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HomeMy WebLinkAbout2017-07-26 BDHRA Minutes BANYAN DRIVE HAWAII REDEVELOPMENT AGENCY COUNTY OF HAWAII MINUTES July 26, 2017 The Banyan Drive Hawaii Redevelopment Agency met at 2:02 p.m. in the County of Hawaii, Aupuni Center Conference Room, 101 Pauahi Street, Hilo, Hawaii, with Chairman Brian DeLima presiding. MEMBERS PRESENT: Brian DeLima Mary Begier, and Barry Taniguchi ABSENT & EXCUSED: Elmer Gorospe and Sigmund Zane ALSO PRESENT: Michael Yee (Planning Director), Daryn Arai(Deputy Planning Director), Amy Self(Deputy Corporation Counsel for the Agency), Lucas Mead (Planner), and Kim Tanaka(Secretary) A quorum was present with three members in attendance. DELIMA: Good afternoon. I'd like to call to order the Banyan Drive Hawaii Redevelopment Agency meeting. I'd like to thank Mary Begier and Barry Taniguchi for being here so that we have a quorum. STATEMENTS FROM THE PUBLIC There were eight members of the public in attendance. DELIMA: We're at the point of the agenda where we take statements from the public. Our first testifier is Jon Bockrath. Afternoon, Jon. BOCKRATH: Good afternoon. DELIMA: We only have two testifiers. We do have a four-minute limit. Go ahead. BOCKRATH: I am Jon Bockrath, fee simple owner of 21 Banyan Drive, more commonly known as the Ice House. I am known to Mr. Taniguchi as a specialty contractor responsible for installation, repair, and maintenance of refrigeration equipment, air conditioning equipment, throughout the County of Hawaii since 1978. Mr. DeLima is aware of my long-time personal friendship with his family and as founder of Alii Ice Company, among other business ventures. The rest of the Board and most of the Planning Department are probably oblivious to my existence, until now. My roots in Hilo go back prior to Statehood. My father was the director of the Board of Health and a key player in Civil Defense for the County of Hawaii when our current mayor was still in school. Why am I here? For the past thirty seven months, I have diligently pursued a simple building permit to improve and expand my business venture, providing goods and services to Hilo and the County of Hawaii. Upon numerous attempts to acquire this permit, I have met with total Page 1 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes contempt; I've been met with total contempt, lack of assistance and cooperation from both the Planning Department and the Building Department. As I speak, somewhere behind me, on the other side of the bureaucratic stone wall, my permit application lies amongst some employee's family photo and desktop novelties. Civil servants paid by my tax dollars, derived from my business ventures, my frustration is only absorbed by my meals and a few cold beers. In October of last year, I was elated to observe this board with the consent of the Planning Department and the previous administration, the successful vote to rezone my property to commercial use. I immediately invested sixty thousand dollars to the cosmetics and aesthetic appearance of my building to appease the Japanese Gardening Association and other like-minded individuals. I quote, "That ice house is an eyesore to the park. Move it out of there; we can be in there in a week," end quote. Rest assured that ice house is a blessing to the fishing industry and the majority of the population in Hilo in their daily activities. Currently at 72 years of age, I'm approaching a turning point. I'm considering three options with regard, regards to my business ventures. Continue dealing with the current fiasco known as the Department of Public Works, i.e. Building Department and associates, as my business remains stable but stagnant. Expand, grow, and prosper; continue to provide goods and services for the benefit of our community, my children, and my grandchildren. Three, dedicate the facility as a federal historical site; lock the doors, lay off eighteen full-time employees, spend more time drinking beer and shooting pool. As I stand here before you, I'm here to request that you, the Board, and you, the Planning Department, follow up immediately with a final determination and implementation, implementation of your vote last October. To renege on that vote is to stagnate future development and stymie the motivation of the two percent fee simple owners of the very peninsula that you're attempting to improve. Please keep in mind we, that'd be HELCO [Hawai`i Electric Light Company], myself, Suisan, and one other parcel—parcel owner, should be taken under consideration and the action should be expedited. We're all self-funded, and we ask for no government assistance. On the contrary, we support our community in numerous ways. From my perspective, there's way too much politics and excessive discussion about who controls the land, how to deal with the quote, "blight,"unquote, who is responsible for the liability, where will the money come from. In my conclusion, in my opinion, it's time for you, the Banyan Drive Redevelopment Agency and the County of Hawaii with regards to the fee simple ownership of Banyan Drive peninsula, to either defecate or evacuate the throne. Thank you for my three minutes. Aloha. DELIMA: Thank you, Mr. Bockrath. Mr. Inouye, do you have any comments? INOUYE: I didn't really expect to be speaking, but I'd like to speak in regards to the legislation that just was passed, which is your number one on the agenda. You know, it's very good that they've, the Governor allowed it to pass, but it does only apply to people that are on a lease or ten years during the lease in order to seek a new lease. And I think it's very good. The only comment I have on that is that I don't know how it's going to apply to my hotel, you know. I know that Hilo Hawaiian was approved under the Act 219 and then I applied for a lease Page 2 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes extension and sort of had an approval in concept, but it was only a draft. I mean we all know that that's the procedure. You have to get an approval in concept and then actually get into the actual negotiation of your leases. Now, it has all these years that they've been going through this, you know, I feel kind of, wow, you know, I'm the only one left now on Banyan Drive trying to get a lease. Which could probably qualify for a lease, but I'm not going to be able to get a renegotiated lease because time has run out. Now, why has time run out? Well, Department of Land and Natural Resources, because all three leases were going to run out at the same time, chose to have a bunch of studies made; they had five of them. These delayed everything. Then we got into the business of a redevelopment area. It [phone rings] sorry oversight redevelopment of Banyan Drive by the Hawaii Redevelopment Agency and everything has delayed. The only thing that I see positive now in the new bill is that maybe with all the investments that my corporation has done, and since I took over the operation in year 2003, maybe we'll get some remuneration out of it. The only remuneration I see in the new bill, it does state, and I don't know if it's going apply to our corporation or not, but it does state that it could, the improvements could be paid by a new lessee if I lose the lease on a bid auction; when it comes out for an auction. Cause I am going to bid on it, and I'm going to put in over two million dollars' worth of improve . Follow the architectural plans that were brought out by the fifth study that the Department of Land and Natural Resource I understand they have another one going on now. I haven't seen the results of it. Okay. My building, I did a structural study by a firm, which is the same firm gonna do the one on this last study that they're going after and it said that the structural strength of Reed's Bay is very, very good. Because it has up to twelve inch girders throughout the building, concrete floors and everything. It just needs to be brought up to date; the electrical, plumbing, or anything else that needs to be brought up, especially the ADA. And that's why we're over a two million dollar deal. And if anyone can offer me any consolation, or way to go on this, or whatever, I'd appreciate it. Thank you. DELIMA: Okay, thank you. Thank you. BUSINESS OF AGENCY 1. Update from Planning regarding 2017 legislation that involves or pertains to properties within the Banyan Drive redevelopment area. DELIMA: Okay, we'll move on to updates from the Planning Department regarding the 2017 legislation that involves or pertains to properties within the Banyan Drive redevelopment area. MEAD: Alright, good morning. Again, so today we're just offering the agenda items are just updates from the Planning Department regarding some of the actions that have taken place within the redevelopment area. So we don't have actions for the Board, necessarily, but these are again just updates on what has been going on within the redevelopment area lately. We reviewed, several times, some of the legislation from the 2017 legislative session. We did get the—Governor did put an intent to veto on the outcome, or the amended version of House Bill 575, however he did let that go into law as Act 215 a couple weeks ago, on the 12th, without his signature. So there's, there were concerns stated from the Governor on the bill, but it did go through and has become law. It does pertain toinitially it had a lot more pertinence to some of the properties on Banyan Drive, however, the amended version that was passed pertains to commercial and industrial leases of State lands. Again, it amends Chapter 171 and allows those with some life left on their leases to request interest in a re-lease and negotiation. So again, as Page 3 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes that pertains to, we were following it, but as it pertains to the Banyan Drive redevelopment area properties that are within that blighted designation, we don't really see any impact on that right now. There—it is worth mentioning again that this is the first year of the legislative biennium, which means that those bills that did not pass are automatically carried over into the 2018 legislative session. We are following eight bills which are down there 575 and 274; 575 did become law, House Bill 1469 and its companion, 1310 and its companion, and 1479 and its companion. So we will keep track on those, and see if there's any action on those, or any amendments put forth for the new Act 215 in this upcoming 2018 legislative session. So if there's no questions on that we'll move on to the second agenda DELIMA: Any questions? Okay, go ahead. MEAD: Okay, so what we wanted to do is, because there's been a lot of, there's been a lot of publicity regarding the Uncle Billy's, the former Uncle Billy's, and the Pagoda property, we wanted to just give an update of how Planning has been involved in the actions that have transpired that—and its current disposition right now. So a brief history of what has happened on that property, the lease to the Hilo Bay Hotel that was doing business as Uncle Billy's expired in March of 2015. It proceeded to have a holdover in a month-to-month revocable permit until a different disposition could be handled. In last year, February of last year, there was a month-to- month revocable permit issued to Savio that was doing business as Pagoda. So they had taken over the hotel and were operating it as Pagoda on a month-to-month revocable permit. This permit, on last month, the Board of Land and Natural Resources held a meeting regarding two items on this property. The first being a proposed, after the fact, renewal of this revocable permit for the period to extend to December of this year, and the second item that was going to be considered was the proposed DLNR [Department of Land and Natural Resources] three-year lease of the property to be awarded through a public auction. Planning, the Planning Department did comment on this lease, actually on both items; the after-the-fact renewable—renewal of revocable permit, and the three-year lease, and we essentially said the same thing based upon the information provided in the Erskine report. There were numerous life-safety issues with the structures that were identified and Planning had concerns on the use of the property and spoke to that in testimony to the Board of Land and Natural Resources. The outcome of that meeting was the BLNR actually canceled the month-to-month revocable permit to Savio for the hotel resort purposes, and that was to be effective this month, on the 14th. However, there was a provision in there, they requested a County of Hawaii inspection of the property, with Building Division and other agencies to include Fire. And those inspections actually supported the closure of the hotel sooner than anticipated; actually last month on the 17th was the last day. So, that was the, essentially the result of this June meeting. In July, on the 14th, there was, it was supposed to be the cancellation of this month-to-month revocable permit to Savio, and an issuance of a new month-to-month revocable permit to Tower, Tower Development, for securing the property. Tower Development is the same entity running Naniloa right now. The Planning Department did comment on this as well, and the Planning Department was supportive of closing the structure due to the identified life-safety issues that were brought up both in the Erskine report and confirmed by County inspection, and was also supportive of the Department of Land and Natural Resources through the Board of Land and Natural Resources in securing the property, again, for life-safety, life-safety concerns. The outcome of that meeting was the cancellation of the permit to Savio, and this will be effective August 4, and they did award a month-to-month revocable permit to Tower effective the next day, on the 5th, to secure and manage the property. And I did bring, I did ask Gordon Heit, our district land agent, if there are questions from the Agency, if Page 4 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes there's any clarifying questions with respect to those actions on the Uncle Billy's property that you'd like clarification on. He is here, so, we do have DELIMA: Mr. Taniguchi. Barry. TANIGUCHI: Gordon, what was the rationale for allowing them permit versus denying the other one? Why was Tower given a permit? HEIT: Okay so, Tower came to us, DLNR and the Board, with the idea that they could secure the property for a cost that was less than the State would be able to secure for, and do it aesthetically more enhancing job than we could. I guess their interest was that because they're adjacent to this property that their guests would feel better if there had a more pleasing aesthetic look to the property adjacent, rather than just a stark-looking abandoned property that's fenced off So that's why they approached us. TANIGUCHI: Do they intend to use that property for their like gatherings HEIT: No, the permit that we're issuing to them is strictly for security purposes. So the agreement is that they will secure the property, fence it off, and they will not be able to use the property for any commercial or business purposes; strictly for security purposes and management of the property. DELIMA: So my understanding is that the structure has to be torn down at some point. And the State doesn't have the funds at the present time to finance the teardown; that's my belief, because there's no appropriation that was done at the last session to do so. Tower Development is paying for the fencing and the—they're eating the cost of the present time for the month-to- month? HEIT: Yeah, again the agreement them as agreed to at the Land Board meeting, July 14, was they would, we're issuing a month-to-month revocable permit for security and property management purposes in addition to Tower erecting a security fence, and will be paying us one thousand dollars a month for the property. As far as going back to yourdemolition, we hired consultants to come up with a proposal for what the cost would be for demolishing the property. We're still evaluating that proposal. We're also drafting a request for interest in some future development of the property that would include inclusive of the demolishing of the property and restructuring, or build a new structure on the property, so we're kind of still in the development stages of that. DELIMA: Okay. If the DLNR put out such a request, it would have to be by auction, correct? HEIT: Correct. DELIMA: Okay, now because we're an agency, similar to what the Aloha Tower did, a redevelopment agency could actually ask for request for proposals and evaluate proposals on the merit of the proposals, could we not? HEIT: I believe so, yes. Page 5 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes DELIMA: Okay, so—and the proposal could also include other leases that have already expired, for example the Country Club property as well. HEIT: Correct. DELIMA: Correct. Okay so, you know, I'm kind of suggesting that we put on the agenda a discussion and possible action for a request for proposal and perhaps our Corporation Counsel can analyze the legal mechanism of a memorandum of understanding is it called a memorandum of understanding or memorandum of agreement, or something like that and we should, maybe, consult with the Aloha Tower Redevelopment Agency because I know that's how they did that project. Now the thought, the thought is, is that for example the Country Club lease HEIT: Oh again, the lease expired; it's on a month-to-month revocable permit. DELIMA: Right, right. Okay, the month-to-month, the association is still collecting rents from the respective I mean there's monies that are being paid and being held somewhere. The State still collects their month-to-month lease? HEIT: Correct. DELIMA: Okay, and then, I would hope that we could get a presentation on that lease and what's going on because people are paying money each and every month; where's that money being deposited? And the question is if we could have a request for proposal and someone would take over the management of that property,perhaps the lease rents, the rents that would be paid by the people that live there could be help to use for the,the demolition of the Uncle Billy's property. I'm just thinking out loud. HEIT: Yeah, okay. DELIMA: You know it's a possibility; we should take a look at it. HEIT: Right. DELIMA: But in order to evaluate it, we need to understand it. And I don't have all the facts on that as well. So I would like us to get a presentation on that property; what's happening, where's the money going, who's managing the money, and whether we could analyze and use that as a possibility of raising funds. Now of course if we did a request for proposal and someone had an interest in building a hotel at the Uncle Billy's site, and took responsibility for demolition, and even taking a look at the Country Club site as a possible development area. I think the Agency would be interested in seeing what is out there for improving that area. But that's something for a future agenda, if we could do that. Does anyone have any other questions based on my questions? TANIGUCHI: Yeah, I don't have my material with me, but where the Country Club is adjacent to, I thought that was a condominium. Right next a condominium. DELIMA: Yeah, but the lease, the ground lease Page 6 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes TANIGUCHI: The ground lease is still a DELIMA: Yeah, the ground lease. HEIT: No, it DELIMA: Go ahead. HEIT: It was a condominium but it's now just a, basically an apartment building for lack of better description, on a month-to-month permit. To the, I guess, Incorporated Association of Apartment Owners of Country Club, Inc. That's who we gave the permit to and that's who we collect the rent from. DELIMA: But you only collect your lease rent. HEIT: Correct. DELIMA: So that's my point, is that because the leasehold has expired HEIT: Right. DELIMA: —and you got the master lease, people are paying, I don't know what they're paying each month, and that's going into the unincorporated association's bank account. And maybe those monies above the monies being paid to the State, should be paid to perhaps the redevelopment agency for the purpose of utilizing it for the demolition of the Ban HEIT: Right, but as the current permit is written we don't have that provision. DELIMA: I understand, but it's month-to-month. HEIT: Correct. DELIMA: Right, so HEIT: Revocable permit. DELIMA: Right, so we can maybe change that, and that's why I'm thinking out loud here. I'm looking at different avenues— HEIT: I understand, I understand. DELIMA: —and you know, I'm trying to be as productive and creative at the same time within the parameters that the law allows us to be. Okay. HEIT: Yeah well, since these permits were established, and this is often before this agency was created, so, anything we go forward with will involve action or inclusion with this agency. Page 7 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes DELIMA: Right. I'm just trying to take advantage of the powers that the agency has for the benefit of the public. But we need to involve the Planning Department, and the people who live there, and etcetera, etcetera, so. Any other questions? Okay. So, thank—Mary. BEGIER: What is the mechanism to make sure that ideas that were discussed at the numerous Agency meetings that have been held and the plan that was put forth about what we want, what we would like the future of Banyan Drive to look like. What mechanism exists to make sure that the Land Board at the State level is cognizant of that and takes it into consideration in their decision-making. HEIT: I don't know if there's a mechanism in place, but anything we do take to the Board we also, I think, I think it's been proven every submittal we've brought, we brought to the Board has included mention of this agency, and participation of it, so the Board is aware of it. The chairperson, Suzanne Case, is, has attendance of the meetings so BEGIER: Thank you. HEIT: Yeah, we are aware of it. BEGIER: Okay. My concern is that we talked about climate change, global warming, whatever people are comfortable calling it, and I just would like to have it on record that we, as an agency, are aware of the need to look at that coastline. So when we're talking about issuing new leases, or revocable permits, or whatever, that we would when we looked at those ideas we would keep that in mind. HEIT: Oh, absolutely. BEGIER: Thank you. DELIMA: And then another thing, Lucas, perhaps the next agenda we could also have a report from the Planning Department on the, on the General Plan amendments. Because I think Mr. Bockrath raising the question of what—we voted in October, what does it mean, and we've asked in a previous meeting what the status of the because that would require a General Plan amendment. And MEAD: Yeah, we actually have, we'll be doing a presentation on the General Plan Comprehensive Review at the next meeting. So we have that scheduled already, and we have our planners gearing up for that presentation. DELIMA: Okay great. And that would kind of address Mr. Bockrath's testimony today. Okay, so let's move on. I'm sorry, but the plan—we're not taking any action on things that I've commented on. It's going to be on a future agenda, so you can comment at the next meeting because we're in the part of the agenda where we now are at administrative matters. At this time Chairman DeLima directed the Agency to the agenda item Administrative Matters. Page 8 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes ADMINISTRATIVE MATTERS 1. Approval of minutes from the May 31, 2017, Banyan Drive Hawai`i Redevelopment Agency meeting. DELIMA: Go ahead Lucas. MEAD: Okay, so apologies, I actually—it skipped my mind so we'll revisit that at the next meeting, but I forgot that we didn't have quorum at the last meeting, but right now is approval of the minutes from the May 31, 2017, Banyan Drive Hawaii Redevelopment Agency meeting. You can take action on that. DELIMA: Chair will entertain a motion to approve the minutes as circulated. TANIGUCHI: (raises hand) DELIMA: Barry makes a motion. Mary, you second? BEGIER: Second. DELIMA: Any discussion? Seeing none, all those in favor say aye. Opposed say nay. ALL: Aye. DELIMA: Motion is carried. ANNOUNCEMENTS 1. Next meeting date. DELIMA: Okay, we go to announcements. Next meeting. MEAD: Yep, the next meeting we have tentatively scheduled for August 30, next month. Again, that should be the last Wednesday, 2:00, same place, same time. But we will finalize that agenda and get that out as well. Another—we have two more items. 2. BDHRA vacancy. MEAD: We do have a pending vacancy, upcoming vacancy. Right now the rules allow for a, essentially a holdover until the Mayor appoints a new member to the BDHRA. We do believe the Mayor's putting forth a nomination here shortly for a BDHRA vacancy. And so that—we will keep everyone up-to-date on that. 3. DLNR request for comments on annual renewal of revocable permits for Hawai`i Island. MEAD: And lastly, the Planning Department wanted to let the Agency know that we did receive a request from DLNR to comment on the annual renewal of revocable permits for Hawaii Island, and there are two properties are involved in the BDHRA area, and that is Country Club and the Reed's Bay Hotel. So both of those are comments, similar to the comments, request for Page 9 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes comments that came through for Uncle Billy's. The Board of Land and Natural Resources is seeking comment from us and we will, essentially, craft a message review materials that we have and craft a message in coordination with the mayor's office and everything too. So, we just want to give everyone a heads up that that's a request that was just brought to our attention from DLNR as well. DELIMA: Okay, any questions? TANIGUCHI: When is that due? MEAD: That comments are due August l lth. TANIGUCHI: So we'll have to look at it. DELIMA: We're not gonna get it, I guess. When you folks do submit it, could you send all the board members a copy so that we can—maybe put it on the next agenda so we can at least talk about it. MEAD: Will do. DELIMA: Okay, any further announcements? MEAD: No, that's it. DELIMA: Okay, seeingI know we talked about a lot of different things, but we're not gonna take any action on unless it's on the agenda. So the next meeting we'll have those items on the agenda, you'll have notice, and people can attend and provide further comment. With that we'll adjourn the meeting and thank you all for coming. See you in a month. Thank you. Meeting adjourned at 2:35 p.m. Respectfully submitted, Kim L. Tanaka, Secretary ATTEST : Brian DeLima, Chairperson Banyan Drive Hawaii Redevelopment Agency Page 10 of 10 Banyan Drive Hawaii Redevelopment Agency July 26,2017 Minutes