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HomeMy WebLinkAbout2019-03-21 Leeward Exh B (Discussion on condition deadlines) LEEWARD PLANNING COMMISSION COUNTY OF HAWAI‘I HEARING TRANSCRIPT MARCH 21, 2019 A regularly advertised Discussion on Permit or Ordinance condition deadlines and consequences of not complying with condition deadlines 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, Scott Church, Perry Kealoha, Sonny Shimaoka and Faye Yates ABSENT AND EXCUSED: Michael Vitousek ALSO PRESENT: Malia Hall, Esq. (Counsel for the Commission), Amy Self (Deputy Corporation Counsel), Ronald Kim (Deputy Corporation Counsel), Michael Yee (Planning Director), Jeff Darrow (Planning Program Manager), Maija Jackson (Planner) and Noriko Sauer (Commission Secretary) And approximately 30 people from the public in attendance. Discussion on Permit or Ordinance condition deadlines and consequences of not complying with condition deadlines. UNGER: Administrative Matters No. 1, discussion on permit or ordinance condition deadlines and consequences of not complying with condition deadlines. Before we get into our staff presentation, I just wanted to explain some background on how this got on the agenda. This was at a request of the Leeward Planning Commissioners. We, some of us, have been on the Commission two, three, four and even five years, and this is something that has come before us on a regular basis, these time extensions, and, and we began questioning how and why and what is the history, what is the background, what is the legality, what ordinances are we bound by or not bound by in making these determinations. We started, we requested that it be brought up at the last meeting, not officially, and as we got into the discussion, Corporate Counsel Malia Hall said, hey, wait a minute, this, if we are going to have this discussion, we have to have it on the agenda, public needs to be part of it, they need to provide testimony, and then, and if they want, then they can show up and testify. So that’s where we are today. For us as commissioners, for you as members of the public, we look at this as an educational opportunity, and I’m really glad that we have this opportunity now to hear from staff. I’m curious also; what is the history, what is the background? And so we are going to start with a presentation from staff, then we are going to go into public testimony. So you will have an opportunity to testify. We are thinking there’s going to be some questions or some issues brought up in testimony, so we want to give staff an opportunity after that to answer some questions, not necessarily a 1 EXHIBIT B question-and-answer process, but to give staff perhaps a chance to answer some of the top three or four questions that we see consistently being asked, and then we are going to close public testimony. Commissioners get a chance to have our own discussion. There is no motion; we are not deciding anything. This is just a discussion, discussion opportunity, and it’s not tied to any application or any project. I want to be specific with that; it’s not, there is no agenda item that is specific to this other than this is, for all of us, education. So, mahalo, if you keep that in mind when you testify. Jeff, if you would like to proceed with your presentation. And it’s my understanding that after today you will also be making this presentation on the Windward side. Maybe you could talk a little bit about, recommendations will be coming out of that discussion as well, or comments, and then, possibly, then going before the County Council for discussion and possible ordinance changes? Is that kind of how you see it going forward? DARROW: Thank you, Mr. Chair. If I could just say good morning, good morning, Commissioners, Mr. Chairman. So that is correct. Because this agenda item has been brought forward by the Leeward Planning Commission, we also are bringing it forward to the Windward Planning Commission. And it’s not just because you folks brought it up; the same questions have been being asked at the Windward Planning Commission. When we were at the Hawai‘i County Council recently, one of the Council members asked that something similar to this topic be placed on their agenda to be able to talk about time extensions, as well as conditions on ordinances. So that issue is going to be brought up by the Council to be addressed. I don’t think it’s just going to be Planning involved in that discussion; it’s going to involve other agencies as well because the conditions affect multiple agencies. So with that, if I could direct your attention to our presentation. Again, this is a request by the Commission to be able to discuss permit and ordinance condition deadlines and consequences of not complying with these condition deadlines. What we are going to do, just to kind of lay out the presentation, is we are going to bring to your attention what’s in our code regarding conditions, what’s in our rules regarding conditions, as well as time extensions, typical condition, typical permit and ordinance conditions that you’ll see in ordinances or permits that relate to time conditions, as well as, the last area will be the consequences that are currently in place for those particular areas of noncompliance. And then at last we’ll bring forth some possible options that we are looking at that maybe the Commissions can consider going forward, which may require possible rule changes or code changes or it could just be effectuated through the actual permit and ordinance process as conditions within those. So first of all, we are looking at the Zoning Code. This is relating to conditions within Change of Zones. So it says: “(a) Within any ordinance for a change of zone, the council may impose conditions on the applicant’s use of the property subject to the change of zone provided that the council finds that the conditions are: (1) Necessary to prevent circumstances which may be adverse to the public health, safety and welfare; or (2) Reasonably conceived to fulfill needs directly emanating from the land use proposed with respect to: 2 EXHIBIT B (A) Protection of the public from the potentially deleterious effects of the proposed use, or (B) Fulfillment of the need for public service demands created by the proposed use. “(b) Changes or alterations of conditions of any change of zone ordinance shall be processed in the same manner as a change of zone, unless the council authorizes the changes or alterations to be made by the director. A request for any change or alteration of conditions shall be submitted in writing to the director, in lieu of the application required for an applicant-initiated change of zone. The request shall be accompanied by a filing fee of $250.” So just with that, a typical amendment request or Change of Zone would come in with the request and reasons for the request, along with the filing fee. Normally, that involves a time extension, but that’s not the only thing they will come in; they will come in sometimes because there is an issue with a particular condition and they need to amend that condition to go forward. “(c) Failure to fulfill any conditions of the zone change within the specified time limitations, or any extensions thereto, may be grounds for the enactment of an ordinance making further zone changes or for … designation, upon initiation by either the director or the council in accordance with section 25-2-43.” \[Remark from the audience that Mr. Darrow had skipped a line in reading his presentation on the screen.\] Oh, I’m sorry, “further zone changes or for rezoning of the affected property back to its original zoning designation or a more appropriate zoning designation, upon initiation by either the director or the council in accordance with section 25-2-43.” I apologize. We will discuss this in greater detail in regards to the consequences for these actions. So looking at the Planning Commission Rules, I didn’t put every rule relative to time extensions for reference. What I did was reference to Special Permit, Use Permit, they are very similar, as well as the SMA Permit. All the others are almost identical in language, so if you, as we are dealing with this, they are very similar in their language regarding time extensions. So this is Rule 6 in our Planning Commission Rules as relative to Special Permits. Rule 7 is relative to Use Permits, and the language is very similar: “The applicant may apply to the Commission through the Planning Department for an amendment to the permit or condition(s) imposed. “(b) In the case of time extensions, the applicant shall file the request not less than ninety days prior to the expiration date of the time conditions, setting forth: (1) The affected condition; (2) The length of time requested; and (3) The reasons for the request.” So that’s the typical information that is requested in the Rule. “If the Commission is not able to act on a properly filed time extension request prior to the expiration date, the use granted under the Special (or Use) Permit may be continued, unless the Commission specifically disallows the activity during the interim period. 3 EXHIBIT B “(c) In the case of additions, modifications, and/or deletions of conditions; or the original permit granted, the applicant shall set forth in writing: (1) The affected condition; (2) The specific amendment requested; and (3) The reasons for the request. “(d) The applicant shall also file a two hundred fifty dollar processing fee, along with the original and twenty copies of the request. “(e) The hearing and notice procedures and action shall be the same as under Sections 6-5, 6-6 and 6-8,” that’s for Special Permits and then the references to 7 has to do with Use Permit, “of this rule.” So, basically, just in a nutshell, they have to follow the same procedures for notification to surrounding property owners when they come in for an amendment or time extension. They have to do the same requirements for posting the sign, the information requested in the Rule is basically either the time extension length of time and the reasons thereof or, if it’s an amendment, the requested amendment and the reasons for the amendment, and then also a 250-dollar filing fee, along with the original and 20 copies of that. The reason for that is when we receive the request, we send out the copies to all agencies that are affected and request their comments on it, so those can be referenced in regards to conditions that are placed on the permit. So what happens is, I think I’m hearing a lot that the applicant should come in with a new application. That’s what you hear a lot. The Rule doesn’t say that. So if that is something that the Commission would want to do, such as put a time limit on a permit, and that permit dies, and they have to come in with a new permit, a Rule change will have to happen. So just, just to clarify that, because that was a lot of information being brought up that they should be denied and come in with a new application. Now, just for reference to the Commission, the staff at the Planning Department, as well as the Planning Director, normally just does not accept a simple request without a lot more information. And the reason why is – we’ll get into that later, though – when you are asking for a time extension and it’s been some time, there’s been a lot of changes since it was originally approved, and things have changed – General Plan may have changed, the Community Development Plan may have come in to effect, there could be changes to agency requirements – all those are taken into consideration for a new application, as well as for an amendment and a time extension. And those are all normally you’ll see something from staff, or the Director, that says the applicant requested this, the Planning Director is adding these to be able to bring this permit up to current standards as far as conditions and requirements. So you’ll see a lot of that. These rules are relative to Special Management Area Rules. Again: “(1) Application: The applicant may apply to the Commission through the Director for an amendment to the permit or condition(s) imposed by the Special Management Area Use Permit.” 4 EXHIBIT B So, this last application, Kilohana, is an extension to a Special Management Area Use Permit. “In the case of time extensions, the applicant shall set forth in writing: (a) the length of time requested; and (b) the reasons for the time extension. “In the case of additions, modifications, and/or deletions of conditions, the applicant shall file the request not less than sixty days prior to the expiration date of the time conditions, setting forth: (a) the condition to be amended; and (b) the reasons thereof. “The applicant shall also deposit with the Department the sum of two hundred fifty dollars to cover publication and other administrative costs, along with the original and twenty copies of the request. “(2) Notice and Hearing: The hearing and notice procedures shall be the same as under Section 9-11 (c) and (d),” which are the same requirements for a brand new Special Management Area Use Permit. The reason why our first agenda item is continued today is the applicant did not follow these procedures. So in our normal case requirements we request that that be continued until the proper procedures have been met so that people in the area are notified correctly, as well as the sign is posted correctly and people are made aware of that. Okay, typical timing deadline conditions within a Change of Zone ordinance or permit. So this is one of our standard conditions. Now, I have the first part \[the following paragraph\] underlined; that is relative to an ordinance. Now, we’ve been starting to use this particular language for ordinances and it says: “Construction of the proposed development, as substantially represented by the Applicant, or as permitted by its zoning district classification, shall be completed within five (5) years from the effective date of this ordinance.” Now, the next part \[the first sentence in the following paragraph\] in Italics and bracketed is what we normally use for our permit. It was our typical language in an ordinance as well, but again, we kind of fine-tuned our language in the ordinance to give more clarity regarding the allowances within the zoning district. So the second part says: “Construction of the proposed development shall be completed within five (5) years from the effective date of this permit. Prior to construction, the applicant(s), successor(s) or assign(s) shall secure Final Plan Approval for the proposed development from the Planning Director in accordance with Section 25-2-70, Chapter 25 (Zoning Code), Hawai‘i County Code. Plans shall identify all existing and/or proposed structure(s), paved driveway access and parking stalls associated with the proposed development. Landscaping shall be indicated on the plans for the purpose of mitigating any adverse noise or visual impacts to adjacent properties in accordance with the requirements of Planning Department’s Rule No. 17 (Landscaping Requirements) and Chapter 25 (Zoning Code), Hawai‘i County Code.” 5 EXHIBIT B This is just one of many conditions within a permit, but again, this is normally the condition that an applicant comes in for a time extension request. The other condition relative to ordinances is this one, which, if they are not proposing to build anything, if they are proposing to change the zoning from, let’s say, Agricultural to Residential and they are creating a subdivision with no proposed development, then this would be the timing condition: “Final Subdivision Approval of the proposed subdivision shall be secured from the Planning Director within five (5) years from the effective date of this ordinance.” So those are typical timing conditions. Now, the administrative time condition that’s normally added in a majority, if not all, of the permits with a time factor, is this particular one. It says: “An initial extension of time for the performance of conditions within the ordinance (or permit) may be granted by the Planning Director upon the following circumstances: 1. The non-performance is the result of conditions that could not have been foreseen or are beyond the control of the applicant, successors or assigns, and that are not the result of their fault or negligence.” I would, in commenting on this particular aspect, I would say 90 percent approximately use the economy as the reason for not being able to move forward. That’s normally. Other, there’s a number of other reasons; health reasons is one that comes up on occasion, but normally it’s the economy. That’s what we see. Before I go forward on that, so, all of a sudden we are seeing a number of request for time extensions coming to the Commissions and the Council, and so they are asking why are all these time extension requests coming to the Commission and Council? It appears that at this time these applicants, or owners, successors or assigns, are able to go forward with their projects. Now, that may not be true in all cases, but all of a sudden we are seeing a number of time extensions come before the Commissions and the Council. So that question has been asked. They are able to secure loans or funding and they state that they are in the position to go forward. So, No. 2: “2. Granting of the time extension would not be contrary to the General Plan or the Zoning Code.” So we, when these administrative time extensions come in, we look and see if there has been any change to the General Plan in the particular area or the Zoning Code, and then: “3. Granting of the time extension would not be contrary to the original reasons for the granting of the change of zone (or the permit).” 6 EXHIBIT B So – oh, I don’t know what happened there \[with the PowerPoint image on the screen\] – so, we will also look at these very reasons when we look at a time extension request, and these two items here pretty much pull in almost everything that we look at originally. So, is it still consistent with the General Plan; is it consistent with the Community Development Plan; has there been a new Community Development Plan; is it consistent with that new Plan; is there change in the Zoning Code; is it still consistent with the Zoning Code; is it still consistent with the original reasons or criteria for granting the original request? So we always look at those issues when we present the background and recommendations for these request to the Commission and to the Council. So it’s, it’s a, sometimes, I mean, we comment all the time that sometimes for staff, it’s, an amendment request can be a lot more cumbersome than the original, a new request because it’s like we have to hash out everything and even more so because we have to go through and look at compliance of conditions that happened and what has changed and everything. It becomes quite a process. I won’t mention some of them, but we’ve had some recently that were just unbelievable, the amount of amendment request in a particular ordinance; it might have been easier to just do a new ordinance. Anyway: “4. The time extension shall be for a period not to exceed the period originally granted for performance.” For example, if the, if construction was to be completed within five years, the administrative time extension can be granted by the Director up to five years. There has been cases in the past where the Director did not grant a full five years; they may have been granted a portion of the period because maybe the Director wanted to see if they were actually going to make some movement on there, or maybe the applicant said I don’t need five years, I only need a year because I’m almost done, or something in that nature This last one, 5, is we add that on this administrative time extension condition, but it’s also the condition that we have, if the applicant is coming in for a time extension and that’s approved, there is no longer an administrative, normally, there is no longer an administrative because they’ve already received that, so this would be the condition added regarding additional time, which states: “5. If the applicant should require an additional extension of time, the Planning Director shall submit the applicant's request to the County Council (or the Planning Commission),” depending if it’s an ordinance or a permit, “for appropriate action.” Okay, so consequences, there’s two; there is one for ordinances and one for permits. Ordinances, this is typically at the end of an ordinance: “Should any of the conditions not be met or substantially complied with in a timely fashion, the Planning Director may initiate rezoning of the area to its original or more appropriate designation.” That’s the consequence right there. There is no fine, there is no jail time, there is, it’s those two options there. So what happens is, the Planning Director, normally, to approve a rezoning, you have to be consistent with the General Plan, you have to be consistent with the Community 7 EXHIBIT B Development Plan, you have to be consistent with the Zoning Code, and you have to meet the criteria for approval; so you would think that the zoning that got approved was the appropriate zoning designation for that particular area. So we run across a lot of older expired ordinances that have just been sitting, and when requested why doesn’t the Planning Director initiate rezoning back to its original, and sometimes even the applicant will ask, can you please revert it, but that’s actually the proper zoning for that area, and to revert it, it may go back to an inappropriate zoning. I mean, if you are in the middle of an urban core and you change it back to agriculture, then we are looking at any development requiring a Special Permit or something. That might not be what we want to see happen. So what happens is that zoning will sit because it needs time, it needs to come back to the Commission and to the Council for a time extension to be able to move forward. Again, we look at the bigger picture when we go through that because things will have changed, all the conditions are updated, fair share is updated, roadway conditions are updated, water conditions are updated, traffic reports are required, if an archaeological report is outdated, those will be required; so, it’s, again, as if they are doing the work normally associated with a new permit or a new ordinance, if it’s been some time, okay? So what will happen is it sits until somebody comes forward that can do a project there. And again, that’s something that the Commission has to consider, as well as the Council; is that what we want to see happen or do we want to create a process where an ordinance is good for a period of time, and then it’s, it expires, it actually reverts back? And legally, we’ll have to, you know, look into this to see if it’s going to require an actual ordinance to revert it back or if the ordinance that is created has the ability to revert it back after a period of time. So that’s an option. So, that’s one consequence, that’s the ordinance consequence. For permits, it says: “Should any of the conditions not be met or substantially complied with in a timely fashion, the Planning Director may initiate procedures to revoke the permit.” Now, this is different because permits normally are specific to a specific project; it’s not zoning where you have a multitude of uses that are allowed. It’s I’m coming in for a school or a church or some type of use that’s very specific. They have to build that project; they don’t have flexibility to build something else unless they come in and amend or to revoke and come in with a new permit. So what happens is, this has happened not a lot but in an occasion where the Planning Director initiates revocation based on non-compliance of conditions. And a lot of times the applicant, we’ve got, in our last rule change there are applicants that just say, look, I’m not doing the project any more, can you please revoke it? Previously, we had to come to the Commission to request it, but we were able to change the rule to just say if it’s an applicant requesting revocation, we can just go ahead and revert it, I mean revoke it. So that is for permits. Okay, let’s look at our ideas here for consideration. Number 1, the Planning Commission always, even now, has the ability to deny a time extension or an amendment request. And this happens on occasion, especially with amendment requests that are not reasonable or they are asking for something that the Commission doesn’t agree with, and it won’t be approved. So that’s a current option. Another option, okay, this would require additional action from the Planning Commission or the County Council to revoke the permit or zoning ordinance. So again, that’s the request that comes before the Commission or the Council; they have the ability to deny the request. 8 EXHIBIT B An idea we spoke about earlier is to: “Place an expiration date on a permit or zoning ordinance so that it automatically expires without the Director, Commission, or Council having to take further action.” Legally, we need to look into that to just make sure what that process would be; if that can be done as part of the permit or as part of the ordinance, or if it’s going to require an additional step. And, since I’m on this subject, one thing I wanted to speak about, there has been discussion that I’ve heard, too, about a number of timing request, like some people say you shouldn’t give them five years, give them three years, you shouldn’t allow an administrative, or whatever. One thing to consider, or to keep in mind, is that not every project is the same. Although we’ve been in a habit of making five years the normal time, there have been times where a project comes in and it’s obviously a very large project; five years, they wouldn’t be able to do most of their, even their infrastructure to get off the ground. So we’ve got to keep in mind that we should look at timing as far as the actual project itself. If it’s a smaller project, three years or five years may be appropriate; if it’s a much larger project, we should be looking at a reasonable amount of time that an applicant could realistically do that project. Next option is, or idea is, order to show cause. This is a process that is being done currently by the Land Use Commission. What will happen is if the – they are required normally to submit annual reports to the commission – and if they find that there is a lack of action on condition compliance, they would generate an order to show cause to require the applicant to come before the commission and address why they have not complied with those conditions. The, currently, the only options that the commission has, the Land Use Commission, is to allow the applicant to continue or to revert it back to what the actual boundary amendment approved. So if it was approved for Urban from Agriculture, it would be reverted back to Agriculture. So this, this happens on an occasional basis. We’ve, we just had a large hearing recently where the Land Use Commission did an order to show cause on a project for lack of compliance. The applicant has the burden of proof to be able to prove that they’ve complied, and the commission makes a decision whether or not they agree that they have or have not, and then they decide whether or not they are going to revert or not. So that is a process that we could possibly replicate and create rules for, and at times when we feel like we need to bring an applicant before the Commission to address compliance, we can issue an order to show cause. So that is one of the ideas. We also are considering, you know, it seems like there’s, there are times where the intention of the applicant is questioned; are you really going to do this project or are you just doing this for speculation? And so one of the questions that we might want to add to our forms is financial information that can show that the applicant is in the position to financially be able to go forward and do this project. It also places them in a place where they have to say whether or not they are going to do it, or whether or not where I’m just getting it ready so I can sell it. And then at that point the Commission and the Council know full well what the intention of the applicant is. There have been, you know, this issue comes up on occasion where an applicant comes before the Commission and/or Council and says this is my plans, elaborate plans, everything, you know, drawn out and everything, and then a year later it’s sold, you know, because maybe, we just don’t know, we thought that was their intention, we don’t know if something happened or, you 9 EXHIBIT B know, but on occasion we get questions; how come that is becoming that use now and they propose that? And so those things do come up. But again, when it’s talking about an ordinance, when we look at zoning, we shouldn’t be looking at a specific project, even though when an applicant may come in and say, look, I’m looking at doing this. The reality is, is this the appropriate zoning in this area to allow these permitted uses here? Because the reality is maybe even this guy may build this, whatever it is, but ten years down the line it doesn’t work and something else comes in there, you know, that’s allowed in that particular zone. But in regards to permits, that’s different; they are required to build that particular project and they have to stick with it. The only way then can change it is coming for an amendment. So that concludes our presentation. We can try to answer any questions that the Commission may have. UNGER: I think I’d rather hold off on questions right now. I’d rather take testimony from the public, and then once that’s closed you can address some of the questions that invariably will come up, and then I think then we can open for, one time for the Commission to have a discussion. DARROW: Thank you. UNGER: Yeah, let’s do that. We have a five-minute request for a break. Five-minute break. Thank you. RECESSED: Chairman Unger called for a short recess at 11:03 a.m. RECONVENED: The meeting reconvened at 11:12 a.m., with approximately 15 people in the audience. UNGER: Let’s go ahead and start the public testimony on Administrative Matters No. 1. I’ll call – actually, why don’t we, everybody who wants to testify, if you would raise your right hand. Do you swear or affirm to tell the truth before the Planning Commission? TESTIFIERS: Yes. I do. UNGER: Thank you. First four testifiers: Mark Van Pernis, Greg Olsen, David Blancett-Maddock and Keola Childs. Please state your name and area or residence. VAN PERNIS: Mark Van Pernis. Makalei, North Kona. I’m a retired attorney and I’ve studied this issue significantly. First of all, let me digress to say if – he didn’t tell us what the recommendation of the Planning Director and the Department were on the prior application – but if they recommended approval, it shows how out of touch they are with the local community. I would argue that the Planning Department presentation, which took about half an hour, was incomplete, and certainly stilted; you didn’t get a fair statement of everything. The truth of the matter is that the Council, or the County – and when I refer to the County, I’m talking about you, the Planning Director and Council, everybody – they give the developer hundreds of thousands, 10 EXHIBIT B if not millions, of dollars of increased value by rezoning their property in exchange for certain promises of infrastructure development. Those promises are routinely broken, and I suggest the County is a fool for allowing it to happen. The extensions that the Director, or whoever it may be at the time, gives often run ten, 20, 50 years in some cases, with no public input and additional public input, public hearing. Now, the matter can be easily resolved – something I don’t think the Planning Department has given you. There is a rule that says if you don’t do what you – and by the way, this is discussion, and the Hilo attorney should not be so oriented towards developers to limit our testimony in discussion. This is, as your Chair has made clear, this is not a hearing on an application, so the three-minute rule does not apply and there is no, nothing in here that says anything about the three-minute rule. But the matter is easily resolved; there is a rule that says if you don’t comply with the conditions, which you get in exchange for the millions in value given, the Planning Director may rezone. That’s a problem, down-zone again. You up-zone for millions, you, down-zone is the Planning Director’s only recourse. He may do it. He never does it. Again, I’m not addressing Mr. Yee personally, but prior planning directors, they regularly extend. They don’t know Kona but they extend. Now, my suggestion is that you change your rule to say the zoning stays. The Planning Director doesn’t have to revert the zoning. The zoning is appropriate. The zoning stays. The conditions terminate and they reapply for new conditions based on what infrastructure and other needs there are then, five, ten, 20, 50 years later. Don’t leave it to the Planning Director, and have public input like you did on the last project. That’s the only rule change you need. And let me also suggest that you eliminate the Planning Director from giving the extensions. Whatever he says is necessary or whatever the Council decides is necessary, two years, five years, ten years, whatever, that that be in the ordinance, that there be no further extensions without the Council’s action, because the Planning Director goes five, ten, 15, 20 years, without any public input. So I would suggest that after the initial application of time that the matter expire. Thank you. UNGER: Thank you. OLSEN: My name is Greg Olsen. I live here in Kona up in Kona Vistas. What I’d like to talk about is something that I don’t think a lot of you – I haven’t heard anything about this, which has been a concern of mine – is when we do not make consequences to developers delaying, constantly asking for extensions and so forth, that that would drive up the eventual price of any of the properties developed therein. Condominiums are now no longer affordable to the majority of people. I’m finding – I’m a realtor here – I’m having difficulty getting people into properties, who are first-time home buyers, simply because it may have taken 20 or 30 years to develop a condominium project. And that’s partly because of these constant extensions; the longer we take to build something, the more expensive it ends up being. And that’s something I hope that you will take into consideration, that you put some sort of time constraint that is tied into the value of the initial sale of any property. 11 EXHIBIT B The other thing I’d like to take into, bring to your attention – I’m sure you are fully aware of it – is our schools are overcrowded. So by lengthening the time with which a development takes place, that’s separates the time from when they pay their school fees into the kitty to when the keiki start arriving. The downside to that, of course, is that they probably, we probably got enough new developments on the books right now for at least another thousand children. Where will we put them? I think that there needs to be a better tie-in between the fees that are charged upfront to developers and the eventual arrival of those children, because it’s going to be more expensive with each and every passing year. So please take into consideration the eventual cost to us, to we the people who live here, for when a development arrives. Thank you. DAVID BLANCETT-MADDOCK: Aloha, I’m David Blancett-Maddock. I live up in the Kona Vista up on Lako. I am a licensed attorney here and I was a planner in the City of Pittsburgh for many years but not in, I was more in the budget into the planning. Three minutes is too little time, and as my colleague has indicated, this is a discussion, I would ask for a little leeway because this subject is so broad and so much needs to be said at this time. I agree with my colleague about the problems that I’m seeing with delegation of authority all the way down to the Planning Division. No offe- I don’t mean to take exception to this body. But the laws in zoning are derived from State authority. They are derived from the State authority to the County and to the Land Use Commission, based on that authority of the State. And the delegation of power has to come to you in that form; it can’t be subrogated. Now, in the LUC in 1990 the Legislature instituted the very thing that’s causing a lot of these issues with the LUC reverting, like in Waikoloa Mauka, the recent case, where they reverted the subdivision to Agricultural, and it was very, very specific. I have in written testimony – I had no idea how broad this was actually going to go today – but it said the Senate Committee on Energy noted that “vacant land with the appropriate state and county land use designation is often subjected to undesirable private land speculation and uncertain development schedules, and such speculation and untimely development inflates the value of land … coordination of planning efforts, adequate funding, public services, and facilities.” They put this, they specifically put the authorization to give the LUC the ability to revert these in, because it requires successful, this, “which will require that successful applicants for land use boundary amendments either ‘use it, or lose it.’” That’s your State Senate telling you what the intent of the LUC getting enforcement powers is. Now, let me put that in perspective. You probably wonder why I’m talking about the LUC. The LUC had no enforcement powers. The enforcement power is right here at the County level. The delegation from the State was to the County for enforcement. And it had the LUC out there working on these large projects with no enforcement powers, and it didn’t go in and start to give you the broad powers you have to amend these to things that are more appropriate – Ma’am, I’m going to kind of ignore that \[countdown sign Ms. Hall was holding up\] for a minute because I have to try to get to these points. HALL: Go ahead, keep going. Just doing my job. DAVID BLANCETT-MADDOCK: They – I understand, ma’am – they gave broad authority to the County but they didn’t give it to the LUC, and they discovered the LUC was letting these project just sit out there and be speculative projects. Putting money in the, large amounts of money in the hands of the developers and giving nothing back to us the public and, you know, 12 EXHIBIT B carrying on these projects that have been in – in Kona Vista the one currently in front of the Commission right now for Kona Vista in my area is 40-some years old. The highway can’t even handle, it’s, it’s, this State has taken notice of the fact that Kuakini Highway can no longer handle the traffic. This is no longer relevant zoning. And when you hear your planners tell you that, well, you know, this is harsh when you see the court, like I know people are going to say, okay, I heard one of my colleagues say, you know, this wouldn’t bring down, you know, the risk of additional litigation. Let me make clear as a tax payer and as a citizen of this community, you are our recourse to these people with deep pockets. It is the responsibility of you to challenge them even if they come in with their big teeth and their lawyers. You are the only thing we have. It’s those large parts of government power, those overwhelming wheels, they protect us the citizens from developers who may have gone out and speculated 40-some years ago and gotten somebody convinced that they were going to build something, and they’ve never touched it. Now, one of the things that happens here – and I see it mysteriously missing from all this – is in a court case, the court case that’s most on point in this case, is this DW ‘Āina, back, it’s a Supreme Court case. I don’t, I have the citation in the written stuff that I gave you. The Supreme Court, although they ruled against the reversion, make it clear, the courts do that all the time; the law says that there is a right to reversion. That right is not only a right but the Senate has told us that it is expectation of the State that we should be enforcing our land use so that we don’t have something that somebody did something for 42 years ago and puts a huge amount of money and it inflates the price of real estate and causes all these problems and havocs with our roads and our infrastructure and all that. Now, I saw, I saw for the first time how the County handles this, because I’ve had questions about this and brought it to the County. They kind of laughed at me when I brought it up the first time this Kona Vista thing, because they said, well, we routinely grant these extensions. And now I’m seeing the criteria they use, and what I’m seeing is unbridled discretion in an agents, in an administrative body, not so much you but all the way down to the planners. And what’s going on here? What’s going on? The State has told us no. The State has said this is not for the benefit of developers; it’s for the benefit of the community, and that we can revert these. It gave the most harsh reversion option to the LUC, but it reserved you guys a lot more authority. So I’m going to suggest that the rule to show cause, which is what came up in the LUC, is not only appropriate but it’s mandatory. The LUC says it’s mandatory. They’ve got to show, a rule to show cause why they haven’t complied with these conditions or met the criteria that they’ve set forth, the contract they made with the County to get rich. And kid yourself not, when they come back, these things don’t look anything like they looked like and the lot property development \[inaudible\] like. So I’m going to suggest that you need a rule to show cause. And if these things have expired, they’ve expired. The law says you finish something up. We are not going back on that. You don’t have the right in the planners to say we’ll give them another year, we’ll give them another two years, even make application. So there is so much here to be talked about. I will, I will release the floor, but I want to make clear; this authority of this body is derived from the State power, it is not independent, and you cannot ignore the intent of the Legislature in this matter. And you’d better get on it, or you’re going to get lawsuits, and I’ll be glad to be along with those when they go for that ride. And I’m going to tell you something else about this— 13 EXHIBIT B UNGER: Please wrap it up because I know Mr. Childs— DAVID BLANCETT-MADDOCK: I, I am, I am wrapping it up. UNGER: —has to— DAVID BLANCETT-MADDOCK: But I’ve got to make clear, it’s delegated authority, you have to take that seriously, you have to take the intent that was given to you with and the parameters that was given to you with. And this is just unreasonable for people to sit 42 years on some approval that’s no longer valid. Okay? Thank you. UNGER: Thank you. \[Applause from the audience.\] CHILDS: Aloha, I’m Keola Childs. I reside in Pua‘a just north of Hōlualoa in the Kula Belt. A couple questions, maybe rhetorical, and a couple comments. One is about the time extension filing deadline. If I understand what I read in the rule, it said that, for a permit, the applicant seeking a time extension shall file within either 90 or 60 days prior to the extension deadline. So the question I have is if in any particular case the applicant, the request for a time extension comes in later than that prior to, since this is a rule, is it, uh, gee, a guideline, and, gee, we are sorry you are late but we can handle it, we’ll take a look at it, yeah, we’ll put it on the agenda and we’ll pretend or ignore that, or is a rule a rule, a rule a rule? Is there any flexibility? Does the Commission have the power under its rule to accept without immediate rejection that application – or the Department staff on the Commission’s behalf because they are all part of the Planning Department – is that even, is that even something you can hear? Are you entitled to hear by law an extension request, if the deadline was not filed, met? And I believe there are some current applications and recent ones where they have been filed past the deadline. I’m not going to mention any particular ones. Second one is the requirement to be consistent with the General Plan for time extension. We know by ruling of the State’s Intermediate Court of Appeals that the Kona Community Development Plan is a component of the County General Plan. That’s an ICA decision and it’s incontrovertible because the Supreme Court denial, it denied the appeal. If that’s the case, then a CDP test is critical. There have been, so, in the CDP it contains a condition that time extensions shall be treated in the same manner for compliance with the CDP as a new change of zone request. It provides that one of the requirements is to meet the Kona CDP’s, Community Development Plan, condition for concurrency, and the concurrency is set forth in various zones. We heard an example today of a site, earlier testimony on a site that’s located in certain concurrency zones, for which the CDP says certain roads shall be built prior to any new zoning, at least where area mitigation is required. And this is one of the many gray, gray areas of the CDP as to what the law really is. If concurrency pertains, and if area mitigation is required in particular – area mitigation means things not just like a left-turn lane into your project but just that the whole area needs better circulation – does, can a time extension be legally approved, if that CDP condition is not met? Also my two question areas. 14 EXHIBIT B Two comments briefly. The Commission while certainly does have the right to deny a time extension for whatever reasons, I would suggest just the point of view and thought that when the Commissioners may feel that there is not enough information to assess something given a period of time that has passed or a change or tsunami that just hit or whatever, that the Commission instead of merely denying it, ask for fresh global look. It’s a constructive twist to simply saying, gee, do I have to deny it, is saying instead, we want to look at this fresh in a global look to see how things are, please resubmit a fresh application package, and we will consider all the reasons you’ve given. It’s still a denial, but saying a denial in a positive way that things have changed, we need a fresh, global look. It’s just perspective, result is similar, okay? Last thing is, it’s a little bit off, stretching it slightly, but I have a comment that’s not really fair in a landscape where substantial amount of zoning was given in a 1967 Zoning Code that exist without conditions at all, lands that are underdeveloped or completely undeveloped today that are zoned for Commercial, Resort, etc. Think of the vacant lot on Ali‘i Drive that’s zoned Resort right next to the big banyan tree that everyone takes pictures of. Those sites have no time conditions on them. But people who come in today that want to do something for infill pockets, have these conditions that we are talking about. There is something unfair about that system where some get a free ride in perpetuity with no conditions and others don’t. I don’t have a solution, just pointing that out for your perspective. Thank you very much. UNGER: Great, thank you. You all may be seated. Mark Powell, Diane Blancett-Maddock, Bob Hoxsie and Simmy McMichael. You can begin. Please state your name and area of residence. POWELL: Aloha, Commissioners, Mark Powell, Kinau Street, Kailua-Kona. A couple of things that just going through what I heard today and some other stuff is time extensions. You know, if a developer comes in, or a person, with an idea 30 years ago and gets approved, is it still that today? Any of you planned on being in this room 30 years ago? I doubt it. Ten years ago? Maybe not. Five years ago? Probably not. So things change. So when a developing project exten- time, zoning expires and they apply for an extension, if they haven’t applied as the rule say before it expires, they should have to start from square one again. No doubt. The 250-dollar fee for an extension probably doesn’t cover the County’s cost. Every time a developer, after looking at them, looks for a time extension or, that they put in, ask for more favors to put more money in their pocket. That isn’t fair. You heard about impact fees. If you paid your taxes 30 years ago for life, you would be saving a lot of money. Well, that’s basically what the developer does on impact fees, basically paid them years ago when they were low, a lot different than today. And times have changed. Do we have water? Do we have the right sewer system, road system? So there is a lot of things that you can look at. And I think, I think it is in your favor to deny extensions when they didn’t follow basic duties of what they were required to do and there was no significant development started. And 20 years doing a development through over time is not reasonable. If they are going to build it, get in, build it and get rid of it. I heard today, ask, maybe you should ask, are you going to build it or, you know, flip it? So that is an important thing because they aren’t members of our community. Thank you. DIANE BLANCETT-MADDOCK: Aloha, Commissioners. My name is Diane 15 EXHIBIT B Blancett-Maddock and I live in Kona. Deadlines for complying with conditions for zoning changes should not be routinely ignored or extended by the Planning Department or receive favorable recommendations from the Planning Commission. I applaud you for considering this issue that is of great concern to residents of our side of the island and complies with planning standards adopted through the State and exist in your code. The practice of entitling landowners to extend zoning changes and land use plans forever negatively impacts the community that the planning process is supposed to protect. I urge you to revert changes after a reasonable time, maybe five years, when required conditions have not been met and substantial progress has not been made based on the code. Thank you. HOXSIE: Aloha. Bob Hoxsie. I live in Kona. So, my question I guess is – I’m going to use the Kilohana as an example, but there’s much larger ones obviously that go on that are much more impactful, but, you know, in this case no construction has been done in twelve years, their extension has expired, the rule seem to give the authority to revoke the permit – so my question is why hasn’t this happened on this one, why hasn’t it happened on many other ones? And so, so that’s something that I’d love to hear in your discussion is if we have rules to address this, why, why isn’t this enforcement happening? Thank you. P. MCMICHAEL: Aloha. I need to show you all these pictures \[her collage of photographs in front of the Commissioners\] and— UNGER: For the record, please state your name and area of residence. P. MCMICHAEL: Oh, sorry, Paula Simmy McMichael. I’m in the Ahupua‘a of Hōlualoa I and II. UNGER: Mahalo. P. MCMICHAEL: So this project, Kilohana Makai, \[inaudible\] addressing, they never gave proper notice on that lot ever. And I would have been right there on it, and that is because I was fighting with DLNR, County Planning and the State on these walls and erosions and it went back and forth till 2010, and then that was just Bali Kai. The other one is Banyan Tree Condo, which happened years, a couple of years later. So in this process that this was accepted, was never notified to the public; there was not, not ever a sign that I saw there, I never, I never saw any ads about it, no one there knew about it. Jerome Kanuha has lots there; he never heard about it. So, how did this all get passed, and this fact that in 2007 it was administratively extended, was in this process of going back and forth with the County, with the State, with DLNR, and what it was is all the bickering between who had the responsibility. The County would say the State, the State would say DLNR, and it went back – my file in the back there is very heavy, it’s this thick, I can bring it forth, and it’s all the paper trail of going back and forth. So I’m saying that this was all done in-house, and we should, the public, the public has been affected by it. And the record show that the Bali Kai lost over an acre and it was 20 feet out. It’s not 20 feet out. They try to get a shoreline survey – what happened is the seawall was old and the waves took it out, they tried to repair, restore, what they did is they took it out and they brought in dredging machines, 16 EXHIBIT B backhoes, with no permit, and they did all the stockpiling, all of that was going into the beach. Banyan Tree, when this permit of extension was happening, they did not have legal rights to do the seawall. The surfers called me, and everything drenched to the ocean, everything was, it was so bad. Here is what happened is the tarp, they had a black tarp to try to hold all the construction, because they had heavy machinery anyway with no permit, and then it went onto the reef, and there was endangered sea turtles there, and it stunk because they died – oh, sorry \[responding to the countdown sign for testimony\]. But, okay, make a long story short is that you should have them go through clearly another permit. There’s too many things that have changed there, including historic, including iwi-s, skull, skull popped up, so. I want to – I can go back there. UNGER: Great, thank you. Thank – oh, ma’am? DIANE BLANCETT-MADDOCK: I just wanted to add, there’s probably a multitude of letters that were submitted in written testimony for this issue. I hope that the Planning Department has given them to you. UNGER: Yeah, we all have them, thank you. DIANE BLANCETT-MADDOCK: Thank you. UNGER: Thank you, you may be seated. Is there anybody else here that wishes to testify on this topic? Not seeing any, I need a motion to close public testimony. SHIMAOKA: I motion that we close. KEALOHA: I’ll second. UNGER: Motion by Commissioner Shimaoka, second by Commissioner Kealoha. All in favor? COMMISSIONERS: Aye. UNGER: Opposed? Hearing no opposed, public testimony is closed. As we outlined in our process, Jeff, why don’t you start again? And if you took some notes of some of the questions, we did also, so if you miss any, we can continue the discussion. But why don’t you start with what you’ve heard and how you can respond? DARROW: Sure. Thank you, Mr. Chairman. There are questions I can respond to. Some of them are legal questions that would probably be better addressed by our corporation counsel, and I’m not sure that’s something they can do at this time, it would probably take research. But I’ll try to address the ones that I can. Mr. Van Pernis brought up the idea of keeping – for zoning ordinances, not for permits – but keeping the zoning in place, and we had briefly touched upon that that the options available to the Director are to revert back to its original or to a more appropriate zoning. As mentioned, we’ve gone through all that work to approve it as an appropriate zoning, it would be, it seems 17 EXHIBIT B appropriate to keep it in that zoning even though conditions have expired. Now, again, the option available is to put possibly an expiration date on the conditions of the ordinance, and they would come back to the Commission and Council with a new request for conditions, but the ordinance, the zoning would actually stay in place. So that is an option, or an idea, that can be considered. In regards to costs to surrounding property owners or to other projects in the area for delay of project, that’s a, that’s a real difficult area to actually grasp and be able to identify, you know, this. It seems like there is a little confusion in regards to impact fees, fair share fees, Department of Education impact fees. What happens is when – there are certain developments that don’t have these fees, commercial developments is a good example, but if they were to develop residential units in those developments, those fair share requirements and possibly DOE impact fees may kick in. DOE is separate from us. When we have a large residential development, we send comments and they will send their comments back letting us know the developer needs to work with them on paying DOE impact fees. Our ordinances usually have what’s called a fair share fee; it’s not an impact ordinance. That is still something that the Council, the Commissions, the Mayor need to consider in the future as implementing, and that would be an overall impact fee that could be something that may not be associated with an ordinance or a development; it may be something associated with a building permit or with another type of action. Currently, in the ordinances they have a fair share fee and those cover cost relative to regional impact, such as fire, police, parks, solid waste, those types of facility charges. Those are normally placed on a developer when they are proposing residential type units. So if you have a developer that’s proposing 100 units, there will be a trigger when they have to pay those impact fees. Normally, it’s prior to Final Subdivision or prior to Plan Approval. They cannot, we normally will not accept the impact fees early; they have to, it’s when they are ready to final subdivision or final their Plan Approval. So it’s going to be a considerable time down the line. So if they delay, those costs only increase because every year the Honolulu Consumer Price Index raises those costs. And again, when you see a time extension come back before the Commission and it includes a fair share, you’ll always see that we change those figures to be updated to current costs, and the applicant is required to pay these higher costs. In regards to the Kona Community Development Plan and its requirements within it, as mentioned earlier, when we have an amendment request or time extension come in, we look at the changes that have occurred to the General Plan, as well as the Community Development Plan, and we will place conditions on there, if there’s requirements that need to be added, we will look for consistency, those types of things in our review. We also request comments from what we call the Design Center in Kona; they are the ones that are reviewing the Kona CDP and provide comments to us whether or not this project is an infill project, whether it’s in a TOD or whatever the situation may be. There was a comment made about existing zoning that – that’s true, in the late 60’s when zoning was enacted, basically a map was created that identified the zonings in the particular areas, those zonings do not have conditions connected with them. So you will see areas around the island where you have commercial properties, or whatever it may be, without conditions connected to the particular zoning. Maija is bringing to my attention that a good example is Ali‘i Drive, the 18 EXHIBIT B Resort zoning along Ali‘i Drive; a majority of those are existing zoning so they don’t have conditions tied with them. So we spoke about impact fees and fair share. I’m not sure what Simmy was trying to get at; I think it was relative to another project. We would have to look at that separately, and be able to address her issues regarding those. But I can also try to answer any questions the Commission may have. UNGER: I know specifically, or maybe this is the one that you might want corporate counsel to chime in on, but two testifiers, and I also had the question, one of the first things you brought up was if a permit is not, an application to extend a permit is not given to the Planning Department 90 days prior to their expiration, then it expires. So, is that one of the things that you chose not to or to have corporate counsel talk about? Because I would like to hear the answer to that. DARROW: Sure, I will try to answer. Okay, so this condition that we are looking at is actually placed on the permit conditions, okay? So, let me get up there— UNGER: Okay, so that’s not ordinance. DARROW: No, it’s not. UNGER: Just permit. DARROW: Yeah— UNGER: Okay, that’s significant. DARROW: So it says, “If the Commission is not able to act on a properly filed time extension request prior to the expiration date, the use granted under the Special (or Use) Permit may be continued, unless the Commission specifically disallows the activity during the interim period.” Now, again, that could be, I know, it says, “properly filed,” so what we’ll have to do is— HALL: You are on the wrong rule, I think— DARROW: I’m sorry? HALL: Right? Isn’t that the other rule? DARROW: The SMA rule? HALL: No, no, no, I mean, I just mean I think they are talking about what happens when they don’t file. So basically, it’s your last slides— DARROW: This one? 19 EXHIBIT B HALL: —the last two slides. DARROW: \[Inaudible dialogue with Ms. Jackson\] SMA, yeah, SMA has a – here, okay. So the issue in the SMA Permit is “the applicant shall file the request not less than 60 days prior,” so what happens during that time. Yes, the question would need to be looked at through corporation counsel to see if legally they could apply for an SMA Permit, if it was not filed within 60 days from the expiration. UNGER: And again, that seems pretty black and white. Then also, and I also was talking about 6-9(b), the slide before, where it affected permits, and it said the same stipulation except 90 days, if an extension was not received 90 days before the expiration of the permit, then – what happens, 6, (b) – “90 days prior to the expiration date of the time conditions, setting forth,” so it does, it says that “the applicant shall” put this in, but it doesn’t talk about the consequences. DARROW: Right. UNGER: So I guess, that’s maybe a legal question on what the Commission can do, what the Planning Department can do. Okay, those are, those are really important things that we need to, we all need to be aware of, because it is pretty black and white there. DARROW: Yeah. There was a time in the past, I’ve seen older permits that kind of directed the applicant within the condition that we had up there on construction, or it was in the administrative time extension, that kind of clearly said that if you need additional time, you need to submit within 90 days from the expiration date. At some point in the past they took the language out of that. That might be something we want to consider adding back in as a condition. So, you know, so that’s, that’s an issue we can look into legally. There was discussion on State versus County powers. There is a clear separation of those powers. Again, that’s a legal matter. There are sections in the law that deal with State Land Use Law, and there are sections in the law that deal with county zoning, and they are separation. So that can be discussed in the future by our corporation counsel. I think that addresses most of the issues that I have written down. But again, I can try to answer any questions the Commission may have. UNGER: Great. Commissioners, do you have any questions? The floor is open for discussion. Commissioner Yates. YATES: I’m just— \[checking her microphone\] UNGER: You are on. YATES: I’m just wanting to know, I’m kind of confused here because we are talking about extension, extension, extension, expiration. So, is there no expiration? It never expires? \[Laughter from the audience.\] 20 EXHIBIT B DARROW: The— YATES: I’m really confused because I don’t hear, all it says is that \[applause from the audience\] if it doesn’t expire, or when is that, you know, you’ve got to file an extension, you’ve got to file an extension, but I don’t hear that it’s expiring. DARROW: Well, what, it, there is no language that says – and again, that’s one of the ideas we are proposing, right – the reality is when an applicant bypasses their time, if they try to do anything on the property, if they try to come in for a permit, if they try to get Plan Approval, they try to get a grading permit, it will not be approved; they will be told you cannot move forward until you come back to the Commission and/or the Council to get a time extension. So that happens on a regular basis. We will get a request for a Final Subdivision Approval, and we have to send them a letter saying you cannot proceed with Final Subdivision Approval until you go back to Commission and Council and receive additional time on your ordinance or permit. So that’s, again, it may not, the language isn’t there that says it’s expired, but the reality is they cannot do anything past that time. That’s the reality. But again, we can, an idea would be to actually put the language in there that this permit expires on this particular date. KEALOHA: So your slide about things for our consideration, what would be required to execute those rule changes? DARROW: What we would request is to take this matter before the Windward Planning Commission for discussion and input as well, as well as possibly see if the Council is going to bring this matter before them, and then be able to get all the information provided together and maybe bring a full packet of ideas to the Commissions. The Commissions, yes, we would, if it requires a rule change to the Commissions’ rules, it will require a Joint Planning Commission meeting where they need to approve that jointly. If it’s going to require a code change, then it will come to each Commission and then go to Council for final approval. So, and, you know, the reality is it’s time, I mean it’s been, we constantly try to look at our rules, we are fully aware there are areas in our rules that need amending. We have priorities; our priorities are applications that have deadlines that we have to meet. Sometimes we have a break where we can initiate some of these changes. Right now, we are, there’s quite a bit going on, so we have to prioritize. But again, this is an important matter that we want to try to address. And we really appreciate— SHIMAOKA: I just wanted to make a comment on the needs or the concerns of the, especially, the Kona community, people that live on Ali‘i Drive, is that the reason why we are having this discussion today is – I wanted to just make mention that I cannot speak for previous Commissions but I can speak for this one here – is that we are concerned, and so the reason why we are having this discussion is so that we can make the appropriate changes that all of us feel needs to be made. This is ridiculous. \[Applause from the audience.\] CHURCH: I’d like to make a comment, too. And I think it’s just, you hear it in different forums that there is just inadequate accountability on the part of landowners not only – and I’m going to address something specific in a second – not only with regard to permits, which is that we are all 21 EXHIBIT B on focus, but you find it also, you find it in property tax abuse, and as it relates to Agricultural zoning and so forth; you find it in vacation rentals where they are taking place in violation of CC&Rs and zoning, so forth. So I think that the broadest impact that we hear and that we all feel within the social framework we live in, is that just in today’s world that’s so fast-moving, there’s just not the accountability that needs to take place. The perspective from which I talk from is over 40 years now in Hawai‘i, with the family being raised here and so forth, and really in development, the first ten years in large scale development for developers in Honolulu, on various islands in the last 25 or so, just small stuff in Kona. And I’ve just become increasingly sensitive to land issues as time goes on, and I guess to some extent slightly resentful for people just bring in money, park it, and then get out here, and are here two or three months a year whereas the rest of us live within the community. What I’m specifically sensitive to is in the area of shoreline management area permitting, and I think that we need to have greater accountability here. I just don’t believe – and I had to go through it myself – I don’t believe in automatic time extensions or administrative time extensions \[applause from the audience\] and I believe that the characterization of a project – and there is a difference between large scale and small projects, and I’m going to make a comment about that in a second – but we see a lot of small-scale projects, and there should be very descriptive and specific information on these projects other than two sentences in the summary of the application, that become a condition, number one condition, and a specific time frame that’s generally easy to define for small projects. And any violation of these things as simple as – by the way, you always see that there is a condition for filing annual reports, I can’t believe how simple this is, yet we have seen here where people don’t file even an annual report. If you don’t have a commitment enough to evaluate the project and submit an annual report, then I’m sorry you should, that thing should be revoked. He didn’t comply with the condition. So I think we need to be, we need to hold greater accountability particularly on small projects. But larger projects, which may be under shoreline management permit areas, require phasing, and these things are hard to define in three years or five years or whatever, and so they require a little more imagination on the part of the application and make sure there’s compliance. But in any event I’ll go back and cease my comments here, which is across not only what we are doing here but I think within the communities at large and other areas. The world is moving fast pace, and we simply need to have greater accountability. \[Applause from the audience.\] CARR SMITH: I have a few comments and a couple of questions here. Why is it that commercial developers are not required to pay fees? DARROW: I’m not sure, I mean, it’s just the way that the conditions have been ever since I’ve been working with the conditions. I mean it’s been relative, relational to residential units, and it hasn’t – and I’ve got be honest with you, I had the same question, just recently I was thinking, why didn’t they put an amount – I don’t know if it’s, I mean, they could, you know, I mean they could use square footage as a means of requiring a fair share requirement. But that’s a good point and I think that we should definitely look into that. Thank you. CARR SMITH: I agree, thank you. I have several thoughts here. I’m wondering if a 250-dollar fee is a sufficient amount of money to process something. As a comment, the basic concept of use-it-or-lose-it I think is valid. I think we need to look at and get some feedback from the Planning Director about administrative extensions on whether that is a good idea or whether it’s 22 EXHIBIT B better not to have that. I do agree with Mr. Van Pernis that on zoning ordinances that the zoning shouldn’t change. I do agree that when conditions are expired, that they are done, and that the applicant should have to reapply. I’m not sure, I’d like to hear more from the Department about the potential questions or additions to an applicant about whether they are going to speculate or not and whether they can verify that they can afford it; just curious about that, whether that’s valid, it can change so quickly, and I’m not sure. I mean I get the intent, I think that’s good, but I’m wondering about that. Also, I heard a couple of times that sometimes the applicant want you to revert the zoning, and I don’t know, I don’t think that they should be using the Planning Department to get the zoning they want; if they want to change the zoning, they should have to apply in my opinion. The order to show cause, I wonder if that should also include perhaps the order to show progress. I’m wondering if they should have to show that they’ve done something on the property and have some buy-in. Yeah, so the Use Permit and the Special Permit both say “shall,” that the applicant “shall” submit 90 says prior to expiration, the SMA says they “shall” submit any potential changes 60 days, so I don’t know whether there should be any kind of consistency on those time frames or not, but maybe. I definitely believe that if they expire and they don’t do what they are supposed to do based on our rules, that it should end and they should have to reapply. UNGER: For the permit? CARR SMITH: For the permit, yeah. And then my last question I guess is I’m wondering if there is a disconnect with the applicant understanding the rules. I mean, why do we have so many people that just ignore these time frames and our rules that say one thing? Is there maybe a way that they could be better informed about upfront, you know, what that is? Especially if we change the rules. UNGER: Yeah, Jeff, do you, would you like to comment on that particular question? I mean, you receive these extensions requests. DARROW: Yeah, it sounds like the, is it the rules for the extension or the rules for compliance with the conditions that you are asking? CARR SMITH: The fact that it says that they “shall” submit any requested changes within 60 or 90 days but— DARROW: I would guess— CARR SMITH: —in many cases they don’t or are we just seeing a few that— DARROW: No, I mean, I would guess that they are not aware of that because that is in the rule and not in the permit, which is what they receive and read. So, again, maybe a good idea is to be placing the language back in the permit— UNGER: Absolutely, then— DARROW: —which it used to be— 23 EXHIBIT B UNGER: —yeah, if they are bound by that— DARROW: Right. UNGER: —request, they absolutely should be aware of that right up front. DARROW: Right. SHIMAOKA: Is that all included in the condition changes that you suggested? Would that be included? DARROW: It would be in the, in either the ordinance or the permit under this last Condition No. 5; it would have a sentence that would say that the applicant shall submit the time extension request within 90 or 60 days of the date of expiration or the end date. CARR SMITH: Or risk losing your permit. DARROW: Yeah, we could put some stronger language, or resubmit a new application if after, or something. KEALOHA: So, are we at the point of discussing possible language? Are we there or— DARROW: You, we can bring it forth, sure— SHIMAOKA: That was my point. My point is that, does it take an act of congress to put that statement in there or— DARROW: No, again, what we want to do is get as much ideas as we can, bring it before the Windward Planning Commission and present those ideas as well, get uniformity so that we can move forward with the rule change, and then also hear form the County Council and be able to also look at code change. UNGER: Okay, so Planning Department will review these minutes— DARROW: Sure. UNGER: There are certainly some highlight— DARROW: Definitely. UNGER: —that kind of we definitely want in there, and then that will be presented to Windward Planning Commission, and then you’ll composite it— DARROW: Right. 24 EXHIBIT B UNGER: —and come back in front of us. Okay, so— DARROW: Yeah, so, yeah, any suggestion— UNGER: —yeah, we’ll see these again. DARROW: —would be very good at this time. KEALOHA: Okay, with that, the pragmatism would be, you know, understanding that extenuating circumstances happen, and to make someone start all over every single time may not be reasonable. What about language limiting administrative extensions to one five-year term? I mean, as an example, this last, you know, request, we were listening to testimony on today was on year 15 already, right? So if we limited administrative extensions to one term based on extenuating circumstances. And second possible recommendation would be limiting extension request to the original applicant only; so if the property changes hands, all prior approvals would expire. So that limits the potential to get entitlements to increase value and speculate the property; you are only looking for a serious request. DARROW: If I could address, if I could address Nancy’s concerns first, and then maybe I can address Commissioner, I’m sorry, Commissioner Nancy Carr Smith, and Commissioner Kealoha. So going back to Commissioner Carr Smith’s comments, so we spoke briefly about the fair share for commercial, so we can look into that. The filing fee, 250 dollars, we actually recently changed that. Our filing fee for applications was 100 dollars, we increased it to 500 dollars and 250 for administrative time extensions. So that wasn’t that long ago that we increased that, but again, we can consider increasing that up to 500, similar to the cost of a new application to help cover administrative cost. I was a little shocked to hear how much it cost for publication of these hearings. It’s quite shocking. I’m not going to say it; we would have to call the ambulance, I think. Administrative time extensions, you are saying maybe not grant them, and Commissioner Kealoha is mentioning maybe we should grant just one. My understanding, looking at the record – and again, I shouldn’t be talking about an application we are looking at now – but, normally, the course of action is you have a time, your permit has a time limit, it’s normally five years, and one time extension for a period not exceed what was originally granted. They have to come back in at that time. There is no other administrative time extension after that. So whatever permit we were talking about, there wasn’t two administratives; there is only one time you can get. So if there is something being said that oh this applicant hasn’t come in for 15 years, what most likely happen is it expired after ten and they are coming back five years later, and, because they didn’t come back within the-. So let’s just be clear on that. This, there is, there is applicants – again, when we get to specific projects, we need to look at it because, we can guess, but it’s good to look in the file and find out exactly what happened – there is, we normally try to provide the Commission with history on each project. So when you look at these projects today, you’ll look at the chronologic history of it and you’ll see that there is some history to this project. There’s been some action before and there is now new action on it. And again, all those require public hearings and those kind of things. 25 EXHIBIT B CHURCH: It’s difficult to be hard and fast. I like Perry’s idea, but let me just give you an example. I like the idea off the cuff that oh yeah you can’t extend it for a new applicant, but, okay, so a lot of applications come on a corporate basis, so I can keep the same applicant, just change the stock ownership and so forth. To the extent that extenuating circumstances and words like that get crafted into the rules, there are ways to get around them, and so I think it’s difficult to be hard and fast. But I would encourage with regard to some of these rule changes to be hard and fast on this. DARROW: Okay, thank you. So, continuing on, so the, Commissioner Carr Smith brought up the matter of reversion that the, you know, the applicant request or the Planning Director; what we normally see is an applicant is requesting reversion because they couldn’t comply with the conditions of the ordinance. But again, reversion would be to, back to a zoning that now is really not the appropriate zoning. So this brings the matter that Mr. Van Pernis brought up of keeping the zoning in place, that the owner or applicant cannot do anything on the property until they are able to move forward with compliance, come back in, get either new conditions or updated conditions. That normally, the problem that happens with that is the applicant has already started something, right? You have something that was half-built or you have some use – I’ll give you an example, there’s one on the east side that’s a large property that’s now zoned Industrial that’s got 3, 4, 500 cars on it, junk cars, because that’s what they use the Industrial zoning for, and they want to revert it because they can’t do the conditions. That can’t happen, so they either got to clean it up and fix it up or come back in and do compliance, it’s kind of a tough situation. Order to show cause, you had brought that up, so that is something that we are looking at. I’m thinking that you are thinking that’s a good idea, correct? CARR SMITH: I think so, and further, I wondered about requiring showing progress especially— DARROW: Yes, normally— CARR SMITH: —for additional time. DARROW: Yeah, as Commissioner Church mentioned, we, for larger projects, we put in an annual progress report condition. That lets the Planning Department know where they are at. It’s, it’s unfortunate, but as mentioned, there are applicants that just don’t even comply with that simple requirement. We have to contact them and say hey you’ve got to give us an update on what’s going on. And unfortunately, a lot of times it’s “Applicant will comply,” “Applicant will comply,” “Applicant will comply”; nothing has been done, you know, and so you can see this project is going to be one of those that’s going to have to come back to the Commission and/or Council. And, has anything changed since they first came in, you know, or are they at a position now to be able to move forward, or are we just going to keep getting the same reports? I agree that we should try to get uniformity with the time frame, so we can work on that in our rule change, 60 or 90 days prior. I think that’s it. Are there any questions or comments— 26 EXHIBIT B UNGER: I think a common thread throughout this is having some kind of ramification for not meeting deadlines whatever it is, and— DARROW: Suggestions? UNGER: —whether it’s a simple annual report, you as Planning Department should not be contacting the developer and saying hey where is your annual report. If he doesn’t hit his annual report, there should be negative consequences to him. So, I mean, not getting specific but just a general comment. Then I did have a question because it seems like the terms are used interchangeably, it’s my understanding there is no automatic extension. There is a five-year administrative extension. So, are we talking about two different things or are we talking about the same thing? DARROW: The condition right here says, “An initial extension of time for the performance of conditions within the ordinance, or permit, may be granted by the Director upon the following circumstances,” and No. 4 says, “The time extension shall be for a period not to exceed the period originally granted….” So if it was for five years, the Planning Director can, as long as they meet those criteria, extend it for an additional five on one-time extension. UNGER: Okay, so that’s not automatic— DARROW: It’s not automatic. UNGER: —it’s not automatic, so I think, I think that deserves some clarification; the Director at his discretion can look at that and say no. DARROW: Correct. UNGER: Okay. DARROW: And that has happened. UNGER: Okay, okay. DARROW: As far as consequences, that’s kind of what we are looking for direction from, I mean ideas. Is it’s something that we want to look at in regards to a fine or is it something that we are, I mean, that’s the difficulty is what – the consequences we have now is they are in jeopardy of losing their zoning or their permit, I mean that’s pretty substantial. But the reality is we don’t find ourselves going down that road a whole lot. UNGER: Right, and it looks like we should be going down that road and having, you know, more detailed discussion whether this is the forum or not, but that, you know, that should be asterisked and exclamation mark on all these discussions going forward because that’s the key. Commissioner Kealoha. 27 EXHIBIT B KEALOHA: Just to add to that is, you know, Item 5 says an additional time extension, “the Planning Director shall submit the applicant’s request to the County Council, Planning Commission, for appropriate action.” What I was suggesting earlier is it’s expired; it’s not an additional extension but you begin the process all over again. DARROW: And that is one of the ideas that we were looking at is to put that expiration date on the permit or the ordinance. And again, at that point it requires them to come back for new conditions or possibly a new permit or ordinance. But, legally, yeah, we have to find out if it can be done in that ordinance or permit. I think in a permit it could be; an ordinance is, needs more clarification because you’ve created an ordinance to create that zoning, do you need to create another ordinance to change it? But again, it could be incorporated in the same ordinance. We’ve just got to see legally. UNGER: And you are talking two different things: you are talking permit or ordinance. And I think it’s a lot simpler to divide the discussion between those two, a lot clear, because for me personally, and again, not getting into specific things, but for me personally a permit is pretty cut and dry, you know; they don’t hit their stipulations, they don’t hit their conditions, they don’t extend for a permit for an extended time for a permit within what’s allowed, the permit is gone— DARROW: Correct. UNGER: —permit is gone. Ordinances I think then that should be back on the Planning Department hey do we, and the commissioner whoever on the Council, do we want to keep that ordinance in place? It should be back on the, I guess, us, not the developer lose, or the owner of the property to a certain extent, loses the decision or the control, and it’s now back in our hands to say hey is it for the better of the community to have this zoned whatever, Commercial Village, whatever it is, or not, and then we make that decision. So, I mean, personally, I don’t think we are talking fines; I’m thinking we are dealing with the permit or the ordinance itself. DARROW: Correct. Thank you. CARR SMITH: What’s the difference between placing an expiration date and as it reads now that there is time frames based upon the permit date? DARROW: Normally, how we look at that is, and we kind of briefly touched upon it, that when the ordinance or the permit expires, they cannot do anything. They can’t come in for a permit, they can’t come in for Plan Approval or any action. They would have to come back before Commission and/or Council. But there needs to be another action identified in the permit or the ordinance that has to be taken to actually dissolve that to revoke the permit or to revert the zoning. So it requires that additional action. So it kind of just is in limbo until that particular action is done, and that’s why we are talking about this possibility of just creating an expiration date where that action happens automatically without another action occurring. UNGER: That’s an important point, and personally, I would like to see another action taking place, you know, formal action, and I’m surprised it’s not in the ordinance right now. If it’s 28 EXHIBIT B created, there should be a way to un-create it and it should be a formal body. But that’s just a general thought to be thrown out there. DARROW: I mean, just for clarification, this is what’s in our ordinances, so this language here says, “Should any of the conditions not be met or substantially complied with in a timely fashion, the Planning Director may initiate rezoning of the area to its original or more appropriate designation.” UNGER: Okay, okay, that’s there then. DARROW: Yeah, right. UNGER: Okay. DARROW: It, just for reference, it used to say “shall” and that again was changed. They took that language out because “shall” was so definitive, and there were so many ordinances that were, you know, not meeting their conditions. And so— KEALOHA: What about simple language just stating that all rights and privileges, the permit is not transferrable? DARROW: That’s a good point. We were actually going to, we were discussing that matter, too, is – and I believe the Land Use Commission has this as a condition that if the applicant sells the project or there is a new successor or assign, that they have to notify the commission, it’s not as if they come back or anything and there is any action, but it is a requirement that they have to notify the Land Use Commission of a change in the ownership. We normally are informed, if they come in for a time extension or if they are submitting annual progress reports, we’ll notice a change in the applicant and we will change that in our files personally, but— SHIMAOKA: Commissioner Church and I were talking about the reason why we are in this predicament is because we don’t have really clearly defined lines. You get developers who have the deep pockets who can hire people who can craft language that gets around a lot of the ordinances that we set forth. And so, for me, for instance the one that was under discussion today on Ali‘i Drive, that to me is— HALL: Please do not discuss open applications, please. SHIMAOKA: Okay, okay, thank you. Again, the reason why we are in this predicament is because we don’t have any hard fast rules. CHURCH: For instance, get the, resubstitute “shall” for “may,” okay, try that out. SHIMAOKA: Yeah. Provide the hard fast rules and allow the Commission the discretion on taking it by case by case, but at least we have set forth hard fast rules so that these guys cannot get around it. Otherwise, we are going to find ourselves in this predicament again and again and again. 29 EXHIBIT B UNGER: I would like to hear from the Planning Director, if he would like to just throw out a few comments. YEE: Yes. So plenty of great ideas today from Commissioners, from the public, and certainly staff will, and I will, take that, talk to corporation counsel, mull it over with Windward Planning Commission, and certainly bring forth ideas to you. And they are all good ideas, right, and trying to deal with legal issues and stuff is our job. I do want to note one area that hasn’t been spoke of, which is, what’s being highlighted today are very high-profile, you know, applications that kind of brought forth this issue. What you don’t see is all the applications that we deal with, that we’ve provided administrative extensions and stuff that you don’t have to see nor do you want to see. They are small. You also don’t know all the applications that we process that deal with just a regular resident, okay, and, as we deal with those and provide extensions for administratively when they reach them. And, you know, it’s not an excuse. These big projects are certainly highlighting something we need to fix, but also understand, if you go so hard and fast, these same rules will apply; there is not a distinction in law around a big developer and your neighbor next door that’s trying to do something, okay? Granted we can try to craft language to try to address; the big differences could be within scale of a project or something. But I think people have lost sight that there are many applications, many things we process, that don’t reach you that we are trying to affect. There are many projects so far that Planning, you know, tries to shape, that we have a rub that we are trying to protect the public interest, and we do that every day and we shape those every day. What you are hearing today are a few that, you know, get to you, become higher profile, and you don’t hear the ones that we actually a lot of times help to adjust, help shape in a way that does work for the community. And so, again, not an excuse, I think there is, we definitely have heard plenty of things to fix. I certainly, you know, being the newer planning director here, it’s quite obvious to me that as time goes on, Commissions, and, you know, cyclical things that happen in the economy affect viewpoints, right, and right now we are seeing a very big change within our community. The lift the last couple of years, let’s say, has been a shift to address vacation rentals, which was within Planning, even the Planning Division of Jeff’s was a huge time commitment to be able to address that. And again, not an excuse, but I have to manage the resources we have in the Department. And so if it’s lifting up new rules on here, well, it’s going to be a significant time commitment. But meanwhile, we are still stuck with having to process applications in a timely fashion; otherwise, they are automatic approvals. So we have to balance that work. And within the civil service system, it’s not as if I can grab Planning staff from one position and say okay now you have to do this job. I wish I had the flexibility that doesn’t always occur. So when, let’s say, Jeff’s division were short two staff for a significant period of time, it really weighs heavily. Again, not an excuse, I have to manage the resource to get the job done. But I will quickly say the whole time I’ve been here, we’ve never been fully staffed, okay? And certainly within Kona it’s problematic, not that that affects the work of this Commission; that has to do with housing issues, another economics. So I’ve, from a larger perspective, community is changing, we are seeing that effect in how community is coming forth with their arguments, you know, for or against projects. We are seeing it legislatively in the projects that the Mayor wants us to affect in 30 EXHIBIT B terms of vacation rentals. We couldn’t have foreseen the lava event, which is another huge lift for Planning in terms of having to pry, stand up a redevelopment agency around that. And you are seeing it in the changes that the community and you want to see within how we deal with projects. So, it’s a great process, I came from community, so it’s great to see that everybody is working toward a similar goal at this point. Thank you. DARROW: Mr. Chairman, if I could just, I just remembered I wanted to speak briefly about a matter that was brought up, and it mainly has to do with conditions of zoning. There is a dual land use system in Hawai‘i; there is State Land Use and State Land Use Commission, there is County zoning. Normally, you are going to have conditions on the State Land Use zoning, which are taken care of by the Land Use Commission. And again, that’s the process for order to show cause; they have the possibility of losing that zoning and being reverted like we’ve seen recently in Waikoloa, not mentioning a specific project. But, County zoning, same thing, they come in, an applicant comes in, conditions of zoning are placed on that zoning. The applicant has to comply with both the County zoning ordinance, as well as the State Land Use ordinance. And so that’s their requirement. If they mess up on either one, they risk the entire development because then the zoning becomes inconsistent, and they will have to fix one or the other. So in a case of, if a State Land Use zoning is reverted to its original zoning, it’s now out of compliance with most likely the current zoning, as well as the General Plan. So the project is pretty much sitting there dead. So again, just for the information purposes there are these conditions that could be on a project both in the State Land Use, as well as County zoning. UNGER: Great, thank you. I’d like to go ahead and wrap this portion of the agenda up, and on behalf of Leeward Planning Commission, to Planning Department and members of the public, thank you very much. I think we’ve all achieved our goal of highlighting this as an issue that we were all aware of. We realize there are some problems with it. It’s one of those things that has been going on for a long period of time, and now it looks like people are that more aware of it. And mahalo to County Council also for being here. I think this is something that you also will be addressing. And certainly, all the ideas and notes that we’ve come up with, once it gets over to the Windward side and then back to the Council and the Planning Department, I think we are onto a really good path here on an issue that absolutely does need to be addressed in some form. So, thank you all. FROM THE AUDIENCE: Mr. Chairman, just \[inaudible\]. Will the testimony and discussion that took place here be incorporated into the discussions on the other side of the island— UNGER: Yes, they will. Absolutely, the minutes are going to be taken, County will compound the minutes and the ideas, and they’ll go to – Corporate Counsel is shaking her head, so I guess not. DARROW: Well— HALL: But you guys are free to come and testify at Windward, if you’d like to. FROM THE AUDIENCE: Oh, come on— 31 EXHIBIT B FROM THE AUDIENCE: See, that’s the problem. Commissioner, Commissioner, if I could ask— HALL: Point of order, this is not, this is not debate. UNGER: Hold, hold on, let’s, you know, let’s go ahead and discuss this afterward so we can clarify— DARROW: I can address it right now. UNGER: Okay, go ahead and address it. DARROW: The reality is the minutes need to be typed. It has been a very lengthy discussion today. It just depends; if that particular item draft, a draft of the minutes can be prepared in time, th because the next meeting is two weeks from now on April 4. So, again, it’s not, it may happen, it may not. The reality is we are going to be giving the same presentation. I have a lot of the information that was provided today. But again, we will try to get a draft copy of the minutes to the— UNGER: Okay, and so it’s more of a time frame thing; it’s not like those minutes will not ever be available. They are public information, public knowledge— DARROW: Yeah, we’ll pass that. UNGER: —and they will be eventually passed over— DARROW: Right, we will be providing the Windward Planning Commission with testimony that was submitted to the Leeward Commission— UNGER: Great, okay, I think that— DARROW: —to the Windward Commission. UNGER: Thank you. Commissioner Carr Smith – you are good? Okay. Very good. So I would like to close this portion of the agenda and move along in the agenda. The discussion ended at 12:38 p.m. Respectfully submitted, Noriko Sauer, Secretary Leeward Planning Commission 32 EXHIBIT B