Resort plan contrasts with initial outcry
By Kevin Dayton
Advertiser Big Island Bureau
HILO, Hawai'i — Thirteen years after the start of a legal battle over a massive resort and marina development at Kohanaiki that resulted in the landmark court decision affirming Native Hawaiian gathering and cultural rights on private property, a new owner is pressing ahead with scaled-down plans for a golf course and upscale homes on the site.
Developer Rutter/KW Kohanaiki LLC is proposing 500 homes and a golf course, clubhouse, tennis courts and other amenities at Kohanaiki, perhaps best known for its popular "Pine Trees" surf spot. The $80 million project appears to have considerably more support than the resort, housing and marina development proposed by Nansay Hawai'i Inc. in the 1980s.
Concessions worth an estimated $2 million to provide land for a shoreline park, parking and other facilities, and water and sewer hookups for the park, have helped win over some skeptics. Big Island Mayor Harry Kim helped broker the new development deal with a half-dozen community groups including the Kohanaiki 'Ohana and Na Keiki He'e Nalu, a youth advocacy group.
County Planning Director Chris Yuen said the administration would recommend that the Planning Commission approve a special management area use permit for the project. The commission will hold a public hearing on the application today at the Ohana Keauhou Beach Resort.
"If you think that it's going to be inevitable — this growth — then this is about as good a deal as you can get," said Jerry Rothstein, founder and president of Protect Access Shoreline Hawai'i, or PASH, the group that instigated legal action against Nansay's $350 million plans to build two hotels, a golf course and more than 700 homes as well as a marina eventually.
The lawsuit led to the so-called PASH decision of 1995, in which the Hawai'i Supreme Court upheld lower court rulings that voided the special management area permit granted to the Nansay project in 1990. The court ruled that Native Hawaiians had a right to go onto private property for traditional gathering, cultural and religious purposes, and mandated that government agencies try to protect those rights when approving developments in Hawai'i.
The Japanese developer withdrew its application for the project the next year and ended up losing millions of dollars.
The PASH decision was a powerful statement by the state's highest court that jolted major landowners. Critics warned it would scare off potential investors in Hawai'i.
But with the Big Island enjoying the biggest building boom in county history, the PASH decision appears not to have resulted in the dire economic consequences some had feared.
One thing it did do was give developers a compelling legal reason to conduct carefully researched cultural and historical assessments of properties where they plan to build. That resulted in better, more marketable projects, said Randy Vitousek, a Kona land-use lawyer who represented Nansay in the PASH case.
"I think the projects are better designed, they have less adverse impacts on natural and cultural resources, and they sell better because I think people care," Vitousek said. "Potential buyers, especially at high-end properties, care about the history, and it makes it special and adds something to it."
One initial concern about the PASH decision was that it left unclear whether anyone with even a drop of Hawaiian blood had the right to enter any private property, developed or not, and what activities were covered.
Later rulings made it clear that practitioners had to prove they were engaging in traditional gathering or customary practices on the land in question, said David Callies, a law professor at the University of Hawai'i's William S. Richardson School of Law.
The court also found that traditional customary rights could not be practiced on fully developed land, Callies said.
Another fear was that land titles might be encumbered by Hawaiian rights to use the property, an issue that wasn't well understood by investors and may have made some properties less marketable, said John Ray, president of the Hawai'i Leeward Planning Conference, which represents large landowners and developers in West Hawai'i.
Title companies responded with a number of strategies to keep property transactions moving, said John Jubinsky, lawyer for Title Guaranty of Hawai'i, the largest title company in the state. Techniques were developed for investigating whether PASH rights were likely attached to particular properties, and limited insurance coverage was offered to protect most landowners.
"There are some transactions I think that just didn't happen because the potential of PASH (problems) was perhaps too great," said Jubinsky, but he does not believe it happened often.
Arnold Lum, a former Sierra Club Legal Defense Fund lawyer who represented PASH in the case, said the issue of clouded title became less important as title insurers demonstrated they were willing to insure around PASH rights, and buyers demonstrated they were still willing to buy.
"The market didn't even blink," Lum said. "If it blinked, it was so quick I couldn't see it."
Although Native Hawaiian gathering rights at Kohanaiki are now well established, there are other concerns about the new development there.
Rothstein is pressing Rutter to adopt environmentally responsible practices to protect the ocean from pesticides and fertilizer runoff from the golf course. Others are worried that archaeological features on the property might be destroyed, and that the project might eliminate some of the brackish shoreline anchialine ponds on the site.
In all, there are 108 identified archeological features on the property and 137 mapped anchialine ponds. Most will be preserved, according to the application by the developer.
Reach Kevin Dayton at kdayton@honoluluadvertiser.com or (808) 935-3916.
