granting of the time extension would not be contrary to the original reasons
for the granting of the Special Management Area Use Permit. The original reasons
for the approval of Special Management Area Use Permit No. 388, and its amendments,
are still applicable today and the request is not contrary to these reasons. Based on the
discussion above, the request for a 5-year time extension to Condition No. 2 (time to
complete construction) of SMA Use Permit No. 388 would not be contrary to the General
Plan or Zoning Code nor the original reasons for granting of the permit. It is
recommended that the Planning Commission approve the request with the following
changes to conditions. (Material to be deleted is bracketed and struck-through; new
material is underscored):
1. The applicant, its successor or assigns shall be responsible for complying with all
of the stated conditions of approval.
2.Construction ofthe proposed development shall be completed within 5 years from
the effective date of this [second] third amendment.
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3. A sewer line shall be installed to tie in with the Ali'i Drive Interceptor Sewer
meeting with the approval of the Department of Environmental Management.
4. Ali'i Drive and Kahakai Road shall be improved along the property's frontage
with curb, gutter, and sidewalk construction, pavement widening, drainage
improvements, and relocation of utilities along the Ali'i Drive and Kahakai Road
frontages meeting with the approval of the Department of Public Works. The
street widening and roadside improvements required by this condition shall be
installed along an alignment meeting with the approval of the Department of
Public Works. Any portion of the subject parcel upon which the improvements to
meet this condition are installed, shall be subdivided and dedicated to the County,
upon satisfactory completion and prior to the issuance of a Certificate of
Occupancy, at no cost to the County.
5.Should any remains of unidentified historic sites such as rock walls, terraces,
platforms, or human burials,lava tube or cave systems 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 finds that sufficient mitigative measures have been taken.
6. Ifthe applicant should require an additional extension of time, the applicant shall
submit the request to the Planning Commission for appropriate action.
Further, should any of the conditions not be met or substantially complied with in a
timely fashion, the Director may initiate procedures to revoke the permit.
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