Maui SMA permit, resort building permits. Board of Variances and Appeals, appealing the county public works director's refusal to accept its application for building permits on the property
Maui North Beach development stalled by issues tied to
consistency, conformity
By HARRY EAGAR, Staff Writer
reprinted courtesy Maui News 11/15/09
WAILUKU - Ordinarily, once a developer gets a special management area permit, the rest of the path to construction is routine. But SVO Pacific Inc., the developer of the Westin Kaanapali Ocean Resort and Westin Kaanapali Ocean Resort North at North Beach, has had its SMA permit since March 2008 for a nearly identical third resort next to the other two, but it has not been able to get building permits.
To be precise, it cannot get any more building permits, although it has gotten some to do $20 million worth of site and foundation work.
In September, the developer filed its case with the Board of Variances and Appeals, appealing the county public works director's refusal to accept its application for building permits on the property, although its attorney, John Rapacz, believes that Mayor Charmaine Tavares could "tell the director to sign the permit."
Last week, Tavares did not address the question of whether she had the power to instruct Public Works Director Milton Arakawa to accept the permit application and move the project review forward, but did say she would support legislation to resolve once and for all the legal ambiguity that seems to be causing the holdup.
"We have a bill introduced to clarify what applies to what, so folks are in line with interpretations," she said.
Meanwhile, a project with financing in place - a project that developer SVO said would create 400 construction jobs and 440 permanent jobs after completion - is stalled. Rapacz said several other large projects also are being held up by a disagreement among county officials over how to interpret Titles 18 and 19 of the Maui County Code, which deal with subdivision and zoning laws, respectively.
That disagreement revolves around developments whose various governmental authorizations do not conform to one another - in particular, when there is more than one community plan designation on a single lot. In the case of the proposed 390-room Kaanapali Ocean Resort 3, the lot is zoned H-M hotel, but in the community plan it is split between hotel and open space.
The Planning Department and Maui Planning Commission did not see that as a reason to stop the project and approved the SMA. But the Department of Public Works said it cannot even accept an application for subdivision while there are two community plan designations on the land and asked developer SVO to resolve the issue.
Arakawa said he had not yet read SVO's appeal and did not want to comment on it. However, he did provide a PowerPoint presentation he made to the Maui, Molokai and Lanai planning commissions explaining how the issue arises. (See related story.)
The need to resolve a divided community plan designation - a situation labeled "consistency and conformance" - apparently hasn't always been an issue for county officials.
According to developer SVO's appeal, the exact same situation existed on the land under the first two Kaanapali Ocean Resort properties, and public works officials issued building permits for those projects in 2002 and 2005.
And Rapacz said officials with SVO met with the Department of Public Works to discuss the project before they bought the lot for Kaanapali Ocean Resort 3, and the "consistency and conformance" issue was never brought up.
There is no question that a property owner has to have a community plan designation that allows urban development in order to get urban zoning (in this case, hotel).
Furthermore, to subdivide, the owner has to comply with all the various levels of land regulation.
But those laws shouldn't make any practical difference for the new Kaanapali Ocean Resort project, said Rapacz, because the developer has no intention to build on any land labeled open space in the community plan. The project plans to use the property's open space for a shoreline setback, a drainage swale and a buffer area along Honoapiilani Highway.
In other words, everything SVO is proposing to do on land designated "hotel" in the community plan is consistent with that designation, and everything it is planning to do in the area designated "open space" is consistent with that designation.
The developer's appeal disagrees with Arakawa's interpretation.
"Section 18.04.030 says nothing about requiring conformity or consistency between or among the enumerated plans and laws themselves," says the appeal. Instead, it says, the requirement is that "the proposed subdivision conforms to and is consistent with each of the specified plans and laws."
Developer SVO said it's not trying to do anything on the ground that the law was designed to prohibit.
"At no time in connection with KOR and KORN did (the Department of Public Works) ever raise the problem of non-compliance with Section 18.04.030," says the appeal, even though the three lots have identical zoning and community plan designations.
The conflicts between Titles 18 and 19 in the Maui County Code, "have got it a little messed up," said Tavares. "We are going to try to make legislation so things don't clash with each other."
She acknowledged that there are other properties that could face the same hangup and said she is concerned about the loss of jobs the work would create.
"That is why we are trying to rush this bill through the County Council. . . . It has gone through the planning commission already."
The bill is now pending before the Maui County Council.
The difficulty with waiting for legislation to be passed, said Rapacz, is two-fold. One, it will take time. Two, he's not sure the council will want to "fix" what he regards as a problem, because left unfixed, it will give the council a chance to "review any development that may have this issue," whereas in the usual case, the council does not get to review (and impose conditions on) projects that do not need rezoning.
Even going to the BVA does not address the time issue.
"We advised those folks to file with the BVA whatever happens first," said Tavares. "We want these projects to move."
The board is expected to take up SVO's appeal at its Dec. 10 meeting.
However, said Rapacz, an appeal to the BVA is a contested case, and those often take a long time. Moreover, he is concerned that a question will arise about whether the Corporation Counsel will be able to represent the board if there is (as seems possible) an appeal to Circuit Court, which might create more delays while the council has to decide whether to hire outside legal advisers.
All the while, the meter will be running on SVO's sunk costs, which the appeal says already have reached $100 million.
* Harry Eagar can be reached at heagar@mauinews.com.
reprinted courtesy Maui News 11/15/09, original link www mauinews.com/page/content.detail/id/525759.html?nav=10
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