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HomeMy WebLinkAbout2008-11-24 TKOHALA LLC PLANNING COMMISSION COUNTY OF HAWAII HEARING TRANSCRIPT NOVEMBER 24, 2008 A regularly advertised hearing on the applications of Initiator PLANNING DIRECTOR (SMA 379) and Applicant KOHALA LLC (SMA 379) was called to order at 9:37 a.m. in the Hapuna Beach Prince Hotel, Hau Room, 62-100 Kaunaoa Drive, Kohala Coast, Hawaii, with Chairman Rodney Watanabe presiding. PRESENT: Rodney Watanabe ABSENT & EXCUSED: Lani Bowman C. Kimo Alameda Shelly Ogata Takashi Domingo Frederic Housel Andrew Iwashita Rell Woodward Ivan Torigoe, Deputy Corporation Counsel  Christopher Yuen, Planning Director Norman Hayashi, Planning Program Manager OgxkkhrEtihlnsn+Rs`eeOk`mmdq Jeff Darrow, Staff Planner Maija Cottle, Staff Planner And five people from the public in attendance INITIATOR: PLANNING DIRECTOR (SMA USE PERMIT NO. 379) Reconsideration on the Planning Commission’s action on the revocation of Special Management Area (SMA) Use Permit No. 379, which allowed the development of a 50-lot single-family residential subdivision. The property involved, owned by Kohala LLC, is located along the st southwest (makai) side of Akoni Pule Highway and the Kohala Ranch Subdivision, Kahua 1, North Kohala, Hawaii, TMK: 5-9-1:8. APPLICANT: KOHALA LLC (SMA 379) Reconsideration on the Planning Commission’s action on an amendment to Condition 4 (time to secure final subdivision approval) of Special Management Area Use Permit No. 379, which allowed the development of a 50-lot single-family residential subdivision. The property involved is located along the southwest (makai) side of Akoni Pule Highway and the Kohala st Ranch Subdivision, Kahua 1, North Kohala, Hawaii, TMK: 5-9-1:8. WATANABE: Agenda Item No. 1, the initiator is the Planning Director. It’s a recommendation to revoke Special Management Area Use Permit No. 379; this is regarding Kohala LLC. Agenda Item No. 2 is the applicant, Kohala LLC, and it also involves SMA 379. We’ve taken these up in prior meetings, and we’ve as the Commission been divided on this. So I’m wondering if it would be all right with the Commission that we discuss both matters jointly. EXHIBIT A 1 Of course, we’d have to vote on the matters independent of each other. And because I also realize that we have Mr. Housel who has, this is going to be his first meeting on this particular topic, so if we can agree to that, then I’d like to call on Jeff Darrow to provide all of us with the background and kind of briefly summarize what we’ve been through. WOODWARD: Mr. Chairman? WATANABE: Yes? WOODWARD: I have no objection, but I wonder if we should consult the representative to make sure that that’s okay with the representative. WATANABE: Mr. Lim – I see a nod. We’ve done this in the past. We’ll swear you in later. So why don’t we proceed that way? And you can begin, Mr. Darrow. DARROW: Thank you, Mr. Chairman. Good morning, Members of the Planning Commission. If I can direct your attention to our location map on the board. The area of this application is within the North Kohala district. More specifically, we are looking just north of Kawaihae; Kawaihae would be just south of the map. We are looking at the project location identified with a dot. It is directly across from the Kohala Ranch Estates subdivision, right on the makai side of Akoni Pule Highway that runs in a north-south direction. The property is located in the Special Management Area. It’s zoned RS-15 – or as far as the zoning goes, that is in question, but that’ll be something discussed at this hearing – currently, on the map it shows RS-15 zoning. The zoning around it is identified as Agricultural 5 acres; that’s the light green zoning. The blue identifies Agricultural 3 acres. Just to summarize, we did supply the Commissioners with a pretty detailed chronology within the background and recommendation that talks about the actions that have occurred over approximately a year and a half regarding these applications. There was a request for a time extension for Change of Zone Ordinance 97-102 to allow them time to secure final subdivision approval. Additionally, there was a request from the applicant for a time extension for SMA 379, Condition 4, the same condition to secure final subdivision approval. SMA was originally approved to allow a 50-lot single family residential subdivision on this particular property. The nd property itself is 37.88 acres in size. At our May 22 hearing, 2008, the Planning Commission approved to defer both the Planning Director initiated revocation of SMA 379 as well as the time extension request for Condition 4 of SMA 379. The deferral was to allow the County Council to finalize their actions on the pending change of zone that was occurring from RS-15 to RA 15 th acres. On October 13 the Mayor vetoed the Council Council’s downzoning of the property from RS-15 to RA-15. And on November 7, 2008, this month, the County Council failed to override the Mayor’s veto. So at this point the zoning is in question. And the Planning Director is requesting that SMA 379 be revoked, and the applicant is requesting a time extension for Condition 4 of SMA 379. This again is an aerial photo of the area, just showing you currently it’s undeveloped. We have the entrance to Kohala Ranch Estates directly across. EXHIBIT A 2 The Planning Department’s recommendation is that the Planning Commission approve the revocation of SMA 379, and deny the request of the applicant for the time extension of Condition 4 of SMA 379. This morning we received correspondence from the applicant, dated November 24, 2008, in which they are asking the Planning Commission to defer these matters until the zoning is resolved. WATANABE: Fellow Commissioners, do we have any questions of staff? Seeing none, I do have some questions then. Earlier, Mr. Torigoe, you and I were discussing the Planning Commission Rules. And I’m wondering if you might explain to the Commissioners the rule regarding time limitations on the SMA and what nay or yea or inability to come to a decision actually means. TORIGOE: Thank you, Mr. Chairman. I’m referring to your Rule 9-11.F, which is the rule that applies to both amendments and to revocation actions. Procedurally, basically we are at the point of reconsideration; you may recall that both the Director and the applicant had asked for reconsideration because there was a failure to make a decision by five votes one way or the other. And under Rule 9-11.F.3, the Department is supposed to place the application for reconsideration on the agenda for its reconsideration at the next meeting, and in the event the Authority fails to render a decision by a majority vote of the total membership at the next meeting, the application shall be considered as denied. So you may recall that at the last meeting on this matter that was to consider both of the reconsideration motions, but the parties agreed to continue both of these reconsideration matters until after the Council has had the chance to deal with the pending rezoning applications. And of course, as has been explained at the Council, the applicant’s request for extension of time for conditions on the RS-15 rezoning was denied. But the Council also went ahead, and basically took their own rode on the Planning Director’s request to go to RA-5a and instead attempted to go to a 15-acre designation, which the Mayor then vetoed. So here we are. And you are back in the position where under the rule basically, unless the parties agree to continue the matter further, the rule seems to indicate that you should try to make a decision on both of these motions for reconsideration. WATANABE: But I believe you also pointed out that if we fail, there are consequences, if we fail to make a decision either way. TORIGOE: Well, again, both the request for amendment of the condition and the request for revocation are under this rule, and if you cannot get five votes for either of them, then it appears that they both are considered as denied, which would leave you in a position of having this SMA Permit not revoked but neither with an extension of time. So it’s kind of sitting out there not, you know, not revoked but kind of immobilized – similar to where the zoning is now. WATANABE: Okay, thank you. Mr. Yuen, I assume you are not willing to concede to a continuance. nd YUEN: No. The agreement was, at the May 22 meeting, that we would continue it until final Council action on the pending zoning matters. If there are not five votes either way, EXHIBIT A 3 there is not a final resolution to the issues. But the SMA Permit has to be consistent with the zoning. At the Council the issue was not, there were no votes in fact in favor of extending the RS 15,000-square foot zoning; that was defeated eight to nothing in Committee and seven to nothing at Council at first reading. The issue at Council is between being a 5-acre zoning and a 15-acre zoning. So given that the SMA Permit should be consistent with the zoning, I would urge the Commission to revoke it today. If the Commission cannot reach a decision, then both sides have to live with the consequences of what that means. There will have to be future Council action on the zoning. WATANABE: Okay. I have one further question for either of you from the legal standpoint. I agree that the SMA, however it’s approved or disapproved, must agree with the zoning that is in place, and the zoning is in question. But assuming the time extension for this particular SMA were granted, that would not imply that the SMA would continue subject to any zoning changes in its current state because it’s, shall we say, highly unlikely that RS-15 would remain the zoning of the property. Am I correct in that in which case it would need to be adjusted? YUEN: Well, actually to develop the property there are administrative permits that are necessary, and in my view those could not be granted under the present state of the zoning where they are not in compliance with the time conditions of the zoning, and the Council has refused to extend it. WATANABE: Okay. Do we have any further questions for staff? Then, well, before I forget, we don’t have anyone signed up from the public to testify on either of these matters, either Agenda Item 1 or 2. So Mr. Lim, may I call you up? And let me swear you in. Do you swear or affirm to tell the truth now before the Planning Commission? LIM: I do. WATANABE: And for the record name and address, please. LIM: I’m Steve Lim from Carlsmith at 121 Waianuenue Avenue in Hilo. I represent Kohala LLC. WATANABE: Thank you. I apologize; I didn’t mean to enter into these discussions without having you available for comments. So I guess this will be a good time for you to put forth your views. LIM: Okay. Just a short wrap-up in terms of where we started probably some two years ago or so – or more. The applicant, Kohala LLC, was just at the point of coming off of a failed joint venture to develop the property, and was starting to have us work on the – you know, there were significant archaeological and access issues over there – so we were starting to work on the plan to come in with what was going to be a reduced density project down from the 50 lots that were allowed in the SMA Permit 379. It was at that point – before we started, we were starting to work on our annual report – at that point the Planning Director filed his notice with the Planning Commission to revoke the SMA Permit and the zoning. So here we are some EXHIBIT A 4 two plus years after the fact, and essentially, legally, where we are is or the applicant is is exactly the same place we were when we started. We have a Change of Zone Ordinance that requires a time extension in order to be valid. The Planning Director uses that word, “valid” or “invalid” or “lapsed” or those types of word with the indication that the Change of Zone and the SMA Permit are somehow dead. That’s not the case. The Director says that the RS-15 zoning has lapsed; that’s an incorrect statement of law, and I think your Corporation Counsel can clarify that. During the initial hearing that we had on this matter is that I think that the words have been “put in limbo.” The Change of Zone is in limbo; it’s still effective, it’s still a law, it’s still the zoning for the property. And until such time as the Council takes action to rezone it to another zoning, then the RS-15 zoning still is in effect. Same thing with the SMA Permit. Until the Planning Commission takes final action to revise or revoke the SMA Permit, that also is in effect. These are the due process things that we’ve been talking about all these times. Turning to the particular question at hand is, you are on reconsideration of the initial April 18, 2008, Planning Commission’s failure to reach a decision either for the time extension or for the revocation of the SMA Permit. At the next Commission meeting on May 22, the parties and the Planning Commission agreed that we would further defer this to the final action on the Change of Zone. As you know, the Change of Zone went up and, as Mr. Darrow explained, was amended by the Council to a 15-acre zoning, and then subsequently vetoed by the Mayor, and the Council failed to override that veto. So like I said, again, we are back still with our RS-15 zoning for the property. And the applicant’s desire all the way through this even from day one has been to come in with a revised development proposal, and it will in all likelihood be less than 50 residential lots on that property; however, because we’ve had to basically fight for our life on this one, we just stopped the effort two plus years ago, and we have been fighting ever since. So that’s why I submit my letter to you of today, which basically ask that the Planning Commission again defer the final decision on the SMA Permit. And the reason why we want to do that is because we want to be able to work on the project proposal without having a threat of litigation or any type of formal action. I mean, the developer is, as Mr. Yuen says, the developer cannot do anything on the property without getting further permits. And the applicant feels that the best way to do that is to keep the status quo like we’ve had since two years ago and keep deferring this. Another big reason for a deferral, because the first reason why you deferred the decision on this reconsideration was in order to get a final determination on the zoning, and the Director has said to you that he intends to submit another change of zone or downzoning probably to the RA-5 acres zoning, and so that’s another reason why we ask that the Commission not make a final determination on the SMA Permit. What my anticipation is that, what the applicant is going to do is we’ll develop a project plan and come back in to the Planning Commission under the existing zoning and under the existing SMA Permit for something less than the 50 lots that’s in Special Management Area Permit 379 at this time. At that point in time – we don’t have to lose our zoning, we don’t have to lose our SMA Permit – we can come in and you can make the decision on what the appropriate development is on the property, and address all issues at that time, rather than have me on, you know, one hand fighting in court and on the other hand trying to develop the property here. EXHIBIT A 5 So that’s why we are asking for a deferral. We think that it doesn’t hurt either side. We think that the Commission has inherent ability to continue this one more time on a deferral, and that Rule 9-11 allows you to do that. So we ask for your consideration in deferring this matter until such time as we can come back in with a new development proposal and convince you, you know, where you can say yes or no; but basically we want to come back in without having a threat of the litigation, because that is the difficult part for us. Once we have the threat of litigation, you know, the developers would just, the applicant in this case, would just freeze; why would you go and spend a lot of money trying to, you know, do your project proposal when you have a threat of litigation? So that is our request. And we think that the Commission has a legal power to do that. You’ve done it before. And because of the pending downzoning that the Director may be filing before he leaves, it’s another reason to defer things. Thank you. WATANABE: Thank you, Mr. Lim. Do we have any questions of Mr. Lim? Seeing none, I do have -. Oh, Mr. Iwashita? IWASHITA: Thank you, Mr. Chair. I guess my concern is that from the planning perspective in my view the density for this property is inappropriate in the big picture, especially dealing with environmental concerns and all of those. And so what concerns me about your comments this morning is that you’ve indicated that any proposal that the owner is going to consider is basically looking at maintaining the existing zoning on the property. Did I mishear that? LIM: It’s kind of half and half. We want to maintain the existing zoning and the existing SMA Permit. But, like SMA Permit 379, we want to come in for an amendment to the Permit for something less in density, something that the Commission can accept, and that acknowledges the public access – and there’re a lot of archaeological sites on the property – so yes, we would like to come in. And this is not unusual; it’s very similar to what happened in the – if you look at the map there, the property one, two, we move from us to the, I guess it’s the south towards the Kawaihae side, you’ll see, I think that’s probably a brown color – that’s a multi-family zoning and that’s the Kohala Waterfront property, which was developed under multi-family zoning but they developed 1-acre lots generally in that property. And so we would like the same opportunity without loosing our legal rights to come in with a downsized proposal that the Planning Commission can accept for development of this property. IWASHITA: Well, I guess my concern would be that, from again the planning perspective and my view, that the zoning ought to match the nature of the development and not -. Because if you don’t change it to reflect whatever this new proposal you are talking about, then what it does is it allows the zoning that in my view is inappropriate at the present time to remain in place, and that can be used later for further development of the property. So my concern is as far as your request and what I’d like to get clarified is whether or not any proposed downsizing of the development would include, you know, a downzoning essentially. LIM: I haven’t asked my client specifically on that issue, but that has been done in the past by the Planning Commission and the County Council; we would consider that. Essentially what we would be doing is, you know, the way it’s happened before is the SMA EXHIBIT A 6 Permit is accompanied by a change of zone or downzoning to match the density that has been agreed upon by the Planning Commission. IWASHITA: Thank you. Thank you, Mr. Chair. WATANABE: Okay. Any further questions? I do have one, Mr. Lim. You mentioned, I believe it was Rule 9-11, that it’s within our authority to defer action on this? It’s my understanding from our Corporation Counsel that actually both parties need to agree and, as you heard in earlier testimony, the Director is not willing to concede to a deferral at this point. Could you point out for us maybe what section of Rule 9-11, which would specifically allow or provide the authority for this Commission to defer action? LIM: I think that the Commission’s Rules and the Robert’s Rules of Order would support the decision by the Commission or the majority of the Commission to do the deferral, to approve a deferral, although your Rule 9-11.F.3 states that if the Authority fails to render a decision by a majority vote of its total membership at the next meeting, the application shall be considered as denied, and that the Planning Director has withdrawn his consent to further defer this. I think that his consent is irrelevant; this is the Planning Commission’s Rules, this is a Planning Commission’s call on a deferral. As a practical matter, you’ve already deferred thnd it one time from the April 18 meeting to the May 22 till today. WATANABE: I have another question – follow-up, sort of, to what I asked Mr. Yuen with regard to the SMA agreeing with the zoning issue, and I’d like to hear your opinion on that. In other words, if it were deferred or a time extension granted for the SMA, what do you feel are the ramifications subsequent to a final decision on the actual zoning? LIM: I’m not sure I understand the -. WATANABE: In other words, let’s assume that – maybe I’m assuming too much – let’s assume that you are not able to retain the RS-15 zoning, which would mean that it would likely change to something else, probably some Ag; the Director had recommended Ag-5, the Council had proposed Ag-15, you have suggested possibly Ag-1 or 2 or whatever, you know, you feel the Planning Commission might be willing to agree in an SMA on the downsizing, kind of issue. What do you think are the ramifications, if we just -? Well, I guess, it seems to me like we can’t defer; we have to decide one way or the other, so -. LIM: I actually disagree, but -. WATANABE: So if we can’t defer because the Planning Director would not concede to a deferral, what do you feel are the legal ramifications, if we granted a time extension based on the existing SMA? Do you see what I’m getting at? Or are we then opening the door with the existing SMA, saying that you have up to 50 units now, everything is off the table again? LIM: Yeah, I think if you were to vote to grant the time extension to Kohala LLC, we would still have the impediment of having the Change of Zone that needs to be extended on the same time frame. So we wouldn’t be able to move forward, but then we EXHIBIT A 7 wouldn’t have to appeal in court; that’s in part what I’m trying to avoid is because I feel that, you know, we can’t go forward anyway, let us go back to the drawing board and continue our development efforts rather than spend the time fighting this in court. Because the net effect of having a denial on both of ours – which is what I’m anticipating the vote would be, if you took a substantive vote on Items 1 and 2 on the agenda today – is that we both should be appealing to the Third Circuit Court. Because, you know, if the Planning Director’s application to revoke the SMA Permit is effectively denied for a failure to reach a five-vote either which way, what does that mean? Does that mean my SMA Permit 379 is good now? I don’t know. To me, there’re a lot of uncertainties there. And it’s really somewhat of a useless legal exercise for us to be in court and appeal a final decision by the Planning Commission. That’s why I’ve asked for the deferral. Everybody will stay status quo. There is no court action. I can go concentrate on the development of the property, and bring something back to you that’s acceptable. WATANABE: Any further comments from anyone else? Yes, Mr. Housel? HOUSEL: Mr. Lim, you’ve mentioned that you would, with the deferral, you would consider reducing the number of lots in this property. Do you have an idea how many lots you would have in mind? LIM: No, we never got to that point. We tried to talk with the Director during the proceedings on this case in which you had directed us to discuss this, but we never got anywhere on that. So that’s why I’m saying, you know, let us go back to the drawing board and let us restart our planning effort again and come back to you. And if we can’t convince you that that’s a reasonable proposal, then deny the Permit. HOUSEL: Okay. WATANABE: Follow-up? Do you have a follow-up? HOUSEL: No. WATANABE: Well, for your information, historically we were discussing half the density, 25. There was a proposal, and that was not accepted by the Director, though. Mr. Woodward? WOODWARD: Are we ready for comments, or are we just still in the questions phrase here? WATANABE: Very good question. I’ve kind of moved forward, haven’t I? Yes, Mr. Yuen? YUEN: I’ll keep it brief. There are just a couple of brief things I’d like to say in response to what Mr. Lim has said. One is that I agree with the term, “limbo;” I actually used this with the Council. I don’t think we have an argument about that the zoning is in effect in limbo, and that the Council needs to make a decision on the zoning. As far as instituting litigation, that’s entirely up to Mr. Lim and his client; no one is forcing them to do that. If the EXHIBIT A 8 time extension is not approved today or if the Planning Commission votes on this today, nobody is forcing them to sue. They can come in with a new SMA Permit request. The zoning has to be cleaned up for it to make any sense. But the process to amend the present SMA Permit is not significantly different to the process for introducing a new SMA Permit; you have to provide the same notice to surrounding owners, the same public hearings and the like. And finally, you know, the procedural things get really mind boggling, and so, as the Planning Director – I mean, my basic role is to advocate for what I think is the proper land use for the property – and since I do not, without arguing the point again, I’ve said before that the 50-acre (sic) SMA Permit and RS-15 zoning is not the proper land use for the property, I’m going to continue to advocate that. And as you’ve noticed before, I don’t vote on that; the Planning Commission and the County Council get to vote on it. My role is simply to present what’s a good land use and what’s not a good land use, and then you get to vote, and the chips then fall as they will. WATANABE: Thank you. Mr. Torigoe, I believe you had some comments? TORIGOE: Yes, thank you, Mr. Chairman. Just for procedural purposes, you know, this remains a contested case type of hearing, and I think in the previous proceedings the parties had agreed to the fairly informal procedure, and there have been some proposed Findings I believe filed. At this point I just want to make sure that the parties are in agreement. So far you’ve basically allowed what amounts to like a final argument on the reconsideration in a very informal fashion; and if the parties are okay with that and the Planning Director sitting with the Commission – sometimes we ask the Planning Director to sit down at the party table. I just want to make sure on the record that the parties are okay with what’s been going on so far, and let’s see where you want to go from here. If you intend to allow for further final argument, then we want to make sure the parties are okay with keeping on going the way that we have been. WATANABE: Okay. Mr. Lim, are you okay with this sort of informal process of a contested case hearing? th LIM: I think we were okay up until the April 18 hearing, but I don’t think I can say I’m okay with it right now. TORIGOE: So in that case I suppose you should find out what Mr. Lim would like to see happening in terms of procedure form this point, and discuss it with the Planning Director. LIM: Well, this is another reason why I feel we should defer things, because what should happen really is that we should submit new proposed Findings of Fact again to the Commission because there were significant things that have happened with respect to the applications in the meantime with respect to the veto and all the other things. So that’s the type of thing that I cannot waive at this point in time. WATANABE: Thank you. Your point of view, Mr. Yuen? YUEN: I think we are fine for the Commission to take a vote based on what’s on the record. EXHIBIT A 9 WATANABE: Mr. Woodward, you have something to add? WOODWARD: Well, are we able to take comments, or we need a motion first? WATANABE: No, I think we are in discussion. You know, the hardest part for me right now is the technicality of Mr. Lim now not being willing to handle it informally without Findings of Fact. But it’s on the table, so we may as well discuss it. WOODWARD: All right then. When we voted initially to defer this, we were trying to avoid the situation where essentially the tail was wagging the dog.What’s really important is a final decision regarding the zoning of this property, and then the SMA will follow that. So to make a preemptive strike against the SMA until we know what’s going to happen to the rezoning, I think, again, the tail wagging the dog, the cart before the horse – use whatever you’d like. But I am still in favor of deferring this until we have definitive action by the Council, signed by the Mayor. The zoning is in limbo; there is no reason this shouldn’t go along with it. WATANABE: Thank you. Anyone else has any further comments? Yes, Mr. Housel? HOUSEL: I had a question to Mr. Yuen. You state here in your letter that you intend to reintroduce a rezoning to I think it’s RA-5. Is that contingent upon the decision today? YUEN: No. HOUSEL: Okay. So is there, I mean, with the transition, with your leaving, is it going to be the future Planning Director’s decision whether or not to file that? YUEN: The incoming Planning Director, if it’s not filed before the changeover in term, could withdraw the request. So yes, it’s completely up to the Planning Director. However, there are only three parties that can initiate a zone change: One is the property owner, the other is the County Council, and the third is the Planning Director. I think we all agree that something has to be done. So you know, I initiated the 5-acre zoning. Unfortunately, the Council, instead of initiating their own bill, amended the 5-acre bill with a 15-acre bill; otherwise, the 5-acre bill would still be conceivably alive at the Council. But now it was amended. And you know, I did recommend to the Mayor the veto of the 15-acre bill as being too drastic a change in landowner’s entitlements. And then to go to 5-acre, the only alternative at this point is for someone to introduce 5-acre zoning. As I said, there are only three parties that can do that. HOUSEL: I see. Thank you. WATANABE: Thank you. Mr. Iwashita, do you have comments? IWASHITA: Given Mr. Lim’s statement about how we are proceeding as a contested case matter – this is a small tiny procedural thing – I don’t know if that really meant, you know, like, the Director should really be sitting next to him now as far as any further proceedings. EXHIBIT A 10 WATANABE: We could do that. But I think he did state that he would love to have an opportunity to revise the Findings of Fact, Conclusions of Law that were filed, which then both parties would file and comment on each other, so -. Is that correct, Mr. Lim? Did I interpret your response correctly? LIM: Yes, I’m going to be reserving all of our rights under Rule 4 of the Planning Commission and Chapter 91 with respect to the contested case hearing on the SMA. WATANABE: Okay. In my limited legal knowledge that means we are in limbo again procedurally, because technically we had Corporation Counsel say you have to decide at this meeting one way or another, or it’s denied. On the other hand, we have Mr. Lim saying that I’m not going to agree to any continuance, and I’d like the opportunity, and I object to the informal contested case hearing methodology that’s currently taking place. And then we have the Director saying I’m not going to agree to a deferral, which means according to Corporation Counsel we can’t defer. Now, borrowing comments from others, let me add my two cents into this, if we might. We’ve been through this for quite a while now. I agree that the current RS-15 zoning is much too dense to develop within this. And so I think a change of zone is appropriate, whether that change of zone is Ag-5 or RA-5 or something else – I’m not certain. It seems to me if we can’t defer and if we have to take action one way or another, granting the time extension on Agenda Item 2 for Kohala LLC would seem appropriate to preserve their rights; however, there is no guarantee that the courts will decide that RS-15 is inappropriate. So my question for Corporation Counsel is, if we were to grant the time extension, which would in theory preserve their rights, but the courts decide that RS-15 is fine, then what happens? Does that mean the applicant can go and build 50 homes there, which I think everyone on the Commission agrees is too great a density? TORIGOE: Basically you are asking if the Commission goes ahead and grants the request for extension of time on the SMA Permit, and then the courts basically say that RS-15 is okay, then what happens. Basically, I mean, that’s a very general way of stating it, but I think generally speaking, obviously if you’ve given a go-ahead on an SMA Permit and the courts basically okay a zoning that allows for what you’ve permitted in the SMA Permit, then they can go to the extent of whatever the SMA Permit allows. But if they want to go beyond that, then they’ve got to come back and get the SMA Permit changed. WATANABE: That’s right. That’s what I was trying to clear up, and that’s the quandary for me anyway because, as I stated earlier, I really believe that the density has to be reduced. And this is why in our previous meetings I have really been reaching for both parties to come to some type of compromise, so that we wouldn’t have this limbo situation. Even if it didn’t mean that the zoning would comply with the actual SMA Permit, you know, the zoning could be changed subsequent to the SMA density being worked out. But we’ve never been able to achieve that. So that’s why I’m stuck. Well, do you care to respond to that, Mr. Torigoe? TORIGOE: Well, it sounds like what Mr. Lim is asking for is basically, well, he’s asking for a deferral, so he can work on something that the Commission might be able to support. And then if he gets that, then he hopes to go to the Council and get the zoning adjusted to be able to go ahead with that. EXHIBIT A 11 And I’ve been looking at your Rule 9-11, which in honest face says that you’ve got to make a decision, you know, by the next meeting. I’m also looking at your contested case rules now. And Rule 4-3 says, in case of conflict of time and notice requirements, basically Rule 4 applies. There is also Continuance, Rule 4-5, where the presiding officer may postpone or continue any hearing to ensure the orderly and just conduct of a hearing. I guess what I’m trying to say is that there is a possibility; if there is a good reason, you know, that would be unjust to make a decision at this point, then I could see making your argument that you could continue the hearing on the reconsideration. But it would have to be I think a pretty good reason that would be unjust to go forward, the rule as is written in Rule 9-11. Mr. Lim mentioned that he felt that they should be able to submit further Findings of Fact, Conclusions of Law because of what has transpired between then and now; I suppose that would need to be explored a little bit because in some sense what happened between then and now amounts to nothing happening, right, because everything went up and everything failed, so -. In that sense I guess my question is, if nothing really happened between then and now, then is there anything that really requires new proposed Findings of Fact, Conclusions of Law to be presented and considered and argued over. WATANABE: Thank you. Mr. Woodward? WOODWARD: Thank you, Mr. Chairman. We are dealing with a lot of hypothetical’s. And right now we have no idea what the County Council is going to do; but they’ve got to do something. They can’t do anything with this property until they either get a time extension or a change of zone. So it doesn’t seem to make any sense to me to act on this matter. And I think there is a good reason to defer it. Mr. Lim would like to submit more Findings of Fact. And again we are in a situation where this is not going to determine a final outcome of this property. We really need to know what the County is going to do with the zoning; they’ve either got to give a time extension or they’ve got to rezone it. And for that reason, voting on this particular issue would have no effect other than perhaps just throw this thing into court, and I don’t see any particular reason that that needs to be done.So again, it’s dependent on the County Council and then having their initiative signed off on by the Mayor as far as the rezoning; otherwise, this is all moot. WATANABE: Thank you. Mr. Domingo. DOMINGO: Mr. Chairman. To go on further with the discussion with regards to finding a legitimate reason to not defer or any reason of that sort, you know, it’s contained in the Mayor’s veto message; it says, “The County government operated in a land use system where we did not take into account the legitimate interest of private owners of property will be free to make various restrictive controls on this and other lands.We must, however, understand that the property is privately owned and we have to look for a balance between the desires of the public and the interest of the property owner.” And you’ve alluded to that fact many times whenever we deferred action on this issue; you said that we’d like to have the applicant and the Planning Director sit down and see how we could come to some amicable decision where both parties can buy into it. You made that point so strongly. WATANABE: Exactly. EXHIBIT A 12 DOMINGO: And you know, even here the Mayor himself is amplifying that very same approach to resolving this matter. So you know, I think to defer is a proper motion to make, and a legitimate and reasonable one to make for this Commission. WATANABE: Thank you. Mr. Woodward? WOODWARD: Thank you, Mr. Chairman. I would say, too, the point you made, while nothing specifically has happened with the SMA Permit, a lot has happened that affects the SMA Permit; that is a negative recommendation from the Commission sent to the Council to rezone Ag-5a. They not only didn’t listen to that, they decided they want to rezone it Ag-15a. And then the Mayor vetoed it. So I’d say a lot has happened since we initially deferred this – not specifically with this Permit but having a direct bearing on it. And I think that, and the fact that Mr. Lim would like to submit more documents, is ample ground for not making a decision now that is not going to make any sense depending on what the rezoning is. WATANABE: Any further comments? Mr. Iwashita? IWASHITA: Thank you, Mr. Chair. My inclination now is to agree with Commissioner Woodward as far as essentially the need to have the zoning matter resolved, and that that really would impact obviously the need or whatever action we might want to take on the SMA extension – that’s procedurally. Substantively, I view myself as someone that really looks at property rights and protecting the owner’s property rights as being paramount. That has to be balanced, though. And I think as Commissioners who are required to enforce the law including the Constitution of this State, which has a specific mandate to protect the environment; in SMA applications we really, that’s our main concern, is how does any proposed development affect the environment. I want to make it clear on the record that any owner of property in this State is subject to those considerations and the limitations on the use of property imposed by the Constitution and all of the zoning laws and use control laws that we have in place. But the bottom line is that I agree and I would cast my vote in favor of a motion under Rule 4-5(c) in which the Chair would continue this matter under some terms and conditions -. WATANABE: You are looking at the Contested Case Hearing Rule 4 -. IWASHITA: Yes, Contested Case, right, 4-5(c). Because in my view the limbo status of the zoning on this matter really is a, to me, in my mind, determinative, and puts into, you know, I believe that in and of itself allows us, and the request of the applicant, the owner – not necessarily the applicant – but the owner, you know, to have this matter continued. I think for all practical purposes the zoning matter needs to be resolved somehow, someway, and then after that, if there is no agreement going forward after that, we can deal with the SMA request. WATANABE: Okay. Well, assuming this is – I see you, Mr. Woodward – but assuming this is quasi-contested case hearing, I think we should -. IWASHITA: It’s not “quasi;” this is a contested case. EXHIBIT A 13 WATANABE: We should allow Mr. Yuen to comment on the more recent comments that Corporation Counsel provided with regard to the contested case hearing Rule 4 – what is that again – Rule 4-5 and whether the presiding officer actually has the ability to defer the matter. YUEN: We are here on the two motions to reconsider the previous actions that the Commission took, which were accompanied by proposed Findings of Fact, Conclusions of Law. Rule 9-11F says exactly what has to happen; and it says that if reconsideration is not granted, the application is denied. WATANABE: Okay, thank you. Mr. Woodward? WOODWARD: Well, there seems to be some legal disagreement here. But right now both the zoning and this Special Management Area Permit are in the same legal limbo. They still have the RS-15 zoning status, but they haven’t got the time extension, which means it’s essentially worthless – they’re nowhere. And then on the SMA it is exactly the same. So again, I don’t think it makes any sense to vote on this when the zoning is paramount on it obviously. So I would move, if it’s appropriate -. WATANABE: I believe it’s the Chair’s authority, or at least that’s -. WOODWARD: Okay, well, I might suggest then to the Chair that we consider a deferral until either a time extension is granted for the rezoning or the area is rezoned by the County Council and signed by the Mayor. WATANABE: Thank you. Any further comments from any of the other Commissioners? Okay. To summarize then, we certainly have our differences in the interpretation of the Rules, however, it’s been pointed out by and I guess agreed to by at least two of the attorneys in the room that the power to continue under Contested Case Hearing Rule 4-5(c), the Chair has the authority to defer. However, Corporation Counsel also did point out that there ought to be a good legal reason for deferring. So let me try and summarize in my layperson’s terms what I feel are legal reasons for continuing. No. 1, it’s been pointed out throughout the discussions that the SMA should agree at least in zoning or in concept with the zoning laws. We recognize that the zoning ordinance is in limbo because the Council wants RA-15 whereas the current zoning is RS-15 – I’m getting a little lost in my thoughts here – so I think until that zoning becomes law, which, as Mr. Woodward pointed out, the Council would have to vote on and approve and the Mayor would also have to approve, whatever we do with the SMA at present will be sort of moot. In addition, if we were to make a decision, as I pointed out earlier, on granting a time extension on the SMA, as Kohala LLC is requesting, it would allow for a maximum of 50 single- family residences, which I think the Planning Commission is in agreement is too high a density for the property; however, we have no way of predetermining what the courts may decide in the future with regard to the zoning case. So I think it behooves us to defer this matter on both Agenda Items 1 and 2 with regard to the revocation of the SMA and also the time extension of the SMA, so that the Planning Commission, when it does make its final decision on either, we’ll at least have the final decision on the zoning, and the SMA and the zoning will be compatible with one another. Hopefully, there are no objections to deferring. EXHIBIT A 14 DOMINGO: That’s your ruling, Mr. Chairman. IWASHITA: Mr. Chair? WATANABE: Yes, Mr. Iwashita? IWASHITA: I am loathe to have a contested case hearing, which this is, just hanging out there in limbo based on some prospective hope that something is going to be done at some time in the future, and I would ask the Chair to set at least a -. WATANABE: Time frame? IWASHITA: Time frame for a status report on this matter by next May meeting on this side, so that this doesn’t get lost out there, you know. To me there needs to be a time frame and checking procedure. WATANABE: I understand your concern for that, and I thought in many ways I voiced the time frame by saying that a final decision needs to be made with regard to the zoning and it has to become an ordinance. I realize that that may take -. IWASHITA: Twenty years. WATANABE: It may take years. But without, let me point out that without the zoning and without further approvals from the Planning Department, the SMA as it exists is meaningless anyway and no development can occur anyhow. IWASHITA: I understand that, Mr. Chair. But my concern is that this is a pending contested case hearing, procedurally, right? So what I really don’t want is to have this matter just held in limbo in the Department for years and years and years, which it will be if the zoning is not changed, you know, in the foreseeable future. So administratively to me at some point, if there is no real prospect of the zoning being changed, that something ought to be done about this contested case hearing, that this should not be left open for years and years and years. So my suggestion would be, have a status review of this contested case hearing in the May meeting on this side, I guess, and the new Commission. WATANABE: Okay. Mr. Woodward, do you have some comments? WOODWARD: Well, yes. In point of fact, until they get either a change of zoning or a time extension on their current zoning, as you were mentioning, this is just a piece of paper that is absolutely worthless. And to bring this back in May, well, there will be two Commissions and most of those people will not know anything about the history of this case. And likely, unless the County has enacted a rezoning, it would be pointless to pursue it. And I would suggest perhaps that, if you wanted to modify your motion, that if there is approval by the County Council or some change in zone and that is signed by the Mayor, that this matter be brought up on the next available meeting. EXHIBIT A 15 WATANABE: Let me comment on that, and this is again a compromise then. I will revise the ruling and say, the time frame will be the earlier of either a final decision on the zoning or, shall we say, the August Planning Commission meeting in 2009. The reason being the two Planning Commissions don’t come into effect until April 1, and the Commissions cannot meet unless they have a quorum and as you know, we are in a change of administration, the appointments haven’t been made, and the appointments also need to be confirmed by the Council. So I think maybe the August meeting of 2009 may very well be the earliest we could convene and actually have a body to make a decision on that. IWASHITA: That’s fine. I have a procedural concern that I’d like the parties to address, and that is this matter has started as a contested case with the Commission having nine members and that has changed over the years. But I guess my concern is that once we split into the two Commissions, what are the, if there are any procedural or substantive procedural issues of concerns that either party may have about whether or not the West Hawaii Commission, right, what is its authority at that point? How is this case going to be handled? If or if they agree on the record, I guess they would agree on the record that the West Hawaii Commission would take over and treat it as it continues. And I’m not sure how the legislation handles that. But since this is a contested case hearing, I would like the parties to on the record agree how it’s going to be handled, so we don’t have procedural questions that come up later. LIM: I don’t know if we can reach agreement because it’s pretty new into the Charter amendment for the, I guess you’re going to call, the Leeward Planning Commission. The thoughts off the top of my head are that the seven members of the Leeward Planning Commission in order to take action on this matter would have to review the record on file pursuant to Chapter 91 and have been presented new proposed Findings of Fact, Conclusions of Law, Decision and Order by the parties and have us do our final oral argument, that would then qualify the new members to vote on the matter. So that’s my initial thought: like I said, I haven’t research it, but that’s my initial thought. WATANABE: Maybe I can add to that. Fortunately, Mr. Torigoe has a copy of the ordinance that created the Leeward and Windward Commissions. And Section 6-4.6 Transitional Provisions, the last sentence indicates, “Matters pending before the existing planning commission that are not finally decided by April 1, 2009, will be transferred to the windward or leeward planning commissions, as appropriate to be finalized.” So it would appear that a reasonable person would assume that the Leeward Planning Commission would handle this. LIM: I think the other comment I had on the schedule that you were talking about is August; it’s probably – you can ask the Director – but that’s probably being optimistic in terms of the Council taking any action on the Change of Zone. WATANABE: I understand. And so it’s likely that we would review this once more with the Leeward Planning Commission. But it was, the time frame was revised to satisfy Mr. Iwashita’s concern that this be held in limbo forever. The Leeward Planning Commission whoever they may be may have different views on this; we then provide them with an opportunity to make their own comments irrespective of whether the Council has made a EXHIBIT A 16 decision on the zoning or not. And I see Mr. Yuen would care to make comments also at this point. YUEN: Commissioner Iwashita did ask for comments from both parties. I simply renew my statement of objection to the deferral. On the more general question of what happens with the Leeward and Windward Commissions, what Mr. Lim and Mr. Torigoe have said is correct. It would be, if there is a matter that is validly deferred out of this Commission and at that time when it goes over to the – when the Commissions gets split, they do get split geographically into Leeward and Windward – and if a matter is in a formal contested case mode where it would be as if new commissioners were appointed and had to review the record before they took a vote on it; so that part is correct. If I can try to be a little helpful on the question of not leaving this sit out there. It’s quite likely that you’ll see the rezoning come through. My plan would be to have the zoning come through the Commission. I believe we were trying to get to the – I can’t remember if it was December’s – actually it would be sometime in January, so the Commission, you know, you’ll have a new zoning bill. Although I’d like to take it straight to the Council, because all the issues have been thrashed over quite a bit, the fact of a matter, to be procedurally correct on this, these rezonings have to go through the Planning Commission. So I wouldn’t be worried that you are not going to see something; if you don’t see something, it means that the Department, the Council or/and the property owner have not done anything to initiate a rezoning that would come through you. So the idea that you need to schedule a renewal of looking at the SMA Permit, I don’t think that’s really necessary. HOUSEL: Mr. Chairman? WATANABE: Mr. Housel? HOUSEL: I wonder if I can ask Mr. Lim. You said that you and your client intended to put together a new plan for developing this property. What do you think is a reasonable time frame that you can do that? LIM: I would say we probably need a minimum of six months, maybe eight months. HOSUEL: Okay. And do you intend at that time to request rezoning? LIM: I haven’t thought of that far ahead, but we may. It depends on how the Council also wants to treat it; they could do it how they did this time, which is basically the zoning allows something like 110 lots, but the SMA took it down to 50 lots. And we could do it the same way with the actual density is higher. But I heard Commissioner Iwashita’s comment, you know, so we’ll consider that so long as it doesn’t expose my client to additional impositions. HOUSEL: Okay, thank you. EXHIBIT A 17 WATANABE: Well, we’ve heard both sides, and I guess one thing we’re agreeing on is that we can’t reach a complete agreement. I don’t think it’s going to hurt, although maybe it’s not as necessary now as the Planning Director indicated, that we review this or the Leeward Commission review this come August; that would be I think an aggressive time frame, but I don’t suppose it’s going to hurt. HOUSEL: Mr. Chair, I would suggest, as Mr. Lim stated that they expect to be able to do something in six months, that we follow that time frame. And if necessary, you know, the ball is in their court to come back with new facts. WATANABE: He said, as I recall, six to eight months, so I don’t know if it’s -. And six months might be quite aggressive even on his part, I think. HOUSEL: Okay. WATANABE: Mr. Woodward? WOODWARD: Might I suggest a compromise? And that would be that the Planning Director review progress in August, and if he feels it necessary at that point, to bring it to the Commission. But if there’s nothing that has changed, I don’t see any reason that everybody should be burdened with rehashing this. We really have to wait -. And they can’t do anything with their property until they get the zoning situation cleared up. It’s either got to be a time extension on their zoning or rezoning, and whether that happens by August is anybody’s guess. WATANABE: I would tend to agree personally; on the other hand I’m just one body. As st I understand it, I will still be on the Leeward Planning Commission after April 1. But I just assume, leave it up to the entire body of the Leeward Planning Commission to decide how they want to handle this at that time. And it seems to me reasonable – possibly aggressive time frame – but it’s reasonable to allow that body to review it because most of those people will be new people. And they can decide what they want to do, rather than my making a ruling now that that body may not agree with in the future. So I think it’s a fair way of handling the rather awkward situation. IWASHITA: Just to clarify in my mind, Mr. Chair, the ruling of the Chair is that this contested case matter is continued, and if before August of 2009 the zoning is changed, then this matter would be reset -. WATANABE: Exactly. Earlier of final zoning or the August Leeward Commission meeting -. IWASHITA: And if the zoning has not been changed by August of 2009, then this matter would be reset to be heard again and dealt with in -. WATANABE: By the Leeward Planning Commission, right. IWASHITA: August of 2009. EXHIBIT A 18 WATANABE: And they can determine then as a body what the status of this SMA should be. IWASHITA: Thank you, Mr. Chair. WATANABE: Is that satisfactory to all? COMMISSIONERS: Yes. WATANABE: I think I’ve been about as fair as I can with this, given that we can’t really agree on what the legal process really should be. Is that satisfactory to you, Mr. Lim? LIM: I understand. WATANABE: Okay. Then given that I have that authority, that’s the final ruling for this; we will defer until the earlier of either a final decision on the zoning or the August Leeward meeting in 2009. I guess that’s the best we could do here. LIM: Thank you very much. The discussion ended at 10:50 a.m. Respectfully submitted, Noriko Sauer, West Hawaii Secretary EXHIBIT A 19