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The Honolulu Advertiser
Posted on: Wednesday, February 17, 2010

Turtle Bay nearing completion on roadway as struggle goes on

By Eloise Aguiar
Advertiser Staff Writer

Five years after the owners of Turtle Bay Resort resurrected a redevelopment plan that would allow construction of thousands of new hotel rooms and condos on the North Shore, the proposal remains alive but inching along amid a struggling economy and a tangle of petitions and filings with agencies ranging from the Land Use Commission to the Hawai'i Supreme Court.

The resort is completing roadway improvements to satisfy permit requirements that would establish lots and easement, including for public parks and access, according to the city.

Local developer Stanford Carr, who took over interim management from Oaktree Capital Management LLC on behalf of Kuilima Resort Co. as part of the restructuring of a $400 million loan, did not return calls seeking comment. Upon his appointment, he was tasked with finding new development partners, among his other duties.

The LUC took up the case again on Feb. 4 and scheduled decision-making on a request from opponents of the plan to issue an order to show cause as to why 236 acres at Turtle Bay Resort shouldn't revert to agriculture because of what they called failures by Kuilima Resort Co. to meet conditions of the original land-use change from 1986.

But the day ended without a decision, and the request for the order to show cause remains pending after six hearings and 34 months.

"We're frustrated," said Tim Vandeveer, co-chairman of the Defend O'ahu Coalition, which requested the order to show cause. "If the commission would simply issue the order to show cause, all that does is allow the public to take part in this process, we feel, and it also gives the commission an opportunity to amend the original agreement with the developer."

The 1986 agreement allows for up to five hotel and condominiums on the 880-acre property, including a hotel at Kawela Bay. In return the developer had agreed to numerous conditions, including building four parks, rights of way to the beach, highway improvement, a half-million-dollar employment program even a childcare center for employees.

Apparently there was no time limitation on the project, and when a new owner, Oaktree Capital Management LLC, announced in 2005 that it would be moving forward with development, opposition quickly arose. Opponents demanded a new environmental impact study, challenged the validity of the agreement because so much time had passed and said that most of the conditions remained unmet. They also backed a subsequent proposal by the governor to purchase the property there.

Today, a Hawai'i Supreme Court case on the environmental impact study is pending, and the governor's plan to purchase the property has taken a back seat to the failing economy.

The state Office of Planning, which is a party to the original agreement, recently added to the mix its suggestion that the LUC issue an "intent" to modify the original agreement and add a timeline, said Abbey Mayer, OP director.

Mayer said the LUC has no legal ground to reverse the land-use change so an order to show cause is pointless.

"We feel it's more advantageous to everyone to amend the decision in order to place new conditions on the decision, which hopefully would be met. And if they're not met, then there would be foundation to reversion later."