The bill rezones 2.024 acres of land in Ha'iku from preservation to residential, with a 25-foot building height limit. The landowner Kamehameha Schools requested the zone change to permit development of a daycare center there.

"While my administration supports the zone change itself, the City Council has supported an accompanying Declaration of Restrictive Covenants that sets a bad precedent," Hannemann said in a message to the Council returning the unsigned bill.

The declaration was developed to address community concerns but sets detailed restrictions that go beyond zoning regulations and designates the City Department of Planning and Permitting to enforce the restrictions.

"This places DPP in the untenable role of enforcing what is a private, civil matter between Kamehameha Schools and Haiku residents. We do not intend to enforce these conditions, so at best, it gives the community a false sense of understanding about how these conditions will be enforced," Hannemann wrote. "At worst, it would force the City to enforce restrictions that it is not a party to, expanding the City's workload. The language also suggests that the city will use its zoning powers to retaliate for lack of compliance with conditions for which it has no interest; this is quite unsettling. We should not be participating in, and encouraging separate agreements outside of the official zone change action. In this instance, the Declaration of Restrictive Covenants could be viewed as 'spot zoning.'