Posted on: Monday, March 28, 2005

EDITORIAL
Hokuli'a case making waves at Legislature

A luxury development halted 18 months ago by a Big Island judge is now the focus of a possible $200 million lawsuit and some interesting remedies being discussed by lawmakers.

We don't blame the 100 prospective residents for being upset enough to sue. They spent an average of $1 million each for Hokuli'a home lots, only to see Kona Circuit Judge Ronald Ibarra halt the project.

The ruling was devastating. It jeopardized the jobs of scores of workers, froze building plans of home-lot buyers, and deprived the developers of any return on their $300 million investment. It may throw the legitimacy of other, similar properties, mainly on the Big Island, into doubt.

But it's the law. In a September 2003 ruling that seemed reasonable and proper, Ibarra ordered a halt to the project after finding that the developers had failed to gain Land Use Commission approval.

Growing fig leaves

Because the development is on agricultural land, buyers are limited by state law to "farm dwellings" that are "tied to agricultural activity." The developers sought to meet the agriculture obligation by planting coffee and other trees in common areas and roadways.

In reality, Ibarra found, the developer was growing fig leaves, hoping to wink at state law — "an absurd result that the Legislature could not have intended."

Ibarra ordered the developer to halt work on the project until it receives reclassification of the entire subdivision to urban use from the LUC. Whether or not that application succeeds, the process will take months.

Now the lot buyers plan to sue Hawai'i County, seeking $200 million in damages.

We'd presume the buyers are suing the county because of evidence presented to Ibarra that the developer received assurances from the county that state approval wouldn't be needed for the project.

One can guess at the basis for those assurances. So common (some would say brazen) have such pseudo-farmlot projects become on the Big Island that one such gentleman farmer, The Advertiser reported, filed a nuisance suit against his neighbor for engaging in animal husbandry, which is a smelly and noisy, but decidedly agricultural, pursuit.

Ibarra also saw evidence, however, that the developer was advised to seek reclassification from the LUC. We can thus wonder whether attorneys for the lot buyers will next question the developer's due diligence.

They also may question whether it was a massive storm runoff into some of the world's most pristine waters caused by overgrading in 2000, followed by difficulties with native burials and landmarks, that melted the indifference shown by Big Island residents to earlier "gentleman farming" projects. These incidents led us at the time to suggest that this developer wasn't a very good example of the prototypical victim of "anti-business" Hawai'i.

A key Senate committee, meanwhile, has been exploring some interesting, if provisional, revisions of an anachronistic set of protections for ag lands. Today we find plenty of ag land, and not enough farmers; plenty of urban land, and not enough homes. It's time lawmakers and the LUC revisit the laws governing the classification of ag lands.

The Legislature has failed for almost four decades in its constitutional obligation to identify and designate agricultural lands of importance (the so-called "prime cuts") and create an extra level of protection around them.

The more marginal ag lands — and those would include, many would argue, the Hokuli'a acres — have long been out of production, overrun by haole koa and guinea grass. What should become of those lands?

The Committee on Water, Land and Agriculture has wisely resisted legislation to create a special exemption from the state land-use approval process for Hokuli'a and other projects.

Clarify land-use laws

For the time being, the committee should focus on bills clarifying land-use laws so that prime ag lands are identified and protected and developers know, up front, what the rules are.

One bill under consideration would make it clear that homes are not permitted on ag lands if "non-agricultural features" exist, such as golf courses, country clubs, hotels, homes not compatible with agricultural activities and covenants that restrict agricultural uses.

That language, of course, describes the Hokuli'a project to a tee. Perhaps if such a law had been in place, it might have helped this developer avoid a costly mistake. In any case, it deserves careful consideration.