Commission rules against Waikoloa Highlands developer

KEAHOLE — The state Land Use Commission Wednesday voted to revert more than 700 acres in South Kohala from rural district to an agricultural land classification after determining that the developer of a planned 398-lot residential subdivision did not substantially get the project off the ground.

Steven Lim, the attorney for developer Waikoloa Highlands Inc., said after the hearing that he would be discussing with his clients possible next steps, which could include approaching the county about amendments to the rezoning ordinance and a proposal for affordable housing or potentially appealing the commission’s decision in court.

While the vote by the commission was nearly unanimous — only commissioner Lee Ohigashi voted against the motion — many members voiced conflicted feelings on reverting the land back to agricultural classification, citing the immense need for affordable housing and traffic improvements, which were among the conditions the developer was expected to meet through the project.

“I am extremely conflicted. It’s very emotional,” said commission First Vice Chair Nancy Cabral, who holds the Hawaii Island seat on the commission and is also the owner of Day-Lum Rentals and Management, Inc. “This is my island. I have properties in the lava zone — I have friends; I have tenants. I have lots of people I know dearly that have lost their home.”

Other members spoke more critically about the lack of development on the land over the last decade. Commission Second Vice Chair Aaron Mahi, who made the motion asserting there had been a violation and to reclassify the land, criticized the lack of making any productive use of the site.

“I think it’s wrong that we’ve come this far, and we have treated the land so disfaithfully,” he said. “Shame on us.”

Mahi’s motion asserted there’s been a violation of conditions, that the developer had “not substantially commenced use of the land,” and that the area should be reverted to its former land use classification.

The commission’s decision, which it issued Wednesday afternoon, capped a series of hearings initiated by an order to show cause that the commission issued in July.

That order to show cause identified a dozen conditions related to issues like affordable housing and transportation that the commission suspected Waikoloa Highlands of not meeting and mandated the developer to come before the commission to answer as to why the developer should keep the rural district classification it received in 2008.

The developer had argued that the project had been hindered by a former director of the project. The vice president of the parent company that owns Waikoloa Highlands said at an October hearing that the director in question was fired from Waikoloa Highlands in 2016 and that a new director had been appointed.

Introducing his closing remarks Wednesday, Lim echoed a commissioner’s likening the hearing to a “death penalty case.”

In response, commission Chair Jonathan Likeke Scheuer acknowledged that reverting land is both the “harshest and really the only tool that the Legislature has given us,” adding that they have sought alternatives from lawmakers to no avail. And not only is it all they have to use, he said, they’re legally obligated to do so.

And, he added, he believes that most of what the developer is trying to accomplish can be done through working with the county, without the commission’s involvement, contrasting this project with a high-density urban development that was being reverted from urban district to conservation or agricultural.

“That would be a very different story than this, where it’s actually on the record from a witness from the county that it might take a little while, it might take a few years,” he said, “but you could do this under the county’s jurisdiction.”