Halt to Hokuli'a project revives 'anti-business' issue

By Timothy Hurley
Advertiser Staff Writer

While environmentalists cheered, land developers warned of dire consequences after a Big Island judge's ruling that virtually shut down the massive Hokuli'a luxury development in Kealakekua.

"It's a sad day," said John Michael White, president of Hawai'i Land Co., who described Kona Circuit Judge Ronald Ibarra's ruling as "far-reaching" and raising "caution flags to new heights" for anyone contemplating development on agricultural-designated land.

"Hawai'i is already labeled anti-business and anti-development. This just makes it worse," White said.

In his ruling Tuesday, Ibarra said Hokuli'a developer 1250 Oceanside Partners collaborated with Hawai'i County to skirt the state's development process. Under the ruling, Oceanside must seek land reclassification from the state Land Use Commission, a potentially long and controversial process.

Jeff Mikulina, director of the Sierra Club's Hawai'i chapter, was among those who applauded Ibarra's ruling. He said he was happy the judge recognized that Hokuli'a is not an agricultural project and that the LUC plays an important role in protecting cultural sites and natural resources.

Mikulina said the ruling sends a loud signal that the state's 40-year-old land-use law cannot be ignored.

The development, which also includes a lodge, clubhouse, pavilion and tennis courts, was the target of a lawsuit by a handful of activists and the Protect Keopuka 'Ohana, a group of Hawaiian cultural practitioners and descendants of Hawaiians buried on the project site.

Hokuli'a Chief Executive Officer John De Fries said yesterday the company probably would petition the court for reconsideration of the ruling and, if that fails, appeal it.

De Fries said work on the project was suspended early yesterday morning in compliance with the judge's ruling, forcing 200 employees who work for contractors and subcontractors off the job. Construction will continue on the golf course and oceanfront park as permitted by the judge.

The employment of 180 Hokuli'a employees will be evaluated on a weekly basis, De Fries said.

Gov. Linda Lingle, who was visiting the Big Island yesterday, said that while she wasn't familiar with the details of the Hokuli'a case, she believes too much land is designated agricultural when it shouldn't be. That has created situations in which developers "dress up" their projects as agricultural subdivisions when in reality they involve little or no farming activities.

She said state Board of Agriculture Chairwoman Sandra Lee Kunimoto is working with the county mayors and major landowners to devise a plan to sort out which lands really should be used for agriculture. Once designated agriculture, Lingle said, they shouldn't be used for other purposes, including golf courses.

Lands that are clearly not going to be used for agriculture should be reclassified as rural, allowing development, she said. "Long term, I think that's the solution."

De Fries insisted that Hokuli'a followed the direction of state and county regulators from 1994.

"It's inconceivable for a private property owner to spend $300 million without making sure of the legal standing every step of the way," he said.

De Fries warned that the consequences of the ruling are being watched by potential investors.

"There's tremendous implication," he said. "We've been dealing with international banks, and we've had a number of (Mainland) inquiries regarding the status of the case. It's about the perceptions offshore people have about Hawai'i as a place to do business. This isn't doing the state and county any good."

Echoing those sentiments was David Callies, a land-use law professor at the University of Hawai'i's Richardson School of Law and adviser to Hokuli'a's law firm, Carlsmith Ball. "It sends a very chilly message to developers from outside the state," he said.

Callies said Hokuli'a obtained its government approvals in the same way at least a half a dozen others did during the past 15 to 20 years.

"Whether it was right or wrong, the landowner relied on that process," he said.

Big Island Mayor Harry Kim said he'll meet with county attorneys today to examine the implications of Ibarra's ruling. While he wasn't fully aware of the details of the decision, Kim said it is clear government had failed the developer, with resulting damage to the state and the county's image.

"We have an obligation to put all the cards on the table (at the outset)," Kim said. "It's not fair to any potential developer not to know all the requirements. We've got to make sure this doesn't happen again."

Staff writer Kevin Dayton contributed to this story. Contact Timothy Hurley at thurley@honoluluadvertiser.com or (808) 244-4880.