Agenda - Planning Commission - 03/05/2015

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Zoning Bulletin January 25, 2015 l Volume 9 Issue 2 mer land use classification pursuant to Hawai'i statutory law, Hawai'i Revised Statutes ("HRS") § 205-4(g). The Background/Facts: In 1989, the LUC reclassified 1,060 acres of land in Waikoloa on Hawai'i Island from agricultural to urban in order to allow the development of a residential community. The reclassification was subject to numerous conditions, including a condition that at least 60% of the residential units be affordable. Over time, the land changed hands several times, and the LUC granted requests to amend the affordable housing condition. By 2005, the condition required the landowner, Bridge Aina Lea, LLC ("Bridge"), to construct 20% of the housing units as af- fordable housing units. By December 2008, the LUC opined that Bridge and its predecessors in interest had failed to meet the affordable housing conditions of the reclassification. LUC issued an order to show cause ("OSC") pursuant to HRS § 205-4(g) as to why the land should not revert back to its former ag- ricultural land use classification. Soon after the OSC, Bridge assigned its interest in the land to DW Aina Le'a Development LLC ("DW"). DW then invested more than $20 million in developing the site. Nevertheless, after OSC proceedings over the course of several years, in April 2011, the LUC issued an order reverting the land to the agricul- tural use district. Bridge and DW appealed the LUC's decision and order: Their cases were consolidated in circuit court. The circuit court reversed and vacated the LUC's decision and order. Among other things, the circuit court concluded that the LUC had exceeded its statutory authority and violated HRS Chapter 205. The court found that while the statute granted the LUC authority to establish land use regulations for the major classes of uses and to establish boundaries of the districts for those uses, the responsibility of enforcing the land use classification districts adopted by the LUC was expressly delegated to the counties. The LUC appealed. On appeal, the LUC argued that reclassification and reversion of property was different under HRS § 205-4(a) and 205-4(g). Specifically, the LUC argued that pursuant to HRS § 205-4(g), it was au- thorized to impose conditions on a petition seeking to amend a district boundary, to issue an OSC, and to revert property to its former land use classification. In the LUC's view, because reclassification was different than reversion, it was not required to consider other factors set forth in HRS §§ 205-16 and 205-17, or satisfy the requirements of HRS § 205- 4(h), or satisfy the 365 day deadline set forth in HRS § 205-4(g). Bridge and DW argued that, pursuant to the statute, the LUC could only revert property pursuant to an OSC if the petitioner had not substantially commenced use of the property. They pointed to the language of HRS § 205-4(g), which provides: "The [LUC] may provide by condition that absent substantial commencement of the use of land in accordance with © 2015 Thomson Reuters 3