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HomeMy WebLinkAbout2018-10-18 Leeward Exh C (AMEND REZ 926) LEEWARD PLANNING COMMISSION COUNTY OF HAWAI‘I HEARING TRANSCRIPT OCTOBER 18, 2018 A regularly advertised hearing on the application of KD ACQUISITION, LLLP AND HUALALAI INVESTORS, LLP (FORMERLY KAUPULEHU DEVELOPMENTS) (AMEND REZ 926) was called to order at 10:25 a.m. in the West Hawai‘i Civic Center, Community Center, Building G, 74-5044 Ane Keohokālole Highway, Kailua-Kona, Hawai‘i, with Chairman Keith F. Unger presiding. COMMISSIONERS PRESENT: Keith F. Unger, Nancy Carr Smith, Perry Kealoha, Michael Vitousek and Faye Yates ABSENT AND EXCUSED: Scott Church and Sonny Shimaoka ALSO PRESENT: Malia Hall, Esq. (Counsel for the Commission), Michael Yee (Planning Director), Jeff Darrow (Planning Program Manager), Maija Jackson (Planner), Christian Kay (Planner) and Noriko Sauer (Commission Secretary) And approximately 14 people from the public in attendance. APPLICANTS: KD ACQUISITION, LLLP AND HUALALAI INVESTORS, LLP (FORMERLY KAUPULEHU DEVELOPMENTS) (AMEND REZ 926) Submission of an Overall Status Report to the Planning Department, Planning Commission and County Council as required by Condition BB of Project District Ordinance No. 99 42, which rezoned 1,078.634 acres from Open to Project District. The applicants are requesting a determination from the Planning Commission and County Council if a time extension to Condition B (Development Period) is needed. If it is determined to be needed, the applicants are requesting a 20-year time extension to comply with Condition B. The subject properties are located adjacent to the west of the Kona Village Resort, makai of Queen Kaʻahumanu Highway, between the 87 and 84 mile marker, Kaūpūlehu,ʻ North Kona, Hawai‘i, TMKs: (3) 7-2-010: 022 (por.) to 027, 031; 7-2-031: 001, 002, 004, 06 to 011, 013, 015 to 023, 025 to 030, 032, 033; 7-2-032: 001 to 003, 005, 007, 009, 010, 014, 016 to 034, and 036 to 053 collectively “Lot 4-A”); and 7-2-010: 020, 028 to 030; 7-2-029: 001 to 020, 022 to 025, 027 to 048, 050 to 058 and 7-2-030: 001 to 035 (collectively “Lot 4- B”). UNGER: Agenda Item No. 3, Applicants KD Acquisition, LLLP and Hualalai Investors, LLP, formerly Kaupulehu Developments, Amend REZ 926, submission of an overall status report to the Planning Department, Planning Commission and County Council as required by Condition BB of Project District Ordinance 99 42, which rezoned 1,078.634 acres from Open to Project District. The applicants are requesting a determination from the Planning Commission and County Council if a time extension to Condition B, Development Period, is needed. If it is determined to be needed, the applicants are requesting a 20-year time extension to comply with Condition B. The subject properties are located adjacent to the west of Kona Village Resort, 1 EXHIBIT C makai of Queen Ka‘ahumanu Highway, between the 87 and 84 mile marker, Kaūpūlehu, North ʻ Kona, Hawai‘i, collectively referred to as Lot 4-A and Lot 4-B. KAY: Yes, thank you, Mr. Chair. If I can direct your attention to the screen. The subject property, or the subject project area, is located in the North Kona District of Hawai‘i Island, and it’s identified, or known, as Kaūpūlehu Project District. For your reference, Queen ʻ Ka‘ahumanu Highway is running generally east-west through the slide, and the subject project area is outlined in red. Just for reference, you’ve got the Kona Village Resort located here along the shoreline and the Hualālai Resort to the west. So this is kind of an interesting application; it’s kind of multiple parts. First, the applicant is requesting a determination from the Planning Commission and County Council if a formal request for a time extension of the 20-year development period articulated in Condition B, Development Period, is needed. That condition states, “This project area shall be called the Kaūpūlehu Project District will be ūpūlehu Project District. The development period for the Kaʻʻ 20 years from the effective date of approval of the Project District Ordinance.” If it is determined ultimately by the County Council that a time extension to Condition B is needed, the applicants are requesting a 20-year time extension to allow the completion of the remaining development activities on the subject parcels. So we didn’t come to you first to try and deal with the determination, get a determination from the Council, then have to come back for the amendment; the applicant asked to kind of do it all in one shot. In addition to this, there was a Condition BB of the ordinance that required an overall status report at the 20-year mark for the Planning Director, Planning Commission and County Council to consider as well. So the reasons for the request is the applicants believe that the 20-year development period for the KaʻProject District comes from a representation made in the Project District application stating, “full buildouts of the project is expected over 20 years.” The applicants believe that the 20-year development period condition was likely only added to allow the Planning Department, Planning Commission and County Council an opportunity to review the overall progress of the development of the project after 20 years as required by Condition BB, which reads, “Twenty years from the effective date of the Kaūpūlehu ʻProject District Ordinance, the applicant shall submit an overall status report of the project, including the percentage of the completed development. The Planning Director shall also provide an assessment of the development of the Project District and its compliance with conditions of approval for transmittal to the Planning Commission for their review and recommendation and then forward to the County Council for their review and action.” So it’s a bit of a mouthful. I didn’t add a slide here, but ultimately in 1999 the Project District Ordinance 99 42 rezoned the 1,078.634 acres from Open to Project District in order to develop a resort residential community consisting of 530 single-family homes and 500 low-rise multiple-family units, 36 holes of golf, a golf clubhouse, an eleven-acre neighborhood commercial center with 45,000 square feet of leasable space, a three-acre residence/members recreation club and a 70-acre area for public shoreline access facilities and other recreational uses and cultural activities. So that’s the development against which we are trying to determine whether or not it’s been complete. The applicants believe that if the ordinance intended for the applicants to apply for a formal time extension, there would be no overall status report condition, but a clear directive to request a 2 EXHIBIT C time extension. Furthermore, the ordinance lacks the standard administrative time extension condition. The applicants believe that this condition was omitted inadvertently, citing other Project District Ordinances in the general time frame that were adopted, which included the administrative time extension condition. Given the lack of clear guidance in the record on the reasons or intentions of the Planning Department, Planning Commission and County Council regarding what to do at the end of the 20-year period, the applicant is requesting a determination on the need for a formal time extension. So, just, again, the County zoning for the planning area is a Project District, which allow for a mix of uses that I talked about before. And other zoning surrounding area is Open as indicated in green, and then other Resort and Multiple-Family zonings are indicated in the pink, purple and mustard colors. The State Land Use designation for the project area is Urban as indicated in red, with the surrounding area is Conservation. The General Plan designation for the property is for the most part Resort Node as indicated in purple and some Open along the shoreline and Conservation is surrounding the property as well. Here is an aerial photograph of the subject project area. Again, we’ve got Queen Ka‘ahumanu Highway running generally east-west through the slide, and then you’ve got, generally this area to the south is Lot 4-B, which is the Hualālai Resort, and then the lot to the north is 4-A, which is Kaūpūlehu as identified by the applicant.ʻ Here is the applicant’s site plan for 4-A. And, again, you can see some of the development has taken place already. According to the applicant, approximately 80 single-family residential lots and associated subdivision improvements, including roadways and utilities, the Kaūpūlehu ʻ Beach Club, set-asides for the coastal planning areas, which are kind of in this area here, as well as the interpretive center, which is generally located here, and the Kaūpūlehu private wastewater ʻ treatment plant. The applicants intend to develop additional 425 single- and multiple-family residential units within Lot 4-A over the next 20 years, as well as an 18-hole golf course, golf clubhouse and commercial retail opportunities. And just for your reference, here is Lot 4-A and Lot 4-B. It’s here closer to, in this case, to the east. Here is Lot 4-A. This is showing much more development that’s already taken place. They are indicated that approximately 76 single-family residential lots, three multiple-family residential lots and 20 multiple-family residential units and associated subdivision improvements have already taken place in addition to the back-nine golf holes for the Keolu Golf Course. The applicant anticipates approximately 25 more residential units within Lot 4-B over the next two to three years. That’s in this general undeveloped area. So, in order to determine kind of these multiple questions, the first question being whether or not a time extension is needed, or a formal request for a time extension is needed, we took kind of a deep dive into the record to determine if there was anything in the record form the original rezone, any testimony or information at Planning Commission or at County Council, and here is ultimately what we found: 3 EXHIBIT C There was no clear rationale for limiting the development period to 20 years; there was no definition of what would constitute a completed development nor any guidance what to do at the end of the 20-year development period, for instance, would they be reverted at the end of that 20-year period or a time extension be required, etcetera; there was no apparent rationale for the requirement of an overall status report at the 20-year mark; there was no criteria against which the County Council should review the Planning Director’s assessment of the overall status report nor any guidance on which actions the County Council should take; and finally, there was no justification for omitting the standard administrative time extension condition for this project. So really it’s kind of a black hole of information. We couldn’t find anything that, there was no request from the applicant to have it structured this way, there was nothing at the Planning Commission hearings where the commissioners added these conditions, and the same thing at the County Council level. With that in mind, the Director found it difficult to kind of answer the question as to whether or not a time extension was needed. So then what we did as required by Condition BB is then take a look at that overall status report. And again, to date the applicants have developed approximately 582.030 acres of land, which is approximately 54 percent of the land covered under the Project District Ordinance. That includes spine infrastructure, water and wastewater systems, public access amenities and about 170 residential units within Lot 4-A and Lot 4-B development areas. However, to date the applicants have only completed about 23 percent of the now proposed dwelling units, about 170 of the proposed 727 dwelling units. And additionally, the applicants’ own estimates indicate that full buildout of Lot 4-A will continue through several development increments and will not be completed for another 20 years, based on current market demand. So, because we are compelled to make a recommendation relative to Condition BB, and looking at the information that the overall status report supplied, the Director is recommending a favorable recommendation be sent to the County Council for a 20-year development period time extension to Condition B, with conditions. I – it’s a lot – I’m happy to answer any questions that the Commission may have on our thought process and anything else that I can help you with. UNGER: Great, thank you. Commissioners, any questions? KAY: I apologize. There are a few more things, sorry. There were a few additional, a few additional pieces of information that came through since we sent out the background and th recommendation: On October 9, we received a State Department of Transportation letter outlining some requests and requirements relative to this application, and then this morning you should have received a response from Carlsmith Ball to DOT’s comments. And then another piece of information that we found, I mean not another piece of information, but, based on DOT’s comments, we are recommending an amendment to Condition N, which ultimately is just addition a No. 6 to the condition and it says that “the applicant shall provide an updated Traffic Impact Analysis Report and Traffic Signal Warrant Study if and when required by the State Department of Transportation.” That was something that came from their letter saying that they would like an update to the TIAR and Traffic Signal Warrant Study; they didn’t provide us with any guidance on at what point that should take place. And then based on Carlsmith Ball’s 4 EXHIBIT C response, there has been some ongoing conversation between the applicants and the district engineer whether or not that was going to be required and what other mitigation may take place th instead of that. So that’s something that is outlined in that October 17 response from Carlsmith Ball. And then one last thing, we found Condition W, there was just, and this is a condition for fair share, it’s the third to last page in your conditions – I’m sorry, these aren’t numbered, I apologize, but Condition W we pretty much x-ed out the entire existing condition because we’ve got new language now for fair share – so this is now on the fourth line down of the new underlined language, I’m sorry, it starts with, “The fair share contribution shall become due and payable prior to receipt of Final Subdivision Approval.” Because the Project District allows for both single-family and multiple-family dwellings, the trigger for fair share payment for multiple-family dwellings is Final Plan Approval and not Subdivision Approval, so we’d just like to add the language to say, “The fair share contribution shall become due and payable prior to receipt of,” and this is what we are adding, “Final Plan Approval or Final Subdivision Approval, whichever is applicable.” So that’s going to be the language we are proposing to add to Condition W in order to just clarify the trigger point for different development for fair share payment. And, with that, I’m happy to answer any questions the Commission may have. UNGER: Commissioners? VITOUSEK: Sure. I was just wondering how the fair share payments were adjusted, how it went from what it was to what it is now. KAY: Sure. So, fair share payment gets adjusted every year and it’s tied to Honolulu Consumer Price Index. And generally our standard condition says three years after the date of the ordinance it will start adjusting. So because this was, the original ordinance was granted back in 1999, we just updated to our standard condition with the new per multiple- or single-family residential amount. And that’s something that’s pretty standard when we do amendments to older Changes of Zone that have a fair share component, we generally will come and update those. VITOUSEK: So it’s like a standard formula for calculating that. KAY: That’s correct. VITOUSEK: Got you. KAY: Yeah, and it’s updated every year, yeah. UNGER: So, looks like that the Condition B is really what we are focusing on and trying to determine what exactly that means or doesn’t mean. KAY: That’s correct, yeah. And that’s where, we were really interested to see if there was anything that would shed any kind of light on how to provide you with any kind of guidance on 5 EXHIBIT C how to make your determination, and, unfortunately, we weren’t able to find anything in the record on that first question as to whether or not a formal time extension should be required. UNGER: Okay, and, again, just to read it, “This project area shall be called the Kaūpūlehu ʻ Project District. The development period for the Kaʻ from the effective date of approval of the Project District Ordinance.” KAY: That is correct. That’s— UNGER: And so that’s what we are trying to determine if that’s indeed a 20-year time limit, do they have to come in for another 20 years, etcetera, etcetera? KAY: That’s correct. UNGER: Okay, well, I guess, we’ll, and your opinion is yes, this does— KAY: Our opinion is yes, based on our review of the overall development, or the overall status report, which, again, was required under Condition BB, and, again, it compels the Director to make a recommendation to the Planning Commission and County Council for review and ultimately action. Again, the record didn’t give us any kind of idea as to what that recommendation looks like, but— UNGER: Okay, so this is your recommendation. KAY: This is our recommendation is ultimately at a 20-year time extension based on our review of where they are at in the development process. UNGER: And just from a procedural point, is this an opportunity then for the Planning Department to go back in, review and make changes to the conditions? Is this a legal question or is this -? If, if, say, they did not have, say, it was agreed that they don’t need a 20-year extension and they are just coming in for an update. KAY: So, yeah, I mean, it— UNGER: I mean they come in for an update and we take this opportunity to, because, I mean, and reviewing the changes, it looks like the most substantial change is the traffic analysis; I mean, there is not a lot of changes in here other than the opportunity to update or modify the conditions, which is probably a good thing. But, is this from, I guess, from a legal standpoint, is this the opportunity for the Planning Department to comment and require additional changes to the original agreement? KAY: It could be an opportunity. We didn’t see anything here that was out of the ordinary where it would require it. So, basically, all of the proposed changes to the language that we have are to allow for the 20-year time extension, and then just really updating older conditions so that are bringing up the standard language that we have now. 6 EXHIBIT C UNGER: Okay, assuming a 20-year extension is required. KAY: Assuming a 20 – well, ultimately, they are required to comply with conditions of approval through the end of development. And so, really they are still, they are not getting out of anything, should the Council decide to not require a 20-year time extension; they still have to comply with all the conditions of approval until the development is complete. UNGER: No question. But now we are adding and changing those conditions. KAY: Yeah, to the extent that generally we normally do that for these older Changes of Zone; we update language to standard condition language. So there is nothing here that’s really jumps out of the ordinary that we are making a substantive change. UNGER: Okay, and certainly the applicants can add to that as well. KAY: Certainly, yeah. YATES: I have a question regarding public access. KAY: Yes. YATES: Is there any? KAY: So I will have the applicants address this a little bit more, but my understanding is public access has been made available. There is the interpretive center as well. The interpretive center and then opening up the cultural reserve area is kind of on hold right now pending State Historic Preservation Division approval of a preservation plan. And the applicants can address kind of where that’s at in the process. YATES: Okay, I’ll hold my question for them. KAY: Okay, thank you. UNGER: Commissioner Carr Smith. CARR SMITH: I was saying an opportunity for the Planning Department to create a policy or procedure to deal with a situation like this so that we don’t have to appear like we have no history or don’t know what to do with this. KAY: I would, that is an opportunity. This is such a rare occasion, or rare situation. Like I say, it’s very strange that we didn’t provide an opportunity for an administrative time extension. It’s very strange that we required a 20-year overall status report. That’s not something that is usual or normal in what we do. So, I mean, we could come up with a procedure, but I’m not sure it’s happened enough or will happen enough in the future where it’s required. CARR SMITH: I just have one more question for you. 7 EXHIBIT C KAY: Yes. CARR SMITH: How has the applicant dealt with fair share to date? KAY: I believe – I’ll have the applicant address that – but they have paid fair share, I believe, up to the level that they’ve developed at this point. And that’s based on either prior to Final Plan Approval or prior to Final Subdivision Approval. CARR SMITH: Okay, thank you. KAY: Mm-hmm. UNGER: Thank you. Any other questions? Thank you. We’ll call the applicant up at this time. Please raise your right hand. Do you swear or affirm to tell the truth before the Planning Commission? APPLICANTS: I do. UNGER: Please state your name and area of residence. LIM: Good morning, Mr. Chair, Members of the Commission. Good to see you again. Steven Lim from Carlsmith Ball. Our office is in Hilo and Kona. BOND: Good morning. Thad Bond. I am representing the KD, the Lot 4-A side of the application for, and residing in Kailua-Kona. KNABLE: Good morning. I’m Jason Knable, work for Carlsmith Ball, and I reside in Hilo. UNGER: Thank you. LIM: We also have at the back of the room Mr. Jay Uyeda from Hualalai Investors, Project Manager. UNGER: Okay, thank you. LIM: So, I guess going to the question raised by Christian, the applicant will be requesting that the Planning Commission make dual recommendation so that you don’t have to choose one for the other. We think that there is, because the Planning Commission is making a recommendation only and that the County Council is going to effectively make the final decision on how this comes down, we’d ask the Planning Commission issue favorable recommendations on both the receipt of the status report for the project pursuant to Condition BB, and also make a favorable recommendation on the proposed conditions of approval by the Planning Department, i.e. for the 20-year extension, for the updating of the impact fees, and those types of things. And I think that way we can proceed in an expeditious fashion up to the County Council and have them make the final decision. 8 EXHIBIT C UNGER: Okay, great, so that being said, have you read and reviewed and do you agree with all the recommendations as set forth by the Planning Department and their recommendation? LIM: That is correct and we agree with the proposed conditions by the Planning Department, including the most recent revision on the Department of Transportation condition. Of course, that’s subject to our clients’ understanding that we won’t be changing other substantive conditions of the ordinance, but we agree with the current background and recommendation. UNGER: Okay, great, good clarity. Thank you. LIM: Essentially, what we are, kind of at the tail end on two different projects. The Hualālai Resort project on Lot 4-A only has another two development parts left; they are proposing single-family dwellings for a total of about 24 more lots, 25 more lots. The Lot 4-A development for the KD Acquisition side is more in the middle of their project, although the spine infrastructure, you know, water, electric, wastewater plants, that’s all constructed for the project. And so these are all under substantial commencement of their projects. I think they’ve been contributing a significant amount of jobs and tax revenue to the County over the past years. And we would ask for the Commission’s support of the dual recommendations that we discussed. The fair share question, you know, how do you make the fair share payments. When you come in for either Lot 4-A or Lot 4-B, you come in for your proposal either for Final Subdivision Approval for the lots or Final Plan Approval for the multi-family condo units, we will pay the fair share assessment updated to the current date, so we’ve not been, you know, paying the old rate; we’ve been paying the current rate as adjusted by the CPI Index. And I think that’s, you know, that’s why we don’t have any problem with the updating of the CPI Index on the fair share in the current proposed bill. With respect to the public access issues, I’ll go ahead and let my planner from Carlsmith, Jason Knable, address that issue. KNABLE: Good morning. With regard to the public access at KD, currently, the KD project has constructed an interpretive center that’s intended to provide some educational opportunities for those persons that want to come and visit the site and the Kalaemano preservation preserve, which is located just makai of the interpretive center, and, and also to allow for folks to do, you know, the typical public access down to the shoreline. I think, you know, what’s important to note is that in this area the public access, or it’s actually shoreline access, it isn’t traditional access where you would find beach areas to go down and do your activities; you know, the entire coastline is of a rocky nature, it’s pretty dangerous because of the surf. So the intention of the interpretive center was to allow for education on the cultural aspect and the rich natural and cultural resources there, but also allow for an opportunity to educate folks on the public safety aspect to protect folks. And, you know, the interpretive center was something that was conceptualized amongst the lineal descendants of the area, the kupuna-s, and a lot of consultation occurred with the, the government agencies were involved at that time. And they, I think they all agreed, and it’s also articulated in our comprehensive public access plan, that folks come to the 9 EXHIBIT C interpretive center to learn about the area, so we can ensure that, you know, the resources are preserved and nobody gets in trouble by the ocean. Currently, as we stated inside our overall status report, we are held up from opening this interpretive center to the general public because we have a pending long-term preservation plan being reviewed by SHPD. You know, we’ve, over the years we’ve followed up, our archeologist has followed up with SHPD. We have gotten no response. Our office has actually followed up about three times this year and, with no luck. KD is, you know, eager to get these improvements open to the public because it’s been completed for some time now. We actually met with the Planning Department about 2013, and walked through the entire area. I think the Planning Department was impressed with the level of improvements that were provided, but the full implementation of the access to this area couldn’t occur until the long-term preservation protocols are in place and all the proper signage goes up. And so right now we are kind of stuck. But in the interim, you know, folks want to come down to visit the shoreline, we’ve been directing those folks down to the Hualālai public access areas, where there is sufficient parking, and they can still get to, to the resources in our property by the lateral shoreline trail. I understand that folks do that by going through Hualālai, Kona Village, crossing through our properties, and even from the north they come through the property that way. We do allow public access currently to the interpretive center by reservation. We call Aunty Lei who is one of the caretakers down there, and set up an appointment, and she’ll educate you on the area by taking you on a guided tour because she knows where all the sites are. And she also brings down a lot of school groups that come and take a look at the resources down in that area. And, of course, you know, the area is still open for any lineal descendant that wants to come down, any cultural practitioner that wants to take advantage of the resources, including gathering salt. So that’s how we are addressing public access. YATES: Who would they call for that? You know, you make a reservation. You have to call someone? KNABLE: Yeah, you would typically contact Aunty Lei, but I, you know, I can, we can certainly arrange for— YATES: Kona, uh, who? KNABLE: Yeah, this would be at the— YATES: Hualālai? KNABLE: —interpretive, no, this would be Kaūpūlehu Developmentʻ, then— YATES: Oh— KNABLE: —and we can, yeah. YATES: —thank you. 10 EXHIBIT C LIM: The Hualālai Resort side there are north and south parking areas totaling about 77 stalls. VITOUSEK: Thanks. Yeah, I have a couple of questions about that. Is the requirement to open it up to public after the acceptance of the preservation plan a legal requirement or is that something that the developer has decided to do? Is there a condition existing that says the preservation plan must be accepted prior to opening it up to public? KNABLE: Just one sec. If I could open up the comprehensive public access plan. LIM: I don’t think that that says particular key in the condition itself, but it has been always part of the discussion with the cultural groups and the State Historic Preservation Division. Part of the problem on the oceanfront area fronting the Kaūpūlehu Development side is that there is a ʻ series of conservation subzones that were enacted during the initial approvals of the project through the State Land Use Commission, and many of the archaeological sites and the areas fronting the shoreline, which are pretty dangerous, were subject to these buffer agreements. And there is also an integrated resource management plan that was agreed to by the project owners and the community and accepted by the County as part of this. So that all ties into it. So that’s why Jason was saying it’s not like your typical let’s-go-to-the-sandy-beach-and-go-into-the- water kind of a place; this is more of a pretty important cultural asset for the community. In the original Land Use Commission proceedings, they had the area kūpuna, they had, Hannah Springer was involved, Leina‘ala Lightner who is Aunty Lei that Jason is referring to, they are all involved in the Kaūpūlehu Development Monitoring Committee, which was a reqʻuirement of the State Land Use Commission approval. So they proceeded through the initial stages of the project, meeting with the developer, and essentially approving all of these various cultural and access plans. VITOUSEK: Okay. In reading this we see that the only real requirement for opening public access is after the completion of the golf course, but I didn’t see any updates on plans for the golf course. Is there a time frame on the 18-hole golf course in the area? LIM: No, no, and we proceeded ahead with development of the various parking lots and interpretive center prior to the development of the golf course because we know that was important to the community. VITOUSEK: Absolutely. Would you mind giving us just a little bit more information on the preservation plan? I see that in your application you guys submitted a copy of that, but that didn’t make its way to us, and I was just wondering if we could have a little bit of history on the correspondence between SHPD. When was the plan originally submitted to SHPD? KNABLE: The plan was originally submitted in late 2013. The architect, or, excuse me, the archaeologist, at that time followed up I believe a few months later, and then it has just been continual follow-up by the developer over the past five years, including our office. We followed up in April and May of this year and then also earlier this month. VITOUSEK: And who submitted it? 11 EXHIBIT C KNABLE: The project archaeologist was— LIM: T.S. Dye and Colleagues. KNABLE: —Tom, yeah, Tom Dye. It was Tom Dye, and so he had made the original submittal, he had followed up I think once or twice after that, and then after that it was just the developer that followed up, and our office a few more times. VITOUSEK: And has there been any correspondence back and forth relating to it? KNABLE: We got one message acknowledging that, you know, we sent over, in April we sent over a copy of the plan and the letter from Tom Dye, you know, responding to the latest round of comments on the plan. And we were told that they would take a look, they weren’t familiar with the plan, they would take a look at it and get back to us. VITOUSEK: So there has been comments that SHPD has issued on the plan? KNABLE: This, yeah, this, as far as we are aware, the project archaeologist had responded to the last set of comments in 2013, and provided an updated report addressing those comments— VITOUSEK: Okay, so— KNABLE: —so we are just waiting. VITOUSEK: —SHPD reviewed the project in 2013, they submitted comments, most likely me, and then there was another draft that came back— KNABLE: Correct. VITOUSEK: —and has not been reviewed by SHPD. KNABLE: Correct. VITOUSEK: Okay. Has the County Planning Department reviewed the preservation plan? UNGER: Christian, can you — oh. KAY: Yeah, not to an extreme level of detail, no. We defer to State Historic Preservation Division on making the final determination on that. We, and I need to apologize. The applicant did supply us with not only the preservation plan but also response from the archaeologist in response to SHPD’s first set of comments or questions, and also supplied us with a traffic impact analysis report; for sake of saving of paper we decided not to print those fairly large documents. I apologize. In the future, and I’m happy to email that to you, but in the future when we have those, we’ll make sure we provide them digitally at least so that you can review those. VITOUSEK: Thank you. 12 EXHIBIT C KAY: Yeah. VITOUSEK: Has the County Cultural Resources Commission reviewed the preservation plan? KAY: At the time the preservation plan was drafted and submitted, I don’t believe our Cultural Resources Commission was seeded. So, no, they have not. VITOUSEK: Okay, but, I mean, now we do have the Cultural Resources Commission, and, you know, according to Hawai‘i Revised Statutes 6E-42 State Historic Preservation Division is required to have the opportunity to review and comment on mitigation plan that affects a permit, and, ultimately, it’s the County of Hawai‘i, or the permitting agency, in this case the County of Hawai‘i’s responsibility to make the actual determination. At this point if these guys have been held for years and years on end, and the public is losing out of that as not being able to access the property, at some point I would think that, because the County has this Cultural Resources Commission in place, the County has to make its own determination as to whether or not this preservation plan is acceptable per these permitting conditions, and review that so that the project can have some knowledge on whether they are in compliance or not and whether these sites are being maintained appropriately. KAY: We can certainly follow up with the State Historic Preservation Division and see where they are at with that. And the way that we direct, the way that we engage the Cultural Resources Commission is at the call of the Director to have them review a project or an application or something like that, so if it’s the pleasure of the Commission to direct the Director to do that, we can take that under consideration or we can have the Director kind of address that at this point— VITOUSEK: Sure. KAY: —sorry to put you on the spot. VITOUSEK: I mean I definitely don’t feel like I can direct the director to do anything, but I can make a recommendation that, you know, something like this where there is a clear need to have public access into that area for the community to have to be able to appreciate these resources that are down there. And a department is not meeting its regulatory time periods. And because of the way that the historic preservation laws are written, it is ultimately the County’s responsibility to move forward on that. And because the County has the commission, it seems like they are adequately suited to deal with that. YEE: More of a higher level comment would be I just met with Susan Lebo and Sean from SHPD, probably two weeks ago, to have a very private conversation around their untimely response to things. They certainly recently again lost their archaeologist on this side of the island, so that hasn’t helped the situation any more. But they are expecting, they were approved for more staff. It’s just trying to get the bodies into SHPD to do the work. But I also think I have very good communication with them right now, and we can try to have them move things up in the priority, but in a larger scheme there’s just a lot of bottlenecks with SHPD, which I’m 13 EXHIBIT C trying to work with them to fix, not just this kind of situation but all of them. How we leverage CRC’s concern would be something we are looking into, too. VITOUSEK: Right, I mean, for us I don’t think that the County is in the place where we can solve the State’s problems for them, but the County has its own requirements under the law, under State Historic Preservation Law, and I feel like in this particular case— HALL: Sorry, what statute are you talking about? VITOUSEK: Hawai‘i Revised Statutes Chapter 6E-42. HALL: Okay, thank you. VITOUSEK: That the County can step in and complete these requirements so that this application can proceed. That being said, I have a couple of more questions on the preservation plan. Does this preservation plan that’s under review affect the entire project area? LIM: It affects the KD side, KD Acquisition side. Hualālai Resort has its own set of archaeological reports. VITOUSEK: Okay, so it is not just a preservation plan for the park, public access area, but for the entire development as a whole? KNABLE: No, the preservation, long-term preservation plan is purely for the Kalaemano Preserve, which is the area, the cultural preserve that Christian is pointing to right there. VITOUSEK: And is there another preservation plan that covers the development area? KNABLE: Yes, there was one that was completed, that allowed these folks to go in and apply for their grading permits for the development that’s there. VITOUSEK: You know, one of the potential conditions that, you know, with Chairman’s question about adding additional conditions, I have wondered about was this doesn’t seem like it has any conditions, which requires the applicant to uphold the terms of their mitigation plans. The only historic preservation related question is to report any inadvertent discoveries. And in the, you know, the agenda item that will be discussed later on, there is adding a condition to, “The applicant shall comply with mitigation and preservation plans approved by the Department of Land and Natural Resources.” And, to me, something being added into their requiring the applicant to continue to uphold their approved mitigation plans would be, would make sense to me. KAY: Yeah, I’m not sure if the applicant can speak to this. There is Condition U relative to, or related to the integrated resource management plan, which was made available as an appendix to the original ordinance, and it says, “The implementation recommendations and management 14 EXHIBIT C guidelines shall govern the use of the Coastal Planning Area and other resources.” So, not sure if that’s something that just covers that small area or something larger. Okay, just pointing out Condition No. 10 in the next application, the KW, which reads, “The applicant shall comply with mitigation and preservation plans approved by the Department of Land and Natural Resources-State Historic Preservation Division,” and that’s, and then it goes on to say, “In the unlikely event,” for inadvertent finds; but we can add that sentence as well so that that’s covered. VITOUSEK: Sure. KAY: And at least it’s spoken to in the updated ordinance. VITOUSEK: I would also recommend adding language into that indicating not only the Department of Land and Natural Resources but also by the County Planning Department. KAY: Okay. DARROW: If I can just chime in on this part. The Planning Director mentioned a meeting that we just had. One of the subjects that came up was SHPD saying, well, ultimately it’s the County to make that decision. I think all of us that were in the room were a little shocked when we heard that. And the reason why is because we don’t have the expertise that SHPD does in these types of matters. And so, now we do, that you’re mentioning we do have the Cultural Resources Commission, we can bring this to them and ask for their comments in relation to this. But, ultimately, you understand we, you know, this is a resource that we want to preserve, or we want to be mitigated properly— VITOUSEK: Absolutely. DARROW: —and when it comes to the County making kind of like moving forward when we haven’t heard from these experts, we feel very weary on doing that. But again, we do have the Cultural Resources Commission in place and we can bring it to them— HALL: Jeff, sorry to interrupt you. DARROW: —we are hoping that through this meeting that we had recently, that there will be a better collaboration of responses from SHIPD. But again, that’s for the future to tell. But based on today’s discussion, we definitely will bring this matter before them. Thank you. HALL: Jeff, do we have any archaeologist on the Cultural Resources Commission? DARROW: Currently, we have Theresa Donham who is actually a big part of the State Historic Preservation Division. HALL: So she’s an archaeologist. 15 EXHIBIT C DARROW: Correct. HALL: Okay, thank you. KAY: Thank you. VITOUSEK: You know, to me, going on about this, the issue here is public access, you know. I mean, to me, I would be a lot more comfortable, if there was a much clearer path requiring public access so that, you know, the community can get some benefit out of the area as well. Would you guys be willing to insert additional language about requiring public access by a certain point in here? LIM: Lateral shoreline public access is allowed from the north and from the south. The only thing that’s missing is the driving in and parking at the interpretive center. VITOUSEK: Sure, and that’s what I would like to see because it’s a long way in, and, you know, kūpuna are not able to walk that long ways in from both sides. LIM: Well, what’s happened over the past several years now is that anybody who wants to practice cultural practices or the school groups, they’ve been allowed to go down and they get toured and educated by Aunty Lei. And, you know, that’s why the preservation plan is important because we, I don’t think anybody wants a group just running around down there in the cultural preserve. So that’s why it’s a little bit sensitive for us. VITOUSEK: Completely understand, I completely understand, you know, I understand the importance of public access, I understand the risk of public access to a sensitive area, completely get that. But we have plans in place to manage these things, you know, resource management plans, and, you know, implementing those plans are a requirement of the, the thing I want to be saying is I think we need to make sure that we have that condition in place so that we have the adequate resources there to make sure that the public access doesn’t impact these sites, but allows public access to occur. And, for me, you know, the existing language where it doesn’t require public access to be released until after the golf course is built when we have no plans to build the golf course, seems like we just, and the developers themselves saying that they would like to open it as soon as possible, to me, it seems like it would come together nicely with, you know, just another condition in there indicating that, you know, extensions will be granted subject to opening public access within a certain time frame. LIM: We don’t have the authority to agree to any changes in conditions. You know, this was mostly, at least from our point of view, a status report exercise, and if my clients were thinking that they had to come in here and start to negotiate all the new conditions all over again, I don’t know, I don’t have a, you know, client position on that right now for me today. I think that the, you know, just the nature of the archaeological sites and the preservation plan that’s been proposed, I think for us to open it up before the buffers are established and the treatments are approved by SHPD, is a little bit dangerous for the developer. You know, we don’t have, I mean and I’m sure the Planning Department and the Planning Commission hasn’t had a clamor of people asking to access the shoreline in that area. If you really want to go, you can go. So, you 16 EXHIBIT C know, I’d hate to create another process for public access when we already have the existing condition, and the only reason why it’s not being implemented at this point in time is because of the review by a State agency. UNGER: To clarify, all of our recommendations are just that, just recommendations. We are not, our, Leeward Planning Commission is not making or asking for any additional requirements at this time. It’s just, we are having a discussion and, I guess, Commissioners, you can recommend anything you want. The County Council obviously will be making the final decision. And, hopefully, between now and then whatever does come out of this, that’s the opportunity for everybody to get involved in a discussion. So, anyways, this is a great discussion. LIM: For the record for the applicants, for both KD Acquisition and Hualalai Investors, we concur with the mitigation condition that was read into the record by Christian just a little while ago. UNGER: Okay, and the rest of the recommendations from the Planning Department as— LIM: That’s correct. UNGER: —okay, great, thank you. VITOUSEK: Would it be possible for me to make a recommendation that the Cultural Resources Commission review the archaeological preservation plan and make a recommendation on whether the Director should accept that. UNGER: Let’s hold that thought, and the process will be to finish with the applicants, and then we’ll open it for public comment, and then we’ll go ahead and ask for a motion, we’ll get a second on the motion, and that’s when we can have our full discussion amongst the Commissioners. So if there is no more questions with the applicants, thank you, you may be seated. If there are more comments. LIM: No, no further comments. UNGER: Okay, thank you. You may be seated. At this time I’d like to open it up for public testimony, if anybody is in the audience that would like to testify. Seeing none, I motion to close public testimony. YATES: So move. KEALOHA: Second. UNGER: Motion by Commissioner Yates, second by Commissioner Kealoha. All in favor? COMMISSIONERS: Aye. 17 EXHIBIT C UNGER: Opposed? \[None.\] Motion carries, public testimony is closed. I recommend we take a five-minute break and, to consult with our corporate attorney to discuss a possible motion. HALL: If we are going to discuss that, we have to go into executive session. UNGER: I’d like to go, I make a motion to go into executive session to further discuss this with our corporate counsel. I need a second. CARR SMITH: Second. UNGER: All in favor? COMMISSIONERS: Aye. UNGER: Opposed? \[None.\] At 11:20 a.m. Chairman Unger called a short recess. The room was cleared, and the Commission went into executive session at 11:25 a.m. for the purpose of consulting with its counsel regarding questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities, pursuant to Hawai‘i Revised Statutes 92-5. At 11:42 a.m. it was moved by Commissioner Vitousek and seconded by Commissioner Kealoha that the Commission go out of executive session. Upon a voice vote, the motion carried unanimously. The meeting was reconvened at 11:43 a.m. UNGER: Hearing is called to order. After executive session the Commissioners had additional questions for the applicants. If you don’t mind, could you please come up? Thank you. Commissioners, please feel free to ask the applicant questions. VITOUSEK: Sure. We’re just trying to understand. We see in your application submittal, it says, “Although PDO 99-42 allows for KD to defer opening the public access elements to the general public until the opening of the 18-hole golf course, KD always intended to open these public access improvements to the public earlier.” PDO 99-42, what is that? LIM: Project District Ordinance 99-42, which is the subject of this— VITOUSEK: So that’s, it’s a County, a County requirement. Okay. Thank you. UNGER: And while we are on that subject, has there been any discussion within your group with regards to the exact topic? It’s good that it is stated in there. Has there ever even been a discussion? It is tied to the golf course. It sounds like the golf course is maybe not even planned in the future. It sounds like, pursuant to that sentence there, there is desire to open earlier. It’s all very general, and, obviously, the Commission is just, you know, questioning about the public access. So has there been any discussion about opening this up earlier versus just tie it to the opening of the golf course? 18 EXHIBIT C LIM: That was always the intention. The golf course is still on the table, but we recognize that that would be pushed back to a later stage in the development pretty early on. And so that’s why the applicant took the step of trying to move forward with the improvements, and then we are just pending the SHPD approval. So it’s still their intention to voluntarily do that. And that’s why we would resist changes in the conditions or changes in the process. We think that the process is lined up pretty clearly that we just need SHPD approval, and then once that happens, then we are willing to follow through with our commitment to open the public access. Like I said, the critical part is the cultural buffers, making sure that all this is managed, because people won’t be able to just drive down to the shoreline; they’ll have to go and receive cultural briefings by Aunty Lei before they even step foot on the property. Thank you. UNGER: Great, okay, thank you. CARR SMITH: And then to the north of the interpretive center, is there a – I know the cliff becomes pretty high there and treacherous – so, is there a trail along the cliff going north? LIM: Yes, there is a shoreline trail like many areas in Kona, and so people often come from either the south or the north in through, fronting the project. We try to, we try to brief people when they come onto the property, but it’s not that often. UNGER: Any other questions? Thank you, Applicants. Great, so, the floor is open for a motion. CARR SMITH: I’d like to move that a favorable recommendation be forwarded to the County Council to accept the Project District Ordinance No. 99 42’s updated status report. KALOHA: I’ll second. UNGER: We have a motion by Commissioner Carr Smith, second by Commissioner Kealoha. Roll call, or discussion, sorry. In executive session the Commission decided to clarify two parts: To approve the update, which was presented by the applicants, and so that’s the motion that’s on the table now; then the second motion will be to talk about the extension and conditions associated to those extension. So, first order of business. KAY: Okay, thank you, Mr. Chair. Just a — UNGER: Hold on one second. Commissioner Carr Smith, are you -? Okay. Yeah, roll call. KAY: My apologies. Just so we are accepting the overall status report as required by Condition BB. UNGER: Correct. KAY: Okay. Okay, thank you. Commissioner Carr Smith? CARR SMITH: Aye. 19 EXHIBIT C KAY: Commissioner Kealoha? KEALOHA: Aye. KAY: Commissioner Vitousek? VITOUSEK: Aye. KAY: Commissioner Yates? YATES: Aye. KAY: And Chair Unger? UNGER: Aye. KAY: Thank you. Mr. Chair, motion carries, five-nothing. UNGER: So, again, we’d like to open the floor to the second motion to the same agenda item in regards to the extension request, or discussion, and conditions associated with the development. VITOUSEK: So, I move that a favorable recommendation be forwarded to the County Council on the request to amend Project District Ordinance 99 42, based on the Planning Director’s recommendation, findings, and proposed amended conditions, which shall be adopted; the amended conditions include the updated language on the preservation plan and mitigation plan being upheld that was read in by the County Planning staff; and we’d also like to include our recommendation to the Planning Department and to the County Council that the public access conditions be evaluated so that they are not tied to the completion of the golf course but to a more publicly beneficial and mutually beneficial time period. YATES: I second the motion. UNGER: Motion by Commissioner Vitousek, second by Commissioner Yates. The floor is open for discussion. Hearing no further discussion, roll call. KAY: Mr. Chair, if I may — UNGER: Oh, yes. KAY: — I’d just like to clarify. The question is to “more mutually publicly beneficial timeline”; it is kind of vague, and I’m not sure if that was on purpose or — VITOUSEK: It is — KAY: Okay. 20 EXHIBIT C VITOUSEK: — I mean we, we feel like we don’t have enough information now to determine what appropriate timeline to open for public access is. We believe that the Department should work with the applicant to figure out what’s an appropriate time frame to open this for public access so that it’s not tied to the golf course, which is far down the road. You know, we think they are already taking steps to open it up for the public. We just want to have that evaluated and clarified, and that’s our recommendation to the Council. KAY: Okay. UNGER: Roll call. KAY: Okay, thank you, Mr. Chair. Commissioner Vitousek? VITOUSEK: Aye. KAY: Commissioner Yates? YATES: Aye. KAY: Commissioner Carr Smith? CARR SMITH: Aye. KAY: Commissioner Kealoha? KEALOHA: Aye. KAY: And Chair Unger. UNGER: Aye. KAY: Thank you. Mr. Chair, motion carries, five-nothing. UNGER: Thank you, Applicant. You’ll be contacted in writing by the Planning Commission of our decision. LIM: Thank you very much. UNGER: Thank you. LIM: Can I ask a point of clarification? That was, part of the conditions that were included, the amended DOT condition if and when required by DOT? 21 EXHIBIT C KAY: Yeah, my understanding – and if, I don’t want to put words in your month \[speaking to Commissioner Vitousek\] – but my understanding was all conditions as presented either previously in writing or on the floor today. VITOUSEK: That’s correct. KAY: Okay. VITOUSEK: Yes. KAY: Thank you. UNGER: Thank you. The discussion ended at 11:53 a.m. Respectfully submitted, Noriko Sauer, Secretary Leeward Planning Commission 22 EXHIBIT C