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HomeMy WebLinkAbout2018-07-25 BDHRA Minutes BANYAN DRIVE HAWAII REDEVELOPMENT AGENCY COUNTY OF HAWAII MINUTES July 25, 2018 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(Chairman), K.T. Cannon-Eger, and Nathan Gaddis MEMBERS ABSENT & EXCUSED: Barry Taniguchi and Elmer Gorospe ALSO PRESENT: Harry Kim (Hawai`i County Mayor), Michael Yee (Planning Director), Amy Self(Deputy Corporation Counsel for the Agency), Jeffrey Darrow(Planning Division Manager), Kim Tanaka(Secretary), Kaiali`i Kahele (Senator)in at 2:04 p.m., Sue Lee Loy (Councilwoman), Gordon Heit (DLNR Representative) A quorum was present with three members in attendance. STATEMENTS FROM THE PUBLIC There were 16 members of the public in attendance. At 2:02 p.m. Chairman DeLima opened the floor to take statements from the public. DELIMA: I would like to welcome the members of the public here, as well as the staff, and the Mayor, and the Planning Director for attending today's meeting. I've been advised that Senator Kahele is also going to be in attendance. Our business of the agency will be to discuss the legislation that has been adopted by the Legislature and signed into law by the Governor. But before we take any further action, this is the opportunity for members of the public to make statements. We also have Councilmember Lee Loy present and the members of the Redevelopment Agency is Nathan Gaddis, K.T. Eger, and myself, Brian DeLima. So, with that we'll have Dean Au present testimony. Thank you for coming, Dean. AU: Good afternoon everybody. Thank you all for your, for your volunteer services and thank you, County employees for being here. It's nice to see a lot of familiar faces, you know everybody here and in this room are vested in our community and vested with the Banyan Drive, so thank you for everybody involved in this process. My name is Dean with the Hawaii Regional Council of Carpenters. We represent 7,000 members and about 200 signatory contractors, and our biggest concern for Banyan Drive is fair wages. We advocate for the prevailing wage and we believe prevailing wages are fair, livable wages, a wage that a construction worker can make and can provide for him and his family. So that's all I'm here, is to make a comment. So thank you. DELIMA: Thank you. We'll now call Connie Jacobson. Ms. Jacobson has distributed testimony. Thank you for coming this afternoon. Page 1 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes JACOBSON: Thank you for having this meeting so that we can all share with you how we feel about Banyan Drive. I am with Banyan Drive Country Club Hawaii at 121 Banyan Drive. We understand the goal of high-end resort hotel magnet to bring tourist dollars to Hilo and wants to participate as a resort hotel. The bones and architecture and management of a good structure already exist. Buildings can last if maintained so the job and cost of maintaining and revenue for maintaining are the issue. We understand that the lower cost residential is not the vision for Banyan Drive, it was never our vision for Banyan Drive. We hope you understand that the botched March 15, 2015, land lease termination left us with a lot of debt, over $800,000. We had 50 percent squatters, 97 delinquents because no one thought that the building would remain open so pretty much everyone stopped paying, only to find that we could go on, we could keep it open, and we could start building. We had no choice at the time but to rent to the people that were on the island that needed a place to live. The cost to tear down Country Club is an estimated eight to ten million, but due to the water level environment rules, no rebuild is possible. Therefore the ten million cost of the small green space is unrealistic and uneconomic. The renters at Country Club want to remain, continue to renovate the building, increase our resort traveler's portion of occupancy towards 100 percent. Currently 55 rental units of the 141 total rental units are mainland travelers who contribute real money to the Hilo economy, and with a reasonable time period could contribute much more. We understand it will take a few years to work towards higher resort hotel status, but from the beginning and from the 2015 disaster to the present, County Club has maintained the hotel function and works daily to improve. Country Club now provides snowbird mainland and oriental tourists a moderate but improving rental rate hotel destination. And Country Club will upgrade as tourist market demand provides economic opportunity. The Country Club has been contacted by Hawaii County on behalf of FEMA, East Hawaii lava victims are living in tents and school gyms and corridors. Available housing for lava victims is fully occupied. Country Club has 16 units at this time which are in need of serious renovation, but could be available to those lava victims if investment money were available for renovation. Country Club is on a possible 30-day termination DLNR special permit so FEMA and SBA and banks cannot loan for unit renovation investments. We would need to repay that in 30 days and that's an impossible repayment plan schedule period. Country Club asks that Banyan Drive Redevelopment Authority [sic] put its weight behind Country Club being issued a new reasonable time duration lease for investment repayment or reimbursement if the lease goes to others. Please appreciate that Country Club pays land lease money to DLNR and would pay more if Country Club could obtain investment money to renovate the units beyond the 30-day special permit potential termination. An empty 121 Banyan Drive building would have squatters and security costs, but no revenue flow. Country Club management is helping build toward the future, and with the Banyan Drive Redevelopment backing can work towards maintaining a much better building for the community as a whole. Country Club would like to repaint, redecorate the interior, operate as a moderate resort hotel as the tourist dollar market permits. Country Club wants to renovate its building infrastructure for Page 2 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes $450,000 including whole building sprinkler system plus interior decoration costs. Currently, 30-day repayment provisions frustrate all of us. At Country Club, you can only invest with cash- flow dollars from which are produced from operations. There's presently a dis-incentive for renters for Country Club to invest with only a 30-day horizon with no reimbursement of infrastructure upgrade investments. Country Club is starved for investment dollars. Please help end this investment dollar starvation, allowing us to help you with written Banyan Drive Redevelopment authority, support for reasonable Country Club lease time period or reimbursement for investment funds. We want to, and work daily, to evolve 121 Banyan Drive into an architectural gem with resort traveler dollars flowing into Hilo, but need you, the Banyan Drive Redevelopment Authority with the authority and ability to now end the starvation of investment dollars for 121 Banyan Drive Country Club Hawaii. We need the investment starvation to end or we will end up an abandoned building such as Uncle Billy's Hotel. Thank you for your consideration. DELIMA: Thank you. Any questions? Thank you very much. And now we'll call Delene Osorio. OSORIO: Oh okay. Hi. I don't have any written testimony. I'm here to hold Connie's hand; I'm on the board of director's also at Country Club Hawaii. And I have to say, for the last year and a half that has been an admirable fight for that association to stay open and provide housing. One of my other questions, and some of you know that I already deal in affordable housing, so if Gordon gave me a piece of property today to build affordable housing on, we might be able to get approval for the entitlements in a year, it might take another two years to get the funding to build, and it might take another two years after that to build. So we're talking five years. So that all evolves to the question of where do these 120 people that occupy Country Club go to live now? I mean that's—Harry and I've talked about Lanakila for a couple of years and can't seem to wrest that from Hawaii Public Housing Authority to do something with it and about it, and the question I leave with you to think about is where do the folks go now if we can't even build fast enough to handle the regular households that are looking for places to live, in addition to the FEMA displaced households, you'll have another 120 people on the doorstep of every shop in town. I mean, that sounds dire, but I don't know how, what the time period is for this plan, but we're looking at five years at least, to try to build something to accommodate the tenants that are there now. Thank you. DELIMA: Thank you very much. Now I'll call Patty Heidenfeldt. HEIDENFELDT: Harry Kim, Mayor, Senator Kahele, members of the Board, and members of the community. My name is Patty Heidenfeldt and I reside at 175 Banyan Drive. I am the executive administrator for Reeds Bay Resort Hotel. Don Inouye is off-island right now doing business for the hotel and wished that I come today and speak here. I apologize for the typos in the letter that you have before you, or the brief that you have before you, but I will go over it as quickly as possible. The purpose is a brief synopsis of Reeds Bay Resort Hotel on Banyan Drive, and why we are here today, and what is our future? We are all aware that on July 11, 2011, Senate Bill 1830 Act 219 was put into place. Why? It was put into place for the purpose of extending for those who qualified prior to their lease expiring. This was the best thing that could happen for Banyan Page 3 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes Drive. Three hotels took advantage: Hilo Hawaiian, Coral Reef, and Reeds Bay. All three were qualified. All three met the criteria, and two were granted approval in concept and received their extension. Our first proposal, one of many, was dated October 21, 2013. It took nine months for a denial letter to be received. Please keep in mind, we waited nine months for a denial letter. Reeds Bay Resort Hotel submitted a proposal which included a $1,171,000 upgrade. A letter was seen by Reeds Bay Hotel from DLNR which was approval in concept. This was great news for Reeds Bay Resort Hotel because we knew that Hilo Hawaiian and Coral Reef received the same and were granted their extensions. So you can believe how we felt at that time. Then, several months later, a denial letter was received dated July 24, or 21, excuse me, 2014 stating that they believed there was, the site had greater potential, leaving us only five months to respond with another proposal, which we did. And again, I want to state, that Reeds Bay Hotel legally qualified under Act 219 but was again denied for the same reason, that there was better potential for that area. Soon after Reeds Bay Resort Hotel received a request for a structural report over the confusion of the life of the building. Subsequently, a report was submitted which found Reeds Bay Resort Hotel was fit for future hotel use with only a few modifications and upgrades which was included in our previous proposals and would have more than qualified Reeds Bay under Act 219. Unfortunately for Reeds Bay, and timely for those interested in our lease renewal—not interested in our lease renewal, the Act 219 expired which left Reeds Bay Resort Hotel where we are today. Reeds Bay Resort Hotel is not a small hotel. We are a 64-unit hotel and we have invested over a half a million. Over $500,000 since 2005. We are quickly approaching $2 million in revenues per year and we have a current proposal of$2.2 million in renovations to make this hotel a beautiful landmark with a spectacular waterfront restaurant located on the beautiful Reeds Bay. Reeds Bay Resort Hotel is and will be a place for all to enjoy the view, have a quiet night's stay, and dine in fine cuisine. Which brings us to today. What is the future of Reeds Bay Resort Hotel and the new Senate Bill 3058 which appears to allow BLNR the ability to modify or extend leases which may modify or eliminate any statutory restrictions. Members of the Board, Mayor Kim, Senator Kahele, we reach out to you. We were qualified under the original Act 219 and we stand before you today with hopes of a fair and honorable board to do the right thing. We currently have that proposal of$2.2 million which we have waited over 10 months to hear any news of our predicament. And I apologize for the spelling of predicament. We humbly appeal to the integrity of this board and strongly feel we should not have to go out for bid based on the law that was instituted for this very reason and why we are here today, dated back on July 11, 2011. We believe that the $2.2 million dollar proposal will fit the DLNR's beautification plans and will make a Reeds Bay Resort Hotel a beautiful hotel and a landmark for tourists and locals alike to be proud and enjoy. Humbly submitted, Patty Heidenfeldt. DELIMA: Well thank you for your testimony. I'll call on Ed Bushor at this time. BUSHOR: I'll pass. DELIMA: Okay, and Mr. Applegate. Do you want to testify George? APPLEGATE: I'll pass. Page 4 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes DELIMA: Okay. So at this time I'll introduce Senator Kahele. Thank you for coming. KAHELE: Good afternoon. BUSINESS OF AGENCY The Agency took this item up at 2:20 p.m. with approximately 16 members of the public in attendance. 1. Open discussion between the Banyan Drive Hawai`i Redevelopment Agency (BDHRA) and representatives of the Department of Land and Natural Resources, Hawai`i Island Senate and House of Representatives, Hawai`i County Mayor's Office, and the Hawai`i County Planning Department regarding roles, recent government actions, near and long-range plans, and legislative initiatives relating to the BDHRA's fulfillment of its obligations within that portion of the Banyan Drive Redevelopment Area. DELIMA: I want to indicate that there's a scenario on the board that was one of the proposals that the Redevelopment Agency looked at, but it is not what we finally approved because we deleted the resort proposal next to Lili`uokalani Park [sic Gardens] from the final proposal that we approved as a Board. We did not want a resort next to Lili`uokalani Park, and the other thing is that we kept open the idea of, of having condominiums or businesses from where they exist now because when we were presented testimony to make all of that park land, the thought was that no one would want to look at the harbor, and the members of the Redevelopment Agency unanimously decided that that's not the case, that a lot of times views of harbors have one of the highest attractive values of people wanting to live with such ocean views. So I don't believe that what is on the board is accurate. Now, this is a revision deleting the resort expansion, I appreciate that—I think we had a more open, we weren't wed to a cultural center right in the middle of the golf course, but that's something that was open for further discussion. I do want to indicate that we thought having a meeting of the Redevelopment Agency after the Legislature completed their discussions about the various economic proposals for Hilo, that it would be wise for the Redevelopment Agency to have a meeting and I really appreciate the Mayor, the Planning Director, Senator Kahele, Gordon from DLNR, as well as the Council being in attendance with members of the public for us to fully understand the role that the Agency has in light of the enactment of the economic zone for the Hilo area. Because as you know, it's in earlier discussions about the relevancy of the Banyan Drive Redevelopment Agency and we were advised that the Redevelopment Agency has no authority, and I think it's important for the public to understand we have no authority until such time that the underlying plans and studies are completed in order for us to have the authority to be able to take action on the various proposals for the area. And then ultimately, it's State land, and the role of the Board will still have impact in the final say as how to, what type of leases would be approved, etcetera. So, the whole concept of the Redevelopment Agency was started with the idea that we should have local input as to what the people in that area would want to see, at the same time we had no resources, no plan, no money to adopt the necessary plans for the Redevelopment Agency. And fortunately Senator Kahele and our legislative, other legislatures were able to enact the senate bill that the governor signed into law and we asked if everybody could come today to talk about how things are going to progress, and I think it would be best to turn it over to a member of the conference committee, a sponsor of the bill, Senator Kahele. Page 5 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes KAHELE: Thanks, Chair DeLima, and aloha. Mayor Kim, it's good to see you. Thanks for coming, and also Councilwoman Sue Lee Loy. Mahalo. You know, at the legislative sessions, we're pretty busy yeah, from January through May. Of course we had a lot of different ideas and different bills and many different legislative proposals through the years. Different, my predecessors, you know, my dad and Representative Tsuji and others who have tried different things on the Banyan Drive peninsula. I think what was most concerning to me over the course of the legislative session was when I would get about every month, a notice that the Banyan Drive Redevelopment Agency was canceling the meeting because we had no agenda, nothing to talk about. And I just felt that was a problem that I observed but was too busy to address over the course of the session, and so I was really, it was really important for me to reach out to, to the BDHRA and say, "Hey, let's have this July 25th meeting." It's time for us to come together and to talk about how we move forward on, on Banyan Drive given one legislative success in Senate Bill 3058, and definitely spirited conversations on the Banyan Drive peninsula over the last few months. So, I can tell you that whatever we do on Banyan Drive is one of my top initiatives and legislative priorities for the future. Working together with Mayor Kim and his vision for Banyan Drive and the greater Hilo community and the County administration. It's a partnership between State, County, the Council, and the leadership there, on what we do on Banyan Drive. And given what has happened to our island's economy over the last two months, the declining in hotel occupancy rates, the cancelation of flights to East Hawaii, the—what has happened to our agriculture industry, and everything as a whole, Banyan Drive is a big part of East Hawaii and our economic future. And, and so I'm happy we're having this meeting. I'm here to answer any questions we have. Have a lot of different things that I could talk about. I will address one thing in Senate Bill 3058 and previous testifier for Country Club was, is, 100 percent accurate. I'm sorry that you were not able to take advantage of that bill back in 2011. That bill has sunsetted. There's nothing we can do about that. That bill's gone. But Senate Bill 3058 is a vehicle you can use that is now a law that you can move forward with by following the nature of the legislation, which is to take your development plan that you had submitted in 2011 to DLNR and resubmit that under the terms of the new law and it will require a 30 percent investment of the market value of Reeds Bay. And of course that requires Board of Land and Natural Resources approval, but that legislation is a vehicle that you can use today and anyone that is in the defined Hilo Economic, Community Economic District zone, whether they're industrial, commercial, luxury resort, can use that piece of legislation to extend your current lease for another 30 years. And so I would encourage you to do that. I know some businesses are already finalizing their development agreements or development plans to take to the Land Board, but that is definitely something that you can utilize for a long-term lease extension for Reeds Bay. And you could arguably say could be the same thing for Country Club. But thanks Chair, for convening this meeting, and I have other things I can talk about, I don't need to talk about it now, but um DELIMA: Yeah, I appreciate. Well, we've been postponing it because we didn't know well, the bottom line is if you look at the state law, and Corporation Counsel can correct me if I'm wrong, but if you look at the state law, it says that the Agency is only empowered after adoption of a Master Plan. And the Conceptual Plan is, to be frank, I've been trying to argue that the Conceptual Plan is the Master Plan, but I've been corrected by the planners that, "No, that's not Brian," the Master Plan is much more involved and detailed, and it would require approximately, Page 6 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes and you can correct me if I'm wrong too, Michael, approximately $2 million dollars to complete the Master Plan. Is that the number? YEE: I'm unsure of the exact number, but it's certainly not a small number. DELIMA: So, so in terms of the Agency's powers, I know that there was some public testimony about (inaudible) they're looking at the board; we really don't have the ability to extend leases. I think the Senator hit the nail on the head that the legislation does provide some mechanism as part of this pilot project to do so and I'm not the attorney for these, for the members of the public that wanna have their, like for example Country Club, extended, but they are on month-to-month leases and I'm not certain under the, under the 3058 whether or not, if they are on a month-to- month lease, whether they qualify because it provides if they're, prior to expiration of their lease and technically maybe if they're on month-to-month maybe the AG might read it in a way that says it suggests that they can still qualify. Because it still requires such a significant investment that if somebody wants to invest that money, why not let them. But those are some of the questions I have. I think we're all excited about the ability for people to invest and extend leases, at the same time, the relevancy of the agency can only be relevant if we have the Master Plan developed. And I'm—did they, was there money allocated? KAHELE: You know, there was a sister bill to 3058 which was specifically written for Banyan Drive and both bills made it to conference, and unfortunately the Banyan Drive bill that would have focused on that, it would have appropriated money, matched the County's investment in Banyan Drive should the County choose to invest and partner with the State on the financial piece of the Master Plan, would have been able to accomplish that, and unfortunately that bill never made it out of conference. It was one or the other and couldn't have both. So with—that's something a 2019 legislative priority. You know others have proposed different management mechanisms of Banyan Drive, creating a, you know, another board within DLNR. I'm fully supportive of the BDHRA and its powers under Chapter 53 and of course, you know, with working with the administration. I wanna see the BDHRA do what it was intended to do, but I also realize it has limitations if you don't control the land and you don't have financial resources, which is where I personally feel the State's obligation is to do that. The State is the landlord for Banyan Drive, we collect about a million dollars in rent on the peninsula. The Naniloa pays a significant amount of that rent annually every year, of course they have the largest piece of land down there which includes the golf course. But there's not much that's being reinvested in Banyan Drive. DLNR has done studies, about a half-million dollars' worth of tourism studies, and market studies, and different types of studies. But what we really need is the Master Plan that's done in a collaborative effort, you know, within our community so we can really feel like this is the vision for Hilo. What do we want Hilo to look like? What do we want Banyan Drive to look like in the future? And it, it really is the nexus for everything. It's the nexus for the harbor, for our cruise ship industry, for our airport, for bringing back domestic flights from the mainland, for attracting international flights and it's a centerpiece of everything, so. DELIMA: Anyone else want to jump in? Because one way that I kind ofI was trying to argue for in the past that if we're not increasing density, you know, why can't we consider this a Master Plan and I was, again, I was told this, it doesn't qualify as a Master Plan. Because until, until such time that we are empowered as an Agency, we cannot take any action. We cannot even go to the DLNR and to the Board and say we want to do a memorandum of understanding for the development of, for example, Country Club where we want to solicit interest. So the last Page 7 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes time we, we met, when Suzanne Case was present, we kind of suggested to the chair that maybe they should put out a request for proposal; see if people are interested in entering a memorandum of understanding for the development of Uncle Billy's, I think we were talking about, in terms of tearing it down and constructing onsite at the same density for that proposal and perhaps other proposals for that were adjacent to the Naniloa area. So that's where we left it and we're here today. So KAHELE: After that meeting, which was I think was in the fall, DLNR did put out a request for information for potential interest in the Uncle Billy's property. And one strategy is to look at the peninsula parcel by parcel with probably the Uncle Billy's parcel being the one that needs the most attention because that's the one that's closed, it's the one that has the most potential depending on what we decide to use, use it for. So they put out a RFI and they got one proposal back from Tower Development and they had suggestions in what to do. Demolition of Uncle Billy's, the first thing it's gonna trigger is either an Environmental Assessment or Environmental Impact Statement. Either of those can be $500,000 or a million dollars. It's gonna take time to do that. After you figure you get that done, then you, demolition of Uncle Billy's is five, seven, potentially ten million dollars because of its, it's in a Special Management area, it's in a conservation district, and so we're looking at a very significant investment and time just to even address Uncle Billy's. Now, what do you do with that? So, you know, it's my role as a State Legislator is I'm looking at what types of incentives can we provide to potential developers, whether it's tax credits or its some type of different bonds, or what, what can we do to attract investment so the State or the County doesn't have to bear the burden of a $12 million dollar demolition, that at the end of that $12 million dollars is just a vacant piece of land. We haven't even built anything yet. Now, arguably, you would be able to get a higher lease for that because the developer doesn't have to put in all that money, but it's gonna be pretty difficult to go to the Leg for, you know, a million dollars for an EIS and $8 million for demolition for Uncle Billy's. That's, that's going to be a challenge, there's no question. But that's where that is right now. Request for interest on that and DLNR is waiting to respond to that. Another thing we've suggested with, on the peninsula, is to look at a request for information to look at a Master Plan for both the Uncle Billy's or the Country Club—and the Country Club property. You know, what would you do if you wanted to lease both of those parcels, or develop both of those parcels. And so that's something that DLNR's maybe looking at as well; I don't know. Mr. Heit can speak to that, but that's where our focus is right now. How do you, how do you come up with the financial resources to do a Master Plan. How do you come up with the financial resources to at least do an Environmental Assessment of Uncle Billy's. And unfortunately that has to wait until the 2019 legislative session which is a year from now. Unless, DLNR, through their special land development fund, which they have some financial resources, is willing to put in that investment. But, you know, that fund is used to fund a lot of conservation and different programs and different lands throughout the State, but. You know the other thing that we looked at as well is each property and how we maximizing highest and best use of each property. You know, most of the leases there, the only property that is on a month- to-month revocable permit is the Country Club property. They generate about HEIDENFELDT: Reeds Bay too. KAHELE: Is on a month-to-month? Okay. Page 8 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes DELIMA: Gordon, was the request for interest only for the demolition of the HEIT: Um, actually no, the request for interest was, I believe, for demolition and redevelopment of the Hilo Bay Hotel property. So yeah, and going back to what Senator Kahele mentioned before, we did look into potential of doing multiple property requests, but again, given the limitation that we have and what this agency has, we have very few options. You know, we essentially put a property up for lease. You know, do a long-term lease through public auction and we have structures on those sites that need to be addressed, you know, what do we do with them. We've done the studies, several studies, and the consensus is that they need to be demolished. KAHELE: You know, in the request for information for the demolition of Banyan—Uncle Billy's and construction of a hotel, one of the proposals from Tower Development was also to allocate, I believe, at least two acres right across Reeds Bay for parking, because there is no parking at Reeds Bay, and maybe even parking on the other side where Lili`uokalani Park is where the tea house is. So, you know, the current lessee was, was willing to look at the golf course property as partnering with the County, which I'm not sure how Mayor Kim's thoughts on that is, but I thought that was pretty innovative, you know, as we look at, you know, enhancing more public use on Banyan Drive in places that people really gather at on the weekends, right? Reeds Bay is definitely one of`um, Lili`uokalani Park is another one. DELIMA: What's the status of that Tower proposal? HEIT: Well, it's still being reviewed. Unfortunately that's done at our central office on Oahu, so to the best of my knowledge it's under review and supposed to be getting back to the folks at Tower Development on a response. But again, one of the limitations on that property, the Uncle Billy's property, is like you said, the parking. You know, you tear down the building and you put something up, where are people gonna park their vehicles? You know, it's—this is a mobile island. People come here, they rent a car, they need—if they stay at a hotel they want someplace to park. And given the current limitations, I think it's one parking stall per unit, basic unit, if there's a modified unit it's one and a half or something. So, you know, you're very limited on that property as where you're gonna put the vehicles. So it makes it a unique challenge for the Department to come up with a DELIMA: Unique challenge for the Department, but a unique opportunity for Tower. HEIT: Unique would be the key word, yes. KAHELE: And you know, I'd have to commend Tower Development DELIMA: Absolutely. KAHELE: —for what they've done at the Naniloa. You know, it's, it's fantastic. You know, if you, I was there on the Fourth of July weekend and there was about 500 people in the pool. I didn't think you could put 500 people in the pool. And about 2,000 people on the lawn, you know, and that was just something that they had done for our community and it's fantastic. When the Hokule`a was there for Merrie Monarch, I mean, it was the place to be. And, you know, KITV and the news stations was doing their morning shows out on the lawn of Banyan Page 9 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes Drive, I mean of Grand Naniloa. So that same type of model is what I'd like to see, you know, start to permeate through Banyan Drive. When I met with Chair Case on several occasions, she's always very supportive of the BDHRA, and I've heard this often, you know, that we're waiting for the BDHRA to tell us, give us their vision, their Master Plan, what they wanna do, how they wanna move forward, and so I don't know if, you know, Gordon you feel the same way or think that's, that's the intention of, of the Chair of the Land Board, but it seems like they definitely support home rule, they definitely support our community and our county and want this community to be the driver of what happens on Banyan Drive with they kind of being the check as the landowner. So HEIT: Oh absolutely, I agree 100 percent, I think and the chair is on board with that too. Again, you know, it's kind of like a catch 22 situation where we, you know, we want to move forward, you know, the Department wants to move forward on developing these properties but how do we do it. You know, any commitment we make now is going to have an impact 50, 60 years from now. You know, it's a long-term decision that we're making so we have to make the right decision, make it right the first time. YEE: Michael Yee with Planning, Planning Director. So, I think for a while now, the Planning Department has been putting forth that what we need is an EIS for the entire area instead of piece-mealing. We heard if Country Club does something then they would do one, if somebody wanted to do it then they're going to do another one. It's easier to done entire EIS for the area and get `er done. So then when you sit there and say, "Okay, we want to move forward,"what we have to move forward on one option was to go with the EIS. Okay, easy to say move forward, but as landlord, is DLNR ready to put up to help with that EIS? And in every step that we've taken with the Leg, we've met barriers to that. And again, you know, there's been plenty of testimony that DLNR has invested certain amounts for this and that studies, but we're at the point where we acknowledge what we—one option is an EIS. BDHRA has no funding right now, and so without a partner, kind of tough. And I think the Senator tried his best to help us with the funding, so did the Mayor, and we still fell short and so it's not as if there wasn't options that we were trying to fill that funding void, but now it's kind of like coming back to dad, right? It's like, we need a little something—if we really mean about moving forward, what now? And as landlord, what's the leadership that's going to be provided, you know, from DLNR is one of my questions, and one last big question I propose is we're all talking about in the end revitalization of Banyan Drive. And if we're talking about revitalization of Banyan Drive, we can't you know, economic development stuff isn't just one area. It's not just about housing, it's not just about commercial business, it's a bunch of things. And so the question has to be, what's the best practice to get us there? And again, we gotta stop thinking about what has been done, over if we've done things. The question right now is would a consultant come in, let's say we hired a consultant to say how we're going to do revitalization, and would they right now suggest the way we're going about doing it? And if that's not the answer and they wouldn't say, "well that's not exactly how we would, should be doing it,"then we have to take that advice and move forward. And again we don't have that consultant, but everything that I know as a planner tells me we're not approaching this with all the best practices, and unless we start looking for what our best practice is in economic development, then we're kind of falling short in what we need for Banyan Drive. So, some hard questions, Gordon. I get that, but at a certain point if we wanna move forward, we need some answers. Straightforward answers. Page 10 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes DELIMA: We need money, you mean. YEE: That too. Mostly that. KAHELE: On the money piece, you know I was a big advocate of shared resources. County of Hawaii puts in money, State puts in money. The fourth of May, and what's happened to our island the last few months, has changed that decision for me. I don't expect when we get property tax bills starting to come in next month and we're short five, six million, the Leg didn't appropriate more TAT to Hawaii County that I can go back and say, "Hey, Mayor, we need you to put in two million for Banyan Drive," no way. So I think it's gonna fall more to the State and DLNR to invest that money. I can't expect Mayor Kim to do that when, when we're in a major, major budget crunch now. And we don't know how long this is going to last. We don't know the economic financial impact to this county, and that's why even think more the State has to take the lead role in investing financial resources on the peninsula. DELIMA: Where does that money go, the lease money. Does it go to the General Fund or does it go into DLNR HEIT: It goes into a special land development fund. Eighty percent does, twenty percent off the top goes to Office of Hawaiian Affairs. KAHELE: Yeah, it's called the SLDF, Special Land Development Fund. It's under like DLNR 101 is the program code. That's where all the revenue from lease rent goes. It's managed by the Land Division. Russell Tsuji is the director of that division and, if I'm not mistaken, it generates just about $800,000 a year on the peninsula is paid to SLDF. With Naniloa paying about half a mil in a year in lease rent, and Hilo Hawaiian next at about $150,000 a year. DELIMA: Could the Board reallocate some of those monies? Maybe to pay for the, the EIS over a period of time? HEIT: I'm not sure if the Board has the authority to do that. KAHELE: So if you looked at Senate Bill 2972 when it first was heard in the Senate, that's what the bill proposed. To allocate a portion of the SLDF to the BDHRA. DELIMA: But that didn't go KAHELE: Of course; DLNR adamantly opposed it because they utilize the SLDF for their statewide programs then manage a lot of their resources. They're already under-staffed and under-funded as well. You know, but my argument was, if we've been collecting $800,000 a year on the peninsula for several years now, then we should allocate a percentage of that back, just like a landlord would invest in their property, into the peninsula. But that didn't make it out of Leg this year so. DELIMA: The long and short of it is, the only real, immediate proposal that is in any shape or form of trying to get implemented is the Tower Development proposal for Uncle Billy's and, you know, we can agendize that for our next Redevelopment Agency and discuss specifically that proposal, and maybe as an Agency we can take action on that proposal. Hear that proposal and Page 11 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes make a recommendation to the Board in DLNR to try to get that going. You know, if we see that it has any merit, we should vet it at our next agency meeting and property agendize it. But KAHELE: You know, what I've DELIMA: Go ahead. KAHELE: You know, tried to rationalize with DLNR is that if they invest, the State invests on the peninsula, we increase ground rents. Well, I mean, right now we have Tower Development paying a thousand dollars a month to secure the Uncle Billy's property on a revocable month-to- month permit. But, you know, potentially, if we had demolished Uncle Billy's and built a new hotel, that would generate a lot more money than that. Which is more money for the special land funds, it's more general excise taxes for the State,right? So it's gonna require that investment on DLNR as the landlord or the State Legislature to do that, which is where I'm looking at what, what as something between now and mid-fall, based on recommendations of the administration and the BDHRA, what are some legislative vehicles I can and my house colleagues can put together? Tax credits, entitlements, or zoning, I don't know. Whatever different things that we can, legislative tools we can start working on for 2019 to help get this going based on the BDHRA vision, Master Plan, Conceptual Plan for what we need to do. We just can't wait any longer cause this is multi-year project. We're lucky if we see a new hotel on Uncle Billy's property in five years. Five years? Three? You know? DELIMA: Well the sooner you get it, it—kind of like a domino effect. Mr. Mayor? KIM: You know, I'm going to take a different perspective if you don't mind. I just got involved in Banyan Drive in the year 2000 and something must be wrong with my thinking because I am, I'm really quite pleased with where we are today. You know, I think Mr. DeLima, you share some of that because you've been through this such a long time as a just a citizen, not just a member of the Board, and so let me back track some of the things I think the County is doing a good job in Kalaniana`ole Highway. I think the State has done in expansion of the harbor. I think the State did a great thing in granting to the County of Hawaii that one acre next to our park, Reed's Bay Park. We promised that we'll improve it; we're 90 percent finished. The rest is make a retaining wall because of erosion, and put in some sand, and finish their parking lot picnic area on the one acre lot that was given. All of this within the past few years to me. So, you know, I look at that. I think everybody is extremely happy with the Grand Naniloa. I thought it was great progress when the State and Grand Naniloa came to agreement in regards to putting out to bid Uncle Billy's. Whether it be, hopefully, three to five years that we have a new mid-scale type of hotel for the middle class. If you look at all of that, to me, that's tremendous as far as this place here. I go down there every weekend when it's a nice day and admire the hundreds of local people that use Reed's Bay Park, and that's not by accident. You know, that was heavy discussion that Banyan Drive will be not a peninsula of Hilo, Banyan Drive is part of Hilo. Look at the connection on the trails, you know, we are in discussion with State and Kamehameha of working together to clear out the park next to Wailoa. We are going to proceed with the expansion of the trails through Wailoa, and as I told them, to me a naturally most beautiful place on God's earth is for a bikeway walkway. I have total confidence that the State and Naniloa will work out and we'll have a nice mid-sized type class hotel, motel, whatever we call it, next to Naniloa. I think I see great progress in a private ownership for the property next to Naniloa in communication, and see and the last communication with them was they want to be Page 12 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes part of the expansion after years of just sitting there. Now I mean, cause what the Legislature did, the elation of the commercial lots, elation of the Banyan Drive people, what they can go forward now. Those two places, you know, if I'm wrong, I'm wrong, but I think they all are eligible for a lease extension of 40, 50 years, or whatever it is to fix it. I don't know if I'm wrong then I stand corrected. But here's the best part, coupled with the worst part, that eruption still goes on, the demand for people coming to Hilo to me is unbelievable. I've never, this is my home for all my life, I've never seen it like today. People are really interested in Hilo, of wanting to visit, wanting to live, and wish they could work here. But it's a, I'm very grateful for Naniloa, of reaching out to the County and said you need parking lot for your beach, we're willing to negotiate with you part of our property for a parking lot. I'm not trying to be, you know,just Mr. Optimistic. I really see all that. So the only thing holding us back is some of the nitty-gritty things in regards to the EIS. To me that's just money. And we were going full speed on that until we got into some nature's bad luck, but we'll get it. And I really feel all of that. We made a commitment to do a better job in maintaining the banyan trees on Banyan Drive, and maintaining the whole place. We are making plans right now to see how, what kind of picnic park area we will make next to Reed's Bay Park because of the extreme popularity of that place. At first it was going to be just a parking lot and we thought, no, that's just a waste. Look at the pop-tents and those things that people do every nice weekend, and birthday parties, etcetera. I'm not trying to criticize your concerns because they are real, but I'm saying look at that beautiful place and what has become. Turn the clock back just ten years. That place at Reed's Bay was hardly used except for one or two cars. Nobody went swimming there anymore except the druggies in the back until the State gave us that so we could clean it, and now it's a beautiful swimming hole again. And we'll fix it. We'll fix it within two years. You know, right now it's a design phase of what shall we make, a bigger parking lot, I think it's a waste, if we can negotiate with Naniloa and use that place for a parking lot and make that a nice, bigger picnic area because the demand there. And look at the sidewalk plans for Kalaniana`ole, look at Kuhio Park. That was all within the past few years. That was a community coming forth and saying give us permission to make that park. That's all they asked, and look at what we have today. And the plan was to make it a connector to Reed's Bay. I don't know when that will be done, but it will be done. And just visualize how great that will be. I really feel good about Banyan Drive. DELIMA: Thank you, Mr. Mayor. I appreciate those comments. Nathan? GADDIS: So, actually, I'm just kind of following up on the Mayor's comments. I agree with his observation that victories tend to be incremental here and really happen over time. But I also want to follow up on something Senator Kahele mentioned, and also I think Mr. DeLima, which is we have the lava flow issue sort of happening in sync with these things that we're trying to figure out. And I don't know funding mechanisms, how they work exactly, but you know, if for instance a similar disaster event were to happen in Honolulu, I'm sure there would be the political will and everyone would be scrambling to come up with some sort of rescue fund, you know, some sort of major redevelopment plan for Honolulu. And I do wonder if there's some opportunity there. I don't know if we have the political power from the outer islands as much, but if there's some opportunity there to use a bigger push for some sort of rescue package, economic redevelopment package, you know, due to the flow that's happening cause it's changing our geography in real time and changing, displacing residents, you know, there's a major big picture shift happening like Mayor Kim said into Hilo especially. So I wonder if there's any opportunity there to have a grand strategy this coming session for, I'm sure you guys Page 13 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes are working hard on various things, but to kind of take that as an opportunity to approach the State and say step up, you know, for the Big Island, step up for East Hawaii, and see where you can get some of those funds re-directed to maybe even fund this effort a little bit. Because they're all interconnected at this point. You know, it would help us to have a grand plan for how to redevelop this side of the island with the flow going on. Private sector will respond over time and you'll have resettlement, you'll have redevelopment, but if there's a guiding hand, there's a good role to play there so I do wonder if there's an opportunity here for a bigger piece of funding that could hopefully be funneled into various projects, possibly even this one, maybe even Downtown Hilo. You know, something to get things restarted there. But the need is there, and I think at least on this side the political will is there. So I just wanted to mention that and, you know, I'll leave it to you guys to be the experts on how you figure that out. KIM: If I may Mr. Gaddis, the meeting I just had before this one was just that. The request by the State. First of all, I'm the last guy to back the State Legislature; I shouldn't have said that, that's not true. But they're reaching out to us. They came out to the EOC on weekend meetings, the State, the House, and the Senate, asking us what our needs are. And right now, I see this is an opportunity for that. By this Friday I am supposed to finish a general plan, I don't know what general means but as specific as possible, for our needs for a special session. And within that we will identify these things. Our needs are great; number one priority may be directed towards the Puna evacuees and develop community in a housing program long-term for them, but part of our request, and maybe I shouldn't make this public but I'll take advantage of it and maybe get the Senator's vote, that we want the re-evaluation in regards to the GET. And what that is, is funding to allow us to do these things, because you are right, sir, you know this volcano—this morning's discussion was nobody knows how long this will last but at this present state already destruction is tremendous. The demand for hotels, I wish I was in the hotel business in Hilo, I'd make a lot of money I think. Because we have to account for,plan for, the lack of hotel space in the Volcano area and residential areas as well because of what is happening. But we will submit to the State Legislature a special session, not wait for next session, in regards to additional revenues and means of additional revenues and how we're going to spend it, and part of it will be about our general fund expenditures to do just what we're talking about. DELIMA: Councilmember you want to say anything? Go ahead. LEE LOY: Thank you, Chair. I just want to reflect on a couple of things. I also have a planner hat so I absolutely agree with Kai, and DLNR needs to help with the funding. This is a new reality for us. The events in Puna has triggered just a whole new reality for East Hawaii in general. As the Councilmember for the district, there's 11 beach parks and they are really beginning to feel the stress of all the beaches and beach areas that we lost down in Kapoho. And so back to that new reality, besides the peninsula, we have to look at how just Hilo, so many people are migrating to Hilo to just be family. So I really stand firm on a special session, maybe some creative ways that the State can come up through those special funds. You know, that's where I stand in all of this. And I just want to leave this one thought, with the events in Puna, in Hawaiian language we call this hulilau [sic hulihia]. It's a transformative time. And if we're looking for a goal, or a vision for the peninsula, maybe we should consider that, that hulilau, that transformative time for economic development. So I hope that can be, maybe a driver. I also agree with Michael, we need that EIS, we need a Master Planned EIS so we can start penciling out some of the other stuff Those are my thoughts. Page 14 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes DELIMA: Go ahead. YEE: Again I'm not, I'm not, Gordon's the local guy here so he's our messenger to the powers that be, so I understand that, and so part of it is arming you with the best arguments I can, let's say from a planning perspective. And again, you may want to disagree with the science or whatever, but the State has decided that we're gonna assume a 3.5 foot sea-level rise by 2050, and you only have to look at Banyan Drive to realize that's gonna have impacts on the entire area, possibly. So that's another reason, even from a conservation standpoint, why you want to take a look at it as one encompassing EIS around even just simply a sea-level rise. Obviously that's not the only issue that gets looked at, but again, that's a reason why the leadership should come from DLNR on wanting to be part of that effort to get the EIS done. Just food for thought. DELIMA: Gordon. HEIT: Yeah, I think Michael has a good point on that. They were looking at doing studies on, like we said, sea-level rises on future development. I get calls from the lessees down there now, Hilo Hawaiian Hotel. You know when we had those king tides last year, the water was going into the lobby, the downstairs. And they're asking, you know, "What can we do to stop it?" I wish I had that power to, you know, move the tides back; I don't. But yeah, our concern is with the existing structures, never mind the structures that are gonna be developed in the future. Where we gonna put `um? The existing footprint is dynamically changing year to year. Again, it goes back to what I said earlier, how, you know, we're planning for the future here. We're planning for 50, 60 years from now so anything we do, any decision we make has to be taking that into consideration. You know I wear two hats, you know, I am, you know, the local representative, the district land agent for this island. I care about this island, I care about Hilo. I've lived here for the last 40 years. I know this place, I've seen it grow, I've seen it develop. I'm also, you know, representative of DLNR and so I get drilled into me that, you know, funding is a legislative issue. The funds that we generate through Land Division, as Senator Kahele mentioned before is, funds the department. You know, our DOCARE officers, our forestry personnel, parks, boating, they all receive funds from us. And, you know, where do we take the money away from? Who do doesn't get funding to develop this? I understand that, you know, yeah and that's basically Land Division's responsibility is to, you know, we generate funds. I think we're the only division in the department that actually has a, you know, a large capital source. We take care of a lot of things so, you know, we'd ask, we'd go back to the Legislature, you know, help us out. We need to get this thing done. We need to move forward. And EIS would be the most logical way of doing it. You know, we can do a piecemeal, work on Uncle Billy's, work on Country Club, maybe I'll move down the row, but doesn't make sense. Environmental Impact Statement, comprehensive analysis on the whole area will help us determine where to go and how to proceed in the future. DELIMA: Well, I think the discussion has come full circle and what it comes right down to it is there is a proposal for Uncle Billy's, I think everybody agrees that the EIS is something that we need to do. The Mayor is working hard dealing with our overall problems that the community is facing and is putting together a proposal for legislative action, whether it be a special session. So I feel good that everybody is doing a great job in identifying the problems and addressing the solutions for a productive effort to get things implemented. So with that, my suggestion is that we agendize for our next meeting the proposal for Tower Development so we can vet it and we can receive community input and if a majority of the members of the Board support it, we can Page 15 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes forward a recommendation to the BLNR, DLNR that we support the proposal and we hope that they will look favorably upon it. If we have concerns we can address those concerns as well. And hopefully we'll continue to make progress. Does any members of the Agency wish to make K.T., you didn't say anything, I'll give you the last word. You can filibuster too if you want to. CANNON-EGER: Thank you, Brian. It's good to be here. This is my first meeting. I'm a new member of this agency. Thanks to all of the members of the public who have come out today. Some of you know my involvement on the peninsula with Friends of Lili`uokalani Gardens, celebrating a centennial for three years because the garden was started in 1917, didn't get finished till 1919, what date do you pick? We picked all of them, three year party. And one of the things we said we were going to do is involve the entire area, so we came up with the Banyan Drive art stroll and we will do that again in January. We came up with a photographer's competition and made a calendar. We're coming up with all of these oddball ideas to involve the whole area. The next one that's coming not too far down the pike is the Queen's birthday celebration that's in six weeks and three days from now. That attracted 35 hundred people last year to Lili`uokalani Gardens. Parking, yes, we know the difficulties and shuttling people from Afook Chinen is one solution, but having some parking in the area would be a great help. The next thing down the line is holiday lighting. It shouldn't be just Downtown Hilo; all of this area should be lit, including the gardens for the holidays. So the ideas we come up with for the gardens, an economic engine if there ever were one, gardens aren't just, "oh nice, look at that," gardens are economic engines for communities and they should not be looked at as, "oh, what can we put in that space." No, the space alone is valuable to any individual walking through it just for calm and tranquility, for grandchildren playing on the big stones. There are some big needs for the benefit of our residents and our visitors in this area. That pond is full of mud from the 1960 tsunami and it's time that stinky mud got taken out, more than one bucket at a time the way we've been doing it for the past year and a half. Yeah, we got 4,000 gallons out, we're getting ready to have a pumper truck from the County come in and do some more work so we've taken it away from the very fragile walls. Yeah, the walls need to be fixed too. So having an EIS for the entire area would be very beneficial to our residents and to our visitors in their use of this park, which is increasing as parks in Puna disappear. The demand for a place to have a wedding, a place for graduation, a place to take photographs with the family. All of these things are demands on our parks and we're going to see more as the parks in Puna disappear. I am so grateful to be here and thank you very much. DELIMA: That was very well said, K.T. I really appreciate your comments, it gives us a real healthy perspective of the opportunities to solve some of the crisis that exist. ADMINISTRATIVE MATTERS The Agency took this item up at 3:14 p.m. 1. Approval of minutes from the March 28, 2018, Banyan Drive Hawai`i Redevelopment Agency meeting. DELIMA: And if you could make the motion to approve the minutes, we can CANNON-EGER: I move the minutes be approved as circulated. Page 16 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes DELIMA: And if we can get a second from you, Nathan. GADDIS: Second. DELIMA: If there are no corrections, all those in favor say aye. ALL: Aye. DELIMA: Opposed say nay. Motion is carried. We've approved the minutes so now we can adjourn the meeting. ANNOUNCEMENTS The Agency took this item up at 3:15 p.m. 1. Next meeting date. DELIMA: The next meeting date will be probably the last Wednesday in August and we'll agendize the Tower Development proposal. And with that, Chair will entertain a motion to adjourn. GADDIS: Make a motion to adjourn. CANNON-EGER: Second. DELIMA: Everybody's important in this meeting. Cannot conduct business without all three. All those in favor say aye. ALL: Aye. DELIMA: Opposed say nay. Motion is carried. Thank you very much all for coming. Meeting adjourned at 3:15 p.m. Respectfully submitted, Kim Tanaka, Secretary ATTEST : Brian DeLima, Chairperson Banyan Drive Hawaii Redevelopment Agency Page 17 of 17 Banyan Drive Hawaii Redevelopment Agency July 25,2018 Minutes