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HomeMy WebLinkAbout2025-09-11 Proof of Service to the Director DeVera, Ashley From: Arushini Sinnaduray <arushini@hawaiilawyer.com> Sent: Thursday, September 11, 2025 3:17 PM To: Planning Internet Mail Cc: Toren K. Yamamoto Subject: Kona Plantation LLC; Notice of Appeal; Holualoa 3rd, Kaumalumalu, HI 96740 Attachments: Notice of Appeal to Planning Department.pdf Good Afternoon, Please find attached a letter to you of today's date regarding Kona Plantation LLC, Notice of Appeal. Should you have any questions or concerns, please contact our office. A hard copy of the letter has been sent to you via first class mail. Thank you, Arushini Sinnaduray Assistant to Gregory Kugle Arushini Sinnaduray I Legal Assistant/Paralegal Office: (808)531-8031 Fax: (808)533-2242 Mail: arushini@hawaiilawyer.com Web: www.hawaiilawyer.com Addr: 1003 Bishop St,Ste 1600 j E R I TA S® Honolulu, HI 9681319Ell 0 LAW FIRMS WORLDWIDE DAMON KEY LEONG KUPCHAK HASTERT hawai7Iawyer.camy- A 11'w ' [' C1RPC)RATIL1N Confidentiality Notice:This email message,including any attachments,is for the sole use of the intended recipient(s)and may contain confidential and privileged information. Any unauthorized review, use, disclosure, or distribution is prohibited.If you are not the intended recipient,please contact the sender by reply e-mail and destroy all copies of the original message.Thank you. FRAUD ALERT—PLEASE CALL YOUR DAMON KEY CONTACT TO VERIFY ANY EMAIL OR FAX REQUESTS FOR WIRE TRANSFER PAYMENTS,WIRING INSTRUCTIONS,OR CHANGES TO WIRING INSTRUCTIONS THAT APPEAR TO BE FROM OUR FIRM. 1 hawaii lawyer.com® DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Gregory W. Kugle Toren K.Yamamoto September 11, 2025 1003 Bishop Street,Suite 1600 Honolulu, Hawaii 96813-6452 Telephone (808) 531-8031 Facsimile (808) 533-2242 E-Mail:gwk@hawaiilawyer.com tky@hawaiilawyer.com www.hawaiilawyer.com VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED and EMAIL Kathy Lewis, Chairperson Board of Appeals 25 Pauahi Street Hilo, Hawaii 96720 boardofappeals@hawaiicounty.gov Re: Notice of Appeal to Planning Department Notice of Violation and Order Holualoa 3"d,Kaumalumalu (Beach Section),Hawaii 96740 TMKs (3) 7-7-04:073 Dear Chairperson Lewis, This firm represents Bruce Bergey ("Bruce" or "Owner"), Member of Kona Plantation, LLC, an Oregon limited liability company ("Company"). On August 12, 2025, our client received a Notice of Violation and Order, dated July 31, 2025, ("NOVO"), from the County of Hawaii Planning Department ("Planning Department") alleging that the Owner was using its property, located at 77-360 Hoomaluhia Dr., Kailua Kona, in violation of County ordinances and certain settlement obligations between the County and the Owners. The allegations made within the NOVO are patently untrue and erroneous. Therefore, please treat this letter as a notice of appeal of the NOVO and the cited to violations within. L DESCRIPTION OF THE PROPERTY The Company owns that certain property located at 77-360 Hoomaluhia Dr., Kailua-Kona, Hawaii 96740, more particularly described as TMK (3) 7-7-004-073:0001 ("Unit A") & 0002 ("Unit B", and collectively with Unit A,the"Property"). Owner is a member and majority interest holder of the Company. For over 25 years Owner has legally operated the Property for agricultural purposes. lil MERITAS" uvd=.a:s woapwipq hawai i lawyer.com® DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Kona Plantation, LLC September 11, 2025 Page 2 II. BACKGROUND In around April of 2000, Owner, with the help of his son Matthew A. Bergey ("Matthew", collectively with Owner, the "Owners")), began the process of attaining various building permits related to the creation of two separate 8-bedroom/4-bathroom dwellings on the Property. The Planning Department, for its part, approved the creation of both dwellings, authorizing the total of 16-bedrooms on the Property via the issuance of Building Permit numbers 005433 and 005931. In 2002, Owners moved to separate Unit A and Unit B into two distinct condominium properties. In order to achieve that end a Declaration of Condominium Property Regime of Plantation Estates, dated November 13, 2002, was recorded in the Bureau of Conveyances of the State of Hawaii ("Bureau") as Document No. 2002-205148. On January 30, 2004, Owners were issued a Notice of Violation and Order, alleging that the Property maintained an "unpermitted additional farm dwelling" and was being used for the "operation of vacation rentals/retreats without an SMA permit." Owners, in turn, filed an appeal (BOA 04-004)which culminated in a settlement between the County and Owners dated September 8, 2004 ("2004 Settlement"). The 2004 Settlement required that Owners delete a website(www.konaplantation.com), as well as a prohibition from using Unit B as a "vacation rental." Sometime in or around January 2008, the County once again levied a Notice of Violation and Order against the Property and the Owners. On January 28, 2008, Owners once again appealed said Notice to the County of Hawaii Board of Appeals ("2008 Appeal"). Upon information and belief, as a result of the 2008 Appeal, the parties entered into a second settlement agreement("2008 Settlement"),which superseded the 2004 Settlement. The 2008 Settlement echoed the 2004 Settlement and provided that Unit A "shall not be occupied at any given time by more than five unrelated persons," and that Unit B was to be "occupied only by individuals involved in the agricultural or farm related activity on the Property." Of note, the 2008 Settlement did not include a prohibition of website advertisements nor did it prohibit "vacation rentals." The 2008 Settlement did, however, expressly "supersede[] and replace[] the [2004 Settlement]." On August 12, 2008, Unit A and Unit B were both transferred to Kona Plantation, LLC, an Oregon limited liability company, via Apaitinent Deeds recorded in the Bureau as Doc No(s) hawai i lawyer.com® DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Kona Plantation, LLC September 11, 2025 Page 3 2008-128262 and 2008-128263 respectively. After which Company was the fee simple owner of the Property. Bruce Bergey is the majority interest holder and member of the Company. Bruce's son Matthew, and Bruce's grandson Andrew Bergey ("Andrew") are also members of the Company. For twenty-six years, Owner managed and operated the Property without interruption under the dictate of the 2008 Settlement. It was only in 2024 that issues once again started to arise. Specifically on October 14,2024,the Planning Department sent out a"Courtesy Letter"indicating that a complaint had been received about the Property's operations and that a Planning Inspector would be conducting a site inspection. On June 17, 2025, such site inspection was conducted by Planning Inspector Tiffany Clark("Inspector"). During the site inspection Owner, when discussing website listings for the Property, mentioned to the Inspector that a platform had previously reached out to list the Property, but the Owner had since decided to remove such listing. Owner was not referring to the "Ohana Retreat" website as alleged in the NOVO. The Inspector also erroneously concluded that all sixteen bedrooms on the Property constituted as"dwelling units"upon the Property, despite the fact that key elements of establishing a "dwelling unit" under the Hawaii County Code were absent from said bedrooms. Specifically, heating elements are not and should not be present in any of the sixteen bedrooms. Finally, the inspector alleged that the "host currently resides in the additional farm dwelling" but does not "actively engage[] in agricultural operations on the property." This is simply false. The Property is used and operated for farm activities. Specifically, 200 trees are maintained on the Property including both cacao and coffee trees. Both the cacao and coffee that are grown on the Property are processed into consumables (chocolate and Kona coffee) on the Property grounds. Bruce actively farms the Property to this day despite some health complications, and continues to plant, water, and prune the farm's trees. Andrew assists his grandfather in the year-round management and operation of the farm. Thus,Bruce and Andrew both qualify to reside in Unit B of the Property. It is unclear why the County has changed its position after almost seventeen years of uninterrupted operations on the Property, but it is clear that the Planning Department's NOVO is completely contrary to the Parties 2008 Settlement and is based on erroneous findings of fact and conclusions of law. hawai i lawyer.com® DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Kona Plantation, LLC September 11, 2025 Page 4 III. ANALYSIS 1. Owner has not Violated the 2008 Settlement. Pursuant to Section 1(g) of the 2008 Settlement, said document "supersede[d] and replace[d]"the 2004 Settlement. That being said, the 2008 Settlement does not prohibit the use of the Property as a "vacation rental" nor does it prohibit the Owner from establishing a website to advertise the Property. The 2008 Settlement simply requires that Unit A "shall not be occupied at any given time by more than five unrelated persons" and that Unit B "shall be occupied only by those individuals involved in the agricultural or farm related activity on the Property." Owner has adhered to both of these requirements. First, County unlawfully and erroneously levies allegations against Owner that they have violated a settlement obligation to only rent Unit A to no more than five unrelated persons, however, they provide no evidence to corroborate this assertion. This is likely due to the simple fact that no such evidence exists, after all, the "Ohana Retreat" is aptly named and Unit A is and has only ever been advertised for"large famil[ies]". In order to comport with the 2008 Settlement, Owners have always maintained that the while 8-bedrooms are available for rent in Unit A, said premises capacity could only be reached so long as no more than five unrelated persons were renting it. This has been Owner's requirements since the 2008 Settlement took effect and County has no evidence to show that Owner has breached that responsibility. Second, County unlawfully and erroneously alleges that the Owner has breached its responsibility to engage in farm activity while living in Unit B. Unit B is and has only ever been lived in by "individuals involved in the agricultural or farm related activity." Owner (Bruce Bergey), who lives in Unit B, has extensively engaged in farm activity on the Property for over 25-years. Owner has hand planted over 1,000 trees on the Property and to this day waters,prunes, harvests, and plants crops throughout the year. An additional room in Unit B is also inhabited by Andrew Bergey, the onsite manager of the Property. Andrew assists Owner with the Property's agricultural activity and is charged with maintaining the agricultural operations on the Property when Owner is on and off the island. Thus, while the Owner does spend some time off island, that does not bar him from inhabiting Unit B when he is in the State. As long as an occupant involves him or herself in the agricultural process while on the Property, they are not restricted from living in Unit B. hawaii lawyer.com® DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Kona Plantation, LLC September 11, 2025 Page 5 Finally, the 2008 Settlement, unlike the 2004 Settlement, does not restrict the Owner from maintaining a website for the Property, nor does it prohibit the use of the Property for short-term accommodations. Because the 2008 Settlement superseded and replaced the 2004 Settlement, it is unlawful to now hold Owners responsible for adhering to terms within the 2004 Settlement. Thus, because the 2008 Settlement is the controlling agreement between the Owner and the County, and because the Owner has strictly adhered to the terms within the 2008 Settlement, the NOVO's allegation that the Owner has breached its settlement obligations is clearly erroneous and unlawful. 2. Owner has not Violated the Additional Farm Dwelling Agreement. Likewise, the Additional Farm Dwelling Agreement (recorded January 19, 2000) governing Unit B has also not been violated. As stated above, Owner and Adrew Bergey (the individuals who reside in Unit B)"actively engage[] in agricultural or farm-related activit[ies]"while staying at the Property, and are therefore lawfully permitted to reside in Unit B. 3. Owner has not Violated County Code. The NOVO erroneously alleges that (1) Owner "established 16 additional dwelling units without executing the required farm dwelling agreement or providing the necessary supporting documentation for agricultural activity",(2)that"alterations to create 16 dwelling units were made without the required Special Management Area permit,"and(3)the Property was being advertised for event use. a. 16 Dwelling Units do not Exist on the Property, and all Bedrooms were Lawfully Established. The NOVO erroneously claims that the Owner established "multiple dwelling units" on the Property by equipping the bedrooms with "independent heating elements." This allegation is completely erroneous. HCC Section 25-1-5 defines a "dwelling unit" as "one or more rooms designed for or containing or used as the complete facilities for the cooking, sleeping and living area of a single- family only and occupied by no more than one family and containing a single kitchen." The HCC hawai i lawyer.com® DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Kona Plantation, LLC September 11, 2025 Page 6 further defines a"kitchen"as"a room or a portion of a room designed to be used for the preparation of food and containing at least one item from both of the following categories: (A) Fixtures, appliances or devices for heating or cooking food; and (B) Fixtures, appliances or devices for washing utensils used for dining and food preparation and/or for washing and preparing food." The individual Bedrooms do not have individual "kitchens" raising them to "dwelling units" as prescribed under the HCC. Further, all necessary building permits to create the sixteen bedrooms on the Property were lawfully provided by the Planning Department in 2002. Even if such permits were erroneous, the Owner (and predecessor in interest) has reasonably relied on such permits for over twenty-five years. See Waianae Model Neighborhood Area Ass'n v. City and Cty. of Honolulu, 55 Haw. 40, 44, 514 P.2d 861, 864 (1973) (when a government official acting within the ambit of his authority makes official assurances, the recipient is entitled to rely). To the extent that unpermitted heating elements are available in the bedrooms, Owner will remove such appliances. But at this time we are unaware of any such heating elements being present within the bedrooms. a. The Property is not Advertised for Event Use. The NOVO erroneously claims that the Owner is "advertising that the [P]roperty can be used for events." Owner does not allow events on the Property and never has. The notes from the site inspection (listed in the NOVO) makes no mention of any such events occurring on the Property, nor does the NOVO include evidence of such advertising. The Property is and has only ever been advertised as a rental, not as an event space. Thus, it is entirely unclear why the County raises this unsubstantiated assertion. For the foregoing reasons, and such others that may be shown at the hearing — Owner reserves the right to amend, supplement and assert further objections—Owner respectfully appeals to the Board of Appeals from the Planning Department's decision. hawai i lawyer.com® DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Kona Plantation, LLC September 11, 2025 Page 7 We appreciate your attention to this matter. Please do not hesitate to contact the undersigned at(808) 531-8031. Very truly yours, DAMON KEY LEONG KUPCHAK HASTERT Gregory W. Kugle Toren K. Yamamoto CC: VIA U.S. MAIL and EMAIL Jeffrey W. Darrow Planning Department Director planning@hawaiicounty.gov Aupuni Center 101 Pauahi Street, Suite 3 Hilo, Hawaii 96720 GWK/TKY:das 930250