Commission says U of N land conditions not met; future development in jeopardy

KAILUA-KONA — Time could be running out for the University of the Nations Kona to develop 62 acres once envisioned for affordable housing, a cultural center and an educational facility off Kuakini Highway.

The state Land Use Commission has scheduled a Wednesday hearing for the University of the Nations Kona (UNK), successor to U of N Bencorp, to show cause as to why it should be able to keep the urban district classification granted to it in August 2003 or lose that classification nearly 19 years later.

The hearing is set for 9:30 a.m. at the Hale Iako Training Room at Natural Energy Laboratory of Hawaii Authority in Kailua-Kona. Commissioners will also take up a motion by UNK to rescind the order to show cause or continue the hearing.

If needed, the commission will take up the matter the following day at 9 a.m.

UNK, according to the order to show cause issued March 29, has failed to meet 18 conditions that allowed for reclassification of two adjacent parcels, one 56.6 acres and the other 5.36 acres, and hans’t substantially commenced use of the land.

Among the conditions are requirements for affordable housing, public school facilities, a cultural center, drainage improvements, water, cultural, historical, customary and traditional rights and resources, and filing timely reports and notifying the commission of ownership changes.

The state Office in Planning on April 21 reported it does not object to reverting the classification to agricultural district.

The reclassification from agricultural to urban was granted to UNK’s predecessor, U of N Bencorp, in August 2003. It was for the development of the Hualalai Villages condominiums, a multi-function cultural center, and a 5-acre educational facility.

UNK says a motion to amend the 2003 decision and order was filed in 2006 by Aeko Hawaii, successor to U of N Bencorp.

The changes sought would have more closely aligned the project with the university’s institutional and faith-based values. They included abandoning the cultural center (because it was profit-driven) and, instead, expanding education and recreational facilities, and replacing the underdeveloped, market-rate phases of Hualalai Villages with staff and student housing.

Hearings were held in May 2007, but no action was taken as the LUC didn’t have quorum, or enough members to hold proceedings. To date, no decision has been rendered, and UNK believes that the 2006 Motion to Amend is still pending.

“While Aeko, and later UNK, fully intended to return to the Commission for action on the 2006 Motion to Amend, internal reorganization and a series of unfortunate and unforeseeable events prevented them from doing so,” reads UNK’s statement of position and rebuttual filed May 3. “If given the opportunity, UNK will return to the Commission and file an Amended Motion to Amend Findings of Fact, Conclusions of Law and Decision and Order so that the petition area can be developed as presently envisioned, while remaining in compliance with the D&O, as amended.”

Nevertheless, if the commission won’t provide the time to file the amended motion, UNK says the classification shouldn’t be reverted for four reasons.

First, UNK has substantially commenced use of the area, according to the May 3 statement. The petitioner said it has satisfied its obligation to protect archaeological resources within the area; provided significant affordable housing to Kona by refurbishing 68 units at Kamaaina Hale on a different parcel; developed educational facilities; processed a well application; and created and trained a Community Emergency Response Team (CERT).

Second, good cause exists to excuse the failure, UNK said.

“Since the time of the D&O, UNK and its predecessors suffered through the severe impacts of the Great Recession, underwent a significant internal reorganization, were defrauded of millions of dollars, and were forced to fight out-of-state litigation. All of these events significantly and adversely affected UNK’s ability to timely proceed with all aspects of its development,” UNK said in its statement of position and rebuttal.

Third, no deadline was set for the development.

And lastly, urban classification is appropriate as surrounding lands are designated for urban development and the acreage is poorly suited for agricultural use.

During the Wednesday hearing, commissioners will also consider a May 9 motion filed by UNK to rescind the order to show cause; or in the alternative to continue the order to show cause hearing or any further action for one year to allow UNK to file the amended motion.

If the commission is unwilling to do either of the above, the motion requests that it provide UNK sufficient time to prepare for an order to show cause hearing. Two months is not enough time, attorneys said in the statement of position and rebuttal.

Following the May 9 filing, the state Office of Planning said May 15 it still believes the hearing should be held, but would not object to a one year stay of proceedings to allow for UNK to submit the revised motion to amend. The office requested that commissioners, however, not allow any development work during that time within the 62 acres.

“Due to the pending hearing, we cannot comment on specific details at this time. Even so, we wish to express our desire and intent to work in full cooperation with the Land Use Commission, the Office of Planning, the County and State of Hawaii, and all other related parties to develop the land in such a way that will contribute to our UofN campus, the local Kona community, and the people and culture of Hawaii,” UNK said in a statement to West Hawaii Today.

View the Land Use Commission docket online at https://luc.hawaii.gov/a02-737-u-of-n-bencorp-2019-order-to-show-cause.