council of the county of maul land ... - maui county, hawaii

COUNCIL OF THE COUNTY OF MAUl

LAND USE COMMITTEE

Honorable Chair and Members of the County Council

County of Maui Wailuku, Maui, Hawaii

Chair and Members:

January 6,2006 Committee Report No. 06-1

Your Land Use Committee, having met on July 13, 2005 (site inspection and meeting), August 31, 2005, November 16, 2005, December 7, 2005, and December 12, 2005, makes reference to County Communication No. 04-181, from the Planning Director, transmitting the following:

1. A proposed bill entitled "A BILL FOR AN ORDINANCE TO AMEND THE WEST MAUl COMMUNITY PLAN AND LAND USE MAP FROM AGRICULTURAL AND OPEN SPACE TO WEST MAUl PROJECT DISTRICT 2 (KAP ALUA MAUKA) FOR PROPERTY SITUATED ON THE SOUTHEASTERLY SIDE OF HONOAPIILANI HIGHWAY, AT HONOKAHUA, NAPILI, LAHAINA, MAUl, HAWAII".

The purpose of the proposed bill is to amend the West Maui Community Plan and Land Use Map for approximately 475 acres from Agricultural and Open Space, respectively, to West Maui Project District 2 (Kapalua Mauka) to facilitate a request from Maui Land & Pineapple Company, Inc. (MLP) to develop a 690-unit resort development and amenities at Honokahua, Napili, Lahaina, Maui (TMK: (2) 4-2-01 :001 (por.) (now known as (2) 4-2-01:042), (2) 4-3-01:006 (por.), and (2) 4-3-01:008 (por.)). The amendment would expand the area mauka of Honoapiilani Highway that is currently designated West Maui Project District 2 (Kapalua Mauka) from 450 acres to approximately 925 acres, while reducing the number of housing units allowed in the area from 750 to 690.

2. A draft bill entitled "A BILL FOR AN ORDINANCE TO CHANGE ZONING FROM COUNTY AGRICULTURAL DISTRICT AND INTERIM DISTRICT TO WEST MAUl PROJECT DISTRICT 2 (KAP ALUA MAUKA) (CONDITIONAL ZONING) FOR PROPERTIES SITUATED ON THE SOUTHEASTERLY SIDE OF HONOAPIILANI


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January 6,2006

Committee Report No. 06-1

HIGHWAY, AT HONOKAHUA, NAPILI, LAHAINA, MAUl, HAWAII".

The purpose of the draft bill is to conditionally change the zoning for approximately 925 acres from County Agricultural District and Interim District, respectively, to West Maui Project District 2 (Kapalua Mauka) to facilitate the proposed development.

3. A proposed bill entitled "A BILL FOR AN ORDINANCE AMENDING TITLE 19, MAUl COUNTY CODE, TO ESTABLISH WEST MAUl PROJECT DISTRICT 2 (KAPALUAMAUKA)".

The purpose of the proposed bill is to establish the development standards for the West Maui Project District 2 (Kapalua Mauka) (the Project District).

Your Committee notes that the Maui Planning Commission held a public hearing on the application for the proposed Community Plan Amendment, Change in Zoning, and establishment of the Project District on July 21,2003.

Your Committee further notes that the Maui Planning Commission, after reviewing the findings presented in the documents respectively entitled "MAUl PLANNING DEPARTMENT'S REPORT TO THE MAUl PLANNING COMMISSION JULY 21, 2003 MEETING", and "MAUl PLANNING DEPARTMENT'S RECOMMENDATION TO THE MAUl PLANNING COMMISSION mLY 21,2003 MEETING", voted to recommend approval of the Community Plan Amendment, Change in Zoning, and Project District.

Your Committee notes that County Communication No. 04-181 was referred to the prior Council's Planning and Land Use Committee at the Council meeting of July 27, 2004.

At its meeting of January 21, 2005, the Council referred County Communication No. 04-181 to your Land Use Committee (County Communication No. 05-13).

By correspondence dated February 9, 2005, the Chair of your Committee transmitted correspondence dated February 4, 2005, from Yarrow Flower, on behalf of Ryan Churchill, Kapalua Land Company, Ltd., transmitting a document dated November


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2002, entitled "Kapalua Mauka (Project District 2) Final Environmental Impact Statement TMK 4-2-01:1 (portion); TMK 4-2-05:50 (portion); TMK 4-2-05:51; TMK 4-3-01:6 (portion); TMK 4-3-01:7 (portion); and 4-3-01:8 (portion), Kapalua, Maui, Hawai'i".

By correspondence dated June 27, 2005, the Chair of your Committee requested that the Director of Parks and Recreation provide updated information concerning the Department's position on how the applicant should fulfill the park dedication requirement under Section 18.16.320, Maui County Code (MCC).

By correspondence dated June 27, 2005, the Chair of your Committee requested that the Director of Housing and Human Concerns provide updated comments concerning the Department's recommendation for an affordable housing condition.

By correspondence dated June 27, 2005, the Chair of your Committee transmitted a copy of the State Land Use Commission's Findings of Fact, Conclusions of Law, and Decision and Order dated June 29, 2004, relating to the subject property (the LUC Decision and Order). Your Committee notes that, among other things, the LUC Decision and Order requires MLP to "develop no less than 125 affordable units as a part of its proposed Pulelehua project", a stand-alone site.

By correspondence dated June 28, 2005, the Chair of your Committee requested that Pamela English, Development Manager, MLP, provide the following: (1) the status of MLP's negotiations with the State to obtain the 60 acres of the project area that are owned by the State; (2) a copy of the conveyance document if MLP has acquired the 60 acres; (3) a response to questions posed in the State Land Use Commission's (LUC) correspondence dated April 9, 2002, regarding the location of various project components and anticipated impacts if the land exchange could not be negotiated with the State; and (4) the status of any agreement with the State Department of Education to fulfill MLP's fair-share requirement for educational facilities.

By correspondence dated June 28, 2005 to the Planning Director, the Chair of your Committee noted a discrepancy in the Change in Zoning conditions recommended by the Maui Planning Commission, and requested clarification as to whether the signalization at the intersection of Honoapiilani Highway and Office Road had already occurred, or whether the proposed Change in Zoning bill should be revised to incorporate the improvement as a condition.


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By correspondence dated June 29, 2005, the Chair of your Committee requested that the Department of the Corporation Counsel (1) confirm whether the subj ect property is adequately described in the proposed and draft bills; and (2) respond to several questions and revise the proposed bills as appropriate.

By correspondence dated June 29, 2005, Ryan Churchill, Vice President, Community Development, MLP, confirmed that a land exchange had been completed with the State for the 60 acres described as TMK: (2) 4-3-01 :006 (por.) and 008 (por.). He also transmitted a copy of the LUC Decision and Order; and a copy of Kapalua Land Company, Ltd.' s Education Contribution Agreement with the State Department of Education dated July 10, 2003.

By correspondence dated July 5, 2005, Pamela English, Development Manager, MLP, provided updated Tax Map Key information explaining the reason why the property description originally contained six Tax Map Keys (TMK: (2) 4-2-01:001 (por.); (2) 4-2-05:050 (por.) and 051; (2) 4-3-01:006 (por.), 007 (por.), and 008 (por.)) and currently contains three (TMK: (2) 4-2-01 :042; (2) 4-3-01 :006 (por.) and 008 (por)). She also transmitted the following: (1) correspondence dated October 7,2003, from the State Department of Land and Natural Resources to Hallett Hammatt, Ph.D., Cultural Surveys Hawaii, noting that the site preservation plan is acceptable; (2) correspondence dated June 21, 2005, from Wayne Yoshioka, Manager of Transportation Planning/Traffic Engineering, Parsons Brinckerhoff Quade & Douglas, Inc. to Ms. English, stating that the conclusions of the traffic analyses for the project remain valid; and (3) correspondence dated June 30, 2005, from Ryan Churchill, Vice President, Community Development, MLP, to the Director of Parks and Recreation, noting MLP's understanding of the way in which the park dedication requirement for the project, pursuant to Section 18.16.320, MCC, would be met.

By correspondence dated July 5, 2005, the Planning Director responded that the signalization at the intersection of Honoapiilani Highway and Office Road should be included as a Change in Zoning condition.

By correspondence dated July 6, 2005, the Director of Housing and Human Concerns recommended that MLP be required to provide 173 affordable units in the West Maui Community Plan area.


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By correspondence dated July 7, 2005, the Planning Director transmitted revised Community Plan Map No. CP-815 and revised Land Zoning Map No. L-989 for the project.

By correspondence dated July 8, 2005, the Director of Parks and Recreation commented on the status of negotiations with MLP to identify and acquire up to 60 acres for a large district park in the Napili area. He noted that the Department's intent is to use the project's park dedication requirement for the development of such a district park through either a cash contribution or land dedication.

By correspondence dated July 8, 2005, the Department of the Corporation Counsel transmitted the following revised proposed bills, as requested in your Committee's June 29,2005 correspondence:

1. A revised proposed bill entitled "A BILL FOR AN ORDINANCE AMENDING ORDINANCE NO. 2476 (1996), THE WEST MAUl COMMUNITY PLAN AND LAND USE MAP, FROM AGRICULTURAL AND OPEN SPACE TO WEST MAUl PROJECT DISTRICT 2 (KAP ALUA MAUKA), FOR PROPERTY SITUATED ON THE SOUTHEASTERLY SIDE OF HONOAPIILANI HIGHWAY, AT HONOKAHUA, NAPILI, LAHAINA, MAUl, HAWAII";

2. A revised proposed bill entitled "A BILL FOR AN ORDINANCE TO CHANGE ZONING FROM COUNTY AGRICULTURAL DISTRICT AND INTERIM DISTRICT TO WEST MAUl PROJECT DISTRICT 2 (KAP ALUA MAUKA) (CONDITIONAL ZONING), FOR PROPERTIES SITUATED ON THE SOUTHEASTERLY SIDE OF HONOAPIILANI HIGHWAY, AT HONOKAHUA, NAPILI, LAHAINA, MAUl, HAW All"; and

3. A revised proposed bill entitled "A BILL FOR AN ORDINANCE AMENDING TITLE 19, MAUl COUNTY CODE, TO ESTABLISH WEST MAUl PROJECT DISTRICT 2 (KAPALUAMAUKA)".

At its site inspection of July 13, 2005, your Committee met with the Planning Director; a Planner, Department of Planning; the Deputy Director of Public Works and Environmental Management; a Lieutenant, Department of Police; the Fire Chief; a Captain, Department of Fire and Public Safety; and a Deputy Corporation Counsel.


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Your Committee also met with the following representatives on behalf of the applicant: Robert McNatt, Executive Vice President, Maui Land & Pineapple Company, Inc.; Ryan Churchill, Vice President, Maui Land & Pineapple Company, Inc.; Warren Suzuki, Senior Vice President, Maui Land & Pineapple Company, Inc.; Wes Nohara, Vice President of Farm Operations, Maui Land & Pineapple Company, Inc.; Pamela English, Development Manager, Maui Land & Pineapple Company, Inc.; and Tom Schnell, Associate, PBR Hawaii, applicant's land use planner.

Your Committee received a booklet entitled "Maui County Council Land Use Committee Site Visit July 13, 2005" from MLP, containing site maps and brief descriptions ofMLP's vision and goals for the area and the project in particular.

Your Committee viewed the subject property and surrounding area from a vantage point below the site.

Mr. McNatt provided a brief overview of West Maui land ownership as a point of reference for the subject property. He also noted the current and proposed expanded areas of the Proj ect District.

Your Committee proceeded to a second vantage point at the central portion of the subject property, located mauka of Honoapiilani Highway, on TMK: (2) 4-2-01:042. Mr. Churchill noted that the vantage point is situated within the Project District area, at the top of the Village Course.

The Planner stated that the subject property is outside of the Special Management Area. She also explained that, if the Council approves the request, the applicant would then return to the Maui Planning Commission for a Project District Phase 2 approval, followed by a Phase 3 approval.

There was no public testimony.

Your Committee questioned the location of the boundary for the State Land Use Urban District.

Your Committee deferred consideration of the application pending a meeting at the Lahaina Civic Center later that evening.


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At its meeting of July 13, 2005, your Committee met with the Planning Director; a Planner, Department of Planning; the Deputy Director of Public Works and Environmental Management; the Director of Housing and Human Concerns; the Planning and Development Division Chief, Department of Parks and Recreation; the Fire Chief; a Lieutenant, Department of Police; and a Deputy Corporation Counsel.

Your Committee also met with the following representatives on behalf of the applicant: Robert McNatt, Executive Vice President, Maui Land & Pineapple Company, Inc.; Warren Suzuki, Senior Vice President, Maui Land & Pineapple Company, Inc.; Ryan Churchill, Vice President, Maui Land & Pineapple Company, Inc.; Wes Nohara, Vice President of Farm Operations, Maui Land & Pineapple Company, Inc.; Pamela English, Development Manager, Maui Land & Pineapple Company, Inc.; Tom Schnell, Associate, PBR Hawaii, applicant's land use planner; Wayne Yoshioka, Parsons Brinckerhoff Quade & Douglas, Inc., applicant's Traffic Engineer; Warren Unemori, Warren S. Unemori Engineering, Inc., applicant's civil engineering consultant; David Schideler, Cultural Surveys Hawaii, applicant's consultant; and Rick Kiefer, Kiefer and Merchant LLC, applicant's attorney.

Your Committee received public testimony from 11 individuals, 9 in support of the project, 1 opposed to it, and 1 who did not state a position. Three testifiers in support of the project were employees ofMLP or its subsidiaries, and generally noted support for the company, its efforts to give back to the community and promote sustainable balance, and the need for housing for working residents. Four of the testifiers in support were current or former representatives of union or labor organizations who testified about job creation and economic opportunities associated with the project, and noted the need for affordable housing. Another testifier noted support for the opportunities to be provided by the development, and the last testifier in support noted MLP's generosity toward the Maui Preparatory Academy and other programs.

The testifier in opposition to the project expressed concerns over infrastructure shortfalls and traffic, and stated that affordable housing should be intermingled with market-priced housing, not built elsewhere. The testifier who stated no position on the project commented on goals for the West Maui community and criteria for companies he feels should be supported, noting support for MLP.

Five of the individuals who testified in support of the project also submitted written testimony. In addition, two representatives of the Maui Carpenters Union submitted written testimony in support of the project. The West Maui Alliance submitted


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written testimony raising infrastructure concerns and suggesting conditions of zoning that might assist West Maui. Another individual submitted written testimony voicing concerns about current and anticipated traffic congestion, and urging a reduction in future development in West Maui.

Your Committee received a computer-generated presentation and a printout of the presentation from MLP, entitled "Maui County Council Land Use Committee Public Hearing Kapalua Mauka July 13, 2005". Mr. McNatt provided an overview of the request and the proposed development of the 925-acre site, defining the key issues as transportation, affordable housing, water infrastructure, wastewater infrastructure, archaeology, economics, and schools. Approximately 100 individuals rose in response to his request for a show of supporters for the project.

Mr. McNatt also summarized project-related impacts and MLP's proposed contributions in response to those impacts, highlighting the following: (1) that MLP is willing to pay its fair share of regional traffic improvements, offering a fee of $3,500 per unit or an amount to be decided upon by the Council in its deliberations on MCC Chapter 14.62; (2) that MLP is willing to provide 173 affordable housing units, 125 of which would be rentals; (3) that potable water would be provided by the Kapalua Water Company, and nonpotable water provided by the Honolua Ditch, with nonpotable water for fire protection coming from the reservoirs; (4) that MLP's wastewater allocation would cover the project's estimated usage; (5) that all 39 identified archaeological sites would be preserved; and (5) that an agreement to pay almost $700,000 had been entered into with the State Department of Education.

MLP distributed a brochure entitled "Cultivating Our Next 100 Years". MLP also provided your Committee with a copy of correspondence dated June 29, 2005, from the Wastewater Reclamation Division Chief, Department of Public Works and Environmental Management, relating to capacity at the Lahaina Wastewater Reclamation Facility (LWRF) and MLP's remaining wastewater allocations.

The Planner summarized the requested changes to the West Maui Community Plan, the proceedings before the Maui Planning Commission, and the Change in Zoning conditions recommended by the Maui Planning Commission.

The Director of Housing and Human Concerns commented on the Department's updated recommendation for an affordable housing condition, noting MLP's willingness to provide affordable housing units equaling 25 percent of the market-priced units,


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composed of 48 for-sale units and 125 rental units at 50 percent to 140 percent of median income. The Director noted that the projected rental payments include utilities.

Your Committee discussed the timing of construction of affordable units and the phasing of market-priced units over the next 15 years; and possible locations for affordable units, all of which would be provided outside of the project area, in Napili and Kapalua, as well as at the proposed Pulelehua project.

Mr. McNatt informed your Committee that Kapalua Mauka is "intended to be a resort product". He noted that MLP employees would have first choice at the affordable units, and if any affordable units remained after qualified employees were considered, those units would be open to others in the community. Accordingly, your Committee questioned the distribution ofMLP employees across the affordable income categories.

Your Committee discussed the possibility of allowing renters of affordable units the option to buy, which MLP agreed to consider. MLP also agreed to consider extending buy-back restrictions from 10 years to 15 years.

Mr. McNatt informed your Committee that the affordable rentals would all be multi-family units, with a mix of one-, two-, and three-bedroom units. The affordable for-sale units would likely consist of a mix of single-family and multi-family units. Your Committee requested a breakdown of the number of affordable units by square footage and number of bedrooms.

The Planning and Development Division Chief informed your Committee that the Department is discussing with MLP the possibility of a 60-acre park site for the Napili area. He stated that the park dedication requirement for the 690-unit project would consist of roughly 8 acres or a cash equivalent of about $7 million. He further noted that the Department needed an opinion from the Corporation Counsel as to whether the park dedication requirement would also apply to time share units.

The Planning Director informed your Committee that neither the Department of Police nor the Department of Fire and Public Safety anticipates the need for additional facilities as a result of the project.

Your Committee questioned specifics relating to the stream restoration program. Mr. McNatt informed your Committee that MLP would not divert any additional water from the streams for the project.


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Your Committee deferred consideration of the application pending further discussion.

By correspondence dated July 18, 2005, the Chair of your Committee requested that Pamela English, Development Manager, MLP, respond to various questions posed by your Committee at its July 13, 2005 meeting, relating to affordable housing, short-term rental units, and the proposed stream restoration program.

By correspondence dated July 18, 2005, the Chair of your Committee requested that the Department of the Corporation Counsel opine on a question presented by the Planning and Development Division Chief, Department of Parks and Recreation, regarding whether the park dedication requirement under MCC Section 18.16.320 would apply to the 250 units for which short-term rental uses could be authorized.

By correspondence dated July 18, 2005, the Chair of your Committee requested that the Director of Housing and Human Concerns provide information relating to the inclusion of utility costs in rates for affordable rentals; a comparison of the mortgage payment versus the rental payment for specific income categories; and a response indicating how any list of applicants for affordable rentals would be maintained, how applicants would be prioritized, and how affordable rentals would be managed.

By correspondence dated July 18, 2005, the Chair of your Committee requested that the Planning Director provide a comprehensive summary of all West Maui residential development projects spanning the next 15 years, including the number and type of units.

By correspondence dated July 25, 2005, Pamela English, Development Manager, MLP, responded to your Committee's request. She noted that potential locations for the affordable housing component of the project include the Pulelehua project (if land use entitlements are obtained) and land zoned M-l Light Industrial District adjacent to the Maui Preparatory Academy. She provided a preliminary breakdown of units for each of these locations by size, number of bedrooms, and whether the units would be offered as rentals or sales. Ms. English advised that an interest list for Pulelehua contains 2,776 names, including 210 MLP employees whose household incomes are less than 140 percent of the median. In addition, she confirmed that MLP would consider extending the buy-back restrictions from 10 years to 15 years and outlined MLP's efforts to manage water resources, including West Maui streams.


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By correspondence dated August 2, 2005, the Director of Housing and Human Concerns confirmed that utility costs are included in affordable rental rates, provided a chart illustrating the difference in mortgage and rental payments for various income groups, and indicated that the list of applicants would be maintained by MLP, with a pre-set prioritization scheme.

By correspondence dated August 10, 2005, the Planning Director provided a projected summary of West Maui residential development projects through 2020, categorized by stage in the land use approval process, and noted a total planned and proposed project build out of 6,432 units.

By correspondence dated August 17, 2005, Ryan Churchill, Vice President, Community Development, MLP, provided a list of proposed amendments to the Change in Zoning conditions and a matrix reflecting the size and number of units contemplated for MLP' s affordable housing component.

By correspondence dated August 18, 2005, the Chair of your Committee requested that Pamela English, Development Manager, MLP, provide a copy of the appropriate title document establishing the current ownership of the subject property.

By correspondence dated August 25, 2005, Pamela English, Development Manager, MLP, transmitted a copy of a title report dated August 15,2005 and a Policy of Title Insurance dated August 12,2004.

By correspondence dated August 30, 2005, the Chair of your Committee transmitted a map from the Planning Director entitled "West Maui Development Projects - Kapalua to Lahaina Town".

By correspondence dated August 31, 2005, the Chair of your Committee transmitted a copy of correspondence dated June 22, 2005, from the Wastewater Reclamation Division Chief, Department of Public Works and Environmental Management, to Ryan Churchill, MLP, noting that MLP has a remaining allocation at the L WRF of 177,11 0 gallons per day (gpd) and is expected to generate 176,000 gpd from the subject project.

At its meeting of August 31, 2005, your Committee met with the Planning Director; a Planner, Department of Planning; the Deputy Director of Public Works and


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Environmental Management; the Director of Housing and Human Concerns; the Deputy Director of Parks and Recreation; a Captain, Department of Police; a Captain, Department of Fire and Public Safety; and a Deputy Corporation Counsel.

Your Committee also met with the following representatives on behalf of the applicant: Robert McNatt, Executive Vice President, Maui Land & Pineapple Company, Inc.; Warren Suzuki, Senior Vice President, Maui Land & Pineapple Company, Inc.; Ryan Churchill, Vice President, Maui Land & Pineapple Company, Inc.; Wes Nohara, Vice President of Farm Operations, Maui Land & Pineapple Company, Inc.; Pamela English, Development Manager, Maui Land & Pineapple Company, Inc.; Tom Schnell, Associate, PBR Hawaii, applicant's land use planner; Warren Unemori, Warren S. Unemori Engineering, Inc., applicant's civil engineering consultant; and Rick Kiefer, Kiefer and Merchant LLC, applicant's attorney.

Your Committee received public testimony from ten individuals, six in support of the project, two opposed to it, and two who stated no position on the project. Five testifiers in support of the project were employees of MLP or its affiliates, and testified generally about its history and operations; how the project would assist MLP to reinvest in the community; MLP's role in supporting jobs, the economy and the environment; and the affordable housing opportunities that would be provided. The fifth testifier in support testified about the support given the Maui Preparatory Academy and MLP's stewardship.

The testifiers in opposition questioned infrastructural capacity to support the project and the sufficiency of the environmental impact statement, whether project units would provide housing for existing residents, and at what cost the affordable units were being achieved. A testifier who stated no position on the project asked your Committee to consider the broader picture for development in West Maui, and objective criteria for projects and for project applicants. The second testifier who stated no position on the project noted concerns related to water issues and requested that your Committee consider a condition to ensure adequate stream flows. She also noted concerns over the lack of on-site affordable housing, protection of marine districts, and run-off associated with siting on steep slopes.

One of the testifiers in support of the project also submitted written testimony. A testifier who stated no position on the project also submitted written testimony containing a proposal for decision-making criteria to consider for the future of West Maui.


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The Director of Housing and Human Concerns provided the following documents: (1) a chart estimating the first-time homebuyer housing needs; (2) a chart estimating rentals needed for 2003-2007; and (3) a two-page excerpt of findings from a 2003 Hawaii Housing Policy Study.

Mr. McNatt provided a brief update to your Committee. He noted that MLP had decided to offer 40 affordable units constructed prior to or concurrent with the first market-rate unit, and buy-back restrictions of 15 years rather than 10.

The Planning Director presented an overview of the Department's response dated August 10, 2005, regarding pending West Maui projects, to place the subject application in the context of other development proposed for West Maui.

The Director of Housing and Human Concerns informed your Committee that the Department would like the affordable housing to be developed as soon as possible, that the Department was unsure how practical it would be to intersperse the affordable units with multi-million dollar homes in a resort area, and that it therefore found the proposal to locate the affordable units outside of the Project District but within the Community Plan area acceptable. She noted that MLP is considering the old "Rainbow Ranch" site for some of the affordable units. A Committee member noted that that site is zoned Light Industrial, and that she had been informed by MLP that MLP would like to have a mix of light industrial, retail, commercial and multi-family uses on the property.

The Director of Housing and Human Concerns commented on the applicability of the affordable housing policies for hotel-related developments under MCC Chapter 2.94 to the project. Your Committee discussed the prioritization of affordable housing applicants proposed by MLP, options available in determining the number and type of affordable units to be provided, monitoring compliance with the provision of affordable units, the possibility of extending the period for which affordable housing applicants are permitted to qualify, and the demand for affordable housing in West Maui.

Your Committee noted the remaining allocation at the Lahaina Wastewater Reclamation Facility marginally exceeds the amount expected to be generated by the project. The Deputy Director of Public Works and Environmental Management advised that the affordable units had not been accounted for within the allocation, but would need to draw from the County's available capacity. He also noted that capacity could be increased with system modifications. He further noted that the Department has not evaluated drainage and traffic impacts associated with the affordable units.


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The Deputy Director of Parks and Recreation informed your Committee that the Department is in negotiations with the applicant for either a combination of cash contributions and land, or land only, in fulfillment of the park dedication requirement. The Department is considering developing a district park of about 50 acres outside of the Project District and in the vicinity of the Kapalua Airport.

Your Committee questioned whether the property that was the subject of a land exchange between MLP and the State would be counted toward MLP's requirement for park dedication requirement under MCC Section 18.16.320. Your Committee also questioned whether the use of treated effluent had been considered to irrigate such a park, and whether a storage facility that might be necessary to facilitate such use would be available.

The Captain, Department of Police, stated that the Department does not anticipate traffic congestion as a result of the project. However, the Department recommends adding beats to the West Maui area, and over the long term, the Department will probably require a new facility. Your Committee also discussed the status of roadway projects impacting West Maui.

The Captain, Department of Fire and Public Safety, stated that the Department does not have any specific requests arising from the project, but that it is interested in starting discussions for a site north of the project that could accommodate both the Department of Fire and Public Safety and the Department of Police in the future. He noted that the Department of Fire and Public Safety had not had an opportunity to review and provide written comments on the application. Your Committee discussed demands that might be placed on the Department as a result of increased fire alarm systems in the project units.

The Planning Director clarified certain points raised through public testimony and Committee discussion. He noted that proposed developments in the area of Launiupoko to Ukumehame, which had been omitted from the Department's summary, would total approximately 4,000 units; that the Department feels that one of the areas being considered for affordable units, at the corner of Napilihau and Honoapiilani Highway, would be appropriate for that use; and that the Department feels transient vacation rental use is appropriate in a resort area.


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The Planning Director also commented that the Department supports this project, noting that the Community Plan amendment calls for a reduction in the number of units that would be allowed and a decrease in project density; the market-priced housing would have a slow absorption rate and would not be expected to generate high levels of traffic; and the project would rely on private water. Your Committee questioned the status of funds appropriated to the Department for cost of community services studies.

Your Committee questioned whether the environmental impact statement had considered possible time share and transient vacation rental uses, and whether the Office of Environmental Quality Control and the LUC had considered such uses in evaluating the application. Your Committee also discussed jurisdictional issues relating to stream management, and requested that the applicant provide the Council and the Department of Water Supply with copies of its stream restoration program prior to the issuance of any building permit for the project.

Mr. McNatt informed your Committee that MLP would be willing to offer a firsttime home buyers' program of $250,000, reiterating that MLP's preference would be for the funds to go to its qualifying employees and for the program to be privately administered. Your Committee requested that MLP consider providing additional monies for a rental assistance program.


By correspondence dated September 22, 2005, the Vice-Chair of your Committee requested that the Director of Housing and Human Concerns comment on a proposed Change in Zoning condition that would require MLP to provide annual status reports relating to affordable housing.

By correspondence dated October 5, 2005, the Director of Housing and Human Concerns commented that the status report condition is acceptable while suggesting possible revisions to the condition.

By correspondence dated October 18, 2005, the Council Chair requested that the Department of the Corporation Counsel opine whether bed and breakfast operations would be allowed in the Project District; and whether time share units, time share plans, and transient vacation rentals are allowable in the Project District, given the provisions of Section 19.37.010, MCC, restricting such uses and plans to the hotel district.


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By correspondence dated October 19, 2005, the Chair of your Committee requested that the Fire Chief provide comments on the application and on a hypothetical situation raised by your Committee involving land for a fire station in Honolua, along with a response concerning the potential requirements for new facilities, additional equipment, and manpower anticipated to service the area as a result of the build out contemplated by the subject application.

By correspondence dated October 19, 2005, the Chair of your Committee requested that Pamela English, Development Manager, MLP, provide written confirmation that copies ofMLP's stream restoration program would be provided prior to obtaining building permits for any market-priced units; and a response concerning any possible increase in the funding proposed for the first-time home buyers' and rental assistance program discussed.

By correspondence dated October 19, 2005, the Chair of your Committee requested that the Director of Public Works and Environmental Management provide a copy of the Lahaina Wastewater Reclamation Facility Expansion Agreement between MLP, Kapalua Waste Treatment Company, and the County.

By correspondence dated October 19, 2005, the Chair of your Committee requested that the Director of Parks and Recreation provide information relating to MLP's park dedication requirement under Section 18.16.320, MCC, and the use of treated effluent and the availability of a storage facility to service the proposed district park located above the Kapalua Airport.

By correspondence dated October 19, 2005, the Chair of your Committee also requested that the Director of Public Works and Environmental Management comment on the feasibility of using treated effluent and the availability of a storage facility to service a possible district park located above the Kapalua Airport.

By correspondence dated October 19, 2005, the Chair of your Committee requested that the Department of the Corporation Counsel opine on the Council's parameters in revising the affordable housing conditions being proposed, and review MLP's proposed revisions to Condition Nos. 6, 10, 11, 12 and 14.

By correspondence dated October 19, 2005, the Chair of your Committee requested that the Planning Director respond whether the departments have considered


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the impacts and infrastructural requirements of the proposed affordable housing units in commenting on the project, and whether the affordable housing units should be evaluated for impacts and infra structural requirements by the departments. The Chair of your Committee also requested an update on the use of funds appropriated in the Fiscal Year 2006 Budget for cost of community services studies.

By correspondence dated October 20, 2005, the Director of Public Works and Environmental Management transmitted a copy of the Lahaina Wastewater Reclamation Facility Expansion Agreement between MLP, Kapalua Waste Treatment Company, Ltd., and the County.

By correspondence dated October 24, 2005, the Fire Chief transmitted a copy of his correspondence dated October 24, 2005 to the Planning Director, commenting on the application; noting that the Department of Fire and Public Safety feels its ability to handle fire emergency services is sufficient at this time and that it does not anticipate the project requiring more facilities, equipment, or manpower; and stating that the Department would appreciate MLP considering designating a portion of property north of Honolua Bay for emergency services in the future.

By correspondence dated October 26, 2005, the Director of Parks and Recreation responded as follows: (1) that the mauka-makai pedestrian path and bicycle trail satisfies the park dedication requirement for the Pineapple Hill at Kapalua, Phase II; (2) that the Department intends to use the park dedication requirement for the project "as part of the acquisition process" for the area mauka of the Kapalua Airport, which has been identified for a 50- to 60-acre future park site; and (3) that the Department intends to use treated effluent to the extent feasible to irrigate the proposed park.

By correspondence dated October 27, 2005, Robert McNatt, Executive Vice President, MLP, confirmed that MLP would provide copies of its stream restoration program, and noted that MLP would consider the possibility of additional funding for a first-time home buyers' program.

By correspondence dated October 27, 2005, the Planning Director explained that there are normally four ways in which applicants propose to provide required affordable housing units, and that MLP is proposing to provide its affordable housing requirement off-site, with the permit process handled separately from the overall project. According to the Planning Director, in such a case, the impacts of the affordable housing units are analyzed as part of the permit process for those units and not the subject project. The


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Planning Director also responded that the Department is in the process of procuring a consultant for the cost of community services study.

By correspondence dated October 28, 2005, the Director of Public Works and Environmental Management noted support for the use of reclaimed water at the proposed district park and summarized improvements that would be necessary to deliver such water from the L WRF.

By correspondence dated November 1, 2005, the Chair of your Committee requested that Pamela English, Development Manager, MLP, comment on the Fire Chiefs response dated October 24, 2005, regarding the possible setting aside of land north of Honolua Bay to be used for emergency services in the future.

By correspondence dated November 4, 2005, the Chair of your Committee requested that the Department of the Corporation Counsel respond to your Committee's October 19,2005 request.

By correspondence dated November 4, 2005, Robert McNatt, Executive Vice President, MLP, responded to the Fire Chiefs comments, noting that MLP understands that current needs are adequately addressed in the Kapalua area, and that when the Department of Fire and Public Safety determines that another station is warranted, MLP will work with the Department to determine the best site if it is to be located on land owned by MLP.

By correspondence dated November 14, 2005, the Council Chair transmitted a copy of a response dated November 14, 2005, from the Department of the Corporation Counsel, stating that: (1) the proposed bill to establish the Project District does not allow for bed and breakfast homes; and (2) pursuant to Section 19.45.030(B), MCC, project district ordinance provisions control notwithstanding any conflicting provisions of the Maui County Code, and that time share units, time share plans, and transient vacation rentals would be allowed in the Project District under the bill as drafted.

By correspondence dated November 15, 2005, the Department of the Corporation Counsel responded that: (1) any affordable housing condition imposed must meet the requirements of Section 19.510.050, MCC, and the constitutional parameters associated with that section; (2) if MLP's applications for land use entitlements for the Pulelehua project are denied, MLP will remain bound by Condition No.1 of the LUC Decision and Order, such that MLP may need to petition the LUC to have the condition amended; and


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(3) LUC Condition No.1 does not restrict the Council's power to adopt an appropriate affordable housing condition that may consider locations other than Pulelehua.

By correspondence dated November 16, 2005, the Vice-Chair of your Committee transmitted a document containing three proposed revisions to the affordable housing condition, received from MLP on November 15, 2005.

At its meeting of November 16, 2005, your Committee met with the Planning Director; a Planner, Department of Planning; the Director of Public Works and Environmental Management; the Director of Housing and Human Concerns; a Captain, Fire Prevention Bureau, Department of Fire and Public Safety; the Corporation Counsel; and a Deputy Corporation Counsel.

Your Committee also met with the following representatives on behalf of the applicant: Robert McNatt, Executive Vice President, Maui Land and Pineapple Company, Inc.; Brian Nishida, President, Maui Pineapple Company; Warren Suzuki, Senior Vice President, Maui Land and Pineapple Company, Inc. ; Ryan Churchill, Vice President, Maui Land and Pineapple Company, Inc.; Wes Nohara, Vice President of Farm Operations, Maui Land and Pineapple Company, Inc.; and Pamela English, Development Manager, Maui Land and Pineapple Company, Inc.

Your Committee received public testimony from nine individuals, four in support of the project, three opposed to it, and two who stated no position on the project. Three of the testifiers in support of the project were current or former employees of MLP, and testified about the important role the project would play in keeping MLP in agriculture; about MLP's contributions to equity, economy, and ecology; and about the need to create housing that would allow MLP's employees to spend more time with their children. The fourth testifier in support of the project was the head of Maui Preparatory Academy and testified about the support MLP has given to the school.

Two of the testifiers opposed to the project voiced concerns over the use of stream water for the project, one stating she is a landowner in Honokohau Valley and the other stating that the streams are dry. The other testifier in opposition stated that the environmental impact statement did a disservice to the community by segmenting MLP's projects, thereby declining to evaluate cumulative impacts in the region, and discussed existing and planned developments in West Maui and related impacts. A testifier who stated no position on the project encouraged your Committee to consider who would be good stewards for West Maui, and the other testifier focused on historical use of stream


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water and asked the Council to consider requiring use of reclaimed water for MLP's projects.

A testifier who opposed the project also submitted a map and chart reflecting planned development for West Maui. The two testifiers who stated no position on the project also submitted written testimony - one concerning the future of West Maui, and the other relating to "Honolua & Honokohau Aquifers - Maui Land & Pine KapalualHonolua Water Use" for the time period January 1988 through October 2002, as well as Honokohau water sales to Pioneer Mill.

Mr. McNatt informed your Committee that MLP has struggled financially and must reposition itself at the premium end of the market to survive. This project is instrumental to that goal. He summarized key conditions being proposed for the project. He noted that the affordable housing component is critical because MLP is having difficulty attracting employees who will move to West Maui. He also noted that MLP has decided to increase proposed funding for its first-time home buyers' and renters' program to $500,000. Mr. McNatt advised that no additional water would be diverted from Honokohau Stream for the project, and that MLP will commit that if anyone wants to grow taro in Honokohau Valley, the water will be there for that taro. In addition, MLP will commit to fulfill the park dedication requirement for all project units, including in the unit count those units that could be used for transient vacation rentals or time share purposes.

The Planning Director noted that the Department has no objections to MLP's first or third proposed revisions to the affordable housing condition, transmitted by correspondence dated November 16, 2005 from the Vice-Chair.

The Director of Housing and Human Concerns stated that the Department has no objection to the 120-day offering period for applicants to be qualified for affordable income categories. She further advised that the Department has no objection to MLP appointing individuals to provide oversight for its first-time home buyers' fund.

Your Committee discussed whether MLP's intended employee preference for affordable units is appropriate. The Director expressed the view that MCC Chapter 2.94 provides for a 1:4 ratio of affordable units to market-priced units; that the provision applies to the project, which she views as resort in nature; and that the project would generate new employees and the need for affordable housing. Your Committee questioned this interpretation and whether the affordable units should be equally available


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to income-qualified households, without regard to the identity of the applicant's employer.

The Corporation Counsel advised that Chapter 2.94 neither requires nor prohibits the reservation of affordable units for employees. He opined that the Chapter applies to affordable units when hotel or motel or apartment-hotel units are being created, and that some of the subject units would fall under that definition. He also noted that one of the traditional bases for imposing affordable housing conditions on projects is a finding that the project would generate employment and employees would require homes.

Your Committee also considered the following factors as providing a nexus for affordable housing: that the speculative nature of the market units does not address the housing needs of residents of Maui County or the goals or objectives of the community plan; and that the project is depleting a pool of very finite resources that would otherwise be available for resident housing. Your Committee also notes that MLP did volunteer and agree to the creation of up to 173 affordable units, if the maximum of 650 marketpriced units are developed, at the 1:4 ratio of affordable units to market-priced units.

The Director of Public Works and Environmental Management explained issues relating to design of the Lahaina Wastewater Reclamation Facility, its capacity, and potential increases in capacity. He advised that the Department currently estimates useable capacity at the plant is 5.2 million gallons per day (mgd), but that such capacity could be increased to 7.0 mgd with additional system modifications, requiring $500,000 to $1 million. Your Committee discussed the number of additional units that could be accommodated with the increased capacity. Your Committee questioned the timing for capacity increases, and also discussed the feasibility of connecting the project to a reclaimed water line and the current amount of reclaimed water being generated out of the facility.

The Captain, Department of Fire and Public Safety, noted that the proposed Pulelehua project had also been considered in the Department's comments, and that the Napili Fire Station is capable of handling both Pulelehua and Kapalua Mauka at this time.

Mr. McNatt informed your Committee that the revenue stream expected to be generated by the project bears directly on MLP's ability to sustain its agricultural activities. Mr. Nishida described efforts undertaken by MLP to improve its pineapple operations and remain competitive. Mr. Nohara advised that MLP will maintain approximately 2,000 acres in pineapple.


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Your Committee questioned claims that the survival of MLP' s agricultural operations is at stake. Noting that MLP had estimated its project costs in its petition to the LUC, your Committee questioned anticipated profits as of that date.


By correspondence dated November 18, 2005, the Vice-Chair of your Committee requested that Pamela English, Development Manager, MLP, provide MLP's projected profits from the proposed project as of the date its petition was filed with the LUC.

By correspondence dated November 18, 2005, the Vice-Chair of your Committee requested that the Director of Public Works and Environmental Management provide the Department's timeline for increasing capacity at the LWRF from 5.2 mgd to 6.0 mgd, and the current amount of reclaimed water being generated out of the L WRF.

By correspondence dated November 25,2005, the Director of Public Works and Environmental Management responded that the Department would be conducting testing through March 2006 to see whether process changes will increase capacity at the L WRF by 0.8 mgd, that the Wastewater Reclamation Division is beginning design on a Fiscal Year 2008 construction project to allow the plant to process up to 9.0 mgd, and that the L WRF has generated an average of 1.4 mgd per month of reclaimed water from July through September 2006.

By correspondence dated November 29, 2005, Robert McNatt, Executive Vice President, MLP, stated that MLP did not have an overall profit expectation for the project at the time it submitted its petition to the LUC.

By correspondence dated December 2, 2005, Laurie Lowson requested that no further development occur in West Maui until the bypass has been completed.

By correspondence dated December 5, 2005, the Chair of your Committee transmitted an article from the December 3, 2005 issue of The Maui News, entitled "LUC questions affordable numbers".


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By correspondence dated December 6, 2005, Councilmember Michelle Anderson transmitted correspondence dated December 5, 2005, from Kathryn Snyder, stating that ohana rentals at Pulelehua would not provide affordable housing.

At its meeting of December 7, 2005, your Committee met with the Planning Director; a Planner, Department of Planning; the Administrative Planning Officer, Department of Planning; the Deputy Director of Public Works and Environmental Management; the Director of Housing and Human Concerns; the Deputy Director of Parks and Recreation; the Corporation Counsel; and a Deputy Corporation Counsel.

Your Committee also met with the following representatives on behalf of the applicant: Robert McNatt, Executive Vice President, Maui Land & Pineapple Company, Inc.; Warren Suzuki, Senior Vice President, Maui Land & Pineapple Company, Inc.; Ryan Churchill, Vice President, Maui Land & Pineapple Company, Inc.; Wes Nohara, Vice President of Farm Operations, Maui & Pineapple Company, Inc.; Pamela English, Development Manager, Maui Land & Pineapple Company, Inc.; Tom Schnell, PBR Hawaii, applicant's land use planner; Warren Unemori, Warren S. Unemori Engineering, Inc., applicant's civil engineering consultant; and Rick Kiefer, Kiefer and Merchant LLC, applicant's attorney.

Your Committee received public testimony from two individuals, one in support of the project and one who stated no position on the project. The testifier in support of the project was the Academic Dean and Assistant Head of the Maui Preparatory Academy, and noted the importance of the success of the project and the success of the school, and the support MLP has given the school. The other testifier was a resident of Honokohau and informed your Committee that residents do have water there, and that the proposed project would not take water away from those residents.

The Deputy Corporation Counsel provided comments on the proposed affordable housing condition as it applies to this project, and the way in which MLP intends to administer the affordable units. First, he noted that he had been asked to consider whether there would be any illegality in MLP exercising its stated intention of giving its employees a preference for the affordable units. The Deputy advised that if the Council were to remain silent on whether or not such a preference is permissible, and MLP applied such a preference, the Department had not identified any violations of State, County, or Federal law by the Council that would occur. Second, he noted that he had been asked whether the Council could, within its zoning powers, prohibit such a preference. The Deputy advised that, if the Council in reviewing the applicable standards


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for creating Change in Zoning conditions, concluded that it was necessary to incorporate prohibitions against such a preference, it would be within the Council's powers to frame such a condition. Finally, the Deputy noted that he had been asked whether MCC Chapter 2.94 applies to the Project District. He responded that, as long as some hotel development is being created, it would be appropriate to apply Chapter 2.94 to those situations.

Mr. McNatt provided your Committee with an overview of MLP's proposal for providing affordable housing. He noted that MLP would provide one affordable unit within the Community Plan area for every four market-priced units, with a total of 173 affordable units at full project build out. MLP would like to begin construction in 2007, with the first units available in 2008. MLP anticipates constructing about 60 marketpriced units per year, depending on market conditions. MLP would provide 40 affordable units up-front and currently anticipates those units would be located across Honoapiilani Highway from Napili Plaza. The remaining 133 affordable units would be located within the Community Plan area, at the proposed Pulelehua site or elsewhere. He confirmed that the proposed Pulelehua project would not need to be approved in order for the affordable unit requirement to be satisfied. He also agreed that, after the first 40 affordable units, MLP would commit to build one affordable unit for every four market-priced units until the remaining 133 affordable units are built, rather than wait until 160 market-priced units had been built to build additional affordable units. Mr. McNatt also stated that MLP is motivated to build its affordable housing component as quickly as it can.

Your Committee questioned whether MLP would build employee housing if the Council were to impose a condition that prohibited MLP from giving its employees a preference for the affordable units. Mr. McNatt responded that MLP would probably not accept such a condition.

Mr. McNatt advised your Committee that the 15 affordable housing credits MLP had been granted for its Kapua Village project in Kahana are restricted to Lahaina Project District 1 (Kapalua Mauka) (property makai of Honoapiilani Highway), and therefore could not be used to satisfy the affordable unit requirement for this project.

Your Committee probed the method being used by MLP to count affordable units being used to satisfy the requirement for this project, all of which would be built outside the Project District and would necessarily be part of a separate, stand-alone project such as, hypothetically, the proposed Pulelehua project. Your Committee emphasized that the


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concern is that the same affordable housing units not be double counted as fulfilling the affordable housing requirement for two separate projects.

Your Committee noted that the breakdown of affordable units within Income categories that had earlier been provided by MLP through its matrix had not been incorporated into the proposed Change in Zoning conditions. MLP agreed that the breakdown could be incorporated.

Mr. McNatt informed your Committee that the 48 affordable units that would be offered for sale would be those units in income ranges from 101 percent to 140 percent of median income. He also informed your Committee that alternative locations for affordable housing units, in the event the proposed Pulelehua project is not approved, had not been identified.

Your Committee discussed salary ranges that would qualify for affordable housing by income category, and what would occur if the renter is no longer an employee or if his or her salary increases outside of the qualifying income range.

Your Committee voiced concerns over (1) limited infrastructural resources being dedicated to such high-end housing; and (2) removing vital agricultural land out of production for this purpose.

Your Committee voted to recommend passage of the revised proposed bill entitled "A BILL FOR AN ORDINANCE AMENDING ORDINANCE NO. 2476 (1996), THE WEST MAUl COMMUNITY PLAN AND LAND USE MAP, FROM AGRICULTURAL AND OPEN SPACE TO WEST MAUl PROJECT DISTRICT 2 (KAP ALUA MAUKA), FOR PROPERTY SITUATED ON THE SOUTHEASTERLY SIDE OF HONOAPIILANI HIGHWAY, AT HONOKAHUA, NAPILI, LAHAINA, MAUl, HAW All".

Your Committee expressed continuing concerns about the time share and transient vacation rental components of the proposed Project District, and the appropriateness of such uses outside of the hotel district. Your Committee noted that, as proposed, over onethird of the units in the project could be used for such purposes. Your Committee expressed a reluctance to permit further expansion of the short-term rental industry. Your Committee also noted that the Project District had originally been intended for recreational amenities along with residential uses.


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Your Committee recommended that all references to short-term rentals, including time share and transient vacation rentals, be deleted from the proposed Project District bill.

Your Committee noted that the proposed Project District bill measures "maximum height" by "finished grade" and expressed reservations over grading alterations that might occur, affecting view planes. Your Committee recommended that all references to "finished grade" be revised to read "finished or existing grade, whichever is lower". The Planning Director noted that this proposed revised language is consistent with the Maui County Code at present.

Your Committee discussed how the uses allowed within the four subdistricts vary from uses that would otherwise be allowed under the Maui County Code. Mr. McNatt advised your Committee that MLP is seeking to keep the Project District flexible by allowing for the range of uses provided in the proposed bill. He also indicated that it is very likely the golf course would be expanded into the Rural area.

The Planning Director advised your Committee that proposed revisions to the Maui County Code are being considered that would in essence state that building height is measured from the top of the structure to the existing or finished grade, whichever is lower, unless there has been a review of the grading plan in conjunction with a public hearing.

Your Committee voted to recommend passage of the revised proposed bill entitled "A BILL FOR AN ORDINANCE AMENDING TITLE 19, MAUl COUNTY CODE, TO ESTABLISH WEST MAUl PROJECT DISTRICT 2 (KAPALUA MAUKA)", as amended.

Your Committee discussed the logistics of the proposed 120-day offering period for the affordable units.

Mr. McNatt advised your Committee that MLP does not have an agreement with the International Longshore and Warehouse Union (ILWU) to earmark housing specifically for ILWU members. He surmised that the ILWU may have been alluding to its members who are also employees ofMLP being given a housing preference.

Your Committee considered various changes to the revised proposed Change in Zoning bill, separating out proposed Condition Nos. 10, 11, and 12 for discussion.


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Your Committee discussed Condition No. 10 of the Change in Zoning bill, relating to traffic impact assessments, expressing concerns that the condition as worded would not provide flexibility in the event a traffic impact fee is adopted that is greater than $3,500 per dwelling unit. Your Committee considered, and rejected, the revision proposed by MLP by correspondence dated August 17, 2005. The Corporation Counsel suggested that your Committee's concern might be alleviated by replacing the word "satisfy" with "be credited against" in the last sentence of the condition. Following further discussion, your Committee offered the alternative revisions below (additions are underlined, and deletions are bracketed):

"10. That, as represented by Maui Land & Pineapple Company, Inc., a voluntary contribution for road and traffic improvements in the West Maui Community Plan region shall be provided by Maui Land & Pineapple Company, Inc. to the County of Maui in the amount of $3,500.00 or the prevailing rate in effect at the time of final subdivision approval, whichever is greater, per dwelling unit in the West Maui Project District 2 (Kapalua Mauka). This contribution shall be made prior to issuance of a building permit. An agreement between Maui Land & Pineapple Company, Inc. and the County of Maui shall be executed and recorded setting forth the terms and conditions of the voluntary contribution prior to Phase II Project District approval. [This contribution shall satisfy traffic impact assessments or similar assessments which may be imposed regarding the project under Chapter 14.62, Traffic Impact Fees for Traffic and Roadway Improvements in West Maui, Maui County Code, or otherwise. ]"

Your Committee recommended that Condition No. 10 of the Change in Zoning bill be revised as noted immediately above.

Your Committee proposed that Condition No. 12 of the Change in Zoning bill, relating to initiation of a stream restoration program, be revised to read: "That a stream restoration program shall be initiated immediately to establish in-stream flow standards for Honokohau and Honolua Streams to be reviewed and approved by the Commission on Water Resource Management as prescribed in the State Water Code.". Your Committee questioned whether such a condition would be enforceable in light of the authority granted to the Commission under Section 17 4C-7 of the Hawaii Revised Statutes. The Corporation Counsel noted that he assumed the condition was not intended to usurp the powers of the Commission but to require MLP to fund the necessary research to develop in-stream flow standards. Your Committee considered the revision proposed


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by MLP by correspondence dated August 17, 2005, which replaces the existing proposed condition with the following language: "Maui Land & Pineapple Company, Inc. shall comply with the State Water Code and the directives of the State Commission on Water Resource Management regarding Honokohau and Honolua streams.".

MLP provided your Committee with a revised condition, consisting of the first sentence below, and confirmed that it is MLP's intention to fund the studies necessary to support the petition. Your Committee added the second sentence to confirm that intent, as follows:

"12. [That a stream restoration program shall be initiated for Honokohau and Honolua Streams.] That Maui Land & Pineapple Company, Inc. shall immediately petition the State Commission on Water Resource Management to establish in-stream flow standards for Honokohau and Honolua Streams in accordance with the State Water Code. Any data necessary to support the petition will be paid for by Maui Land & Pineapple Company, Inc."

Your Committee recommended that Condition No. 12 of the Change in Zoning bill be revised as noted immediately above.

Your Committee recessed its meeting to December 12,2005.

By correspondence dated December 8, 2005, the Chair of your Committee requested that Committee members make available in writing any proposed amendments to the Change in Zoning conditions at the Committee's reconvened meeting of December 12, 2005.

By correspondence dated December 9, 2005, the Chair of your Committee transmitted a consolidated set of proposed conditions of zoning from the Maui Planning Commission (as revised at the Committee's December 7,2005 meeting) and from MLP.

At its reconvened meeting of December 12, 2005, your Committee met with the Planning Director; a Planner, Department of Planning; the Deputy Director of Public Works and Environmental Management; the Deputy Director of Parks and Recreation; the Corporation Counsel; and a Deputy Corporation Counsel.

Your Committee also met with the following representatives on behalf of the applicant: Robert McNatt, Executive Vice President, Maui Land and Pineapple


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Company, Inc.; Warren Suzuki, Senior Vice President, Maui Land and Pineapple Company, Inc.; Ryan Churchill, Vice President, Maui Land and Pineapple Company, Inc.; Pamela English, Development Manager, Maui Land and Pineapple Company, Inc.; Tom Schnell, PBR Hawaii, applicant's land use planner; and Rick Kiefer, Kiefer and Merchant LLC, applicant's attorney.

At its meeting, your Committee received the following proposed amendments to the Change in Zoning conditions:

1. By correspondence dated December 8, 2005, from Councilmember Michael J. Molina, a proposed revision to the affordable housing condition (Condition No. 11 of the Change in Zoning bill), relating to MLP's contribution to a first-time home buyers' fund, to restrict it to employees "who earn up to 120 percent of the median income".

2. By correspondence dated December 12, 2005, from the Chair of your Committee, transmitting correspondence dated December 9, 2005, from the Planning and Development Division Chief, Department of Parks and Recreation, a proposed condition as follows: "The applicant agrees to enter into an agreement with the department of parks and recreation to use the park assessment fees from the Kapalua Mauka project to purchase approximately 60 acres of land for a future district park for the Napili region. The land will be located mauka of the West Maui airport and for which the shape and size will meet the satisfaction of the department of parks and recreation. The price of the land will be determined by the appraised value of the land based on its current agricultural use and upon mutual agreement of both parties.".

3. By correspondence dated December 12, 2005, from Councilmember Danny A. Mateo, suggested revisions to the affordable housing condition, as follows: (a) to insert the underlined language, to read, "Affordable dwelling units offered for sale shall be offered to qualified full-time Maui County resident owner-occupants only and shall be maintained as affordable for a 15 year minimum period through resale restrictions and buy back clauses."; and (b) to add the following: "That the affordable housing units required for this project shall not be counted towards the affordable housing requirement for any other project.".


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4. By correspondence dated December 12, 2005, from Councilmember Jo Anne Johnson, a proposed revision to the affordable housing condition, stating: "Prior to final subdivision approval, any affordable housing policies adopted by the County of Maui which would result in a greater number of affordable units shall be applicable.".

Your Committee also received further proposed revisions to the affordable housing condition from MLP, which primarily vary from MLP's earlier proposed condition in the following respects: (1) by revising the timing of the construction of affordable housing units so that, after the first 40 affordable units are completed, subsequent affordable units shall be completed prior to or concurrently with the completion of every 4 market-priced units; (2) by stating that the maximum potential affordable housing units required for the project would be 173 units; (3) by attaching a matrix delineating the breakdown of affordable housing units by income category and square footage; and (4) by providing parameters for qualification for the affordable rental units.

The Planning Director requested that your Committee consider revIsmg the definition of "height", which should state "the vertical distance measured from a point on the top of a structure to a corresponding point directly below on the natural or finished grade, whichever is lower." He noted that the definition should also provide, "For structures within projects that have received site plan approval in association with a Special Management Area permit, project area Phase II approval, or plan development phase II approval, finished grade shall be used to determine height.".

The Planning Director noted that on a project of this magnitude, it will be necessary to grade more than one site at a time, and that this language is consistent with the language being recommended to the Council for consideration. He noted that another alternative would be to state that the building height shall be measured in accordance with the Maui County Code at the time of the final building inspections. Your Committee voiced reservations about revising the definition of "height" to one that has not yet been adopted.

Your Committee recommended that MLP's proposed affordable housing condition transmitted by the Chair of your Committee by correspondence dated December 9, 2005, be substituted for the affordable housing condition recommended by the Maui Planning Commission. The proposed revised condition of the Change in Zoning bill reads as follows:


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"11. That Maui Land & Pineapple Company, Inc. shall provide at least one affordable dwelling unit for every four market-priced dwelling units that are constructed. Maui Land & Pineapple Company, Inc. has represented that affordable dwelling units will be offered only to full-time residents of the County of Maui to the maximum extent permitted by law.

a. One affordable dwelling unit must be completed prior to or concurrently with the completion of every four market-priced dwelling units provided that the forty (40) affordable dwelling units required for the first one hundred sixty (160) market-priced dwelling units in the project district must be completed prior to or concurrently with the completion of the first market-priced dwelling unit.

b. All affordable dwelling units must be located within the West Maui Community Plan area.

c. Affordable dwelling units offered for sale shall be offered to qualified, full-time owner-occupants only and shall be maintained as affordable for a 15 year minimum period through re-sale restrictions and buy back clauses.

d. That Maui Land & Pineapple Company, Inc. shall provide annual status reports to the Director of Housing and Human Concerns and the Council, commencing within one year of the effective date of the Change in Zoning, and ending five years after the last lot is sold. The status reports shall include: (a) the number of affordable units and market priced units proposed for development; (b) the number of affordable units and market priced units completed; (c) the number of affordable units and market priced units sold; (d) for each unit, the sales price, square footage, number of bedrooms and baths, and lot size; ( e) the income bracket for each purchaser of an affordable unit; (f) the number of units sold to individuals in each category on Maui Land & Pineapple Company, Inc. 's prioritization list; (g) for prioritized employees, the length of time working for that employer; (h) the number of units sold to individuals who are not qualified residents as defined in the housing agreement; (i) the number of units offered for resale and the number of units sold on the resale market, if any by both the developer as well as any other party; and G) any


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buyback provIsIons, owner-occupancy requirements, or ohana-unit restrictions that apply.

e. Affordable dwelling units must be offered for a minimum period of 120 days to potential renters or purchasers in the designated income bracket. If none qualify to rent or purchase within that time period, the units may be offered to potential renters or purchasers in each of the higher brackets, in order, until a qualified renter or purchaser is found.

f. That Maui Land & Pineapple Company, Inc. shall provide a voluntary contribution of $500,000 to a first-time home buyers' and rental assistance fund that will be held in escrow or trust and administered by Maui Land & Pineapple Company, Inc. for its employees. The contribution shall be made prior to the completion of the first market unit. Maui Land & Pineapple Company, Inc. shall provide annual updates to the Director of Housing and Human Concerns and the Council."

Your Committee considered the proposed revisions distributed by Councilmember Mateo at the meeting. With respect to incorporating the phrase "Maui County resident", the Deputy Corporation Counsel opined that if the language used for the qualification process is not durational, it may avoid constitutional challenges. Your Committee recommended that both revisions proposed by Councilmember Mateo be incorporated in the Change in Zoning bill.

Your Committee considered the proposed revision distributed by Councilmember Molina at the meeting. Councilmember Molina stated that the purpose of the amendment would be to ensure that the funds go to those employees who are most in need of them. He also noted that this fund would be administered by MLP and is unrelated to the County's first-time home buyers' fund. Your Committee recommended that the revision be incorporated in the Change in Zoning bill.

Mr. McNatt noted that a predetermined maximum amount might be provided to buyers for down payment assistance, or for renters, there might be a subsidy that could be provided for a set period of time.

Your Committee recommended that the affordable housing condition (Condition No. 11 of the Change in Zoning bill) be amended by adding a paragraph (h) to read: "That affordable dwelling units offered for rent shall be offered to qualified full-time


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Maui County resident occupants only and shall be maintained as affordable III

perpetuity." .

Your Committee provided flexibility to revise the order of the conditions in the proposed Change in Zoning bill and make further nonsubstantive revisions as necessary.

Your Committee recommended that the condition requiring status reports be amended to require reporting for all affordable dwelling units, including references to account for rentals as well as sales in subsections (c), (d), (e), (t), (h), and (i). Your Committee noted that the condition as drafted would sunset five years after the last lot is sold and questioned whether the reporting should continue in perpetuity due to the inclusion of reporting for rentals. Your Committee recommended that the sunset provision for the reporting requirement be deleted from the Change in Zoning bill.

Your Committee recommended that proposed Condition No. Il(e) of the Change in Zoning bill be revised to include the revisions proposed by MLP in the document received at the meeting, by referencing the attached matrix that reflects a breakdown of affordable units by income category, by attaching the matrix, and by including the following language at the end of the paragraph: ", provided that the affordable rental units shall not be rented to persons with incomes above the highest affordable bracket. If an existing renter's income rises above the highest affordable bracket, the renter shall be permitted to remain in the dwelling until the expiration of the renter's lease, not to exceed 12 months.".

Your Committee further recommended that proposed Condition No. Il(a) of the Change in Zoning bill be revised by replacing the existing language with the language proposed by MLP in the document received at the meeting. Condition No. Il(a), as revised, states:

"a. That the affordable dwelling units must be provided as follows:

(i) Forty (40) affordable dwelling units must be completed prior to or concurrently with the completion of the first market-priced dwelling unit.

(ii) Thereafter, one affordable dwelling unit shall be completed prior to or concurrently with the completion of every four market-priced dwelling units.


LAND USE COMMITTEE

January 6,2006


(iii) Paragraphs (i) and (ii) above do not alter the maximum potential affordable housing requirement of 173 units."

Your Committee considered the condition relating to the parks requirement proposed by the Planning and Development Division Chief, Department of Parks and Recreation. Your Committee questioned the need for the condition. The Deputy Director noted that the Department did not want to purchase land later at an Urban rate. The Department is evaluating the acquisition of 60 acres in the vicinity of the Kapalua Airport. The equivalent for the 690 units would be approximately 8 acres, or $9.7 million in cash contributions ($14,000 per unit). The proposed amendment to add this condition to the Change in Zoning bill failed.

The Deputy Corporation Counsel opined that the affordable housing units would not be assessed under the park dedication requirement at this time because they are not located within the Project District. However, when the affordable housing site is developed, the park dedication requirement would then be assessed.

Your Committee recommended that Condition NO.6 of the Change in Zoning bill be revised in light of the executed agreement between MLP and the State Department of Education, as follows:

"6. That Maui Land & Pineapple Company, Inc. shall contribute to the development, funding, and/or construction of school facilities on a fair share basis pursuant to the Education Contribution Agreement for Kapalua Mauka between Kapalua Land Company, Ltd. and the State of Hawaii Department of Education dated July 10, 2003 [, as determined by and to the satisfaction of the Department of Education. An executed agreement between Maui Land & Pineapple Company, Inc. and the Department of Education shall be submitted to the Department of Planning with the Phase II Project District application]."

Your Committee noted it had received a copy of the executed Education Contribution Agreement, which was transmitted by correspondence dated June 29, 2005, from Ryan Churchill, MLP, to your Committee.

Your Committee noted that MLP's proposed revision to add a new Condition No. 14 had been rendered moot by the deletion of short-term rentals from the Project District. The park dedication requirement would necessarily apply to all dwelling units within the Project District as a result.


LAND USE COMMITTEE

January 6,2006


Your Committee considered the proposed revision to the affordable housing condition distributed by Councilmember Johnson at the meeting. Your Committee recommended that the revised language be incorporated into the Change in Zoning bill.

Your Committee voted to recommend passage of the further revised proposed Change in Zoning bill, recordation of a unilateral agreement reflecting the applicable zoning conditions, and filing of the communication.

Your Committee is in receipt of the revised proposed Community Plan Amendment bill, Change in Zoning bill, and Project District bill, approved as to form and legality by the Department of the Corporation Counsel, incorporating your Committee's requested revisions and other nonsubstantive revisions.

Your Committee is in receipt of an agreement entitled "Unilateral Agreement and Declaration for Conditional Zoning" executed by Maui Land & Pineapple Company, Inc.

Your Land Use Committee RECOMMENDS the following:

1. That Bill No. (2006), as revised herein and attached hereto, entitled "A BILL FOR AN ORDINANCE AMENDING ORDINANCE NO. 2476 (1996), THE WEST MAUl COMMUNITY PLAN AND LAND USE MAP, FROM AGRICULTURAL AND OPEN SPACE TO WEST MAUl PROJECT DISTRICT 2 (KAP ALUA MAUKA), FOR PROPERTY SITUATED ON THE SOUTHEASTERLY SIDE OF HONOAPIILANI HIGHWAY, AT HONOKAHUA, NAPILI, LAHAINA, MAUl, HAWAII", be PASSED ON FIRST READING and be ORDERED TO PRINT;

2. That Bill No. (2006), as revised herein and attached hereto, entitled "A BILL FOR AN ORDINANCE AMENDING TITLE 19, MAUl COUNTY CODE, TO ESTABLISH WEST MAUl PROJECT DISTRICT 2 (KAPALUA MAUKA)", be PASSED ON FIRST READING and be ORDERED TO PRINT;

3. That Bill No. (2006), as revised herein and attached hereto, entitled "A BILL FOR AN ORDINANCE TO CHANGE ZONING FROM COUNTY AGRICULTURAL DISTRICT AND INTERIM


LAND USE COMMITTEE

January 6,2006


DISTRICT TO WEST MAUl PROJECT DISTRICT 2 (KAP ALUA MAUKA) (CONDITIONAL ZONING), FOR PROPERTIES SITUATED ON THE SOUTHEASTERLY SIDE OF HONOAPIILANI HIGHWAY, AT HONOKAHUA, NAPILI, LAHAINA, MAUl, HAWAII", be PASSED ON FIRST READING and be ORDERED TO PRINT;

4. That the County Clerk RECORD the "Unilateral Agreement and Declaration for Conditional Zoning"; and

5. That County Communication No. 04-181 be FILED.

Adoption of this report is respectfully requested.

lu:cr:0569aa:cmn


LAND USE COMMITTEE

January 6,2006

ROBERT CARROLL

JOSEPH PONTANILLA

MICHELLE ANDERSON

G. RIKI HOKAMA

JO ANNE JOHNSON

Chair

Vice-Chair

Member

Member

Member

DAINP. KANE

DANNY A. MATEO

Committee Report No.

MICHAEL J. MOLINA

CHARMAINE TAVARES

06-1

Member

Member

Member

Member

council of the county of maul land ... - maui county, hawaii

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