Hokuli'a 'war is over' as judge outlines settlement
By Kevin Dayton
Advertiser Big Island Bureau
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KEALAKEKUA, Hawai'i — Kona Circuit Judge Ronald Ibarra restarted the controversial 1,550-acre Hokuli'a luxury home project and the Mamalahoa Bypass road yesterday, reversing much of his own 2003 ruling that halted construction.
Ibarra's approval was required to complete an out-of-court settlement that includes the pledge of a package of community benefits that Hokuli'a chief executive officer John De Fries estimated is worth more than $100 million. The Hokuli'a development by some estimates is worth more than $1 billion.
"The war is over," said Jim Medeiros Sr., chief executive officer of Protect Keopuka 'Ohana, which joined in the lawsuit challenging the Hokuli'a.
"This is what I think from the very beginning we all hoped and prayed for," said Big Island Mayor Harry Kim, who attended yesterday's hearing in Kealakekua. Kim said he knows the settlement was difficult for some of the players in the case to accept, and "I am so appreciative of them for working it out."
The package of community benefits Hokuli'a agreed to in the settlement requires the developer to:
"I think it's good, PKO is happy with the settlement," Medeiros said. "It's incredible. What the community is getting has never been done, I don't believe, before."
COMMUNITY BENEFITS
Medeiros said all of the money paid by the developer will go to the community benefit package, and not to benefit the plaintiffs personally.
Medeiros, who has focused on the issue of Hawaiian burials discovered on the site, said there "are a lot of things for the burials." One major provision of the settlement will give the descendants of people buried on the site more say over how burials there are treated, he said.
Critics of Hokuli'a, including PKO, sued in 2000 to stop the Hokuli'a project, alleging among other things that developer 1250 Oceanside Partners violated state law governing the use of agricultural lands. The other plaintiffs in the case were Charles Flaherty, Jack Kelly, Michele Wilkins and Patrick Cunningham.
Ibarra ordered construction halted on the project in 2003, ruling that Hokuli'a actually was an urban-type development being illegally built on agricultural lands.
Ibarra ruled the developer should have asked the state Land Use Commission to reclassify the land for urban development before beginning work, and ordered that all work stop until the Land Use Commission either reclassifies the land or declares Hokuli'a a legal use of agricultural lands.
The settlement was finalized yesterday as state lawmakers advanced a bill to declare Hokuli'a and other projects like it to be a legal use of agricultural lands. People involved in the settlement negotiations say the bill, which has already passed in the state House and is pending in the Senate, helped speed the settlement negotiations along.
That bill in effect would have reversed Ibarra's 2003 ruling that stopped construction on both the Hokuli'a subdivision and the bypass road.
MILLIONS INVESTED
Developer 1250 Oceanside Partners so far has invested about $350 million in Hokuli'a, which includes the cost of the land, but the subdivision was still less than 40 percent complete when Ibarra ordered a halt to the project.
Ibarra's order also barred home construction on the 192 lots the developer had already sold, and so far only three homes have been completed in the subdivision.
Ibarra also ordered work stopped on the two-lane, 5.5-mile $55 million bypass highway between Napo'opo'o and Keauhou, which the developer was required to build as a condition of rezoning for Hokuli'a.
That road was almost half finished when construction was halted, and De Fries said the developer will work to quickly restart construction on that road to ease clogged traffic in the Kona area.
"We clearly hear the community's call for this highway to be given a priority," De Fries said.
However, another lawsuit over condemnation of land for the bypass road must be resolved before the highway can be finished, a lawsuit De Fries said he hopes will be resolved quickly.
Contractors who had been working on Hokuli'a have long since moved on to other projects, and De Fries said he expects it will take several months before bulldozers are operating again. He said a more comprehensive timetable will be drafted within the next three months for completing construction.
"A project of this magnitude, it remobilizes in phases as opposed to hitting one switch and turning it all back on," he said.
De Fries declined to estimate how much the lawsuit cost the developer in legal fees or other costs since all work on the development stopped 30 months ago, but said the losses were "painful."
"In order to get to where we got to today, all parties had to let go of the past, and if I were to drag that number around, and hold on to those kind of feelings, we'd never get there," De Fries said.
EXORBITANT FEES
Just a taste of the amount of money involved is available through court records: Hokuli'a reported spending more than $7.5 million on lawyers' fees even before Ibarra ordered the project halted, and before the developer appealed Ibarra's ruling to the state Supreme Court.
The developer has also agreed to pay $2 million in lawyers' fees to the Native Hawaiian Legal Corp., and $1 million to Kona lawyer Robert D.S. Kim, the lawyers who challenged the project.
That doesn't include the cost of the years-long delay after Ibarra ordered that all work stop at the site, and doesn't include the extra construction costs the developer will face when Hokuli'a rebids work for the project in Kona's now-booming economy.
Reach Kevin Dayton at kdayton@honoluluadvertiser.com.
