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March 9, 2021 PC Agenda Packet Reduced linkedCOUNTYOFKAUA'I PLANNING DEPARTMENT TO:Subdivision Committee,Planning Commission SUBJECT:Extension Request PURPOSE: »EaTO CHANGE x File Final Subdivision Maps Complete Subdivision Improvements Other: Subdivision Application No.Applicant(s) S-2005-41 Visionary LLC. Location:Lihue Tax Map Key:|(4)3-7-02:01 (Por.) st nndExtensionRequestNo.(Is1,2"u,etc.)Tentative Approval Granted On:Previous Ext.Expired On; 4th April 28,2009 July 12,2019 Subdivision Bonded:No Deadline to Complete Improvements:Not Applicable APPLICANT S REASONS:Additional time is being requested to comply with the conditions/requirements oftentative approval.The applicant is currently with the reviewing agencies in complying with their requirements for the proposed subdivision. PLANNING DEPARTMENT EVALUATION &RECOM M E NDATIO N EVALUATION:Please refer to next page... RECOMMENDATION:Please refer to next page. /•O2.a?>.'2o2( yfPlanner Date [^JApproved and Recommended to Planning Commission []Denied Comments: c i?/^i 'ector Date I.l.^-'- .MAR O 9 2021 ^Yes COUNTY OF KAUA'I PLANNING DEPARTMENT Extension requests are primarily processed for the purpose ofcontinuing a tentative approval for a subdivision application.An extension approval allows an applicant additional time to comply with the requirements in order to obtain final subdivision approval. In determining whether additional time should be granted,an evaluation is made ofthe project s progress as well as compliance with the requirements oftentative approval.The evaluation is primarily based on determining whether the applicant is progressively working towards obtaining final subdivision approval with the various reviewing agencies.The tentative approval conditions are then re-evaluated to determine whether the conditions/requirements are adequate to address the impacts ofthe proposed development in consideration ofthe time that has lapsed. Pending evaluation of an extension request,one of the following can occur: 1.The extension is approved without changes to the tentative approval requirements; 2.The extension is approved with modified time frames but no modifications or additions to the tentative approval requirements; 3.The extension is approved with modifications and/or additions to the requirements; and 4.The extension is denied. FINDINGS/BACKGROUND: The proposed subdivision establishes a total of 40 lots,4 bulk lots that can be further developed, 3 roadway lots,and 2 remnant lots within lands makai ofthe Kapule Highway/Ahukini Road intersection,adjacent to the Airport facility.The development area is referenced as "Ahukini Makai"and is considered a block subdivision.The subdivision application was granted revised tentative approval by the Planning Commission on April 28,2009 and the Applicant's request is the fourth extension ofthe tentative approval.The previous extension request was approved and granted to July 12,2019. The proposed development is within the County zoned General Industrial District (I-G).The development shall be subject to the applicable requirements ofOrdinance No.PM-326-96 and Land Commission Docket No.A94-703,which was a part ofthe overall Lihu'e-Hanama'ulu Master Planned Area. S-2005-t 1;Extension.Request (4th) Visionary LI.C 03.09.2021 -2- PROGRESS OF THE SUBDIVISION: As previously mentioned,the project site is situated within the Lihu'e-Hanama'ulu Master Planned area,which was originally petitioned by AMFAC.The master planned area is subject to the requirements ofOrdinance No.PM-326-96 and Land Commission Docket No.A94-703. In consideration ofthe Applicant's extension request,it should be noted that the Applicant has shown progress with the development and has been actively working with the various govenuiient agencies to finalize the requirements relating to this subdivision.The Applicant has submitted pre-final subdivision maps for review.Additionally,the Applicant is still trying to coordinate the infrastructure improvements with other subdivisions in this vicinity and more particularly,the "Molokoa Village and Ahukini Mauka"subdivisions that are being processed thiough Subdivision Application No.S-2005-39 &S-2005-40,respectively. The proposed development will require an extensive amount of improvements both on and off- site since it is directly linked with the Molokoa Village and Ahukini Mauka Subdivisions.Part of the improvements involves waterline &sewer line transmission,and road &intersection improvements involving State &County roadways.Because it is uncertain as to when the required infrastructure improvements will be completed,an extension oftime is being requested by the Applicant. Based on the forgoing circumstances,the Applicants reasons arejustifiable and no problems are foreseen in granting the extension request.The Department of Public Works and Water have no objections to the request. Additionally,the Applicant should show further progress with the subdivision within one (1) year from the approval ofthis extension request.Therefore,the Applicant shall be made aware that in further considering extension request involving the proposed development,the Applicant shall continue to submit to the PIanning Department an updated status report on the subdivision with a detailed time chronology on the progress ofthe tentative approval requirements in order to justify further extension request.The status report shall be submitted to the Planning Department no later than sixty (60)days prior to the expiration date in order to allow sufficient time to evaluate whether progress has been made and conditions satisfied. RECOMMENDATION: It is recommended that an extension until March 09,2022 be granted to obtain final subdivision approval.However,the Applicant is made aware that an uvdated status report on the subdivision with a detailed time chronology on the progress ofthe tentative approval requirements shall be submitted to the PIanning Department for review for further extension requests.The status report shall be submitted to the Plarming Department no later than sixty (60) days prior to the expiration date. S-2005-11.Extension.Request (4th) Visionarv LI.C 03.09.2021 -3- n— \ i ~ -•%n t iwf IC1 £1]-£-^Ifrt ^Ml inill';ISUBH r t-10WE'1'l'1SlN^;)SV3 •V SlN3n3SV3 JQ NOIJ.TN31E3a QNV flt K^DOyni i ^icnoiMi i.laoavd jo Noiiyod do NoisiAiaans NoisiMaans inwn iNixnHV ~']/ -.Ji -^;. 'l'll-.^ IVNUSUd 30NVH3 QJ—tS3CanS_-wnvM •3nHn "mnvnvNVH jo NOiiyod -^..e=»A5£'^B -'A ^/b^ a^. iozo-/-£:)im•3~]~]^DUOISIA Lfr-900Z-S s) •FV'£Wt- 'o ^t'-;. \ \ \ 3»1T /v< / ^ \-z- ^. '^ ;[giB^>S;?*^%i'g^»TSsS*'*sSK 1 ^Ss;^!u^i'-g^S sii ^i3i|K ;•: r KODANI &ASSOCIATES ENGI NEERS,^ftiC January22,2021 21 JAN28 P 132 Mr.Ka'aina Hull,Director Planning Department CountyofKaua'i 4444 Rice Street,Suite 473 Lihu'e,HI 96766 RE:AHUKINI MAKAI SUBDIVISION (S-2005-41) TMK:3-7-002:Por.1 Lihu e,Kaua'i,Hawai i K04-4022B DearMr.Hull: fcL.C.i'. We respectfally request for an extension oftime for fhe subject project.Our client, Visionary,LLC,continues to actively pursue completioni ofthe Ahukini Makai Subdivision project.This project is large in magnitude and contains complex issues such as,but not limited to water,wastewater,housing,transportation,and major infrastmcture. We have been working closely with govemmental agencies to resolve their respective conceins and significant progress has been made since the previous subdivision extension request was granted.Several agreements,pennits and govemmeat agency clearances were secured over the past two years including a Memorandum ofAgreement with Hawai'i DOT,a Orant ofAvigation and Noise Easement with DOT Airports Division,an NPDES pemiit,DCAB clearance and SHPD clearance.Other achievements include construction plan approvals for water infestructure projects in accordance with Kaua'i Department ofWater requirements and the approved Water Master Plan.Attached is a matrix showing the major chronology ofevents since 2018.We expect to continue making progress on fulfilling agency conditions. Thank you for your consideration oftbis extension request.Should you have any questions,please feel free to contact our ofRce. Very truly yours, u.s^ William Eddy,PE Vice President cc:Visionary,LLC Enclosures 3126 AKAH)STREET.LlHU'E.KAUA'I.HAWAI 1 96766 EMAIL:KODANI@KODANI.COM PH:808.245.9591 FAX:808.246.6368 Ahukmi Makai Subdivision (S-2005-41) TMK:3-7-002:Por.1 LIhu'e,Kaua'i,Hawai'i LIST OF MAJOR CHRQNQLQGYOF EVENTS Page 1 of3 DATE DESCRIPTION April2018 Initiate documentation required by Hawai'i Department of Transportation (DOT)Highways Division for approved access point to Kapule Highway.Also initiatioa ofUse and Occupancy Agreement (UOA)documents.(Access and UOA documentation subsequently approved,see August 2020.) September2018 Hawai'i Department ofLand and Natural Resources (DLNTR),State Historic Preservation Division (SHPD)issues detenninatioa that,"no historic properties affected"by the Ahukini Makai Subdivision project. April 2019 Traffic Assessment,update to the project TrafRc Impact Analysis Report (TIAR),was submitted Hawai'i DOT Highways Division.for review and comment.(TrafSc Assessment subsequently mcorporated into the executed MOA,see April 2020.) October2019 "Grant ofAvigation and Noise Easement"exeeuted between Hawai'i DOT Airports Division and Visionary,LLC.The document describes various aspects ofdevelopment that is within close proximity to the Lihu'e Airport. October2019 Hawai'i Dqiartment ofHealth issues a Notice ofGeneral Permit Coverage (NGPC)fer the National Pollutant Discharge Elimination System (NPDES)permit for fhe Ahukini Makai Subdivision project. November2019 Subdivision construction plan submittals to govemment agencies including:Hawai'i DOT Aiiports Division,Kaua'i Department of Public Works Engineering Division,Kaua'i Department ofPublic Works Wastewater Management Division,Kaua i Department of Water,Kaua'i Island Utility Cooperative,Hawaiian Telcom and Spectrum Charter. January 2020 Pre-Final Subdivision Map was submitted to the Planning Department for distribution to the various agencies for review. Subsequently received comments from Hawai'i DOT Highways Division Kaua'i District OfEce on May 5,2020.No other agency comments have been received by the applicant. Ahukini Makai Subdivision (S-2005-41) TMK:3-7-002:Por.1 LIhu'e,Kaua'i,Hawai'i LIST OF MAJOR CHRQNQLQGY OF EVENTS Page2of3 March 2020 Received approval of construction plans from the Hawai'i, Disability and Communication Access Board (DCAB)as required for public facilities or facilities to be dedicated for public uses. March 2020 Hawai i DOT Aiiports Division indicates that Ahukini Makai Subdivision construction plans are acceptable and that tracings may be submitted for signature. April 2020 "Memorandum ofAgreement"(MOA)was executed between the State ofHawai'i,Department ofTransportation and Visionary,LLC. The MOA contains provisions for pro-rata fanding for local and regioaal transportation improvements,establishes TrafBc Impact Analysis Report (TIAR)requirements,and ofher requkements such as the establishment ofa future road widening reserve along the frontage ofKapule Highway and Ahukim Road. June 2020 Received approval signatures on consfa^iction plans from all govermnent agencies for the water source project,"Waiahi Water Treabnent Plant -taitial Upgrades,"which is a condition ofKaua'i Department ofWater and the approved Water Master Plan for the Ahuldni Makai Subdivision.Application for Building Pemrit has been submitted and accepted by the Kaua i Department ofPublic Works Building Division. July2020 Received approval signatures on construetion plans from all govemment agencies for the water storage project,"Waiahi 2.0 MG Water Storage Tank,"which is a condition ofKaua'i Department of Water and the approved Water Master Plan for the Ahukini Makai Subdivision.Application for Building Pennit has been submitted and accepted by the Kaua i Department ofPublic Works Building Division. August 2020 Finalized documentation required by Hawai'i Department of Transportation Highways Division for approved access point to Kapule Highway and Use and Occupancy Agreement documents. October 2020 Kaua'i Department ofPublic Works Wastewater Management Division indicates that Ahukini Makai Subdivision construction plans are acceptable and that tracings may be submitted for signature. Ahukini Makai Subdivision (S-2005-41) TMK:3-7-002:Por.1 Lihu'e,Kaua'i,Hawai'i LIST OF MAJOR CHRONOLOGY OF EVENTS Page3of3 November 2020 Kaua'i Department ofPublic Works Engiaeering Division indicates that Ahukini Makai Subdivision construction plans are conditionally acceptable and that tracings may be submitted for signature after other agencies sign the plans. December 2020 Kaua'i Department ofWater indicates that Ahukini Makai Subdivision construction plans are acceptable and that tracings may be submitted for signature. Ka'aina S.Hull Director ofPlanning Jodi A.Higuchi Saycgusa Depuly DirectorofPlanning COUNTY OF KAUA'I PLANNING DEPARTMENT DIRECTOR'SREPORT TO CKANGE I.SUMMARY Action Rcquired by Planning Commission; Pcrmit Application Nos. Name ofAppIicant(s) Consideration ofApplicant's request to AMEND Project Development Use Permit,Class IV Zoning Permit,and Use Permit to allow 40 additional multiple-family residential units to the residential aspect ofthe project. Project Development Use Permit PDU-2008-1 1 Class IV Zoning Permit Z-IV-2008-12 UsePermit U-2008-10 Koloa Village,LLC.(formerly Village at Koloa Town,LLC.) lan K.Jung,Authorized Agent II.PERMIT INFORMATION F.^f^\ 'HAR092621 PERMITS REQUIRED S Vse Permit A Use Permit was required to allow residences within the General Commercial (C-G)zoning district. Project Development Use Permit A Project Development Use Permit was required since it combines commercial &residential aspects ofthe project in order to allow residential uses within the commercial zoning district and deviances from certain development standards. 1I Variance Permit 1]Special Permit Zoning Permit Class ^IV III Pursuant to Section 8-8.4 ofthe KCC,1987,as amended,a Class IV Zoning Permit is a procedural requirement for obtaining a Use Permit within the commercial zoning district,and for development of commercial zoned property that's greater than one (1)acre in size. 1I Special Managcmcnt Area Permit DUse Q Miiior AMENDMENTS Zoning Amendment Date of Reccipt of Completed N/A Application: Date ofDircctor's Report:N/A Date ofPublicHearing:N/A Deadline Date for PC to Take Action N/A (60 Day): III.PROJECTDATA IV.LEGAL REQUIREMENTS 2 1 P age PDU-2008-11,Z-IV-2008-12,u-2008-10;Director'sReport (Project Amendment) Koloa Village,LLC, 02.02.2021 1I General Plan Amcndment D State Land Use District Amendment PROJECT INFORAMTION Parccl Location:Koloa Town.The parcel situated to the east ofthe Koloa Neighborhood Center facility that is bounded by Koloa Road to the north,Weliweli Road to the west and Waikomo Road to the east. Tax Map Key(s):2-8-008:001 Area:5.381 acres ZONING &DEVELOPMENT STANDARDS Zoning;General Commercial (C-G)/Residential (R-4) State Land Use District:Urban Gencral Plan Designation:Residential Community Height Limit:50 feet (C-G)/30 feet (R-4) Max.Land Coveragc:90%(Commercial)/60%(Residential) Parking Requirement:As previously approved,requires 206 off-street parking stalls.Applicant representing total of 230 parking stalls Front Setback:lOfeet Rcar Setback:lOfeet Side Setback;5feet Community Plan Area:South Kaua'i Community Plan Community Plan Land Use Designation: T4N,T3VN-1 Deviations or Varianccs Requested:NA. Section 8-3.1(0,KCC:NA. Commission Meeting Date:March9,2021 V.PROJECT DESCRIPTION AND USE 1.BACKGROUND The subject pennits involve the development of a two-story,34-unit multi-family residential condominium project,off-street parking structure,and a coiTuiiercial complex containing approximately 45,000 square feet of conimercial retail and office space within the Commercial &Residential Districts.The permits were initially approved by the Planning Commission June 10,2008. As originally approved,the project involves: a.Commercial -The commercial portion of the proposed development would occupy approximately 2.661 acres ofthe property,fronting Koloa Road approximately 175 feet,and approximately 580 feet makai along Weliweli Road.The commercial project would consist of eight (8)two-story buildings,joined by an upper-level connecting walkway.An existing single-story plantation-era residence would be renovated for commercial use at this original location along Weliweli Road. b.Residential -The residential portion ofthe parcel encompasses approximately 2.72 acres.A total ofseventeen (17)two-stoiy buildings shall be constructed and developed as duplexes.Thirteen (13)buildings would feature a 3-bedroom unit with an attached garage (Type 1)whereas the remaining buildings contain 2- bedroom units with a shared parking area (Type 2).Two parking spaces are provided with every residential unit and no residential building would be constructed higher than 30 feet,as measured from the finish grade to the highest point ofthe roofridge line.A solid waste trash enclosure and a detention pond area would be provided. It is noted that the Applicant obtained Plaiming Coniinission approval on April30,2013 and April 12,2016 to amend Condition No.21 ofthe foregoing permits allowing additional time to complete the proposed development.As a result,the completion date of the project was moved from June 10,2013,then to June 10,2016,June 10,2018,and finally to June 10,2022. The Applicant recently appeared before the Planning Commission on June 25,2019 seeking an amendment to the project to allow fourteen (14)ofthe thii-ty-four dwelling units to be incorporated into Phase I ofthe project involving the constmction ofthe commercial area.These studio units would be replacing commercial space in one ofthe proposed buildings. Since that time,the Applicant has met with the department to re-evaluate the residential phase ofthe project and how it would be affected by the development policies adopted thi'ough the South Kauai Community Plan (SK.CP).It has been detemiined that based on the location ofthe property,it would be allocated additional residential density. PDU-2008-11,Z-IV-2008-12,U-2008-10;Directoc's Report (Project Amendment) Koloa Villoge.LLC. 02.02.2021 3|Page VI.APPLICANT'S REASONS/JUSTIFICATION 1.Request Based on the recent findings and development policies contained in the SKCP,the Applicant is seeking an amendment to the projecl to allow an increase in the total number ofresidential units from 34 to 74 that would be developed in Phase II.At the time the project was approved,the development entailed two phases;Phase I = Commercial/Retail along Koloa Road,Phase II =Residential along Weliweli & Waikomo Roads. With the proposed amendment,the additional 40 residential units would be designed as multiple-family residential (MFR)buildings (refer to Section IV.,Page 5 ofthe Application)and the project would now be constructed in four (4)phases.The construction breakdown ofthe project is as follows (taken from Page 6 and Exhibit 'H' ofthe Application): a.Phase 1 -Mixed Use Commercial/Retail and 14 Studio Dwelling Units.(Currently ongoing) b.Phase 2 -Residential Multi-Family Quadplex Structures (Buildings H,I,J,and M; Total =16 units). c.Phase 3 -Residential Multi-Family Quadplex Structures (Buildings A,B,C,N and O;Total =20 units). d.Phase 4 -Residential Multi-Family Quadplex Structures (Buildings D,E,F,K and L;Total ^24 units),and Resident Amenity (Pool). VII.FINDINGS 1.Proiect Site &Surroundings Lands to the immediate west,north,and east of the proposed commercial development is zoned General Commercial (C-G),and is in or is proposed for commercial use, which includes retails shops,offices,restaurants,a post office,grocery store,a mini- storage facility,and several residences.Approximately midblock across Weliweli Road are two parcels zoned Residential District (R-4)/Special Treatment District - Public Facilities (ST-P),one containing the Koloa Neighborhood Center facility,and the other in private ownership but is designated for the expansion ofthe neighborhood center in the Koloa-Po'ipu-Kalaheo Development Plan (KPKDP). Lands to the west ofthe residential phase ofthe project are zoned Residential District (R-20)and has been developed as a residential project (Koloa Creekside).Lands across Waikomo Road from the parcel are zoned Residential District (R-6)and has been developed as a multi-family housing project. PDU-2008-11,Z-IV-2008-12,U-2008-10;Direclor's Report (Project Amendment] Koloa Village.LLC. 02.02.2021 4 |P ag e 2.Vehicular Access 'I'he primary access to the residential phase ofthe project is through a driveway comiecting into Waikomo Road.It is a County roadway with a 44 feet wide right-of- way that can accommodate two-way vehicular traffic.Recent improvements related to the commercial phase of the development were made to both Waikomo and Weliweli Roads to accommodate sidewalks as well as on-street parking stalls (refer to Exhibits'G'&'H'oftheApplication). VIII.PRELIMINARY EVALUATION In evaluating the Applicant's development proposal,the following aspects are being considered: 1.General Plan b. The County General Plan (2018)acts as an over-arching values statement and provides a policy framework for the Kauai Island Plan and Community Plans within a twenty-year timeframe.The County General Plan provides broad goals, objectives,policies,and implementing actions that portray the desired direction of the County's future. The residential phase ofthe Koloa Village Development is in accordance with the goals,objectives,and policies ofthe Kaua'i General Plan as demonstrated below: 1)Goal #1:Promote a Sustainablc Island Objective:Improve the stewardship ofthe natural environment Policies: o Manage growth to preserve rural characteristic by limiting supply of developable land to an amount adequate for future needs,prohibiting development not adjacent to towns,and ensuring new development occurs inside growth boundaries and is compact and walkable o Protect the island s natural beauty by preserving the open space and views between towns. 2)Goal #2;Stewardship and Protection ofUnique and Beautiful Place Objective:Share kuleana,or responsibility to care for and protect treasured resources,traditions,and qualities ofthe natural,built,and human environment.Policies include: o o Recognize and protect the identity ofKauai's individual towns and districts and uniqueness in community plans and reinforced in development standards. Uphold Kauai as a unique visitor destination by protecting the identity ofKauais visitor industry by focusing on revitalization PDU-2008-11,Z-IV-2008-12,u-2008-10;Director's Report (Project Amendment) Koloa Village,LLC, 02.02.2021 5|Page and limiting new resort growth only to existing Visitor Destination Areas and reducing visitors'impacts on infrastructure and communities. o Respect native Hawaiian rights and Wahi Pana by perpetuating traditional rights and protecting public trust resources and cultural sites in all land use development and activities. o Protect Access to Kauai's treasured places such as the access to and customary use ofshoreline areas,trails,and places for religious and cultural observances,fishing,gathering,hunting, and recreational activities,such as hiking and surfing. 3)Goal #3:Healthy and Resilient People Objective:Increase resilience and vitality of communities and improve natural,built,and social environment to promote better health outcomes. Policies include: o o o o o Design healthy and complete neighborhoods by ensuring new and existing neighborhoods have safe roads and functional parks, as well as access tojobs,commerce,transit,and public services. Make Strategic infrastructure investments by having government investment support growth areas and include priority projects as identified in Community PIans. Build a balanced multimodal transportation system to reduce congestion conditions thi'ough strategic infrastructure improvements and increase multimodal transportation options. Complete Kauai's shift to clean energy by mitigating climate change and reduce system-wide carbon emissions by at least 80 percent by 2050 through deep reductions in energy use and by transforming electricity,transportation,and infrastructure systems toward the use of clean energy. Prepare for climate change and impacts to the island economy, food systems,and infrastructure. 4)Goal #4:Equitable Place,with Opportunity for All Objective:Foster diverse and equitable communities with vibrant economies,access tojobs and housing,and a high quality oflife. Policies includes: o Provide affordable housing while facilitating a diversity of privately-developed housing for local families by establishing fair and effective housing ordinance,adequate capital,effective partnerships,clear policy guidelines ensuring cost-effective and energy-efficient homes by design and location,a strategy for providing adequate infrastructure for affordable housing,a housing first approach to ending homelessness,and a timetable lor action. PDU-2008-11,Z-IV-2008-]2,U-2008-10;Director's Report [Project Amendment) Koloa Vilfoge,LLC. 02.02.2021 6 1 P age o Reduce the combined cost of housing and transportation by connecting housing tojobs and by providing a diversity of housing types and affordable transportation options. o Create and foster thriving commercial areas in Town Centers through improved infrastructure,civic space,streetscapes, updated zoning standards,and streamlined approval processes. o Value youth as Kauai s most treasured resource and provide them with safe communities,great schools and facilities,and financially sustainablejobs,housing,and transportation opportunities so they are able to seek livelihoods on Kaua'i. 2.South Kaua'i Community Plan CSKCP) The proposed development remains consistent with the goals and objectives ofthis plan and is compatible with the surrounding commercial/retail and residential uses in this neighborhood.The SKCP has designated most ofKoloa Town as Special Planning Area "H"and the residential phase ofthe project site is situated within the Transect T3 Village Neighborhood 1 (T3VN-1)zone.As a result,it would be subject to all applicable development standards contained in Appendix C ofthe SKCP. It is noted that the intent ofthis zone is to provide a walkable neighborhood that would integrate compatible multifamily housing types such as duplexes and cottage courts within walking distance to transit and village center areas. 3.Native Hawaiian Traditional and Cultural Riehts The site previously contained fifteen houses,numerous sheds,and garages.The site previously contained the Shingon-shu Mission that was destroyed by fire in the past. An Archaeological Inventory Survey was commissioned by the Applicant and has been reviewed by the State DLNR Historic Preservation Division.Other than the historic buildings that previously existed on the subject parcel,there are no known impacts to any Native Hawai'i Traditional and Cultural Practices on the subject property. However,the Applicant should inform the Planning Department ifthey receive any knowledge ofor discover any cultural/historical resources. 4.KCC Development Standards &App.Iicable Regyirements As proposed,the project complies with the building height and setback requirements for development,as specified in Sections 8-4.3,8-4.5,and 8-5.3(b)ofthe Comprehensive Zoning Ordinance (CZO).It is further noted that this project is subject to the conditions previously imposed with the permits and that they remain in effect. A Project Development Use Permit is generally sought to address certain variations from the development standards contained in the Comprehensive Zoning Ordinance (CZO).In this instance,the project was initially sought relative to the Special Treatment -Cultural/Historic (ST-C)and Special Treatment -Public District (ST-P) designations ofthe parcel (or portion thereof);for development ofmulti-family residential housing in a General-Commercial District (C-G);and to allow deviation in 7|P ag e PDU-2008-11,;-IV-2008-12,U-2008-10;Director's Report (Projecf Amendment) KoloaVilloge.LLC. 02.02.2021 setbacks between buildings. a.Residential Density At the time project was approved,the residential density ofthe project was attributed to the commercial zoning designation.Since the adoption ofthe SK.CP, the new development standards within this transect zone does not specify the equivalent residential density requirements.The new standards would allow a project that is much denser to the surrounding residential properties to the north and south ofthe project site.However,this policy would remain consistent in accomplishing the objectives ofHRS Section 226 and the Goals &Policies ofthe Kaua'i General Plan in that the density deviation is necessaiy to facilitate an affordable housing project development. b.EIAFees The Applicant would be subject to the requirements ofSection 11A-2.2 ofthe Kauai County Code (KCC),relating to the payment ofthe Environmental Impact Assessment (EIA)Fee for each multi-family unit. c.TrafficStudy Another subject matter that should be revisited is the traffic analysis ofthe project. The additional 40 residential units could warrant another review by the County Department ofPublic Works (DPW)and any mitigative measure should be implemented prior to occupancy ofthese buildings.It would be suggested that the Applicant contact the DPW to determine whether an updated traffic study is necessary. 5.Status ofProiect There have been substantial improvements involving the project within the past four years and the Applicant's 2020 Status Report indicates vertical construction has resumed (refer to Exhibit 'G'ofthe Application).In the last year,the Applicant was successfully granted a time extension to June 10,2022 to complete the project,but it was to complete the remaining 20 residential units.Since the project amendment involves 40 additional residential units,the department finds itjustifiable to allow two (2)additional years to complete the residential phase ofthe project involving 60 units. The department would encourage the Applicant to continue its progress,but also realizes the infrastructure challenges associated with the second phase ofthe project (i.e.wastewater treatment &domestic potable water).It is encouraging to see the recent developments considering the amount of time that has lapsed since its initial approval in 2008. IX.PRELMINARY RECOMMENDATION It is recommended that the Commission APPROVE the proposed development involvin; the addition of 40 residential units and to allow time to complete the construction of the PDU-2008-11.Z-IV-2008-12,U-2008-10;Director's Report [Project Amendment) Koloa Village,LLC. 02.02.2021 8|Page project.Based on the foregoing Condition No.21 should be amended to read as follows and the following conditions added lo the permits: 21.The Applicant shall substantially commence construction ofthe project development within one (1)year from the date ofbuilding permit issuance and shall complete construction ofthe project development by June 10,[303S]2024.Ifthe project is not completed by this date,the Planning commission reserves the right to revoke the permits through proper procedures. 29.The proposed Phases II to IV containing a total of sixty (60)multi- family residential units shall be constructed as represented.Any changes to said units shall be reviewed by the Planning Department to determine whether Planning Commission review and approval is warranted. 30 The South Kauai Community Plan (SKCP)has identified the project site within Special Planning Area "H"and located within the Transect T3 ViUage Neighborhood 1 (T3VN-1)zone.As a result,the residential phase ofthe project shall be subject to all applicable development standards contained in Appendix C ofthe SKCP.Prior to building permit application,the Applicant shall work closely with the Planning Department to ensure compliance with the T3VN-1 building design standards. Furthermore,the Applicant is advised that all applicable conditions ofapproval, including the payment of EIA Fees and provision of annual status reports as required by Condition Nos.15 &20 respectively,shall remain in effect. *NOTE:Material to be dcletcd in brackets and new matcrial is underlined. By_C Planner Approved &Recommended to Commission: Director of PIinning Date:^/^/^l PDU-2008-11,Z-IV-2008-12,U-2008-10;Director's Repori (Project Amendment) Koloa Village,LLC. 02.02.202] 9 1 Page EXHIBIT"A" (Agency Comment) For reference Water has no substitute.......Conserve it ^rpMlmmtc^ ENGINEERING DIVISION DEPARTMENT OF WA IER,COt;N'I'V OF KAt'A'l MICIIAEI.K.1IINAZUMI,P.E. DATE: TO: SUBJECT: 1- ^. .•.••yofK;;. ^JNINGnrT February 14,2021 Planning Department Kaaina Hull,Director (Dale 21 FEB 18 P1 :44 RECElvt.u County of Knun'l MARK R.KNOFF,P.E.,PhD. MANAGER AND CHIEF ENOINEER Z-TV-2008-12,Addition of Multiple-Famlly Dwelling Units to the Existing Thirty-Four Dwellmg Unlts Prevlously Approved;TMK:2-8-08:001 (Koloa Village Development) DOW COMMENTS: The Department of Water (DOW)has concerns regarding the possible backflow of water into our system and the increase in water demand associated with this Class IV Zonlng Permit Z-FV-2008-12 application. We recommend to the Plannlng Department that any approval of the proposed Class IV Zoning Permit Z-rv-2008-12 application be conditioned;whereby,the applicant shall be made aware that prior to the DOW recommendlng water meter service or bullding permit approval,the applicant will be requlred to: 1.Submit detailed water demand calculations for the proposed project for DOW's review and approval. 2.Submit a formal request for water service for our review and approval. 3.Prepare and receive DOW's approval of construction drawings for the necessary water system facilities and construct sald facilities.These facilities shall include but not be limited to: a)The interior plumblng with the appropriate backflow prevention devlce/s. b)The domestic service connection/s. c)The fire service connection,if applicable. 4.Pay the applicable charges in effect at the time of payment to the Department.At the present time,these charges shall include but not be limited to the Facilities Reserve Charge (FRC) which is based on $9,880 per unit or the FRC based on the approved water meter size; whichever amount is greater. 5.Receive a "Certification of Completion"for the construction of the necessary water system facilities from the DOW. Requests for additiona]water meters or increase in water meter size will be dependent on the adequacy of the source,storage,and transmission facllities existing at that time. "h^cAa&£^.^/^ei^i^it-Feb 15,2021 Michael K.Hinazumi,P.E. Engineering Divlsion Z-IV-2008-12,T.21549,Addltlon of MuItiple-Family DivelUng Units,Koloa VlUage,2^8^08-001/RF:mlm Date 4i98PuaLokeSlreerLIhu e.H3(\ai'i 9C.76G •(KU3)245-5400 (business)•(808)245-58)3 (fa\)• An Equal Opportunily Emplo>er KAUA'I COUNTY HOUSING AGENCY ADAM ROVERSI,DIRECTOR DEREK S.K.KAWAKAMI.MAYOR MICHAEL A.DAHILIG,MAHAGING DIRECTOR February3,2021 To:Kaaina S.Hull,Planning Director From:Adam P.Roversi,Housing Director RE:Housing Agency Comments on Class IV Zoning Permit Z-IV-2008-12,Addition of Multiple-family Dwelling Units To The Existing Thirty-four Dwelling Units Previously Approved,TMK (4)2-8- 008:001,Koloa Village Development,Applicant Koloa Village Development requests that the Planning Commission grant its Petition to modify the site plan of its development to add 40 additional dwelling units to yield a total density of 74 dwelling units. The Housing Agency supports this request. The Kaua'i County Housing Policy,Chapter 7A-1.4.2 establishes a special infill multi-family exemption for the multi-family projects in the Koloa Town Walkable Mixed-Use District in which Koloa Village is located. The purpose of this exemption is to remove specific workforce housing requirements to incentivize high density multi-family projects within the Koloa Town core area,as well as other designated town centers. In line with the goals ofthe County General Plan,this Housing Policy provision seeks to promote multi- family construction in town centers where infrastructure,employment,and educational opportunities already exist.These higher density multi-family developments bytheir nature also generally result in more affordable housing as compared to lower density and single-family projects.Accordingly,the Housing Agency supports the applicant's Petition. The Housing Agency cannot require,but otherwise encourages the applicant to adopt a marketing plan for its proposed project that includes preferences for Kaua'i residents who are employed within the Koloa Town Walkable Mixed-Use District,and the larger Koloa-Po'ipu area.We also encourage the applicant to offer these units at price points that are within reach of our permanent workforce community. Thank you for the opportunity to provide comments. 4444 Rice Street,Suite 330 •Lihu'e,Hawai'i 96766 •(808)241-4444 (b) An Equa!Opportunity Employer 241-5118(0 r r' RECEIVED FEB -2 2021 COUNTY OF KAUA-I___County ofKauai PLANNING DEPARTMENT TransportationAgency 4444 RICE STREET,SUITE A473 LIHU'E,HAWAI-I 96766 21 FEB-9 fl 8:11 (808)241.4050 (Dale)February2,2021FROM:Kaama_S.Hull,Director SUBJECT:Class IV ZoningPermit Z-IV-2008-12,Addition Of Multiple-family Dwelling Units To The Exisiting Thirty-four Dwelling Units Previously Approved Tax Map Key:(4)2-8-008:001,Koloa Village Development,Applicant TO: D Department ofTransportation -STP DPW-Engineering DOT-Highway,Kauai(info only)a DPW-Wastewater D DOT-Airports,Kauai (info only)a DPW-Building a DOT-Harbors,Kauai (info only)D DPW-SoIidWaste State Department of Health a Department of Parks &Recreation D State Department of Agriculture Fire-Department State Office of Planning County Housing-Agency D State Dept.of Bus.&Econ.Dev.Tourism a County Economic Development State Land Use Commission a KHPRC State Historic Preservation Division Water Department DLNR-Land Management a Kaua'i Civil Defense a DLNR-Foresty &Wildlife D U.S.Postal Department DLNR-Aquatic Resources a UH Sea_Grant a DLNR-OCCL County Transportation Agency Other:Lee S.(Trans.Planner) FOR YOUR COMMENTS (penaining to your department): l^aj.^-opj,pi^o/oa ^^.si i ^£__rA^-(5e iMCftc-TCD ^\'S ^o3^'. -2-.^-2-0 ^; This matter is scheduled for a public hearing before the County of Kauai Planning Commission on 3/9/2021 at the Lihue Civic Center,Moikeha Building,Meeting Room 2A-2B,4444 Rice Street, Lihue,Kauai,at 9:00 am or soon thereafter.If we do not receive your agency comments by March 2, 2021,we will assume that there are no objections to this permit request.Mahalo! ^_c.^.i_z.£ FE3 -3 2021 ENVIROiMMENTALHEAlJH SERVICES jatffll.. COUNTY OF KAUA'I PLANNING DEPARTMENT "'"•':-''•;'-T r.uUu Pi A ai^.!f^i/%--i^rL^f^^f^c^DF-',"»•'f— °:' 1 . 4444 RICE STREET,SUITE A473 LIHU'E,HAWAtl 9®619 P ):3Q (808)241.4050 FROM:Kaaina S.Hull,Director (Dale)hiy 2,2021 SUBJECT: TO: Class IV Zoning Permit Z-IV-2008-12,Addition Of Multiple-family Dwelling Units To The Exisiting Thirty-four Dwelling Units Previously Approved Tax Map Key:(4)2-8-008:001,Koloa Village Development,Applicant a a D a D D Depanment of Transportation -STP DOT-Highway,Kauai(info only) DOT-Airports,Kauai (info only) DOT-Harbors,Kauai (info only) State Department of Health State Department of Agriculture State Office of Planning State Dept.of Bus.&Econ.Dev.Tourism State Land Use Commission State Historic Preservation Division DLNR-Land Management DLNR-Foresty &Wildlife DLNR-Aquatic Resources DLNR-OCCL a a D a D DPW-Engineering DPW-Wastewater DPW-Building DPW-SolidWaste Department of Parks &Recreation Fire-Department County Housing-Agency County Economic Development KHPRC Water Department Kaua'i Civil Defense U.S.Postal Department UH_Sea Grant County Transportation Agency Other:Lee S.(Trans.Planner) FOR YOUR COMMENTS (pertaining to your department): See comments on attached sheet. February 16,2021 /f(MU^~^m- Darren Ta)hekazu,fActing Chief This matter is scheduled for a public hearing before the Co'untjlirflKauat PI&nriiBg>i^(!fflnit8^i$teafl.th Office Kauai 3/9/2021 at the Lihue Civic Center,Moikeha Building,Meeting Room 2A-2B,4444 Rice Street, Lihue,Kauai,at 9:00 am or soon thereafter.If we do not receive your agency comments by March 2, 2021,we will assume that there are no objections to this permit request.Mahalo! J~ Class IV Zoning Permit Application:Z-IV-2008-12 Applicant:Koloa Village Based on our review ofthe application,we have the following environmental health concerns for your consideration. 1.The subject project is located within the Poipu Water Reclamation Facility wastewater sewer system.All wastewater generated shall be disposed into the Poipu Water Reclamation Facility sewer system.All lots in the proposed development shall connect to the Poipu Water Reclamation Facility sewer system. 2.Noise will be generated during the construction phase of this project.The applicable maximum permissible sound levels as stated in Title 11,Hawaii Administrative Rules (HAR),Chapter 11-46,"Community Noise Control",shall not be exceeded unless a noise permit is obtained from the State Department of Health (DOH). 3. 4.Temporary fugitive dust emissions could be emitted when the project site is prepared for construction and when construction activities occur.In accordance with Title 11,HAR,Chapter 11-60.1 "Air Pollution Control",effective air pollution control measures shall be provided to prevent or minimize any fugitive dust emissions caused by construction work from affecting the surrounding areas. This includes the off-site roadways used to enter/exit the project.The control measures include but are not limited to the use of water wagons,sprinkler systems,dust fences,etc. 5.The property may harbor rodents which will disperse to the surrounding areas when the site is cleared.In accordance with Title 1 1,HAR,Chapter 11-26,"Vector Control",the applicant shall ascertain the presence or absence of rodents on the property.Should the presence of rodents be determined,the applicant shall eradicate the rodents prior to clearing the site. 6.The construction waste that is be generated by the project shall be disposed of at a solid waste disposal facility that complies with the applicable provisions of Title 11 HAR,Chapter 11-58.1 "Solid Waste Management Control",the open burning of any of these wastes on or off site prohibited. 7.The proposed development/food establishments shall comply with the applicable requirements ofTitle 11,Hawaii Administrative Rules (HAR),Chapters 11-39,"Air Conditioning and Ventilating",pertaining to mechanical ventilation. 8.The proposed food service and food establishments shall comply with the applicable requirements of Title 1 1,HAR,Chapter 11-50,"Food Safety Code". EXHIBIT"B" (PublicTestimony) ABC STORES ABC STORES 766 Pohukaina Street Honolulu,Hawaii 96813-5391 www.abcstores.com Telephone;(808)591-2550 Fax:(808)591-2039 E-mai):mail@abcstores.com February9,2021 County of Kauai Planning Commission 4444 Rice Street,suite A473 Lihue,Kauai,Hawaii 96766 Public Hearing -Tuesday March 9,2021 Amendment to Proiect Development Use Permit PDU-2008-11.Use Permit U-2008-10.and Class IV Zoning Permit Z-IV-2008-I2 to allow fortv (40)additional multi-familY_residential units from 34 to 74 on a parcel situated at the Weliweili Road/Waikomo Road intersection in Koloa Town. Written Testimony only My name is Paul Kosasa,owner ofthe Sueoka Store and adjacent parcels.I do not have an objection to the additional multi-family units because there is a need for housing.However,I would like the developer to go further in design to match the character of Koloa Town. As someone from Oahu,I witnessed the urban sprawl and the intmsion of "plain"buildings into older communities without regard to the sense of place. •Building structures are equidistance from each other with little setback to the road.Suggest staggering the buildings to increase open spaces.Open spaces can be compact playgrounds or pocket parks. •Koloa has wonderful front yard setbacks.The 25'height close to the road will resemble the Ewa Beach townhomes that are repetitive and takes away the chann of Koloa.Below is an example of one of these proiects. Varying the exterior architecture of the buildings will help remove the sense of cookie cutter,say,adding board and batten siding and plantation style railings. Travel Resort Retail •Is street parking allowed?If so,cars will line the roadway,both residents and guests.Road is very narrow. •Usually,bathrooros are back-to-back.In the developer's scheme,the Unit 1 bathroom abuts the other Unit 2s bedroom.It would seem awkward to hear noises of your neighbor's bath activity in your bedroom. •Second floor lanai above first floor neighbor's front door entry facing the street seems awkward (at least for my comfort). •Window fenestrations appear undersized and unvarying. •Landscape details are missing.Suggest shnibbery to buffer the hardscapes. These comments can be constmed as unnecessary or over reaction.My opinion is Koloa town should have special design district status with an architecture review board of directors to preserve the rural character of the place.If not controlled,then urban sprawl will remove "what once was". New construction should be sympathetic to the Koloa town's historical features ofsize,scale, proportions,and massing.If there are design guidelines in place,I am unaware it is implemented. Thank you for the opportunity to testify. Ka'aina S.Hull Director of Planning Jodi A.Higuchi Sayegusa Deputy Director of Planning I.SUMMARY Action Required by Planning Commission; COUNTY OF KAUA'I PLANNING DEPARTMENT DIRECTOR'S REPORT Consideration of Class IV Zoning Permit and Use Pemiit,to allow a commercial kitchen and juice bar operation in the portion of the Old Mill building and to pemiit a new Health Club Use in an existing Warehouse building. Permit Application Nos.Class IV Zoning Permit Z-IV-2021 -7 Use Pennit U-2021-6 Name of Applicant(s)KILAUEA OLD MILL,LLC. II.PERMIT INFORMATION V;\202I MasterFIIes\Begutatory\ZoninBPermlti\ClasslV\Z-IV.2021-7\Beport\R«port-1 2.15.21_Z-IV-2021-7_U-202I-6_OM Kilauea MilLdocx p.^.tol. MAR O 9 2021, PERMITS REQTORED Use Pennit Pursuant to Article 2,Chapter 10 Section 10.-2.4 ofthe KCC,1987 as amended,a Use Permit required to allow the health club use. [_|Project Development Use Permit [_[Variance Permit 1]Special Permit ^l Zoning Permit Class 1 IV III Pursuantto Section 8-3.1 ofthe KCC,1987,as amended,a Class FV Zoning Pennit is a procedural requirement in applying for a Use Permit. 1]Special Management Area Permit DUse Q Minor AMENDMENTS I1 Zoning Amendment 1I General PIan Amendment Date ofReceipt of Completed Application: Date ofDirector's Report: Date ofPublic Hearing: Deadline Date for PC to Take Action (60 Day):April 24,2021 III.PROJECTDATA January 28,2021 Febmary 12,2021 MARCH 9,2021 IV.LEGAL REQUIREMENTS Section 8-3.1(1"),KCC:This report is being transmitted to the Applicant and Planning Commission in order to satisfy the requirements of Section 8-3.l(f),relating to the provision of the Planning Director's report and recommendation on the subject proposal within sixty (60)days of the filing of a completed application.Tbe Z-IV-2021-7,U-2021-6;Director'8 Report KHauca OId Mill,LLC. February 12,2021 a|Page [_]State Land Use District Amendment PROJECT INFORMATION Parcel Location:The project site is located .32 miles North off Kilauea Road,0.06 miles East on Oka street at the intersection of Aalona street. Tax Map Key(s):(4)5-2-014:049 Area:20,389 s.f. ZONING &DEVELOPMENT STANDARDS Zoning:Residential (R-6) State Land Use District:Urban General Plan Designation:Neighborhood General Height Limit:25 feet OR Based Flood Elevation (B.F.E.)plus 15 feet Max.Land Coverage:60%Maximum Front Setback:lO'-O" Rear Setback:5'01 V2 the wall plate height whichever is greater Side Setback:5'or '/2 the wall plate height whichever is greater Community Plan Area:North Shore Development Plan Community Plan Land Use Designation:N/A Deviations or Variances Requested: application was received on February 23,2021 and the Applicant,through its authorized agent,was notified accordingly of the Planning Department's intent to commence pennit processmg. PublicHearingDate:MARCH9,2021 V.PROJECT DESCRIPTION AND USE As represented the subject property is located on tax map key (TMK)parcel (4)5-2- 014:049,contaming 20,389 square feet and has an existing single story warehouse (the"Warehouse")building of 3,600 square feet and a 2,940 square feet building (hereinafter"Old Mill Building".)Both Old Mill Buildiag and Warehouse were constructed prior to the Kaua'i County Code,Comprehensive Zoning Ordinance (CZO). 1.WAREHOUSE BUILDING: With Use Permit U-12-79 and Class IV Permit Z-IV-79-17,the warehouse building was granted "light"manufacturing use since it was not a permissible use within the Residential zoning district.The Planning Commission amended these permits in 1996 to restrict occupant of the warehouse to low traffic uses ,which requiied seven (7) parking stalls and any subsequent use or change in configuration would require PIanning Commission review and approval.Currently,the building is being utilized by a surfboard manufacturer,storage by an individual tenant,and by the Longman Jiu- Jitsu Academy.Currently,the "healfh club"use for the Jiu Jitsu Academy is not an outright permissible use. The applicant is seeking permits for the Longman Jiu-Jitsu Academy (Academy)to operate within the warehouse building.The Longman Jiu Jitsu Academy is a martial arts school that teaches the art of Brazilian Jiu-Jitsu and self-defense. a.Operation:Classes are held four times a week with moming adult classes from 9:00 a.m.to 10:30 a.m.Monday through Friday,keiki classes ae to be held for ages four (4)to eight (8)years of age from 3:15 p.m.to 4:05 p.m.Monday through Thursday,another keiki class is to held for ages nine (9)to fourteen (14)at 4:15 p.m.to 5:15 p.m.Monday through Thursday,evening adult classes are to be held from 5:30 p.m.to 7:00 p.m.Monday through Friday.There are no classes between the hours of 10:15 a.m.to 3:15 p.m. Moming adult students has an average of 2-8 students Children are usually dropped off and picked up by the parents for the keiki classes.The applicant states that the adult early evening classes have a higher than average attendance.The adult evenmg classes start at 5:30 p.m.,at which time the medical building is closed for busmess.Parking conflicts are kept to a minimum between the employees clients Z-IV-202I-7,U-2021-6;Director's Report KBauea OId Mill,LLC. Febmary 12,2021 3|Page and the Academy's students.The change in use will not affect the exterior or the interior of the Warehouse. 2.QLD MDJ^BUILDING: The Planning Commission approved the use for a portion of the building through Use Pemiit U-2010-7 and Class IV Zonmg Permit Z-IV-2010-8 (hereinafter "2010 Pemiit") to allow the operation of a medical facility.In late 2018,a physical therapy and wellness center opened and operated within the aforementioned portion.Condition No. 1.of the 2010 permit reads: "1.The proposed medical facility shall be operated as represented.Any changes to the operation and/or the respective building structure shall be reviewed by the Department to determine whether Planning Commission review and approval is required." In June 2015,the applicant requested to use the remaining portion of the Old Mill Building for a variety of mixed uses.The Planning Department's deteimination dated November 20,2015 indicated that a new Use Pemiit and Class FV Zoning Permit would be necessary to facilitate the operation of a commercial kitchen and juice bar within a 1,000 square foot portion of the Old Mill Building (see Exhibit "H"floor plan). a.Operation:The commercial kitchen will be used to support local food processing busmesses on the North Shore.The juice bar will be used as a take-out order only operation and no seating established for dming will be provided.Proposed hours of operation ofthejuice bar will be Monday thiough Friday from 7:30 a.m.to 6:00 p.m.and Saturday from 8:00 a.m.to 5:00 p.m.Deliveries of supplies and locally grown produce for the commercial kitchen and juice bar made by local farmers are anticipated to be minimal.Most of the renovations will be in the interior of the Old Mill Buildmg. VI.APPLICANT'S REASONS/JUSTIFICATION PIease refer to Application. VII.ADDITIONAL FINDINGS 1.The subject property is within KTlauea Town located.38 miles off Kuhio Highway and .08 miles south of KIlauea Town Center. 2.The State Land Use District (SLUD)designation for Parcel 49 is "Urban"which allows for urban growth in a specified area. Z-IV-2021-7,U-2021-6;Dircctor's Rcport KnaucaOldMilLLLC. Februaiy 12,2021 4|Page 3.The property is situated within the North Shore Plaiining area and will be subject to the objectives and goals ofthe North Shore Development PIan (NSDP),which that includes the following: Goal A:To preserve the unique natural beauty of the North Shore Planning area. Goal B:To preserve the special rural charm of the North Shore Planning area. Goal C:To provide for the safety and welfare of the people,of their property of the North Shore Planning Area. Goal D:To provide for economic development of the North Shore planning area. Goal E:To preserve the wildlife and flora and the North Shore,recognizing man's dependence upon this preservation for his own health and welfare. Goal F:To insure the preservation of historic-archaeological sites in the North Shore Planning Area. Goal G:To create a development for evolutionary growth that depends upon a plaiming process whereby conflicts can be resolved through the establishment of priorities and community participation. Goal H:To provide for recreational opportunities that are compatible with the unique qualities and natural features of the North. 4.All proposed improvements or developments are not located within the shoreline setback area.The proposed development is approximately a mile away from the shoreline. 5.The subject property is located within Zone "X"of the Federal Emergency Management Agency Area (FEMA).Flood Insurance Rate Map (FKM)/FEMA has identified Zone "X"areas as outside of the 0.2%annual chance of Hooding.In addition, this area is outside of the Tsunami Evacuation Zone. 6.The topography is relatively flat,and no grading or gmbbing of the project area will be done. 7.CZO Development Standaids The proposed development is subjected to standards prescribed in Sections 8-4.3 and 8- Z-rV-2021-7,U-2021-6;Dmctor's Report Kllauea OId Mill,LLC. Febmary 12,2021 5|Page a.Setback Requirements:Front property line setbacks are lO'-O"with a side and rear property line setback of five feet (5'-O")or half the distance of the plate height whichever is greater. b.Parking Requirements: 1)WAREHOUSE:The off-street parking requirement for the warehouse building is one (1)stall per 500 square feet of gross floor area,which calculates to seven (7)stalls (3,600 s.f./500 s.f.=7.2).The Academy will occupy 1,800 oftotal square feet of space within the warehouse,1,200 square feet is used for the actual class instmction and a check in desk area.The remaining 600 square feet is used for storage area.The Academy's total parking requirement would requiie a total of five (5)parking stalls:Four (4)for the work-out area,one (1) for the storage area. The total parking stalls required for the warehouse is nine (9)parking stalls: four (4)for the existing warehouse/Iight industrial use,five (5)for the Academy. 2)OLD MILL BUILDING:The off-street parking requirement is one (1)stall per every 200 square feet of net of office space and waiting rooms or other spaces used by the public for the transaction of business or services,but not less than two (2)parking spaces shall be required.The medical use portion of the Old Mill Building requires five (5)off-street parking stalls (1,046 s.f./200 net s.f.=5.23)pursuant to Section 8-6.3(3)(c).The remaining 1,000 s.f.portion of the building to be used as a commercial kitchen/juice bar requires a minimum of four (4)parking spaces pursuant to Section 8-6.3(3)(a)of the KCC.The total parking space required for the Old Mill Building is nine (9):five (5)for the medical use portion,four (4)for the commercial kitchen and juice bar. The subject property contains a total of 18 existing parking stalls.The applicant will provide a surplus of four (4)new parking stalls bringing the total to twenty-two (22) parking stalls. It is noted within the application that the majority of the students live within the KHauea area and moming/aftemoon keiki classes the students are dropped off and picked up after classes are done.The highest attendance of the Academy occurs during the early evening hours when all other businesses are closed for the day. c.Setback between buildings:The distance between buildings shall be ten (10)feet mmimum. Z-IV-2021-7,U-2021-6;Du-ector's Rcport KnaucaOIdMill.LLC. February 12,2021 6|Page d.Lot Coverage:The subject property has been utilized for commercial purposes since the 1940's.Existing lot coverage to date is 17,891 square feet (see Exhibit "G")which calculates to approximately eighty-seven percent (87%)lot coverage. With the addition of 100 square feet ofpaving for one (1)new parking stall bringing the new lot coverage to eighty-eight (88%). 8.Building Height Pursuant to Sec.l0-2.4(e)(l),the North Shore Development Plan (NSDP)allows structures to be no higher than twenty-five (25)feet,except as provided under Ordinance No.416 (Flood Hazard Areas)Section 15-1.5(c)(4)(A)which allows a structure to be no higher than 25 feet from ground level or base flood elevation plus fifteen (15)feet,whichever is greater at the site.No new stmctures are being proposed with this application. 9.Use Pemiit a.Pursuant to Article 3 of the Comprehensive Zoning Ordinance (CZO),Chapter 8 of the Kauai county Code (1987),the purpose ofthe Use Permit Procedure is to assure the proper integration into the community of uses which may be suitable only in specific locations of a district,or only under certain conditions,or only if the uses are designed,arranged or conducted in a particular manner,and to prohibit the uses if proper integration cannot be assured.Section 8-3.2 of the CZO specifies a Use Pennit may be granted only if the Plaiming Commission finds that the use meets the following criteria: 1)The use must be a compatible use; 2)The use must not be detrimental to persons or property in the area; 3)The use must not cause substantial environmental consequences;and 4)The use must not be inconsistent with the intent of the Comprehensive Zoning Ordinance (CZO)and General Plan. VIII.AGENCY COMMENTS See attached Exhibit "A" IX.PRELIMINARY EVALUATION In evaluating the Applicant's request to allow the retail sales,art gallery,farm tours,and community events,the following are being considered. 1.General Plan The proposed development satisfies the followmg policies of the General Plan,as taken from Section 1.3 and 1.4: A.1.3,entitled"VISIONSANDGOALS" Z-IV-2021-7,U-2021-6;Director's Report KBaueaOIdMill.LLC. Febmary 12,2021 7|Page 1)Goal #1 "Sustainable Island"-This project will use the existing Warehouse and Old Mill Building and have minimal impacts to the surrounding areas and preserving open space.The proposed use assists in the economic and environmental aspects of the General Plan. 2)Goal #2 Unique and Beautiful Place -As represented in the application the project will not change any natural landscapes or have negative visual impacts in the suriounding area. 3)Goal #3 "A Healthy and Resilient People"-The Academy use will promote physical exercise through its martial arts and self-defense classes along with a strong sense of community to the KIlauea neighborhood area as well as the Island of Kaua'i.The commercial kitchen/juice bar will support local farmers and the local food processing business around the North Shore area. 4)Goal #4 "An Equitable Place,with Opportunity for All"-The proposed commercial kitchen/juice bar will providejobs up to three (3)full time aud encouraged to hire people within the KIlauea area.The commercial kitchen/ juice bar intends to use locally grown produce and support local farmers by purchasmg their goods. B.Section 1.4,entitled "POLICIES TO GUIDE GROWTH" 1)Policy #1 "Manage Growth to Preserve Rural Character"-The proposed Academy and Commercial kitchen/juice bar is within the "Neighborhood General"designation ofthe Kaua'i General Plan.It uses existing stmctures in an established urban area. 2)Policy #3 "Recognize the Identity of Kaua'i Individual Towns and Districts -The subject property surrounding area has mixed use of residential and commercial uses.The Subject property is also walking/biking distance to the KTlauea Town Core. 3)Policy #4 "Design Healthy and Complete Neighborhoods"-The proposed projects will not involve any new stmctures or additions.The subject property is situated within walking and biking distance to the KTlauea Town Core.As stated within the application the majority of the Academy's students live within the KIlauea area. 4)Policy #6 "Reduce the Costs of Living"-The proposed projects will provide commercial opportunities for tourists and residents.The project area is located close to existing Kilauea's Town Core offering economic growth to surrounding commercial and business activities.Also,the subject property is in an area that is easily accessible by walking and biking reducing transportation needs such as car use. 8|Page Z-IV-2021-7,U-2021-6;Director's Rcport KHauca OId Mill,LLC. Febru.iryl2,202I 5)Policy#l0 "Help Business Thrive"-Both projects supports small businesses within the area and support local framers in purchasing locally grown goods. farmland. 6)Policy#16 "Protect Access to Kaua'i's Treasured Places"-The proposed projects will have no negative impacts to any public access to streams, shoreline,trails,recreation areas,and places associated with Traditional Native Hawaiian Cultural Practices. 7)Policy#17 "Nurture our Keiki"-The proposed use of both projects promotes small business as well as promoting safe recreational and educational areas for the keiki.The projects will provide a live,work,and play environment with the KTlauea community.The subject property is also with walking and biking distance to the KIlauea Town Core reducing the need for travel and commuting for these services. 8)Policy#19 "Communicate with AIoha"-The applicant has contacted the KIlauea Neighborhood Association and scheduled a hearing with The Kaua'i Planning Commission giving the public opportunity to participate in the local govemment and plaimmg decision making process. 2.North Shore_Development Plan Standards The proposed development is in compliance with the Northshore Development Plan (NSDP).Both buildings were built prior to the adoption of the CZO and considered "grandfathered"or legally non-conforming.Although the buildings are non- conforming,they are within the twenty-five (25)feet height limitation.The proposed uses will provide commercial economic opportunities as well as be compatible with the natural suiroundings of the area. 3.Native Hawaiian Traditional and Cyltural Rights The applicant is unaware of any archaeological,cultural,or historical resources on the surface of the subject property.The nearest historical resource is a historic stone building approximately 550 feet east of the subject property (see Exhibit "L").The applicant has reached out and identified two (2)community members with historical and cultural knowledge about the area within the application.Currently,there are no known impacts to any Native Hawai'i Traditional and Cultural Practices on the subject property.The applicant shall mform the Planning Department if they receive any knowledge of or discover any cultural/historical resources. 4.Use Permit a.Pursuant to Article 3 of the Comprehensive Zoning Ordinance (CZO),Chapter 8 of the Kauai county Code (1987),the purpose ofthe Use Fermit Procedure is to assure the proper integration into the community of uses which may be suitable only in specific locations of a district,or only under certain conditions,or only if the uses 9|Pag e Z-IV-2021-7,U-2021-6;Director's Report KBauea Old Mill,LLC. February 12,2021 are designed,arranged or conducted in a particular manner,and to prohibit the uses ifproper integration cannot be assured.Section 8-3.2 ofthe CZO specifies a Use Permit may be granted only if the Plarming Commission finds that the use meets the following criteria: 1)The use must be a compatible use; 2)The use must not be detrimental to persons or property in the area; 3)The use raust not cause substantial environmental consequences;and 4)The use must not be inconsistent with fhe inteat of the Comprehensive Zoning Ordmance (CZO)and General Plan. b.Based on the foregoing,the following aspects are considered: 1)Compatible Use -The proposed development is designed to be integrated with the surrounding commercial and residential uses within KTlauea Town. As noted in the Director's Report,the project site is directly adjacent to commercial and residential projects on all three sides of the project site. As such,the proposed use is compatible with the surroundmg uses and is not expected to impact urban activities in the area. 2)The subject proposal has actually been in operation without the proper permits since 2010.To date,the Department has not received any complaints conceming the operation of the Long Man Jiu-Jitsu Academy on the subject property.The absence of any complaints against the Academy's operation by surrounding neighbors living in or frequenting the surrounding area can be considered demonstrative ofthe operations'compatibility wifh the surrounding area. X.PRELIMINARY CONCLUSION Through proper mitigation measures,the proposed development would not have any detrimental impact to the environment or the surrounding area and is in compliance with the criteria outlined for the granting of a Use Pennit and Class IV Zoning Pennit. The Applicant should institute the "Best Management Practices"to ensure that the operation of this facility does not generate impacts that may affect the health,safety,and welfare of those in the surrounding area of the proposal. In addition,the Applicant should implement to the extent possible sustainable building techniques and operational methods for the project. XI.PRELMINARY RECOMMENDATION Z-FV-202I-7,U-2021-6;Dmctor's Report KUauca Old Mill,LLC. Febmaiyl2,2021 io|P ag e Based on the foregoing evaluation and conclusion it is hereby recommended Class IV Zoning Permit Z-IV-2021-7 and Use Pemiit U-2021-6,to be APPROVED.If approved, the following conditions shall be implemented: 1.The proposed uses and improvements shall be operated and constructed as represented.Any changes to said development shall be reviewed by the Plarming Director to determine whether Planning Commission review and approval is warranted. 2.The Applicant is advised that should any archaeological or historical resources be discovered during ground disturbing/constmction work,all work in the area of the archaeological/historical findings shall immediately cease and the Applicant shall contact the State Department of Land and Natural Resources,Historic Preservation Division at (808)692-8015 and the Plamiing Department at (808)241-4050 to determine mitigation measures. 3.In order to minimize adverse impacts on the Federally Listed Threatened Species, Newell's Shearwater and other seabirds,if extemal lighting is to be used m connection with the proposed project,all extemal lighting shall be only of the followmg types: downward-facing,shielded lights.Spotlights aimed upward or spotlighting of structures shall be prohibited. 4.The Applicant shall develop and utilize Best Management Practices (B.M.P's)during all phases of development in order to minimize erosion,dust,and sedimentation impacts of the project to abutting properties. 5.An Environmental Impact Assessment fee equal to $100 per minimum number of stalls required shall be due at time ofbuilding permit application. 6.The Applicant is advised that prior to construction and/or use,additional govemment agency conditions may be imposed.It shall be the Applicant's responsibility to resolve those conditions with the respective ageucy(ies). 7.The Applicant shall resolve and comply with the applicable standards and requirements set forth by the State Health Department,State Historic Preservation Division-DLNR, and the County Departments of Public Works,Fire,Transportation,and Water. 3.The Planning Director reserves the right to increase parking requirements when particular uses cause unusual traffic congestion.Parking spaces shall be used for parking of employees,customers,students (martial arts school)and business vehicles. Storage of materials or long-term parking of vehicles and/or trash bins in the required off-street parking stalls is not pennitted. Z-IV-2021-7,U-2021-6;DiiEctor'a Report KUauea Old Mill,LLC. February 12,2021 ii[P a g e 9.Prior to commencement of the proposed development,written confirmation of compliance with the requirements from all reviewing agencies shall be provided to the Planning Department.Failure to comply may result in forfeiture of the SMA Pennit. 10.To the extent possible within the confines of union requirements and applicable legal prohibitions against discrimination in employment,the Applicant shall seek to hire Kauai contractors as long as they are qualified and reasonably competitive with other contractors and shall seek to employ residents of Kauai m temporary constmction and pennanent resort-relatedjobs.It is recognized that the Applicant may have to employ non-Kauai residents for particular skilledjobs where no qualified Kauai residents possesses such skills.For the purposes of this condition,the Commission shall relieve the Applicant of this requirement if the Applicant is subjected to anti-competitive restraints on trade or other monopolistic practices. 11.The Planning Commission reserves the right to revise,add,or delete conditions of approval in order to address or mitigate unforeseen impacts the project may,create,or to revoke the permits through the proper procedures should conditions of approval not be complied with or be violated. The Planning Commission is further advised that this report does not represent the Planning Department's final recommendation in view of the forthcoming public hearing process scheduled for MARCH 9,2021 whereby the entire record should be considered prior to decision-making.The entire record should include but not be limited to: a.Pending govemment agency comments; b.Testimony from the general public and interested others;and c.The Applicant's response to staffs report and recommendation as provided herein. By' ROMIO IDICA Planner Approved &Recommended to Commission: KA'AINA S>HULL Director of Plamung Date: •/^/-l3 •2-^Z- Z-IV-2021-7,U-2021-6;Dh-cclor's Repon KaaueaOUMill.LLC. February 12,2021 121 Pag e EXHIBIT "A" (Agency Comments) For reference ENVIHONiillENTATTIBiLni SERVICES j<,feyAi -^;^ COUNTYOFKAUA'I i-"-.ANN)N6 OEP"i. PLANNING DEPARTMENT 4444 RICE STREET,SUTE A473 LlHU'E,HAWAI1 96766 (808)241.4050 "21 FEB 19 P):3Q FROM:KaainaS.Hull.Director (Romio)Janyary 28,2021 i-. SUBJECT:Class IV Zoning Pennit Z-rV-2021-7,Take-out Juice Bar With A Commercial Kitchen Tax Map Key:(4)5-2-014:049,KUauea Old Mill,Llc,Applicant TO: FOR YOUR COMMENTS (pertaining to your depaijment): See comments on attached sheet, February 11,2021 larren T District .//Ta^lek^u,Acting Chief Snvlroftmental Health Program Kauai This matter is scheduled for a public hearing/before the County of Kauai Planning Commission on 3/9/2021 at the Lihue Civic Center,Moikeha Building,Meeting Room 2A-2B,4444 Rice Street, Lihue,Kauai,at 9:00 am or soon thereafter.If we do not receive your agency comments within one (1) month from the date of this request,we will aisume that tfaere are no objections to this permit request. Mahalo! s Department of Transportation -STP x DPW-Engineering 3;DOT-Highway,Kauai(uifo only) "D: DPW-WastewatersDOT-Airports,Kauai (urfo only) ~n_ DPW-Building E DOT-Haibors,Kauai (infoonly) -D" DPW-SolidWaste~w State Department of Health s Department of Parks &Recreations^State Department of Agriculture s Fiie-Department~u State Office ofPlamung s County Housing-Agency E State Dept.ofBus.&Econ.Dev.Tourism County Economic Development~D' State Land Use Commission s KHPRC State Historic Preservation Division x Water DepartmentsDLNR-Land Maiugement E Kaua'i Civil Defense~n' DLNR-Foresty &WUdIife "D: U.S.Postal Department~n~ DLNR-Aquatic Resources s UH_Sea_Grant~n DLNR-OCCL ~w County Transportation AgencysOther: Class IV Zoning Permit Application:Z-IV-2021-7 Applicant:Kilauea Old Mill,LLC Based on our review ofthe application,we have the following environmental health concerns for your consideration. 1.The existing septic system can continue to be utilized,if wastewater flows do not exceed 1000gallonsperday. 2.The proposed food services and food establishments shall comply with the applicable requirements ofTitle 11,Hawaii Administrative Rules (HAR),Chapter 11-50,"FoodSafetyCode". 3.The proposed food establishment shall be constructed in accordance with the applicable ventilation requirements ofTitle 11,HAR Chapter 11-39,"Air Conditioning and Ventilating". 4.Noise will be generated if remodeling/construction activities occur.The applicable maximum permissible sound levels as stated in Title 11,(HAR), Chapter 11-46,"Communrty Noise Control",shall not be exceeded unless a noise permit is obtained from the State Department of Health (DOH). 5.Temporary fugitive dust emissions could be emitted if remodeling/construction activities occur.In accordance with Title 11,HAR,Chapter 11-60.1 "Air Pollution Control",effective air pollution control measures shall be provided to prevent or minimize any fugitive dust emissions caused by construction work from affecting the surrounding areas.This includes the off-site roadways used to enter/exit the project.The control measures include but are not limited to the use ofwater wagons,sprinkler systems,dust fences,etc. 6.If remodeling/constniction activities occur,the construction waste that is generated by the project shall be disposed of at a solid waste disposal facility that complies with the applicable provisions of Title 11 HAR,Chapter 11 -58.1 "Solid Waste Management Control",the open burning of any of these wastes on or off site prohibited. Due to the general nature of the application submitted,we reserve the right to implement future environmental health restrictions when more detailed information is submitted. COUNTY OF KAUA'I . PLANNING DEPARTMENT 4444 RICE STREET,SUITE A473,LIHU'E,HI 96766 Phone:(808)241-4050 TO:Kaaina S.Hull,Director (Romio) SUBJECT:Class FV Zoning Permit Z-IV-2021-7,Take-out Juice Bar With A Commercial Kitchen 21 E£g 19 A7:49 Tax Map Key:(4)5-2-014:049,KTlauea Old Mill,Llc,Applicant PW 01.21.100^- :L» TO: [_]DepartmentofTransportation-STP f C]DOT-Highways,Kaua'i (info only)D DOT-Airports,Kaua'i (info only)Q 0 DOT-Harbors,Kaua'i (info only) State Department of Health D 1I StateDepartment ofAgriculture StateOfdceofPlanning Q I1 State Dept.ofBus.Econ,Dev.Tourism [_] State Land Use Commission I1 15^1 State Historic Preservation Division Q DLNR -Land Management Q D DLNR-Forestry&Wildlife F] Q DLNR -Aquatic Resources D D DLNR-OCCL DPW -Wastewater DPW -Buildiug DPW -Solid Waste Department ofParks &Recreation Fire Department County Housing Agency Couuty Economic Development KHPRC Water Department Kaua'i Civil Defense U.S.Postal Department UH Sea Grant County Transportation Agency Other: February 4,2021FORYOURCOMMENTS(pertaining to your department): We have reviewed the subject application to use the vacant area adjacent to the Physical Therapy and Wellness Center at the Old Mill Building for a commercial kitchen and juice bar.We have no coiiunents. Sincerely, Michael Moule,P.E. Chief,Engineering Division MM/PT copy:Design and Permitting This matter is scheduled for a public hearing before the County of Kaua'i,Plaiming Cominission on 3/9/2021 at the Lihu'e Civic Center,Mo'ikeha Building,Meetmg Room 2A-2B,4444 Rice Street,LIhu'e,Kaua'i,at 9:00 am or soon thereafter.Ifwe do not receive your agency comments within 21 days from the date ofthis request,we will assume there are no objections to this permit request.Mahalo! KPAR-8-1.5 DEFINITIONS,COMPREHENSIVE ZONING ORDINANCE GUE5THOUSE AUTHORITY: PURSUANTTO Article XIV section 14.03.E ofthe Kauai County Charterthe Planning Commission ofthe County of Kaua'i adopts the following administrative rules pertaining to the responsibility of the Departmentto implementand enforce Chapter 8,Section S-1.5 ofthe Kaua'i CountyCode,1987 as amended,concerningthedefinitionof'Guest House." DEFINITION: Section 8-1.5 of the Kauai County Code,1987 as amended,defines Guest House to mean "a building with a floor area of no more than five hundred (500)square feet,may contain a kitchen,and is used for dwelling purposes by guests,tenants,or owner(s).A guest house shall not be used for a transient vacation rental (TVR)or homestay operation within or outside ofthe visitor destination area (VDA). FINDINGS: In implementingthe definition ofa "Guest House",there isa needtoclarifywhetherornotthe structure may be attached to a single family residence,detached from a single family residence,within a multifamily residence,or accompanied by an accessory structure (i.e.Garage). RULE: DEVELOPMENTAL STANDARDS 1.The maximum floor area for a guest house is five hundred (500)square feet. 2.Thetotal floorarea fora guest houseshall bethesum ofthe horizontal areasofeach floor of a building,measured from the interior faces of the exterior walls.The total floor areas shall include enclosed attached accessory structure such as garages or storage areas.Unenclosed attached structures,such as breezeways,lanais,or porches shall be excluded. 3.The guest house may be detached from a single-family residence or multi-family residence. 4.The guest house may be attached to a single-family dwelling unit or multi-family unit(s). When the guest house is attached to a single-family dwelling unit or multi-family dwelling unit(s),the enclosed and unenclosed floor areas of the dwelling unit(s)shall not be counted in the calculation ofthe maximum five hundred (500)square feet offloor area forthe respective guest house. f;-4(t. NAR O 9 2021 5.When attached to another dwelling unit(s),the guest house shall have its own separate exterior access. 6.When proposed with a kitchen in the State Land Use Agriculture,the guest house application shall require an executed Farm Dwelling Agreement DEPARTMENT OF PLANNING KA'AINA HULL,DIRECTOR JODI A.HIGUCHI SAYEGUSA,DEPUTY DIRECTOR DEREK S.K.KAWAKAMI,MAYOR MICHAEL A.DAHILIG,MANAGING DIRECTOR MEMORANDUM To: Fr: Date: RE: Honorable Commissioners Kauai Planning Commission Kaaina S.Hull Clerk of the Commission February 22,2021 Hearing Officer's Report and Recommendation of Contested Case Re Appeal of Planning Director's Decision Regarding Denial of 2019 Renewal Application Packet for Non-Conforming Use Certificate TVNCU #5023,Hale Haloko Kai,located at 5111 Hoona Road,Koloa, Kauai, Hawaii,TMK 2-6- 006:4,containing 6,035 sq.ft.,ffosa Glem,Petltioner,Contested Case File CC-2019-18 Please find in this attached communication the Hearing Officer's Report and Recommendation of Contested Case,and Certificate of Service. 4444 Rice Street,Suite A473 •LThu'e,Hawai'i 96766 •(808)241 -4050 (b) An Equal Opportunity Employer 1.1. MAR O 9 2021 BEFORE THE HEARING OFFICER OF THE PLANNING COMMISSION OF THE COUNTY OF KAUA'I RECBVEO JAN 2 8 .2021 BOARDS8.COMMISSIONS In the Matter of: Petition to Appeal Planning Director's Decision Regarding Denial of 2019 Renewal Application Packet for Non-Conforming Use Certificate TVNCU #5023,Hale Haloko Kai, located at 5111 Hoona Road,in Koloa,Kaua'i,Hawai'i,identified by Kaua'i TMKNo.(4)2-6-006:004 containing 6,035 square feet, ROSA GIEM. )CC-2019-18 )TVNCU#5023 )TMic:(4)2-6-006:004 ) )HEARINGOFFICER'SREPORT )AND RECOMMENDATION OF )CONTESTED CASE; )CERTIFICATE OF SERVICE ) )HEARING ('Held): ) )Date:My 29,2020 Time:9:00 a.m. Petitioner. vs. PLANNING DEPARTMENT OF THE COUNTY OF KAUA'I, Respondent. HEARING OFFICER'S REPORT AND RECOMMENDATION OF CONTESTED CASE I.INTRODUCTION. Petitioner ROSA GIEM ("Petitioner")is appealing the denial ofher 2019 Transient Vacation Rental Outside OfThe VDA Renewal Application ("Renewal Application")received by Respondent COUNTY OF KAUA'I PLANNING DEPARTMENT ("Planning Department")on August 6,2020,six (6) days after its deadline ofJuly 31,2019 ("Appeal").According to Petitioner's undated Prehearing Statement ("Petitioner's PH Statement"),the Appeal advances five (5)grounds in support ofher request to be excused from the untimely submittal ofthe Renewal Application.First,Petitioner argues the Planning Department should be able to provide reliefto Petitioner because it still has "the ability to expand,develop,and create new requirements for the renewal with no legislative requirements or oversight."Petitioner's PH Statement at 2.Second, the Planning Department did not provide adequate notice ofthe deadline for submittal ofthe Renewal Application.Id.at 3.Third,the "2018 Renewal and 2019 Renewal Notice"dated July 18,2018 from the Planning Department failed to state "when,where,and what are the requirements ofthe renewal."Id.at 4. Fourth,Petitioner is "an elderly homeowner with no computer,no intemet skills, Although Petitioner's PH Statement is not paginated,the page numbers referenced in this Report and Recommendation to the same corresponds to the number ofthe page(s)following the first page ofthat document. no digital phone or knowledge ofthe intemet [in order]to comply with [the Planning Department's]expanded renewal requirements."Id.Finally,the failure ofthe professional agents retained by Petitioner to prepare and timely file the Renewal Application should be considered by the Planning Department to excuse the late submittal.Id.at 4-5. In response,the Planning Department cites to "§8-17.10(h)(l)ofthe Kaua'i Comprehensive Zoning Ordinance ...that failure to timely renew a nonconforming use certificate for a temporary vacation rental will result in the automatic denial ofthe application for renewal[.].. .This is a strict rule;the County does not and has never contended otherwise....[T]he [Planning] Department has no authority to vary from this rule whatsoever."Planning Department OfThe County OfKaua'i's Prehearing Statement dated July 22,2020 ("Planning's PH Statement")at 2 (intemal quotation marks omitted)(emphasis in original)(second and third brackets added). II.PROCEDURAL HISTORY. The Contested Case Hearing commenced at 9:02 a.m.on July 29, 2020 utilizing the Microsoft Teams Platform ("Hearing").Compare Transcript of the Contested Case Hearing held on July 29,2020 in this Contested Case; CC-2019-18 ("Transcript"),at 1,with Hearing Officer's Scheduling Order dated May 19,2020 ("Scheduling Order")at 1-2.Petitioner was present accompanied by her husband,Mr.Norman Giem ("Norman Giem")and son,Mr.Kelly Norman Giem ("Kelly Giem").Transcript at 1.Kelly Giem acted as Petitioner's duly-authorized representative,and Norman Giem was present to observe the proceedings,but would not be testifying.Id.at l-2.Deputy County Attomey Chris Donahue appeared on behalfofthe Planning Department,along with its duly-authorized representative and Director,Mr.Ka'aina S.Hull.Id.at 2. Second,Exhibits 1 through 7,2 and Exhibits A through H,were admitted into evidence by agreement ofPetitioner and the Planning Department. Transcript at 3-4. Third,upon conclusion ofthe evidentiary portion ofthe Hearing,the undersigned Hearing Officer directed Petitioner to file her Closing Arguments and/or Proposed Findings ofFact and Conclusions ofLaw ("Petitioner's Closing Arguments"or "Closing Arguments")by "no later than 4:30 p.m.on the thirtieth (30th)date from the date of [the Minutes OfContested Case Hearing dated July 29,2020 ("Minutes")],or no later than 4:30 p.m.on the fourteenth (14th)day from receipt ofthe Transcript ofthe Contested Case Hearing, whichever is later".Minutes at 2.The Transcript was received on September 3, Exhibits identified by Numbers are those introduced by Petitioner.All Exhibits referenced by Alphabets were offered by the Planning Department.See Scheduling Order at 2. 2020.However,on September 18,2020 Petitioner requested atwo-week extension ofthe deadline to submit her Closing Arguments.Since the Planning Department had no objections to this request,the deadline to submit Petitioner's Closing Arguments was extend to 4:30 p.m.on October 1,2020.See Minute Order Regarding Briefing Schedule dated September 19,2020 ("Briefing Schedule")at 2. On September 30,2020,Petitioner requested another two-week extension ofthe deadline to submit her Closing Arguments.The Planning Department also did not have any objections to this second request.Therefore,the deadline for Petitioner's Closing Arguments was extended to October 15,2020. See First Amended Minute Order Regarding Briefing Schedule dated October 1, 2020 ("First Amended Briefmg Schedule")at 2. On October 16,2020,Petitioner requested a third (3rd)extension to submit her Closing Arguments.The Planning Department did not have any objections to this further request provided it was also given a two-week extension to file its Responsive Closing Statement and/or Proposed Findings ofFact and Conclusions ofLaw (collectively "Planning Department's Closing Arguments"). Therefore,the deadline for Petitioner's Closing Arguments was extended to December 4,2020,and the Planning Department's Closing Arguments would be due two (2)weeks thereafter,on December 18,2020.See Second Amended Minute Order Regarding Briefing Schedule dated October 20,2020 ("Second Amended Briefing Schedule")at 2. Petitioner's Closing Arguments were not received by December 4, 2020.However,on December 17,2020 the Planning Department's Closing Arguments ofeven date was timely received.The following day,Kelly Giem on behalfofPetitioner acknowledgedreceiptofthePlanningDepartment's Closing Arguments and advised that "this is a big help for me to fmalize our draft of our Closing Argument."Email from Kelly Giem to all parties sent at 9:11 a.m.on December 18,2020.Thereafter,the undersigned Hearing Officer advised Petitioner that her "Closing Arguments and/or Proposed Findings ofFact and Conclusions ofLawwere due no laterthanDecember4,2020... .Therefore, any Closing Arguments and/or Proposed Findings ofFact and Conclusions ofLaw submitted after that date will be untimely."Email from undersigned Hearing Officer to all Parties sent at 10:32 a.m.on December 18,2020. Since Petitioner assumed she was entitled to submit a filing responding to the Planning Department's Closing Arguments aflter receipt ofthe same,the undersigned Hearing Officer advised at 10:50 a.m.on December 18, 2020 that she had until "4:30 p.m.on the seventh (7th)day after service ofthe [Planning Department's]Responsive Closing Arguments.In other words, Petitioner has until 4:30 n.m.fHST')on December24,2020."Email ftom the undersigned Hearing Officer sent at 10:59 a.m.on December 1 8,2020 (emphasis in original),and Compare with Minutes at 2.In response,Petitioner requested until December 28,2020 to submit her Closing Arguments since December 24, 2020 was Christmas Eve.As a result and due to the Holiday Season,the Third Amended Minute Order Regarding Briefmg Schedule dated December 21,2020 ("Third Amended Briefing Schedule")allowed Petitioner until 4:30 p.m.(HST)on December 29,2020 to submit her optional Reply to the Planning Department's Closing Arguments ("Petitioner's Reply").Petitioner's Reply was timely received on December 29,2020. III.FINDINGS OF FACT. A.The Parties and Subiect Propertv. 1.Petitioner whose present address is 4220 Upa Road,Koloa, Kaua'i,Hawai'i 96756 ("Mailing Address"),is the owner ofthe real property that is the subject ofthis Contested Case located at 5111 Hoona Road,Koloa,Kaua'i, Hawai'i 96756 ("Subject Property"),Exhibit F at 1. 2.The Subject Property is located outside a Visitor Destination Area ("VDA").3 Transcript at 9. 3.Petitioner operates a Transient Vacation Rental4 on the Subject Property.Transcript at 9. "'Visitor Destination Area'or 'VDA'are those areas designated as Visitor Destination Areas on County ofKaua'i Zoning Maps."Kaua 'i County Code 1987 ("KCC")§8-1.5 (bold emphasis in original). "'Transient Vacation Rental'means a dwelling unit which is provided to transient occupants for compensation or fees,including club fees,or as part ofinterval ownership involving persons unrelated by blood,with a duration ofoccupancy ofone hundred eighty (180)days or less."Id. (bold emphasis in original)(italics emphasis added). "'Dwelling Unit'means any building or any portion thereofwhich is designed or intended for occupancy by one (\)family or persons living together or by a person living alone and providing complete living facilities,within the unit for sleeping,recreation,eating and sanitary facilities, included installed equipment for only one (1)kitchen."Id.(bold emphasis in original)(italics emphasis added)."'BuiIding'means a roofed structure,built for the support,shelter or enclosure ofpersons, animals,chattels or property of any kind.Theword 'building'includes the word 'structure.'" Id.(bold emphasis in original)(italics emphasis added). "'Structure'means anything constructed or erected which requires location on the ground or which is attached to something having location on the ground,excluding vehicles designed and used only for the transportation ofpeople or goods,and excluding utility poles and towers constructed by a public utility."Id.(bold emphasis in original). "'FamiIy'means an individual or group oftwo (2)or more persons related by blood,adoption or marriage living together in a single housekeeping unit as a dwelling unit.For purposes ofthis Chapter,family shall also include a group ofnot more than five (5)individuals unrelated by blood,adoption or marriage."Id.(bold emphasis in original). "'Kitchen'means any room used or intended or designed to be used for cooking and preparing food."Id.(bold emphasis in original). "'Transient'or 'Transients'means any person who owns,rents,or uses a dwelling unit or a portion thereoffor one hundred eighty (180)days or less,and which dwelling unit is not the person's primary residence under the Intemal Revenue Code.This defmition shall not apply to nonpaying guests ofthe family occupying the unit,patients or clients in health care facilities, full-time students,employees who receive room and/or board as part oftheir salary or compensation,military personnel,low-income renters receiving rental subsistence from State or Federal governments,or overnight accommodations provided by nonprofit corporations or associations for religious,charitable,or educational purposes where no rental income is transacted."Id.(bold emphasis in original). 8 4.Petitioner was awarded Non-Conforming Use Certificate TVNCU #5023 ("TVNCU #5023")to operate the Transient Vacation Rental on the Subject Property because it is located outside a Visitor Designation Area. Compare Transcript at 9-10 and Exhibit 4,with KCC §8.17.10. 5.TVNCU #5023 was to be renewed annually no later than July 31st ofeach year.Compare KCC §8.17.10(h),with Exhibit 4 at 1. 6.Petitioner last obtained a renewal ofTVNCU #5023 on July 18, 2018.Exhibit4atl. 7.The Planning Department's Letter dated July 18,2018 entitled "2018 Renewal and 2019 Renewal Notice"addressed to Petitioner ("Notice ofRenewal")noting TVNCU #5023 was renewed to Julv 31.2019: advised that in order to keep [the]Non-Conforming Use Certificate valid,you must: 1.Apply for renewal every year,no less than thirty (30)days, and up to two months,prior to the renewal date ofJuly 31, 2019,utilizing the most current renewal form on [the Planning Department's]website,and the renewal fee existing at the time (presently $750).Shouldyour renewal be at least one (1)day late,you will be served with a Cease &Desist andNotice of Forfeiture.Shouldyour renewal be incomplete,it will not beprocessed and will be returned to you via USPS.The resubmittal ofthe complete appllcation must be before the renewal date.The only supporting documents [the Planning Department] will accept after the renewal date isyour tax documents that areflled on an extension. Id.(emphasis in original). 8.Petitioner knew her TVNCU #5023 was to be renewed by July 31,2019 ("Deadline").Transcript at 10. 9.The Planning Department is the govemmental agency responsible for reviewing and acting on the 2019 Transient Vacation Rental Renewal Application Forms. B.The Cease &Desist and Notice ofForfeiture Followed By Renewal Application. 10.By letter stamped-dated August 5,2019 entitled "CEASE & DESIST,and FORFEITURE ofNon-Conforming Use Certificate TVNCU #5023 (Hale Haloko Kai)",the Planning Department advised Petitioner that TVNCU #5023 was to have been renewed by July 31,2019 ("Cease &Desist Notice").ExhibitDatl. 11.The Cease &Desist Notice further advised that pursuant to KCC §8-17.10(h)(l): Each application to renew shall include proofthat there is a currently valid State ofHawaii general excise tax license and transient accommodations tax license for the nonconforming use and shall be received by the [Planning]Department prior to the expiration date of a held Nonconforming Use Certificate. Failure to meet this condition will result in the automatic denial ofthe application for renewal ofthe Nonconforming Use Certiflcates. 10 Id.at 1 (emphasis in original)(quotation marks omitted). 12.In addition to the Cease &Desist Notice being sent by Certified Mail to Petitioner at her Mailing Address,it was emailed that same day to Petitioner and Mr.Bryan Patterson ofElite Pacific Properties,Petitioner's authorized representative designated in the Renewal Application ("Property Manager").Compare Exhibit D at 1,with Exhibits C and F at 1. 13.Following the issuance ofthe Cease &Desist Notice,the Renewal Application,and check dated "30 July 2019"for $750.00 drawn on the Rosa Giem Enterprises'checking account ("Check"),5 were both received by the Planning Department on August 6,2019.Compare Exhibit F at 1,with Exhibit 6 at 1 and Transcript at 27-28. 14.The Planning Department stamped "DENIED"("Denied Stamp")upon receipt of the Renewal Application and advised Petitioner by way of the Denied Stamp ofher "right to appeal this denial pursuant to the Rules of Practice and Procedure ofthe Kauai Planning Commission."Exhibit F at 1. 15.The Renewal Application with the Denied Stamped was retumed to Petitioner with the Planning Department's letter stamp-dated August 7, Although the Check was dated "30 July 2019,"its Memo portion referenced"TVR Renewal 8/6/19".Exhibit F at 1 (emphasis added). 11 2019 entitled "DENIAL OF 2019 RENEWAL APPLICATION PACKET" ("Denial Letter").Exhibit 6. 16.The Denial Letter again informed Petitioner that she "failed to submit a renewal application with the required documentation prior to the Julv 31, 2019.It is for this reason that the renewal packet submitted to the [Planning] Department on August 6,2019 is being denied and returned to you (attached)." Id.at 1 (emphasis in original). 17.After receiving the Cease &Desist Notice and/or Denial Letter, Petitioner queried the Property Manager why the Renewal Application was not submitted by July 31,2019.See generally Transcript at 60."[His]explanation was [that]they forgot."6 Id. C.Appeal Of Planning Director's Decision Denvine Petitioner's Renewal Application. 18.Petitioner filed her Notice of Appeal with the Planning Department on August 21,2019 contesting the denial ofher Renewal Application ("Notice ofAppeal").In the Notice ofAppeal,Petitioner stated that she,with the However,the employer ofthe Property Manager,Elite Pacific Properties LLC ("Elite Pacific"), advised him that "[a]s Elite did not have a contractual obligation to file the renewal nor did the owner ask you to file it this year,we believe you did not have a requirement to remember to do so this year."Exhibit 5 at 2.This explanation is contrary to the understanding ofPetitioner because she depended on the Property Manager and Elite Pacific to timely submit the Renewal Application.Transcript at 11 and 45. 12 assistance ofthe Property Manager,prepared the Renewal Application and attempted to submit it to the Planning Department the same day they received the Cease &Desist Notice,August 5,2019.Notice ofAppeal at 2.7 19.The Planning Department did not accept the Renewal Application on August 5,2019 because Mr.Michael Laureta, Planning-Enforcement Program Manager for the Planning Department,was not available that day.Id.Instead,Petitioner "filed the renewal application on August 6,2019,and the packet was denied."Id. 20.The Notice ofAppeal argues Petitioner relied upon the Property Manager to prepare and submit the Renewal Application in a timely manner as he had done the year before.Id.at 1.However,"[i]in 2019,they failed to remember to renew."Id.Consequently,the Planning Department should: consider that [Petitioner is]a person of senior age,limited income and battling for her life against cancer[.Due to these factors,she]was not able to have the facility to file for the renewal on her own and was depending on the professional property manager to care for her interest,and the total failure of Elite Pacific Properties LLC to fulfill the basic duties ofa property manager are not her fault. Although the Notice ofAppeal is not paginated,the page numbers referenced in this Report and Recommendation to the same corresponds to the number ofthe page(s)following the first page ofthat document. 13 Id.at 2.Therefore,Petitioner requested the Planning Department "consider [her] renewal packet,based on the direct harm to [Petitioner's]ability to pay for her health care needs."Id. D.Relevant Authorities and Pertinent Lesislative History. 21.Haw.Rev.Stat.§46-4 provides in pertinent part: (a)This section and any ordinance,rule,or regulation adopted in accordance with this section shall apply to lands not contained within the forest reserve boundaries as established on January 31,1957,or as subsequently amended. Zoning in all counties shall be accomplished within the framework of a long-range,comprehensive general plan prepared 01-being prepared to guide the overall future development ofthe county.Zoning shall be one ofthe tools available to the county to put the general plan into effect in an orderly manner.Zoning in the coun.ties ofHawaii, Maui,and Kauai means the establishment ofdistricts ofsuch number, shape,and area,and the adoption ofregulations for each district to carry ,out the purposes ofthis section.In establishing or regulating the districts,fiill consideration shall be given to all available data as to soil classification and physical use capabilities ofthe land to allow and encourage the most beneficial use ofthe land consonant with good zoning practices.The zoning power granted herein shall be exercised by ordinance which may relate to: (2)The areas in which residential uses may be regulated or prohibited; 14 (4)The areas in which particular uses may be subjected to special restrictions; (5)The location of buildings and structures designed for specific uses and designation of uses for which buildings and structures may not be used or altered; (12)Other regulations the boards or city council find necessary and proper to permit and encourage the orderly development of land resources within their jurisdictions. The council of any county shall prescribe rules,regulations,and administrative procedures and provide personnel it finds necessary to enforce this section and any ordinance enacted in accordance with this section.The ordinances may be enforced by appropriate fines and penalties,civil or criminal,or by court order at the suit ofthe county or the owner or owners ofreal estate directly affected by the ordinances. The powers granted herein shall be liberally construed in favor of the county exercising them,and in such a manner as to promote the orderly development ofeach county or city and county in accordance with a long-range,comprehensive general plan to ensure the greatest beneflt for the State as a whole.This section shall not be construed to limit or repeal any powers ofany county to achieve these ends through zoning and building regulations, except insofar as forest and water reserve zones are concemed and as provided in subsections (c)and (d).[(This paragraph shall hereafter be referred to as the "Liberal Construction Provision".)] 15 Neither this section nor any ordinance enacted pursuant to this section shall prohibit the continued lawful use of any building or premises for any trade,industrial,residential,agricultural,or other purpose for which the building or premises is used at the time this section or the ordinance takes effect;provided that a zoning ordinance may provide for elimination of nonconforming uses as the uses are discontinued,or for the amortization or phasing out ofnonconforming uses or signs over a reasonable period oftime in commercial,industrial,resort,and apartment zoned areas only.In no event shall such amortization or phasing out of nonconforming uses apply to any existing building or premises used for residential (single-family or duplex)or agricultural uses.Nothing in this section shall affect or impair the powers and duties ofthe director oftransportation as set forth in chapter 262.[(This paragi'aph shall hereafter be refen-ed to as the "Continued Lawful Use Provision".)] (emphasis added). 22.KCC §8-17.10 adopted by the Council ofthe County of Kaua'i,State ofHawai'i ("Council"),on February 20,2008 as part ofOrdinance No.864 provided in pertinent part: Section 8-17.10 Nonconforming Use Certificates for Single-Family Vacation Rentals (a)The purpose ofthis section is to provide a process to identify and register those single-family transient vacation rentals as nonconforming uses which have been in lawful use prior to the effective date ofthis ordinance and to allow them to continue subject to obtaining a nonconforming use certificate as provided by this section. 16 (b)The owner,operator or proprietor ofany single-family transient vacation rental which is operating outside ofa Visitor Destination Area on the effective date ofthis ordinance shall by March 30,2009,obtain a nonconformmg use certificate for single family vacation rentals. (c)No nonconfonning use certificate shall be issued by the Planning Director unless the use as a single-family rental is a legal use under the Comprehensive Zoning Ordinance,and the applicant demonstrates to the satisfaction ofthe Planning Director that a dwelling unit was being used as a vacation rental on an ongoing basis prior to the effective date ofthis ordinance and was in compliance with all State and County land use and planning laws,including but not limited to,HRS.[sic]Chapter 205,the Comprehensive Zoning Ordinance,Shoreline Management Area,Flood Plan Management and Shoreline Setback laws at the effective date ofthis ordinance,up to and including,the time of application for a nonconforming use certificate.The Planning Director,in making the decision,shall take into consideration,among other things,the following guidelines: (1)The applicant had a State of Hawai'i General excise tax license and transient accommodations tax license for the purpose ofthe lawful operation ofsingle-family transient vacation rentals for a period long enough to demonstrate actual payment oftaxes. (2)That prior to the effective date ofthis ordinance, applicant had deposits for reservations by transient guests in exchange for compensation for use of subject property as a vacation rental. (3)That applicant had transient guests occupy subject property in exchange for compensation prior to the effective date ofthis ordinance,with a pattem ofconsistency that evidences an ongoing and lawful enteqirise. (f)Failure to apply for a nonconforming use certificate by October 15,2008 or failure to obtain a nonconforming use certificate by March 30,2009,shall mean that the alleged nonconforming use is not a bona fide nonconforming use,and it shall be treated as an unlawful use,unless the applicant 17 demonstrates to the satisfaction ofthe Planning Commission that the alleged vacation rental use meets the criteria under Section 8-17.10(c) and (d).The Planning Director shall prepare an application form which shall be available to the public by March 30,2008. (g)The owner or lessee who has obtained a nonconforming use certificate under this section shall apply to renew the nonconforming use certificate by July 31 for every year. (1)Each application to renew shall include proof that: (A)There is in effect a State ofHawai'i general excise tax License and transient accommodations tax license for the Nonconforming use. (B)notwithstanding any other ordinance or rule to the contrary,the use has been ongoing,with a presumption that if the nonconforming use has occurred less than a total ofthirty (30)days,said use has been abandoned,and (C)that at the time of renewal the dwelling unit was in compliance with all State and County land use or planning laws,including,but not limited to,HRS Chapter 205,the Comprehensive Zoning Ordinance,Shoreline Management Area,Flood Plain Management,and Shoreline Setback laws. (2)Failure to meet these conditions will result in the denial ofthe application for renewal ofthe nonconforming use certificates. (3)Applicant shall pay a renewal fee of One Hundred Fifty Dollars ($150.00)which shall be deposited into the County General Fund. (emphasis added). 23.Thejustification for the Council's passage ofOrdinance No.864 was,in pertinentpart,as follows: SECTION 1.Findings and Purpose. 18 The Council of the County of Kaua'i finds that there is a compelling need to regulate single-family transient vacation rentals on Kaua'i.Single-family transient vacation rentals are occurring at a greater rate and inflicting a larger impact on the community ofKaua'i than was ever anticipated in the County's original Comprehensive Zoning Ordinance.While this type ofvisitor unit could be compatible with fhe character and nature ofKaua'i and while it has certain positive advantages to the community and is desirable in terms ofoffering a mix of accommodations to the visitor, the uncontrolled proliferation of vacation rentals in residential and other areas outside the Visitor Destination Areas (VDAs)is causing significant negative impacts to certain residential neighborhoods,foreshadowing similar potential impacts on other areas of the island [sic] The County General Plan,updated in the year 2000, recognizes this need by its policy for "Altemative Visitor Accommodations,"which reads as follows: "4.2.8.2 Alternative Visitor Accommodations (a)The County ofKaua'i shall recognize alternative visitor accommodations,such as B&Bs,vacation rentals,inns,cabins, and retreat centers. (b)The County shall enact clear standards and permit processes for regulating alternative visitor accommodation structures and operations in Residential,Agriculture,Open,and Resort zoning districts. (c)County development standards and permit processes shall be scaled to the size and potential impact ofthe use: [...] (d)Permitting processes should consider the cumulative impact that a large concentration of alternative visitor units can have on a residential neighborhood." Census data shows that seasonal rentals account for 45%ofthe new housing units built on Kaua'i between 1990 and 2000,a greater percentage than housing built for long-term renters (14%)or for owner-occupied use (36%).Since 2000,out ofthe 2,050 new 19 residential units,1,070 have been built for the seasonal homes market and less than halfhave been for local families to rent (46)or own (936).The potential for vacation rental use increases the value and thus the selling price and investment rating of property on Kaua'i,which increases prices and adds another potential layer of speculation in the real estate market.This also means that the limited available infrastructure and resources on Kaua'i, including roads,water,sewer capacity,building materials,and contractor time are being used primarily for expensive second or third homes rather than the primary home needs oflocal residents. In oceanfront or other places ofpremium real estate value, second and third homes and vacation rentals (often one and the same)are displacing traditional neighborhoods where people of low and moderate income have been able to live in the past. Besides contributing to a lack of affordable housing in the community,this is changing the social character of neighborhoods where neighbors used to know each other.This has tended to make these neighborhoods more vulnerable to crime.While regulating single-family vacation rentals will not guarantee more affordable housing,it will dampen speculation and bring a halt to uncontrolled growth and cumulative impacts ofvacation rentals which have affected the traditional neighborhoods of 'Anini and Ha'ena,and which could or are beginning to also affect neighborhoods such as Waimea Valley, Kekaha,and the makai side ofKapa'a Town. The Council also fmds that the transient accommodation and general excise taxes on various vacation rentals are sometimes not being paid,causing a loss ofrevenue to state and county govemments and a failure to pay for impacts associated with visitors. The purpose of this bill is to restore a balance between primary residences and single-family transient vacation rentals by:1)requiring registration ofvacation rentals or nonconforming use certificates and setting standards for all vacation rentals,2)explicitly prohibiting new single-family vacation rentals outside visitor destination areas (multi-family 20 vacation rentals are already so prohibited),and 3)identifying and allowing nonconforming uses where single-family vacation rentals have been operating lawfully prior to approval of this bill. (emphasis added). 24.KCC §8-17.10(g)was renumbered KCC §8-17.10(h)by the Council on January 14,2009 as part ofOrdinance No.876,and on July 23,2013 Ordinance No.950 amended that subsection to its present form as follows: (h)The owner or lessee who has obtained a nonconforming use certificate under this section shall apply to renew the nonconforming use certificate annually on the date ofthe issuance ofthe nonconforming use certificate. (1)Each application to renew shall include proofthat there is a currently valid State ofHawai'i general excise tax license and transient accommodations tax license for the Nonconforming use and shall be received by the Department prior to the expiration date of a held non-conforming use certificate.Failure to meet this condition will result in the automatic denial ofthe application for renewal ofthe nonconforming use certificates. (2)Upon renewal,the Planning Department may initiate re-inspection ofproperties for compliance with other provisions ofthis chapter,or other pertinent land use laws,and may withhold approval ofa renewal application and issue cease and desist notices to the applicant until all violations have been resolved to the satisfaction ofthe Planning Director. 21 (3)Applicant shall pay an annual renewal fee ofFive Hundred Dollars ($500.00)8 which shall be deposited into the County General Fund. (emphasis and footnote added). 25.KPAR-8-19-1 of the Interpretive Administrative Zoning Rules And Regulations (2014)OfThe Kaua 'i Planning Commission Relating To Chapters 8, 9,and 10 OfThe Kaua 'i County Code (1987)effective November 23, 2017 ("Inteqaretive Rules")provided in pertinent part: RULE: 1.NQN-CONFORMING USE CERTIFICATE (NCUC) RENEWAL A.Requirements for Renewal.Applications for renewal shall be accepted by the Planning Department sixty (60)[days]no earlierthan.. .priorto theNCUC's expirationdate.The annual renewal deadline is the same day and month ofthe original determination made by the Planning Department, which certified the non-conforming use.Along with the mandatory renewal form,the following documents must accompany the submittal,pursuant to KCC 8-17.10(h)(l): 1.The renewal fee in the amount set forth by ordinance; 2.A copy ofa current and valid General Excise Tax (GET) certificate for the transient vacation rental;and 3.A copy of current and valid Transient Accommodation Tax (TAT)certificate for the transient vacation rental. Ordinance No.974 adopted by the Council on September 30,2014 increased the renewal fee to 22 B.Renewal Applications.Itis the certificate holder's responsibility to submit applications to renew the NCUC by the NCUC 's expiration date.The Planning Department shall not be responsible for notifying the holder of any pertinent deadlines. C.Late Renewal Applications.Failure to submit an application to renew the NCUC by the NCUC's expiration date •will result in the automatic denial ofthe application.The Planning Department shall not accept apphcations submitted after the expiration date. (italics emphasis added)(bold emphasis in original). 26.KPAR-8-19-1 was adopted by the Planning Commission ofthe County ofKaua'i at its meeting held on September 26,2017,approved by the Mayor ofthe County ofKaua'i on October 6,2017,and filed with the Office of the County Clerk for the County ofKaua'i onNovember 13,2017. 27.The Interpretive Rules have the force and effect of law.County ofKaua'i Charter,ArticleXIV,Section 14.03(E). 28.If any Finding ofFact herem should be designated as a Conclusion ofLaw,the same shall be deemed to have been identified as such, Seven Hundred FiftyDollars ($750.00). 23 IV.CONCLUSIONS OF LAW.9 A.The Responsibility For Timely Submittal Of The Renewal Notice Is The Responsibilitv OfThe Owner. 1.Petitioner first argues "the Planning Dept.has added on so many requirements beyond the original request for the property being in use as a vacation rental,and proofthat the General Excise and Transient Vacation Rental taxes were paid,that it created a system too difficult and onerous that Rosa Giem could not comply without a real estate professional."Petitioner's Reply at 2.In other words,Petitioner's argument is that because the Planning Department promulgated the requirements which made it difficult for Petitioner to complete the Renewal Application without the assistance ofthe Property Manager,she should not be penalized for his failure to timely submit the same.Id.a 4. 2.KCC §8-17.10(h)provides that the "owner or lessee who has obtained a Nonconforming Use Certificate under this Section shall apply to renew the Nonconforming Use Certificate annually on the date ofissuance ofthe Only the arguments raised in Petitioner's Reply are addressed in this Conclusions ofLaw Section because all prior arguments set forth in the Notice ofAppeal and Petitioner's PH Statement are deemed waived.See generalSy Rosa v.Johnson,3 Haw.App.420,430, 651 P.2d 1228,1236 (1982)(Specified errors may be deemed abandoned ifappellant presents no argument in briefs conceming them.)citing Quality Furniture,Inc.v.Hay,61 Haw.89, 595 P.2d 1066 (1979)reh 'g denied,61 Haw.661 (1979),State v.KahuaRanch,47 Haw.466, 390 P.2d 737 (1964),reh'g denied,47 Haw.485;and Dement v.Atkins&Ash,1 Haw.App.324, 631 P.2d 606 (1981). 24 Nonconforming Use Certificate.""Owner"is defined as "the holder[]ofat least seventy-five percent (75%)ofthe equitable and legal title ofalot."KCC §8-1.5. 3.The Interpretive Rules also provide that "[i]t is the certificate holder's responsibility to submit applications to renew the NCUC by the NCUC's expiration date."KPAR-8-19-1 Rule l.B.There are no exceptions to this requirement.Transcript at 116-17. 4.Petitioner is the "Owner"ofthe Subject Property and "Certificate Holder"ofTVNCU #5023.Exhibit F at 1,Finding ofFactNo.1,and Transcriptat 10. 5.There is no exception to the timely submittal ofthe Renewal Application.See KCC §8-17.10(h),KPAR-8-19-1 Rule l.C.,and Transcript at73. 6.Petitioner is ultimately responsible to ensure the Renewal Application is timely submitted to the Plannmg Department by the date of issuanceofTVNCU#5023.KCC §8-17.10(h)and KPAR-8-19-1 Rule l.B.She cannot rely upon the Property Manager's failure to timely submit the Renewal Application to the Planning Department to be excused from complying with the Deadline.See generally Applications ofHerrick,82 Hawai'i 329,344, 922 P.2d 942,957 (1996)("When individual interests are adversely affected by a legislative action,publication ofthe statute puts all individuals on notice ofa 25 change in the law ofthejurisdiction;individual notice is not required.")citing Texaco,Inc.v.Short,454 U.S.516,531-38,102 S.Ct.781,793-97, 70 L.Ed.2d 738 (1982)("[I]t has never been suggested that each citizen must in some way be given specific notice ofthe impact ofanew statute on his property before that law may affect his rights.")Id.at 536,102 S.Ct.at 796. B.The 2018 Renewal And 2019 Renewal Notice Was Adequate To Advise Petitioner Of The Requirements ofKCC §8-17.10(b) 7.Petitioner's first argument also complains the Notice of Renewal "was incomplete because there is a deadline,but no notice as to when the permit filing can commence being executed because Planning Dept.changes the rules every year."Petitioner's Reply at 4. 8.The Notice of Renewal provides Petitioner may renew TVNCU #5023 "no less than thirty (30)days,and up to two months,prior to the annual renewal date ofJuly 31,2019,utilizing the most current renewal form on [the Planning Department's]website,and the renewal fee existing at that time (presently $750)."Exhibit 4 at 1 (emphasis in original). 9.The Notice ofRenewal also sets forth the information and documents required to be submitted with the Renewal Application.Id.at 2. 26 10.The Notice of Renewal further cautions Petitioner that "[s]hould [her]renewal be at least one (1)day late,[she]will be served with a Cease &Desist and Notice ofForfeiture."Id. 11.The text ofthe Notice ofRenewal includes information as to when,where,and what are the requirements ofthe renewal,and therefore, adequate notice was provided to Petitioner for her Renewal Application.See generally Korean BuddhistDae Won Sa Temple ofHawaii v.Sullivan, 87 Hawai'i 217,243,953 P.2d 1315,1341 (1998)("The basic elements of procedural due process oflaw require notice and an opportunity to be heard at a meaningful time and in a meaningful manner."). C.KCC §8-17.10(h)Does Not Overrule Haw.Rev.Stat.§46-4fa). 12.Petitioner next argues that KCC §8.10-17 cannot overrule Haw.Rev.Stat.§46-4 and therefore,only discontinuance ofuse would terminate the transient vacation rental use ofthe Subject Property under state law.See generally Petitioner's Reply at 4. 13.All parts ofHaw.Rev.Stat.§46-4 are to be given effect to further the purposes ofthat statute as pronounced by the legislature.See generally RobertD.Ferris Trust v.Planning Com 'n ofCounty ofKauai,138 Hawai'i 307, 27 310,378 P.3d 1023,1026 (2016)and Roaring Lion,LLCv.Exclusive Resorts PBL,1,LLC,2013 WL 1759002 at 10 (Haw.Ct.App.2013). 14.When taking into account the purpose ofHaw.Rev.Stat.§46-4 which is to empower the counties to enact zoning ordinances allowing and encouraging the most beneficial use ofthe land consonant with good zoning practices,and constming it in a manner consistent with that purpose,the zoning mandate ofKCC §8-17.10(h)is to be liberally construed to permit the nonconforming use ofthe Subject Property to continue provided TVNCU #5023 is continuously maintained and registered with the Planning Department (i.e.Liberal Construction Provision). 15.Should the renewal of TVNCU #5023 lapse as in this Contested Case,the nonconforming use is no longer a lawful use because the Subject Property lacks a "Nonconforming Use Certificate for [that]single family vacationrental".10 KCC §8-17.10(b). 16.Other principles of statutory construction also support the above interpretation ofHaw.Rev.Stat.§46-4 because when nonconforming use certificates were first required by Ordinance No.864,that ordinance also contained a renewal procedure for those nonconforming certificates. 28 17.It was contemplated by the Council that the nonconforming use would only continue as a lawful use in accordance with the Continued Lawful Use Provision in Haw.Rev.Stat.§46-4(a)provided the certificate to pennit that use is annually renewed pursuant to KCC §8-17-10."See generally Waikiki Marketplace Inv.Co.v.Chair ofZoning ofAppeals ofthe C&C ofHonolulu,86 Hawai'i 343,354,949 P.2d 183,194 (1997)("[The]previous lawfulness ofuse is to be determined in reference to the zoning ordinance in existence at the time that property owner s structure or use ofproperty was rendered unlawful under a change to the zoning laws."). 18.KCC §8-17.10(h)does not overrule Hccw.Rev.Stat.§46-4,but rather,the later empowers the fonner to enact other grounds for continued lawful use ofthe Subject Property.Consequently,KCC §8-17.10(h)permits continued Such action by Petitioner may also be viewed as a "Voluntary Forfeiture"pursuant to KPAR-8-19-1 Rule 1 .G,or "discontinuance"ofthe Transient Vacation Rental under the Continued Lawfiil Use Provision in Huw.Rev.Stat.§46-4(a). This construction ofHaw.Rev.Stat.§46-4 is entirely consistent with the purposes ofboth that statute andKCC §8-17.10 because the former granted the counties zoning powers to furtherthe intent oftheir respective general plans,and the County ofKaua'i concluded the need to control the proliferation ofvacation rentals in residential areas which causes real estate prices to skyrocket beyond the reaches ofmany ofits residents warrants "a balance between primary residences and single-family transient vacation rentals by:1)requiring registration ofvacation rental or nonconforming use certificates and setting standards for all vacation rentals,2) explicitly prohibiting new single-family vacation rentals outside visitor destmation areas (multi- family vacation rentals are already so prohibited),and 3)identifying and allowing nonconforming uses where single-family vacation rentals have been operating lawfally prior to approval of [Ordinance No.864]."Ordinance No.864 at 2. 29 lawful use ofthe Subject Property as a Transient Vacation Rental provided TVNCU #5023 is annually renewed by July 31st ofeach year. D.Substantial Deference Is Accorded The Council In Determining That KCC 8-17.10 Is Designed To Limit Transient Vacation Rentals Outside OfVDAs To Maintain The Supply OfAffordable Housing For Residents OfKaua'i. 19.Finally,Petitioner argues the Council's intent to regulate Transient Vacation Rentals outside ofVisitor Destination Areas to maintain affordable housing opportunities for residents ofKauai does not apply to her situation.Petitioner's Reply at 5.In Petitioner's case,the operation of the Subject Property as a Transient Vacation Rental is for the purpose of having: a home available for her family to come home to on the island ofKaua'i.Vacation renting allows her to share the home with her grown children and their fainilies.The revenue from vacation renting pays to maintain the house,and the taxes and insurance for the home and is an important source of income for her. Id. 20.The Council observed that the "uncontrolled proliferation ofvacation rentals in residential and other areas outside ofthe Visitor Destination Areas (VDAs)is causing significant negative impacts to 30 certain residential neighborhoods,foreshadowing similar potential impacts on other areas ofthe island".Ordinance No.864 at 1. 21.Enactment ofKCC §8-17.10 is the Council's attempt to address the problem observed in Ordinance No.864 and therefore, substantial deference is accorded to that action.See generally Sierra Club v.Department of Transportation ofState ofHawai'i,120 Hawai'i 181,196, 202 P.3d 1226,1241 (2009)(The legislature's fmdings are entitledto substantial deference provided they adhere to the provisions ofthe Constitution). 22.The language ofKCC §8-17.10(h)is also unambiguous in that it applies to the renewal ofTVNCU #5023.Therefore,Petitioner may not avoid the requirements ofthis provision on grounds the intent of the Council in enacting that legislation would not be furthered in the application ofKCC §8-17.10(h)to her situation.See generally Alfred v. Utah Statement Retirement Bd,914 P.2d 1172,1175 (Utah Ct.App.1996) ("Unless statutory language is unreasonably confused,moperable,or in blatant contradiction to the express purpose ofthe statute,this court applies the statute's literal wording and does not look beyond the language to ascertain legislative intent.")(intemal quotation marks and brackets omitted). 31 V.CONCLUSION. It is recommended that the Planning Commission AFFIRM the decision ofthe Planning Director to DENY Petitioner's Renewal Application because Petitioner has not met her burden ofproofby a preponderance ofthe evidence establishing that the decision ofthe Planning Department was based on an erroneous fmding of a material fact,or the Planning Director had acted in an arbitrary or capricious manner,or had manifestly abused his discretion.12 Rule l-9-2(b)(6)ofthe Rules ofPractice andProcedure ofthe Kaua'i County Planning Commission (Codified May 2014). DATED at Honolulu,Hawaii,January 25,2021. /s/Harian Y.Kimura HARLAN Y.KIMURA Hearing Officer for the Planning Commission ofthe County ofKaua'i Therefore,Petitioner's Due Process Rights have been satisfied.See generally Alejado v.City andCounty ofHonolulu,89 Hawaii 221,226,971 P.2d 310,315 (App.1998)("The due process clause strives to ensure that individuals who have property rights are not subject to arbitrary governmental deprivation ofthose rights.")(internal quotation marks omitted). 32 BEFORE THE HEARING OFFICER OF THE PLANNING COMMISSION OF THE COUNTY OF KAUA'I IntheMatterof:)CC-2019-18 )TVNCU#5023 Petition to Appeal Planning )TMK:(4)2-6-006:004 Director's Decision Regarding Denial ) of 2019 Renewal Application Packet )CERTIFICATE OF SERVICE for Non-Conforming Use Certificate ) TVNCU #5023,Hale Haloko Kai,) located at 5111 Hoona Road,in ) Koloa,Kaua'i,Hawai'i,identified by ) Kaua'i TMK No.(4)2-6-006:004 ) containing 6,035 square feet,) ROSA GIEM, Petitioner, vs. PLANNING DEPARTMENT OF THE COUNTY OF KAUA'I, Respondent. CERTIFICATE OF SERVICE I hereby certify that a copy ofthe foregoing document was duly served upon the following parties listed below,in the manner described thereto,at their last-known addresses,.on January 25,2021. U.S.Mail x Hand Deliverv ROSA GIEM 4220 Upa Road Koloa,Kaua'i,HI 96756 Email:normgiem(5),gmail.com kellvgiem(%gm ail.com Petitioner Pro Se MATTHEW M.BRACKEN,ESQ. County Attorney CHRIS DONAHOE,ESQ. Deputy County Attomey County ofKaua'i 4444 Rice Street,Suite 220 LThu'e,Kaua'i,HI 96766 Email:cdonahoe@kauai.gov Attomeys for Ka'aina S.Hull,Director, County ofKaua'i,Department of Planning Email x x x MAHEALANI M.KRAFFT,ESQ. First Deputy County Attorney County ofKaua'i 4444 Rice Street,Suite 220 Liliu'e,Kaua'i,HI 96766 Email:mla'afft(@kauai.gov x x Attomey for Planning Commission of the County ofKaua'i ELLEN CHING Administrator Office ofBoards and Commissions County ofKaua'i 4444 Rice Street,Suite 150 Lihu'e,Kaua'i,HI 96766 Email:eching(5)kauai.gov asegreti(S),kauai.gov U.S.Mail x Hand Deliverv Email x DATED at Honolulu,Hawaii,January 25,2021 /s/Harlan Y.Kimura HARLAN Y.KIMURA Hearing Officer for the Planning Commission ofthe County ofKaua'i hawaiilawyercom' DAMON KEY LEONG KUPCHAK HASTERT A LAW CORPORATION Attorneys at Law 1003 Bishop St/eef,Suite 1600 Honolulu,Hawaii 96813-6453 Tetephone(808)531-8031 Facsimile (808)533-2242 E-Mail:info@hawaiilawyer.com Website:mvw.hawaiilawyer.com Niclwlas K.Ernst MalthewT.Evans Tred R.Eyerly Kayla M.Fajota Dlane D.Hastert ChristineA.Kubota Cregory W,Kugle Kenneth R.Kupchak NaLan DentsCH.Leong Megan L.M.Lim' David P,McCautey CaseyT.Miyashifo Mark M.Murakami Veronica A.Nordyke Anna H.Oshiro Laurel E,Pepe Loren A.Seehase Megumi Soga Dougtai C.Smith RossUehara-Tlltan Cheyne I.Y,YGnemori MichaelA.Yosfiida Madeieine M.V.Young2 Joanna C.Zeigler DirectorEmeritus Robert H.Thomas OfCounsel jed Kurzban3 R.Charles Bocken (1921-2020) C.F.Damon,Jr. (1926-2017) Charles W.Key (1929-2008) 'Admittedin HawaiiandV/ashington }Admitted in Hawaii and Califomia ]Admitted in Hawaii and Florida TTTMERITAS iA^FIPWS AOKLU'MDE Providing business clients worldwideaccess to sophisticated legal advice and exceptional service. February22,2021 VIA EMAIL &CERTIFIED MAIL Clerk ofPlanning Commission Planning Commission County ofKauai,State ofHawaii 4444 Rice Street,Suite A-473 Lihue,Hawaii 96766 DNakamatsu@kauai.gov Mr.Ka'aina S.Hull Director of Planning Planning Department County ofKauai,State ofHawaii 4444 Rice Street,Suite A-473 Lihue,Hawaii 96766 khull@kauai.gov Re:Notice of Appeal and Demand for Contested Case Hearing from Notice ofViolation &Order to Pay Fines for 4-1194 Kuhio Hwy #1, Kapaa,Hawaii,TMK:(4)4-5-0006:005 Dear Planning Commission and Director Hull: This firm represents Michael and Paula Hulme the owners of the property located at 4-1194 Kuhio Hway #1,Kapaa,Hawaii,TMK:(4)4-5-0006:005 (the"Property").The Hulmes received a Notice of Violation &Order to Pay Fines dated January 25,2021 ("NOV").This letter constitutes a notice of appeal and demand for a contested case hearing from the NOV pursuant to Chapter 9 of the Rules ofPractice and Procedure ofthe Kauai PIarming Conimission. The NOV alleges that the Property was utilized as a transient vacation rental ("TVR")outside of Ihe visitor destination area ("VDA")in violation of Kauai County Code ("KCC")§8-17.8.The NOV is factually and legally insufHcient. First,there is a complete lack of evidence of any violation,let alone any reliable, probative,and substantial evidence as required under Hawaii law.Haw.Rev.Stat.§ 91-14;Dao v.Zoning Bd.ofAppeals,144 Haw.28,434 P.3d 1223 (App.2019). x'a. MAR O 9 2021 hawaiilawyer.com1 DAMON KEY LEONG KUPCHAK HASTERT Clerk ofPlanning Commission PIanning Commission Mr.Ka'aina S.Hull Director ofPlanning Planning Department February 22,2021 Page 3 Here,the Director acted erroneously,arbitrarily,and manifestly abused his discretion when he issued the NOV and the Order to pay a $10,000 fine.For the foregoing reasons.and such others that may be shown at the hearing—theHulmes reserve the right to amend,supplement and assert ftirther objections—theHulmes respectfully request a contested case hearing pursuant to Chapter 9 of the Kauai Planning Commission Rules. Very truly yours, DAMON KEY LEONG KUPCHAK HASTERT /s/Joanna C.Zeigler Gregory W.Kugle Joanna C.Zeigler GWK:JCZ/ravp:taill 572410 PLANNING COMMISSION THE COUNTY OF KAUA'I KA'AINA S.HULL,CLEIiK OF THE COMMISSION MEMORANDUM Glenda Nogami Sh-euferi CHAIR Donna Apisa VICE-CHAIR RoyHo Lori Otsuka Melvin Chiba Helen Cox Francis DeGracia MEMBERS To: Fr: Date: RE: Honorable Commissioners Kauai Planning Commission .>Kaaina S.Hull Clerk of the Commission February 22,2021 Clerk of the Commission's Recommendation to Refer an Appeal of the Planning Director's Decision Related to the Planning Director's Notice of Violation &Order to Pay Fines for the unpermitted transient vacation rental use outside of the Visitor Destination Area,Michael and Paula Hulme,4- 1194 Kuhio Highway #1,Kapaa,Hawaii,Tax Map Key (4)4-5-006:005, received on February 22,2021 via email,for referral to Board and Commissions as Contested Case File No.CC-2021-2. Please refer this appeal filed as CC-2021-2 to Boards &Commissions to conduct the required analysis and contested case hearing,as necessary. Services should include but not be limited to:procure the services of a hearings officer, conduct the hearing,consolidate appeals where necessary,dispose of all pre-hearing motions,receive and record all evidence including subpoenaing any witness,and render a recommended filings of fact,conclusions of law,decision and order for the Planning Commission's Action. www.kauai.gov 4444 Rice Street Suite A473 •Lihu'e,Hawai'i 96766 •(808)241-4050 (b) An Equal Opportunity Rmployer (808)241-6699 (f)X.^L.4. MAR fl 9 202j CADES SCHUTTE LLP MAUNA KEA TRASK 8418-0 3136 Akahi Street,Suite A Lihu'e,HI 96766 Telephone:(808)521-9297 Fax:(808)540-6015 Attorneys for Petitioner HBR ENTERPRISES,LLC 20 0£;r26 /;y:24 Hc,;,,, BEFORE THE COUNTy OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11. Docket No. HBR ENTERPRISES LLC'S PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE WITH THE COMPREHENSIVE ZONING ORDINANCE AND VARIANCE APPLICATION PEEMITV-72-11 MEMORANDUM IN SUPPORT VERIFICATION OF PETITION DECLARATION OF MAUNA KEA TRASK EXHIBITS "1"-"20" CERTIFICATE OF SERVICE PETITION FOR DECLARATOEY ORDER REGARDING NONCOMPLIANCE WITH THE COMPREHENSIVE ZONING ORDINANCE AND VARIANCE APPLICATION PERMIT V-72-11 COMES NOW Petitioners DENNIS R.SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R.SCIOTTO AND CAROL ANN SCIOTTO COMMUNITy PROPERTY TRUST,EDWARD E.COLSON,III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST owners of Unit 16A and HBR ENTERPMSES,LLC,a Hawai'i Limited Liability Company,and long term lessee of Unit 16A (collectively "Petitioner"or "HBR Enterprises"),by and through counsel,Cades Schutte LLP,and respectfully submits its Petition for a Declaratory Order (the "Petition"),pursuant to Chapter 10 (1-10-1 &1-10-2)of the Rules of Practice and Procedure of the Kauai Planning Commission ("Conuiussion Rules")and Hawaii Revised Statutes ("HES")§91-8. I.PETITION FOR DECLARATORY ORDER REGARDING NONCOMPLIANNCE WITH THE COMPREHENSIVE ZONING ORDINANCE AND VARIANCE APPLICATION PERMIT V-72-11. Pursuant to the Coniinission Rules,the forin and contents required for the Petition for Declaratory Order are as follows: 1,2,3.Name,Address and Telenhone Number ofPetitioner Name:HBR Enterprises,LLC c/o Cades Schutte,LLP,3135 Akahi Street,Suite A Lihu'e,HI 96766 Telephone:(808)621-9297 4.Sienature of Petitioner. This Petition is signed by Petitioner's counsel,who is authorized to sign on behalf of Petitioner.A letter of authorization is attached hereto as Exhibit 1. 6.A desienation ofthe specific statutorv provision,rule.or order in auestion.toeether with a statement ofthe controversv or uncertainty involved. The permit in question is "Variance Application Permit V-72-11 Apartment Use,Hanalei,Kauai (Hanalei Beach &Racquet Club)"(V-72- 11").See,Exhibit 2.V-72-11 permitted General Hawaiian Development Corporation ("GHDC")to develop the Hanalei Beach &Racquet Club (the "Club")a 134 unit apartment complex centering around a beach and racquet club.V-72-11 was issued pursuant to the Order of the Kauai Planning Commission (the Coinnussion )after hearing on July 6,1972 under the provisions of the Interim Zoning Ordinance (IZO").The specific statutory provisions of the IZO that are relevant to this proceeding are Sections 2,3, and 6. Little inore than a nionth after V-72-11 was granted,the Kauai County Council passed the Comprehensive Zoning Ordinance ("CZO")on August 17, 1972.The CZO became effective September 1,1972 and is still in effect today.The CZO placed the Club within the R-10 zoning district.The provisions of the CZO that are relevant to this proceeding are:Article 3, including but not limited to Sections 8-3.1,8-3.2,8-3.3,and 8-3.6;Article 4, includmg but not limited to Sections 8-4.1,8-4.2,8-4.4,8-4.5, 8-4.6,8-4.7,and 8-4.9;Article 6,including but not limited to Sections 8-6.1,8-6.2,8-5.3,8-5.4, and 8-6.6;Article 13,including but not limited to Sections 8-13.1,8-13.2,and 8-13.3;and Article 17,including but not limited to,Sections 8-17.1,8-17.2,8- 17.3,8-17.4,8-17.6,8-17.6,8-17.7,8-17.8, 8-17.9,and 8-17.11. Currently the Club is known as the Hanalei Bay Resort (the "Resort"). The controversy or uncertainty involved in this Petition relates to the specific use permitted under V-72-11 and whether the current use of renting out individual lockout portions ofthe respective 134 apartment units exceeds the rights granted under V-72-11. 6.A statement ofthe uetitioner B interest in the subiect matter,includine the reasons for submission of the petition. Petitioner HBR Enterprises,LLC,dba Bali Hai Restaurant and Happy Talk Lounge ("Bali Hai")is a long term lessee of Unit 16-A within the Resort located in Princeville,Kauai.HBR Enterprises,LLC operates a restaurant business as allowed under V-72-11.HBR Enterprises has a direct interest in ensuring that Hanalei Bay Resort is complying with its legal obligations under V-72-11,the Resorts governing documents,and the Protective Covenants,Charter of Incorporation and Bylaws of the Princeville at Hanalei Community Association ("PHCA"). When V-72-11 was granted the Commission specifically approved GHDC's application for Hanalei Beach and Racquet Club as an "Apartment Use"of the property.The Commission did not approve the use of the Project as either a "hotel use or hotel-apartment use,and from 1972 to approximately 2020 the Department consistently maintained that the rental of individual lockout portions of the apartinent units was not an allowable use. However,recently the Department has abruptly changed course and now allows the transient rental of the individual lockout portions of the apartment units as a grandfathered use"because of the apartment's design. See,Exhibit 3.The allowance of individual rental of the internal apartment rooms has created an extreme parking deficiency for the project and the original one-for-one parking standard for the apartment units utilized by the Department with extra parking &r employees and special tennis events is not sufficient to accommodate the increase in units attributable to the allowance of renting lockout portions of the apartnient units. HBR is seeking a Declaratory Order from the Commission that the rental ofindividual lockout rooms within each ofthe 134 approved apartment units is not allowed under V-72-11 and therefore is not a grandfathered use under the CZO. 7.Statement of Petitioner's Position. Petitioner's position is that V-72-11 originally permitted the Club as a residential multi-dwelling "Apartment Use"centered around a recreational tennis and beach club that supplemented the general plan for Hanalei and enhanced the stature of the Princeville recreational community.Although the Club was originally permitted under the IZO as a variance,V-72-11 did not allow the rental of the individual lockout rooms within the respective apartment units.Despite the original apartment design including separate entrances and internal lockouts,the Commission never granted the "use"of these individual internal roonis as transient vacation rental units,hotel units,or otherwise.This is evidenced by numerous letters from the Department from 1973 to 2017 indicating that such use was not allowed. Pursuant to Kauai County Code ("KCC")Section 8-2.4(f)(6)hotels are not allowed within the R-10 zoning district. 8.Memorandum in Support Containine the Reasons and Leeal Authori- ties in Sunuort of the Petition. Petitioner's Memorandum in Support of the Petition is attached herewith. 6 DATED:Lihu'e,Hawai'i,October 22,2020. MAUNA K^A TRASK Attorneys for Petitioner HBR ENTEPRISES BEFORE THE COUNTy OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11. MEMORANDUM IN SUPPORT OF HBR ENTERPRISES LLC'S PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE WITH THE COMPREHENSIVE ZONING ORDINANCE AND VARIANCE APPLICATION PERMITV-72-11 MEMORANDUM IN SUPPORT OF HBR ENTERPRISES LLC'S PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE WITH THE COMPREHENSIVE ZONING ORDINANCE AND VARIANCE APPLICATION PERMIT V-72-11 Petitioner HBR Enterprises,LLC ("Petitioner"or "HBR Enterprises")respectfully submits this Memorandum in Support of its Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11 (the Petition")pursuant to the Rules of Practice and Procedures of the Kaua'i Planning Commission. I.PRELIMINARY STATEMENT The Hanalei Beach and Racquet Club (the "Club")opened in 1978 under the project name "Hanalei Bay Resort"(the "Resort").See Exhibit 4, II.1.When it first opened it was the jewel ofKaua^i","but three decades of developer mismanagement had left it with climbing delinquencies,depleted reserves,and 15 years of deferred renovations."See Exhibit 5.Then in the early evening ofJuly 1,2011 a fire erupted within the common areas of the Resort forcing the closure of the restaurant,bar,front desk,convenience store,and fitness center.Id.As a result,the Resort had to contend with a multimillion dollar insurance claim and major reconstruction project on top of everything else including their financial troubles.Id. In November 2012,the Resorts Vacation Owners Association ("VOA") held a meeting with the Resort's condominium association,the Association of Apartment Owners (AOAO ),to discuss common concerns and long-term plans.Id.Both associations stated they desired the reopening the areas damaged in the fire,establishing proper reserve funding,and reviving the resort s reputation as one of the most desirable properties in Princeville.Id. In February 2013,the Resort contracted with Grand Pacific Resorts,a California based tiineshare Manageinent Conipany at which both associations looked towards for financial advice.Id.By 2015 the VOA was in the black,able to fund a healthy reserve keeping theni well position for years to come.Id.As a result,both the AOAO and VOA were able to address their other goals with respect to the Resort's common areas.In 2015,AOAO President Michael Rembis attributed the Resort's renaissance to the strong partnership between the AOAO and the VOA.Id.However,in their pursuit for financial success and ever increasing profit margins,the Resort's sister associations lost sight of the original permitted uses of the Club and how the deviation from the uses allowed under V-72-11 negatively impacted the Club facilities its owners and the Princeville community. This Petition is brought under Chapter 10 of the Rules of Practice and Procedures of the Planning Commission (the Coininission Rules"). Petitioner respectfully requests that the Commission issue a declaratory order finding:1.the rental ofindividual rooms within each ofthe apartment units is not allowed under V-72-11 and therefore is not a grandfathered use under the CZO. II.BACKGROUND 1.Permitting History. Hanalei Bay Resort (the Resort )is the project naine for the Hanalei Beach &Racquet Club a condominiuin development located on a 19.174 acre parcel in Princeville,Kauai (TMK (4)5-4-011:003 HPR 0001 thru 0137).See Exhibit 6.The Resort property is split zoned with 13.4 acres in the R-10 zone and the balance in the Open zoning district. On April 28,1972,General Hawaiian development Corporation ("GHDC )submitted a variance application under Section 6 of the Interim Zoning Ordinance (IZO")seeking approval to develop the Hanalei Beach & Racquet Club (the "Club")a 132 unit apartinent coniplex centering around a beach and racquet club.See Exhibit 7.GHDC represented that the Club would have 2 swimniing pools and 11 championship tennis courts,including an exhibition "center court"located in front of the Club.Id.GHDC proposed to provide parking for 150 cars near the entrance of the property.Id.In justifying the variance,GHDC represented that the Club was designed to supplement and compliment the general plan for Hanalei;it would be a major center for tennis activity on both amateur and professional levels,was ideally suited to enhance the stature of the Princeville recreational community and the variance would therefore be in the public interest.Id. While the variance application was pending both GHDC and the Planning Department (Department )were aware that the new Comprehensive Zoning Ordinance ("CZO")would be passed by the County Council.An undated Departnient staff report notes that the proposed zoning for the Club property was R-10.See Exhibit 8.According to a notation on said staff report a communication dated May 23,1972 revised the plot plan and density for the Club to 10.0 units/acre for a total of 134 units which was consistent with the proposed R-10 zoning ofthe Club property.Id. According to the June 2,1972 Staff Report,the proposed development density of 10 units per acre was in compliance with the density set on the master plan for Princeville.See Exhibit 9.As such,a maximum of 134 units was possible on the 13.4 net acres leaving approxiinately 6 acres in open space.Id.The living units of the project included 60 studios,12 three- bedroom units and 62 two-bedroom units in two and three-story structures. Id.The proposed development would also include a clubhouse containing a variety of uses such as a pro shop,dining rooms,bars,shops,offlces,a locker room with a sauna,and a lounge.Id.However,the Department stated that the parking required for the proposed project was 228 spaces and only 160 spaces were provided,a deficiency of 78 parking spaces.Id.Nonetheless,the Department reconimended granting the proposed variance subject to five conditions,including resolving the parking deficiencies.Id. On June 6,1972,the CZO was introduced by council man Ralph S. Hirota to the County Council.See Exhibit 10.The next day,on June 7,1972, the Commission held a hearing on V-72-11 during which they discussed the parking issue.See Exhibit 11. After the June 7th Commission hearing GHDC worked with the Department to resolve the parking deficiency.GHDC submitted a revised parking plan along with nuinerous letters explaining how the revised parking plan complied with the Departnient and Conimission's requirements.See Exhibit 12.In their communications GHDC's architects explained that their understanding was that the project is to be zoned as a inultiple dwelling district and that the parking required for the Club should be based on the one-for-one parking requirement for dwelling units while also recognizing that additional parking should be provided for the staff required to maintain the grounds and Club facilities.Exhibit 12,letter dated June 9,1972. However,because of the nature of the exhibition tennis facilities GHDC would expect occasional exhibitions of interest to the Prineville community and general Kauai community.Id.To accommodate these apecial tennis occasions GHDC proposed temporarily allocating the greater percentage of the paved parking area to theater-type parking and further recommended that grass areas adjacent to the paved parking be prepared with a gravel base course in order to provide additional over-flow parking.Id.This parking proposal was illustrated on a parking plan dated June 7,1972 and submitted June 21,1972,which showed a total of 249 parking spaces, including 180 paved parking stalls and accommodation for the lawn parking of 32 vehicles and theater parking for 37 vehicles,See Exhibit 13. At its next hearing on July 6,1972,the Commission approved variance application V-72-11 based upon the Planning Director's representation that the parking scheine now meets the requirement of the Departnient's standards.See Exhibit 14.On July 14,1972,the Department sent to GHDC the written permit for "Variance Application V-72-11 Apartment Use, Hanalei,Kauai (Hanalei Beach and Racquet Club)."See Exhibit 2.A little over a month later the County Council approved the CZO and Mayor Antone 6 Vidinha signed the same into law on August 17,1972.Per the terms of the ordinance the CZO shall take effect September 1,1972.See Exhibit 10. Thereafter,over the course of the following decades,GHDC made numerous inquiries with the Department regarding the zoning of the Club and the uses allowed under V-72-11.In a letter dated July 7,1976,Planning Director Brian Nishimoto informed GHDC that the Club was zoned Residential District R-10 and although nothing contained in the CZO would prohibit short-term occupancy of an apartment unit,like a day,the variance application requested apartments centered around a beach and racquet club. See Exhibit 16.Nowhere in his letter did Director Nishimoto indicate that the rental of individual lock-out portions of the apartment units was allowable. On June 6,1989,Department Planner Brian Mamaclay sent a letter to William Wessler stating the short-term rental or time share of the condominium units was an allowable use.See Exhibit 16.However, Mamaclay stated that the Department had observed that there is a potential that the project could be operated both as a residential project (rooms rented with kitchens)and hotel (rooms rented without kitchen facilities).Id.This dual function,according to Mainaclay,would be a violation of the existing R-10 zoning ofthe property and would exceed the density of 134 units which were approved thereon. On November 6,1996,Planning Director Dee Crowell wrote a letter to Rick Wall stating that the rooms rented at Hanalei Bay Resort should not consist of more than 134 resort apartment-condominium units,and that any attempt to rent individual bedrooms or lock-out units independently of the main dwelling or condominium-apartment unit would be considered an illegal activity.See Exhibit 17. On November 20,2016,Planning Director Michael A.Dahilig signed a declaration affirming that he read the aforementioned 1995 letter from Planning Director Dee Crowell and that the position provided in said letter still accurately reflects the Department s position.See Exhibit 18. It is clear from the Department s own record and files that from 1972 to approximately at least 2016 the Kauai Planning Department ("Department") maintained that the individual lockout rooms within the respective apartment units could not be rented individually as hotel or transient vacation units. 2.TheAugust2017Notice On or about 2017,the Department began receiving complaints of non- compliance with V-72-11.See Exhibit 19.The Department conducted field inspections ofthe Resort on June 27,2017 and July 11,2017 and determined that two Permit Compliance Violations existed.First,the Resort did not provide the required 249 vehicular parking spaces.Second,the Department 8 noted that the individual apartment dwelling unit bedroom areas were being offered and rented out as sectional accommodations which in effect created 280 individual rental units,exceeding the maximum unit density for the property by 146 units.As a result the Department issued a Permit Compliance Violation &Zoning Compliance Notice on August 9,2017 (the "Violation Notice").In the Violation Notice the Department directed the Resort to coruply with the following requireinents immediately: a.Cease rental and use of the bedroom areas of all units as separate dwelling units.Remove from the secondary bedroom exterior access doorways the individual room number marquis within 45 days[.] b.Remove all "installed equipment"from any and all bedroom areas within 45 days[.] c.Remove the gated control points to allow for access to all parking areas for use by patrons,unknit owner/renters and employees of the permit- ted uses associated with the Variance Application Perinit. d.Provide the Department with a remedial plan to address the lack of and provisions for the minimum required parking stalls within 45 days of this notice. The Resort never appealed the Violation Notice and instead elected to work with the Department to resolve the violations.Over two years later on December 3,2019,the Resort entered into a Compliance Plan and 9 Remediation Agreement that purported to resolve the Violation Notice.See Exhibit 20.With regard to item a"above the Department found that through further investigation and review of all issued permits that the Variance Permit application plan presentation,building permitted plans and hence construction of the Units is in accord with the existing floor plans with designed lockout bedroom areas,and the Department required all apartment units to not have more than one (1)kitchen as permitted.The Department never stated that the "use"of the lockout bedroom areas as individual rental units was permitted,only that their construction and design were. 3.The 2020 Director Declaration. Despite the purported settleinent of the Violation Notice,in failing to specifically address and confirm the long recognized illegal use of the lockout rooms as individual rental units,the Department had created an ambiguity as to whether or not such use was permitted.Then on October 19,2020,the Planning Director,contrary to over 40 years of Department precedent, declared that because the Resort's lockout designed bedrooms were approved prior to the adoption of the CZO,the use of renting a separate bedroom as a lockout was perinissible under Kauai County Code Section 8-13.1.See Exhibit 3. 10 III.LEGAL STANDAED According to Chapter 10,upon petition by an interested person setting forth the "specific statutory provision,rule or order in question,together with a statement of the controversy or uncertainty involved,"the Commission may "issue a declaratory order as to the applicability of any statutory provision or of any rule or regulation or order of the Commission."Commission Rules l-10-l(a),1-10-2(6). Unlike other types of land use approvals or permits,a variance "permits a landowner to use his property in a manner forbidden by ordinance or statute[.]"Neighborhood Bd.No.24 (Waianae Coast)v.State Land Use Comm'n,64 Haw.265,270-271,639 P.2d 1097,1102 (19823).Accordingly, "[t]he general rule is that variances and exceptions are to be granted sparingly,only in rare instances and under peculiar and exceptional circumstances."8 McQuillin,The Law ofMunicipal Corporations §26:179.32 (3d ed.July 2018)(footnotes omitted).The general rule is important because "[o]therwise,zoning regulations would be einasculated by exceptions until all plan and reason would disappear and zoning in effect would be destroyed." Id.(footnote omitted).A variance should be strictly construed and granted only in cases of extreme hardship where the statutory requirenients are present."Id.(footnote omitted).Thus,"because a variance affords relief from the literal enforcement of a zoning ordinance,it will be strictly construed to 11 liniit relief to the mininiuin variance which is sufficient to relieve the hardship"and "[a]board should not grant greater than minimum necessary to afford relief."Id.(footnote omitted). The CZO treats nonconforming buildings and structures separately from nonconforming uses.Under Section 8-13.1 (a)Buildings and structures that do not conform to the regulations established by this Chapter and which lawfully existed prior to or on September 1,1972 or any subsequent amendment may be maintained,transferred and sold,provided that the Planning Commission may,after hearing,order the termination of a nonconforming use that creates substantial danger to public health or safety. Under Section 8-13.2 (a),a nonconforming use of land,buildings,or other structures may continue to the extent that the use existed on September 1, 1972 or any amendment hereto,as provided in this Section,provided that the Planning Commission may,after hearing,order the termination of a nonconforming use that creates substantial danger to public health or safety. Hawaii Revised Statutes ("HRS")§46-4 (a)provides,inter alia,that no ordinance shall prohibit the continued lawful use of any building or premises for any trade,industrial,residential,agricultural,or other purpose for which the building or premises is used at the time this section or the ordinance takes effect;provided that a zoning ordinance may provide for eliinination of nonconforniing uses as the uses are discontinued,or for the 12 amortization or phasing out of nonconforming uses or signs over a reasonable period of tinie in conimercial,industrial,resort,and apartnient zoned areas only."Lawful use"and "previously lawful",as used in [§46-4]and land use ordinance,respectively,refer to compliance with previous zoning laws,not the building codes or other legal requirements that may be applicable to the construction or operation of a structure.Waikiki Marketplace Inv.Co.v. Chair of Zoning Bd.Of Appeals of City &County of Honolulu,86 H.343 (App.),949 P.2d 183. IV.DlSCUSSION 1.Land Use Under the IZO. The IZO was a very strict land use ordinance that was promulgated pending the fornial adoption of a Coruprehensive Zoning Ordinance and map. IZO Section 2.Under IZO Section 3,no land or building shall be used except for one or more ofthe following uses:1.One-family dwellings;2.Hospitals, sanitariums,and/or convalescent homes (under certain restrictions); 3.Publically owned buildings;4.Public utility uses;5.The expansion of existing parks,playgrounds,or conimunity centers owned or operated by either private or governmental agencies;6.Golf Courses;and 7.Agricultural uses.Any inference that land use and development on Kauai prior to the CZO was a free for all or was somehow inore lax than under the CZO is 13 r unfounded.In fact more land use and development rights were permitted under the CZO than the IZO. If anyone wanted to develop and use property beyond any of the seven uses explicitly provided in the IZO,they had to apply and receive a variance. Under IZO Section 6,in any particular case where strict compliance with the provisions of the IZO would cause practical difficulty or unnecessary hardship an applicant may file a written application with the Commission for a variance from the restrictions imposed setting forth therein the description of the property,the regulations affecting it and the conditions justifying such a variance.Upon a finding by the Commission at the completion of the hearing that the application presents a situation wherein strict enforcement of any provision of the IZO would involve practical difficulty or unnecessary hardship,and further,that desirable relief may be granted without being detriinental to the public interest,convenience and welfare,a variance permit may be issued to such applicant on such terins and conditions and for such period oftinie as the facts niay warrant. 2.V-72-11 did not permit rental of individual lockout rooms. The Commission specifically granted GHDC's request for a 134 unit apartment use.Strictly construed (as required by the IZO),the use of individual lockout rooms within the respective 134 apartment units is not a 14 .//""•• lawful use under V-72-11 This is clear in reviewing all relevant records and files.Even a non-strict construction would yield the same result;134 is 134. GHDC's Application for V-72-11 consistently refers to a 132,later a 134,unit apartment complex nothing more.The Application for V-72-11 does not request a variance to rent out individual lockout portions of the 134 apartment units.At that time both the Department and GHDC recognized that the R-10 zoning designation was inevitable and that the maximum allowable density within the R-10 zoning designation was 134 units.GHDC even benefitted froin the upconiing R-10 designation by increasing their variance request by two units in order to obtain the 134 unit entitlement. There is simply nothing in any of the Department's records or files indicating that V-72-11 allowed for the rental ofindividual lockout portions of the 134 apartment units or that the Club could be used for anything but apartment use. 3.Design ofthe Apartment units does not grandfather their unlawful use. The fact that the apartment units were designed and constructed to include separate entrances and internal lockouts is irrelevant to an evaluation oftheir lawful use under V-72-11.The CZO is clear on this point by treating nonconforming structures and buildings separately from nonconforming uses.In fact,there is nothing in the CZO that provides for nonconforniing structures to tacitly allow nonconforniing uses. 16 Because the law provides variances are to be strictly construed to limit relief to the niinimuni sufficient to relieve the hardship and a board should not grant greater than ininiiuum necessary to afford relief,it is preposterous to say that the rental ofindividual lockouts within the apartment units was a grandfathered use under the IZO simply because the apartment were designed and built with internal doors or more than one exit/entrance. As provided supra,"lawful use"and "previously lawful",as used in HRS §46-4 and land use ordinance,respectively,refer to compliance with previous zoning laws,not the building codes or other legal requirements that may be applicable to the construction or operation of a structure.Waikiki Marketplace Inv.Co.v.Chair of Zoning Bd.Of Appeals of City &County of Honolulu,86 H.343 (App.),949 P.2d 183. V.REQUESTFORHEAEING Petitioner respectfully requests that the Commission hold a hearing on this matter as provided under Commission Rule 1-10-6.Petitioner's main concern is that they are contesting the current Planning Director's October 19,2020 Declaration which appears to be based solely on his "finding for which he provides only the most cursory of legal and factual support and in direct contrast to decades of Department precedent. The Planning Director is the Secretary of the Commission and he has unrivaled access to the Coininissioners.Declaratory rulings by agencies are 16 part of the Hawaii Administrative Procedures Act and are .subject to administrative appeal and Circuit court review.To decide this matter at the administrative level without the ability to examine and confront the Director regarding his determination would deny Petitioner both procedural and substantive due process. VI.CONCLUSION For the foregoing reasons,Petitioner respectfully requests that the Commission hold a hearing on this Petition for a Declaratory Order and that the Comiaission rule that the rental of individual lockout rooms within each of the 134 approved apartinent units is not allowed under V-72-11 and therefore is not a grandfathered use under the CZO. DATED:Lihu'e,Hawai'i,October 22,2020. MAUNA KEA TRASK Attorneys for Petitioner HBR ENTEPRISES,LLC 17 BEFORE THE COUNTY OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Coinprehensive Zoning Ordinance and Variance Application Permit V- 72-11. VERIFICATION OF PETITION VERIFICATION OF ORDER MAUNA KEA TRASK,being first duly sworn on oath,deposes and says that I am an attorney for Petitioner HBR Enterprises LP,and as such am authorized to make this verification on behalf of Petitioner.I have read the foregoing Petition and accompanying Memorandum and have full knowledge of the contents thereof,and the same are true to the best of my knowledge and belief. DATED:Lihu'e,Hawai'i,October 22,2020. MAUN5~KEA 'l'SASK Attorneys for Petitioner HBR ENTEPRISES,LLC BEFORE THE COUNTY OF KAUA'I PLANNWG COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application PermitV-72-11. Docket No. DECLARATION OF MAUNA KEA TRASK DECLARATION OF MAUNA KEA TRASK I,MAUNA KEA TRASK,declare under penalty of law that the following is true and correct: 1.I am an attomey with Cades Schutte LLP,representing Petitioners DENNIS R.SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST,EDWARD E. COLSON,III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST owners ofUnit 16A and HBR ENTERPRISES,LLC,a Hawai'i Limited Liability Com- pany,and long temi lessee of Unit 16A (collectively "Petitioner"or "HBR Enterprises"). Unless otherwise stated,I make this declaration based on personal knowledge. 2.Attached hereto as Exhibit 1 is a true and correct copy ofa letter authoriz- ing counsel to sign on behalfofPetitioner. 3.Attached hereto as Exhibit 2 is atrue and correct copy ofthe July 14,1972 Permit for Variance Application V-72-11 Apartment Use,Hanalei Kauai (Hanalei Beach & Racquet Club). 4.Attached hereto as Exhibit 3 is a true and correct copy ofthe October 19, 2020 Declaration ofPlanning Director Ka'aina Hull. 5.Attached hereto as Exhibit 4 is a true and correct copy ofthe Declaration of Horizontal Property Regime Under Chapter 514A,Hawaii Revised Statutes ("HRS")for Hanalei Bay resort,recorded in the Bureau of Conveyances of the State of Hawaii in Liber 13050 atPage 465. 6.Attached hereto as Exhibit 5 is a true and correct copy ofthe article titled. "Hanalei Bay Resort Rises from the Ashes."Originally published in September/October 2015 Time Sharing Today and downloaded from the following web site: https://www,grandDacificresorts.com/hanalei-bay-resort-rises-ashes/. 7.Attached hereto as Exhibit 6 is a true and correct copy of the County of. Kauai,State of Hawaii Real Property Tax Office Overview map and report for the Hanalei Bay Resort. 8.Attached hereto as Exhibit 7 is a tme and correct copy of the April 28, 1972 variance application for the Hanalei Beach and Racquet Club,as amended. 9.Attached hereto as Exhibit 8 is a true and correct copy of an undated County ofKauai Planning Department staffreport pertaining to Application No.V-72-1 1. 10.Attached hereto as Exhibit 9 is a true and correct copy ofthe StaffReport dated June 2,1972 regarding Variance Application No.V-72-11 . 11.Attached hereto as Exhibit 10 is a true and correct copy of the cover page, transmittal memo,table of contents and portions of the Comprehensive Zoning Ordinance show- ing the dates of introduction,approval by the County Council and approval by Mayor Vidinha. 12.Attached hereto as Exhibit 11 is a true and correct copy ofexcerpts ofthe June 7,1972 Planning Commission meeting regarding Variance Application No.V-72-11. ((' 13.Attached hereto as Exhibit 12 is a true and correct copy ofvarious com- munications regarding the parking plan for the Hanalei Beach &Racquet Club. 14.Attached hereto as Exhibit 13 is a tme and correct copy of the parking plan for the Hanalei Beach &Racquet Club dated June 7,1972 and submitted June 21,1972. 15.Attached hereto as Exhibit 14 is a true and correct copy ofthe July 5,1972 Planning Commission meeting minutes regarding the approval ofvariance application No.V-72- 11. 16.Attached hereto as Exhibit 15 is a true and correct copy of a letter dated July 7,1976 from Planning Director Brian Nishimoto to Mr.Charles Hosokawa,General Hawai- ian Development Corporation. 17.Attached hereto as Exhibit 16 is a true and correct copy of a letter dated June 5,1989 from Planner Brian Mamaclay to Mr.William Wessler,Architectural Services. 18.Attached hereto as Exhibit 17 is a true and correct copy of a letter dated November 6,1995 from Planning Director Dee Crowell to Mr.Rick Wall,President,Castle Resorts &Hotels. 19.Attached hereto as Exhibit 18 is a tme and correct copy the Declaration of Planning Director Michael A.Dahilig dated November 20,2016. 20.Attached hereto as Exhibit 19 is a true and correct copy the Permit Com- pliance Violation &Zoning Compliance Notice dated August 9,2017. 21.Attached hereto as Exhibit 20 is a true and correct copy the Compliance Plan and Remediation Agreement dated November 28,2019 and signed by the authorized agent for AOAO ofHanalei Bay Resort on December 3,2019. I declare under penalty ofperjury under the laws ofthe State ofHawai'i that the foregoing is true and correct. DATED:Lihu'e,Hawai'i,October 22,2020. MAUNA KEA TRASK AUTHORIZATION BY HBR ENTERPRISES LP The undersigned confirms that he is a partner ("Partner")ofHBR ENTERPRISES LP ("HBR Enterprises"),a Hawaii limited partnersUp ("LP").HBR Enterprises hereby authorizes its attomeys CADES SCHUTTE LLP ("Cades"),a limited liability partnership and,in particular, Mauna Kea Trask,ofCounsel thereof,to sign,by and on behalfofPartner and Petitioners DENNIS R.SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST,EDWARD E. COLSON,III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST owners ofUnit 16A and HBR Enterprises,a petition to the County ofKauai Planning Commission conceming a Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11 . Partner confirms and agrees:(a)that Partner is authorized to give such authority to Cades and Mauna Kea Trask,and;(b)that other parties,including the plamiing Commission,may rely on the authorization contained herein. DATED:Kaua'i,Hawai'i,October 21,2020. JIMIT MEHTA HBR ENTERPRISES LP A Hawaii limited partnership EXHIBIT 1 July 14,1972 , •General Hawailan Development Carporation 745 Fort Street Honolulu,Hawaii 96813 iubjecti Variancg Applio'ation V-72-11 Apartmgnt Use»Hanelei,Ka'uai (Hanalsl.Beach &Racquet Glub) At •fcbe reBulasc'meeting of the Planni.ng Comuiission ,heldonJuly.5f l972>-the Cornmissl.on spprovsd the subjeci't var- Aance applicatlon wiith the following tetms and conditions, as recommended by the Plann.ing staff; 11.All dsvsloptuen't.be boplcsd up to 'fche sewer tesa'taient and dlsposal facllities.• 2..The corrscted boundary llnas be'aubmttted along with the relocaUon of the 10 ft.sewer sassraent. 3.Bulldlng and swimui.ng pool plans bs subjectto"plan approval." 4.A.landscape'plan be submitted at the ·til.me of buildihg pes-mit applicatlori. Pri.oa t;p the JLnitiation of any oonstBuctioncyou aae sdvlsedtocoinplywUh.all appliCBble'Stal;®and Coun-t.ystatuteStordinahces,codese an~d rules and eegula-fcions. EXHIBIT 2 Page a July 14,197% We call your a-ftentlon to the attaohed comments made by agenclaB .i.'evlewing th9 varlance appllcation. BRIAN MISI-IIMOTO Planning Dirac'l.or Bttach. cc!Mayor Pub.WoriC4 Dep-t. watsy Depl:. Health Dept. Taxation ECDC DISPUTE PREVENTION &RESOLUTION,INC. FOR THE DISTRICT OF HAWAH DENNIS R.SCIOTTO,ET AL., Claimants, )ARB N0.:20-0037-A ) vs. )DECLARATION OF KA'AINA HULL ) ) ) ASSOCIATIONOFAPARTMENTOWNERS ) OFHANALEIBAYRESORT,) Respondent. DECLARATION OF KA'ABNA HULL I,KA'AINA HULL,do hereby state and declaie as follows; I.tam the Director for the County ofKaua'i's Department ofPIanning and have been so since December 2019.Priot t&that I was the Deputy Planning DireGtOt. 2.I am famiiiar witb Ehe eoaaplamts aboilt parkisg and tfae uss of leeketits at Haaalei Bay Resort. 3.I have reviewed the November 28,2019 letter I sent to lan Jung,which addresses the parking and lockout concems at Hanalei Bay Resort. 4.My finding from my invesdgatiQn with regard to tbe complaint against the practice of using lockouts at Haaalei Bay Resort is that the complamt is unfounded for the reason that the Hanalei Bay Resort's lockout designed bedrooms were approved prioi to the adoption of the County's Comprehensive Zoning Ordinance. 5.Therefore,the units at Hanalei Bay Resort,which each rent a separate bedroom as a lockout,are legal non-confomung structures,and their use as such is permissible under Section 8-13.1 ot'the County Comprehensive Zoning Ordmance. [W:/DOCS/28903/lAV01t6490.DOCX ) EXHIB1T 3 t"'• 6.Separately,my department is actively addressing parking concems at Hanalei Bay Resort,which fmal paiking plan,identified as "PROJECT N0.5963 October 28,2019,As Amended (Version 5)",was approved by the Kauai Fire Department,and the County Engineer, on September 3,2020.My enforcement staff has inspected the iiew parking lot improvements on September 21,2020 and found them to be compliant with the Agency approved paiking plan "PROJECT N0.5963 October 28,2019,As Amended (Veision 5)".Therefore,the Plannmg Department considers the parking plan being approved September 21,2020. I,KA'AINA HULL,declare under penalty of perjury that fhe foregoing is true and correct to the best of my knowledge. DATED:Lihu'e,Kaua'i,Hawai'i,"7/^ZoVf KA'AINA (•W:/DOCSQ89[l3/l/WOl66490.DOCX )2 .'^~\ ^y /50^S/ 7?'-7^o/t3 ^/-^^n RECORL'A"IOK K2HUESTED Ei':i ti^/;S &dffU F£nJfffft/^ >•^e'^s-r '^-76*023 7 't'i.:..i3050 :,-,465 '••''•"'/"6:P| /" AFTEii RSCOBD.'i'riOK,RETURK TOs tffr^ff-s Ajy-urpE'r^w/Mf ^s fj{^s-<r '<joo tiisw^y. A^M';f>)*f^ffi y.(^f^f^ W»en coniplete<3:Mail () Pick up /1 Phone;^»-'^>f)^ DSCLARA~ION OF HOM20NTAL ?SO?ERTy REGIME U'mSR CHAPTER 5I4A,KAKAII ,RS->"ISEO STASUTES KAKM-Ei BRC|INC.,2 Hawali corporatlon (the "Oeciar- anttl i,viz-h its pri,nci?sl place of bi-sinegH in aanalei,Kauai, Ka'.raii /and ;.ts post office adaress st P,O.Box 220,Kauai, Kavsii 96714^is the ovner in fee sirasle of t'ne land 6esccibec in 2>;:nibifc *'A"attsched hereto an6 itode a part hereof (th°/ "L-.n^"^to^ether vith the buildxn^s an<3 other improvements thereon. The Declarant intencs to subr".it the Land and b'ji26- ;.ncs an=improvenients thereon to a Sorizontal Property Regijne (hersinafter soinetinies referred to as the "Project")containing 3.35 Asar-tiner.fcs,pursuant fco the provisicir;s of the HocizontBl Froperty Act (tbe "Act"),Chapter 514A,Kaweii Revlse3 Statutes,as Bmended,the projeot beina more specificellv <;i«*ficribsd hsrei:i ana in plans incot"por£t'°<t herein by reference^ recorded in the Bureay of Conveyances,State of Haweii, as Condomini'j^-Kap No.^^/tthe "Coniioir.iniuffl Map"). l".funherance 01 saci:Intent the Dec;arant (i) heceby subiits ItB Interest in the Land and all bui.ldtn9S an3 inpyovensR-.s ^hereor.tc a 'norieontal Property Reqime»and (ii) EXHIBIT 4 HBR 001.940 b".i3050 ?;46(i liccleres that such fcand,buildingE anc improuement?,Including each Aparcment establlshed by this Declaratlon;are and shall be heJid,conveye^T hypothecated..ntortgageG,encumberedr lease<3, rentted,usedf occupied and impr'oved subject to fche decla- rations^litr.itations,resfcrictions,covenanfcs and condir.ions set forfcb in this Declaration and in the Bylsws attached hereto as Exhib'.t ITB<r and made a part hereof (fche "Bylaws")^as this Declaration and the Bylaws may £ro?n time to time be a'mended, all of vbich declarations/liir.itasions,restrictions,covenants and conditions are declared fco be in furfcherance of a plan establis'nea for the purpose of complying with the requireinents o£the Act and of enhanclng and perfectinc the value r desir- sbility snd enjoyment of such Korizontal Propetty Regime and o£ each Apartment therein.All such liir.AtationSr restrictions, covenants anc condltions shell constitute covenants runni.no vith the Land and any iTP.provement r Apactment or interest therein conveyed or reserved anfl sball be bindlng on and for the benefit of eech such interest conveyed oc reserved sn^upon ai.i.parties havi.ng or acquiring any rightt titlef interest or estate in the Land,buildings and improvenients on the Land or an Apartmentf iLncludinc without liniitation the heirs,personal representatives,successors anfi assigns of any such parties and all sabsequsnt ouners and lessees of all or any par;of the Korisontal Property P.eciiRe. I CEFINITION3 The following terms as used in this Declaration shall havs the following meanings: HBR 001941 IK.13050 ,,;46? 1."Dec.'arant"shall msan Hanal'ei ERC,Inc.,OE'any successor in interest bu merger or by express aissi*jni?ent of the rlghcs o£tbe Beclarant hR'eunder by Inserunens executed by che E>eclarant and recordea in the 3i;reau of C^nveyances or filed with the Assistant Registrar of the Land Courtf State of Havail. 2."Land"shall mean tvie real property described in Exhiblt "A". 3."Act"shall mean the Horizontal Property Act^ Chapter 53.4A,Hsis'aj-i Revised Statures,as amended. 4 ."ApArt.rnent"shall raean one of the 136 freeholfi esiates established by an6 describes in fchis Declaration and shown on tbe Condop.iniuni Map. S."Con^dpnixniun:._Ma&tt shall mean Sheets A-l.l,u2, A-2.1,h-2.2,A8,A9,AIO,A31,A31a,A41,A42,A-2.6,PC-14 and A-3.5»prepared by wimberly,'Whisenand,Allison,Tong &Goo recorc-ed in the Bureau of Conveyanoes together with this Decl&rationr as they nisy be anisnded or suppleniented, 6."Bylaws"shall mean the instrument attacheB he-reto ^s Exiiibit "B",as it niay be aniended. 7."PsQjffct"shall meaR tbe Horizontal Prosertu Fiecime estab^ished herebyr consistinc o£the Land (includinc; all eassn'.ents,rights an<3 appurtenances thereto)and all buildi.nc s,improvements and sts-uctures thereon as oescribeci ir: this Seclaration ana as shown on ths Condoniiniuin Map. 8."Coinmon Eleinents"and "Liinited Cominon Elements" shall mean those portions o£the Project described ir.Article II»paracraphs 5 and 6,below. 9."Apar'*jnent Qvner11 shall mean the owner of an Apdrtment. HBR 001942 10. ":i-13050 ?.-;'S6& 'Assocaak.inr.of A&sttmerit Owners"or "Associa- tion"shal2 Tnean the owners'associstlon Sor the Project estahlishe;?by shis Declaration anc the Sylavs. 11."Board oS.Direceors"or "Boarc"shall mean the Board of Directors of tne Associasion prov.icec ^or in the Svlavs- 12."Hanaairic Aoent"shall mean the Kanaginq Agent for the Projecfc appointed by the Board of Directors of the Associ.ation of Apartinent Owners* 13."Buildinc"or "Builcincs"shall nean one or more of t-hose seventeen struct-ures numberec 1 throush 13.,inclusive, 12A ana 12B,and X3 throuch 16,inclusive r shown or^the Conao- rniniui?Map. 14."Kirles and Reculstions"shal.;,n-san rylAS a<3opte£ by the Board of Directors of the ASEoeiation governing use of the CO^.TOOD Ele^ients of fche Project by Apsrtment Owners. I: TKE PROJECT: B'-ILSINGS,ft?ARTNENTS,COMMOK EI.EKEKTS A!;S LIXITro COMMOK ELEKESTS 3-•K ame.The Project shail be known as Ka^clei Say Resort. 2.Land Description.The La.na submitteo to the Project is descri,be6 in Exhibit "A". 3.SiBScription^of Buildinqs ana Asar-tTnents -i ^*nTi'ic su^lainas.Th9re ^r-p>fipventeen Sbild- ings,n bered 1 through 11,incli.siva,12.;,and 12B,anc 13 through 16,inclusive.Each iE a three-storv structure exceot numbers 9/11,12A ana 15 which have two storip-Sr <sn6 a porcion of number 12E whi.ch has four stories. Each of ths Buildings has a concrete foundation; < HBR001943 •„>(,1.3050 !',46a the second"anc3 any thiro-ana rourth-s^or^£.i.oors are rein" forced concTste.S'"e floors 'n'ithin e&cY AoarS-tnei^in Sui.l.cinL's 1 throu9h XI,inclusive,12Ar l^B/13 ^'i<ani?15 ara carpeted, e?:ce?r thst the kitchen and bathsoof:.hav&asbestos tile floor coverinas.Extierlor -walls of all Suilcincs will be concre^e b^,oc>;with rough tex-ture finish.P.oofs wil^be of asphs^t shincl&s. ;b]The Apartments*T^iere are 135 Apartroenss in the seventeen Buildingsr plus 1 Aparferoent consistinc of tennis courts 8,9/10 an6 ll anci tlie nearby tennis shelter. The number of each Apartment,its floor level within ir.s Builfiinc,the approxiniste size of each Aparttnent 's livinc area ana of its lanai sn'3 its type are as follows: Build- 1RQ Apartinent Numbers Ul,A12 Ml,A22 Ml,A32 313,El« B23,B24 333,B34 C15,C16 C25,C26 C35,C36 Gll,G12 S21,C22 G31,G32 H13,E14 Hli,K16 B23,K24 H2S,H26 H33,H34 K35,H36 U7,U8 L27,L2S L37r L3B 0.5,K16 K25,K26 K35,K36 Approxunate SCTU^r&Fect Livina Ares in Flooc Sscb /oartmsnt Ist 2na 3ri Isz 2n3 3m '.st 2rri 3rd 1st 2n3 3rd 1st 1st 2rc 2nd 3tB 3rd 1st 2rd 3rd Ist: 2n9 3--:! l,7C5 1,335 1,705 1,335 1,335 ^ccoxiiriSfce Scpjare F&et of Lanai in Each Apartment 381 288 381 28B 28! TvpS 3 BetirooT, 2 Bedcooc tt tt 3 fedroor; II n tl It 2 Besroar. tl II 2 Becrocr 1,235 1,335 2B8 2BB 2 BedrooR 2 Bsiroa: HBR 001944 10 11 1ZA 123 13 14 15 16 N/A toertment Nunbers Jll,J12 J.13,J14 J21,J22 J23,J24 J31,J32 J33,J34 F15,P16 F25,F26 E13,E14 E23,E2« E33,E34 Dll,D12 D21,D22 Mis,^a6 M25,M26 Kll,N12 N13,K14 N21,N22 N23,N24 N31,N32 N33,N34 141,N42 Pll,P12 ?13,P14 PZl,P22 P23,»24 P31,P32°33,P34 TU,T12, 113 314,T15, T16 T21,T22, T23 I2<,T2S, 126 T31,T32, rr^t T34,T35, T36 KL5,M.6 M7,iae B25,R26 S27,R28 E35,B36 R37,B3B 16 99 Flccr Isi: 1st 2ns 2n3 3rd 3rd 1st InS Ist 2n3 3rd 1st 2n;a 1s!: 2ra5 1st 1st 2n3 2rri 3ri 3rd 4tii lEt 1st Ziri 2ro- 3rd 3rd 1st 1st 2nd 2rc t^ 3td 1st 1st 2nd 2ni 3ri 3rd J^proxiiaate Sguare Feet Livinc .^rea in Each Aa£rtor»ent 1,335 1,335 1,335 II 1,335 867 867 867 86'; 86'; liii.i3050 f.-470 Asprcxi'ftafce Sauare'Fee; of Lanai in E3tA_At>^rtinfflnt Typ& 28f 288 2B8 n 288 224 224 11 22< 224 224 2 Beflroai; 2 Bedroar, 2 Bec3rocn II fl •r ti 2 Ba3roar. It It 1 Bedrocir'"II 1 Bedrosr: fl It 1 Bedrot.n 1 Bedrocr; 1 Bedrocci 1st «2nd Approximafee floov area;25^200 square £eet N/A AF^roximats floor area:25,600 square feet HBR001945 i'it,13050 f-,471 The layout»location,dimer.s.i.ort^and nunber oiC each Apsrtment are shown on the CondOTniniuir 11sp.One freehold estate is herebv establlshen in each o2 the Apartments des- cribe<3 above and shown on the Condoir.inium E4ap. (c)ConipQBition of the Apartments.Each oS ih0 twelve Aparfcments in Buildings 1 an<=3 shsll have a living- dinins roow.,a kitchen,3 bedrooins»3 bathrooms and 4 Isneis. Sach o;ths sixty-th-o Apartments in Buildlngs 2 and <through 3.1f inclusive,shcll bave a living-din.inc rooir.f a fcitchsn,2 bedrooins,2 bathrooms and 3 lansis,Each of the sixty Apsrfc- ments i-n Buiidin9S 12A,12B,13,14 and Ib shall have a living- dining room wifcb an efficiency kitchen,e bedrooin,2 bathrooms and 2 lanais. Apartiment 16 s.hall contein a lounge area,a bar,a dining room^a kitchenr sn office,s lobb5f an6 lobby seatino ar^as/a porte cochere/an area for a commercial shop/ restrooms^opsn decks and an open expansior.area on the inain floor;and storage areas,a hOLisekeepin?service srea^ar. employee lounoe,employee loclcer rooms»sauna and shower rooms/restrooms,s.meetlng room,a loadin?doc'Kf a msinte- nance rooir.,a snach bar,s gazebo and connecting walkway and an area for a pro shop or other coinmercial shops on the around floor. The Kitchen?in the 2-ani S-becroom Apartments shall include a double stsinless steel sink,a sarbage dis- posal,e range,a reSrigerator/fceeser,a dishwasher and e clothes washer/dryer.The efficiency kitchen in the 3-bedroon: Aparttinents shall include e Dwyer kitchen unit consistina of a 3-burner electric ran9e wlth oven and broiler,an under-counter HBR 001946 fi'.13050 ;:472 g-cu'ric-fee^re^riuer&tor,a si.ncle-coff.part^ent 1-piece sin»:vitih disposal,storacp drsveirs anc ^abinecs. 2ac.^br.fchroor.in i>n Aosrtffent (except £or Apartme"!3,6)sha.12 contain a si^k,lavatory and bethtub/shower conbination. Apartment 99 consists o£tennis couris e^9,10 sm I'.,tooether vith adjscent:retairsi.nc waJlls &•:=Derinieter psvi^c,and the near&y tennis shslter (d)Access to Coa^on PaciAities.All first- floor residential Apartments aric Ap&rtmpnts 16 anc ?9 shall he'.'e airect 'access to the Land and valkvays co^.prisinc c pcrsion o^the Coir.mpr!Eieraer.^s.?>1^cthe;:resicential Aoar*:- inents shall hsve cirfec-t access to extsrior stairwavE snd lenciincs coirarisinc e portior;of th"ConiTngr:Elements. 4.Li.n'.its o£/ipar^n'.ents.sxcept for Apartments 15 and 95,the respecti"e Apartments shall not be deemea to include the undecoratec or uniiniLs;-;n walls,the floors anc ceilincs surrounciinc each Apart^ent,or a.ny pipes»wireE,con- c'jits or ofcher utility li.r.es runninc throuch such Apartnser:*: vhi.ch are utilized for or serve more than one Apartinent , tbe saffie being deenied Common El&tnents as hereinafter orc— •;ice=.Each Asartser":shall include any acjscent laneis shoun on ihe Condomi^iutn Hap.Each Apartment shell be c^^rr.v-6 to ;nc^.uoe 3ll the vdls anc partitio^s which &re no-:load-bearinc vithin i;s peiiriie^er n'pllc,the iinner decoresefl an3 finished sarfnces o;sil valls,iioorE snc ceillncs,anc the bullt-in fixtur-E.Apartment 16 shal; be deened to include the space and all walls,floors, ceilings,roofs,slabs,footings,foundations and other structural coinponeni-s enclosed by and within bhe outside sur£oces of the oiterior valls dnd roo£s and the bottom HBR001947) /'" iBt.13050 f.-47;j s'jrfacss of the slab^r foocinc^and foun^ations o^sucr.Apart- ment/except thst Apartment 1£shall .'••"s include any space withi.n or beneakh the telephone and elec.trical eguipment rooros in the basement of Bulldinc 16.Apaftment 99 shall be deemed to incluoe the space and ali slabs^fencefit walls pa'uement and other structurel components above the botio.Ti surfsces of ths slabs,footings snc foundasloris c^suci':Apartmsnt. 5.Consmon EJeniersts.The Coinmon Elenients of the Pro^ect will include the Lanc ano all byi.iflingE anc iraprove- jnents on the Lanar includinc Eiiilcinos 1 fcbrough 11,inclusive, Suildings 12A»12E^13,14,15 anc 16 (except Sor sll portions of such Buildinas which arB Apfirtfferits)r the Litnited Coniinon Elements,as we*l as all Com.T.or;E^-sn'ent?Tnentionec in Chspter 514A^Hawaii Revised Statutes,whi.ch are actuallv constructec on the Land and speciiically shall include,but shall not be limited to: (a)Tne land in fee sin-.ple; (b)All foundations,floor slabs,columns, exz.c-rior stairways and lan<iinas,lc>a<3-bearinc valJLs and roofs of Buildincs 1 thrauah 11,inclusive,Buildings 12A,12E,13, i'and 15; <c)A^l l.andscaped yairds,plantincs an6 re~ taining walls,and slffilar iteins; (d)Two RuiniZiina pools,their respective aojecent:terraces and fcbe pool shelter near BuiXding 7; (e)Tennis courts 1 through *?; (f)Ttiree laundry ar.d utillty bullfllngs; (g)All roads/driveway areas and exterior qround-level walkuays snd golf cart paths; a',. HBR 001948.1 rt K •i."(.-13050 r;47.4 (h)All purhinc aceas; (i]The te;cphone anc eiectrici.equiament roo^.5 i.n the bassment o£Bui.l,din9 16 and All ducfcSi electrical ecuipmentf wirins and other centra.l and appurtenanfc ihstalls-- tions foc servioesr ••'.ncluding power^li9htr cold and hot wster, fire alarm,refuse an£telephone,except that the telephone switchb&ard in Buildinc 16 shall not be part of the comr.on E^e^ents but sha^l be psrt of Apart:rne".t 16;an<3 (j)All other devices or other inst&llstions upon the Land existino {or,or rationally of^common use to all Apartinents vithin t.^s Project. 6.Liinjteo Coinmon Elements.The thiee laundrv anc sstvice buildings shall be Lireittec Comnion Elements appurtenant to ana for the exclusive use of Apartment 16. 7.Percentape Interests in fche Common Eleinents Appurtenant tohoartTnents.The percentage of undivitiefi interest in all of the CoT.r'ion Slements sppertaining to each of the twelve Apartinents in Buildi^qs 1 an^3 shall be 1,081;that appertainin9 to each of the sixty-two Apartinents in Buildinas 2 and 4 through 11»inclusive,shall be 0.85%;that appertaininc to eac'^of the renaining sixty Apartment-s in Buildings 12A, 12B,13,1<anii 15 shall be 0.571;that apperteinins to Apatt- ment 3.6 shall be O.IO^F and that appertaining to Apartnient 9? sha^l be 0.04^. 8.Easenents.The Apartments ano Common Element® shall ?lso have and be subject to the fo,liowi.ng easenents : (a}Each Apartn&nt shall have appurtenant 10 HBR001949 r"- 'uii.13050 •,-,475 thereto nonexclusive easeff-ints in th^Conrson S.le'nents dcsign-ed ;OT suc-h uurposes for In^ress to/ecress Sroir,,ano support, maintenance and repcir of sach Apsrtmenfc?i.n the other Coraipon EAements for use accoroing tc their respectivs putposes, sybject alvayp to the evclusi.ve use of thc Limiteo ConiTnon E2emsnts as provxaeo herein;and in sll other Apartmen^s end Lin-.itec Common EAeraentSi if any,of their respectlve S'jildi.ncs for support; (b)If any part of the Coinmon Elements,the Limited Common Elements or an Apartroenfc now or hereaft.er encro&ches upon any CommoR Element ,[iiTr.ited Conimon EleTpent or Apartinent»e valid easemena fcr such QncroachmeRt anc the masntenance thereof*so lonc as ifc continues,shall exist.In the event any of the Builcincs shall be p&rtialAV or to^ajLly desiroyec anc then rebuiltf ininor encr'oachnients o£any parts of the Comnion Elenients,the Lin.it.ee CoiT-sssn Elements or an Apart" 7;ent upon ar.v portion of the Coninion Elements,Liraited CoTDmon Ele^.ents OT an Apa»."ttnenfc due to construction error shall be penr.it teo,and valid easements for such encroachfflents and the nseir.tenance thereof shell exxstr (c)Each Apartraent sheill have an easement in connon with all other Apartments to uss all pipesr wires^ ducts,cables,conduits,public utility Ixnes an<3 other Coramon ClssicntE located in any o£the other Apartments ana servinc; such Apartraenfe;and each Apartraent shsll be subject IG an. easentent in favor of all other Ap&rtnients foc access to any Coniniar.Elements located in such Apartment;and (d)The Association of Apartment Owners,as 11 HBR 001650 r li:i.13050 rE47u provided ;r:Articl"III ci tfcis Declsri;icn end i-i'the Bylavs,shall heve the right,to be ex^rcised by ifcs Board of D;.rectors or fche Man&gins Agent,to enter each Aparttnentt and the Liiclcea Coninton EleiTients fsoir ti^.e t-o ^ime during reasonsble hours ss Ray be necesssr"for the operation o£ she Project or for raakina eir-ergency ropsirs therein neces" sary to prevert fia.T.cge to any Apsrtinents or the Comr.on £lemer:ts. 9.Alteration anc Transfer of Inserests.The conmon interest and essements appurtenant fco each Apartraent shall have a perTiianent character and shail not be altete<3 without the consent of all of ths Apartnisnt Qvners affectec, e>:pressec!in sr;oiTiend^.enfc to this Scclarstion 3i;lv recorded. Th-»comjnon i.nterest and esseBients shsll not be separsted from the Apartment to whjicb they appertain,and shall be deeroed to be conveyed,leased or encumbered witb such Apart- inent even thoug.h such intere&t or easenients are not «x- press^y mentioned os'ctescribed in the conveyance or other instrument;> 1C.Purposes and Uses. (s)Aaartmen^s _i^_B:i;il6ings 1 Throuch 1 5 » Inclusl-v-c.The Apartments in Euildinss 1 through 15,inclu- sivCr s?:all at all times be used onlv for oermanent or teopoi-ary reEidential purposes or :or fcra!;scient occaoar.c';; PROVJDES thst tbe Declarant may use anv of the Apartments for sales or oisplay purposes prior to the sole and co'.veyance thereoC by the Declarant.An Apartmenfc Ownee may rent or arrange to have hi.s Apartment rented for any length o£time. 12 •'--••-HBR0019t1 &>•' i i.ii;13050 i^77 The 4p2:;;,ie^';Owners of .iipaiiRencs la Sulld- inps 1 through 1S shall not,without the prior written consent of the B&ara,ma}<e any sLructural al^eration?in or additions to the exterior o£s;.Apaftraertt l includ Lna awnings >islousles or screens)o;to any other portion or portions of the Coi".raon Eleraents unlsss otherwiss provioec by the By3,avs< (b)Apartnent 16.Apartnient 16 and its ap~ purtenar:t Liniited Consaion Elements roey be used by its Apartinent Oh'ner ^or sny cominercinl an5 recrsational e-'tiviti&s pernsittec by law,including but not 1 iTr-ited to use as a restaurant and oar,a tennis or other club or clubSt 3 tennis equipinent shop, food and beveraae shops ano ofcher coffimerci al shops.All or any portion or pprtions oi A?artn;ent 16 may be leased or rentefi hy its A?a£'tn;ent Owier to thirc parties on such terir.s anc ^cr such lenoths o£time as such Apartment Owner shall deterr.-.i.Tie. Anythlng in this ir,.^.-ument or in the Byjaws to tbn contrary notwifchstandlnc,tn<s Owner of Apartment 16 shsll have the right^to be exercised frora tinie to time/consistent vith the provisions of Art.i.cle IV,Paragraph 8 hereoff to alter the ai.mensionsf structure or chsracter of such Apartment ar any improvements on oc compri.&ing such ApartTnent;and the Board &f Di.rectors o£the Associst-ion and all Ap&rtinent Owne^s sheU be 5ecTnec-CQncl'jgivfrly by their acceotance o£an AosrT.Tnent or interest therein x.o have consente^to anv such alteration or a6dil:ion»an<3 such aitcration oc addition mav be ma^e without further consant of the Soard,any other Apartir.ent Owner or any othes person havinc an interest in the ?rojeck. E-i' & 13 HBR001952 i.>i.i3050 ••;A7(i [ci Apart-nie^t S&.Aparcment 99 s.hail b<?used or.lv for recrea^ion* la)Prcbibi.t.ion Aq&inst InjL'r'i.ous or Unreason- _ah;l e U ses.Ko Apar tjnent Owner of an apar tne n t &hal1 use or pernsit to be use<3 tiis ^pertment £or any p 1:1005 e w>iich will injure the reputation of th&Project.Ko Apartment Owner shali suffer anythin?to be 6one or )te?t in his ApartmenS or else- where vhich will jeopardizc the soundness of any of the 3ui2d- incs,or vhich vill interfere with or unreasora&ly disturb the richts o£otber Ap&rtment Owners c-which will increase the rate of iise insurance on the BuUdincs or the contents th&rs- of.or which will reduce the value of the Pro'lect. (e)Tersrsis Courts X throuch 7,The schedulinc oz piay o-i tennis coucts 1 throuch 7 shsll be subjecfc to reesonable control by the tennis pro in charge of the pro shop comprisinc part of Apa^tinent 16.If there shall b&no tennls prs to ha^dle such scheduling,such schedulino shall be handled / by a person or persons ^.utuslly acreed upon by the Managinc Acent anc khe ApBrttpent Owner o£Ap&rtment 16.Nothing ln thas p&ragraph shell be aeeinec to pen~.it the person in charae o£ such sche^ulinc to collect any user fee or charge from any /ipBftff.ent Owner or tenartt o;any Apartment nor to pei-mit the use of tennis courts 1 through 7 by persons other than the Ap&rtT'ent Owners and tenan^s of A?erttne"<:s unless such £»e. ci'.arge or use is approve3 by the Boarfi of Oirectors. III RESPONSIBILin OF ASSOCIATION; SES°OKSI3ILIT?OF APARTKENS Ol,"iERS ^.AdTninis^tration p^^the Project.The adrainistra- tion of th^Proj&ct shall be vested in its Association of 14 'HBR001953 ff. i.".13050 f:,47y Aoartn;er.t Owner?consistinc o:cZi.Apart.r'e-.b Owr,ei-e o;th^ Proiect,wnich shsll be constituS.s<5 ar.d ac'.ir.accordencp vith ths AC-L f ?bis Declaretion anc the 3y}a'*-s.Cperafcion of the Project and inainfcfinance,repair,replacefneni an6 restoration &f ths Common Eleir'ents ,anc any aodit-Lons anc alterstions theyeto,shall be in acco^Gance with tbe pro- visieis of the Act,tbis Declaration and the Bylaws,In fcrtherance o£the provisions of this Declaration,the Dec^arant hereby appro"es and affirina thst the pt-operty ce- scribec in this Peciaration shell be heXd/conveyed,hypothe- cated,encuraberec.Jleasec,rente6,used,occupied and iir.- proved in accordance vith the By^a'-.'s.In the event o£sr." discrepancy between e provision of this Oeclaration ana e provision o;ttie Bylevs/ths provi-sions of this Declarasion shell orevail. 2.Maititenance of Apartments.The Apartment Owner o*each Apartnent shall be responsible ror fche repair,upkeep and nairstenance o£the Apartraent as well as responsible for the use a^the Apartnent an6 the conduct of all perjsons usins such Apart*rent,all in sccordance with the orovisions of the Act^ this Declaration and the Bylaws ^and any aiadifeions to or aniendmer.ts thereof. 3.Ut.j.lities Servinq ApsrtTnenfcs 16 end 99.All vt?J1ty 9°rvicep for Apnrtmen^fi 15 and 99 shsll be seaaratelv metered anc chargec to their cespec+ive Apartment Owners, and the costs for suc.h ser-.-ices shall not constitute commor expcnses of the P^oject. zv KISCEL'.MiEOUS PP.OVISIOKS 1.Service of Process.Hanalei ?RC,Inc.,with 15 HBR001954 °1^£ ^ sa' ?t:L^?jv &:ssy/ ^ 9- ^- „,13050 S;4SO II •i I.'".' i^E adcress at t.t.'s Prc'ecf^.IK heresv d&sicr.at.sd as the entity to recelve service of orocer,c j.T'.il SUG.')time as the Boarc of Director^of the Association of Apartffle.it Owners is electea»at which time end thereafter process may be servefi upon any inember of such Board. 2.perccntaqe o;Votes Reauiced for Rebuildino.in the evenfc of damage or d&struction of all or parfc of any Building or of any Li^.ited Co^imon Eleicent appurtenant to an ?t?artment therpin,the perce-.fcsoe o£votes by the ApBrtment Ownsrs which sha.il be detfirn'.inative of whether to rsbu:.lc, repair or restore e B'jild^nc shall be &vote o£the Apartment: Owners of Apai-traen-ss ir.che 3i:ilt3inc so dainsged or dessroyed, cwnin?at leest "ighty percent {SOl)of ^he common interests eppurten&nt to the Apartments in such Buildi.nc;that is,the Building or thc Lir.ited Conpion Eleinents shaIX be rebuiltr repaired or restored unJess ovners in such Building owning et leas-:eiahty percent (80%;o^such ^a^Tnon interests shall vote acainst rebuilding,repeiri.ng or restorinc.If nore than one Builcina is damssed or destroyed,the votes of Apartment Bnwers iT.each ButlBlns shall be separately counted.Ir.the event of substantial damaoe or destructaon of all or part o£ ar.y other Con-Tion Elements,the same shall be rebuilt,repaired or restored "iless fche Aparfcment Owners to whose Apartments ere appyrtenanf.eiahty percent (60%)of the interest in the Com-^on Slemer.ts shell vote acainst such rebuildin9,repalrinc QT ^estoring. 3.Invalldisy.The invalidisy of any provision o; this Declaration shall not be deemed to impair or affect in any maanar the vslidity,enforceability or eifect o£the remalnder .:»s ^' HBR001955 •i;.>....i3050 ;-;48i of this Declaraticn,an^r.sucn ev"nt all o;cne other pro- visio^.s of this Declaration shsll continue ir*£ull force and effeci as if suc".provision nsd nevsr beert include6 herein. 4.Kotices.Notices providec for in this DecXar- etior.siiell be in writing ana sbal.t b&deemed su££xdenfcly Siven when 6elivere6 persona^ly or when deposited in the ur.^teo Stetes weil adcressed to sny A?artme.':t Owner at the lest address such AsartJnent Qwner desjiffnates to the Board or,in the event o;no such (3esi9nation,at su=h Apartnient Owner's last kno^:n address or,if there &e none,to the address of the Aparfmen*:. 5.Ko Waivez.The f&ilure to enforce any provis.i.on of th:.s peclaretion sh&ll not constit'^te s v.'sivear of fehe right to er.force such pro'.'ision shereafter. 6,Interpretaticn.Ti~°section titles at the beginRine of e&cn nuTiberea section of this Declaration are for convenzence on.t.y anci the woras contained therein shall not be consicerec to exp&na,raofiify or aid in the interprststior, cor.str.ictina or meani.ng of this Declaration.As useo herein, the sincylar ehall <,nc.lu3s the plural and the masculi.ne or neuter gender shall include the other gendsrs. 7.ATnendTnent.This Declaretion may be araeRded, consistent vith the provisions of Cnapter 514A^Hawaii Revisea Statutesr as amende^..t?y tha votc o£the Ao&rLmenfc Owners of at least seventy-five percent (75t>of the common interests in the Common Elenfents,evi.denced &y an instrument in writing*slgned ana acknowledced by any two officers of the Association of A.pactm»nt Owners,which a>nendm<3Rt shall be effftctive upon rec^raitng in ths Bureau cf Conveyences or filing in th®Office 17 HBR 001956 i'""'i3050 f;48'; cl the Asslsta-.t Recissrar of the Lanti Cc.-ft cf ;ha Scati?o' Kawaii;prov:ide6,however.that [2)ths Declarent reserves the ri'yht to aineniS this Declaration one or more fciines vithout the conser.t or joinder of sny Apartment Owner in order to record or f i,l e an aniendmer;t pursuar.fc to the piovisions of Section 5KA-12,Hawaii Revxsed Statutes/after coa-,pletion of the Builcincs described herein,containing a verified state- tr.ent cf 3 registered architect certi-fyins that the final planti theretofore recorded or filect or recordsd oc flled therevith, f'jlly and actually cepict the Isyout,loc&tion,aparfcmen^ numbers anc dimensions of thc Apartffients as bu:.lt»(b)except ss providefi In the i.mniediate3,y ptececin9 clsuse (a),no aniend- nient affecting the existence,layoutf locatiion or dimensions of any Ap&rtnient:sha.*!be ef£ect.ive vithout the writfcen consent o£ the Apartmsnt Owner or Owners o;z.he Aparfcmsnt or Apartments sffectedt (c)no asend-.ent o;parsgraph 10(e)of Article II of this DecXaration and no amenfinient constitutlna all or oacfc of the parkins areas as Lin*,^ted Coir.mon Elenients s.hall be effective vithout the consent o£th?Apertnert Owner of Apart- menfc 16r and (d)thig Declaration nsay be amendea ss pro\'idet3 in ihe followxng paragraph 8. B.AUerBtion o£Apartment 16.Anything in this DeclEration to the contrary notvifchstandino,the Apartment Ovner of Apartment 16 Eiiall h?vp the richt»to be exercised as. its so^e cost and expense,from time to •.ime,(a)to alter the exterior appearance,the cimensions,the layout and the jnsterials of Apartment 16 in any manner,provided thafc the exterlor walls shall not be expanded beyond the parlmeter boundasies of Apartment i'-as show^on the Condoniinium Hap sn8 (b)to divide and reconstisute Apartment 16 into fewo or moce 18 HBR 0019^7 ^t.II, .1s j. 6 9K 1.3050 ;;463 separete Apartments anri t.o aXlocate the Lir,iteo Coi^mon E.leinents anc t.he uncivids^intere?t '.r.s,h«-COi.u.on ::le>iieni.£eupurtenaRt to Acarttnent 16 to onc or ~.ors cf suc.-~.^eparafcs Aparfcraents in any manncr deemed appropriate by the npartment Owner of Apart- r.en^16,and thereaf^er to use/sell<leese or otherwise convey such separate Apartnients in any manne^deeraed appropriste by fche Apartfflent Owner of Apsrtraent 16..In furtherance of the foreccing»the Apartrasnt Owner of Apartrr.ent 16 n-iay enter upon the Project,to9e^her with err.ployees^aaents anc subcontractors to exercise the ricbts reserue^herebyr to connect any sych a.lterations or adaitions to utilities ano other Coritfnon Elements of the Project:and grant;sppropriate easements over^under o^ in respect.o£the Lin'.ifced CcT.nicr,E2err>ents sppurtenant to Apartroent 16,Zf tre exercise of any such right results in additional Apartn-.e^ts or a structure or iiiiproverrient materially 6i£ferent from that Rnown on the Condominiam Map,ths Apsrtment Owner of AFert.tnent 16 shall record or file an amendment to this Declarstion ans to the Cor:dom..niuR'M&p describing and depicfcinc the hew-improvements,showing the layoutf locationf diinensions an£apartmeRt nuTibers of any newly constituted Apartmenfcs anfi settinc ^orth any Li.niited Com^on Eiements ano the undivioed intsrest in the Coiriinon Eleraents apaurt&nant to any new.ly constitufced Apartments•The Apdrtment Owner o£Apartment 16 sha2.1 have ths right to execute ar><3 record or fi}e such amend- iiients r wi-.ich shall not req-jire the signatures of anyone e^se having arsy inberes';in the Projectr incluaing any other Apart- raent Ovner or his morfcgagee,and the Apsrtinent Qwner of Apart- Tpent 16 shall be deeined to have an iri-evocable power of at- torney couplea with an interest from all such persons for the pucposse o£executinc all docuwents necessary oc ^esirable for IS •HBR 001958 1 ,;.i;<i3050 i:484 ttie exerci.se &f the righfcs sec forth xn this pasaoraph* 5.Maintenanc-e o;Liinite*?Coninon Elements Appl^c- .fcenant tc Apartnent 16.Anvthinc)ir;the foreooinc to the contrary notvithstandinc,the Apartmsnt Ovner of Aoartment 16 shall be soiely responsible for the repeir»mai.r.ter.ar*>ce and restoratior.of the LimUed Common Eleroents appuriienant tc Aparfcment 16.In the evenr such Litr.it ec Cor.nion Eleinents are pot so repairectf niaintfiined ot restorefi bv the Apartroent Owner of Apar^nent 16,the Association shall perforni sucb work ai the so^e cost an6 expense of the Aparttnent Owner of Apartment 16,and repa^ment of fche Associ&tion by such Apartmenfc Owner shell be securec!by a lien ageinst Apartnienfc 16,wha.ch 3-ien shall be deemed a lien for common expenses against such Apart.- ment 16 gnd in respect of w'nich lien the Assoclatior,shall have e.11 the rights en6 remedies pr-ovitied zo it in this Decleratior an6 the Act. IX KiTNESS HKERSOy,ths Seclsrert hes CBUsed its duly authoriz&d of^icers to sxecute tfcis Declarstion this /^3 day of july 1976. KAKAtEI BRC,INC. f C'P • By k;.ii.il-..'.fc,c.\,,_,,., It5 .;£S. DECLARAKT 20 HBRodl959 ;.;;;.i3050 ;.;4SS STATE OF E.VA'.?.;! CI"!:.=.>;?CC.L-X7Y OF KOXC.L^Ll- .'ss; ) On this 31 aay of /-k^V _.1976,before jne appeared ^4«^f£jLc^(f?.(/A<^^_^t.o me personally known,who,being by jne <3uly swocn,did sey tbet he is Vice President of 9AKALEI ERC»IKC./e Havai1 ccrporation;that such corporation has no corporafce seal;that $uch insfcranient was signed on behslf of such corporation DV autnority of its 3car=of Dit-etftors?ar.a said _/^<^KCi^/£./^^n^ acKnovledged such anstrumenfc to be the free act and deer;of such corporation, 'S^Lfyw ^.^tt(ttAa-- Kotary Public,T'j.rs-i:Judic.laT Gi.rcuit,State cf Hairf2..s,i My Con'r.lssjton pxpirey: e'..0, HBR 00196 Hanalei Bay Resort Rises from the Ashes |Grand Pif Resoils Orand Pacinc Resorts GRAND PACIF1C RESOKTS Time Away^Time Togethff>-. Ownership Management Resorts Vacation Well Support Owners Community Home /Owners Lifestyle /Hanalei Bay Resort Rises from the Ashes Hanalei Bay Resort Rises from the Ashes The fire at Hanalei Bay Resort erupted in the early evening on July 1,2011.Flames licked the roof,sending billows of gray smoke into the balmy Hawaiian air.It took 18 firefighters two hours to bringthe blaze under control.By then,the common areas had already sustained substantial damage,forcing management to close the charred restaurant,bar,front desk, convenience store,and fitness center indefinitely. The closures represented a major setback to the resort's board members,who had worked tirelessly to restore the Princeville property since separating from their developer two years before.The resort was the jewel of Kauai when it opened in 1978.But three decades of developer mismanagement had left itwith climbing delinquencies,depleted reserves,and 15 years ofdeferredrenovations.Now the resort had to contend with a multimillion dollar insurance claim and major reconstruction project on top of everything else. "It really was a perfect storm,"says Deborah Fraga-Decker,who has served on the board of the Vacation Owners Association (VOA)since 2009 and became its president in May 2012. "We were left with absolutely no reserves when we became self-governed in 2010,and we were operating in the red.The fire was another major obstacle." Faced with an increasingly dire financial situation and the loss of its common areas,the VOA partnered with its existing management company to start a rental program.The board hoped that such a move would generate much needed revenue to offset delinquencies until the association could build up its reserves.However,the management company faced one challenge after another,and the rental program eventually fell by the wayside. EXHIBIT 5 htlps://www.grandpacificresons.com/hanalei"bay-resorE-rises-ashes/[9/29/2020 8:25:25 AM] Hanalei Bay Resort Rises from the Ashes |Grand P(•Resorts Grand Pacinc Resorts It wasn't until NQvember 2012 that the situation took a ;i turn for theih^tter.^gfcrnQnth,the VQ^held ajoint j meeting,with;.the,^!iE^rt^,^Rl®-unitio'S'Rers..":...';:,sl'l^pciau<ii^KKBSIII'i8SBIaiJlnE3sl ,,,,;©W!^|||^gg|||||J||^iTOri]g^ii^ long-term.Rlain^^gglsl^.'s-SfilSSII^ Over the nexffewweeks^aTreshvisionTorHarialei Bay Resort emerged.Both associations dreamed of reopening th&areas daroaged in the fire,establishing proper reserve funding,and reviving the resort's reputation as.oneof the most desirable properties in Princeville.They also wanted to boost associate morale,which suffered after the fire, In February 2013,Hanalei Bay Resort contracted with Grand Paciflc Resorts,a California- based timeshare_management company with more than three decades of experience.The VOA and AOAO looked to Grand Pacific Resorts for financial advice,and the VOA began renting and reselling its delinquent use weeks. By the end of2Q1,3,the VOAincreased rental revenue from virtually nothing to more than $450,000."We exceeded our budget in the first quarter for the entire year,"explains Jim Braman,General.ManageroftheVOA.Inaddition,Hanalei Bay Resort processed 85 resales, generating an additional $96,000 in assessment income in 2013. According to Ms.Fraga-Decker,"We're now in the black.We've been able to fund a very healthy reserve that should keep us well-positionedfor years to come."As a result,both the AOAO and VOA have been able to address their other goals. In 2014,more thanthreeyearsafterthe.fire,J:1analei Bay Resort proudlyopene^:jts;3-ig^l:|^t.|iti]c!;:l(gi-J|g|i,'; which was awarded the SilveiARDXfor CommOn-ZS! Area Refurbishment by the American.Resort.^^^^ DevelopmentAssociation(ARDA)in,2Q15.The.resort has also finished its long-awSited renovations with help from Grand Pacific Resorts,which saved the associations more than $600,000 in construction costs.It once again boasts the flnest tennis facility on Hawaii,Gomplete.with two professional instructors from Peter Burwash International. AOAO President Michael Rembis attributes the resort's renaissance to thestrong partnership between the AOAQ and VOA."What's been really successful for us is collaboration.That's the secret to us being able to move forward for the benefit of the resortas a whole." https://\v\v\v.grandpacificresorts,com/hanalei-bay-resort"rises-aslies/[9/29/2020 8:25:25 AM] I-lanalei Bay Resort Rises from the Ashes [Gmnd P(Resorts Grand Pacific Resorfs (' All of the improvements are boosting associate morale and guest satisfaction scores.Guest Services Manager Lillian Watari has worked at Hanalei Bay Resort for 30 years and compared the lobby reopening to Christmas."Now we're finally getting our new beginning," she says."This is the best the resort has looked in decades,and it's so good to see the sparkle in everyone's eyes again." Upcoming plans include the addition of a swim-up bar to the resort's award-winning pool and the reopening of its restaurant and main bar.Nigel Lobo,Chief Operating Officer of Grand Pacific Resorts adds,"We feel privileged to manage such a beautiful resort,and we look forward to taking the service and amenities to even greater heights as we partner with its board,owners,and associates." The future is bright for Hanalei Bay Resort.The VOA recently opened a new onsite resale office/which has already generated a great deal of interest.Thanks to the strong leadership and thoughtful collaboration of the AOAO and VOA,the resort's new and long-time owners now have a beautiful piece of paradise to call home. This article originally published in September/October 2015 TimeSharing Today Are You Interested in Grand Pacific Managing Your Resort? Your First Consultation is on Us! First Name Last Name Zip PMONE^;(###)###-### Email Resort of Ownership littps://www.grandpacif1cresorts,com/hanalei-bay-resort-rises-ashes/[9/29/2020 8:25:25 AM] I-lanalei Bay Resort Rises froin the Ashes j Grand P^Resorts Grand Pacific Resorts Comments O of 200 max characters ?^1s^l Get in Touch 000 CONTACT MEDIA OWNERS COMMUNITir RESORTIME GPX CAREERS PRIVACY DO NOT SELL MY PERSONAL INFORMATION COOKIE SETTINGS COMMUNICATION PREFERENCES 02020 GRAND PACIFIC RESORTS.INC. ^, .,»....»,.,»^,.»»^WaHWSf GPX FINANCIAL CON^ANV ResorTlme https://www.grandpacificresorts.com/lianalei-bay-resort-rises-ashes/E9/29/2020 8:25:25 AM] Coi^o(^;t tlawai i Overview Legend 0 Parcets Roads Parcel ID 5-10110030000 Situs/Physical Address 5380HONOIKIRDMASTER TotalMarketValue $0 l.ast2Sales '^^":f"Si^^^^ '•"::i3^^ • Acreage 19.174 Class n/a MailingAddress HANAl.EIBAYRESORT BriefTaxDescrlptlon n/a (Note;Not to be used on tegal documents) TotalAssessedValue $0 Date Price Reason Total Exemptlons $0 12/2V1999 O VALIDSALE TotalNetTaxableValue $0 11/14/1994 O VALIDSALE The Geographic Informatton Systems (GIS)maps and dsta are made available solely for informational purposes.The GIS data is not the official representation of any of the fnformatton induded,and do notreplace a site survey or tegal documentdescriplions.The Counh^of Kauai tCounty)makes or extends no ctaims.representatlons or warranties of any kind,either express or implled,inkidlng.withoutltmitation,the implied warrantfes of merchantability and fitness for a particular purpose,as to the quality,content,accurac/,currency, or coBipleteness of the informallon,texfc maps,graphics,tinks and o er items contained in any of the GIS data.In no eventshall the Caunt/become liabte for any errors or omlsskins In the GIS,and will notunder any.drcumstances be liable for any direct,indfrect,spedal,Inctdental,consequential,or other toss,injury or dannage caused by its use or otherwise arising in connertianwith its use,even Jfspedftcalty advised of the possibiiity of such toss,injury or damage.Jhe data and or functlonallty on this site may change perfodfcalty and withoutnotice.In usidg the GIS data,users agree to Indemnify,defend,and hold harmless the County for any and all liablllty of any nature arlslng outofor resutUng from the lack of accuracy or carrectness of the data,or the use of the data. Date created:1D/2U2020 Last Data Uptoaded:10/21/20i20 9:12:46 AM Developed by <«?>l?oh. ide[ EXHIBIT 6 •fff 'mKBBiN'li Princeville at Hanalei ^ April 28,1972 Mr,Brian Nishimoto Planning Dlrector County of Kauai Lihue,Kauai 96766 Dear Mr.Nishimoto: Porwarded are the variance applications,exhibits and $25.00 fee for the Hanalel Beach and Bacquet Club,a project being developed at Princ.eviUe by General Hawaiian Development Corp.A variance is requested to the current interim zonlng ordinance.It is hoped tbat this would carry into the new CZO. Please contact us should more information be required. '.purs truly, )onn A.Carswell Project Manager DAC:bg Enclosures /';Qn .;"-"W"^..;«io-->V^ "\ccvwv ^.^^ EXHIBIT 7 l-1analei Kauai,Hawaii,96714 Telephone:808/826 6561 HBR 004198 COWTy Qr'KAUAZ PL.UK'E-SG 33r;V".T;.E;1T LII!U"3,EAUAI VA?.IA(;CT;AFPJ,TOA?Ip:I (lliterim Soning Crdi.iu'nce i!o.107) NAIE OF APl'UC'-UiT: ADBISSS: GENERAL HAUAIIAN DEVELOPMENT-cuRpuRHnar 745 Fort Street~P,"6,!;ox/3treet Hono1u1u,Hawaii'96813 raoiE;N0., City 521-6537 State 3ip Code For ?.L?.:i.--:L'-<;^•'-•a.'.'ir;^".!:'!s?_'^-~!.;'' £pplic?.tio".;'.-i. Sa'Se '.''."C3iv°''L:1/-7;-// l/-.tf-_Ti^~ NoVr.r.Fee':':acl.:Yes i-' 18 Plot Plcns:Yes-;/"'~'Ko' 9 Prelin.Sketches:Yes i^Ko Is Appl.Valid:Ies,i/^l;o_ Itejected By: Accepted Dy;^^_^_.^,^..^,-bf_ Date:Tv\—3-i-3Ti-- :z=—':—==s= 4PS3« ^APPLIC-UiT IS:(please d'.eck o'ne) x (Purchase and Sale ,agreement) ^ (Letter by appoiiitee required)\//}i'rn'Kw\'^ LANB Oi'.]i''IEaS!lIP DATA;(Please indica-ie ovmership as recorded in State Tax Office) a.Oi-.Tier of property b.Lessee of property c.Dtily authofiaed ageut •-'t.^>»n.„„'":*.!"""v.iS'. 'v li ^^'^•^£\ IF PaOEERIY 15 USAS3D:Bidicate muriber af years leased: FROM:,,,_._.__._10: Notei Lessec rmst have sxi imexpired and recorded lease of five (5)years or more from date of filing this application.Attach copy of the lease p.greement. F11e Plan __. TAX M&P I(E?:__^_a->-_l_l-o ^___^p,UIC3L N0.;1187 IOT KO.!_16____,LOT SIZB:829^,000, sq.ft. INTENBED USE OF PaoPSRTl';(Specify exact use,niuriber of units,etc.) Appllcant intends to develop a 132 umt apartment complex centenng around a beach and racquet ctub.In addition,there win be 2 swimniing poo1s and 11 championship tenm's courts,Induding an exhlbition "center court"located in front of the c1ub.Parking for ISOcars 1s near the entrance of the property.Transportation within the project and to the beach access is by electric cart. PAaTICULi\R P."'>OVISIOH OF TiE!ZOimiG OnBIl-'AI.IGS ISOM 'flIICH E'rS VABIAiWS I^BOUKIT: SECTION 3,OROINANCE N0.107 , Indicate here the section of tlie ordinance HBR 004199 i i'ariMic6 Applica'tion -Cont'd COI'IDITIONS JUSTII''n;;G ?;&;V.l'UiU'IO:!;'tCTTH P,\CTS Ii','UIOATD;Gi rhat the application presents a •sitiii'.tioii 'fherein strict enforce^siit of aay provision •of thc aoning ordinance vould involve practical difficiilty.or um'ecBSsa".'hardsliip a:id tha's desii'f.ble rolief inay bs graiited with- out beiug detriinoiital to 'cho publlc inte-'est,cor.veni'snce and walfare; The project is designed to supplement and compliment the general plan for Hanalei. The racquet club will be a major center for tenm's activity oh both the amateur and professional tevels.The club is ideally sui'ted to ehhance the stature of the Princevi11e recreational community and the variance wou1d therefore be in the pub11c interest. TtE_]?OJ.LQWNG-JB3;3ET:TS .U^'3 igitSICTiil^JI'GI TIIIS APPLIGATXOII .TOR VAT<:tAtIG3'AITO IS II3RSBY EHCLOSEB OK A't'EA.GIEia:~. 1.U3ASE /IGISSJil.RKT;,.(Plcase chec'c,if aay) 2.V33TSS IMBIC.Vj'niG ?0',CT OF ATIOI.UIiiY;(Pleaso chec!;,iS any) 3.PU3T PLiU;(83 x 13'-'Biinjjmim size)KU'flLIO SCALS SHOTOMO:(18 copies) «l,Acljoiniiig proportiea b.Adjoiniiig strects (indicate R/;'/aild pavement widths) c,yatrral v?ater coursos d.SxiEtiiig topogi-E-,phy (as required for sites over 10^grade)c.JiiXistiiig casei.ieiitB .:f.3Sxist.uif;trcas (liu.u±cuun dianetor C"). g.Sise aiid dimension of lot (netas and boimds if possible)h.Lscation of e.'a.stin,';istnictures on property i,Area brealcdovm for various use in squaro footage - 1)'Building .'• 2)Open space j.location of iateiided stnictures to be erected on property - 1)Biraensioiis properly inclicatocl '.. 2)Setbncks ••.. 3)Spacing diiicnsioits k.Off-street parl;iiig plans ancl layoiit 1,Circulntion sttucl}'(uiternal)-'. 1)Traffic ....• 2)1'oclostriaii m.Title block sliowuig; 1)Nanie of applicant (owicr or lessee) 2)Intended use of property .. 3)Tax inap key •.•. 4)Date of subr.ti.ssion . 5)ficalc Etnil north meriditdi .• 6)Besifiner 7)location (to»m or city). HBR 00420Q 4 Variance Application -Cpnt'd .4.P^'elirainai-}'skecc^plans of iuteaded struotures drai'm to scale shoi.'uig:(9 copies) n.Floor plKns indicating its USR and floor areas of rooms b,Blevation viav's shovung hoights and shapes of stx-uctures aad ti-pes of pertincnt co'istruction niaterials Intenned for 'the structure, 5,To cover cgst of -public hearing (notice in the nerspaper),aii aniounl;of $25.00 accompanies t'nis request for varianoe-.; I .iinderstaad that the Planning Birector shall be aiithorly.ed to officially accept all variance aaplicati.oas as p^ovided imder Section S,Ordinance 107,•, Apri1 25.1972 Date .,^E__'J</VA._^YAAA-<A_ .ppla>cantt£?Signatnre HBR004201,. Eagle County Development Corporation PO Box 121,Hanalei,Kauai,Hawaii 96714 Telephone 808/826-6561 £?7'^-. May4,lj» Mr.Brlan Nishi.moto Planning Director County of Kauai Liliue,Hawaii 96766 ^G^- Dear Brian: Submitted are ni.ne half-scale plans of the Hanalei Beach and Racquet Club.Additional information on building dimensions has been requested by your staff,and we hope this submittal will satisfy your requirements. Please notlfy us it any questions develop. Yours truly, Q-.L^SM^DonnA.Carswell Project Manager DACibg Enclosures HBR 004202 ^I-JI-I jua,8^J!nn n n n n s1o CE: CD I l|.jj_.j»sis|nn nn n n oooooaii T •l'.;l ..I ;B [wsssr 13 00000 |3 O BIWINC ^>1 KfTtHEN 13 00000 3 00000 WlMBiEiBES',VS'SSSiSXS ,AIi.USBB,'SSSQ &(&B® B'iBmiBgwiL.aig Asr ss&s&jiss.,!&&®&B ^aaesssaKse saiwovm.a ,BiAisyAm »t©7*23 FBJB.•a HBR 004205 ONI BEDBOOM UN1T AR.EA -SIE SO-rT. snnwo,,_,_-- --tf. l.iNXr* TWO tEDBOOM UNIT AftSA -1^307 50.PT t.aHwl THREE BEDROOM UNIT AfC-eA -I,&2>t 5Q..rT. COMMHHttaUW ,—_^.,._ UNIT PLANS •»U 2B ^,B3^JLi3I[S !@@i!',(5I§I &sss Ig^!S@'8JI@lf'(SlfciWlS g'lssEsesmiyyg ^s IE&SS^!I,SB ,IS&®;AB wtszssaas.wanBisa&MB,Ai-usoa,woEas s.i&oa ABacaiiBiEtws 'wisovsva ,sssstai IWB nss S'!SB._'%_^B HBR 004206 Princeville at Hanatei ^.y'^WHfiMtr.Bri.an Kishinioto PlaaniDg Director PIaaaing Commission CoTinty o.f Kauai Libue.Hawali 96766 h ^'i^-S The attached plot pl&ns are submitted -to update General Hawailan Corporation's variance application lor the EaDalei Beach &R&cquet Ctub now under review by yoixr staff.Tfae applicant has requested to cliange the nuTober of uiiits from 132 to 134*or 10 units per aet acre on 13.4 net acres.Thus two -uiiits have been added to -tbe proposed plot plan. "Enclosed ars nine standard sizepriiits atid 18 reduced prints. 'ours truly, D..t Sil3i~^^iSfeA!U: s^'f Doim A. Project Manager DAC:bg Eaclosures Hoooi&i,K.Q'sQt.Hawsii.9<57i4 Tefephow.8QS/826 656? 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'i^KS:'-i'-ir-i'); :St(8.k'u»<'SV®;oiB^'K'.", S'SS'KSfW'SsS&^ *•^•'^^•'•t^:^-^'—-:s&ss^&^.'l-'SSSSs'awssii •^eiKSRiS.;, ^^5'^y-ft^^'i-^^^'^'^S?-'^i"l ^S^S^Sl;'^:;}-.-^~rt •"-^'&i.irm ':•-%»?",%.% •^s^ SS ss!&i^'ISSS&Q^. ^.^f^^!?^:K~f:^'! '••'';':.' a;%^-^/H-^^?^'?n-3<?^J W3S S-SSS sKS •'y'yf^i^S ;<^"'-?';t-^^fS^^^^•.•^^i-^^^i/%'K-S3B%IK!"(^A^^^a ^'fi'3is:^Bia^;?as •s:3^^ 'SsSSs'&saS'S.,,^ ^^^t^€^i-ff^i;fc 3 ^t i'. .g?fitKiy;':'Ewc^r°BISj.SS a.^-:s&SyW)S:-KSS:3^ fe^USffS-Si^^^lS fS3iS9SS'Si,v!'9SSaSr'"•.i^fc'^^^^^i!^:^^^^;^^- R 004211 MJ'^tlh.' APPUCATION N0,V-72-11 coiii'm'y,w iu'tuu punae BEiPAsrfflsif .USS'O'fl;,KAOU: S'SiSV SKfOSX RE&ISTERED OWNER 8 General Hawalian Development Corporation EBSSE32 8 AUTHOBIZES AOENI 8 APPUCANT T4X M&F KEY IjOCATION OF PROPEKTT Saine 5-4-11:3 Lot 16 Sltuated along the north ahore at "Princeville at Hanalei",belng Lot 16,portion of 1-A,Unlt IX, and Identified by Tax Map Key:5-4-11:3,Hanalel, Kauai• IOT SIZE g 829,000 sq.ft. EXISTINO IANB USB g Vacant PKOPOSED ru'ajBs IAM)VSE (cocimr iBai'ERAI,Fl<AKi)2 Project Dlstrict mOPOSED ZOKDtff 8 R-10 DITENDED USE OF PaOtERTlri To develop a 132-unit apartment complex centerlng around a be&ch and racquet club;in addition,2 swlcming pools and 11 chainpionship tennis courfcs with exhibitioTi "cenfcer court"located tn front of the club.Parking for 150 cars JLs near entrance of property; transportation withln the project and to the beach access is by el.ectrtc ,. cart.^,^.i.....^'),^,*^-/'-'--r'4"-'-•—"TT^''"—^•^,1^11 ^,^-rLAcu^*'/'^""" ' ^j ^.^^^^Ai+pJ<-^-c^^^-•^-. Density:132 units @ 19,0 aca.=7 units/ac.)cZ-i—1)<-~-<<l—«->-ti'^'°•«:•v^~d.-/ti'-'• Height:31±ft./3 floors maxlmum 1",^^Jk-^.\"i.C,^Jrd^-u-iU kj0,;>-W^IH. EXHIBIT 8 J KAU1I PLAS'iHJNG COMJtiISSIO1 LIHUE,KAUAI STAFF REPORT TO:Planning Coiwnission RE:Va.riance Appli-ca'tion V"7?.-l,l APr-'LICANT:Gsneial Hawaiian Devalopmen-fc Co3;porg'tion (Apartnient Use) al:Hanalei"•A,Unit corrt.Rin" FIHD.TNGS Ths subject.propex't.'/is loca'ked wi-khi.n tha "Pt-inceville •development along 'the nor-th shors being Lot .16,portion of U- IX,'idsntified by lax Map Key:5-4-11:3,Hanalei,Kauai,and ing an araa o:f 829,000 sq«ft.or approiimately ,1.9.0 acses. The reason for this vax'iance is to establish an apartuen'b use .:fco develop a 134-uni't compXex centeri.ng a3:ound a beach and racque'k'slub.In addition,-bhere will be 2 swimaing pools and 11 championship"fcennis cour-ts,including an exhibrtion "cen'ter court"locat.ed .in front of the club.Parking for 150 cars is near •the en'fcrance of 'l'.he propex'ty. Transpostation w.l'fchin the prdject and to 'the beach accsss is by ei.ect.ric C8Kt that., fl'£l.k.S2.a 1 FIG >]*9CC)U6T<CJiUJCi V^XJ.X P6 ct m5..(0>C G6^1XS3.X'0.1? ac-kiv.'i.ty on bo-th 'the smateur and professional .levelsi.The clu})is ideslly sui'ted to anhance the s'fca'ture of the PKlncevills recreational communi-by and +.he variance wou.id there'fox'.s be in •the publie interestu" Pressntly the si-t.e is vacan-t.It is wi.thin an area clesignated as Projec'fc District on our Coun-ty General Plan,and is within 'the Ur-ban Dis'trtct as established by the S'fca'te Land Use Coirenission. The following axe coinaents froin the .varj-ous,agencies: .?JATJLS^-I^DEPAR. jNli Mo (fcjection to vaxiance provided all 3eveTopine(rEisR3oIce^.up to sewsr t.reatmen't and disposal fac}.3-ities, Swliri(nincj poo;t plan and buildin9 plans subjec'fc -fco review.,. ECOMQMIC.DEyELQPME.N'r,OFFICE;»/e recoimend approval o£•khis app I icaTron..'— KAUAI ELECTRIC COMPAMY: Unclerground 'facilities have bean inBtallsd in Uni'k IV adJBC.ent,•tt>this deve.lopmsnt;hovievev,on.ly 1,0 (phsse)'powcr .is available wlth a liniited capac:i,ty.A new 5000 kva aubsta'tion is now in the planning stage 'to be built,by ECDC soon.Aftar ths completion of th.ie aubs'tation and 'the sxtension of 'bEansrnission and dis- t.Tibu'ti.on facilitieSi,30 power will be availab.l.e. ^?-/ EXHIBIT 9 HBR004215 ~2- A dlstribu'tion systero wi'bhin Lot 14 wi.ll havs 'to be constructed ' iii ox-der 'fco prov3.de poviier within the project. Pouif?x~supply condit.ions on Kaucix remain as heretofors discussed in de'tail by Kauai Electric wi-th the Plannlng Depar-tment. WAJER.D.EPAftTMENT;Tbis is past of the projec-t district known astFieTri ncevITl e at Hanalei'in which all wstea-facili'ties sre unclsr priva'fcs ownersbip and opera'bio.n.These watsr facilltj.es are adsqua'te;and in .view of this;we see no objection 'to granting the variance .reques't. FIR.1;DEPARTMENT:No coroai&n'ts. STATE HIGHWAYSDIVISIQN:N0 coments. •^..PUBLIC^WORKS DEPT.:(Commen-fcs fortbcoming.) Access to and from -fche p3;opf>rty is through a road with.ln a resi- dential subdivision which has a right-of-way width of 50 ft.and a pavemen-t;width of 20 {t. The climate conditions ara gsnsrally favorable wi'fch teaperatures averaging 74.2°?and an annual rainfall of approxl.ma-tely S&'inches. Tbe proposed development with 'fche density of 10 units p8B acre is in coaipliance with the density set by ECDC on -the raaster plan for Princeville approved conceptually by 'bhe Planning Coromission.As such,a maximum of 134 uni-ks ie possible on 'the 13.4 net acres leaving approxima-fcely 6 acres as opsn gpace. (^X'b shou.id be no-ted tha't ths configura'tion of the eubjec't parcel,as subrnitted,is no-t identical to -that saroe parcel in the tax key map. Acc&rding -to Donn Carswell,projsct manager for ECDC,the reason is b.ecause they want to conaolida'ts and sesubdivide to straigh-ten ou-k ,-th.e lot li.nes.')These plans are bei.ng prepared 'and will be submlt-ted .ehor'tly -to -th6 Planning Departraent.Also,thex'e is a 10 ft.wide sewer easement running through 'the lot at two places (see ffiap).Tbesat accoTding to MK.Carswell,will •b<3 reloca'fced and the plans rsflec.ting thosa changes will be subroit'fced latea. 'As mantlonedpreviously,the'davelopment concept entails 1.1 ,ctiaapionship tennts ciaurts wi-th an exhibit.J.Qn "cen-ter court"and 2 swimining pools surrounded by 134 conclomj.n.ium units and a clubhouse. The living uni-fcs wUl include 60 studios,12 •thrae-bedrooa unlts, and 62 twQ~t)@drooro uni-fcs in two and t.hree-story s'kructures construc-ted o£wood-shingle roofs and plas-tei-walls.The thx'ee~story struct.ure will stand approidma'te.Ly 31+.£'k»'from ground level a'k -fchs highost point on th6 land at the buUding 'bo -tha avsrage heigh-t betwean the pl.ate and ridge of the highest gable ro.of.Tba c.Lubhouse mi.U include a'vs'riety of uses such as"a pro'ahop,dining rooms,bars,shaps, afficss,a lacker room.wi-bh a sauna,and a lounge.The parking spaces HBR 004216 -"l"r' ..s. requirecl for this tot.a:).developmen'!;are 228 spaces;150 gpaces we shown on the plans leaving a deficit of 78 spaces under bur prsfient, guidelinas.These spaces will be located around 'the entrance •to the' property.CirculBtion in and around.tba site v<ill be on golf car'fcs;•traveling on the pa'fchs shown on the plan. ~. COHCLUSION Based on the foregoing flndings and evaluation,the staff conclucfes the following:••. The proposgd use is consls'ksnt wlth 'the objactives of the Coun'ty Gsneral Plan and the fCtis'fesr plan for the Princsville area. Tha u'fcili-bies and fac.Uit.i.es are adequate enou9h •t.o servica the devslopment.. The design and layou-t ot the st.ruc'fcures on the site and •khe use in'tsndacl are compatible -to the surrounding area and to the concspt of ths Princoville projec-fc.This developmsn-t.wl.th the tennia courts and living uni-ts spread over X9 acres wlll.prov3.de an aes'theiica.I.ly pleasing and spacious envrlonmen-k for sveryone •fcq enjoy. The conso.tidation and resubdivision of -fchis particuJ.ar 1'ot,plus | J:hs rcloca'fcion of -ths sewar easemsn'fc uiust be c:onipleted./ RECOIWiEnCAI'IQN Baaed on t.h'e foregoing ftndings,evaluat.i.on,snd conclusl.on,•the • .staff .ceeooiaieiide tha't -fchis yar.lance application b®approved subject•to 'fche fo.llow.lng teTms and conditions: a)All developmen-t be hooked up to 'hhe sewar ''fcrea'tnient and disposa.l facili'tissi b)The parking def.'lciencies be resolved; c)The correc'ted boundary llnes be submittecl a-long with 'fche rel-ocation of 'the 10 ft.sewer easement; d)Bui.l.difig and sw.lniming pool pians be subject to "plan approvKi'l e'nd a)A l.andscape Plan be submi-tted at -the tirne of building pe.rniljb||appli.cation. Approvad; <^^<^^4m^(h S:?Ian78TsE£mof?,TTanritng CS^ec'E'or .,':(6/2/72) ^^4p..,^f^y&^&^i-^...n;.Shiqemiyto,Planner II HBR 004217i '-s.. f t COMPREHENSIVE ZONING OKDINANCE FOR THE COUNTY OF KAUAI S'EAIE OF HAWAII ^_BILL.NO.,•^ ^?^-?.-..'. •1"I" .ORDINANCE N0 .164 •<~~~''. •-1 •• AN OBDINANCE OF THE COTJNTY OF KAUAI,SIATE OF • •HAWAII,ESTABLISHING PROCEDURES FOB'-THE DIVISION .OF IHE'COUNIY I.NTO LAMD USEDISTRICTSj CBEAIING . EEGULAIIONS.FOR IHE IYPE,SIZE,PLACEMENT AM) CONIROL OF STRUCTUEES,OF IHE USE'OF LAND AHD OF STRUCTUBES WITHIN EACH OF'THE'VABIOUS DISTRIC'E!..SPECIFXING PBOCEDURES FOR .THE ADMIH.ISTRATION,.•ENFORCEt'IENI AND AMSNDMENT HEBEOF;ABD BEPEALING ' ALL ORDINANCES IN COKFLICT HEREWtlH.• BE II ORDAINED BY IHE CO'UNCIL OF 'THE COUNTX OF KAUAI,STATE .OF HA.WAII:....... Qv-^vv^C.^'\^•At^'tc.ie.:. EXHIBIT 10 COUNCIt RALPH S.HIROTA,CHAIRMAN EDUAROO E.MALAPIT,VICE-CHAISMAN FRANCIS M.F.CHtNG HAROLD NAUMU CHIYOZO SHfRAMfZU RAYMQND D.SOUZA ROBERT K.YOTSUDA KENNETH K.YAMAMOTO COUNTY O.EftK TATSUO KATO OEPUTY CLEftK OFFICE OF THE COUNTy CLERK P.O.BOX 1549 LtHUE.HAWA11 96766 TELEPHONE 245-3663 August 16,1972 Honorable Antone Vidlnha,Jr.',County of Kauai'ihue,Kauai,Hawaii 96766 Dear Sir: The Council of the County of Kaual at its meettng held on August 15,1972,passed on second and final reading Bill No.114,the Conyrehensive Zoning Ordinance for the Coxmty of Kaxiai with the following amendments: 1.Text -As contained in Report No.PF-70-72 of the public Facilities,Youth Programs,planning and Development Committee; 2.Zoniag Maps -No.ZM-MW400 Nitimalu-Nawiliwlli No.ZM-LI400 Lihue-Kapaia (the area between Kupolo and the former Kauai Inn property,next to Rice Street)Change In zoning designatxon from R-4 to R-6. Very..-respectfully, ^dno—St^-"' Kenneth te./^famamoto County Clerk,County of .Kauai ms att. cc:Planning Director TABLE OF CONTENTS .'(' SECTIO!?1.00 SECTION 2.1^0. SECTION 3.00 SECTION 4.00 SECTION 5.0.0 SECTION G.00 SECTION 7.00 SECTION 8.00 SECTION 9.00 SECTION 10.00 .SECTION 11.00 SECTION 12.00 ..SECTION 13.00 .y-~- TITI.E,PURPOSE AND GENERAI,PROVISIONS DESIGNATION OF DISTRICTS,METHOD AND EFFECT OF ESTABLISHMENT OF DISTRICTS,AND ZONING 14APS USE DISTRICTS . SPECIAL TREATMENT DISTRICTS •'... CONSTRAINT DISTRICTS ,. PROJECT DEVELOPMENT ... ZONING PERMITS ,....•...:• USEPERMITS..•:'..- .•. ''.. VARI&NCES '.••.;.... AMENDMENTS '•...'•. NON-CONFORMING STBUCTURES AND USES .. DEFINITIONS^.;•...•.,.:;\...'. ENFORCEMENT,..LEGAI,.PBOCEDURES &ND •:• .PENALTIES :;:.-•,'.:..'.....•,.........:'....,'.,/..- SECTION 14.00 EFFECTIVE DATE:;This Ordinance shall take effec.t .Septeaber 1,1972. .INTRODUCED BX:'';•• RALPH.S.HIROTA Councilman APPBOVED: .^r^;.// Coundilman Counctlman 1 ?•-<•.»->.-z,^^(^/^^^u./?1.<^i-/'-<-,^.-ss\ //^:CounciimaH'^:•^"'—'""~-7--~.'•^Councyl^ian ^^^>^4^'.'^^^^^ ^'•ii • CohncKLman DAIE OF INTRODUCTION:.;• June 6."l.qyz Lihue,Kauai,Hawaii /y^^^ Cbuncilman~^~ CERTIFICATE OF THE COUNTY CLEEK ... I hereby certify that hereto attached is a true and correct ^ of"Bili'No'.-il4'which was passed on first reading and ordered to'print by the Council of the County of Kauai.at a meeting neia on June 6,1972,by the following vote:;..^ FOR PASSAGE:Ching,Malapit,Naumu,Shlramizu, Xotsuda,Htrota TOTAL -6, AGAINST FASSAGE:Souza ABSENT &NOT VOTING:None. Dated at Lihue,Kauai ,Hawaii June9,1972 TOTAL TOTAL 1, 0. ^^•^^;.. Tatsuo Ka£&^ CouTity Clerk ('•nimt-.v of Kauai r .^'v•'^ .fi:.... 0 ,/•'^. .,/—-. ^,. OFFICE OF THE COUNTY CLERK,COUNTY OF KAUAI STATE OF HAWAII LIHUE,KAUAI,HAWAII CERTIFICATE ' 'j. f. I hereby certify that hereto attached is Bill No.114,as amended,,: which was passed on second and flnal reading by the Coimcl.1 pf the-'I County of Kauai at a meeting held on August 15,1972,by the following vote: FOR ADOPTION:Chihg,Malapit,Naumu,Shiramizu,Yotsuda, Hirota AGAINST ADOPTION:Soiiza ABSENT &NOT VOTING:None _"s.Dated at Libue,Kauai,Hawaii, this 16 th day of August,A.D.1972. TOTAL TOTAL TOTAL 6>,: ^0. Kerine th'-'K.^Yamamo to County Clerk,County'of Kauai ATTEST: A^/^^. Ralpb S.Hirota Chairman &Presiding Officer ^^: /^REciCO ^ AUG.30.1972|Sj ESu'riWCLEIiK l>fr] COUNTY OF KAUAI UHUE,IUUAI, HAWAII Date of Transmissl.oa to tbe Mayor; August 17,1972 Appcoved this /'/tA day of August,.A.D.1972. ^^o^E.c-^L-^2^.^/ Adtone Vidinha,Jc. Mayor County of Kaual r ~~ <\ P^^W^mum^P) ^^e^<-^^e%2t -g ^/f^, MR.-.-.L^F^y^N^t we [.l0fi''l;;l-t'ii not a ^WR ^F KJLU^.tll^i->'>'(>'-'.i-ct .T.');LC(U:u'e r9~sS.iIc/nT fi-fciiff.X would ini?i<j:l.iiB the .^a-it:f wil.l ^G •frniji the ifCQ<t o?i-liina,l.KJ.. Ma.4.1-Oy^S;How woulv!your mc'nibyrsh.i.p uo""by the lifiOfrtli;.'..l-?: montliSp u.L"~uhe year? [lM&.^ti^(21'.]?:I't.woul'i ^e a pi'ii-'mfinent ;rt-2inb«i-aiu.p i..vliJ\;f):;;'I!;L-;I ',.>Qft be soXcT'fo someKcjciy (ilsfl',ay we sou 5-i a-i:thiy I'.ifi'c;, MJi--...-T/i^M^i?; 'Huw do you ln-l:t.;nd to iiaoclly Lh'-f d^.-^iii'yA .•-«i.hj.^ yrea;~wiTitl)^.~B"0 conteu.L.l.ed i?y thy 'isroe roijte?W.U.I.K.i-ic'i'r^i;t!lrd propftr^V below? :L.l7 ''^-pr^aS'^.v will bocayde il^^'u ii-i v';.>t'\'j.it'cle .icvj ci i.i.itr) t'.roin Ihs '••iiHrtc.'Lny d:c3in;:!jo ).-i2i:t,>:-.^ri3.The c.i'u^&jl'pct'i/fc.-,yj-ii •jli.^f't^;<:-;r' back t.o [•.hls yitJ ).y (cleycc^bKil the^d£3J.i"igi:'p.-iX't--ej;'if ,-aHSa^^^.S!w:it^i^°5°^^ V ;h^aife^£ffi%®il%^^s^j||^[^^a^^"Kow:^o'7Y^[^i^^^.^<)^ .tiR,^^OX;./<-tire tuki-iici i'l'i i,iniirt:r sdvi-.ifnynt roT;.r?t>.Ki^';vj:-1 i''.iL'<."no pliins ^'t"'rKs t.i-rne,, P-^^.W:11 T'IB ^arkinc|"?amoi.ltiv.a vio.ro banscl on gtine.'cftJ,-.•st,iirid;)rci£»-> 'ill,h(}$,,^i&,..nfta(r;'bo'knuw i'a bhtl:s^act nafcn^o nf t^is (iavaj.optnen.t..fi'i'i;'b 9ti.;LyH?9oAntj.^.ci,;'he.^lini-iit.isl.'l;a:.:ithe,mefiihersi'iip,then X .(ianr1;s^.e niiy ne<,"',l ^^.Jiha^i.X'i.ttUf).!;,q,f pai:king,;.-Aii;t .tf i.-c'y .going •iiu be made aviiil&h.l?•'to •thfeP'yb^'^'c'ii""'cl^iA'l.y ba.s.i^-'bhen "?,'"anif.ii.inl;af st.alis m"?-i.ho prov^dc-.c'v A^.Ahei.-tAmQ ••t.I'ie,.sUff pra'pa^tl tlift •(:ep,o;d,.,-Lfio na'l;u'ce u(;'^.IK.'d^vo.t.op- nient,v;a^iiot clttrir ys y')6.Tc;ti.,.a:c''e hw^bypt^u:^;-!<;itct?Boi'y visy^,.su •hhfi ••s'fc-af^'jus.t,uw:)(i the no^al Stanciardt?..l,l/e s'till need to know f.hB eicBct naturs of this davelopmsn-t;bo U'on out the pa.i.-li.i.ng 3;eqy.i,;-;ftiuyn,t,, I'-?L.^QHNSTpM;You w:e i'-ai.kina abniit.i-in tiy,i'ti,Mtion '.;oiu"i.;^w>;!u3.d a&ayme~:Ei:iHT"y''ou~v7il.T.-t;¥y -t-o sU-.yac-b oi>yiii[-!loiiyfi,!.p i-.fttim;^thon pia'cl'.i.p'i w.U.l hs a probloni. MR.'-.ro^-•^1'-I^y rior>''t',uj;o\/i<J.;;^ri.iiii.iat.e prjA'fi.liKi.!.l v<i.if;'^1.^^ v,i,iib.l.e~p"i:o;[S'c.T.^'.S'e src ptudylng rit.n'.hyv;vra can p'.i:ovl<:-thft pr'ji;lc"t.t;t:i"n cin au^3,3;i.rt^Y b»!?.l£;.,"/H'I.'S hcippy you b;;vi^'yht 'fchA1.':•(•o our ;i't'.t'.?;nt,'..nn. ;UMfX;:l^Afr.;,-•'i'/ho i >csi)you pi-essriL i.hA ^>p^':;Ui.^••l^l^ti^<,;!•!f-ls<,.'.|;>;.;i:Hj,(i9? ^•^^&'-c"^^eeL ^'•'Wit 'i.p'.tsyu ^'A~^,//< I'-^L.-^'OK^li ^Si1 Yt"->t^yFtTy 1:.!;(,"liti.^t;;!t.-.i^ifi^-f^-wiiy? U&.^.WX:SiJ.yhi.nciw .'.^'s PG-!:CSI .i.u,1'his i^i uii yafi^raftnt fc!(.,1.!<yfi besii granl.eci tu Pai'K?;l..1.7 t.u thR 1?t?ai.h sX'^'a (po.Lii^ecl out ;.hh:''.yaci^ <llCCOt;&),. ?>W.!_-SQKi;l!V/tiuid you ^stima't'?J.v>•s.'5 be ffhout 500 ieui? |ll!l-_![OX;No,we rion't 'thlnk It's T.l'i.t f ,]•-••...300-'IOl)faat. (Afi..JQHNSTON:IAl-.Csii.^wfi.LL,HTB ••uni sr,i)..1.liol^li-r.i ':i<7r.:-:;4i'•.•1";;'!":• lio'l.el.TOKor-l:UPB? .<;tins"/Ki.L;ve;?;-h9-fc h.;?£-;ci-;t.i:^"^y,.^"tt^ji.'•"->'•;.-.•••.-".;l;.i-!;- Rnri of^1')eros>:(3(?wr»to tlii'boacl'i,Tlti's •nFL,c.,-)'iittii1,''h:<m 'CtaA'i;<r'.i.n u.;..i.,l. iii'Le.vseul.f.u i';h<i whois r^At^rn hovindary ^w\.'.ft?cl ^u i-,iiu Morcly pt-apii'.ft.y t.0 iite l.ii.',r.-ch, Wi^Lt135'5 *{,P,^MeSzitJ^F-fHE-^^/.^?z-, fi.C^\py^i6.fc^^i^/-p^R^l^R6^^5' ^StVF • ^zr P^STSS?j-^ ...£,lO?^ VA<K^A^^^ffi^rii^^/-f^<(L L^f EXHIBIT 11 HBR 004218 Princeville at Hanalei /s>ff'-i':S <^5S7/^."~'v\ ^.:-' ~<K'J June 24,.1872 \'':,:-\ ;^.''^"•"'-->'-"••I \ Mr.Brlan Nlshlmoto Plannlng Dlrector County Plannlng Department 3021 Umi Lihue,Hawall 96766 Dear Brlan: Referrlng to our Tune 21st dlscusslon on the varlance appllcatlon by General Hawallan Development Gorporatlon,I am submlttlng a oopy of a letter from the archltect,Donald W.Y.Goo of Wlmberly,Whlsenand,AlllsQn,Tong &Goo,to the owner regarding the concept of tbe Hanalel Beach and Racquet Club as It pertalns to parking. Ihe parklng requirements,as established by the plannlng staff are 228.The plan submltted on Tune 2-lst provldes for 249 spaces wlth addltlonal parklng for 20 golf carts.It 1s hoped that thls wlll amply meet the present County standards. Yours truly, Donn A.Carswell Vlce Presldent D^C:at ^-^'L EXHIBIT 12 Hanotei,Kauoi,Hawaii,967N Telephone:808/826 65iiWBR 004223 "\^,..^^fy::'r-!f^^^,^^y^i j:;''''x-'...?1""''.' ••w^^^,.^&fsS ^y^'S'^";-";''.'"••:""''':•''•'"•'. June A:. ;t.;.^ ';•';•••f^: Mr.Peter Amcotts Geaeral Hawaiian Developnnent Corporatioa 745 Fort Stroet,I5th Floor....' M&wsli Building ''.. Honolulu,Hawaii 96813 .Dear Pster:.,...';'•'''.';:•,.;''••.,"'^:'.,•. '•••1WS3S^-'^/^•'"^.:lsif\ff^S^r-/L,'K f-j^{-*'"i•C.5/,,. /•<^'"}'l "y.^j?'{^'"-s0'ta...;K•^^L^ ^SllS^' \li- y ..Re.:,;;{Ianalei Beachand Racquet Cluo -Job #7133 •':>;1: •,,'In raapouse to tke plarialag commtBalon'B report requeBtlag addltlonal .;,.,,pa:rkiag apacefl ln exceas o[tbe 1.50 preaently sfcowa on the.slte plaa,wa.,, ,.,-haye prepared the attached dra'wing dated June 7,1972 ladlcattag how ;."addltfoaal parklog may be accom.pUahed.':,• ^-.•..It-'la.our undfBrttaudiBgthat.tl»i.«i_pxQJect.l8 to be zoned by the Kauai Plan-• .1:,.-Blng-eoininiasioa.a«amultiplc dwelllag.dlatrict.TM.B zoalng impliea •.;"..'•.•.th^tatiteM^li^a..na.gSna.».'*X.c.ojBroA?.cial,.UB^^-Therefore',. ;;^dto";p»aski;agyr<'quireid.£or;thaBeAcfe AOfi^Jtasquet Club'eihould Ae Aas^d on ;}',iL,tbe-oaO-{<iT-ortep»rMng requtremeatfair,the:dw;ellingunita;Wewould,;•, ;J,,»li<(y«tr.ec6gn*ae;thatadditional;parklng_sbquld.be proyided for the^^. ;..qtd.jreAi.tsi^in&intain the grounda attd.the Club facllities.We would estlmate • ?;;..;th»t''tl>enoa-re»tdeate(nployeeBwould tbtal ap'proJtliriately twelye,.,.^:i;' •••:^'s'^,'-••-.'••':•-••.^••-•:'•"•'^•.•'••''•••-•"...':',•''.—':''.1 "•^/.%^. ^'!^.A ejl|!jdlA5<lfeth^.Bat3^^.<i£lthe.A?tyittitifto.te°"lB..facilltlea.,we »fould,,es.pe<:,t^.\.; ''^-QC»»(jy^^|jfi^hitlonA.^Untfii6SAt-tQLjhelBBlac<xHl&Eommunity^«aa^eai^ *K-i ttl'"<i;i?nBiiciutitty';;For these occasioiiis,we would auggest that the owner* i^'-;.•;',aadnianagere otthe prpperty tq^teinporarily allocate.ths greater percen--.' ,;...,.^tagfi^j:>£..thepaye,4;Farklng area to theafer-type parklng.Thls would Increaae «.'-.:i.^';die nuinber of.parlcing in thai area by approximately one-thlrd.The balaace ;;'-.;•','pfthe.paved-parkingspaceB would be resarved (or those residente who : »^£i-:'?lm'1^abticipal.e retUrnlag or lcavlag the groua.ds duriog.the exhibltloa -, !t^?^n^pertod....'...;.;^..'•:'••^'•:•••'••';.;-.•"..:••'.,'':,•''"i'.;'-.';".•;;./': .,i i //—"•"^••..•;^.;."?.•'':•.":.•:' •^•^/^'"• HBR^OCMi224 / ^^^^^^^^^^^^^'r^:'^^:?.'^'.'^'•"^^'^'^y''^•'^.'!"-' ^^&^^%^^;SI^S^I':y'~:'^il9:'':-••'"'^'•'•'••':-:^.^^.^/..•.'•:,'.'^;'^'^^'^'^.^•..^^^^y'••^SWS3'KSM:JW1W ;•:,/--- :General Hawaiiati Oeveldpment Corporadon .'.Attentioa:Mr.Peter Anncotts -Z June 9.1972 '•!?";'.Wcwoul'd furtber recotnBi.esAJhat grasa areae adjacent tothe paved parklng . ;,'.b,e,:preparedwlthagrave.lLbaae.couT8B..inorder to provide addltional ov^r- ,.,.'.;,;'flgw parfclag,Doa Carswell suggeated tbat this is presently being uaed !;. i •'.Bucceesfnlly at Princeville.aad has been coinnaoa practlce ia soine of the ;. 1',;-•;olderHonplulu commualties,aucb aa the Kailua dlatrlct where theTe are ,!^,.;;,no.Bti'eetcUTb8 or driveways to.maay of the homes.'This wlll be tlie niost. .;,.'y-''Best.hetic solutiQB totbe occaai.onal additiooal parlcing requlreinents,I. ;,;.-.~,.'.'.Upon y.oiir revlewof the attached drawiog,we.should get togbyteriaad dlBcuaa ;••^.•'•ttiiii caetl'idd o£preeentatioa to Brain Nlshlmoto.Aa waa stated la the publlc ;^;';i;^.;^i^fae;ariBg,vetndicatcd.io;li>ecnthat our re»ponae 10 the parking quesllou?;'' '.,..;.^,,".;'y9uld beforwardedto thenanext week,..,.,-:\':v^"f:.-."^.^:'^':''^-.:''-•• ••i^; Very truly youra,•.^:!-'hi'S:'^,^^:^.%'2^M'.i.:.i''!¥'^.^••••y ; ^^•i^6'^;':';;;'>''r:-^?i^:''''?^''r';;\-i:"'''.^':•.-.'.::"<'''^;.:;i •^..','"'•. :^-i^^^^M^y^^^S^S!'S/.::&s^-s'''::\'Ponald W.Y.'-poo '••.^^ft.'y^"^.^^'^..' .-,!•'....^.^.^•.''-••'..'•^••.•:'-'i'^.^'i-^.'-^-'-^•.'^:''e-.' .••••''''•'•••.'•:.'•L,''-^."•-•'";"'.'•,.••'.'•"'^•'''•'•••"•''•.••••'"•^••'-"':':1-IL'''';'..-''••'"'•'....•"''...'":••;''•..^•1..-:•;..'\.'..^../-'..•:•••'•:;:^^OWYGi'cay.;,^ A^^^.^'^^^ucloBur?,,,,^"^.'-?!^.;;;;,^.^^.,;.'.:-','.'.••:.^;:.;,.^ K ••'•'f^'iSy'fi'sss^^^fgg^'S:^^:'^:'v~is ^'[/•''^'•.^•^.' ^',:,^X^^^3^M^®^^^^i^w^^-^l^''':^i^^^'^:2S^1 :^^^'i!i'iS:l^'^'":^^.'•y'^'-; '."' •Afcri'.^'f?;^w':"?^'•.•••'.," ^&'':n'^^g^,:'sl%K\-::^;'^'ei'v^:,'^;c:"'^'-:':'y';'''?;^'•"^••'M:'«S}:W^wsy^:n/':vf'^''^"s^''.•'.;:^'::'^ .';-.l:':.";'''';?A,:<N;ft'^:;<<':.i;.y%svi?tA'^''''-wLi''t";.1''..''^'^-.'.;;•'-''•^^;:':y:'•'s^Sgit^S'yii^s^Wv,.^^'.;^..''.s;^'':.';.~::'•"y^'^•..:'"• i&^'^fe^^^^^i's^.^rf^/iy;:^;'.i:'^'^•.;.''''.•''.'.•.^"•'.:"-:''-:':'^i^sc'vaSf''-,,yS'-::v :,'•:'' :y^''^.:^''^'^v:s'K^^^y\'^i'''i'\^.'''^'"v''''.f'';"'.'•;''•''"''•;.',','.••^".^^^:.^'-;-':.: 'i-;:^'HBR"004225 :^ June 26,1972 .^'il3^..i^y'iit^,^r!j "^•;;. r'"\(l' '"'""" V""\s -w -)3;2 't. •r "•-.; a^i-;''"u.'t.-^'."i;/,r ^,, '•"'-°•"w ,^/' County of Kauai -—.i...'-»-i; Kauai Plarming Ccmnission Lihue,Kauai,Hawaii Attention;Mr.Brian K.Nisltunoto,Plaiming Director Subject:PKTNCEVILLE -LCCT #16 Gentlanen: The staff report of the Kauai Plamung Ccmnission,dated June 2,1972, -SOTE the proposedsBanalet:Beach anfl fiasguefc.Glub recaimends approval subject to five Oonditions.Since the date 6f the public hearing General Hawaiian ^Develqpnent Corporation has talcen the necessary actLon to;,sati.sfy tbe; specified conditions. With respect to the first condition that "all developiient be H30KED up to the sewer treatment and disposal facilities":the final oonstruptton .documents will be ocnpleted indicating hookup to the rnain sewer trunk llnes provided by Princeville. In conneetion with the second condition that "the parking defiaiencies be resolved":General Hawaiian DevelOE>nent CorporatLon and its archi-tects . have revised and expanded the parking facilities to nore than adeguately handle the requisite parking as shown on the attached revised site plan-(iated Jime 7,1972,showirg a maximum of 249 cars.The related.guesteua ;;Gf<«tetet*intena^;Bse of this privato facilit^is descrtbed to Jolin;Iteia.ly's .iinaggiKgSfflegpE^June.lA,:I972,and the architect's letteyof;JUnfi,9,lg'72., attached herebo. Iti regards tto thtrfl conflition that "the oorrected boundary Itnes be sulxnitted along with the relocation of the 10 ft.sewer easement";Eagle Oounty Dewelt^nient Corporation has-sut.mitfced or will subnit to you the revised plan reflecting these revisions. Eeference the fourth condition that "the building and smmmlsg pool pLans be subject to plan agprcwal":General Hawaiian Developnent Coiporaticn hereby gives its assurance fhat the taiildlng and swlnming pool plans ynll be .ocnpleted In accardaiice with tlie aiylicable codes and regulations and pcesented to the appcopriate agencies for aEprcwal. ^.^'b General Hawullan Development Corporatfon 74.S Fort Street,Suite 1600,Hawtfii Bw-lding,Honolulu,Hy,ip^\^6 iaiie_SSl-e79.l County of Kauai Planning Ocaamission Ke:Princeville Lot #16 Page 2 June 26,1372 Beference the final condition that "a landscape plan will be sub- mitted at the tlme of buildlng pennit application":General Hawaiian ; Develqxnent Corporation herety gives its assurance that the plan will be suhnitted as required. I trust that the above information is satisfactory to you.I ; will be present at the July 5,1972,hearing in the event you should need any aasistance in making your evaluation of our pioject. Yours very tculy, QENEBAL HBMMIM]DEVELOEMENT CORPOKMION ^/ EeillyfohnW.Eeilly General Counsel Enclosures JWR:CS D.W.Y.Goo D.A.Carswell HBR 004227 ^^rw ?^'«..' •'fSi \'S s'?'^^P^-¥4^HEMORASUUK 'so:•n'iiE ySOMi JOHN BBXLLY SUBJECT;HiiNaLEI BEACH ABD KACQUET .CU!B ^jAffV^^ tti ices-oastse to inquiri&s £ro»tiw Kana.i Plaiw'ii.ng CoiiBaissloji|re- gard.lag the.in<-.®Kded use o<'fche B.iBg.lai B<attc.h »Rac^uAt Club, ttsfi followitig inSormats-on ;s.s svibifti'fc.fced;.; W ']:^-to/'sloPS1-'' .G»s'~r^. S'iscl)yu.h!.i'^Sf^S5~SS (2) (3) •<ii,i«-iTBraSEr7a~<w.a9 ha^-®B<feS(^M^a3ia« ari^«^ili^^ •«»(>.A.t»»3.AlA-&iL^^aaiJAiaa.Such entifcy will distaCTii.i.ne tfte SGOP&o£nee 6f the cXub..•Pfe—a-s ee';rtian>»la*fi£LAte.'i*'"»s'®-CTt t*^-<sta}a«^^U~AiiB«Jj]^j.£gd_£o_jiiah»aeia)&«TB'',Siace tS'ia club .J.B theya^ors ao't ;i.pVtSii.'.;iaeility ifc.is fel'liWftiaaAB^iiagaB' Siac®the club wj.13.be a rs3j»s—fca»aA6~<!i*)sito,it is antj.cj.ge.t.ec' that t.her®'priXX Be-shseis^TSHST'^a&'lriio—fe^w'etra's'ieniss.To handla any Keaultis.g.a.dAl.fioRal pa.ckitig ^sq'sixesssa't.a,our a.rebitects bcive laevis's'd a systa'a of tfeeatar p&cltissg •to sc'conw.Qdata smy averfl&w.Iti addition,bases can bs employed tu traaspOKt ' spec'tators to ths club foa a.sy-sgsci&.l tennis'event. (.4.?rt-Wri^"ke'Spg~TS"5'j'?iTTa'S'^Sgn* ^aASWs&sS^Ui^'iliieiiMaei^iiSii^isssi&assiiui^Miisim&beasi^^aa^L&-&aeauat:a to handle.vehicle i-euu.ireAants EHBi»ietBssa»" "? ^^,/ y ^•^.I'^/'.cwi^^ff^t .f "'" / ^ha Beilly •/,$'obn Beilly JVS.'.ca HBR_000870 JR»a*A^;?ST%LiAi^^:t&Si•GWWiWsxstiS^^y-aa: ^S.^ii^y^WTO.'tWL.^?a.('a.^^;^^? c ^. KAUAI Pl./IMNINB CQf.lMISSXON HESW;W MEBTI'NS JULY 5,1978 The regt.Uar rnee'tins of fche Planning Comii'ssion of -the Gounty of Kaual waa CEilled to ordsr by Mt.Hobett Kunimura,Chairmaii,a't l;3&p."'"°n Bednesday,July 5,1972,ln thii coni'erenoo looin at theLlhueLibrary,F'ollowi.ng Cominiss.toneys answerod J'O,I.L caJ-lr Mi-,Roberi Kunimursa chairman Mr.Welconie Albao fte.Ricrtaxxt J'ohnston Mx^A,lfred LoniSi,Jr. Mr^Takato Sokgi Mr»Leonard Zftlopany Absent &excused; Mr.Gisao Ta'keish:! MNIJfES; 1'be f(3J..Low.iii0 niinuies we;ce approved as c.troula-t-/o<t on n>ot;lon of Mx*John;s1;on#seconded by Mr.Sokei and oas.'ried: Sp^cial Mee-ling o£May 17 &25».1972 ftegular Wea'ttng of June 7,1972 Speci.el Mee-bing of June 26>1973 CU*WISSION ACTl'ON ON FOLI.OBMG PENDING V.A1U/INCE APPLJCAT.IONE.i .VjiJ&^.-W-SS&iS.^saggfSSSS-^&SSSSS&aS.'..Planni,"9 Dlrsct&.t ;o i'ejad'ond Tec0lv^''{:"ox'-f.lis-recor<JT~a~r9t'ter (6/26/72]from Jcfflias Wii P^yton^-fcogffih^T wUh a rsviyed plot pUn showing a .100-unlt low rise,y.'yepias't.inci tl'.a'b the v&riance application tafi granted on 'bi^eir nev?pyoposalf Sta'ff mefiiber»Arabrose pernandea,dQscribed the plot.p.1an which waa redeBigneci from a 150-yni-t,devslojpnien't to g •lOO'-yni't c.lus'fcer 'bype devel.opmeni w:lth ciensl'i/y at 26 units/acye, Mr,John&ton stater.1 •fch^'t du^'to •the fact tha-fc All Hawgil Investmen-k CQrpoxation has itubmit-ted new dsvelopAiQnt plsns for Varlance Appli- Ccttion V-72-6 and 'tha Comiiiission ts not infux-fnedl on •feho prospe ctJ.ve draw.'Lng,dfinsl.ty,snd sowsTags systein^which the State H'ealth Reparbnent; has developsd a pol3.cy,he moved to take the niaiter undey sdvisement at ih.is -fciriie,The mo-bion wss secanded by Mr,Lotiis and ynaniinouely car^iod, y V-72-XJL,General HawaiJLan Developmen-t Corporatioti:Tbe Oirsctor ,receivS(T75yCK&xec5ScTa Te'l;ier"T%7]2?772y ¥r6in;0bmi A>Cax'swel 1.,'Vtce l)Tesid9nt ot"Eayle County Deve.l.opnient.Corpora'bl.on,•transmi-b'fciug copy of lottars 'froni John Reilly and Dona-Ld Goo,for General tlawai:lan Development Corporatlont in response 'to •tho condltion?for approval „^ rsconimended by the Planning stsff. The Directox'ny'becl iha-t:the p&Ticipg scheitfe naw niee-tis -fche ,ce'quire» mon-t of our stanciards,and -fchere is also a eonuni-fcmen-t:•fcu subuii-t; landscaping plfins. Mr.,Zalop^ny fDoyod to approve Vsriance AppljL<;at,5.on y"72-».U as reconunendect by ths s-ka^fp s<jcon'died by Mr.Louis and unanimous.ly cai-Tied by the followlng .rojLl call vot^i AyRS;Zalopany;Albao,Johnston,Louis,Sok&i Kunimura "•6 NOES!None -O AB6BMT,NOT VOTINB;Tataish.t -J. EXHIBIT 14 HBR 004228 EDUARDQ E.MALAPiT riAYOR BRIAN K.NISHIMOTO PLA^MING DjRECTOit COUNTl'OF KAUAI PLANNING DEPARTMENT 4280 RICE STREET LIHUE,KAUAI,HAWA)!96766 July 7,1976 Mr,Charlea Hosokawa General Hawaiian Developiaent Corporation 745 Fort Street,Sulte 1500 Honolulu,Hawali 96813 Dear Mr.Hosokawa: In response to your 6he property aontaining Apartan^nfcs is zoned Reqldential Comprehenslve Zoning Oitdlnance deftaittl.on of '\afSl be informed that feach and Raaquet Club•ict R-10.Under our ss amsnded,the tl-faad.ly dwelllng"IB! A bfiildl.ng or .pdlttSn thercof oonsl.stlng of two\(2)or aQ^e dwelling unlts and deslgnad for\ecupanoy by two or aore familles llvlng tndep^adSBfrty of each othar,whare any one of the construated unlts ts structurally dependent on any other unlt. Our Qrdinanae is sllent on the length of occupanay or stay o£occupants of the apartmenC unlt.As such,In my optnton there 1s npChlng aotiCatned in our Ordinance which would prohlbit short-term oocupancy uae of an apartment unlt,like a day. For your information,the deslgnacion RR-10 neans Reaort Dlstrlct -wbere the nuaber rapresants the mastlnann number o£ dwelling unl.tg pennisstbls per aare of land.In the case of EXHIBIT 15 HBR 004283 Mr.Charles Hosokawa Page 2 July 7,1976 hotala and inotels (contains no kitchen),aueh units are oonaldersd as one-half o£a dwelltns unlt in aomputlng Cbe allowable number of units.'Shi.s would nean that under the RR-10 designation,20 hotel ttr motel unlts may ba permi8BdLbile an a<;re of land In terms of;densl.t;y.In addicton,Resoi^t Dlstricta (RB.)pemlts certatn types of connerolal uses that are not outright pannlttad In the Realdentl.al Dlatrletfl (B.)« In the.Resldential Distrldt,however,certala types of com- merci.al UBBS,i£found tiot IncoBipatlble to the rasldenttal dlstrict,aay be permitted through a IIse Peralt proeedure. Ihe foregoing information is based upon our Gomprehen- sive Zonlng Ordinance No.164 that was adopted and beaane effeotive on September l,1972.When General Hawalian Develop- taent CoKporatlon ftrst applled for peralssl.on to develop on tha property.it was prior to the adoptlon of the GZO. At that time,we had an Interla Zontng Ordlnance and all ustes on Kauai,exaspt slngle faally dwellings,agricultural uaas:, and parka and playgrouttds required a variance peralt frotn the Interin Zonlng Ordiaanse.As such,General Hawallan i Devslopnetit CorpQratlon appll^d for Varlance Permit Applicatlon V-72-.l;l.'Btie vartance appltcatlon requested for aparttflfints osntered aeound d beach and racquet club containing recrteatlonal facilicles suoh as swlBmlag pool,tennis courts,dining,shop and offiae apacas,and was approved by the Gounty Plannlng Conmlssl.oa on July 5,1.972. Should you need further infonnation on thls matter, please faal free to aontaet me. Sinaerely, BRIAN HISHIMOTO Planning Direotor HBR 004285 f'~ JOANNAYUKIMURA MAYOR c^. <e p ,!»• <^' ^ ^a^ J TOM H.SHIQEMOTO PLANNINQ DIRECTOR ROLAND D.SAQUM,III DEPWV HJ\NNING D1REOTOR TELEPHONE (806)245-3819 COUNTlC OF KAUAI PLANNINS OEPARTMENT 4280RICESrREET LIHUE,KAUAt.HAWAII 96768 June 5,1989 Mr.William Wessler Architectural Services 1415 Kalakaua Avenue,Shit.e 210 Honolulu,Hawaii 96826 Subject:Rroposed Improvements/Renovations at Hanalel Bay Resort TMK:5-4-11:3 Please accept my sincere apology for this belated reply to your letter of April 5,1?89,and for any Inconvenience this may have caused you.In respanse to the scope of work described for this project,the following informatlon and comments are provided: 1.It has been determined that a Use Permit and Class IV Zoning Permit" will be required for the following improvements: a.additlon of "prep area"for existing restaurant kitchen; b.pool bar; c.central air-conditioning plant;and d.tennis pro shop. A Use Permit and Class IV Zoning Permit is requ.lred since the afore- mentioned uses are not generally permltted within the Residential District (R-10)and wil-L be subject to the review of the Kauai Planning Commission.All other improvements would not be subject to.the review of the Commission but may require a Class I Zoning Pennlt as more detailed plans become available.It would be appropriate,however,that the entire scope of work be identifled on the Use and Class IV Zoning Permit. EXHIBIT 16 HBR 004288 Mr.William Wessler Page 2 June 5,1989 2.Construction of the proposed tollet with cesspool should be subject to the revisw of the State Health Department prior to its construction.Connectlon to the Princeville sewage treatment plant may be a condition imposed on thls structure by said agency. 3.As I recall during our meeting,you mentioned that the installation af new air-conditioning units or soffits are part of the proposed improvements in each unit.Although this was not described in the scope of work,we note that it is called for in the drawings you submltted (Guest Room Floor Plans).We have no objections to the instal.l.ation of these improvements,however,in reviewing these floor plans,we believe that an assessment by this Department of the overall operations at Hanalei Bay Resort is necessary for the reasons discussed below: a.As we under.stand;,Hanalel Bgy Resort (although containing resort-cpndqmi'hium units such as dwelling units)is currently belng operated as a hotel where the units are prlmarily occupied on a short-term basis.Please be advised that the nature of the oiaeFations (short-term rental or time shaie)and the number of eondominium units on the project are not a problem.However,we have observed that there is a potentlal that the project could be operated both as a residentlal project (rooms rented with kitchens)and hofcel (rooms without kitchen facilities).This dual function,in effect,would be a problem in that it would be in violation of the existing R-10 zoning of the property and exceeds the density of 134 units which were approved thereon. b.Our contentions for this potential problem are based on the floor plans which provide for separate entrances for each bedroom and the connectlng doors from one bedraom to the other.The connecting doors as we have observed in existing hotel projects could "lock out"each room during peak visitor season.The three-bedroom type as indicated could therefore be rented out as three separate hotel rooms. At this time,please be advlsed that our comments on this matter are based on plans which should be further clarified.Specifically,we would like to know whether the design layout for the one bedroom and three-bedroom types, including entries and doorways other than the improvements as shown,are existing.An inspection of the units may also be necessary to determlne whether the project,relatlve to use and density,conforms to the provisions of the Comprehensive Zoning Ordlnance.We trust that you will alert your HBR 004290 Mr.William Wessler Page 3 June 5,1989 client of our concerns slnce each owner,including nan-management owned units,will be Involved financially if the remodeling packages as offered as part of the overall project are transacted. Thank you for the opportunity to reyiew and comment on the proposed plans. If you have any questions,please feel free to call me. -^t-s. BiyrtbL-gAftACLAY Pl'ahner (y HBRS04292 >.'x'w MARYANNE W.KUSAKA MAYOR "~'^...t irt"*'^r*»i^^' A'!._.-. -,f ~»; COUNTt'OFKAUAI PLANNING DEPARTMENT 4444 RICE STREET,SUITE 473 LIHUE,KAUAI,HAWAII 96766 DEE M.CROWELL PLANNINC DIRECTOR IAN K.COSTA DEPUTY PLANNINC DIRECTOR TEIEPHONE(8B8>241-6677 FAX (808)241-6699 November 6,1995 Mr.Rick Wall President,Castle Resorts S Hotels 745 Fort street,Tenth Floor Honolulu,Hawaii 96813 Subject:Hanalei Bay Resort In response to your fax transmittal dated October 31,1995,this is to confirm that the Hanalei Bay Resort Facilit:ies may be used for hotel purposes.Based on our researeh of the project file,the Hanalei Bay Resort was approved under the provisions of the Interim Zoning Ordinanee (Variance Permit V-72-11)on Jul^5,1972.The project consists of 134 Eesort Gondominium units and has been operated over the years as a hotel.The hotel operation, therefore,is considered a legally existing nonconforming use on the subject property,which is zoned Residential District (R-10) and Open District (0). Please be advised that altsh.ough the use of the Hanalei Bay Resort facilities as a hotel is allowed,such use or activities should not impact the design of the resort condomintu'm apartments as dwelling units.Dwelling units,unlike hotel rooms,contain a kitchen for food preparation and cooking.Therefore,the rooms that are rented at Hanalei Bay Resort should not consist of more than 134 resort apartment-aondominium units.Any attempt to rent individual bedrooias or "lock-out"units independently of the main dwelling or condominium-apartment unit would be considered an illegal activity. ''^^SSA^tXeS.sa DEE M.CROWELL Planning Director cc:Clinton I.Shiraishi EXHIBIT 17 AN EQUAL OPORTUNITY EMPLOYER HBR 004304 DECLARATION OF PLANNING DIRECTOR MICHAEL A.DAHILIG I MICHAEL A.DAHILIO.hcreby declaie and affirm under the penalty ofperjury that the fbregoing is tnie and coirBct to tlie best ofmy knowlcdge and is based upon pcrsonal taowledge unless stated otherwise herein. I.I am the Planmng Director for Uie Counly ofKauai,Slnte ofHawoii. 2.I have read the Novcmbcr 6,1995 letler fi-om prior PIanning Director Dee M.Crowdl to Mr.Rick Wall,which is attncbed hereto as Exhibit A. 3.Pursuanl to the cuiTcnt County regulatiDns,the position provided in the letter slill accuratcly rcflccts the Department ofPIanning's position today. 4.I dcclare uadcr penalty oflhe law Ihat Ihe forcgoing is true nnd corrcct DATED:Lihue,Hawaiiii.ll^Zo/^l^ \nCHAELA.DAHILia Flanning Dircctor,County ofKauai EXHIBIT 18 Bernard P.CarvaUlo,Jr. Mayor Wallace G.Rezentes,Jr. Managing Dlrector CERTmED /'''v': FLANNING DEPAE.TMENT County ofKaua'i,State ofHawai'i 444<t Ricc Strcet,Snite A.473,LIhn'e,Hawd'i 967(6 TBL (808)241-4050 FAX (808)M1.6699 Michael A.Dahilig Director of Plfttining '•N1,' Ka'Sina S.Hull Deput;r Director ofPtanning AU6 O 9 20.17 PEKMIT GOMPLIANCE VIOLATON &ZONING COMTLIANCE NOTICE TO;AOAO ofHANALEI BAY RESORT C/o Grand Pacific .Resort Mauagement 5380HonoikiRoad Princeville,Hmalei,HI 96722 Atta:GregVeal,GM HANALEI BAY RESORT VACATION OWNERS ASSOCIATION Deborali Fraga-Decker,President,Dircctor C/o Graud Pacific K.csortIManagem.cnt 5380HonoildRoad Princeville,Hanalei,HI 96722 Atta:Greg Veal,GM ' COGENCY GLOBAL INC. AGENT for Owuership &Managcment Entiiies 1188Bishop Street,Suite22I2 I-Ionolulu,ffl968l3- Attn:Nancy Akamu Hui,Agent SCBJTECTS:NON-COMPLIANCE TO FERMIT CONDITIONS &ZONING COMPLIANCE NOTICE Ref:Variance Application Permit V-72-11 Approved Paridng Requirement,249 Stalls and Approvcd Density of 134 Apartment Dwelllng Units on; TMK;4/5-4-011[003 HPR 0&01 thra 0137 Hanalei Bay Resort Hanalei District Princeville,Hmalei,Kauai,Hawaii The Planniiig Departaients En&rcement Division has received coinplainls of nbn-campliance to pemiit conditions as stipulated wifbin Variance Applicatton Permit V-72-11 approved July 5,. 1972.Aflioioughreview ofPermit ffle documeids including Departmental conespondeaces has been cond.ucted and the Departaent tias determined fhat a Permit Compliance Violattoii exists. An Equal Opporfimity Employer VM012 Mnste Filas Enforccmcnt S-4-1 1-03 CZO RBPOCT-I AOAO Hlirld Bay Rnorl 8-08-11 U>M PCV.dac EXHIBIT 19 AOAO ofHANALEI BAY RESORT HANALEI BAY RJESORT VACATION O^W^E.RS ASSOCIATION COGENCY GLOBAL INC. August7,2017 Page2 Co'nsequeufly,the Planniug Department conducted field inspections ofthe subject property on June 27.2017 and Julv 11,2017 alo.ng with in office investigation of web sites and acquired on-site advertisements,The Department fmds the followiag discrepaiicies and violations of the approved Variance Applicalion Permit: Vttriance AppUcation Permit V-72-11 1,ParlungRequireaent,provide a total of 249 Stalls Refer to construction drawings "Master Site Plaii"on Sheet A-l.1 dated May 10,1978 in accoid with Variance AppHcation Pemiit "Site PIan"dated Jmie 7, 1972.^cirmed o]ans call for 180 caved narldne stalls and 32 "Lawn Parklne'"for a subtotal of 212 avaQabte uarkins stalls.AIso aBorowd is the Brovisions for 37 Theater Type sarlcins'uiwn the vayed varkine ca'ea wovidins &_''GrandTotiil"_o[249 vehicv.lar oarUne soaces. Noted violation;An onsite count ofavailable paved parking stalls conducted on June 27,2017 indlcates l§0_m'ailaIll6j}a.Md.l!aridn&8taU8 (26^Eentothe public and employees and 134 behind gated access)leaving a deficiency of52 ^vailablo'parldag 8talIs-along~witIT no provliions &r 37 "Thcater Type" paridng, 2.Permitted Densily,134 Apartment DweUings Varianw approval isfor 134 residential apartment dwelling units (60-Studlos,62-2 bedroom uniis and 32"3 bedroom units).The 1,2 and3 bedroonis unUs as Qpproved are to funciion and rented as comvlete dwellme vnits.The daily rental of each unit,similar to a hotel opeiation,where fhe unit is open to fhe occupancy by tlie general public on a commercial basis is addressed and allowed. Noted violations;Reviewed web site advertisements and on-site publications along with an on-slte inspectlon has revealed tfaat tlie mdividual "Aparbnent Dwelling"units bedroom arcas are being offered and rcnted out fts sectionftl iiccommodafions by means of implementing lock out doorways and the use o£the bedrooms accoadary exterior access entries as separate units.This use has created 280 individual room nuinber placards placed at eaoh exterior door access,The rental of all noted unit numbers inilicates that the maximum unit dcnsify 1s now 146 units over that whidi is approved.Furthermore,locked out 'bedroom areas whlch contain "instaUed equipment"(i.e.microwave ovens)and used to cook and prepare food constitxites a "dwelling unit"and ia in direct violation ofthe approved Vai'ianoe Applioation Pennit md the current Coinptehensive Zoniiig Oidmance, Based on thc foregoing,the Department fmds thc "Hanalel Bay Resort"in violation of the following Comprehensivc Zomng OrdmmcB,CIiapier 8 Sectlons: .^""~AOAO ofHANALEI BAY RESORT HANALEI BAY RESORT VACATION OWNERS ASSOCIATION COGiENCy GLOBAL INC, August7,20I7 Page3 Sec,8-4.6 Application of Density and Developmeut Standards. (a)Calculation ofPermissible Densities, Pursuant to: Sec.8-1.5 Definltlons."Dwclling Unit"means any building 01 any portlon thereofwhich is designed ot intended for occupancy by one(1)family or persons living together or by a person living alone and providing complete Ilvmg facilities,witUn the unit for sleeping,recreation,eatiag and sanitary facilities,including itistalled equipment for only oae (1)Idtclien, Any building or portion thereofthat contains more fhan.one (l)kitcben shall constitute as many dwelling units as there are kitchcns, "Kitchen"means any room used or intended or designed to be used for cookmg atid prepariiig food. Noted CZO violations:The subject properfy Iiiis advertised and rents a mflximum "Dwellmg" unit count of 280 units,146 units over that wllich is allowed withm the subjects R-10 zoniag district,Both the Variance AppUcation Pcrroit nnd currcnf CZO "Applicafion of Dcnsity" constraints provide for a maximum 134 dwelling units for the silbjcct propcrties Imd area. Ptirsuant to Chapter 8,Kauai Coimty Codo,you are directcd to oomply tritfa the followmg requiremeuts innnediately; a.Ceage rental and usc of the bedroom areas of all uuits as separate chYeUing units.Remove from the secondary bcdroom exterior access dooi-ways the individual room number marquis within 45 days ofthis notice. b.Remove all "Installed equipment"from any and all bedroom areas wlthin '15 days ofthia noticc. e.Based on thu lack ut'required paved nnd lawn parldng stall availability (a deficiency of 52 available paridng stalls),immediatcly remove the gated control poinfs to allow for access to aU parking arefis for use by patrons, unit owners/renters and employees ol thc permitted uses associated with tlie Variancc Applicatlon Permlt, d.Provide the Deparfment with a remedial plan to address thc lack of and provisiona for the minimum required parking sta)ls within 45 days of thls notice. Pursuant to Countv Ordinance No.919,you arc hcreby uotified tliat fallure to remedy the vlolation(s)may result In a Hne ofup to S10,000,00,and/or up to $10,000.00 per day for each day fhe violation persists,which inay bc appealnble pursuant to the rules of the Kaua'i PIanning Commission.You mny also be subject to criminal prosecution. AOAO ofHANALEI BAY RESORT HANALEI BAY RBSORT VACATION OWNERS ASSOCIATION COGENCY GLOBAL INC. Augltst7,2017 Page4 The Department shall schedule compliance inspections of aU uaits,as may be'reasonable in coiisideration of rental occupancy,wifhin 60 days &om date of Uus notice,Any imits found in violafion ofrequired remediation items a.md b.above shall be issued a Notice ofViolation and Levy ofFmes. PIease contact flie PIamiuig Departmen't in writine withm 15 calendai_dax5 from the date oftfus notice by providing an accenfable wriften plan for comnliance.Failure to comply with die above requirements provides us with no other altemative but to issue a Notice of Violation and Levy of Fmes,Fwthennore,inaction may resulfin ttie Plamiing Depaitinent's processing ofcivil remedies m additioii to initiating permit'revocatiou procedures.Upon receipt ofthis notice,please call Leslie P. Milnes,CZM Planning Inspector,at 808-241^064. LESLIBP.MILNES CZM Enforcement Of5ccr Concur KA'AINAI-IULL Deputy Qirector ofPlamiing co:Coiuity Attorney Office ofUie Mayor,COK DEPARTMENT OF PLANNING THB COUNTV 0V KA.UA.'I DEREK S,K.KAWAKAMI,MAYOH MICHAEL A.DAHIUG,MANAGINC DIK8CT08 KA*AINA S.HUI.L DIRECTOR JODIA.HIGUCHI SAVBCSUSA DEPLrTYDlRECTOR November28,2019 AOAO of HANALEI BAV RESORT C/B Bellcs Graham LLP 4334 Rice Street,Suite 202 Lihue,HI 96766 Attn:lan K.Jung,Esq. VIA E-MAIL DELIVERY SUBJECT;COMPUANCE PLAN -REMEDIATION AGREEMENT RBF:PERMIT COMFLIANCE VIOLATON &ZONING COMPLIANCE NOTICE Dated Augu8t9,2B17 Issu'ed to: AOAO of HANALEI BAY RESORT TMK:4/5-4-011:003 HPR 0001 thru 0137 Hanalei Bay Reaurt Hanalei District Princeville,Hanalei,Kauai,Hawgii The Planning Department herein references your Memorandum dated July 31,2019 (Auaclied here with)where in the Hanalei Bay Resort AOAO preaented a Compllancc Plan wliich included a "Parking Plan"map to address thc above referenced Notice, The Planning Department has also received and reviewed your amended Parking Plan_FINALrev4 Dated Octnber 28,2019 addressing remedial action required to address conditional requijements of the abuve referenced Notice,specifically Page 3,Requircment Item d (4).This submitted "Parking Plan"is provided to address concems raised iu the Planning Commission meeting o{Scpt.10,2019 Agenda Item I.l.a. regarding Pire Department access standarda and general parking standards as a whole, The Department,post review and comment by Ihe Kaiiai Fire Department and the Departmenl ofPuMjc Works,Engineering Division,flnds the aroended Parking Plan_FINALrev4 Dated October 2S,2B19 aatisfactoiy to remcdy Bequlrement Item.d,ofthe Notice. As set forth in your Memorandum dalcd July 31,2019,the AOAO requests a 90 day time ftame to implement the approved "Parking Plan"to completioa,The Department is in agreement to this time frame.The AOAO shall inform the Department ofthe completion on or before the 90 day period and the Department shall conduct an on-site ihspection to verify compliance. With regards to the Notice,Fage 3,RequiremeBtItems a.b.nnd c.the Departmtnt flnds the follnwing; Regarding Item a.(1);Cease rental and iise ofthe bedrooin areas ofall unlts as separale tiwelling unlts.Removejrom the secondary bedroom exlerlor access daorways Ihe individual room number maryvis wilhin 4S days oflhis notlce. www.kayai.gov 4444BictiStrt;etSuttcA473*L1hu'fl,HnWol'l 96766 •(808)24l-40SO(t)] An Equal OppOftunity Efnployer (80»)211-6699 (f) EXHIBIT 20 HBR 007923 AOAO at HANALEI BAY UESORT Compliaiice Plan-RcinediatEon Agieemcnt Page2 Thc Depnrlment finds Ihrough further invcstigation nnd review «{all issued pennits tha(the Variancc 1'crmit application plan prcsentation,bultding pennittcd plnns and hcncc construction of the Units is in accord with thc cxisting floor plans with designcd lockout bcdroom areas,The Deparhncnl rcqulres all aparlmcnt units fo not havc morc tlian onc (1)kitchen as pcrniitted. Regardlng Item b.(2);Reimve all "mslalled equipmenl"from any and all bedroom areas wilhin 45 days ofthis iwllce. Thc Dcpartmenl haa workcd with on-sitc managcinent and haa finalued inspcclioni ofnll Units. The Dcpartment shall iasue Zoning Compliance Notices to all Apartmcnt Units found to bc in violation of intcrlor allcrations nnd installation of a sccond "kitchcn"without proper mning pcnnils.The Depnrtment sliall inform tbe AOAO ofits findinga. Rcgarding Itcm c.(3);Based on Ihe lack iifreiiiilred paved and lau'n parklng stcill availcibillly (a deficlency of52 available parking stalls),immecllately remove Ihe galed conlrol polnls lo allmvfor access lo allparklng areasfor lise bypalrons,wiil owners/renters andemplayees ofthe peimilled iises associaleci wtth Ihe yariame Applicalion Permil. Thc Dcpartmenl achiiowlcdgcs thc lifting ofthc pnrking cntrance gatc barricr arms which shall continue in effcct (III such timc thc approved Parklng Plan Is In fact In placc nnd Inspected for complinncc.to tlic approvcd "Pnrking Plan". Please contact Lcslie P.Milnes,CZM Enforeemcnt Officer,of my staB'at 241-4064 or email at lmilnes@kauai.gov should you have any questions. K^AINA S.HULL BireclorofPlanning RESPONDENT'S DECLAIIATION; I have reviewed the violations set forth by Ihe Planning Department in the 1'ERMIT COMPLIANCE VIOLATON &ZONING COMPLIANCE NOTICE Bflted Auguat 9,2017.By directive ofthe Owner ofRecord and as Aiithorized Agent agree to comply with thc above tenns ofremediation in settlement ofthe identified violations.We underetand that failure to comply with these tenns could lead to issuance ofa notice ofviolation and/6i'(lyr to pay fmes. AOREED: lan Jvlig,Ksftdire, Belle^Gmfam LLP Authorized Agent for AOAO ofHANALEl BAY RBSORT Datc 19 DEC -3 R£i/. HBR 007924 RWt<iHaioi& 64 fAM»STM.it3AD*>PAVlOSTiULA 1 SBWREO Sr^U"9_fMv\u,a.w/uswnwiwiai fr Appnwit •p)>!r»frpU6i•»aAminwf lfor'<»nt)n»iiif?j»rtn)iuiltaSonhdtottsd [jiWL AnifJ>rt>ntftt*«rdw[*lii)n«h«l!bw ilnKtftd fof^u<(<ivuL ContlfVetlontf PMAtUl.PAraaMg,..HWS'amvs Kl:3 PAVEO SrALLS:£.-) ^FWiKWa «UMIAKCA'•poB:7B«flSSP^SW,?uwra;;v SSTM.^-' RarUag Lnt A -»portd ilalb Pbrkbq Lnt 8 -»(iwt.d WlltLotB-9 ParMng Ltrt B -3/iOA pmBd'>tB|l(Pcrtog Lct C •W po<»dttfln*"°:un9Ldt ?-'.<!nn?a"*?reF?1cd f"Md )>«IU*ftittlt^..•*;'3?':;'-~.".7 nrlwuq -6 oddUand j»nudttnlt).';":"-*3;';•?'iirt a'sjui*'"*'i»o"-i*>"f*'''..:''-.';y^; Lwn ferUng -W Uall* U*t IU lor ton twn* VWty'^fs-'Mrinlft. -^:'?IPS'N^/ <s ^^^@lAi'ur—t. WS'SSaSiSSiES!- •iaK" nllirtilaidl>fWn»I>n!tn :(>tPul)feWillli .iwwwruaMlw!ES- M,»H •^i"C«wtyEa^«ivr fftwwaa?^ea<Mrr Mwn.wea nwKaw ^AM/.B.aAy-wBoKr'PWitaSWtlE,MLdW,KAVAf,IW-t^l/ BEFORE THE COUNTy OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11. CERTIFICATE OF SERVICE CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the foregoing document was duly served on this date on the below-named parties by hand delivery. TO:Of&ce of the County Attorney 4444 Rice Street,Suite 220 Lihue,Kaua'i,Hawai'i 96766 Attorneys for KAUA'I COUNTY PLANNING COMMISSION KAAINA HULL,Planning Director COUNTY OF KAUA'I PLANNING DEPARTMENT 4444 Rice Street,Suite 473 Lihue,Kaua'i,Hawai'i 96766 DATED:Lihu'e,Hawai'i,October 22,2020. ImanageDB:48B7990.2 MAUNA KEA7TRASK Attorneys for Petitioner HBR ENTEPRISES,LLC CADES SCHUTTE LLP MAUNA KEA TRASK 3135 Akahi Street, Suite A Lihu'e, HI 96766 Telephone: (808) 521-9297 Fax: (808) 540-5015 Attorneys for Petitioner 8418-0 DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, Ill and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST owners of Unit 16A and HBR ENTERPRISES, LLC BEFORE THE COUNTY OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'l Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11. Docket No. ------ PETITIONER'S REPLY TO ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT'S MEMORANDUM IN OPPOSITION TO HBR ENTERPRISES LLC'S PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE WITH THE COMPREHENSIVE ZONING ORDINANCE AND VARIAN CE APPLICATION PERMIT V-72-11; DECLARATION OF MAUNA KEA TRASK; EXHIBITS "21" -"27"; CERTIFICATE OF SERVICE PETITIONER'S REPLY TO ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT'S MEMORANDUM IN OPPOSITION TO HBR ENTERPRISES LLC'S PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE WITH THE COMPREHENSIVE ZONING ORDINANCE AND VARIANCE APPLICATION PERMIT V-72-11 Petitioners DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST owners of Unit 16A and HBR ENTERPRISES, LLC (collectively "Petitioner" or "HBR Enterprises") respectfully submits this Reply brief in response to ASSOCIATION OF APARTMMENT OWNERS OF HANALEI BAY RESORT'S ("AOAO") Memorandum in Opposition to HBR Enterprise's Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Pennit V-72-11 ( the "Opposition"), pursuant to the Order of the Kaua' i County Planning Commission ("Commission") at hearing December 8, 2020. I. FACTUAL BACKGROUND The facts contained in the Opposition are wrong. Variance Permit V-72-11 ("V-72-11 ") did not approve the development of the Hanalei Bay Resori (the "Project") as a "resort 1 ," including the use of "lockout" units as individual rentals. Opp. at 2. The Commission, in granting V-72-11, approved an "Apariment Use"2 for the Hanalei Beach & Racquet Club. Pet. 1 "Resort" is not defined in the Kauai Comprehensive Zoning Ordinance ("CZO"). Instead, CZO Sec. 8-1.5 includes "resort" within the definition of "Hotel," which means, "any building containing six (6) or more rooms intended or designed to be used, or which are used, rented or hired out to be occupied for sleeping purposes by guests when the rooms are open to the occupancy by the general public on a commercial basis whether the establishment is called a hotel, resort hotel, inn, lodge or otherwise which rooms do not constitute dwelling units." (Emphasis added.) 2 CZO Sec. 8-1.5 defines "Apartment" in reference to "Dwelling, Multiple Family." "Dwelling, Multiple Family" means a building or portion thereof consisting of two (2) or more dwelling units and designed for occupancy by two (2) or more families living independently of each other, where any one (1) of the constructed units is structurally dependent on any other unit. 2 Ex. 2. In fact, General Hawaiian Development Corporation ("GHDC"), the original applicant, never intended to build a "resort" or a "hotel." GHDC's intent was, "to develop a [134] unit apaiiment complex centering around a beach and racquet club." Pet. Ex. 7 (HBR 004199). Although approved less than two months before the effective date of the Comprehensive Zoning Ordinance ("CZO") the density of the Project was limited to a maximum of 134 units ( a density of 10 units per acre) because of the master plan for Princeville approved conceptually by the Commission. Pet. Ex. 9 (HBR 004216). If GHDC intended to build a resort, and in order for the Commission to grant a resort use, GHDC would have had to apply to the Commission for a variance for a "Hotel", "Apmiment- Hotel", or some other type of resort use due to the restrictive nature of the Interim Zoning Ordinance ("IZO") and the density limitation set by the Princeville master plan. Although the design of the individual apartment units included internal doors and separate entrances and exits, the use of separate portions of each apartment unit as individual rental lock-outs was never approved. This was understood from 1972 until October 19, 2020. Pet. Exs. 8, 12 (HBR 004224, 000870), 15 (HBR 004283 -004285), 16, 17, 18 and 19. "Hanalei Bay Resort" is merely the project name for the Hanalei Beach & Racquet Club a condominium development located on a 19.174 acre parcel in Princeville, Kauai (TMK (4) 5-4- 011 :003 HPR 0001 thru 0137). Pet. Exs. 4 (HBR 001943) and 6. The word "Reso1i" in its name does not impart any legal weight,3 nor does it indicate an approved "Hotel" or "Apartment- Hotel" use by the Commission4 • 3 For example, many condominiums use words like "vistas" or "royal" in their name. It doesn't mean there is a view or that the people owning tem are royalty. 4 In fact "Hanalei Bay Resort" AOAO President and board member and VOA Treasurer and board member Geoff King and his attorney Norman Odani agree that the "resort" is not a hotel complex. Rep. Ex. 27. 3 In 1976 Planning Director Brian Nishimoto stated the property was zoned R-10, not RR-10, and because the CZO was silent on the length of occupancy or stay of occupants of the "apaiiment unit" in his opinion nothing would prohibit short-te1m occupancy use of an "apartment unit", like a day. Pet. Ex. 15 (HBR 004283). Director Nishimoto did not say that lockouts could be rented individually. While the "apartment units" could be rented on a short- term rental or time share basis, it was always understood that the operation of the project both as a residential project (rooms rented with kitchens) and hotel (rooms without kitchens) was not allowed and would exceed the density of 134 units which were approved under the IZO. Pet. Ex. 16 (HBR 004290). Previous Planning Directors Dee Crowell and Michael Dahilig agreed with the obvious conclusion that any attempt to rent individual bedrooms or "lock-out" units independently of the main dwelling or condominium-apartment unit would be considered an illegal activity. Pet. Exs. 17 and 18. II. LEGAL STANDARD Petitioner did not misstate the legal standard to be applied in this matter. The law concerning the "rare instances"5 and "peculiar and exceptional circumstances"6 under which variances are granted is long standing and applies to variances whether they were granted under the IZO or the CZO. This is because although the IZO was an "interim" zoning ordinance, nonetheless it was a zoning ordinance. Under IZO section 5, in granting a variance, the Commission must find: I) that the application presents a situation wherein strict enforcement of any provision of the IZO would involve practical difficulty or unnecessary hardship; and 2) that desirable relief may be granted without being detrimental to the public interest, convenience and welfare. Cases interpreting 5 8 McQuillin, The Law of Municipal Corporations§ 25:179.32 (3d ed. July 2018) (footnotes omit- ted). 6 Id. 4 such requirements pre-date the CZO. See, Conner v. Herd, 452 S.W.2d 272 (Mo. Ct. App. 1970) (economic hardship due to irregular shape, topography, or other lot conditions justifying variance); Rosedale-Skinker Imp. Ass 'n v. Bd. Of Adjustment of City of St. Louis, 425 S.W.2d 929 (Mo. 1968) (topography giving rise to difficulty and undue hardship); and Priest v. Ort/in, 284 Ala. 97,222 So. 2d 353 (1969) (consideration of public interest). Petitioner understands, appreciates, and correctly articulated that the approval process for V-72-11 ran concurrently with the approval of the CZO, and that V-72-11 was granted under the IZO 58 days before the effective date of the CZO. Pet. Mem. Supp. at 3-7. Petitioner also correctly stated the limitations within the IZO and that V-72-11 was approved by the Commission with the impending passage of the CZO in mind. Pet. Mem. Supp. at 3-7, and 13-14. III. THE COMMISSION SHOULD GRANT THE PETITION A. The Petition is Procedurally Proper. Petitioners are not seeking improper review of an "agency decision." Under IZO Section 5 the Commission, not the Director, has the authority to grant a variance. It is well accepted that a public employee not vested with decision-making authority may not bind the state [or the county] in its exercise of the police power. Brescia v. North Shore Ghana, 115 Haw. 477, 168 P.3d 929 (2007), citing Godbold v. Manibog, 36 Haw. 206 (1942) (holding that a state cannot be estopped by the unauthorized acts or representations of its officers). In Brescia the court found the auth01ity to establish setback lines within the SMA rested with the Commission, thus Brescia could not rely on a letter written by the Kaua'i Deputy Planning Director regarding the same. Similarly, because the authority to grant variances lies with the Commission, the AOAO cannot rely on a recent declaration by the current Planning Director expanding the scope of a variance approved nearly 50 years ago. 5 The Planning Director's flip-flop of over 40 years of departmental precedent is not an "agency decision," it is an unauthorized action which must now be addressed by the Commission under its lawful authority. B. Petitioners have Standing to Request a Declaratory Order. Petitioner, as the owners and lessee of Unit 16A respectively, are considered "owners"7 of the subject property and are directly affected by the application and interpretation of V-72-11. The court has ruled that people who "reside in very close proximity" to a proposed development had a "concrete interest" to request a declaratory action. Dalton v. C&C Honolulu, 51 Haw. 400, 462 P .2d 199 ( 1969). To hold that a property owner does not have standing as an interested party to request a declaratory order in a variance permit that directly affects its ownership interest is absurd. C. The Petition is not Prohibited under Issue Preclusion. The Project has been the source of much dispute over the years, but none of the prior cases preclude Petitioner's request for a Declaratory Order as to whether lockouts can be individually rented. Indeed, decisions have referred this matter back to the Commission for review in a process that involves the County. Plaintiffs in the rather ancient case of Civil No. 2414 claimed that the Defendants were not entitled to time share their units and had nothing to do with the legality oflockouts. Opp. Ex. 5 at 2. The language cited by the AOAO in that case is merely dicta describing background facts regarding marketing and the physical structure itself not zoning, and is taken out of context in a way that misrepresents the focus of that litigation. The AOAO misrepresents Mr. Bennett's order in DPR No. 17-0059-A, an arbitration case that Petitioner won. Opp. Ex. 3. In that arbitration, Mr. Bennett declined to reach the actual 7 Under CZO Section 8-1.5 "Owner" means, "the holders of legal title ofland in fee simple." 6 merits of the lockout claim and declined to order any relief in favor of Claimants or against Respondents on the lockout issue because, inter alia, the County of Kauai was not a party to the arbitration, and the public interest did not materially favor one side or the other on the lockout issue with regard to granting equitable relief. Id. at 36. The Petition for Declaratory Order or in the Alternative, Petition to Revoke and/or Modify V-72-11 (7 /26/19) requested the Commission issue a Declaration of Violation concerning the violation of the existing variance permit particularly noting the requirement of parking stalls and not meeting that requirement. Opp. Ex. 4 at 24; Rep. Ex. 21 Pet. at 4 and Mem. Supp. at 14. Any reference to lockouts during the 12/10/19 commission meeting was to provide context for the parking issue specifically and how parking was affected. Opp. Ex. 4 at 28, and 29. Case No. 19-cv-00433-DKW-WRP (the "Federal Lawsuit") was a, "dispute about available parking spaces in a shared parking lot." Rep. Ex. 22 at I. The court dismissed the Federal Lawsuit without prejudice on procedural grounds due to lack of diversity jurisdiction and lack of federal question jurisdiction. Rep. Ex. 22 at 9, 11 and 19. No ruling was ever made regarding lockouts, and that matter is currently pending arbitration involving other issues. In that Arbitration, (Arb. No. 20-0037-A) the Arbitrator ruled that he would adhere to the previous order by Mr. Bennett Rep. Ex. 23 at ii 6. The Fifth Circuit court in Civil No. 20-000004 7 held that the County of Kaua'i must first rule on the lockout issue and stayed that lawsuit until further order of the comi. Rep. Ex. 23 at 1 4. Petitioners are not trying to take multiple bites at the apple. In fact, they arc following the lawful direction of the Honorable Judge Valcnciano and seeking a ruling from the Commission whether V-72-11 allows the rental of lockouts, which is properly before the Commission. No other body has ruled on this issue one way or another. 7 D. Notice to Proper Parties. The AOAO is the statutory8 representative of the owners and is and has been advocating on behalf of owners illegally renting their lockouts. Moreover this action is only seeking a Declaratory Order from the Commission. Even if all of the above were ignored, and the Commission were to pretend that more parties need to be involved, it is premature to give notice to all concerned paiiies. In fact it is premature to allow the AOAO to submit an Opposition and argue at this time. Petitioner has requested to set this matter for hearing per Commission Rule 1-10-6. Once granted the provisions of Commission Rules Ch. 6 and Rule 1-6-5 specifically governing agency hearing notice procedures will be invoked. Once a contested case hearing is ordered Petitioners will comply with all necessary notice procedures, and those who wish to intervene may submit their filings at that time. E. The Rental of Lockouts is in Violation of V-72-11 and the CZO. Retired County of Kaua'i Planning Depaiiment Senior Planner Brian Mamaclay has verified that renting individual locked out portions of the 134 approved units would constitute a violation of the CZO, the existing R-10 zoning, and exceed the density of 134 units which were approved in V-72-11. Rep. Ex. 24 at ii 13. Retired Planning Director Dee Crowell has verified that the approved dwelling unit density under V-72-11 allowed 134 residential apartment dwelling units ( 60-1 bedroom units, 62-2 bedroom units and 12-3 bedroom units. Rep. Ex. 25 at ,i 24. These units are to function and rent as complete dwelling units and the daily rental of each unit, similar to a hotel operation, is addressed and allowed. Id. However, any attempt to rent individual bedrooms or "lockout" 8 [§514B-104] Association; powers. (a) Except as provided in section 514B-105, and subject to the provisions of the declaration and bylaws, the association, even if unincorporated, may ( 4) Institute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the condominium. 8 units independently of the main dwelling or condominium apartment would be considered an illegal activity. Id. ati[ 35.9 Therefore, although the resort obtained V-72-11 on July 5, 1972, the use and rental of the lock-out portion of any of the 134 units, separately from the main unit, is not a permitted "grandfathered use" under the CZO because such a use was not allowed prior to September I, 1972. Id. at ,r 3 9. The facts show that no less than four ( 4) prior Planning Directors (Nishimoto, Youn, Crowell and Dahilig) and one senior Planner (Mamaclay) a6:rreed with this conclusion. F. The Petition does not Violate the AOAO's Rights. Equitable estoppel is based on a change of position on the part of a land developer by substantial expenditure of money in connection with his project in reliance, not solely on existing zoning laws or on good faith expectancy that his development will be pennitted, but on official assurance on which he has a right to rely that his project has met zoning requirements, that necessary approvals will be forthcoming in due course, and he may safely proceed with the project. L(le of the Land Inc., v. City Council of the City & County of Honolulu, 61 Haw. 390, 453, 606 P.2d 866, 902 (1980) (emphases added). Estoppel "cannot be applied to actions for which the agency or agent of the government has no authority." Brescia; citing Turner v. Chandler, 87 Hawai'i 330, 334, 955 P.2d 1062, 1066 (App.1998) (quoting Filipo v. Chang, 62 Haw. 626,634,618 P.2d 295,300 (1980) (other citation omitted)). Vested rights will be seen to exist "if discretion is limited by the procedures in question, that is, whether the procedures, if followed, require a particular outcome." Crown Point I, LLC v. Intermountain Rural Elec. Ass'n, 319 F.3d 1211, 1217 (10th Cir.2003) (citing Hyde Park Co. v. Santa Fe City Council, 226 F.3d 1207, 1210 (10 th Cir.2000)). 9 Retired Planning Director Avery Youn concurs with this conclusion. See Ex. 26 at i!s 3 and 4. 9 BEFORE THE COUNTY OF KAUA' I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11. DECLARATION OF MAUNA KEA TRASK DECLARATION OF MA UNA KEA TRASK I, MAUNA KEA TRASK, DECLARE: 1. I am an attorney with the law firm of Cades Schutte LLP representing Petitioner DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCI OTTO AND CAROL ANN SCI OTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST owners of Unit 16A and HBR ENTERPRISES, LLC (collectively "Petitioner") in this matter. 2. Attached hereto as Exhibit "21" is a true and c01Tect copy of a HBR Enterprises LP's Petition for a Declaratory Order Regarding Noncompliance and, in the alternative Petition to Revoke and/or Modify Variance Application Permit V072-11 and Memorandum in Support filed July 26, 2019. 3. Attached hereto as Exhibit "22" is a true and correct copy of the Order (1) Granting Defendant's Motion to Dismiss, and (2) Dismissing the Complaint Without Leave to Amend in Case 1 :19-cv-00433-DKW-WRP filed December 31, 2019. 4. Attached hereto as Exhibit "23" is a true and correct copy of the Declaration of Terrance M. Revere. 5. Attached hereto as Exhibit "24" is a true and correct copy of the Declaration of Bryan Mamaclay. 6. Attached hereto as Exhibit "25" is a true and correct copy of the Declaration of Dee M. Crowell. 7. Attached hereto as Exhibit "26" is a true and correct copy of the Declaration of Avery H. Youn. 8. Attached hereto as Exhibit "27" is a true and correct copy of portions of the August 27, 2020 deposition of Hanalei Bay Resort time-share owner, Hanalei Bay Resort VOA board of directors volunteer, Hanalei Bay Resort AOAO Board of Directors president and Hanalei Bay Resort VOA board treasurer Geoff King. I declare under penalty of pe1jury that the foregoing is true and correct to the best of my knowledge and belief. DATED: Lihu'e, Hawai'i, January 22, 2021. 2 EXHIBIT 21 CADES SCHUTTE LLP CALVERT G. CHIPCHASE 7757-0 NICHOLAS M. MCLEAN 10676-0 1000 Bishop Street, Suite 1200 Honolulu, HI 96813-4216 Telephone: (808) 521-9200 Attorneys for Petitioner HBR ENTERPRISES LP BEFORE THE COUNTY OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance and, in the Alternative, Petition To Revoke and/or Modify Variance Application Permit V-72-11 lS) C: \0 N :J '" '_, Docket No. ______ _ HBRENTERPRIBESLPS PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE AND, IN THE ALTERNATIVE, PETITION TO REVOKE AND/OR MODIFY VARIANCE APPLICATION PERMIT V-72-11 MEMORANDUM IN SUPPORT VERIFICATION OF PETITION DECLARATION OF CALVERT G. CHIPCHASE EXHIBITS "A" -"J" CERTIFICATE OF SERVICE EXHIBIT 21 PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE AND, IN THE ALTERNATIVE, PETITION TO REVOKE AND/OR MODIFY VARIAN CE APPLICATION PERMIT V-72-11 Petitioner HER ENTERPRISES LP ("Petitioner" or "HBR Enterprises"), a Hawai'i Limited Partnership, submits this consolidated Petition for a Declaratory Order, pursuant to Chapter 10 (1-10-1 & 1-10-2) of the Rules of Practice and Procedure of the Kaua'i County Planning Commission ("Commission Rules"), and Petition for Revocation and/or Modification of Permit, pursuant to Chapter 12 (1-12-1 through 1-12-3) of the Commission Rules. I. PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE WITH VARIANCE APPLICATION PERMIT V-72-11. Pursuant to the Commission Rules, the form and contents required for the Petition for Declaratory Order are as follows: 1, 2, 3. Name, Address and Telephone Number of Petitioner. Name: HER Enterprises LP c/o Cades Schutte LLP, 1000 Bishop St., Ste. 1200 Honolulu, HI 96813-4216 I Telephone: (808) 521-9200 4. Signature of Petitioner. This Petition is signed by Petitioner's counsel, who is authorized to sign on behalf of Petitioner. A letter of authorization is attached hereto as Exhibit "A." 5. A designation of the specific statutory provision, rule, or order in question, together with a statement of the controversy or uncertainty involved. The permit in question is Variance Application Permit V-72-11. Article 3 of the Comprehensive Zoning Ordinance (CZO), Chapter 8 of the Kaua'i County Code provides, inter alia, for the issuance of variances. Section 8-3.3(e)(2) provides that "[v]ariance shall be issued to the applicant on such terms and conditions, and for such period of time, as the facts may warrant." (emphasis added); see also id. ("The Planning Commission shall append conditions that achieve a substantial equivalent or alternative to the regulation from which the Variance is sought."); see generally id. at section 8- 3.3(b) ("Variances from the terms of this Chapter shall be granted only if it is found that because of special circumstances applicable to the property, including size, shape, topography, location or surroundings, the strict application of the regulations deprives the property of privileges enjoyed by other property in the vicinity and within the same District, and the applicant shows that he cannot make a reasonable use of the property if the regulations are applied. Where these conditions are found, the variance permitted shall be the minimum departure from existing regulations necessary to avoid the deprivation of privileges enjoyed by other property and to facilitate a reasonable use, and which will not create significant probabilities of harm to property and improvements in the neighborhood or of substantial harmful environmental consequences."); id. at section 8-3.5 (providing for enforcement). Additionally, HRS§ 514A-1.6 and§ 514B-5 require condominiums to remain in compliance with County ordinances. In particular, HRS § 514B-5 provides as follows: 2 Any condominium property regime established under this chapter shall conform to the existing underlying county zoning for the property and all applicable county permitting requirements adopted by the county in which the property is located, including any supplemental rules adopted by the county, pursuant to section 514B-6, to ensure the conformance of condominium property regimes to the purposes and provisions of county zoning and development ordinances and chapter 205, including section 205-4.6 where applicable. In the case of a property which includes one or more existing structures being converted to condominium status, the condominium property regime shall comply with section 514B-32(a)(13) or 514B-84(a). Id. See also HRS§ 514A-1.6. 6. A statement of the petitioner's interest in the subject matter, including the reasons for submission of the petition. Petitioner HBR Enterprises LP, dba Bali Hai Restaurant and Happy Talk Lounge ("HBR Enterprises"), is a tenant of Unit 16-A of the Hanalei Bay Resort (the "Resort"), a mixed-use condominium development located in Princeville, Kaua'i, and holds a leasehold interest therein. Petitioner operates a restaurant business, and it leases Unit 16-A in the Resort. HBR Enterprises has a direct interest in ensuring that Hanalei Bay Resort is complying with its legal obligations to create and maintain adequate parking spaces as specified and required according to the Resort's governing documents and legal obligations. HBR Enterprises submits this Petition because the Resort has failed to meet its obligations to this Commission, and because the Resort has failed to comply with County requirements. 3 7. A statement of the Petitioner's position or contention. It is Petitioner's position that Hanalei Bay Resort is bound by Variance Application Permit ("VAR") V-72-11 and that urgent steps are needed in order to ensure and enforce those obligations. In particular, VAR V-72-11 and Hanalei Bay Resort's undertakings pursuant to that measure, requires the creation and establishment of not less than 249 common element parking spaces within the Hanalei Bay Resort. 8. A memorandum of authorities, containing a full discussion of reasons and legal authorities in support of such position or contention. Petitioner's Memorandum in Support of the Petition is attached herewith. Petitioner is not aware of any related dockets before this Commission. II. PETITION TO REVOKE AND/OR MODIFY VARIANCE APPLICATION PERMITV-72-11. Pursuant to the Commission Rules, the form and contents required for this Petition for Revocation and/or Modification of Permit are as follows: 1. Identification of the permit in question and statement concerning§ 1-12-2. The permit in question is Variance Application Permit V-72-11. 2. Specific term or condition of the permit alleged to have been violated or not complied with. Variance Application Permit V-72-11 (and the commitments undertaken by the Resort pursuant thereto), requires that 249 4 parking spaces be built. At this time, only approximately 160 parking spaces have been constructed. 3. Detailed factual basis of the alleged violation. The Resort has failed to comply with the requirements of Variance Application Permit V-72-11 because it has not constructed the necessary number of parking spaces. The Resort currently has only approximately 160 parking stalls. When the developer sought and successfully received approval for its construction, via Variance Application Permit V-72-11, construction of 249 parking stalls was required. The failure to satisfy that requirement is a material and continuing violation of the Resort's obligations to this Commission and of the requirements set forth in County and State law. For additional details, Petitioner respectfully refers the Commission to Petitioner's Memorandum in Support, attached herewith. 4. Any other information that the Director requires for an adequate investigation into the matter. Petitioner respectfully refers the Commission to Petitioner's Memorandum in Support, attached herewith. Petitioner is not aware of any related dockets before this Commission. 5 DATED: Honolulu, Hawai'i, July z~, 2019. CA11siH~~ CA~ NICHOLAS M. MCLEAN Attorneys for Petitioner HBR ENTEPRISES 6 BEFORE THE COUNTY OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance and, in the Alternative, Petition To Revoke and/or Modify Variance Application Permit V-72-11 Docket No. -------- MEMORANDUM IN SUPPORT OF HBR ENTERPRISES LP'S PETITION FOR A DECLARATORY ORDER REGARDING NONCOMPLIANCE AND, IN THE ALTERNATIVE, PETITION TO REVOKE AND/OR MODIFY VARIANCE APPLICATION PERMIT V-72-11 TABLE OF CONTENTS I. Preliminary Statement .................................................................................. 1 II. Background .................................................................................................... 2 III. Legal Standard ............................................................................................... 7 IV. Disct1ssion ..................................................................................................... 10 V. Conclusion .................................................................................................... 14 TABLE OF AUTHORITIES Page(s) Cases Morgan v. Planning Department, CountyofKaua'i~ 104 Hawai'i 173, 86 P.3d 982 (2004) .............................................................. 8 Neighborhood Ed. No. 24 (Waianae Coast) v. State Land Use Comm'n, 64 Haw. 265, 639 P.2d 1097 (1982) ................................................................ 8 Sheehan v. Cty. of Kaua 'i, 134 Hawai'i 132, 337 P.3d 53 (App. 2014) ..................................................... 8 Surfrider Found. v. Zoning Ed. of Appeals, 136 Hawai'i 95, 358 P.3d 664 (2015) ...................................................... 10, 11 Statutes Kaua'i Comprehensive Zoning Ordinance, Art. 3 ..................................... passim HRS Chapter 514A ...................................................................................... passim HRS Chapter 514B ...................................................................................... passim Other Authorities 8 McQuillin, The Law of Municipal Corporations§ 25:179.32 (3d ed. July 2018) .............................................................................................. 8, 9 Planning, Variance Permits (Aug. 20, 2013), available at https://www .kauai.gov/Portals/0/PlanningN ariance Permit.pd f?ver=2015·04·22·151532·447 ........................................................................ 9 11 MEMORANDUM IN SUPPORT OF HBR ENTERPRISES LP'S PETITION FOR A DECLARATORY ORDER AND, IN THE ALTERNATIVE, PETITION TO REVOKE AND/OR MODIFY VARIANCE APPLICATION PERMIT V-72-11 Petitioner HBR Enterprises LP ("Petitioner" or "HBR Enterprises") respectfully submits this Memorandum in Support of its Petition for a Declaratory Order and/ or Petition to Revalee Variance Application Permit V- 72-11 (the "Petition") pursuant to the Hawai'i Administrative Rules and chapters 10 and 12 of the Rules of Practice and Procedures of the Kaua'i Planning Commission. I. PRELIMINARY STATEMENT For more than 40 years, Hanalei Bay Resort (the "Resort") has failed to comply with its legal obligations and failed to live up to the commitments and promises that were made to this Commission by the Resort and its developer. The Resort today has only about 160 parking stalls in place. It has never built the number of parking stalls that this Commission required- 249-w hen the developer sought and successfully received approval for its construction. The Resort's continuing failure live up to its obligations has imposed serious harms on Petitioner, a local business located within the Resort that requires the existence of adequate parking in order to serve its customers. This Petition is brought under Chapters 10 and 12 of the Rules of Practice and Procedures of the Planning Commission (the "Commission Rules"). Petitioner respectfully requests that the Commission issue a Declaratory Order declaring that the Resort is not complying with the terms of Variance Application Permit V-72-11. In the alternative, Petitioner respectfully requests that the Commission amend V-72-11 to add additional express requirements regarding the Resort's parking obligations and/or revoke the Commission's approval of Variance Application Permit V-72-11. II. BACKGROUND Hanalei Bay Resort ("the Resort") is a condominium development located in Princeville, Kaua'i (TMK 4/5-4-011:003 HPR 0001 thru 0137). The Resort was constructed in the 1970s, after this Commission granted Variance Application Permit V-72-11 ("V-72-11"), which was issued and approved on July 5, 1972.1 The Resort is located within the master development project of Princeville at Hanalei ("Princeville"), in Kaua'i County, Hawai 'i. Pursuant to the development's organizing documents, the Resort was to consist of: · 15 buildings containing a total of 134 residential apartments; • a 25,000 square foot commercial building (Unit 16); and · four tennis courts and a tennis shelter (Unit 99). Declaration of Horizontal Property Regime Under Chapter 514A, Hawai'i Revised Statutes ("HRS") ("Condominium Declaration"), Art. II, § 3(b) (attached hereto as Exhibit "C"). The residential apartments were to be used for permanent or temporary residential purposes, including transient occupancy (i.e., vacation rentals). The commercial building, Unit 16, was designed to include a bar, kitchen, dining room and other commercial space (id. at Art. II, § 3(c)), and was to be used "for any commercial and recreational activities permitted by law, including but not limited to use as a restaurant and bar[.]" Id. at Art. II, § l0(b). The Resort complex was to consist of 134 residential apartments, which would be rented to vacationers, as well as a commercial restaurant 1 The Resort was located on property zoned Residential District (R-10) and Open District (0) under the Interim Zoning Ordinance. See Letter from Dee Crowell, Planning Director, to Rick Wall, President, Castle Resorts & Hotels (Nov. 6, 1995) (attached hereto as Exhibit "B"). 2 establishment and tennis courts, for the benefit of guests and others in the community. Petitioner HBR Enterprises LP, dba Bali Hai Restaurant and Happy Talk Lounge ("HBR Enterprises") is a tenant of Unit 16-A of the Resort, and holds a leasehold interest therein. The Association of Apartment Owners of Hanalei Bay Resort ("AOAO") is the association of apartment owners of the Resort. Prior to being built, the Resort's developer submitted to the State of Hawai'i three critical documents: (1) a statutorily required buyer's document called a Developer's Public Report which is designed to protect buyers; (2) the Declaration, which establishes the legal existence of the condominium, and; (3) a statutorily-required2 condominium map that was supposed to describe they lay out of the apartments and common elements, including parking. Similar representations were made to the County. On June 2, 1972, Brian Nishimoto, the Commission's then-Planning Director, approved a Staff Report to this Commission regarding the Variance Application for V-72-11 (attached hereto as Exhibit "D"). The Report concluded, inter alia, that "[t]he parking spaces required for the total development are 228 spaces; 150 spaces are shown on the plans leaving a deficit of 78 spaces under our present guidelines. These spaces will be located around the entrance to the property." Report, at 2-3. The Report recommended to the Commission that the "variance application be approved subject to" certain express "terms and conditions"-one of which was that "[t]he parking deficiencies be resolved[.]" Report, at 3. See also Letter from Donald W. Y. Goo (Architect) to Peter Amcotte, General Hawaiian Development Corp. (Developer) (June 9, 1972) (attached hereto as Exhibit "E") (discussing parking needs, including 2 See, e.g., HRS 514B-33 and 34 and the former HRS 514A-12. 3 "theater-type parking" and stating that "[w]e would further recommend that gross areas adjacent to the paved parking be prepared with a gravel base course in order to provide additional overflow parking"). A few weeks later, the Resort (through its developer) submitted to the Commission revised plans that included 249 parking spaces, an even greater number than initially required by the Commission. See Letter from Donn A. Carswell to Brian Nishimoto, Planning Dir., County Planning Dept. (June 24, 1972) (attached hereto as Exhibit "F"); id. ("The parking requirements, as established by the planning staff are 228. The plan submitted on June 21 st provides for 249 spaces with additional parking for 20 golf carts. It is hoped that this will amply meet the present County standards." (Emphasis added)). The Planning Commission reviewed the revised plans. See July 5, 1972 Kaua'i Planning Commission Meeting Minutes ("July 1972 CPC Minutes") (attached hereto as Exhibit "G"). Ultimately, the Commission approved the project-with the requirement that 249 parking spaces be included. See Nov. 2, 1973 Letter from Planning Commission to General Hawaiian Development Corp. ("November 1973 CPC Letter") (attached hereto as Exhibit "H"). In a letter dated November 2, 1973, then-Planning Director reviewed parking plans submitted pursuant to V-72-11, and "determined that the revised parking plan as shown is acceptable to us and therefore approved as submitted." Id. (emphasis added). The parking requirements set forth in the plans and approved by the Department included the following: 4 Conveyances on December 26, 1986. See Condominium Map (Ex. H) (dated Dec. 9, 1986). But the work depicted above-the additional "theater type parking for 37 additional cars"-was never done. That same map also indicates the following: This work-"lawn space for 43 theater type parking stalls"-was also not done. Finally, there is also an area depicted on the map that is described as follows: 6 This "future parking'' was never put in place. As noted in a recent County inspection, the Resort only has approximately 160 parking stalls. See August 9, 2017, Permit Compliance Violation & Zoning Compliance Notice ("August 2017 CPC Notice" or "Notice") (attached hereto as Exhibit "J"). This leaves a deficiency of 89 parking spaces-more than a third of those required and promised. The Resort has never built the number of parking stalls that were required (249) when the developer sought County approval for its existence. Based upon the original capacity of 134 residential units, in addition to a public restaurant, bar, and tennis courts, the County of Kaua'i Planning Commission mandated that the Resort have a minimum of 228 parking spaces. 1972 CPC Staff Report, p. 3 (Ex. C). In response, the Resort submitted a revised development plan that included 249 parking spaces. See November 1973 CPC Letter (Ex. H). That revised plan, with its 249 parking spaces, was one of the bases for the County of Kauai's approval of HBR's permit. See id.; see also July 1972 CPC Minutes (Ex. G). Ill. LEGAL STANDARD According to Chapter 10, upon petition by an interested person setting forth the "specific statutory provision, rule or order in question, together with a statement of the controversy or uncertainty involved," the Commission may 7 "issue a declaratory order as to the applicability of any statutory provision or of any rule or regulation or order of the Commission." Commission Rules 1-10-l(a), 1-10-2(5). The Commission's inherent and implied authority to revoke variance permits is well established, and reflected in the Commission's own rules. See, e.g., Commission Rules 1-12-1 through 1-12-3.3 Moreover, it is well established that variance permits should be granted sparingly and narrowly construed. Unlike other types of land use approvals or permits, a variance "permits a landowner to use his property in a manner forbidden by ordinance or statute[.]" Neighborhood Bd. No. 24 (Waianae Coast) v. State Land Use Comm'n, 64 Haw. 265, 270-271, 639 P.2d 1097, 1102 (1982). Accordingly, "[t]he general rule is that variances and exceptions are to be granted sparingly, only in rare instances and under peculiar and exceptional circumstances." 8 McQuillin, The Law of Municipal Corporations§ 25:179.32 (3d ed. July 2018) (footnotes omitted). That general policy is important because "[o]therwise, zoning regulations would be emasculated by exceptions until all plan and reason would disappear and zoning in effect would be destroyed." Id. (footnote omitted). "A variance should be strictly construed and granted only in cases of extreme hardship where the statutory requirements are present." Id. (footnote omitted). Thus, "because a variance affords relief from the literal enforcement of a zoning ordinance, it will be 3 Cf Morgan v. Planning Department, County of Kaua'i, 104 Hawai'i 173, 184, 86 P.3d 982, 993 (2004) ("In order to carry out [its] express responsibil· ity, the Planning Commission must have authority to enforce the conditions of a SMA Use permit. Accordingly, therefore, the Planning Commission has the power to revoke, amend, or modify a SMA Use permit, inasmuch as this power is reasonably necessary to carry out the Planning Commission's ex- press authority granted under the CZMA."); see generally Sheehan v. Cty. of Kaua'i, 134 Hawai'i 132, 337 P.3d 53 (App. 2014) (upholding revocation of land ·use permit based on noncompliance). 8 strictly construed to limit relief to the minimum variance which is sufficient to relieve the hardship" and "[a] board should not grant a variance greater than the minim um necessary to afford relief." Id. (footnotes omitted). A variance permit such as V-72-11 imposes binding legal requirements pursuant to County law. See Article 3 of the Comprehensive Zoning Ordinance (CZO), Chapter 8 of the Kaua'i County Code (providing for variances and describing circumstances under which such relief is appropriate); id. sec.8-3.3(e)(2) ("Upon findings of the Planning Commission that a Variance may be granted consistent with the requirements of this Article, the Variance shall be issued to the applicant on such terms and conditions, and for such period of time, as the facts may warrant. The Planning Commission shall append conditions that achieve a substantial equivalent or alternative to the regulation from which the Variance is sought.").4 This Commission and its staff are empowered to enforce the terms of a variance permit. See id. at sec. 8-3.5. Section 8-3.3(e)(2) of the Kaua'i County Code provides that "[v]ariance shall be issued to the applicant on such terms and conditions, and for such period of time, as the facts may warrant." Section 8-3.3(b) further provides as follows: Variances from the terms of this Chapter shall be granted only if it is found that because of special circumstances applicable to the property, including size, shape, topography, location or surroundings, the strict application of the regulations deprives the property of privileges 4 See generally County of Kaua'i Department of Planning, Variance Per mits (Aug. 20, 2013), available at https://www.kauai.gov/Portals/O/PlanningNariance Permit.pdf?ver=2015-04- 22-151532·447 ("The primary intent of a Variance Permit is to allow a devia· tion from a standard that is required by law and it can be done only under exceptional circumstances. It is a basic planning principle that variances should be difficult to obtain, since it establishes a precedent."). 9 enjoyed by other property in the vicinity and within the same District, and the applicant shows that he cannot make a reasonable use of the property if the regulations are applied. Where these conditions are found, the variance permitted shall be the minimum departure from existing regulations necessary to avoid the deprivation of privileges enjoyed by other property and to facilitate a reasonable use, and which will not create significant probabilities of harm to property and improvements in the neighborhood or of substantial harmful environmental consequences. Cf. Sur/rider Found. v. Zoning Bd. of Appeals, 136 Hawai'i 95, 111, 358 P.3d 664, 680 (2015) (explaining that "the standard stated in the [Honolulu] Charter's variance test is clear-an applicant has the burden of establishing that the applicant would be deprived of the reasonable use of land or buildings if the provisions of the zoning code were strictly applicable" (emphasis added)); id. at 123, 358 P.3d at 692 ("to grant a variance request, the [party seeking a variance] must satisfy each requirement of the variance test"). Noncompliance with County requirements also constitutes a violation of State law, because HRS§§ 514A and 514B require Condominiums to remain in compliance with County ordinances. See HRS§ 514A-l.6 and§ 514B-5. If the Commission finds that any term or condition of a permit has been violated or not complied with, the Commission may revoke the permit, or issue a declaration of non-compliance. IV. DISCUSSION The requirements of V-72-11 and the requirements set forth in multiple condominium plans and other representations have manifestly not been met. The Resort is supposed to have 249 parking spaces, 89 more than it actually has. The deficiency in spaces is a violation of County planning and zoning ordinances as well as HBR's own governing documents. Yet the Commission 10 has, to date, neither issued a formal declaration of non-compliance, nor taken formal action to revoke V-72-11-the issuance of which was specifically conditioned on the requirement to provide the necessary minimum parking capacity (249 vehicular parking spaces). Variances are the exception, not the rule, cf. Sur/rider Found., 136 Hawai'i at 111, 358 P.3d at 680, and strict compliance with the terms of a variance is essential. Petitioner, who owns a leasehold interest in Unit 16A of the Resort and manages a business therein, has a direct and immediate interest in the Resort's non-compliance with the Variance Application Permit. The documents relating to the permit application and approval make clear that the required number of parking stalls was calculated, in part, based upon the projected parking needs of Unit 16-A's restaurant and bar operations. Additionally, Petitioner submits that the Resort's violation of County law also results in a violation of State law, as both HRS § 514A and the later-enacted § 514B include provisions requiring condominiums to remain in compliance with County ordinances. See HRS§ 514A-1.6 and§ 514B-5. A recent inspection by the Planning Department revealed that the Resort only has 160 parking spaces, resulting in a deficiency of 89 spaces. In June 2017, the Planning Department ("Department") conducted an onsite count of available parking stalls. The Department found 160 available paved parking stalls-leaving a deficiency of 52 available parking stalls in addition to no provisions for 37 "theater type" parking. The Department issued a Permit Compliance Violation & Zoning Compliance Notice on August 9, 2017 (Ex. J). The August 2017 CPC Notice explained that "[a] thorough review of Permit file documents including Departmental correspondences has been conducted and the Department has determined that a Permit Compliance Violation exists." Id. The August 2017 11 CPC Notice was clear and unambiguous, and it provided in relevant part as follows: Variance Application Permit V-72-11 1. Parking Requirement, provide a total of 249 Stalls Refer to construction drawings "Master Site Plan" on Sheet A-1.1 dated May 10, 1978 in accord with Variance Application Permit "Site Plan" dated June 7, 1972. Approved plans call for 180 paved parhing stalls and 32 "Lawn Parhing" for a subtotal of 212 available parl?-ing stalls. Also approved is the provisions for 37 "Theater Type" parhing upon the paved parhing area providing a "Grand Total" of 249 vehicular parhing spaces. Noted violation: An onsite count of available paved parking stalls conducted on June 27, 2017 indicates 160 available paved parking stalls (26 open to the public and employees and 134 behind gated access) leaving a deficiency of 52 available parking stalls along with no provisions for 37 "Theater Type" parking. Id. (emphasis in original). The Notice also ordered the AOAO (among other parties) to immediately remove certain gated control parking points to allow for access to all parking areas for use by patrons, unit owners/renters and employees of the permitted uses associated with the Variance Application Permit. The Notice also directed the AOAO to provide the Department with a remedial plan to address the lack of and provisions for the minim um required parking stalls within 45 days of the notice. In its August 7, 2017, Permit Compliance Violation Notice, Planning Department staff notified Respondents that they were in violation of the terms ofV-72-11 and associated requirements. August 2017 CPC Notice (Exhibit H). The County gave Respondents 45 days to submit a plan to remedy the parking deficiency. Id. The August 2017 CPC Notice made clear that "[f]ailure to comply with the above requirements provides us with no other alternative but to issue a Notice of Violation and Levy of Fines" and 12 that "[f]urthermore, inaction may result in the Planning Department's processing of civil remedies in addition to initiating permit revocation procedures." Notice, at 4. It has now been more than 21 months since the Notice was sent, and the serious deficiencies in parking remain in place: The Resort has failed to submit an acceptable plan to remedy their persistent noncompliance with the terms ofV-72-11. The Resort's failure to comply with its obligations regarding is, moreover, having a significant impact on Petitioner. In light of the above, the Resort's continued failure to comply with its obligations to the Commission is simply not acceptable. Indeed, the Resort's pattern of evasion of its obligations makes a mockery of the Commission's rules and requirements. After over forty years of persistent noncompliance with County law on the part of the Resort, Petitioner respectfully submits that it is time for the Commission to make clear that this continued noncompliance should cease. Accordingly, Petitioner now respectfully requests that the Commission: a. Issue a declaration regarding the Resort's non-compliance with V-72-11; b. Amend V-72-11 to add additional express requirements regarding the Resort's parking obligations; or c. Revoke V-72-11. 13 V. CONCLUSION For the foregoing reasons, Petitioner respectfully requests that the Commission: (1) issue a Declaratory Order declaring that the Resort is not complying with the terms of Variance Application Permit V-72-11; (2) amend .V-72-11 to add additional express requirements regarding the Resort's parking obligations; or (3) revoke the Commission's approval of Variance Application Permit V-72-11, the issuance of which was specifically conditioned on the requirement to provide, inter alia, the necessary minim um parking capacity of 249 stalls. DATED: Honolulu, Hawai'i, July z.._f, 2019. CAL~~-SE-- NICHOLAS M. MCLEAN Attorneys for Petitioner HER ENTEPRISES LP 14 EXHIBIT 22 Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 1 of 19 PagelD #: 513 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HA WAI'I DENNIS R. SCIOTTO et al., Plaintiffs, vs. ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT, Defendant. Case No. 19-cv-00433-DKW-WRP ORDER (1) GRANTING DEFENDANT'S MOTION TO DISMISS, AND (2) DISMISSING THE COMPLAINT WITHOUT LEA VE TO AMEND This is a dispute about available parking spaces in a shared parking lot. Defendant has moved pursuant to Fed.R.Civ.P. 12(b)(l) to dismiss this action for lack of subject matter jurisdiction, contending that: ( 1) Plaintiffs claims must be resolved in arbitration; and (2) the Court has neither diversity nor federal question jurisdiction over this case. Dkt. No. 10. Although Plaintiffs have indicated a willingness to engage in arbitration, they contend nothing requires that they do so, much less that this Court must dismiss this action to allow for arbitration to take place. See Dkt. No. 14-2 at 12-19. The Court need not decide whether arbitration is required because this Court lacks jurisdiction under either 28 U.S.C. Section 1331 or 1332. Accordingly, Defendant's motion is GRANTED, and this case is DISMISSED WITHOUT PREJUDICE. EXHIBIT 22 Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 2 of 19 PagelD #: 514 FACTUAL&PROCEDURALBACKGROUND A. The Parties Plaintiffs Dennis R. Sciotto and Carol Ann Sciotto are the Trustees of the Dennis R. Sciotto and Carol Ann Sciotto Community Property Trust and residents and citizens of the State of California. Dkt. No. 1, ,r 8. Plaintiffs Edward E. Colson, III and Karen Jeanne Colson are Trustees of the Colson Family Trust and are residents and citizens of the State of California. Id. at ,r 9. The Sciottos and Colsons are joint owners of Commercial Unit 16A at the Hanalei Bay Resort (the Resort), a condominium project located in Princeville, Hawaii. See id. at ,r,r 8-10. The tenants in Unit 16A are the Bali Hai Restaurant (Bali Hai) and Happy Talk Lounge (Happy Talk). See id. at ,r 12. Defendant Association of Apartment Owners of Hanalei Bay Resort (AOAO) is an association of apartment owners, acting by and through its Board of Directors. Id. at ,r 10. B. The Underlying State Court Action and Arbitration In September of 2016, the Sciottos, the Col sons, and HBR Enterprises, LLC d/b/a Bali Hai and Happy Talk (HBR) jointly filed suit in Hawaii state court. Dkt. No. 10-7. In the complaint, Plaintiffs and HBR alleged that the AOAO had "illegally" permitted residential units at the Resort to be split into two or three separate units, referred to as "lockouts," and as a result, there was a higher demand for parking than the Resort was designed to accommodate. See Dkt. No. 10-7, ,r,r -2 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 3 of 19 PagelD #: 515 15-19. Following a July 1, 2011 fire at the Resort, which severely damaged the Bali Hai and Happy Talk, the AOAO Board decided to install a parking gate system and implement valet parking at certain times. See Dkt. No. 1, ,i,i 13-14; Dkt. No. 10-7, ,i,i 20-21, 29-30. According to Plaintiffs and HBR, the parking gate prevented patrons and employees of Unit 16A from accessing a large number of the common element parking spaces at the Resort, and the AOAO required Unit 16A to cover at least some of the valet parking costs. Dkt. No. 1, ,i 14; see Dkt. No. 10-7, ,i,i 14-15; Dkt. No. 10-4 at 26-27. Due to the AOAO's parking measures, Plaintiffs and HBR sought declaratory, injunctive, and monetary relief and asserted the following seven claims: ( 1) Breach of Contract, Breach of Governing Documents and Protective Covenants, Conditions and Restrictions; (2) Breach of Fiduciary Duty and other Common law Duties; (3) Violation of Haw. Rev. Stat. Sections 514A, 514B; (4) Negligence; (5) Gross Negligence; (6) Organized Crime and Racketeering in Violation of Haw. Rev. Stat. Section 842-2; and (7) Unfair Competition in Violation of Haw. Rev. Stat. Section 480. Dkt. No. 10-7 at 7-10. The parties ultimately stipulated to dismiss all claims without prejudice and participate in arbitration. Dkt. Nos. 10-10, 10-11. The arbitrator, now-Judge Mark Bennett of the Ninth Circuit Comi of Appeals, issued a Final Arbitration Order on March 30, 2018. Dkt. No. 10-4 at 72. The arbitrator, in relevant paii, ruled as follows: -3 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 4 of 19 PagelD #: 516 (1) "[T]he parking plan," i.e., the gate and valet measures, is "unreasonable and inconsistent with and/or not allowed by the governing documents of the Resort" because the plan "unfairly, unreasonably, and inappropriately disadvantaged commercial Unit l 6A" by restricting common element parking available for Unit 16A patrons. Dkt. No. 10-4 at 5, 9, 11, 13-14. (2) An injunction was issued in favor of the "the owners of Unit 16A," prohibiting the AOAO from using the "current parking gate system," but the AOAO Board "may, however, establish a valet parking system, as long as all valet parking charges are charged strictly as common area maintenance to all owners, according to their ... common area maintenance/common interest percentage." Id. at 5-6, 17-20. (3) The Sciottos and the Colsons were awarded damages for the valet charges they paid. Id. at 6, 28. The other damages claimed by Plaintiffs and HBR were "speculative, unproven, or unavailable, and rejected." Id. at 6; see id. at 28-32. ( 4) The AOAO 's "lien" for the unpaid valet parking costs and interest imposed on the owners of Unit 16A "is unenforceable and void." Id. at 27. The other fines or assessments imposed on Unit 16A for a sign opposing the parking situation, awning(s), a construction container, and Christmas lights are "unreasonable and unenforceable" and the AOAO was ordered to expunge the associated liens. Dkt. No. 10-4 at 7, 37-45, 47-48. (5)The unpaid assessments imposed on Unit 16A for landscaping and insurance premiums were valid and the AOAO was awarded damages in the form of a setoff against the amounts awarded to the Sciottos and the Colsons. Id. at 7, 45-46, 48-49. (6) By instituting the parking policy, the AOAO "breached a fiduciary duty" owed to the owners of Unit 16A, but no additional damages were awarded. Id. at 60. (7) Plaintiffs and HBR failed to establish that they were "entitled to any relief with regard to the lockouts." Id. at 6, 34-36. (8)The AOAO is not required to "provide for or build additional parking." Id. at 7,51-53. -4 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 5 of 19 PagelD #: 517 (9) Plaintiffs' and HBR's claims for negligence, gross negligence, organized crime/racketeering, and unfair competition, failed because there was either no legal basis for the claim or the claim was unsupported by the facts. Id. at 7, 61-62. Although each party prevailed on some issues, the arbitrator found that "on balance" the Sciottos and the Colsons (the owners of Unit 16A) were the prevailing parties, and thus, the arbitrator required the AOAO to pay the attorneys' fees for the Sciottos and the Colsons. Dkt. No. 10-4 at 8, 70-71. The parties then jointly requested an order confirming the Final Arbitration Award in state court, Dkt. No. 10-13, and subsequently filed a notice acknowledging complete satisfaction of the monetary amount awarded by the arbitrator. Dkt. No. 10-14. On September 20, 2018, the state court entered judgment. Dkt. No. 10-15. No appeal was filed. C. The Instant Lawsuit On August 12, 2019, less than a year after the state court entered its judgment, Plaintiffs filed this lawsuit in federal comi. Dkt. No. I. Plaintiffs allege the AOAO has engaged in three forms of misconduct. First, Plaintiffs assert that although the AOAO has removed the parking gates, the AOAO "is still blocking Happy Talk customers from using common parking via traffic cones and blocking off the entrance to parking via cones and golf carts manned by security guards" and misrepresenting "to patrons of unit 16A that they cannot park on the common elements." Id. at ilil 53-54. Second, Plaintiffs aver that the AOAO has a bar at the - 5 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 6 of 19 PagelD #: 518 Resort. Plaintiffs' issue with the bar is that: (1) the AOAO "is not similarly discriminating against its own customers" or other patrons of the Resort; and (2) the AOAO's bar is offering "free alcoholic beverages to its customers as part of its scheme to compete unfairly with Plaintiffs ... and Happy Talk." Id. at ,r,r 55-56. Finally, Plaintiffs maintain that the AOAO has "refused to provide proper and necessary insurance coverage to Unit 16A." Id. at ,r 57. Based on this alleged conduct, Plaintiffs assert the following eight counts: (1) Declaratory and Injunctive Relief for Additional Parking at the Resort and to Prohibit Lockouts (2) Violation of 15 U.S.C. Sections 1125(a)(l )(A)-(B) under the Lanham Act (3) Breach of Fiduciary Duty (4) Unfair Competition Under Haw. Rev. Stat. Section 480-1 et seq. (5) Organized Crime in Violation of Haw. Rev. Stat. Section 842-1 et seq. (6) Bad Faith (7) Violation of Governing Documents and Haw. Rev. Stat. Section 514B (8) Detrimental Reliance and Equitable Estoppel STANDARD OF REVIEW On a motion to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(l), "[t]he party asserting jurisdiction bears the burden of establishing subject matter jurisdiction." In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 546 F.3d 981, 984 (9th Cir. 2008); Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009). How the Court resolves the motion -6 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 7 of 19 PagelD #: 519 depends on whether the defendant raises a "facial or factual" jurisdictional attack. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A defendant asserts a "facial" challenge when they accept the plaintiffs allegations as true but assert that they "are insufficient on their face to invoke federal jurisdiction." Id. The defendant raises a "factual" challenge, however, if it "contests the truth of the plaintiffs factual allegations, usually by introducing evidence outside the pleadings." Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). Here, the AOAO's motion is a hybrid. As to the question of diversity jurisdiction, the AOAO mounts a factual challenge because the AOAO relies on the declaration of the President of the AOAO Board, stating that he is an owner and member of the AOAO and that he is a citizen of California. Dkt. No. 10-1 at 22 ( citing Dkt. No. 10-3). With respect to the existence of federal question jurisdiction, however, the AOAO asserts a facial challenge because the AOAO merely contends that, based on the allegations in the four corners of the complaint, Plaintiffs' claim under the Lanham Act, 15 U.S.C. § 1 l 25(a), "is immaterial, made solely for the purpose of obtaining jurisdiction, and is frivolous." Dkt. No. 10-1 at 23. "When the defendant raises a factual attack, ... [t]he plaintiff bears the burden of proving by a preponderance of the evidence that each of the requirements for subject-matter jurisdiction has been met" and "the district court may resolve those factual disputes itself." Leite, 749 F.3d at 1121 (internal citations omitted); Savage -7 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 8 of 19 PagelD #: 520 v. Glendale Union High Sch., Dist. No. 205,343 F.3d 1036, 1039 n.2 (9th Cir. 2003); Safe Air/or Everyone, 373 F.3d at 1039 (stating that "the district court may review evidence beyond the complaint" in resolving a "factual" challenge "without converting the motion to dismiss into a motion for summary judgment").1 By contrast, a district court reviews "a facial attack as it would a motion to dismiss under Rule l 2(b )(6): Accepting plaintiff's allegations as true and drawing all reasonable inferences in the plaintiff's favor, the court determines whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction." Leite, 749 F.3d at 1121.2 DISCUSSION Federal Rule of Civil Procedure 12(h)(3) provides that "[i]f the court 1The caveat is that some facts are not subject to judicial determination. "[A] court must leave the resolution of material factual disputes to the trier of fact when the issue of subject-matter jurisdiction is intertwined with an element of the merits of the plaintiff's claim." Leite, 749 F.3d at 1122 n.3; Robinson, 586 F.3d at 685. Here, the citizenship of the AOAO's members is not a fact that pertains to any of the elements of Plaintiffs' claims. 2 Because the standard of review under Rule I 2(b )(6) mirrors that applied on a Rule 12(b )(I) facial challenge, the Court may, in addition to the complaint, "consider certain materials- documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). First, pursuant to Fed.R.Evid. 201, a court may take judicial notice of "undisputed matters of public record," such as "documents on file in federal or state courts," Harris v. Cty. o.f Orange, 682 F.3d 1126, I 131-32 (9th Cir. 200 I), but "a court cannot take judicial notice of disputed facts contained in such pub I ic records." Khoja v. Orexigen Therapeutics, Inc., 899 F .3d 988, 999 (9th Cir. 2018). Second, extrinsic documents are necessarily incorporated into the complaint by reference "if the document's authenticity is not contested and the plaintiff's complaint necessarily relies on it." Johnson v. Fed. Home Loan Mortg. Corp., 793 F .3d I 005, I 007 (9th Cir. 2015); Knievel v. ESPN, 393 F.3d I 068, 1076 (9th Cir. 2005). Applying these principles here, the Court will consider the underlying complaint and the Final Arbitration Order to the extent they are relevant in resolving the AOAO's facial challenge regarding federal question jurisdiction. -8 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 9 of 19 PagelD #: 521 determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." The AOAO argues this Comi lacks subject matter jurisdiction because: ( 1) Plaintiffs claims are subject to arbitration under Haw. Rev. Stat. Section 514B-162 and a prior agreement by the parties to arbitrate; and (2) there is not complete diversity of citizenship, and Plaintiffs' "sole federal claim is immaterial and made solely for the purpose of obtaining jurisdiction, or is wholly insubstantial and frivolous." Dkt. No. 10 at 2.3 There is no need to reach the first issue because the Court concludes that neither diversity of citizenship jurisdiction nor federal question jurisdiction exists. I. Diversity of Citizenship Jurisdiction Does Not Exist 28 U.S.C. Section 1332 grants federal courts "diversity of citizenship" jurisdiction over civil actions in which (i) the amount in controversy exceeds $75,000, exclusive of interest and costs, and (ii) the dispute is between "citizens of different States." Only the second requirement is at issue here, Dkt. No. 10-1 at 22, 3 PlaintifTs correctly point out that the AOAO failed to comply with LR 7.8 because the AOAO's motion does not contain a statement certifying that counsel discussed the substance of the motion at least seven days before filing the motion. Dkt. 14-2 at 1, 5-6; LR 7.8. Indeed, counsel for the AOAO acknowledges that they failed to comply with LR 7.8 because they were "unaware of the amendment to LR 7.8." Dkt. No. 15 at 4. Nonetheless, once the AOAO's counsel was made aware of the omission, counsel for the parties discussed the motion via email and telephone and they were unable to reach a resolution because there was a difference of opinion on the threshold issue of whether the Court lacks subject matter jurisdiction. See id.; Dkt. No. 15-1, ~~ 2-7. Under these circumstances, and given that the amendments to the Local Rules became effective (18) days before the AOAO filed its motion, the Court exercises its discretion and declines to strike the AOAO's motion. Counsel is advised, however, to strictly adhere to the rule in the future. -9 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 10 of 19 PagelD #: 522 which requires "complete diversity" of citizenship "between all plaintiffs and all defendants." Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005); see also Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546,553 (2005) ("[T]he presence in the action of a single plaintiff from the same State as a single defendant deprives the district court of original diversity jurisdiction over the same action."). For diversity purposes, an individual's citizenship is determined by the State of their domicile, not their State of residence. Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001); see Lew v. Moss, 797 F.2d 747, 752 (9th Cir. 1986) ("Domicile ... requires both physical presence at a given location and an intent to remain there indefinitely."). On the other hand, an unincorporated entity "possesses the citizenship of all its members." Americold Realty Trust v. ConAgra Foods, Inc., 136 S. Ct. 1012, 1016(2016) (recounting that the Court has identified "the members of a joint-stock company as its shareholders, the members of a partnership as its partners, the members of a union as the workers affiliated with it, and so on."); Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Complete diversity is not evident in this case. Both the Sciottos and the Colsons aver they are "residents and citizens" of California. Dkt. No. ,r,r 8-9. With regard to the AOAO's citizenship, Plaintiffs do not dispute that the AOAO is an unincorporated association. Dkt. No. 14-2 at 20. Instead, Plaintiffs allege that the AOAO is established pursuant to Haw. Rev. Stat. Sections 514A and 514B, id. at ,r -IO - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 11 of 19 PagelD #: 523 10, and argue that because the AOAO is "a creature of Hawaii statute," its "citizenship must be deemed to be Hawaii." Dkt. No. 14-2 at 20. But that is not the law. "So long as such an entity is unincorporated"-and that is the case for the AOAO-"it possesses the citizenship of all its members." Americold Realty Trust, 136 S. Ct. at 1015 (holding that a "real estate investment trust organized under Maryland law" possessed the citizenship of its members, the shareholders); Johnson v. AOAO Makai Club, No. 09-00072, 2009 WL 2972840, at *3 (D. Haw. Sept. 17, 2009) (holding that the AOAO Makai Club is an "unincorporated association"). Hawaii statute provides that the members of the AOAO are "all the unit owners." Haw. Rev. Stat.§ 5148-102(b). The President of the AOAO Board, Geoffrey King, stated in his declaration that he is "an owner and member of the AOAO" and is a "citizen of the State of California, and domiciled within the State of California." 0kt. No. 10-3, ,i 7. Plaintiffs did not attempt to rebut King's testimony. Therefore, the Court concludes the AOAO is a citizen of California, as are the Sciottos and Colsons. Leite, 749 F.3d at 1121. Accordingly, the Court cannot assert jurisdiction under 28 U.S.C. Section 1332 because there is not complete diversity of citizenship. II. Federal Question Jurisdiction Does Not Exist 28 U.S.C. Section 1331 grants federal courts so-called "federal question" jurisdiction over civil actions "arising under" federal law. Jurisdiction under Section -11 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 12 of 19 PagelD #: 524 1331 is proper if the plaintiff "pleads a colorable claim 'arising under' the Constitution or laws of the United States." Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006) ( emphasis added). There is a difference, however, "between failing to raise a substantial federal question for jurisdictional purposes ... and failing to state a claim for relief on the merits." Shapiro v. McManus, 136 S. Ct. 450, 455 (2015) (collecting cases). "[T]he absence ofa valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction," Steel Co. v. Citizens for a Better Env 't, 523 U.S. 83 (1998), but a plaintiff cannot invoke Section 1331 jurisdiction by asserting a federal claim that is "so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy." See id. (quoting Oneida Indian Nation of N. Y v. County of Oneida, 414 U.S. 661, 666 (1974)); Bell v. Hood, 327 U.S. 678, 682-683 (1946) ("[A] suit may sometimes be dismissed for want of jurisdiction where the alleged claim under the Constitution or federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous."). "[T]he test is whether the cause of action is so patently without merit as to justify the court's dismissal for want of jurisdiction." Duke Power Co. v. Carolina Envt'l Study Grp., Inc., 438 U.S. 59, 70 (1978) (ellipsis and internal quotation marks omitted)). Here, the Court concludes that Plaintiffs' -12 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 13 of 19 PagelD #: 525 asserted federal claim is not colorable or arguable; it falls in the category of "wholly insubstantial and frivolous" or "patently without merit." Plaintiffs assert only one federal claim in their complaint. In Count II, they allege the AOAO violated Section 1125(a)(l)(A)-(B) of the Lanham Act (the Act), 15 U.S.C § 1051 et seq. Dkt. No. 1, ,r,r 65-70. Congress provided a "detailed statement of the [Act]'s purposes." Lexmark Int 'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 127 (2014). Section 1127 provides: The intent of this chapter is to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce; to protect registered marks used in such commerce from interference by State, or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks; and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and unfair competition entered into between the United States and foreign nations. 15 U.S.C. § 1127. "The Lanham Act's trademark provisions are the primary means of achieving these ends,"4 but the Lanham Act also "creates a cause of action for unfair competition through misleading advertising or labeling." POM Wonde,ful LLC v. Coca-Cola Co., 573 U.S. 102, 107 (2014). The Act's cause of action, however, "is for competitors, not consumers." Id. 4(j.' 15 u.s.c. § 1114(1). -13 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 14 of 19 PagelD #: 526 The cause of action under Section 1125(a) of the Act imposes civil liability on any person who: [U]ses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which- (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial adve11ising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities 15 U.S. C. § l 125(a)(l)(A)-(B). "Section l 125(a) thus creates two distinct bases of liability: false association, §l 125(a)(l)(A), and false advertising, § l l 25(a)(l )(B)." Lexmark, 572 U.S. at 122. "Because of its inherently limited wording, [Section l 125(a)] can never be a federal 'codification' of the overall law of 'unfair competition,' but can apply only to certain unfair trade practices prohibited by its text." Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 29 (2003) (internal citation and quotation marks omitted). Here, Plaintiffs allege they have a cause of action under subsection (A) and (B ). Accepting Plaintiffs' allegations as true, Plaintiffs' attempt to shoehorn the -14 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 15 of 19 PagelD #: 527 alleged facts of this case into a cause of action under the Lanham Act is "patently without merit. "5 First, Plaintiffs allegations do not give rise to a "colorable" false association claim under Section l 125(a)(l)(A) because Plaintiffs' issue with the AOAO has nothing to do with the AOAO using a trademark or a "misleading representation of fact" that "cause[ d] confusion" as to who owns, sponsors, or is affiliated with Plaintiffs, Happy Talk, or Bali Hai. 15 U.S. C. § 1125(a)(l)(A); Summit Mach. Tool Mfg. Corp. v. Victor CNC Sys., 7 F .3d 1434, 143 7 (9th Cir. 1993) (noting that "the Act proscribes conduct that is the "economic equivalent" of passing off, including "reverse palming off."). Plaintiffs do not dispute this conclusion. See Dkt. No. 14- 2 at 20. Second, there is no colorable false advertising claim for Plaintiffs under Section 1125(a)(l )(B). Although Plaintiffs assert that the AOAO is misrepresenting "to patrons of unit 16A that they cannot park on the common elements" and that the 5PlaintifTs provide the correct standard of review for a motion under Rule 12(b)(l) but, at the same time (for whatever reason), Plaintiffs recite the pre-Twombly-Iqbal standard for a Rule 12(b)(6) motion. Dkt. No. 14-2 at 2. If the Court were to construe the AOAO's motion as one under Rule I 2(b)(6) for purposes of Plaintiffs' claim under the Lanham Act, this "would only require a new Rule 12(b)(6) label for the same Rule 12(b)(l) conclusion." Morrison v. Nat'! Aust!. Bank Ltd., 561 U.S. 247,254 (2010). The only difference is that a dismissal under Rule I 2(b)( I) "must be without prejudice" whereas a dismissal under Rule I 2(b )(6) is "with prejudice" because it is a decision "on the merits." Hampton v. Pac. Inv. Mgmt. Co. LLC, 869 F.3cl 844, 846 (9th Cir. 2017); Cooper v. Ramos, 704 F.3d 772, 776-77 (9th Cir. 20 I 2); see also Bell, 327 U.S. at 682. -15 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 16 of 19 PagelD #: 528 AOAO is "directly interfering with Plaintiffs' business operations by making false or misleading statements with respect to parking and valet costs," Dkt. No. l, ,i,i 54, 68, these statements were not made "in a commercial advertisement"; the statements have nothing to do with the AOAO's "own or another's product"; and, assuming that the AOAO or its agents are, in fact, misdirecting patrons in the Resort parking lot, the AOAO clearly has not "caused its false statement to enter interstate commerce." Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997) (listing elements of false advertising claim under the Act).6 The frivolous nature of Plaintiffs' lone federal claim is fmiher borne out by their other allegations. For instance, Plaintiffs asse1i that the AOAO is "blocking Happy Talk customers from using common parking" with "traffic cones" and "golf carts manned by security guards." Dkt. No. 1, ,i 53. But this is irrelevant insofar as the Lanham Act is concerned because Section l 125(a) is not a federal cause of action for to1iious interference with prospective business opportunity. See Kahala Royal Corp. v. Goodsill Anderson Quinn & Stifel, 151 P.3d 732, 748 n.18 (Haw. 2007); see Dastar Corp., 539 U.S. at 29. And as to Plaintiffs' grievance that the AOAO is "offering free alcohol to lure patrons to its own bar" as "part of its scheme to compete unfairly with Plaintiffs and their tenant,." Dkt. No. l, ,i~ 54, 67, while such conduct 6See also Southland Sod Farms, I 08 F.3d at 1139 & n.3 (emphasizing "it is the statement itself, rather than the falsely advertised goods or services, that must be used in interstate commerce"). -16 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 17 of 19 PagelD #: 529 might provide a basis for an HRS §480 unfair competition claim, it has nothing to do with the type of "unfair competition" within the scope of the Lanham Act. In sum, the protections and purposes of the Lanham Act are not even remotely implicated by Plaintiffs' allegations. Despite Plaintiffs citing the Lanham Act as one basis for obtaining the relief they seek, the claim is so "patently without merit," Duke Power Co., 438 U.S. at 70, and wholly "frivolous" that it appears Plaintiffs merely cited the Lanham act "solely for the purpose of obtaining jurisdiction." Bell, 327 U.S. at 682-83. This is underscored by the fact that Plaintiffs' argument on the issue in their opposition to the AOAO's motion spans less than a half-page and is bereft of a single citation to any legal authority. See Dkt. No 14-2 at 20-21. As such, Plaintiffs cannot invoke this Court's subject matter jurisdiction under 28 U.S.C. Section 1331. Where, as here, subject matter jurisdiction does not exist over a federal claim, a federal district comi has "no discretion to exercise supplemental jurisdiction over [a plaintift]'s state law claims." Prather v. AT&T, Inc., 847 F.3d 1097, 1108 (9th Cir. 2017), cert. denied, 137 S. Ct. 2309 (2017).7 7See also Herman Family Revocable Trust v. Teddy Bear, 254 F.3d 802,806 (9th Cir. 2001) ("If the district court dismisses all federal claims on the merits, it has discretion under [28 U.S.C.] § 1367(c) to adjudicate the remaining claims; if the court dismisses for lack of subject matter jurisdiction, it has no discretion and must dismiss all claims."). -17 - Case 1:19-cv-00433-DKW-WRP Document 19 Filed 12/31/19 Page 18 of 19 PagelD #: 530 Because there is no basis for subject matter jurisdiction over this action, the AOAO's motion is GRANTED, and the complaint is DISMISSED WITHOUT PREJUDICE. III. Leave to Amend Plaintiffs request leave to amend. 0kt. No. 14-2 at 4. Where an action is dismissed for lack of subject matter jurisdiction, a court is well within its discretion to deny leave to amend if the amendment would be futile. In re Dynamic, 546 F.3d at 990; see also Serra v. Lappin, 600 F.3d 1191, 1200 (9th Cir. 2010) (delineating four reasons a court may deny leave to amend: "bad faith, undue delay, prejudice to the opposing party, and/or futility"); Foman v. Davis, 371 U.S. 178, 182 (1962)). Here, amendment would be futile for two reasons. First, as to federal question jurisdiction, Plaintiffs offered virtually no argument on the issue and did not proffer any additional facts to suggest that there is any more to Plaintiffs' purported Lanham Act claim than what was already alleged. See Dkt. No. 15 at 6-7. Second, with respect to diversity of citizenship jurisdiction, Plaintiffs were already provided the opportunity to produce evidence establishing that Plaintiffs and the members of the AOAO were not citizens of the same State, and they failed to offer any such evidence or explain why they failed to do so. Instead, they rested on an erroneous understanding of the law. That is not something an amendment can cure. -18 - EXHIBIT 23 BEFORE THE COUNTY OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Permit V-72-11. Docket No. ------- DELCARATION OF TERRANCE M. REVERE Trial Date: None Assigned DECLARATION OF TERRANCE M. REVERE I, TERRANCE M. REVERE, hereby declare as follows: I. I am an attorney licensed to practice law in all courts in the State of Hawaii, and am the Principle of Revere & Associates, LLLC, which is counsel of record for Plaintiffs/Claimants in the above-captioned matter; 2. I have personal knowledge of the matters declared herein and am competent to testify to the matters stated herein and make this declaration upon person; 3. On October 15, 2020, I appeared by via teleconference on behalf of Plaintiffs, in front of the Honorable Randal Yalenciano on Plaintiffs' Motion for Partial Summary Judgment Regarding Count I Declaratory and Injunctive Relief ("Motion"). 4. Judge Yalenciano, having received and reviewed the Motion, the memorandum in opposition filed by Defendants, the reply memorandum filed by Plaintiffs, and having thoroughly reviewed and carefully considered all evidence properly before it, including the submitted declarations, exhibits, and oral arguments, together with the records and files in this case, and 1 EXHIBIT 23 McCORRISTON MILLER MUKAI MacKINNON LLP DAVID J. MINKIN LAUREL K. LOO DARA S. NAKAGAWA Five Waterfront Plaza, 4th Floor 500 Ala Moana Boulevard Honolulu, HI 96813 Telephone: (808) 529-7300 djminkin@m41aw.com 11@m4law.com dsn@m4law.com Attorneys for Defendants 3639-0 4806-0 I 0972-0 DEWITT B. RICHARDS and VIRGINIA E. RICHARDS, Individually and as Trustees of the Virginia E. Trust Electronically Filed FIFTH CIRCUIT SCCV-20-0000047 13-NOV-2020 04:31 PM Dkt. 28 ORDD IN THE CIRCUIT COURT OF THE FIFTH CIRCUIT STATE OF HAWAI'l DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, Ill and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST, Plaintiffs, vs. DEWITT B. RICHARDS and VIRGINIA E. RICHARDS; Individually and as Trustees of the Virginia E. Trust; DOE DEFENDANTS 1-300; JOHN AND/OR JANE DOES 1-300; and DOE ENTITIES 1-300, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CIVIL NO. 20-0000047 ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNT I DECLARATORY AND INJUNCTIVE RELIEF AND STAYING LITIGATION HEARING Date : October I 5, 2020 Time : I :00 p.m. Judge : The Honorable Randal Valenciano ) No Trial Date Set ) ) ) ) ______________ ) EXHIBIT A ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING COUNT I DECLARATORY AND INJUNCTIVE RELIEF AND STA YING LITIGATION On October September 19, 2020, Plaintiffs DENNIS R. SCIOTTO and CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO and CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III, and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST (collectively, "Plaintiffs") filed their Motion for Partial Summary Judgment Regarding Count I Declaratory and Injunctive Relief ("Motion"). The Motion came on for hearing before the Honorable Randal Valenciana on October 15, 2020, at 1 :00 p.m. Terrance M. Revere, Esq. appeared via teleconference on behalf of Plaintiffs and Laurel K. Loo, Esq. appeared on behalf of Defendants DEWITT B. RICHARDS and VIRGINIA E. RICHARDS; Individually and as Trustees of the Virginia E. Trust (collectively, "Defendants"). Having received and reviewed the Motion, the memorandum in opposition filed by Defendants, the reply memorandum filed by Plaintiffs, and having thoroughly reviewed and carefully considered al evidence properly before it, including the submitted declarations, exhibits, and oral arguments, together with the records and files in this case, and being fully apprised in the premises, and good cause appearing therefor, the Court rules as follows: Dennis R. Sci<Jffo and Carol Ann Sciotto as Trustees qf The Dennis R. Sciotto and Carol Ann Sciotto Community Property Trust v. Dewitt B. Richards, et al.; Civil No. 20-0000047; Order Denying Plaintiffs' Motion for Partial Summary Judgment Regarding Count I Declaratory and Injunctive Relief and Staying Litigation 2 NOTICE OF ELECTRONIC FILING Electronically Filed FIFTH CIRCUIT SCCV-20-0000047 13-NOV-2020 04:31 PM Dkt. 29 NEF An electronic filing was submitted in Case Number SCCV-20-0000047. You may review the filing through the Judiciary Electronic Filing System. Please monitor your email for future notifications. Case ID: SCCV-20-0000047 Title: DENNIS R. SCI OTTO AND CAROL A1\1N SCI OTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCI OTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST Plaintiff, vs. DEWITT B. RICHARDS and VIRGINIA E. RICHARDS Individually and as Trustees of the Virginia E. Trust DOE DEFENDANTS 1-300 JOHN AND/OR JANE DOES 1-300 and DOE ENTITIES 1-300, Defendants. Filing Date/ Time: FRIDAY, NOVEMBER 13, 2020 04:31 :20 PM Filing Parties: Case Type: Circuit Court Civil Lead Document(s): 28-Order Denied Supporting Document(s): Document Name: 28-ORDER DENYING If the filing noted above includes a document this Notice of Electronic Filing is service of the document under the Hawai'i Electronic Filing and Service Rules. This notification is being electronically mailed to: Laurel Loo ( ll@M4/aw.com ) David J. Minkin ( dminkin@m4Jaw.com) I of 2 Dara Sayuri Nakagawa ( dnakagawa@m4Jaw.com ) RANDAL V ALENCIANO ( randal.g. va/enciano@courts.state.hi.us) Clarisse M Kobashigawa ( clarisse@revereandassociates.com ) Terrance M. Revere ( teny@revereandassociates.com ) 2 of 2 BEFORE THE ARBITRATION TRIBUNALS OF DISPUTE PREVENTION & RESOLUTION, INC. HONOLULU, HAWAII DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III and) KAREN JEANNE COLSON as TRUSTEES) OF THE COLSON FAMILY TRUST, and) HBR ENTERPRISES, LLC dba BALI ) HAI RESTAURANT AND HAPPY TALK ) LOUNGE, ) Claimants, vs. ) ) ) ) ASSOCIATION OF APARTMENT OWNERS I OF HANALEI BAY RESORT; MICHAEL REMBIS; BRAD SCHULTZ; KENT OEHM;; GEOFF KING; DAVID BLANK; JOAN BETTENCOURT; FRITZ LEUTHEUSER; I DEBRA FRAGA-DECKER; MICHAEL LYNCH; JOHN DOES 1-10; JANE DOES) 1-10; DOE PARTNERSHIPS 1-10; DOE) CORPORATIONS 1-10; DOE ENTITIES; 1-10; DOE LIMITED LIABILITY ) COMPANIES 1-10; DOE DOMESTIC NONPROFIT CORPORATIONS 1-10; and; DOE GOVERNMENTAL ENTITIES, ) Respondents. ) ) --------) ASSOCIATION OF APARTMENT OWNERS ) OF HANALEI BAY RESORT, ) ) vs. Counterclaimant, ) ) ) DENNIS R. SCIOTTO AND CAROL ANN ) SCIOTTO as TRUSTEES OF THE ) DENNIS R. SCIOTTO AND CAROL ANN ) SCIOTTO COMMUNITY PROPERTY ) TRUST, EDWARD E. COLSON, III and! KAREN JEANNE COLSON as TRUSTEES ) DPR NO. 17-0059-A FINAL ARBITRATION DECISION, AWARD, AND ORDER EXHIBIT B OF THE COLSON FAMILY TRUST, and HBR ENTERPRISES, LLC dba BALI HAI RESTAURANT AND HAPPY TALK LOUNGE, Counterclaim Respondents. 2 FINAL ARBITRATION DECISION, AWARD, AND ORDER I. INTRODUCTION This arbitration involves claims and counterclaims between and among the owners1 and a tenant2 of Commercial Unit 16A of the Hanalei Bay Resort ("Resort"), and the tenant's principal, on the one hand, and the Association of Apartment Owners of the Resort. ( "AOAO") and certain of the AOAO' s Board of Directors ("Board") on the other. 3 As a result of a fire that took pl ace on July 1, 2 011, the Bali Hai Restaurant ("Bali Hai") and Happy Talk Lounge ("Happy Talk"), both part of Unit 16A, were severely damaged and could not operate. As the multi-year construction neared completion for Happy Talk, the Board and their agents, including those hired to manage the Resort, needed to decide how to deal with parking at the Resort once Happy Talk reopened. As discussed in detail below, the Board made the decision to install a parking gate system to control access to a very large number of the available parking spaces at the Resort, which decision essentially excluded customers of Happy Talk from 1 Dennis R. Sciotto and Carol Ann Sciotto, as Trustees of the Dennis R. Sciotto and Carol Ann Sciotto Community Property Trust, and Edward E. Colson, III and Karen Jeanne Colson as Trustees of the Colson Family Trust, own Unit 16A, and are referred to herein as the "Owners" of Unit 16A. 2 HBR Enterprises, LLC is the tenant of Unit 16A, and its principal is Jimit Mehta. 3 Rc.:.:spondent Directors filed a motion for summary judgment that the arbitrator declined to decide prior to the arbitration. The rulings herein render that motion moot. 3 parking in those spaces.4 The Board also put into place valet parking at certain times, and determined, essentially, that most or all of the costs of the valet parking should or would be borne by Unit 16A.5 It is those decisions by the Board which led to a Circuit Court injunction action and ultimately this arbitration. As presented in the various claims and counterclaims, and as presented at the arbitration, the issues for decision involve not just the above "parking issue," but also issues involving and concerning: whether or not the Resort had an obligation to build, create, or provide more parking at the Resort; "lockouts"6 at the Resort; large fines/assessments made by the AOAO and the Board against the owners of Unit 16A; disputes over construction and obligations owed as a result of construction; and various other claims made by the parties, including, but not Limited to, racketeering and unfair competition. 4 There is a factual dispute about whether the customers of Unit 16A had access to other parking. That issue is discussed below. ~ There is also a factual dispute about whether or not the owners of Unit 16A agreed to pay for at least some of the valet costs. That is also discussed below. 6 The term "lockout ( s) " has been used by the parties throughout this proceeding, and is used in this decision to refer to the practice of configuring two and three bedroom units at the Resort, to allow for occupancy by two or three separate individuals/groups, by giving those individuals or groups the ability to lock others out of their portions of units, thereby converting a three bedroom unit into up to three separate units, and a two bedroom unit into up to two separate units, for 4 While all are discussed below, the arbitrator believes the dispute over the gated parking/valet parking was likely the genesis for most (if not all) of the remaining disputes. The arbitrator believes it likely that had this parking issue been amicably resolved, it is unlikely the remaining disputes would have either come into existence, or if they had, it is likely they would have been resolved by the exercise of sound business judgment by all parties. As set forth below, the arbitrator finds that the parking plan put into place by the AOAO, the Board, and their agents, was unreasonable and inconsistent with and/or not allowed by the governing documents of the Resort, including the declaration (with its various amendments). The Board had the right to enact reasonable and fair measures with regard to parking and parking issues, but the plan put into effect by the Board unfairly, unreasonably, and inappropriately disadvantaged commercial Unit 16A. As a result, and as set forth below, the arb rator finds that the owners of Unit 16A are entitled to an injunction, which is set forth below, against the current parking gate system. As is also set forth below, the AOAO/Board may, however, establish a valet parking system, as long as all valet parking charges are charged strictly as common area maintenance to all owners, according to their normal common area vacation type rentals, etc. 5 maintenance/common interest percentage.7 This system may be established even if the result is that business invitees of Unit 16A would be the ones primarily directed to valet parking. As also set forth below, the AOAO/Board is not enjoined from setting up a valet parking system with charges fairly allocated, but the current system is enjoined. With regard to Claimants' claims for monetary damages arising from the parking issues; except for those claims arising from the actual payment of valet charges by the owners of Unit 16A, the arbitrator finds the damage claims are speculative, unproven, or unavailable, and rejected. Though the arbitrator has ruled in favor of the owners of 16A as to the parking issue, the arbitrator finds that Claimants have not provided sufficient evidence to allow for a finding of liability on the part of, or an award against, the Directors personally, and thus finds for the Directors with regard to claims asserted against them in their individual capacities. With regard to lockouts, and as set forth in detail below, the arbitrator finds that Claimants have not established to the satisfaction of the arbitrator evidence sufficient to be entitled to any relief with regard to the lockouts, including but not limited to declaratory or injunctive relief as to lockouts, ·1 As noted by the Respondents, Unit 16A' s common interest percentage is .06% (.0006). 6 and thus no relief is awarded to Claimants as to the lockouts. With regard to Claimants' ·claims that the AOAO/Board must provide for or build additional parking, the arbitrator rejects those claims, as set forth below. With regard to issues relating to the fines/assessments assessed by the AOAO/Board against Unit 16A, the arbitrator first finds that he has jurisdiction to adjudicate those issues, notwithstanding the fact that Claimants have not paid the fines/assessments.8 On the merits (and as described in detail below), with the exception of assessments regarding insurance and landscaping, the arbitrator finds all other fines/assessments unreasonable and unenforceable, and this award invalidates them, and orders the AOAO to expunge the liens related to them. The insurance and landscaping assessments/fines and the liens relating to them are discussed separately below. With regard to Claimants' claims for negligence, gross negligence, organized crime/racketeering, and unfair competition, the arbitrator finds that Claimants have not demonstrated a factual and/or legal basis as to any of these claims, and thus finds in Respondents' favor on them. 8 The arbitrator agree with Respondents, however, that Claimants' failure to pay the insurance assessments precludes their challenging those assessments in this arbitration. 7 With regard to the claims of both parties dealing with construction issues (including requests for declaratory and injunctive relief), the arbitrator primarily finds in favor of Claimants, for the reasons set forth below. No monetary damages are awarded, however. With regard to the Counterclaims by Respondents, except with regard to claims as to failure to pay insurance and landscaping assessments, the arbitrator primarily finds in favor of Claimants, as set forth below, and except as noted below.9 Both sides sought attorneys' fees and costs. Claimants sought them in their original pleadings and in their post arbitration submissions. Respondents sought them in their original pleadings, including their Counterclaim. The arbitrator believes that the decision on attorneys' fees and costs is committed to the discretion of the arbitrator. Although both sides have had claims that were rejected, and thus as to those, their opponents are the prevailing parties; on balance, and considering the genesis of the dispute (the parking issue), and the ruling on that issue (in favor of the owners of Unit 16A), the arbitrator finds that the Claimants who are the owners of Unit 16A are the prevailing parties in this proceeding. The arbitrator thus finds that it is appropriate that they be 9 To the extent that the Counterclaim seeks declaratory relief as to the issues involving lockouts and a requirement to provide additional parking, the arbitrator rules partially in favor of Respondents on these issues, as the arbitrator is not ordering Respondents to either cease lockouts or provide additional 8 awarded, against the AOAO only, certain of their attorneys' fees and costs, as set forth below. These matters, and matters not specifica1ly addressed in this summary section, are set forth below. II. PARKING POLICY/VALET PARKING ISSUES--DECLARATORY AND INJUNCTIVE RELIEF Claimants seek injunctive relief on a number of theories, relating to the parking. Part of their cause of action is based on alleged violations of the governing documents and Chapters 514A and 5148 of the Hawaii Revised Statutes. One starting place for issues relating to parking is the declarations for the Resort. The Fifth Amendment to the Declaration, AOAO Ex. 7, provides, in part: Apartments 16-A and 16-B and their appurtenant Limited Common Elements made be used by their respective Apartment Owners for any commercial and recreational activities permitted by law and Article IV, paragraph 10 of this Declaration, including but not limited to use of Apartment 16-A as a restaurant and bar and use of Apartment 16-B as a rental front desk and reception area, tennis or other club or clubs, tennis equipment shop and other commercial shops. All or any portion or portions of Apartments 16-A and 16-B may be leased or rented by the respective Apartment Owner to third parties on such terms and for such lengths of time as such Apartment Owner shall determine. ( emphases added) . The parking to which the AOAO restricted access is all common element parking. Declaration, § II. 5 ( h) ( "The Common Elements of the Project ... specifically shall include ... All parking. 9 parking areas .... "). AOAO Ex. 1 at pp. 9-10. Broadly, the AOAO believes that it had the full right and ability to restrict common element parking, essentially at its discretion, to prevent patrons of Unit 16A at times, including late afternoon and evening hours, from using significant portions of the common element parking areas, while making those areas available to owners and guests of Whole Owner and VOA units at the Resort. The AOAO believes it had the right and ability to limit patrons of Unit 16A to much smaller parking areas than unit owners and guests, to put up parking gates to prevent the patrons of Unit 16A from using large areas of the common element parking, to utilize a valet system, and, essentially (as discussed in more detail below), charge the owners of Unit 16A for the valet services. Claimants' position--as exemplified by the written report and oral testimony of their expert Philip Nerney--is that the "Association's parking scheme, and/or efforts to assign parking to particular apartments, amounts to converting common elements into limited common elements." Ex. C-25 at 7 (emphasis in original). Mr. Nerney also stated: "It is my opinion that the Association lacks any legitimate basis for implementing and/or maintaining any parking scheme that deprives Apartment 16A of equal access to all parking areas at the Project." Id. at 10. 10 It is clear to the arbitrator that the parking policy put into effect by the Board of Directors was intended to and did disadvantage the owners of Unit 16A, and was intended to and did make their interests subsidiary to the interests of other owners. Some of the evidence is described below. In an October 20, 2015 email, Scott Pacer, General Manager of the Resort, wrote: "The gates project was started due to the higher occupancy of the Resort to try and contain our guests on one side, to save the other side of the lot as a valet, knowing you were going to need more parking then your allocation." AOAO Ex. 99. A memorandum from Scott Pacer explaining the parking policy, noted: "These rules are being put in place to try and maximize our parking for our owners and guests, as well as accommodate as much possible for additional parking for contractors, vendors, restaurant and bar patrons." AOAO Ex. 220. AOAO Board Minutes of January 30, 2015 state: Scott Pacer explained the Parking Policy. All available spaces in the north lot to the right of entrance will be reserved for the exclusive use of Owners and Guests staying overnight at Hanalei Bay Resort... The lower lot will be utilized for resort associates, vendors, and tennis club guests unless additional parking is needed to accommodate Owners and Guests. Parking for Bali Hai and Happy Talk guests will be allowed in the lower lot contingent upon adequate availability of parking for Owners and Guest in residence, resort Associates, vendors and tennis club guests. Ex. C-39 at 2-3. January 29, 2016 AOAO Board Minutes note, in part, including with regard to a meeting with the Owners of Unit J.6A: "It was recommended to allow restaurant patrons to utilize 11 the resort parking during the day; however valet and shuttle service would be necessary for evening operating hours at 16A's expense." AOAO Ex. 44 at 6. There was some testimony and exhibits to suggest that a primary or at least one reason for the installation of the gates was to prevent those with no connection to the Resort, like surfers or fishermen, from parking at the Resort and accessing facilities at the Resort like ice, spa, etc.10 The arbitrator does not doubt that there may have been ongoing problems at the Resort for years regarding those with no legitimate connection to the Resort parking at the Resort, but the arbitrator finds, as a matter of fact, that the gate system was put in place specificaJ.ly to prevent patrons of Unit 16A from parking in the gated-off J.ots, and that this was, by far, the primary purpose of the installation of the gates, even if it was not the only purpose. There is also evidence that the County of Kauai viewed the gates as iJ.legal/improper. For example, Ex. C-23, an August 7, 2017 letter from the County Planning Department to the AOAO, stated (at p. 3): "Pursuant to Chapter 8, Kauai County Code, you are directed to comply with the following requirements 10 See, ~---___ , Ex. C-4 8, an emai 1 from Scott Pacer to Directors and Un t owners/tenant, indicating one reason for the "gate project" was "to deter people from trespassing at the resort. We have had many issues from J.ocal fisherman stealing ice, to people smoking weed on guests lanai's coming in to check out the surf, to locals using the laundry facilities. You even state that we have local people parking their cars here." 12 immediately: ... Based on the Jack of required paved and lawn parking stall availabiJ.i ty ... immediately remove the gated control points to allow for access to aJ.l parking areas for use by patrons ... of the permitted uses associated with the Variance Application Permit." 11 Regardless of intent, however, the effect of the parking system was to disadvantage Onit 16A and its ·customers. The arbitrator finds, as a matter of fact, that the parking purportedly made available to Onit 16A customers was often not available, and clearly insufficient to meet the needs of Unit 16A and its patrons. As discussed below, the arbitrator finds that the AOAO is not without some discretion in its ability to control and restrict parking, especially in circumstances where the available parking does meet the needs of the Resort as a whole. The arbitrator rejects the view, to the extent that it is proffered vjew of the Claimants and their expert, that a gate system, which does not allow unlimited use by patrons of Unit 16A of all common area parking, is improper.12 This will be discussed further 11 The arbitrator recognizes that this direction by the County was not necessarily based on the claim (or a finding) that the AOAO had improperly converted common element parking into limited common element parking. 12 Claimant's expert, for example, opines: "It is my opinion that the Association lacks any legitimate basis for implementing and/or maintaining any parking scheme that deprives Apartment 16A of equal access to all parking areas at the Project." To the extent that Claimant's position is, for example, that no valet 13 below. However, the arbitrator finds that the system put in effect here, which was specifically intended to disadvantage Unit 16A and to advantage the other owners, was impermissible and unreasonable, and is enjoined, as set forth in more detail below. The Resort governing documents contemplated Unit 16A being used as a bar and restaurant facility open to the public. The parking spaces are common elements. The arbitrator finds that the Board lacked the ability and right to convert the parking system at the Resort to one in which Unit 16A and its patrons became, in essence, second class or third class citizens, as to parking. The problem was not the parking gates, in the abstract--the problem was that the owners of Unit 16A were essentially given the choice between: (1) gates that excluded their customers and valet parking for which they had to pay; or (2) gates that excluded their customers. The arbitrator specifically finds that the system put in place did, impermissibly, convert common element parking into limited common element parking, to the detriment of Unit 16A. The arbi.trator has considered the authority cited by the Respondents, but considers it inapposite or unconvincing.13 system may be implemented if the primary impact is on Unit 16A customers, the arbitrator rejects that position. 13 Though certain of the cases are clearly distinguishable on the facts and the law, one theme running through the cases cited by both Claimants and Respondents is reasonableness. But, it is not reasonableness in the abstract that is relevant here, but rather reasonableness taking into consideration the governing documents and the rights of all unit owners. It is reasonable for the 14 The question is not whether, in the abstract, a rule advantaging some owners to the exclusion of others is logical. The questj.on here is whether the Board had the right to, essentially, exclude business patrons of Unit 16A from the vast majority of the common element parking spaces at the Resort, absent the owners of Unit 16A paying for valet parking. The plan adopted by the Board may have been logical from the perspective of the owners of the non- commercial units, but it was not reasonable or permissible given that parking is a common element, as it severely disadvantaged one unit .14 Board to try to do its best to have a sensible method of parking in the face of more need than availability. It is unreasonable for the Board to predetermine that the needs of Unit 16A are subordinate to the needs of the other units, and to put in place a policy based on that exact predetermination. "All available spaces in the north lot to the right of entrance will be reserved for the exclusive use of Owners and Guests staying overnight at Hanalei Bay Resort... The lower lot will be utilized for resort associates, vendors, and tennis club guests unless additional parking is needed to accommodate Owners and Guests. Parking for Bali Hai and Happy Talk guests will be allowed in the lower lot contingent upon adequate availability of parking for Owners and Guest in residence, resort Associates, vendors and tennis club guests." Ex. C-39 at 2-3. It is this ordering that is at the heart of the challenged policy, and it is this ordering that is unreasonable and impermissible in light of the governing documents of the Resort and the rights of the owners of Unit 16A. 14 There is some evidence that one reason for more cars at the Resort was because of increased occupancy as a result of lockouts. "We are averaging anywhere from 121 to 156 cars due to the larger rise in occupancy from having the units broken apart for rentals to maximize their sales." Ex. C-48, Oct. 20, 2015 email from Scott Pacer to Board Members and Unit 16A 15 The AOAO contends that Claimants have no standing to obtain relief with regard to enjoining the parking plan put in place by the AOAO and the Board. The arbitrator rejects this claim. The arbitrator finds that when a policy is put into place, like the one here, which is contrary to the governing documents of the Resort, and which severely and materially prejudices a unit owner, the unit owner is absolutely entitled, through arbitration, to obtain relief. The stipulation for dismissal of the lawsuit claims, AOAO Ex. 24, provides that the parties have agreed to participate in arbitration, under Haw. Rev. Stat. § 514B-162, of all claims asserted by [Claimants] in their Circuit Court action. Section 514B-162 provides for arbitration of "any dispute concerning or involving one or more unit owners and an association [or] its board, ... relating to the interpretation, application, or enforcement of this chapter or the association's declaration, bylaws, or house rules ... " Haw. Rev. § 514B-10 provides that the remedies in Chapter 514B "shall be liberally administered to the end that the aggrieved party is put in as good a position as if the other party had fully performed.'' The arbitrator rejects the contention that the Claimants have no standing to obtain the relief sought with regard to the parking policy. The arbitrator finds that the owners/tenant. However, the arbitrator finds that ''lockouts," per se, were not the reason for or the cause of the parking policy, and the parking policy was instituted for reasons primarily related to Unit 16A, and not actual increased occupancy (if any) due to lockouts. 16 owners of Unit 16A have standing to seek declaratory injunctive relief against the AOAO, relating to the parking policy instituted by the Board. The injunctive relief granted herein is granted only in favor of the owners of Unit 16A (as listed in note 1, infra), and against the AOAO. The current gate system is improper, unreasonable, and enjoined. Within (30) days of the date of this Final Arbitration Decision, Award, and Order, the AOAO shall either: (1) Render the gate system inoperative during the current business hours of Happy Talk, thus allowing business patrons 15 of Unit 16A to park in all common element parking areas of the Resort that are allowed for parking for unit owners and their guests (including VOA guests), during Happy Talk's current business hours;16 or (2) Render the gate system inoperative in its entirety (or remove the gate system) and allow business patrons of Unit 16A to park in all common areas of the project that are allowed for unit owners and their guests (includi.ng VOA guests), during Happy Talk's current business hours.11 In the alternative, the AOAO may leave 15 The term business patrons does not include Happy Talk employees. 10 The arbitrator understands that Happy Talk could choose to change its business hours. However, the injunctive relief granted herein only applies to Happy Talk's current business hours. The arbitrator does not wish to create a situation where new artificial business hours could disadvantage the reasonable operation of the Resort. The principles of reasonableness would be applicable to parking regulations geared to new business hours, but not the particular injunctive relief granted herein. 17 This injunction does not bar the AOAO from setting aside a 17 the gate system fully operative in its exact current form or operative at times of the AOAO's choosing, with a key card system similar or identical to the one now in place (which system does not allow patrons of Unit 16A access to the gated lot), but g~ if that is accompanied by a valet parking system in effect at all times during Happy Talk's current business hours when the gate system is in use, with Happy Talk business patrons able to use the valet parking system to allow their cars to be parked, at no cost to them (except any optional gratuities), with all expenses of the valet parking charged only as a common expense, and not otherwise. That means that the normal common maintenance percentage fee chargeable to Unit 16A for normal common maintenance charges would be applicable to such valet charges.1B reasonable number of spaces (permanently or from time to time, as needed) exclusively for Resort employee parking, vendor parking, or contractor parking. 1 8 The arbitrator recognizes that even with the use of a valet system where the charges are paid according to normal common interest maintenance charges, there may be occasions where even a valet system would not have the ability to accommodate everyone who needs to park, including owners, overnight guests, and patrons of Unit 16A. However, that would also be true with no gate and no valet system. On occasion, there may be more legitimate parkers than available parking spaces. That fact does not prevent the AOAO from instituting a valet system in conjunction with a gate system. The arbitrator finds that if there is a valet system instituted, combined with a gate access system as currently; that could lead, on occasion, to owners and guests being able to park while Happy Talk patrons may not be able to park. In addition, such a system will mean that owners and their guests, and VOA renters and their guests, will be able to directly access the gated lot, and Unit 16A patrons will need to utilize valet parking. However, the arbitrator finds that that possibility (or even likelihood) does not bar the AOAO from instituting such a system. The AOAO is entitled to ut.ilize 18 The arbitrator finds that the injunction issued here is appropriate because on this issue the owners of Unit 16A have prevailed on the merits. The arbitrator finds, in addition, that the owners of Unit 16A have demonstrated irreparable harm to their business interests. A bar/lounge cannot exist without patrons. Patrons having no place to park necessarily means that they will find another place to patronize. In addition, looking at the balance of hardships, the arbitrator finds that weighs significantly in favor of the owners of Unit 16A. The current parking system imposes a very significant hardship on them, whereas either eliminating the parking gate system during Happy Talk's current business hours, or instituting a valet system, or limited valet system, with the cost imposed on the AOAO and charged per common area maintenance, will impose little or no hardship on the AOAO. In addition, because the arbitrator finds that the imposition of the current parking policy violates the governing documents of the Resort, the arbitrator finds that the public interest is served by this injunction. The arbitrator wishes to make clear that in the future, however, the AOAO could reasonably decide to institute a different parking plan, and cannot and does not prejudge such a plan. It is beyond the scope of this arbitration to set out the exact parameters of some hypothetical future system, but the reasonable non-discriminatory methods to control parking, even if, on occasion, the result on a particular day might be to favor unit owners or their guests over Unit 16A patrons. That does not 19 arbitrator believes that he should at least discuss this issue. The arbitrator believes that AOAO could institute a valet system and charge for it, or assess for it, in a manner not strictly in accord with common expense percentages. The arbitrator believes that the AOAO could charge for valet parking based on overall parking usage. For example, and only by way of hypothetical example, if it were reasonably determined that approximately: 15% percent of the total parking usage was whole unit owners and guests; 50% VOA guests; 15% Resort employees and/or Resort agent employees and Resort contractors; and 20% percent Unit 16A patrons; with total valet charges of $10,000 per month; the valet charges could be assessed, for example, something like: Whole unit owner fees actually increased to pay an additional $1,500 per month; VOA resort fees actually increased to pay an additional $5,000 per month; $2,000 per month assessed as a common expense (because of employee/contractor usage); and $2,000 per month paid by Unit 16A owners. Again, however, this would need to be based on total parking usage--not simply "busy t.ime" or incremental usage. To be based on "busy time" usage could easily be skewed to unfairly disadvantage Unit 16A. But again, this is simply a hypothetical discussion as to the future. The injunction ordered herein does not, however, bar the AOAO from instituting a different parking system in the future that allows Happy Talk business patrons to park in the same areas as owners make such a system unreasonable or impermissible. 20 and their guests, including VOA unit guests, or which institutes a valet system reasonably paid for as generally discussed above. 19&20 III. LIENS AND ASSESSMENTS BASED ON VALET PARKING COSTS AND DAMAGES BASED ON PARKING POLICY ISSUES A. PARKING ASSESSMENT AND LIEN 1. The Owners of Unit 16A may Challenge the Valet Parking Assessment and Lien. The AOAO has argued that Claimants have no standing or right to challenge tl1e fines and assessments related to the valet parking (or any other fines/assessments) because, according to the AOAO, pursuant to Haw. Rev. Stat. § 514B-146(c), a unit owner can only challenge an assessment if he first pays it, and then takes other steps to dispute the assessment. According to the 19 Since Bali Hai is not currently open, and there is no set timetable for opening, the arbitrator believes it would be inappropriate for injunctive relief to address a hypothetical situation involving Bali Hai being open. 20 Respondents have argued that the Circuit Court made a finding which is either binding on the arbitrator, or which the arbitrator should view as precedent, with regard to the AOAO's right to install the gate and institute the parking policy it did. Judge Watanabe noted that ''Plaintiffs have not shown that they are likely to prevail on the merits. The Court is persuaded by Defendants' arguments that the AOAO has statutory authority to regulate the use of the common elements, including the parking lot .... " The evidence before the arbitrator is thus that one of the reasons the Circuit Court denied a preliminary injunction, based on a limited record, was its belief that the AOAO likely had the right to institute the parking control measures that it did. However, it is clear that this was a preliminary finding, and not a finding after a full record, on the merits. For the reasons set forth above, the arbitrator respectfully disagrees with the Circuit Court, and finds, after a review of all of the evidence, that the parking plan put in place by the AOAO was not allowed for by the governing documents and was thus contrary to law. 21 AOAO, because the owners of Unit 16A have never paid any of the fines and assessments at issue, and because they "never once asked for any clarification related to any of the assessments discussed herein, or tried to appeal them in any way," they are barred from challenging them in this arbitration. Post- Arbitration Brief at 56. Respondents also cite Haw. Rev. Stat. § 51413-144 (d) for the proposition that "[i]f any common expense is caused by the misconduct of any unit owner, the association may assess that expense exclusively against such owner's unit." Pre-Arbitration Brief at 48. Section 5148-146(a) provides: "All sums assessed by the association but unpaid for the share of the common expenses chargeable to any unit shall constitute a lien on the unit with priority over all other liens, except .... " Section 5148-146(c), cited by the AOAO, states, in part: "No unit owner shall withhold any assessment claimed by the association." That section then goes on to describe the procedure that must be followed by an owner who disputes an assessment, including the provision that provides in section 51413-146(c) (5), that the right of a unit owner to dispute an assessment in arbitration is dependent on the owner paying the assessment in full. The word "assessment" is not specifically defined in Chapter 5148, including in the definition section of chapter 5148, section 5148-3. The term "common expenses" is defined in section 5148-3 as ''expenditures made by, or financial liabilities 22 of, the association for operation of the property, and shall include any allocations to reserves." Section 514B-104 (a) (2) allows the AOAO to "collect assessments for common expenses from unit owners .... " Section 514B-14 6 ( i) provides that regular monthly common assessments do not include late charges, fines, or penalties. Section 514B-104 (11) allows the AOAO to levy and collect "reasonable fines" in accord with certain procedures, and also provides: ''[P[roviding the fine is paid, the unit owner shall have the right to initiate a dispute prevention process as provided by sections " The Bylaws of the Resort, AOAO Ex. 2 at 6, allow the Board authority for the "Levy and collection of monthly and special assessments of the common expenses and other charges payable by the Owners .... " The Bylaws define the types of items included in common expenses and make clear that each owner "shall be l.iable for and pay a share of the common expenses in proportion to the undivided interest in the common elements appurtenant to bis Apartment." Art. VI. The AOAO assessment power includes the power to make special assessments (in accord with common ownership percentage), to make up a deficiency. Claimants argue that the amounts assessed for valet parking (and other assessments at issue here) are not the types of assessments tl1at must be paid pursuant to section 514B-146(c) prior to challenge, which Claimants say only applies to common expense assessments. Claimants argue that the "assessments" at issue here are fines, and that no prepayment of fines is a 23 prerequisite to a challenge of those fines, merely a prerequisite to taking advantage of a statutory ADR procedure. In support of the latter point, Claimants cite to a 2014 decision of Judge Nacino, of the First Circuit Court. The arbitrator agrees with Claimants that section 514B- 146(c) applies only to assessments for common expenses in accord with ownership percentages, not anything an AOAO chooses to call an assessment.21 Any other reading would leave a unit owner at the mercy of an unreasonable Board, which could impose "assessments" (fines) exceeding the value of a unit, and thereby, as a practical matter, deprive the owner of any recourse at all, if the owner lacked the financial means to pay before challenge. The arbitrator believes the purpose of section 514B-146(c) was to make sure an AOAO would not be at the mercy of owners refusing to pay their share of common expenses assessed against owners in general. The arbitrator also believes this reading is consistent with section 514B-9, which provides that every duty covered by chapter 514B "imposes an obligation of good faith in its performance or enforcement," and section 514B-10, which provides that the remedies in Chapter 514B "shall be liberally administered to the end that the aggrieved party is put in as good a position as if the other party had fully performed." 21 The section may well also apply to assessments for expenses caused by the misconduct of a unit owner pursuant to Haw. Rev. Stat. § 514B-144 (d). The arbitrator finds, however, that the valet parking expense was not caused by any "misconduct" of the owners (or tenant) of Unit 16A. 24 Barring an owner from challenging improper or unreasonable "assessments" unrelated to common expenses unless the owner paid the same, does not, in the arbitrator's view, comport with these sections. As to the Claimants' reading of the "fine" section, the arbitrator believes that based on the statutory language alone, this is a closer questions. However, the arbitrator finds that Judge Nacino's reading is in line with the provisions of Chapter 514B as a whole, and a contrary reading could leave an owner with no practical recourse at all, in the face of very large unreasonable and/or ultra vires fines.22 As to the "assessment" for valet parking, the arbitrator finds that this was not an assessment for Unit 16A's share of the common expenses chargeable to Unit 16A, and thus finds that the Owners can challenge this assessment, notwithstanding the fact that they have not paid it. The arbitrator finds that section 514B-146(c} is not applicable to this assessment, whether or not it is properly characterized as a fine. 22 Claimants also argue that because the assessments/fines for parking and other items were not for common expenses, there was and is no statutory basis for the AOAO to record liens based on them. In light of the arbitrator's other rulings on the validity of the fines/assessments/liens, there is no need for the arbitrator to reach this issue. 25 2. The Parking Assessment/Fine and Lien are Invalid and Unenforceable. Respondents contend Claimants made some binding commitment to pay for some or all of the valet costs. For example, they cite to AOAO Ex. 127, in which the Unit 16A owners, as part of a settlement offer, offered to pay two-thirds of valet costs. However, it was clear that this was part of a much larger settlement proposal, that was never accepted or consummated. 23 Respondents similarly cite to AOAO Ex. 129, which was perhaps an offer to pay 50% of valet costs. The arbitrator, however, finds no evidence from which he can conclude that there was a conlract between the AOAO and the owners of Unit 16A to pay any particular portion of the valet charges. However, the arbitrator does not find this disputed point to be central to this issue. The parking plan put in place by the AOAO was improper and unreasonable. Any valet charge assessment or even agreement as Lo charges (if that had happened), necessarily flowed from that par.king plan, to which Claimants continually objected. The arbitrator finds that even if there was compelling evidence that the Unit 16A owners had somehow contractually agreed to pay for the valet services (which the arbitrator does not find), any such agreement was prompted and caused by the impermissible parking policy put in place by the AOAO, and thus void ab initio and in its entirety. 23 AOAO Ex. 128 specifically states, offer of sharing the valet on a 2/3 26 in fact: "Your client's 1/3 basis was previously Respondents state in their post-arbitration brief that "only when it was clear that Claimants didn't intend to honor that agreement to split the costs 50-50 that the Board and Mr. Veal announced that they would simply charge Claimants $10 per car, the amount they had earlier calculated to be the 'break even' point to cover the valet expenses based on figures provided by Kauai Valet." Brief at 59, citing, in part, AOAO Exs. 128 and 131. However, the premises of the Board were that they could (1) completely exclude patrons of Unit 16A from the gated common element parking area and (2) charge either the owners/tenant of Unit 16A or the patrons of Unit 16A the costs of the valet parking necessitated by the gated parking system. These premises were wrong, as set forth above. The Board and the AOAO did not have the ability to exclude the Unit 16A patrons from the gated area and then make either the Unit 16A owners/tenant or the Unit 16A patrons pay for the valet parking that was necessitated by the gate system. The Board and the AOAO assessed the owners of Unit 16A based on these inappropriate and legally incorrect premises. AOAO Ex. 175 shows a lien for unpaid valet parking assessments and interest recorded at the Bureau of Conveyances on or about December 22, 2017, in the total amount of $100,278.10. The arbitrator finds that assessment/fine, including interest, is unenforceable and void. made and rejected by the Board." 27 All fines and assessments for the valet parking (including any interest) are declared void and unenforceable. The AOAO is ordered to take all necessary steps to forthwith expunge and remove the lien based on the valet parking assessment/fine, and the AOAO is enjoined from taking any action to act upon the assessment, fine, or the lien, including attempting to foreclose on Unit 16A or taking any other action based on the assessment, fine, or lien, as the arbitrator finds and declares the assessment/fine and the lien on which it/they are based, void in their entireties, and unenforceable. B. DAMAGES CLAIMED BY CLAIMANTS AS A RESULT OF PARKING POLICY/VALET PARKING ISSUES AND OTHER ISSUES Claimants have alleged various damages arising from the improper institution of the parking policy, including as to the valet services (and other issues). The arbitrator finds that the $11,044.86 that the owners of Unit 16A or their agent(s) paid for valet services, as set forth in the evidence, including Ex. c- 117, are damages that directly flowed from the improper parking policy, and the owners of Unit 16A are awarded that amount-- $11,044.86--as against the AOA0.24 24 While Claimants HBR Enterprises, LLC and Jimit Mehta were no doubt, in a common sense way, damaged by the actions of the AOAO and the Board, the arbitrator agrees with the Respondents that those Claimants are not in sufficient privity with the Association so as to all.ege valid claims against any Respondents with regard to the allegations as to the parking policy, and thus the award is in favor of the owners of Unit 16A, and not those other Claimants. 28 Claimants seek various other amounts in damages, as a result of the parking policy and other alleged improper conduct and/or misconduct by the AOAO and the Directors. The arbitrator finds, however, that the Claimants have not provided evidence sufficient to allow any of those additional amounts to be awarded as damages, and thus rules against Claimants with regard to those claims. 1. Claimants seek $500,000 for "unusable equipment and storage costs." Post-Arbitration Brief at 29. Claimants cite to the testimony of both Mr. Mehta and Mr. Sciotto. Mr. Mehta testified (at the cited portion of his testimony) that equipment and furniture purchased for Bali Hai is in storage in California. Mr. Sciotto testified similarly. Although it is unclear to the arbitrator that this is (or legally could be) a recoverable cost, even if incurred by the owners of Unit 16A, the arbitrator does not find that Claimants have proven that this alleged damage was proximately caused by the parking policy or related issues. 2. Claimants also seek $1,700,000 "in lost income for the two years since the gate was installed." Id. First, the arbitrator does not believe that pursuant to the counts dealing with the governing documents, condominium statutes, and other condominium violations, or breach of contract, the tenant could recover this type of damage against the AOAO (or the Board), and any "lost income" is lost income of the tenant. But, even if 29 that were not the case, the arbitrator does not find evidence suf cient to allow any award for lost income as a result of the gate and parking issues. While Claimants assert that "Lloyd's of London's numbers," Ex. C-242, demonstrate lost income for 2011 and 2012, there was no testimony tying specific amounts of lost income to the parking policy, no economically reliable evidence of the same, nor any evidence from which the arbitrator could reliably conclude that any parti6ular amount in lost income was suffered by either the tenant or the owners of Unit 16A, or was specifically caused by the parking policy or related issues.25 In this regard, the arbitrator has little doubt that the parking policy did in fact reduce patronage and profits. But, there is simply no evidence before the arbitrator to support any damage award in any particular amount, even if "lost income" was claimed by a party with standing to assert such the claim against the Respondents. 3. Claimants also seek $9,383.09 "for various items in exhibits C-240 and C-242."26 Exs. C-240 and C-241 show Mr. Mehta billing Scott Pacer for this amount--for trash dumps, laundry area repair, patchwork, AOAO portion of lava rock, camera installation, and propane/storage area electrical. Mr. Pacer 2 5 The arbitrator does not recall any specific testimony about Ex. C-242, and much of the document itself is labeled "Preliminary." Moreover, the document only covers the years 2011 and 2012, and does not purport to project other losses for other years, though Claimants do ask the arbitrator to extrapolate. 2 6 The second reference likely was meant to refer to Ex. C-241. 30 made a non-committal email response to this billing. Mr. Mehta testified that the amounts listed "are those amounts that [Mr. Mehta] believe[s] the AOAO owes [him] for their various and sundry agreements that you had that are documented." TR at 1242. The arbitrator appreciates that as the arbitration came to a close, all parties were working hard to finish. Nonetheless, the arbitrator finds insufficient evidence to be able to award these amounts, particularly as Mr. Mehta's contractual relationship was with the owners of Unit 16A. 4. Claimants also seek $189,073 for the owners of Unit 16A for "lost rents." Post-Arbitration Brief at 29-30. Although the owners of Unit 16A allege that based upon "projected sales," they had "an expectation" to receive additional rents based upon percentage rent, the arbitrator finds that they have not demonstrated through credible and reliable evidence, any particular amount of lost percentage rent. While the arbitrator believes that the parking policy did reduce Happy Talk patronage, the nature of· the evidence produced does not allow the arbitrator to make an award in this regard. 27 &28 27 Claimants, citing Exotics Hawaii v. DuPont, 172 P.3d 1021 (Hawaii 2007), contend that uncertainty as to the damage amount does not prevent recovery once the fact of harm is established. Post-Arbitration Brief at 30, n. 60. However, the Exotics Hawaii Court also held: "It is now generally held that the uncertainty which prevents a recovery is uncertainty as to the fact of damage and not as to its amount. However, the rule that uncertainty as to the amount does not necessarily 31 5. Claimant Jimit Mehta also seeks $500,000 in general damages. The arbitrator does not doubt that the wrongful institution of the parking policy took a significant emotional toll on Mr. Mehta. However, the arbitrator does not find that Mr. Mehta has standing to make such a claim against these Respondents under breach of contract or violation of the condominium documents or condominiums statutes theories, and thus cannot make an award for general damages to Mr. Mehta in that regard. In addition, the arbitrator believes that even if Mr. Mehta had standing, the award would likely be barred by the economic loss rule, but the arbitrator does not need to reach that precise question under the counts in which it finds in favor of the Owner Claimants against the AOAO.29 prevent recovery j,s not to be interpreted as requj_ring no proof of the amount of damage. The extent of pJ.a.intit·t·1 s .Loss must be shown w.7-th reasonabJ.e certainty and that excJ.udes any showing or concJ.usion founded upon mere speculation or guess." 172 P.3d at 1035 (quoting a prior case) (emphasis in original). In this case, the arbitrator finds that the extent of the loss has not been shown with reasonable certainty, and thus no award is legally possible. 28 The lease, Ex. C-8 3, provides, inter al..ia, for a percentage rent of "a sum equal to Six (6) percent of Gross Sales in excess of the Breakpoint (as hereinafter defined)." Id. at 6. The evidence simply does not provide enough informat on for the arbitrator to make such a calculation, even though the arbitrator believes that the parking issues caused some lost sales to Happy Talk. 29 Punitive damage issues and issues regarding individual liabil y of Directors will be discussed below. 32 IV. LOCKOUTS The Claimants have alleged that lockouts at the Resort are "illegal." Claimants have introduced evidence dating back, at least to the 1990s, showing that lockouts may be improper or "illegal" activity. Ex. C-22 is a November 1995 letter about the Resort to Castle Resorts from the Kauai County Planning Department, stating, in part: [T]]he rooms that are rented at Hanalei Bay Resort should not consist of more than 134 resort apartment-condominium units. Any attempt to rent individual bedrooms or "lock-out" unites independently of the main dwelling or condominium- apartment unit would be considered an illegal activity. There is also evidence that the County, in 2017, ordered the project to cease and desist using lockouts. Se~, Ex. C-23 ("Cease rental and use of the bedroom area of all units as separate dwelling units") .30 In 2016, the Hawaii County Planning Director signed an affidavit stating that the November ]995 position of the County stated in Ex. C-22 "still accurately reflects the Department of Planning's position today." Ex. C-24. In addition, Princeville Rules appear to bar some lockouts as well. Ex. C-15 at 5 ( "The renting of sing le rooms, 'lock-outs', 30 The AOAO' s September 28, 2017 response to that letter stated that "lock-outs have been in existence and use for forty (40) plus years." Ex. C-216. The letter sought to work with the County on resolution of the lockout issue and other issues raised by the County, including parking issues. There has not yet been any final resolution with the County, as to the County's issues (the County's parking issues are also discussed below). 33 or 'guest quarters' is prohibited''). Claimants, as noted, seek an injunction and/or declaratory relief regarding lockouts. Among other things, Respondents have averred that lockouts may have been "grandfathered" under the Kauai Interim Zoning Ordinance (citing AOAO Ex. 189); that the 1971 Princeville Association Covenants do not mention lockouts; and that the 2004 Princeville Rules on lockouts only apply to "residences" which does not (according to Respondents) apply to the Resort. Post- Arbitration Brief at 12. The evidence is clear that lockouts have been a part of the Resort for decades. Lockouts were a part of the Resort when the owners of Unit 16A purchased their unit. To the extent that lockouts increased occupancy at the Resort, by increasing the number of guests, it is just as likely that that would enure to the economic benefit of the owners of the Unit 16A, as to their detriment as a result of increased parking at the Resort. It is likely (perhaps certain) that many owners of units in the Resort bought their units in reliance upon being able to use their units as lockouts. It is also clear that various owners of units in the Resort are not parties to this arbitration, and yet would have interests that would be materially (and potentially adversely) affected by any decision by the arbitrator with regard to the legality or illegality of lockouts, and with regard to any possible declaratory or 34 injunctive relief the arbitrator could order with regard to lockouts. In addition, any decision with regard to relief as to lockouts would have to take into account issues like laches, estoppel, and various equitable concerns, as injunctive relief and declaratory relief are both equitable in nature. To the extent the Claimants are alleging specific monetary damages as a result of the lockouts, the arbitrator finds there is no proof of the same. The arbitrator finds that the Claimants have not shown any irreparable harm to them, either prior to 2017 or currently, from lockouts (irrespective of whether lockouts are still ongoing at the Resort). Indeed, it is unclear to the arbitrator as to whether the Claimants have shown any material harm to them from lockouts.31 The arbitrator does not find that the balance of hardships favors the Claimants with regard to the lockout issue. Eliminating lockouts through this arbitration (were that even possible) could cause real harm to unit owners, but not providing such relief would not materially harm the owners of Unit 16A. 31 If lockouts materially increased occupancy, and if increased occupancy caused part of the parking problem and the AOAO parking policy, then lockouts did cause harm to the owners of Unit 16A. However, the evidence that lockouts actually materially increased occupancy is slim (notwithstanding Ex. C-48), and the arbitrator has found that the parking policy was instituted for reasons primarily related to Unit 16A, and not because of (alleged) increased occupancy due to lockouts. There is, at best, little evidence that lockouts have harmed the owners of Unit 16A. 35 Given that the County of Kauai and most other unit owners are not parties to this arbitration, and given that the lockouts have been in effect at the Resort for decades, and were in effect at the time the owners of Unit 16A bought their unit, the arbitrator finds that the public interest does not materially favor one side or the other with regard to the lockout issue. Given all of these findings, the arbitrator declines to reach the actual merits of the lockout claim, since the only relief that could be afforded--declaratory or injunctive--would be equitable in nature, and equitable relief is unjustified given the above findings, even if the arbitrator were to conclude that lockouts, at least in the abstract, violated County ordinances, etc. Thus, the arbitrator rules (partially) in favor of Respondents on the lockout claims, as the arbitrator declines to order any relief in favor of Claimants or against Respondents on this issue. V. ASSESSMENTS/FINES ON ISSUES OTHER THAN PARKING The Respondents have alleged and introduced evidence of various assessments/fines as to non-parking matters, assessed against the owners of Unit 16A, all of which have been challenged by the Claimants in the arbitration. Both the Claimants and the Respondents seek relief with regard to the assessments/fines. The arbitrator has already invalidated the liens and assessment/fine related to valet parking. All other assessments are discussed below. 36 A. BANNER/SIGN AOAO Ex. 178 shows a filed lien for unpaid assessments in the amount of $40,613, relating to a banner/sign, awnings, and a container. It appears that about $30,000 of that amount (including interest) relates to the banner/sign. The invoice attached to Ex. 178 describes the assessment as being for "violation of house rules" in addition to interest. The "banner/sign" assessment has not been paid. It is clear that this assessment is not for a "common expense," and thus, as set forth above, the owners of Unit 16A may challenge it, notwithstanding that they have not paid it.32 The sign was on a large banner posted/hung in/outside the Bali Hai Restaurant. Pictures of the sign/banner were introduced in evidence, and the wording was as follows: THE BALI HAI WILL NOT OPEN UNTIL THERE IS A FAIR RESOLUTION TO PARKING WHICH DOES NOT DISCRIMINATE AGAINST LOCAL PATRONS AND NON-RESORT GUESTS. THIS IS THE TRUE SPIRIT OF ALOHA. AOAO Ex. 178 The arbitrator finds as a matter of fact that the Board and its members were upset by criticism leveled against it/them by Mr. Mehta. For example, the January 30, 2015 Board Minutes, AOAO Ex. 39, state: 3 2 Even if the hanging of the banner/sign could be classified as "misconduct," and the arbitrator does not so find, no evidence has been introduced that the assessment is tied to any actual expense to the AOAO. 37 arbitrator finds that the hallmark of appropriate fines for individual, non-common expense assessments, even for violations of rules, must be reasonableness. Haw. Rev. Stat. § 514B- 104 (a) ( 11) allows an AOAO to "levy reasonable fines for violations of the declaration, bylaws, rules, and regulations of the association .... " The arbitrator finds that the fine relating to the banner/sign was wholly unreasonable in amount. The banner/sign did not cause physical harm to anyone, although the arbitrator understands the AOAO has argued that it created a danger. However, in the context of the dispute itself, the wording of the banner/sign, the fact that it was criticizing the Resort (and by implication the Board), and taking into account the amount of the other fines that were assessed, discussed above with regard to valet parking and below with regard to other fines, the arbitrator finds the fine--$29,300 plus interest-- unreasonable, and thus invalid and unenforceable. All fines and assessments for the banner/sign (including any interest) are declared void and unenforceable. The AOAO is ordered to take all necessary steps to forthwith expunge and remove the lien based on the banner/sign, and the AOAO is enjoined from taking any action to act upon the assessment, fine, or the lien, including attempting to foreclose on Unit 16A or taking any other action based on the assessment, fine, or lien, recognizes that AOAOs have a right and responsibility to maintain the appearance of a condominium. 39 as the arbitrator finds and declares the assessment/fine and the lien on which it/they are based, void in their entireties, and unenforceable. B . THE AWNINGS 36 As set forth in Ex. C-237 and AOAO Ex. 233, the AOAO has assessed fines of more than $125,000 (plus interest) for awnings in "Violation of House Rules." Claimants may challenge these fines/assessments notwithstanding that they have not paid them, for the same reasons the arbitrator has ruled they may challenge the previously-discussed fines/assessments. The AOAO placed a lien for unpaid assessments based in part on the awnings fines, AOAO Ex. 178, with likely additional liens either having already been filed or coming based on the awnings.37 The awnings were part of the reconstruction of Happy Talk. Mr. Pacer actually testified that he saw the awnings that were installed, he thought they "were fine," he personally liked the awnings, and no concerns were raised by the Board about the awnings, while he worked at the Resort. TR at 874-75.38 36 It is unclear if technically there is one or more than one challenged awning. That is not germane to the arbitrator's ruling, and this decision will refer to "awnings," as do the violation notices and liens. 37 The AOAO' s Pre-Arbitration Brief at 56 notes that "fines will accrue until [awning] removal." 38 Respondents contend that "the awnings were installed after Mr. Pacer had left GPR, and he was not consulted on the design or placement, and he does not know who was." Post-Arbitratjon Brief at 47. The cited portion of the transcript does not so state, and Ex. C-67 appears to be an emailed photo of the awnings from 40 There is no evidence that the awnings in any way detract from the appearance of the Resort, are improper, or impinge upon the rights of the AOAO in any way. There is no evidence the awnings have caused the AOAO to incur any expense, except with regard to their challenge to the awnings. Though it appears that the AOAO contends that allowing the awnings was part of what was in the AOAO's view the unconsummated global agreement as to various Resort modifications, the arbitrator does not find that in the evidence. In any case, the arbitrator agrees with Claimants' argument that to the extent the awnings encroach onto a common element, an easement in favor of Unit 16A exists for the awnings. But again, the construction of the awnings was well-known to the AOAO, and no objection was made to them, until approximately April 2017. SeE: April 13, 2017 letter, part of AOAO Ex. 178. The arbitrator agrees with the Claj.mants that they had the right to erect the awnings, even if they in some way overhang a common area, or go "beyond the roof line of Happy Talk." But, even if there somehow could be found to be a technical violation (and the arbj.trator does not so find), the AOAO ej.ther acquiesced in the construction of the awnings or agreed to the construction of the awnings, and in any case, did not timely object.39 Mr. Pacer with the comment "nice," from his gpresorsts.com email, but the arbitrator does not view this as an important point. 39 Failure to object to some types of ongoing violati.ons may well be irrelevant to a subsequent enforcement action or sanctions, 41 Fining Unit 16A more than $125,000 for the awnings (and the evidence is that the fines will likely continue after December 31, 2017) is the hallmark of an unreasonable action by the Board of Directors and its agents. There is no evidence that the AOAO was harmed by the awnings or has incurred any cost because of them, and the genesis of the fines for the awnings was the general dispute with Unit 16A, and the litigation. There is nothing about the fines or assessments for the awnings that bear any indicia of reasonableness. All fines and assessments for the awnings (including any interest) are declared void and unenforceable. The AOAO is ordered to take all necessary steps to forthwith expunge and remove the lien based on the awnings, and the AOAO is enjoined from taking any action to act upon the assessment, fine, or the lien, including attempting to foreclose on Unit 16A or taking any other action based on the assessment, fine, or lien, as the arbitrator finds and declares the assessment/fine and the lien on which it/they are based, void in their entireties, and unenforceable. The AOAO is also enjoined from making or assessing any future fines, assessments, or liens based on the awnings. 40 especially if there was no acquiescence in a "permanent" change. That is not the case here, however. 4 0 This injunction does not bar action by the AOAO in the event that in the future the awnings pose some type of safety or other hazard, or their condition materially changes, leading to the need for action by the AOAO, unrelated to the actions described 42 C. CONTAINER Apparently a container was used by a contractor or subcontractor i~ construction. The container was on site with the permission of agents of the AOAO. Because of the death of a principal of the contractor or subcontractor, there was a delay in removing the container, and fines of $500 per day were assessed. A lien was filed, based in part on the container assessment. See AOAO Ex. 178 and Ex. C-237. The fines were for a total of $5,800, apparently for the approximately 12 days it took for Mr. Mehta to remove the container, after he was notified it needed to be removed. Mr. Veal testified as follows: The container was a container sitting on common area that was in vio1ation of the bylaws and construction rules, and dates are for the time period from the notice to the removal of the container. TR at 1281-82. AOAO Ex. 238 states: Shipping container in maintenance area parking used for Bali Hai storage was originally granted use of the space for and during Bali Hai construction. No construction is ongoing in the restaurant at this time so container is in violation of parking rules. Ex. C-27 is a declaration of Michael Cox, who was the Project Manager for Kilohana Electric, and states that prior to the commencement of work, Kilohana "received verbaJ. permission from Scott Pacer" to pJ.ace an equipment storage container behind herein. 43 Building 16. Mr. Cox stated that no deadlines were set for removal and ''it was understood that the container would remain there until all electrical work was completed at both restaurants." Mr. Cox also noted that shortly after the commencement of work, the Kilohana owner suddenly passed away and that assets and liabilities were placed under the control of a probate attorney and the contract was voided. He also notes that Mr. Mehta was asked to remove the container even though it was still the property of Kilohana Electric, and Mr. Mehta took it upon himself to remove it. Given that the container was at the Resort with the original permission of the AOAO, and given that after notice was given for removal, the container was removed quickly, even though it was not the property of the owners or tenant of Unit 16A, the arbitrator finds that the imposition of the $500 per day fine was unreasonable. The AOAO certainly had the right to require the removal of the container. This appeared to have been recognized by Mr. Mehta. If this were the only fine at issue, and if the fine were a modest fine, the arbitrator would have no hesitation in allowing it to be enforced. However, in conjunction with the other evidence presented, including the extraordinarily high and unreasonable fines assessed for, for example, the awnings, the arbitrator finds that this fine/assessment/lien was unreasonable, and may not be enforced. 44 All fines and assessments for the container (including any interest) are declared void and unenforceable. The AOAO is ordered to take all necessary steps to forthwith expunge and remove the lien based on the container, and the AOAO is enjoined from taking any action to act upon the assessment, fine, or the J_j_en, including attempting to foreclose on Unit 16A or taking any other action based on the assessment, fine, or lien, as the arbitrator finds and declares the assessment/fine and the lien on which it/they are based, void in their entireties, and unenforceable. D. LANDSCAPING A bill for unpaid assessments was assessed because of the alleged failure to pay for landscaping replacement, and a lien was fi.led based on that assessment. AOAO Ex. 177. The AOAO contends that the Jiability is based on J.andscaping repJacement necessitated because Claimants' contractors a]JegedJ.y destroyed AOAO landscaping. Post-Arbitration Brief at 63. The AOAO cites to testimony at pages 1278 and 1279 of the transcript. The arbitrator finds the evidence does directly not support the argument. Mr. Veal testified that ''the post-fire build-out was to include J.andscaping on the north side of Happy Talk, and that wasn't getting done, so we went ahead and landscaped and invoiced 16A for it.'' TR at 1279. On cross-examination, Mr. Veal testified that ''we had to purchase the palm trees, and so that's 45 how we calculated the 1800." TR at 1311.11 Mr. Mehta was not asked about the landscaping and thus did not testify about it. Claimants' Post-Arbitration Brief at 45 states: "Claimants flatly reject the suggestion that they or their contractors caused any damages to the north side of Happy Talk .... [T]he AOAO has taken the opportunity to bill Unit 16A for lavishly re- landscaping a small area of scrub and dirt that was not appreciably damaged in the first place." However, there is no evidence cited to support this statement. Although the evidence is not compelling, the arbitrator finds that it is more likely than not that the need for landscaping was caused by construction after the fire, and thus was validly billed to the Claimants, though the evidence is less than clear as to when it was actually billed and by what method. Because of this uncertainty, the arbitrator voids the interest component assessed. The arbitrator thus finds in favor of the AOAO on this claim in the amount of $1,822.91. This amount is awarded to the AOAO as a setoff against the amounts awarded herein to the owners of Unit 16A (including for attorneys' fees). Thus, the award is and shall be considered immediately satisfied. 41 Mr. Oehm testified that he believed "Jimit had first had agreed to handle the landscaping between the sidewalk and the wall, because it had to be torn up so he could get some of this stuff into the Happy Talk." TR at 442. It is unclear whether this is the same landscaping that was assessed, and the basis for Mr. Oehm's statement is also unclear. 46 As noted earlier, Claimants have argued that the types of liens filed here are impermissible, even if the fines on which they were based were permissible (which, of course, Claimants do not concede). The arbitrator does not view the landscaping assessment as a fine, but regardless of how characterized, the arbitrator views it as satisfied because of the setoff award. Thus, the arbitrator finds that the lien based on the landscaping assessment must be expunged. The lien based on the landscaping (including interest) is declared fully satisfied. The AOAO is ordered to take all necessary steps to forthwith expunge and remove the lien based on the landscaping, and the AOAO is enjoined from taking any action to act upon the lien, including attempting to foreclose on Unit 16A or taking any other action based on the lien. E. CHRISTMAS LIGHTS The AOAO has fined/assessed Unit 16A for Christmas .lights. See, , AOAO Exs. 147, 172 & 233, and Ex. C-237. The fines include fines of $500 per day. AOAO Ex. 233. Claimants, for the reasons stated above, have the right to challenge these fines. The AOAO has the ability to enforce its House Rules. It is possible that neutrally-enforced House Rules could forbid the installation of Christmas lights on Unit 16A's roof (though Claimants assert the governing documents of the Resort give them the right to place items on their roof). Although the AOAO has 47 claimed some evidence of danger from the lights, -~~~, e , TR at 1209-10, the arbitrator does not find the assessed Christmas lights fine--$500 per day--reasonable. While the AOAO has the right to reasonably run the Resort, these fines, in the context of the entire case, are unreasonable, and the arbitrator voids them. The AOAO is enjoined from taking any action to collect the fines for the Christmas lights or to levy, assert, or file a lien based on the Christmas lights fine/assessment. If a lien based on the Christmas lights fine/assessment has been filed, the AOAO is ordered to take all necessary steps to forthwith expunge and remove the lien, and the AOAO is enjoined from taking any action to act upon the lien, including attempting to foreclose on Unit 16A or taking any other action based on the lien. The AOAO is not, however, enjoined from neutrally enforcing any House Rules or other governing documents as to Christmas lights, in the future. F. INSURANCE PREMIUMS The evidence with regard to insurance premiums is conflicting. There is no question that the owners of Unit 16A have an obligation to pay their fair share of insurance, as they had apparently done in previous years. The owners of Unit 16A were billed $16,493.82 for the "2016/2017" insurance and $15,975.63 for the "2017/2018" insurance.42 The Claimants have 4 2 The AOAO notes, Post-Arbitration Brief at 62, n. 7, that no 48 alleged that they sought a variety of information from the AOAO regarding the assessment of the insurance premiums, the insurance policies, and how their insurance premiums were calculated, and that they were denied that information. The AOAO argues that the Claimants were provided all of the insurance information to which were entitled. It is uncontested that the insurance bills have not been paid. Unlike the other assessments/fines discussed above, the arbitrator finds that the insurance assessments (even if incorrectly calculated) are the types of assessments covered by Haw. Rev. Stat. § 514B-146(c), and must be paid upon assessment, and such payment is a prerequisite to challenge. A lien was filed based on the insurance, Ex. AOAO 176, in the amount of $35,582.55, including interest. The arbitrator finds in favor of the AOAO on this claim in the amount of $35,582.55. This amount is awarded to the AOAO as a setoff against the amounts awarded herein to the owners of Onit 16A. Thus, the award is and shall be considered immediately satisfied. Based on this, the arbitrator finds that the lien based on the insurance assessments must be expunged. The lien based on the insurance assessments (including interest) is declared fully satisfied. The AOAO is ordered to take all necessary steps to forthwith expunge and remove the lien based on the insurance assessments, and the AOAO is enjoined from "fine" letter was issued for the 2017/2018 insurance. 49 taking any action to act upon the lien, including attempting to foreclose on Unit 16A or taking any other action based on the lien. The AOAO is enjoined from making any further assessment, or filing any further lien based on the insurance assessments, including for interest the AOAO may claim has additionally accrued. The AOAO is enjoined from assessing or seeking any further interest as to these insurance assessments. Because the arbitrator has found in favor of the AOAO based on Haw. Rev. Stat. § 514B-146(c), and not based on any finding that the insurance assessments were correct or appropriate, this award in favor of the AOAO is without dice to the right of the owners of Unit 16A to challenge and dispute the assessments, as they are now fully paid, by this award. The owners of Unit 16A may fully challenge the assessments, including the assessments of interest, in any appropriate forum. Though the AOAO contends that it has furnished all necessary information regarding the insurance assessments, the arbitrator finds that the owners of Unit 16A are entitled to certain information.43 Within 30 days of the date of this decision, the AOAO shall provide to the owners of Unit 16A (or their counsel), copies of the relevant insurance policies upon which the insurance assessments are based, and documents demonstrating, or a specific narrative description of, the manner in which the two insurance assessments at issue were calculated. 4 3 If this information has already been furnished, then the AOAO 50 VI. DECLARATORY AND INJUNCTIVE RELIEF SOUGHT BY CLAIMANTS WITH REGARD TO PROVIDING ADDITIONAL PARKING AT THE RESORT Claimants argue that the AOAO "is breaching the covenants by not having the parking depicted on the 1986 condo map ... and by failing to comply with its zoning requirements to have the number of stalls that were represented to the County." Post-Arbitration Brief at 17. Claimants argue that "the AOAO must be directed to create 89 more parking stalls; that it begin doing so forthwith and that it report on its progress to the Claimants every month until the project is completed." Id. at 19. Claimants seek an injunction requiring the AOAO to build "the required number of stalls." There is significant evidence that demonstrates that the plans for the Resort created decades ago and representations made to the County decades ago, involved the creation or possible creation of more parking spaces than were ever built or part of the Resort. There is also, however, no doubt that the parking actually furnished with regard to the Resort was (or should have been) well known to the owners of Unit 16A at the time they purchased Unit 16A. And, the governing documents for the Resort were available to the purchasers, whether they reviewed them or not. is not materially harmed in having to furnish it again. 51 In order to be entitled to an injunction requiring the AOAO to build or create additional parking, Claimants would first need to demonstrate a legal right to the same. The arbitrator finds that they have not so demonstrated. As correctly noted by the AOAO, the AOAO did not develop the Resort, did not construct the parking lots at the Resort, and did not even exist during the initial construction of the Resort. Post- Arbitration Brief at 20. Various approvals were issued for the Resort, and even though the parking built did not (allegedly) comply with the (alleged) parking requirements, the County (until recently) has taken no enforcement action with regard to the number of parking spaces constructed.44 In 2017, the County directed the Resort to provide ''a remedial plan to address the lack of and provisions for the minimum required parking stalls," Ex. C-23 at 3, but apparently negotiations with the County are ongoing. While the County, in enforcing its zoning ordinances, may (or may not) have a legal right to require the Resort to put in additional parking, the arbitrator finds that the owners of Unit 16A have not demonstrated that they, as owners of one unit, who at the time that they bought their unit, knew or should have known about the parking at the Resort, have the legal right to 44 As the AOAO correctly notes: "There has been no evidence that the County had any concerns with the number of parking stalls at the Project up until the time the Claimants filed their Lawsuit .... More importantly, the number of parking stalls has not decreased since the Project was open '' Post-Arbitration 52 equitable relief forcing the AOAO (regardless of cost) to build additional parking. Even were that not so, the Claimants have not demonstrated that they meet any of the other tests for entitlement to equitable relief as to this issue. Given the arbitrator's ruling on other parking issues, the arbitrator finds that the Claimants cannot demonstrate irreparable harm to them from the lack of additional parking. Given that the AOAO was not responsible for the development of the Resort, and that the cost for providing additional parking is unknown, the arbitrator finds that balance of hardships favors the AOAO on this issue, and not Claimants. Finally, the arbitrator finds that the public interest does not support declaratory or injunctive relief in favor of the owners of one unit, who bought a unit either knowing of, or with the ability to learn of, the parking issues at the Resort, including relating to the governing documents. Therefore, the arbitrator finds in favor of Respondents and against Claimants, as to this issue. VII. ALLEGED ENCROACHMENTS Both Claimants and Respondents assert claims based upon alleged encroachments by the Claimants, as set forth in AOAO Ex. 144 and other documents. The AOAO seeks an order requiring, inter alia, that the Claimants: (1) Remove the propane tank and all their other equipment from space next to Happy Talk; (2) Brief at 22. 53 Remove the beer conduit running on the roof; (3) Remove the equipment that was (allegedly) not authorized on Building 16 roof ( s); ( 4) Cease the use of space on the lower level of 16A, formerly known as the bakery; ( 5) Return the restrooms and common area of the "abandoned" staircase to the AOAO; (6) Remove the awnings; and (7) Remove the bump-out space for the pizza oven on north side of Happy Talk. AOAO Ex. 144. Claimants seek declaratory relief in their favor. Ex. C-238 is a February 27, 2015 letter to the owners of Unit 16A from the AOAO President, setting forth either an agreement or a possible agreement covering a significant number of these items. The AOAO has taken the positon that despite the fact that this letter is signed by all parties, it is not a binding contractual agreement. Post-Arbitration Brief at 45. The signed letter does state: "This will hopefully summarize our discussions and agreements. If you concur, I will bring to the AOAO Board for final approval." The letter also states: "If you agree, then please sign and return so we can both move forward." Above the Unit Owners' signature blocks is the statement: "If the foregoing agreement is acceptable to you please sign below and return a copy to us for our files." Mr. Mehta testified that after this letter was executed by both sides, he concluded that "these matters were done and behind [him]." TR at 920. Most importantly on this issue, AOAO Ex. 97 is essentially identical to Ex. C-238, except that (1) Ex. 54 97 is signed by owners of Unit 16A but not signed by Mr. Rembis, and (2) Ex. 97 has certain handwritten interlineations (apparently written by the owners), but none are initialed by anyone. Ex. C-238, by contrast, is signed by Mr. Rembis, all of the previous interlineations by the owners of Unit 16A are initialed (apparently by the owners and Mr. Rembis), and there is one additional interlineation initialed (apparently by all). Although the evidence is not entirely clear, the arbitrator finds that the sequence was: AOAO Ex. 97 was furnished to the owners, unsigned by Mr. Rembis; the owners returned the letter interlineated (but uninitialed), and signed by them; Mr. Rembis then added one interlineation; and eventually the owners and Mr. Rernbis initialed all interlineations, and Mr. Rembis signed the letter twice, once as President of the AOAO, and a second time for the Association of Apartment Owners of Hanalei Bay Resort, By Michael Rembis, its President. This sequence would appear to demonstrate that prior to final signatures, the Board had approved (or at least Mr. Rembis, by his actions, represented that the Board had approved). The AOAO also contends that to the extent the letter was binding and imposed obligations, the Claimants did not comply with their obligations, including as set forth in AOAO Ex. 144. The AOAO also takes the position that because Claimants did not execute the proposed "Eighth Amendment" to the Declaration, none of the possibly promised (according to the 55 AOAO) accommodations in AOAO Ex. 97 matured into contractual obligations, which would only have occurred upon approval of the Eighth Amendment.45 Ex. 97 discusses the possibility of amending Horizontal Property Regime, but contains no requirement as to the same. The arbitrator finds as to the propane tank, beer conduit, pizza oven, transformer pad issues, and other items on the roof, the AOAO has demonstrated no harm to the AOAO from those items, and finds that any encroachment as to them is, if an encroachment at all, de minimis.46 Moreover, the arbitrator agrees with Claimants that minor encroachments are allowed by the governing documents and statutes, that use by a commercial unit of common elements (like roofs) is allowed,17 and that equitable principles preclude injunctive relief absent a showing of, inter 45 The arbitrator notes that many of the items placed in drafts of the Eighth Amendment by the AOAO were not in AOAO Ex. 97 and were unfavorable to Claimants. See,~' AOAO Ex 10. Included in this category was language that certain "revocable licenses" in favor of Unit 16A "may be revoked at any time on thirty (30) days written notice .... " The AOAO had the right to propose these and other items, but Claimants forfeited no "rights" by failing to agree to them. 46 The arbitrator has ruled above that the AOAO is entitled to no monetary relief with regard to the awnings, and has voided the awnings assessments, etc. The AOAO is also entitled to no injunctive, declaratory, or other relief with regard to the awnings. 4 1 The parties dispute whose roof various items are on, including AOAO items. For example, Mr. Mehta testified an AOAO condenser is on the 16A roof. TR at 886 & 1233. "We were ready to pl.ace our condenser, we realized that the condenser of the AOAO is placed above there." 56 alia, some harm. The arbitrator is mindful of the AOAO's position that intentional encroachments should not be permitted, and is also mindful of the AOAO's position that Claimants took benefits from Ex. 97 but failed to fulfill their responsibilities. Nonetheless, as to the above items, the arbitrator finds that the AOAO has not demonstrated wrongful conduct sufficient to afford relief to the AOAO, and thus finds in favor of the Claimants and against the AOAO. This includes the claims of the AOAO with regard to items on the roofs, as the AOAO has not demonstrated any violation of any of the governing documents to the arbitrator's satisfaction, entitling the AOAO to any relief with regard to these matters. However, the arbitrator does not find that using common area space behind Happy Talk for the storage of discarded grease barrels or refuse is appropriate, and the AOAO is not barred from seeking to require removal of any such grease barrels and refuse, if the same violates the House Rules or the governing documents of the Resort. Though the arbitrator does not make a finding as to encroachment in this regard; based upon currently existing evidence, the arbitrator finds no evidence that would give Unit 16A any unfettered right to store grease barrels or refuse. Similarly, •nit 16A may not store cleaning equipment and chairs on an ADA pathway, to the extent that makes the pathway unusable, and the AOAO is not barred or prevented from seeking to keep the ADA access walkway clear or to enforce the same. 57 bathrooms. Both parties have introduced evidence regarding the The arbitrator finds that while it is not unreasonable to make certain that only owners, employees, and guests use the bathrooms, patrons of Unit 16A may not be barred from using the bathrooms. AOAO Ex. 97 and Ex. C-238 note that the issue of the bakery space was unresolved and ''[W)e will work together to resolve this issue with 120 days ..... In the meantime the AOAO agrees that you may use the Bakery without restriction."48 Board Minutes of January 30, 2015, Ex. C-39, at 2, note that ''[a]s per the agreement, 16A will be allowed to have use of the area agreed upon, accepting all responsibility for maintaining the area, known as the 'bakery' and the area that was located over the stairwell to the 1500 building." Ex. C-149, a series of AOAO emails, appear to indicate that Claimants' position as to who got to control. the "bakery" space (a "disputed" area) was correct-- "As I read this it gives them the 'bakery' area .... "; "Do not send this out as it appears they have all. the disputed area." The AOAO contends that nothing in these emails indicated that the Board was wrong as to space allocation, and that the emails 18 Mr. Rembis testified with regard to this language that the parties disagreed as to who "owned" the bakery space, and "there was a general discussion that if that was important to get the restaurant open, we'd find a way to provide that space for them. We did disagree that we owned the space --we believed it was part of our square footage. They disagreed, ... and as long as they were going to operate the restaurant in good faith and if that was needed, we were willing to al.low them to utilize it." TR at 632. 58 showed disagreement among Board members. at 41 42. Post-Arbitration Brief Although the arbitrator does this very reluctantly, as the parties are participating in this arbitration in order to obtain resolution, the arbitrator finds that neither side has presented evidence of sufficient weight and probative value to allow the arbitrator to decide who "owns" the bakery space. 4 9 The arbitrator believes that definitive expert testimony is necessary for any resolution of this issue, and the same was not presented. Obviously "ownership" of this space is important, and the arbitrator believes it would be inappropriate to make a final decision without appropriate evidence. However, based on the evidence presented and the course of conduct of the parties, the arbitrator finds that the owners of Unit 16A may utilize the bakery space (and, if necessary, the "abandoned stairway" space) unless a court or arbitrator rules that the space is not owned by Unit 16A. This ruling is without prejudice to the ability of the AOAO to obtain such a ruling, and the finding of the arbitrator on allowing Unit 16A to continue to use the bakery space (and "abandoned stairway" space) shall not be taken as evidence as to the actual ownership, should a dispute arise. ~9 Though there was far less testimony about it, there also appears to be a dispute as to who "owns" abandoned stairway space. The arbitrator's ruling as to the ownership and use of "abandoned stairway" space is the same as his ruling as to the bakery space. 59 VIII. BREACH OF FIDUCIARY DUTY Claimants have asserted a claim for breach of fiduciary duty. Respondents argue both that no action against the AOAO for breach of a fiduciary duty lies, and that the actions of the Directors are additionally protected from liability, including by the "business judgment" rule. The arbitrator finds that contrary to the position asserted by the Respondents, the AOAO, in certain circumstances, does owe a fiduciary duty to individual owners, although the AOAO's primary duty is to the condominium as a whole. The arbitrator finds that in certain circumstances, such a claim, for breach of fiduciary duty, does lie. The arbitrator finds that the institution of the parking policy set forth above breached a fiduciary duty owed by the AOAO to the Owners of Unit 16A. However, there is no additional penalty (in the form of damages or otherwise) that attaches to the same. The declaratory and injunctive relief to which the Owners are entitled does not change based on the finding of a breach of fiduciary duty by the AOAO. Although this finding could, in some cases, allow for different damages than awarded here, the only damages the Owners have proven, under any theory, are those very limited damages discussed and awarded above. The finding of a breach of a fiduciary duty by the AOAO entitles the Owners to no additionaJ. relief in this case. The liability/responsibility of the individual Directors is discussed below. 60 IX. NEGLIGENCE AND GROSS NEGLIGENCE Although the arbitrator would not award any additional damages to the Owners, even upon a finding of negligence or gross negligence, the arbitrator finds that these tort claims by the Owners are barred by the economic loss rule. The arbitrator ds that the tenant and its principal Mr. Mehta are owed no tort duty by the Respondents, and so exclusive of the economic loss rule, finds in favor of the Respondents and against those Claimants, on that ground. X. ORGANIZED CRIME/RACKETEERING Claimants assert a claim under Chapter 842 of the Hawaii Revised Statutes. No part of the evidence introduced in this case demonstrates any possible entitlement to relief under this Chapter. There is no evidence that the Respondents were in any way involved in any type of organized crime activity, or indeed any crime or racketeering activity of any sort, or that Claimants were damaged by any racketeering or criminal activity. Though this was a heated dispute, and though assessments and other policies were imposed in a way that the arbitrator finds are such as to entitle certain Claimants to relief, none of the activities in this case were even remotely racketeering or criminal activity. The arbitrator finds for Respondents on these claims. 61 XI. UNFAIR COMPETITION Though Claimants bring a claim for "unfair competition," no evidence before the arbitrator establishes that Claimants and Respondents are competitors ( notwi thstand.i.ng the allegations that at one time the AOAO or its Directors may have wanted to purchase Unit 16A). Nor have Claimants introduced any evidence that Claimants suffered any type of "antitrust injury," nor that they were injured by any conduct that would trad .tonally be considered unfair competition type of conduct. Thus, the arbitrator finds in favor of Respondents with regard to the unfair competition claim. XII. CLAIMS AGAINST THE DIRECTORS IN THEIR INDIVIDUAL CAPACITIES As set forth above, there is si.gnifi.cant evidence that actions taken by the Board of Directors were unreasonable. The arbitrator finds that certain of the actions were unreasonable in the extreme, such as assessing a fine exceeding $125,000 for the alleged "awnings" violations. In addition, there is evidence that the parking policy that was instituted was ir1appropriate. However, despite the extreme and unreasonable nature of certain of the fines, the arbitrator cannot conclude that the Board's conduct was motivated by the type of animus that would be necessary to assess individual liability on board members. Moreover, aside from attorneys' fees (addressed below), almost all aff.i.rmative relief in favor of Claimants is in the nature of declaratory and injunctive relief, and not damages. The only 62 damages awarded are for amounts paid to the Association for valet parking charges, not amounts paid to or taken by individual Directors. The declaratory and injunctive relief is, essentially, meaningless as against individual Directors, as it: is the Association that: is enjoined, and the declarations made in this decision are with regard to conduct: and/or future conduct: of the AOAO, and are binding on the AOAO and its agents. Though the arbitrator believes that there is significant evidence suggesting that the conduct of certain individual Respondents might not be protected by the business judgment: rule, the arbitrator nonetheless declines to find in favor of the Claimants against: any of the individual Directors, and all relief is entered against: the Respondent: AOAO only. As noted above, this renders any decision on the summary judgment: motion moot. XIII. PUNITIVE DAMAGES This was and has been a vigorously litigated and fought: dispute, with emotions running high on both sides, at: times. The dispute, however, involved commercial interests. Although there were things said by both sides in the heat of the moment, the actions taken by the Board and the Directors were related to the Board's governance of the project:, and were economic in nature. While the arbitrator finds that many of the assessments, as set forth above, were unreasonable (and in some cases grossly unreasonable), and while the arbitrator finds that there is significant evidence from which a trier of fact could conclude 63 certain of the assessments were punitive in nature, and intended to be, the arb rator does not find that on the state of this record, the evidence is clear enough to award punitive damages.so XIV. COUNTERCLAIMS A. COUNT I -BREACH OF CONTRACT, BREACH OF GOVERNING DOCUMENTS AND PROTECTIVE COVENANTS, CONDITIONS AND RESTRICTIONS Except with regard to the insurance premiums and the landscaping, the arbitrator finds that the AOAO has not prevailed upon its claims. An issue not addressed above was the allegation in paragraph 42 of the Counterclaim that: "Counterdefendants have not built a promised 'wall' to manage and mitigate noise issues associated with Happy Talk and Bali Hai. AOAO was forced to build such wall at its cost, and is entitled to reimbursement therefor." The arbitrator finds that the AOAO has not proven so "'Award or denial of punitive damages is within the sound discretion of the trier of fact.' 'The proper measurement of punitive damages should be ''[t]he degree of malice, oppression, or gross negligence which forms the basis for the award and the amount of money required to punish the defendant."' Kan . Harri on, 59 Haw. 652, 663, 587 P.2d 285, 293 (1978) (quoting Howell v. Associated Hotels, 40 Haw. Terr. 492, 501 (19:i4))." Kekona v. Bornemann, 349 P. 3d 361, 370 (Hawaii 2015). The proof to justify punitive damages must be ''clear and convincing." Masaki v. General Motors Corp., 780 P.2d 566, 574- 75 (Hawaii 1989). Despite this very high burden to justify the imposition of punitive damages, the arbitrator believes that given the amount and nature of some of the fines and assessments, some triers of fact could have decided to award punitive damages based on the record before the arbitrator. The arbitrator, as noted, however, does not award punitive damages. 64 either a contract or a breach as to this issue, and thus finds against the AOAO as to it. B. COUNT II -VIOLATIONS OF CHAPTER 514A AND 514B The arbitrator finds that the AOAO has not proven by a preponderance of the evidence that Claimants violated Chapter 514A & 5148 except as to the limited areas set forth above; and except as set forth above, the arbitrator finds against the AOAO on its claims. C. UNFAIR COMPETITION For the reasons the arbitrator has found in favor of the AOAO with regard to Claimants' unfair competition claims, the arbitrator finds in favor of Claimants on the AOAO's unfair competition claims. Unfair competition claims simply to do not lie between these parties. D. CHAPTER 481A UNIFORM DECEPTIVE PRACTICES ACT The Counterclaim asserts a Chapter 481A claim based upon Claimants allegedly ''falsely representing to Resort guests and patrons of Happy Talk that the Resort was violating the law in managing parking .... " The Counterclaim also asserts that Claimants publicly disparaged the quality of the Resort and the AOAO Board, services and management, and the tradename of the Resort. The Counterclajm also asserts that Claimants made false and misleading statements of fact, etc. 65 In the circumstances here, even if the arbitrator were to find that false statements of fact were made, this does not establish a Deceptive Practices Act claim. The conduct here was not the type that Chapter 481A was intended to reach.51 Even were that no so, however, the arbitrator has found that the parking practices were not permitted, and that the remaining expressions, to the extent there is evidence they were made, are essentially expressions of opinion, which are not prohibited by Chapter 481A. The arbitrator finds in favor of Claimants and against the AOAO on this ~laim. E. TORTIOUS INTERFERENCE WITH CONTRACT Paragraph 68 of the Countercl.airn states that Claimants interfered with the AOAO's contract for valet services ''by offering to pay and/or paying the valet service to stop performance.'' There is nothing in AOAO Ex. 139, an email from the valet company owner, that indicates that that occurred. Ex. C-26, a declaration from the owner, states that he did not feel harassed or intimidated by Mr. Mehta and that he and his 51 Although not an exclusive Jist of the prohibited conduct, Chapter 481A is designed to punish one who: Passes off goods or services as those of another; Causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services; Causes likelihood of confusion or of misunderstanding as to affil.iation, connection, or association with, or certification by, another; Uses deceptive representations or designations of geographic origin in connection with goods or services. Haw. Rev. Stat. § 481A-3. That simply not what happened here, even were the arbitrator to accept Respondents' view of the facts. 66 company ''certainly were not offered and did not accept any bribe from Mr. Mehta or anyone else when deciding to cease operations at HBR." Had the AOAO been able to prove that through threats or intimidation or an offer of payment, Claimants induced the valet company to breach its contract, they would have been able to prove tortious interference with contract. However, the arbitrator finds that they have not proven that such occurred. The arbitrator also finds that the remaining allegations would not be sufficient to justify a finding of liability on this count, even if proven (which they were not) .52 The arbitrator finds in favor of Claimants on this count. F. TRESPASS These issues are primarily discussed above. However, the parties have an ongoing relationship, and the fact that the arbitrator does not find trespass, does not mean that Claimants are incapable of committing trespass, or placing things where they have no right to place them. However, based on the entirety of the evidence, the arbitrator finds that the AOAO has not demonstrated trespass so as to entitle the AOAO to any relief. s2 Paragraph 72 of the Counterclaim: "In addition, Counterdefendants have interfered with AOAO's employees and used improper efforts to encourage AOAO's employees not to report Counterdefendants' violations related to parking, signage and misuse of areas outside Unit 16-A." 67 G. DEFAMATION The defamation claim is primarily based upon the banner/sign, and social media and related posts. AOAO Ex. 183. In their Post-Arbitration Brief at 67, the AOAO identifies the alleged false statements as the AOAO being against locals; that the AOAO was the cause of the parking dispute; that the AOAO wanted to take control of Bali Hai and Happy Talk; and the specific statements on the banner/sign. With regard to the cause of the parking dispute; while the statements might well be characterized as opinion rather than fact, the finding of the arbitrator is that the AOAO acted wrongfully with regard to the parking issues, and thus no defamation claim could be based on statements as to the same. The statement in the banner/sign regarding "locals" is a statement of opinion. In addition, however, there was evidence the AOAO said it wished to install the parking gate because of surfers and fishermen coming on the property. 53 The arbitrator, however, finds that AOAO did not act or intend to act against "locals" and that it did not institute the parking policy (or any other measures) because of any type of prejudice against "locals.'' The arbitrator finds no such purpose or intent in any of the actions taken by the AOAO or the Board. However, the arbitrator finds both that the statements in the banner/sign are 53 In addition, as set forth in Ex. C-48, Mr. Pacer noted that part of the reasoning behind the gate project was ''[w]e have had many issues from local fisherman stealing ice .... " etc. 68 not actionable in a defamation context, and to the extent they could be actionable, they are statements of opinion. With regard to the statement as to the AOAO wanting to "take control," the arbitrator finds that this is a statement of opinion and not fact, but even if it were a statement of fact, there is some evidence in the record to support it. More importantly, the arbitrator does not find the statement defamatory, even if it were a statement of fact, and even if it were untrue. However, primarily, it is a statement of opinion. The arbitrator finds that the AOAO has not proven its claim of defamation. H. DECLARATORY RELIEF Though there are many claims on which the arbitrator finds in favor of the AOAO, the arbitrator finds the AOAO is not entitled to any declaratory relief as specifically requested in paragraphs 91-95 of its Counterclaim. XV. ATTORNEYS' FEES Both sides have prayed for attorneys' fees and costs. For example, in its Counterclaim prayer for relief, the AOAO has sought "an award of its reasonable attorneys' fees and costs (of suit or otherwise) in bringing this action, to the full extent available by applicable law and the governing documents " Claimants have also sought attorneys' fees and costs in their prayer for relief, and have submitted documentation of the fees and costs they seek. 69 Both parties have prevailed on certain claims. However, the arbitrator finds that on what the arbitrator considers the primary issue in thjs case--the parking gates and valet parking issues--the owners of Unit 16A are the prevailing parties. In addition, the owners of Unit 16A have prevailed as to the majority of the assessment and encroachment claims. The Owners have not, however, prevailed on most of their damage claims, or on their claims relating to lockouts and requiring the AOAO to provide additional parking. While the AOAO has not prevailed as to the main parking issue, it has prevailed as to most of the damage claims, and many other claims, and has partially prevailed as to Lhe lockout claim and the claim relating to providing additional parking at the Resort. In addition, both sjdes have asserted claims rejected by the arbitrator--claims like unfair competition (asserted by both sjdes); racketeering (asserted by Claimants); defamation (asserted by Respondents). Takjng all of these ruljngs into consideration, as well as the arbitrator's discretion, the arbitrator finds that Claimants Dennis R. Sciotto and Carol Ann Sciotto as Trustees of the Dennis R. Sciotto and Carol Ann Sciotto Co~nunity Property Trust, and Edward E. Colson, III and Karen Jeanne Colson as Trustees of the Colson Family Trust (collectively ''Prevailing Parties") are the Prevailing Parties as against the Association 70 of Apartment Owners of Hanalei Bay Resort, and thus award attorneys' fees as set forth herein in favor of those Prevailing Parties and against the AOAO only. No award of attorneys' fees is entered in favor of any other party or against any other party, including the individual Directors. Claimants have sought attorneys' fees and costs in an amounts exceeding $430,000. Post-Arbitration Brief at 32-33 and detailed submissions. The arbitrator believes that in the circumstances here, it is appropriate to award the Prevailing Parties some of their attorneys' fees and costs. The amount awarded to the Prevailing Parties for their attorneys' fees and costs, and awarded against the AOAO, is $175,000. The arbitrator has taken into account the facts and circumstances of this case, the difficulties of presentation, the hard fought nature of the case, but also the fact that Claimants, while prevailing on a significant number of their claims, have failed on a significant number of their claims. Taking into account all of the facts and circumstances, and the discretion afforded the arbitrator in this regard, the arbitrator believes the award of $175,000 for attorneys' fees and costs is fair and reasonable. 71 REVERE & AS SOCIA TES LLLC • . "' t/J ·• "viJ' .. i.-1iE CIF 11,;w~ i:,,, FILED, , .. , TERRANCE M. REVERE 5857-0 970 North Kalaheo Ave., Suite.A301 Kailua, HI 96734 201ll SEP 2 0 PN 12: 2 I Telephone: (808) 791-95 50 terry@revereandassociates.com CADES SCHUTTE LLP PETER W. OLSON 3468-0 NICHOLAS M. MCLEAN 10676-0 1000 Bishop Street, 12th Floor Honolulu, HI 96813-4216 Telephone: (808) 521-9200 p0lson@cades.com nf!1c1ean@cades.com Attorneys for Defendants / Counterclaimants / Third-Party Plaintiffs DENNIS R. SCIOTTO and CAROL ANN SCIOTTO AS TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST; EDWARD E. COLSON, III and KAREN JEANNE COLSON AS TRUSTEES OF THE COLSON FAMILY TRUST; HBR ENTERPRISES, LLC dba BALI HAI RESTAURANT; JIMIT H. MEHTA IN THE CIRCUIT COURT OF THE FIFTH CIRCUIT STATE OF HAWAI'I ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT, Plaintifi: vs. DENNIS R. SCIOTTO and CAROL ANN SClOTTO AS TRUSTEES OF THE DENNIS R. SCJOTfO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST; et al., Defendants. lnianageDB·449993 I. I CIVIL NO. 17-1-0028 (Other Civil Action) JUDGMENT I do hereby certify !h;:it this is a full. true and corrod c1.1py of the original on file in this office. V ... ···-. cC~it Court, Fifff1'circu1t 0 '' ~ "-TT''· v·v ·~r: r.: FUJ/J CU:G!< DENNIS R. SCIOTTO and CAROL ANN SCIOTTO AS TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST; et al., vs. Counterclaimant/ Third-Party Plaintiffs, ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT, Counterclaim Defendant. MICHAEL REMBIS; et al., Third-Party Defendants. JUDGMENT Pursuant to the Stipulation, Joint Application, and Order For Confirmation of Arbitration Award Pursuant to HRS§§ 514B-162(j) and 658A-22; Exhibit "A" ("Stipulation"), entered herein on June 27, 2018, and Rule 58 of the Hawaii Rules of Civil Procedure, FINAL JUDGMENT IS HEREBY ENTERED as between Defendants/Counterclaimants/Third-Party Plaintiffs DENNIS R. SCIOTTO and CAROL ANN SCIOTTO AS TRUSTEES OF THE DENNIS R. SCI OTTO AND CAROL ANN SCI OTTO COMMUNITY PROPERTY TRUST; EDWARD E. COLSON, III and KAREN JEANNE COLSON AS TRUSTEES OF THE COLSON FAMILY TRUST ("Sciotto / Colson"); HBR ENTERPRISES, LLC dba BALI HAI RESTAURANT; JIM IT H. MEHTA (collectively, the "Defendants"), Plaintiff/Counterclaim Defendant ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT ("Plaintiff" or "AOAO"), and MICHAEL REMBIS, BRAD SHULTZ, KENT OEHM, GEOFF EXHIBIT C -2- lmanagcDB:4499931.1 KING, DA YID BLANK, JOAN BETTENCOURT, FRITZ LEUTHEUSER, DEBORAH FRAGA-DECKER, and MICHAEL LYNCH ("Third-Party Defendants") as follows: I. In favor ofSciotto I Colson and against the AOAO in the amount of$1 l,044.86, plus attorneys' fees and costs in favor of Sciotto / Colson and against the AOAO in the amount of $175,000, for a total·award in favor of Sciotto / Colson and against the AOAO in the amount of $186,044.86. 2. In favor of the AOAO in the amount of$37,405.46, in the form ofa setoff, thus making a total monetary award in favor of Sciotto / Colson and against the AOAO in the net amount of$148,639.40. 3. Declaratory and injunctive relief as set forth in the Arbitration Award as between Defendants, Plaintiff, and Third-Party Defendants. 4. Regarding Defendants' Claims in the Arbitration, the Arbitrator found in favor of Defendants on Defendants' Breach of Contract claims insofar as the Arbitrator determined that the parking plan put into place by the AOAO was unreasonable and inconsistent with the Resort's governing documents. The Arbitrator also found that, with the exception of assessments regarding insurance and landscaping, all other fines/assessments were unreasonable and unenforceable, and ordered said fines/assessments expunged. The Arbitrator did not rule in Defendants' favor on the following claims: (1) negligence and gross negligence; (2) HRS Chapter 842; (3) Unfair Competition; (4) Punitive Damages or; with respect to the relief sought regarding "lockouts" and additional parking. 5. Regarding the AOAO's Counterclaims, the Arbitrator found in favor of Claimants and against the AOAO on each of the AOAO's Counterclaims, except as noted parenthetically below: Breach of Contract (except with regard to insurance premiums and landscaping); HRS -3- lmanngeDB:4499931.1 EXHIBIT 24 IN THE CIRCUIT COURT OF THE FIFTH CIRCUIT STATE OF HAWAI'I DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST Plaintiff, V. DEWITT B. RICHARDS and VIRGINIA E. RICHARDS; Individually and as Trustees of the Virginia E. Trust; DOE DEFENDANTS 1-300; JOHN AND/OR JANE DOES 1-300; and DOE ENNTITIES 1-300, Defendants. DECLARATION OF BRYAN MAMACLAY DECLARATION OF BRYAN MAMACLAY I, BRYAN MAMACLAY, declare as follows: 1. I was employed by the County of Kaua'i Planning Department ("Department") from 1978 to 2010. During my tenure at the Department I became a member of the American Institute of Certified Planners. 2. I retired from the County as a Senior Planner with supervisory authority over the other county Planners within the Department. 3. Over the course of my career I learned the County of Kauai Comprehensive Zoning Ordinance ("CZO") and became adept at its interpretation and implementation. EXHIBIT 24 4. Based upon my professional history, training, and experience, I am intimately familiar with the CZO and all state and county laws concerning land use and development within the County of Kaua' i. 5. I am familiar with the Hanalei Bay Resort ("the Resort"), a condominium development located in Princeville, Kauai (TMK 4/5-4-011 :003, HPR 0001 thru O 13 7) via my tenure at the Department. 6. The Resort was constructed in the 1970s, after the County of Kaua'i Planning Commission ("Commission") granted Variance Application Permit V-72-11 ("V-72- 11 "). 7. The Resort is located within the master development project of Princeville at Hanalei ("Princeville"), in Kaua'i County, Hawai'i. 8. On April 5, 1989, while employed as a Planner with the County of Kauai, I received a letter from William Wessler (the "Wessler letter"). Attached hereto as Exhibit" I." Although the Wessler letter is addressed to "Brian Mandag," it was actually addressed to me "Bryan Mamaclay." 9. The purpose of the Wessler letter was to memorialize a meeting that occurred on March 30, 1989 regarding various proposed upgrades and renovations to the Resort. I 0. One of the proposed upgrades to the Resort included, "most management- owned units will be upgraded with new furnishings, carpet, tile, etc., and remodeling packages will be offered to all owners." Exhibit "I," at 2. 11. In response to the Wessler letter I sent a letter dated June 5, 1989 to William Wessler with the subject line, "Proposed Improvements/Renovations at Hanalei Bay Resort TMK: 5-4-11 :3." Attached here as Exhibit "2." 12. In my letter to Mr. Wessler I told him, inter alia, "[p]lease be advised that the nature of operations (short-term rental or time share) and the number of condominium units are not a problem. However, we have observed that there is a potential that the project could be operated both as a residential project (rooms rented with kitchens) and hotel (rooms without kitchen facilities). The dual function, in effect, would be a problem in that it would be in violation of the existing R-10 zoning of the property and exceeds the density of 134 units which were approved thereon." Exhibit "2," at 2. 13. Based upon my professional tenure, training, and experience, and my familiarity with the Resort development, renting out individual locked out portions of the Reso11's 134 approved units would constitute a violation of the CZO, the existing R-10 zoning, and exceed the density of 134 units which were approved in V-72-11. I declare, verify and certify that the foregoing is true and correct. Executed at [Town], [State], on June 8, 2020. EXHIBIT 25 IN THE CIRCUIT COURT OF TI-IE FIFTH CIRCUIT STATE OF I-IA WAI'I DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST Plaintit1~ V. DEWITT B. RICHARDS and VIRGINIA E. RICHARDS; Individually and as Trustees of the Virginia E. Trust; DOE DEFENDANTS 1-300; JOHN AND/OR JANE DOES 1-300; ai1d DOE ENNTITIES 1-300, Defendants. DECLARATION OF DEEM. CROWELL DECLARATION OF DEEM. CROWELL 1, DEE M. CROWELL, declare as follows: 1. I was born and raised in the district of Waimea, County of Kaua'i, State of Hawai'i. 2. I am a graduate of Kamehameha Schools and I attended the University of Southern California where I received a degree in Architecture. 3. I am an actively licensed architect in the State of Hawaii, Lie. No. AR- 5734. EXHIBIT 25 4. In the beginning of my career I spent seventeen ( 17) years as an architect 111 Honolulu and was one of the founding partners of Urban Works, Inc. architecture and planning firm. 5. I then returned to Kaua'i to work in the County of Kaua'i Planning Department ("Department"), where I served as the Planning Director from 1993 to 2003. 6. After serving as Planning Director for ten (10) years I worked 111 the private sector from 2003 to 20 I 0, including jobs at Kukui 'ula Development Co., and Princeville Co. 7. I returned to the County of Kaua'i to serve as the Deputy Planning Director from 2010 to 2015. 8. I currently own and operate my own planning consulting company and serve on the board of the Kauai Island Utility Cooperative ("KIUC"). 9. Based upon my professional history, training, and expenence, I am intimately familiar with the County of Kauai Comprehensive Zoning Ordinance ("CZO") and all state and county laws concerning land use and development within the County of Kaua'i. 10. I am familiar with the Hanalei Bay Resort ("the Resort"), a condominium. development located in Princeville, Kauai (TMK 4/5-4-011 :003, I-IPR 0001 thru 0137) via my tenure at the Department. 1 I. The Resort was constructed in the 1970s, after the County of Kaua' i Planning Commission ("Commission") granted Variance Application Permit V-72-11 ("V-72- 11"), which was issued and approved on July 5, I 972. A true and accurate copy of which is attached hereto as Exhibit "l ." 12. The Resort is located within the master development project of Princeville at I-Ianalei ("Princeville"), in Kaua'i County, Hawai'i and is within the County Residential ("R- I 0") and Open ("O") land use zones. 13. According to the June 2, 1972, Commission Staff Report ("1972 CPC Staff Report"), the applicant/developer represented that the Resort was to consist of: 15 buildings containing a total of 134 residential apartments; a 25,000 square foot commercial building (Unit 16); and four tennis courts and a tennis shelter (Unit 99). A true and accurate copy of which is attached hereto as Exhibit "2." 14. The 134 residential apartments were to be used for permanent or temporary residential purposes, including transient occupancy (i.e., vacation rentals). 15. The commercial building, Unit 16, was designed to include a bar, kitchen, dining room and other commercial space, and was to be used "for any commercial and recreational activities permitted by law, including but not limited to use as a restaurant and bar[ .j" 16. After reviewing the application the Department stated that the developer's proposed 150 parking spaces were insufficient for the proposed occupancy of the Resort. 17. The 1972 CPC Staff Report concluded, inter cilia, that "[t]he parking spaces required for the total development is 228 spaces; 150 spaces are shown on the plans leaving a deficit of 78 spaces under our present guidelines. These spaces will be located around the entrance to the property." Exhibit "2," at 2-3. 18. The Report recommended to the Commission that the "variance application be approved subject to "certain express 'terms and conditions'-one of which was that "[t]he parking deficiencies be resolved[.)" Exhibit "2," at 3. 19. A few weeks later, the applicant/developer submitted to the Commission revised plans that included 249 parking spaces. See June 24, 1972, Letter from D. Carswell to Planning Dept., Exhibit "3." 20. In particular, the revised plans call for 180 paved parking stalls and 32 "lawn parking," for a subtotal of 212 available parking stalls, in addition to 37 "theater type" parking upon the paved parking area. 21. In a letter dated November 2, 1973, then-Planning Director Brian Nishimoto reviewed parking plans submitted pursuant to V-72-11, and "determined that the revised parking plan as shown is acceptable to us and therefore approved as submitted." A copy of the 11/2/73 letter is attached herewith as Exhibit "4." 22. The Commission reviewed the revised plans, and ultimately, approved the project. See .July 5, 1972 Kauai Planning Commission Meeting Minutes ("July 1972 CPC Minutes") (attached hereto as Exhibit "5.") 23. The approved parking plan under V-72-11 called for 180 paved parking stalls and 32 "Lawn Parking" for a subtotal of 212 available parking stalls. Also approved was the provision for 37 "Theater Type" parking upon the paved parking area providing a "Grand Total" of 249 vehicular parking spaces. 24. The approved dwelling unit density under V-72-11 allowed 134 residential apartment dwelling units (60 - 1 bed room units, 62 - 2 bedroom units and 12 - 3 bedroom units). The I, 2 and 3 bedrooms units as approved are to function and rented as complete dwelling units. The daily rental of each unit, similar to a hotel operation, where the unit is open to the occupancy by the general public on a commercial basis is addressed and allowed. 25. I have reviewed the letter dated April 5, 1989 from William Wessler (the "Wessler letter") to Brian "Mandag." Attached hereto as Exhibit "6." There is a notation on the Wessler letter pointing to the last name "Mandag" that states, "Mamaclay." Based upon my employment and familiarity with the County of Kauai Planning Department, the reference to. Brian "Mandag" is actually a reference to County Planner Brian "Mamaclay." 26. The purpose of the Wessler letter is to memorialize a meeting that occurred on March 30, 1989 regarding various proposed upgrades and renovations to the Resort. 27. One of the proposed upgrades to the Resort included, "most management- owned units will be upgraded with new furnishings, carpet, tile, etc., and remodeling packages will be offered to all owners." Exhibit "6," at 2. 28. I have reviewed the letter dated June 5, 1989 from Brian Mamaclay ("Mamaclay") (the "Mamaclay letter") to William Wessler with the subject line, "Proposed Improvements/Renovations at Hanalei Bay Resort TMK.: 5-4-11 :3." Attached here as Exhibit ''7 ." 29. In his letter, Mamaclay replies to Mr. Wessler, inter alia, "[p]lease be advised that the nature of operations (short-term rental or time share) and the number of condominium units are not a problem. However, we have observed that there is a potential that the project could be operated both as a residential project (rooms rented with kitchens) and hotel (rooms without kitchen facilities). The dual function, in effect, would be a problem in that it would be in violation of the existing R-10 zoning of the property and exceeds the density of 134 . d I " E I 'b' "7 " 2 units which were approve t 1ereon. ::,x 11 It , at . 30. Based upon my education, training and experience, and my familiarity with the Resort development, I concur with Mamaclay's conclusion that renting out individual locked out portions of the Resort's 134 approved units would constitute a violation of the CZO, the existing R-10 zoning, and exceed the density of 134 units which were approved in V-72-11. 31. On October 31, 1995, while Director of the Department, I received a letter from Rick Wall, President of Castle Resorts, (the "Wall letter") regarding the Resort. A true and accurate copy of said letter is attached hereto as Exhibit "8." 32. The purpose of the Wall letter was to request confirmation from the Department that the Resort may be used for hotel purposes and that the County explicitly approves of such use as a nonconforming use. 33. I responded to Mr. Wall's letter in writing via letter dated November 6, 1995. A true and accurate copy of which is attached hereto as Exhibit "9." 34. In my letter I make it clear that although the use of the Resort facilities as a hotel is allowed, "such use or activities should not impact the design of the resort condominium apartments as dwelling units." 35. Additionally, I stated that, "[a]ny attempt to rent individual bedrooms or 'lock-out' units independently of the main dwelling or condominium-apartment unit would be considered an illegal activity." 36. Based upon my education, training, and expertise it is my expert opinion that any attempt to rent individual bedrooms or 'lock-out' units independently of the main dwelling or condominium-apartment is an illegal activity under the laws of the County of Kauai and in violation of V-72-11. 37. Article 13 of the CZO addresses Non-conforming Structures and Uses separately. 38. Pursuant to Section 8-13.2 (a), "[a] nonconforming use of land, buildings, or other structures may continue to the extent that the use existed on September 1, 1972." 39. Although the Resort obtained V-72-11 on July 5, 1972, the use and rental of the lock-out portion of any of the 134 units, separately from the main unit, is not a permitted "grandfathered use" under the CZO because such a use was not allowed prior to September 1, 1972. 40. I have reviewed the declaration of Michael A. Dahilig, dated November 20, 2016. A true and accurate copy of which is attached as Exhibit "10." 41. In his declaration, Mr. Dahilig states that he reviewed my aforementioned letter to Mr. Wall dated November 6, 1995 and stated that,"[p]ursuant to the current County regulations, the position provided in the letter still accurately reflects the Department of planning's position today." 42. I concur with Mr. Dahilig's declaration. 43. According to County of Kaua'i Real Property Tax records, Defendants Dewitt B. Richards ("Defendant Dewitt Richards") and Virginia E. Richards ("Defendant Virginia Richards"), Individually and as Trustees of the Virginia E. Trust (collectively "Defendant Richards"), are the owners of that certain apartment unit located at the Resort, 5380 Honoiki Road Unit P33, Princeville, HI 96722, also identified as Apartment P33. See Exhibit " I I . " 44. Unit P33 is designed as a one bedroom unit. See Exhibit" 12" at 1. 45. Under V-72-11, one bedroom units are designed to contain one bedroom, two bathrooms, one kitchen, and a living room. Id. 46. Defendants Richards have divided Unit P33 into two separate studio apartments identified as rooms 1305 and 1306 respectively. See Exhibit "12" at 2. 4 7. Defendants Richards advertise that rooms 1305 and 1306 each contain a master bedroom, bathroom, and fully equipped kitchenettes. lei. 48. Defendants Richards separately advertise the transient rental of room 1305. See Exhibit "13" at I. 49. According to their advertisement, room 1305 appears to be the living/dining room of Unit P33. See Exhibit "13" at 2. 50. According to their advertisement, room 1305 is available for rent only as a one bedroom studio, and although unit 1306 is available from the same owner, units 1305 and 1306 do not connect. lei. 51. Pictures of the interior of room 1305 indicate that there is a bed within the living/dining portion of Unit P33 and the interior lock out door connecting to the bedroom portion of Unit P33 has been remodeled and there is now a solid wall where the lockout doors are supposed to be. See Exhibit" 13" at 3 and 4. 52. Defendants Richards separately advertise the transient rental of room 1306. See Exhibit "14" at 1. 53. According to the advertisement, room 1306 appears to be the bedroom portion of Unit P33. See Exhibit "14" at 2. 54. According to the advertisement, room 1306 is available for rent only as a one bedroom studio, and although unit 1305 is available from the same owner, units 1305 and 1306 do not connect. lei. 55. Defendants Richards advertise that room 1306 contains a "kitchenette" that includes a refrigerator, microwave, 2 burners, large George Foreman Grill, blender, coffee maker, dishes and utensils. Id. 56. In the picture of the interior of room 1306 the kitchenette refrigerator is visible, and the area where the interior lockout door is supposed to connect to the living/dining room portion of Unit P33 has been remodeled to contain only wall area. See Exhibit "13" at 3. 57. Based upon my education, training, and professional expertise, remodeling Unit P33 from a one bedroom 2 bathroom unit into two separate studio apartments as described above, and renting out the studios separate and apart from one another is a violation of the CZO, including but not limited to Sections 8-4.6 (a) and 8-1.5 (definitions of "Dwelling Unit" and "Kitchen"), and the terms and conditions of Y-72-11. I declare, verify and certify that the foregoing is true and correct. Executed at Lihu'e, I-Iawai'i, on July _l3, 2020. ~ ciPF~c::,<'h-.ec<..- DEE CROWELL EXHIBIT 26 EXHIBIT 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 DISPUTE PREVENTION AND RESOLUTION, INC. STATE OF HAWAII DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO as TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO COMMUNITY PROPERTY TRUST; EDWARD E. COLSON, I I I and KAREN JEANNE COLSON as TRUSTEES OF THE COLSON FAMILY TRUST, Claimants, vs. ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT, Respondents. DPR No. 20-1-0037-A VIDEOTAPED DEPOSITION OF GEOFFREY KING Taken on behalf of the Claimants via Zoom Video Conferencing, commencing at 9:02 a.m. on August 27, 2020. Reported by: JESSICA R. PERRY, CSR NO. 404 Certified Shorthand Reporter EXHIBIT 27 1 ------RALPH ROSENBERG COURT REPORTERS, INC.------ Honolulu, HI (808) 524-2090 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 APPEARANCES For the Claimants Dennis R. Sciotto and Carol Ann Sciotto As Trustees of the Dennis R. Sciotto and Carol Ann Sciotto Community Property Trust; Edward E. Colson, Iii and Karen Jeanne Colson As Trustees of the Colson Family Trust: TERRENCE M. REVERE, ESQ. Revere & Associates LLLC 970 North Kalaheo Avenue Suite A301 Kailua, Hawaii 96734 For the Respondent Association of Apartment Owners of Hanalei Bay Resort: NORMAN K. ODANI, ESQ. Roeca Luria Shin LLP Davies Pacific Center 841 Bishop Street, Suite 900 Honolulu, Hawaii 96813 For the Respondent Association of Apartment Owners of Hanalei Bay: WILLIAM C. BYRNS, ESQ. Dentons US LLP American Savings Bank Tower 1001 Bishop Street, Floor 18 Honolulu, Hawaii 96813 Also Present: Jimit Mehta I<:eoni Sallas, videographer 2 ,__-----RALPH ROSENBERG COURT REPORTERS, INC.------ Honolulu, HI (808) 524-2090 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 for the record, please. A. Geoffrey, spelled G-E-O-F-F-R-E-Y, last name is King, K-I-N-G. Q. Okay. You've answered one of my questions already, which is how to say your first name, is Geoffrey or Geoffrey, but it's just like Geoffrey with a J, right? A. Correct. You can call me Geoff. Q. Okay. Thank you. And so Geoff, what do you do at the Hanalei Bay Resort? hold? What positions do you A. I'm a time-share owner and I'm a volunteer that serves on the VOA board of directors and I'm also on the AOAO as board of directors. I serve as president on the AOAO board and I serve as treasurer on the VOA board. Q. Okay. And when did you first --is this your first stint on the AOAO board? A. I'm not sure what you mean by the first stint. I've served a continual --since I was elected to the board five or six years ago, and I've continued on the board. Q. Okay, yeah, I was just wondering if you were on the board in the past and then took a break and then got on the board again or if it's just been one 6 ------RALPH ROSENBERG COURT REPORTERS, INC.-------' Honolulu, HI (808) 524-2090 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. A. Okay. Do they provide it for 16A? Not that I recall. 18 Q. A. Okay. So why isn't that noted in this letter? I'm not sure that it was relevant to our communication. Q. Okay. Well, you're saying that you're comparing, so why wouldn't you compare the whole picture? A. point. We weren't doing a financial analysis at that We were talking about basically basics of the issue at hand. Q. Okay. And here you write, "Unit 16A uses far more parking than any residential unit." Do you see that? A. Yes. Q. So did you mention, on the other hand, the hotel units collectively use way more parking than unit 16A does? A. I'm not sure that I understand that. Relative to individual units, I don't think that's an accurate statement. Q. Okay. Relative to collectively hotel versus commercial, hotel overwhelmingly uses more parking, don't they? A. Well, that's because the condo units --this ,___-----RALPH ROSENBERG COURT REPORTERS, INC.-----..... Honolulu, HI (808) 524-2090 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is a residential condo development, and the residents or guests are primarily residential users. this is a residential resort. That's -- Q. Mr. King, did anyone suggest that you use the word residential in this deposition today? A. No. Q. Okay. That's just nonsense, isn't it, Mr. King? A. Q. A. Q. A. Not at all. Okay. Three. How many people live there full-time? Oh. 134. How many units are there? 19 Q. So they're rented out primarily overwhelmingly on short-term use, correct? A. But they're residential units. Q. I don't care what you're calling them. asking you, are they used for short-term rentals overwhelmingly? A. Not necessarily. We have -we have I'm time-share owners and they are owners and then there are also rentals. Q. Uh-huh, Okay. So how many --so the time-share owners, obviously the name implies, they' re not living there full-time, right? '-------RALPH ROSENBERG COURT REPORTERS, INC.-------' Honolulu, HI (808) 524-2090 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 159 BY MR. REVERE: Q. Okay. I'll describe the nature of the fire, it was a big glowing fire and it burnt the building down to cinders and it was very dramatic and then the next day there's just a pile of ashes and cinders and no units in that building. Does that MR. ODANI: What hotel are you talking about? MR. REVERE: The hotel units at this place. MR. ODANI: The association --Hanalei Bay Resort is not a hotel complex. MR. REVERE: Oh, really? Okay. BY MR. REVERE: Q. So in any event, so one of the hotel buildings burns down, right, does the association have an interest in that? MR. ODANI: Same objection. THE WITNESS: We are responsible for the common area and part of our charge is the --basically the exteriors, the structures of the building. BY MR. REVERE: Q. Okay. So if a building burnt down that has these apartments, be they the lockout apartments or legitimate apartments or whatever, does the .___-----RALPH ROSENBERG COURT REPORTERS, INC.------ Honolulu, HI (808) 524-2090 BEFORE THE COUNTY OF KAUA'I PLANNING COMMISSION STATE OF HAWAI'I Petition for a Declaratory Order Regarding Noncompliance with the Comprehensive Zoning Ordinance and Variance Application Pennit V-72-11. CERTIFICATE OF SERVICE CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the foregoing document was duly served on this date on the below-named parties by U.S. mail. TO: OFFICE OF THE COUNTY ATTORNEY 4444 Rice Street, Suite 220 Lihue, Kaua'i, Hawai'i 96766 Attorneys for KAUA'I COUNTY PLANNING COMMISSION KAAINA HULL, Planning Director COUNTY OF KAUAI PLANNING DEPARTMENT 4444 Rice Street, Suite 473 Lihue, Kaua'i, Hawai'i 96766 IAN K. JUNG, ESQ. Belles Graham LLP 4334 Rice Street, Suite 202 Lihue, Kauai, Hawaii 96766 MICHAEL C. CARROLL, ESQ. SHARON PARIS, ESQ. Bays Lung Rose & Voss Topa Financial Center 700 Bishop Street, Suite 900 Honolulu, Hawaii 96813 Attorneys for Interested Party ASSOCIATION OF APARTMENT OWNERS OF HANALEI BAY RESORT DATED: Lihu'e, Hawai'i, January 22, 2021. ImanageDB:5793538.3 ~~ MAUNA KEA TRASK ~ Attorneys for Petitioner DENNIS R. SCIOTTO AND CAROL ANN SCIOTTO AS TRUSTEES OF THE DENNIS R. SCIOTTO AND CAROL ANN SCI OTTO COMMUNITY PROPERTY TRUST, EDWARD E. COLSON, III AND KAREN JEANNE COLSON AS TRUSTEES OF THE COLSON FAMILY TRUST OWNERS OF UNIT 16A AND HBR ENTERPRISES, LLC 2