The company tasked with putting up a racetrack on Department of Hawaiian Home Lands property in Kalaeloa has been slapped with a violation notice for stockpiling nearly 35,000 cubic yards of dirt on the 35-acre site without a permit.

But leaders of Save Oahu's Race Tracks LLC say they intend to avoid the city fines by obtaining stockpiling and grading permits soon.

Meanwhile, an official at DHHL said SORT LLC was granted a one-year extension to build and operate a temporary racetrack on the site.

The original four partners of the nonprofit SORT have split over a bitter dispute between factions headed by the Grace and Souza families. DHHL has recognized the Graces' newly formed SORT LLC as the "point of contact" and "responsible party" for the racetrack project, but asked that the racing community work out its differences.

Save O'ahu's Race Tracks was formed as a nonprofit corporation in March 2006 with Evelyn Souza listed as the "agent" and chairwoman for the "racing organization." Business registration documents list the officers as Evelyn Souza, George Grace III, Franklin Souza and Jeanette Grace.

The city initially issued a Notice of Violation against SORT LLC on May 14 and gave the company until last Friday to comply or face not just a $1,000 fine for stockpiling without a permit, but an additional $1,000 a day "until corrective action is completed."

City Planning and Permitting Director Henry Eng confirmed that an extension was being granted to SORT LLC. Eng, in an e-mail, said the company had "come in with a stockpiling plan which was not acceptable because it was not prepared and stamped by a registered professional engineer. Another plan has not been submitted."

George Grace III, who along with wife Jeanette are the principles of SORT LCC, said he was told to submit a stockpiling and grading permit together.

Grace said the delay in obtaining a stockpiling permit is not the fault of track organizers but the result of miscommunication and confusion among the agencies.

DHHL officials first asked SORT to obtain permits last year but Grace said he was told by city planning officials that DHHL properties were exempt from needing to obtain permits for stockpiling, grading and related activity.

Later, however, after complaints about the dirt reached the Hawaii Community Development Authority, which oversees development in Kalaeloa, DHHL ordered SORT to go back to the city and ask for permits.

DHHL spokesman Lloyd Yonenaka said his agency was informed that SORT was bringing dirt and other materials to build a racetrack.

"However, when we realized the volume of dirt, we sent them a letter telling them to stop and to seek a stockpiling permit from the city," Yonenaka said.

DHHL is also aware of the violation notice.

"As we expect of all of our lessees, we expect they will comply with the laws of the city and county," Yonenaka said.

Grace said without the stockpiling permit, work on the project has stopped.

"We can cut grass, we can bring equipment onto the property, we can pound pegs, survey," he said. "We just can't do anything until (we) get that permit in."

The Souzas have questioned the amount of dirt the Graces have placed on the property, but George Grace said what's there now isn't enough for what SORT LLC has planned.

"We need like 38,000 cubic yards ... to do the motocross section and the dirt oval track," he said.

The DHHL's Yonenaka said the Hawaiian Homes Commission, in May, gave SORT LLC a one-year renewal on the current lease.