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LUC Hears Evidence in Disputed Land Use Case

Commission to decide if original permitted use is the same or different than the Pi‘ilani Promenade and Maui Outlets projects now proposed for South Maui.

November 8, 2012
Susan Halas ( , The Maui Weekly

Nothing is so complicated that it can't be made simple and understandable.

That notion figured prominently in the testimony heard by the state Land Use Commission (LUC) on Thursday and Friday, Nov. 1 and 2.

The LUC met on Maui as "a quasi-judicial body" to consider whether a change of use granted an 88-acre parcel in Kihei from agricultural to urban in 1995 for a 123-lot, fee-simple, light industrial subdivision could be construed to be the same as the 2012 proposed version of the plan.

Article Photos

Deputy Attorney General Sarah Hirakami, the lawyer for the state Land Use Commission (LUC) and LUC Chairman Kyle Chock listen intently as they consider whether a change of use granted an 88-acre parcel in Kihei from agricultural to urban in 1995 for a 123-lot, fee-simple, light industrial subdivision could be construed to be the same as the 2012 proposed version of the plan.
Photo: Susan Halas

The current plan calls for 700,000 square feet of commercial retail space to be leased to a wide variety of tenants, plus an additional 250 units of "workforce" housing. The parcel as it is presently configured contains four lots and no fee-simple, light industrial property at all.

The LUC must decide whether these two uses are the same or different. Hanging in limbo awaiting the outcome is over $200 million in proposed commercial construction which has already received all preliminary entitlements.

On the face of it, it would seem they are "different," and in fact, every expert witness the developers called to testify during the two days of testimony only accentuated the differences. The 1995 plan has no resemblance to the 2012 plan, except that they are both zoned M-1.

And that amount of "sameness" was the core of the argument of Jonathan Steiner, representing Honua'ula (Wailea 670) developers of the apartments, and Joel Kam, attorney for Pi'ilani Promenade North and South, developers of the two shopping centers. Both argued that though the particulars of what is to be built now is "different" than what was approved in 1995, the way the law works, they are really "the same."

Not only are they "the same," the lawyers and a key witness said, but the commissioners who approved the "conceptual" light industrial scheme 17 years ago knew that the development concept might change radically, that other uses might at a later date be substituted for the property, and still voted to approve the change from agricultural to urban land use.

And how, you might ask, can "different" and "the same" be reconciled?

What Kaono'ulu Ranch (the former land owners) described to the LUC in 1995 was a light industrial subdivision with some ancillary commercial uses. The 1995 marketing study described the need for small lots to be purchased by business owner-occupants as needed to facilitate orderly growth in Wailea and Kihei. It was envisioned as a distribution and staging area.

However, with the passage of 17 years, the property changed hands several times. Now the present owners say what is really meant by the term "light industrial" is not the specifics presented to the commission back then and described by a decision and order--conditions that are recorded on the title, including the condition that what is actually built be "substantially" the same as what was originally represented to the commission. The word "substantially" figured prominently in earlier LUC show cause deliberations, where commissioners pointed out that this was not just frivolous language.

No, the lawyers for the land owners said, "light industrial" means any use included in the Maui County zoning code chapter 19.24-M-1- Light Industrial District (

That chapter includes dozens of uses, a great many more than the term "light industrial" might at first bring to mind.

In zoning lingo, M-1 Light Industrial is a pyramid that includes all prior categories. M-1 is a big grab-bag including all commercial uses named in B-1, B-2 and B-3. Large-scale retail shopping complexes and apartment uses are both permitted in that definition of "light industrial."

The developers' attorneys argued that once the LUC gave approval to change the land from agriculture to urban and the county gave the parcel "M-1 Light Industrial" zoning, the former owners and any subsequent owners were good to go for any of the many uses described in the code without any further discussion or need to amend.

Specifically, one use could be switched for another, so even though what was described in 1995 and what is about to be built now seem patently "different," in the eyes of the law, the lawyers insisted, they were really "the same," i.e. permitted M-1 uses.

Further, they attempted to persuade the commissioners that this potential for change was noted and described in great detail at the time the original request was made, and the commissioners knew back then that at some future date, given the breadth of M-1, that what might come out the other end could be very different than what had been described in the original presentation given "market forces" and the passage of time.

And indeed, that was exactly what happened.

The project emerged in recent times as two large shopping centers, plus a component of "workforce" apartments, and rapidly got the green light from the county. When grading permits were received, the developers announced that new shopping centers and apartments would soon be coming to the mauka side of the Pi'ilani at Kaon'oula Road intersection.

Only then was the announcement of the newest incarnation of the development vocally and vehemently opposed. It was most particularly opposed because, though there had been major changes in "concept," there had been no public review or comment since 1995. Opponents charged that the new uses were not what had been approved for the community plan, and also alleged that notices of the proposed changes had not been properly filed.

In fact, the landowners only notified the LUC that there were any modifications, amendments or revisions underway in October 2012.

That notification came when the dispute had already turned incendiary and the hearing to show cause had already been conducted. That state LUC hearing found sufficient reason to reopen the matter based on the conclusion that there was sufficient need to investigate and see if what was contemplated and what had been approved were "substantially" the same.

And re-open it they did. On Nov. 1, the commission was greeted by a standing-room-only crowd. Approximately 20 members of the audience gave public testimony. The rest of the morning was taken up with legal wrangling back and forth.

The issue brought out an abundance of lawyers. There were the two lawyers for the landowners, plus Lawyers Jane Lovell and Michael Hopper from the County of Maui's Office of the Corporation Counsel supporting the position of the landowners.

Representing the other side was Tom Pierce, the lawyer for the interveners: Maui Tomorrow, South Maui Citizens for Responsible Growth and Daniel Kanahele, a Kihei resident. The position of the interveners was supported by the state's Office of Planning represented by Deputy Attorney General Brian Yee, who was stuck in New York City in the wake of Hurricane Sandy and not present at this meeting. In his place, department Director Jesse Souki conducted the questioning for the opposition. Sara Hirakami, a deputy attorney was the lawyer for the LUC.

Also present were other lawyers, including Mark Hyde, a retired attorney who helped to bring the matter before the LUC as one of the interveners, and John Rapacz, a Maui lawyer acting as a consultant to the landowners.

But one other lawyer who needed no introduction was B. Martin Luna, the dean of Maui land use attorneys. In practice here for more than 40 years, he is the lawyer who originally represented the ranch in 1994-95 and was the first witness called by the current owners.

He looked like a lawyer--only better. He was dapper, slim, confident and neatly dressed. He also sported a black felt cowboy hat with a yellow feather lei headband and a big smile.

The second half of the first day was given over to Luna's testimony and cross examination. He reiterated the specifics of what had been presented and agreed upon in 1995, and particularly noted that Allen Kajioka, a commissioner at the time, had brought up possibility that major changes--the kind now under discussion--could occur and the commission had still voted to approve.

Privately, Luna said in all his years he had never seen a situation like this one. He would not predict how it would turn out, and reiterated that the initial presentation was his work, and he stood by it as complete and legal.

Witnesses called by the land owners filled all of Nov. 2.

These included traffic experts: Ken Tatsuguchi, a planning program engineer from the state Department of Transportation; and Phillip Rowell, a private traffic engineer retained by the owners. Also appearing were Heidi Meeker from the Facilities Branch of the Department of Education (DOE), and Tom Holliday, a senior real estate analyst/appraiser whose firm specializes in market studies.

They all agreed it was different--very different. They all went into detail--lots of detail.

The traffic witnesses said the new version would create more traffic. They went back and forth on how much more and whether it was peak traffic or traffic generated at other times, and what formula was used to arrive at those figures.

The traffic experts also talked about the frontage road that had been presented in 1995 and was a requirement of the decision and order the LUC issued--a requirement that ran with the title to the land.

But the traffic experts said in the 2012 version of the plan, that kind of a road would be essentially useless and potentially dangerous because it would put two very busy intersections very close together.

Charts and diagrams were presented to show that a frontage road, although required, was really "a road to nowhere."

The DOE planner said impact fees for housing had not been discussed in 1995, because at that time, no residential use contemplated.

The market study expert was dismissive of the original proposal for a 123-lot light industrial area. He said, in effect, of course the "concept" had changed, because today such a project wouldn't be profitable, so nobody would build it.

And finally, just when the audience had dwindled to mere handful, Charles Jencks, the key player in the scenario, was called to testify. He only got about 30 minutes before the day's hearing was concluded.

Jencks said in the '90s, he had been deputy public works director for the county and later had moved up to director. Jencks reviewed the initial proposal when it was first presented from the county's side.

Later, he went to work for the private sector. He became the landowner's representative when the property was purchased by Maui Industrial Partners.

Still later, when about a quarter of the original parcel was sold to Honua'ula, Jencks stayed on as its representative, and even later, when Eclipse bought the remaining three quarters, he was also their representative as well, in the name of their holding companies, Pi'ilani Partners North and South.

Jencks' testimony was not yet complete when the commission adjourned and indicated it expected to reconvene again on Maui to continue testimony on Thursday and Friday, Nov. 15 and 16. LUC staff said the matter might even extend beyond those dates, since expert witnesses named by county, the state and the interveners have yet to be heard.

LUC chairman Kyle Chock would not speculate on how the commission would rule. LUC Executive Officer Daniel Orodenker said the options were pretty clear cut: The LUC could find that the present project was "different," in which case they could revoke the prior approval and the land would revert to agricultural status; or it could rule that it was "the same" and no further action would be required.

In that case, it would be full speed ahead for the shopping centers with the housing component probably to follow at a later date.

Orodenker hinted that a third scenario might be possible, too. In the event that the disputing parties could reach an agreement privately, they could bring it to the commission for consideration and ratification. But the Orodenker didn't say he advocated for that or that he thought it was likely to happen.

Out of the hearing room, one expert (who preferred to remain anonymous) said that perhaps it would have been wiser to file an amendment to the original plan a year or so ago, when the state attorney general's office recommended it. Had the owners taken that step, it probably would not have been noticed or commented on, and all the procedural ducks would have been in a row.

As it stands now, the dispute is a political hot potato. Even if the land owners did file an amendment, their current proposed uses would be likely to face stiff community opposition.

In the meantime, whether it's "the same" or "different," it's very much in the news and now not only is it causing costly delays, it's also running on the same timetable as the 2014 re-election campaign of Maui Mayor Alan Arakawa, whose administration is supporting the new plan for shopping centers and apartments.

Whether that support will prove to be a benefit or a liability to his political future remains to be seen. But either way, it is certainly now on the front burner and likely to stay there.



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