The state Intermediate Court of Appeals upheld a 3rd Circuit Court ruling that Hawaii County can continue developing its Waikoloa Workforce Housing process without a cloud on the title regarding ongoing litigation.
Most of the county’s claims against developer UniDev, and the developer’s counterclaims against the county, will not be forced into arbitration, the ICA also said in its ruling, released Friday afternoon.
Deputy Corporation Counsel Laureen Martin said the county could continue work at Kamakoa at Waikoloa with a lis pendens in place but the notification, which puts a cloud on the title, could have made securing financing for the project more difficult. Developer UniDev requested the notification be put in place, but 3rd Circuit Court Judge Elizabeth Strance denied that request. The ICA also upheld Strance’s ruling to deny UniDev’s motion to reconsider her ruling.
The second item on which the ICA ruled was Strance’s order that the terms of the development agreement between the county and UniDev mandated arbitration on all claims. The ICA said only one negligence claim and one counterclaim were subject to arbitration.
In arbitration, “they tend to be more ‘split the baby’ kinds of decisions,” Martin said. “We think a jury would be fairer.”
She said she doesn’t expect the case to reach trial for at least a year. The arbitration the ICA affirmed will also continue, Martin said.
Hawaii County attorneys sued UniDev in 2009, alleging fraud, intentional misrepresentations and negligence in UniDev’s inability to proceed with the project. Hawaii County is seeking an unspecified amount of damages.
UniDev is seeking $7.2 million in restitution and damages for breach of contract, intentional interference with contract and fraudulent transfer.
Hawaii County selected UniDev for the $40 million public-private affordable housing partnership in 2005. The initial plan for Kamakoa was for rental and for-sale units, with one- and two-bedroom units offered at 20 percent below area market rates. Small, bungalow-style homes would be for sale for people earning less than 120 percent of the average median income, and single-family homes were also supposed to be sold.
County officials last year said they expected the first homes to be available for purchase some time this year. The price on the houses will range from $240,000 to $325,000, down from the project’s original concept and designs that set prices from $385,000 to $495,000.