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HomeMy WebLinkAbout2018-10-18 Leeward Exh D (AMEND SMA 260) LEEWARD PLANNING COMMISSION COUNTY OF HAWAI‘I HEARING TRANSCRIPT OCTOBER 18, 2018 A regularly advertised hearing on the application of KW KONA INVESTORS, LLC (FORMERLY KONA VILLAGE RESORT) (AMEND SMA 260) was called to order at 11:53 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, Michael Vitousek and Faye Yates RECUSED: Perry Kealoha 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 eight people from the public in attendance. APPLICANT: KW KONA INVESTORS, LLC (FORMERLY KONA VILLAGE RESORT) (AMEND SMA 260) Application for time extensions to Condition No. 5 (Secure Final Plan Approval) and Condition No. 6 (Commence and Complete Construction of Phase II) of Special Management Area Use Permit No. 260, which was approved in 1987 to allow the expansion and renovation of the existing Kona Village Resort, including the construction of 54 new hotel units and related improvements. Phase II consists of 25 units. The subject property is located at 72-300 Maheawalu Drive, Kona Village Resort, Ka‘ūpūlehu, North Kona, Hawai‘i, TMK: (3) 7-2-010:010. UNGER: Item No. 4, Applicant KW Kona Investors, LLC, formerly Kona Village Resort, AMEND SMA 260, application for time extensions to Condition No. 5, Secure Final Plan Approval, and Condition No. 6, Commence and Complete Construction of Phase II, of Special Management Area Use Permit No. 260, which was approved in 1987 to allow the expansion and renovation of the existing Kona Village Resort, including the construction of 54 new hotel units and related improvements. Phase II consists of 25 units. The subject property is located at 72-300 Maheawalu Drive, Kona Village Resort, Kaūpūlehu, North Kona, Hawai‘i, ʻ TMK (3) 7-2-010: Parcel 010. County? DARROW: Thank you, Mr. Chairman. Good morning, Mr. Chairman and Members of the Planning Commission. It’s been a while since I’ve done one of these, but I hear it’s like riding a bike, so, try to see if I can remember how we do it. 1 EXHIBIT D So our next applicant is KW Kona Investors, LLC, formerly known as Kona Village Resort. As mentioned, they are requesting an amendment to Conditions No. 5 and 6 of Special Management Area Use Permit No. 260. The location of this subject application is within the North Kona District, very close to our last application. Just for reference we have the Queen Ka‘ahumanu Highway running in a north-southeast-west direction. Our last application is in this general location. This current application is identified with the black outline in the pink, pinkish color. This area is known as, you might be familiar with it as Hualālai or Kaūpūlehu. It’s, tʻhere is the Four Seasons Resort, there is Manini‘ōwali, Kūki‘o, quite a number of developments in this particular area. The applicant is requesting time extensions to Special Management Area Use Permit No. 260 for Condition No. 5, which is time to secure Final Plan Approval, and for Condition No. 6, which is time to commence and complete construction of Phase II. Special Management Area Use Permit No. 260 was originally approved in 1987 to allow the expansion and renovation of the existing Kona Village Resort; this included construction of 54 new hotel units and related improvements. Phase I has been previously completed, which consisted of 29 units; these were 25 hotel units and four that were converted for administrative uses. Phase II consists of 25 additional units. Kona Village Resort was first established in 1959 as an isolated retreat-type resort with 71 hotel units, the Hale Samoa restaurant and support facilities. On October 14, 1976, SMA Use Permit No. 18 was issued by the Planning Commission, which allowed for the development of 29 additional hotel units for a total of 100 units. On August 25, 1987, SMA Use Permit No. 260 was issued by the Planning Commission for the renovation of the existing Kona Village Resort and the construction of 54 new hotel units, which was proposed to be done in two phases. There have been two time extensions granted by the Planning Commission for Phase II, which were approved in 1998 and 2003. The reasons for the request: The current time extension requests are a result of the Tōhoku Tsunami event, which occurred in March of 2011. This devastated a number of structures and improvements at the resort, which resulted in the resort being closed since this event. Additionally, the renovation work had to be delayed for a period of time due to foreclosure proceedings and litigation. This is what is identified as the Observed Building Damage Plan. There is a date on the map of July 19, 2011, shortly after the tsunami event. It’s difficult to see the colors on the map, but most importantly it’s the red, which were the units that were pretty much completely destroyed. These were all located in this general area on the south side of the project. The remaining yellow and blue were made up of damaged structures that could be repaired or renovated at this time. This next plan is, was submitted with the application. This is the Overall Site Plan. In this you’ll see a number of black, as well as yellow, identified structures; the black are existing, which are currently being renovated, or they are being relocated, as approved under the original permits 2 EXHIBIT D and those that were grandfathered in. The object of this request is to focus on the red units, which are the additional 25 units allowed for under SMA 260. This is the County Zoning Map. It identifies the subject property mainly as Resort-Hotel 7 – oh, I’m sorry, I went way too far \[advancing the slides\] – and you’ll see some green areas that’s identified as Open. Again, the surrounding areas, the purple is identified as Project District, and some of the darker, or this particular purple is Project District, this lighter purplish color is also Resort-Hotel zoning, and we have a little bit of Multiple-family zoning, and, again, the green is representing Open zoning. This is the State Land Use Designation Map. A majority of the property and surrounding areas are identified in pink, which is the State Land Use Urban District. The blue is identified as Conservation Areas. This is the General Plan Land Use Pattern Allocation Guide Map, which is reflective of the allowance of zoning in the area. The purple is Resort Node, which would allow for those uses that have been approved at this time. The green is, the light green is Conservation, which – wait, this thing \[slide remote controller\] has a mind of its own – again, is reflective of the State Land Use. So you can see how they are very tied together there, State Land Use Conservation. This is an aerial. This was taken several years ago, but it shows that the majority of the resort is, as far as infrastructure and structures, are still somewhat in place, but, again, in need of repair, renovation, as well as those that were completely destroyed being repurposed and relocated. The location of this particular request would be up in the northern portion of the property. Just, I wanted to bring to your attention that – in our last application there was focus on cultural, archaeological reports, as well as public access – in September of 2017 the applicant had submitted an updated public access plan, which brings public access from the highway into the project area into this location, generally in this area there is going to be a 15-lot parking area, there will be a trail that goes to the ocean in this general area, as well as a public access restroom for the public. And then, again, as mentioned before, there is lateral access to the north and south, as well as across the property. The archaeological reports had been done and approved, mitigation and preservation plans. On the applicant’s site map it did represent the archaeological buffered areas that are associated with the project. These are some site photos. These were taken in February of 2017 when staff was able to go out and take a look at the property. Some of these structures had damage to it, so they are in the process of being repaired or renovated. As long as it remains in place and repair and renovation doesn’t expand the particular development, then they are okay to proceed. So these are just a few site photos here. This is on the north side of the property, this is the north side of the property that the area that the tsunami actually came in and took away a number of structures, and we were on the, I’m sorry, we are on the south side looking north and so the far area over here is the north side, so this all includes the project area. So we are working our way towards the north. This is another, I believe this is the restaurant, this is the restaurant that’s on site more in the middle of the project area. These are some units that are located more on the north side. And then this is looking back the beach area there with a little platform, looking towards the south. This is the north side; you can see the distance between the shoreline, as well as the 3 EXHIBIT D existing units, this is where Phase II, the general area where Phase II will be. They will actually be located mauka of these structures, so they are quite at distance from the shoreline. The Planning Director is recommending approval with conditions. To bring to your attention, the Planning Department in collaboration with the applicant worked out some changes to the condition to kind of clean up some of the history on this; since Phase I was completed, we took out references to Phase I, and we took out references to the Change of Zone regarding the effective date because the effective date for this particular SMA permit has changed over the years with the amendments. As far as the conditions of the Change of Zone, they are still applicable; those don’t go away. Additionally, Condition 7, the new Condition 4, we just have our standard language that no improvements can be done in the 40-foot shoreline area without a shoreline setback variance. I’d like to add one change based on the last discussion, and that would be to our new Condition, this would be to our new Condition 7, and Commissioner Vitousek asked that after the first sentence it will state, “The applicant shall comply with mitigation and preservation plans approved by the Department of Land and Natural Resources-State Historic Preservation Division (DLNR-SHPD) and the County Planning Department.” So we go ahead and add that in there as well. With that, that concludes our presentation. Do you have any questions? I’ll try to answer them. Thank you. UNGER: Great, thank you. Commissioners, any questions? \[None.\] DARROW: Thank you. UNGER: Would the applicants come forward at this time? Please raise your right hand. Do you swear or affirm to tell the truth before the Planning Commission? EADIE: I do. UNGER: Please state your name and area of address, area of residence. EADIE: Good morning, Chair Unger and Commissioners. I’m Dave Eadie. I represent KW Kona Investors, LLC. My offices are located in Costa Mesa, California. UNGER: Thank you. You can proceed with whatever presentation you have planned for the Commission. EADIE: Thank you. First of all, it’s nice to be back here, and privilege. I’ve been away from the Commission for 15 years; the last time I appeared before your Commission was in 2003 when we went through the land use entitlement process for Kohanaiki. Some of you may remember that was a long drawn-out process, but I think it turned out very favorably for everybody – the County, the community, as well as the developer. So, that said, the only thing I have to really talk about today is, given the fact that the issues are rather narrow, given that we only have two conditions that have lapsed, we’ve reviewed the 4 EXHIBIT D staff’s analysis and recommendations, as well as the proposed modifications to the conditions of approval, and we are in concurrence with that, sir. And I’m happy to answer any questions you might have. UNGER: Commissioners, any questions? CARR SMITH: Sure, just maybe a brief update on timing of the existing damaged units and the overall plan down there would be nice. EADIE: Certainly, sure. We are the successor of interest, if you will; basically we came into the picture in August of 2016, and executed a new long-term lease with Kamehameha Schools. And at that time we went to work in analyzing how we will carry out the rest of the project. Obviously, we wanted to maintain the low intensity and vibe, if you will, of Kona Village. It was, it’s very special, and everybody is anxious and in fact relying upon us to perpetuate that vibe as we go forward. And, as a consequence, and then moving forward, we have looked at the market conditions and discussed what we need to do to remain competitive, but largely we are proceeding with the plan that is out there now. There are some amplifications of like a spa and fitness facility that are necessary to compete in the market, as I said, but I think what you will find at the end of the day is a, the new Kona Village is going to be a restatement but updated for, you know, where we are this point in time. When we first came in in 2011, or, excuse me, after the tsunami took care of a lot of Kona Village, we came into the picture, as I said, in mid-2016, and Mother Nature had taken over because nothing had been done on the property. It was fallow, and the growth, the overgrowth, was absolutely where you couldn’t even walk through the property. So the first thing was to, you know, clear brush and pick up all the materials that had blown around and, to get to a point where we could actually do some serious analysis in land planning. And since that point in time we’ve, you know, iterations of the plan has gotten to a point where we went through Plan Approvals to update those plans with the County Planning Department. We have proceeded to implementation drawings, working drawings, if you will. And shortly we will be starting with utility work on the property. The hale-s themselves and other accessory buildings, a lot of those are being, some of those are being deconstructed where we have a replacement, if you will, because a lot of these hale-s are, were not only damaged but structurally not up to code, and we have a condition of approval with Planning to bring all the units up to code. So that, as well as repair, as Mr. Darrow pointed out, will be part of the program here as we go forward. We are building two prototype hale-s, if you will. Those hale-s are being built so that when we go and proceed with the rest of the 150, 148, we are assured that we are going to be building something that is not going to be, have to be modified as we go; we are going to de-bug or do all of the changes we want to these prototypes, use those as a model home, so to speak, look at those things and make sure that that’s what we want to do going forward. So that’s a cautionary way of approaching it so that we don’t have a bunch of starts and stops with change plans on the way. So that’s kind of where we are right now in the point in time, and our best guess right now, because any time you are remodeling a facility, if you will, rather than starting on bare ground, it’s a lot more complicated, a lot more moving parts, and our best guess right now is that sometime in early 2020, 2021, is when we would be open for business again. There is a lot of 5 EXHIBIT D expectations to put the 300-plus employees back to work; that isn’t lost unless we won’t get this done efficiently and as expeditiously as possible through the permitting process. And Director Yee and his staff have been excellent to work with in terms of trying to focus on all of the past plans and permits and what we have to do to navigate through the process. UNGER: Thank you. EADIE: Thank you. VITOUSEK: Just wondering. Does the permitting have language that restricts the construction of those 25 additional buildings to the location that was identified? DARROW: We did have such language, and that would be on Condition No. 6 at the end of the Condition. Does that work? VITOUSEK: Yeah, absolutely. Thank you. Yeah, just that the lava flow on the north side is going to have a lot less risk for encountering cultural resources than the sandy areas on the south. I just, the other question is whatever came with the preservation plan on the pond, is that— EADIE: On the existing pond? VITOUSEK: On the existing pond, yeah. EADIE: The preservation plan has, basically restates the way in which the pond has been managed for purposes of public access. In the past the cultural practitioners and lineal descendants who have been highly involved in the property – and are today, by the way, we started with them early in the process – given the fact that the pond is in the middle of the resort and no public access was ever afforded to that, decision was made early on by those people managing the site to arrange for periodic appointment-only access whether it’s a school group of kids or anybody who wants to go to the petroglyph field or to the existing pond, you know, I think that might be counterintuitive to have people walking around the petroglyph field unsupervised, if you will. So I think that we are going to do the same thing; I think Tuesdays and Thursdays were traditionally the days where access was afforded, and it seemed to work for many, many years, so far be it from us to reinvent the wheel on that, I think. VITOUSEK: And the pond is going to be preserved as it is; it’s not going to be turned into a swimming pool. EADIE: No, no. UNGER: Specific to this, your request, you are requesting a five-year extension for two issues within this five years – Final Plan Approval and construction of Phase II 25 units. So what is the status – that can be a tight time frame depending on the status of your Final Plan Approval – what is your Final Plan Approval status? 6 EXHIBIT D EADIE: The Final Plan Approval for Phase I, our Phase I, not the old Phase I that Jeff alluded to, was concluded in November of 2017. We have plans on file now to not process concurrently, but if the Commission votes favorably on this, then immediately Plan Approval for Phase II will be taking place and Final Plan Approval will be expected within, say, 30 days, 60 days. So that’s going to be pretty quick. UNGER: Okay. EADIE: Yeah. UNGER: Any other questions? \[None.\] Thank you. EADIE: Thank you, sir. UNGER: Commissioner Kealoha. KEALOHA: I’d like to recuse myself from this, as Kamehameha School is the owner of the ground lease. UNGER: Okay, so you will not participating in voting a motion. Okay. So noted. At this time I’d like to open it up to public testimony, if any members of the public are here to testify. Seeing none, I need a motion to close public testimony. VITOUSEK: Moved. CARR SMITH: Second. UNGER: Motion by Commissioner Vitousek, second by Commissioner Carr Smith. All in favor? COMMISSIONERS: Aye. UNGER: Opposed? \[None.\] Motion passes. The floor is open for a motion. CARR SMITH: I’d like to move that the application to amend Special Management \[Area\] Use Permit No. 260 be approved based on the Planning Director’s recommendation and proposed amended conditions, which have been discussed here and which shall be adopted. VITOUSEK: Second. UNGER: Motion by Commissioner Carr Smith, second by Commissioner Vitousek. The floor is open for discussion. Seeing no discussion, roll call. DARROW: Thank you, Mr. Chairman. Just for clarification, the conditions that we were referring to, as far as the amendments, are these on the yellow sheet, as well as the small addition 7 EXHIBIT D to Condition 7 that just adds the language, “the County Planning Department,” to the end of the— CARR SMITH: That was my intention. DARROW: Okay, great, thank you. Okay, with that, we’ll take the roll call. Commissioner Carr Smith? CARR SMITH: Aye. DARROW: Commissioner Vitousek? VITOUSEK: Aye. DARROW: Commissioner Yates? YATES: Aye. DARROW: And Mr. Chairman? UNGER: Aye. DARROW: The motion passes, four to zero. UNGER: Thank you. DARROW: Thank you. UNGER: Applicant, you will be notified in writing by the Planning Commission. The discussion ended at 12:20 p.m. Respectfully submitted, Noriko Sauer, Secretary Leeward Planning Commission 8 EXHIBIT D