Status Of Appeal Of Land Use Commission’s Koa Ridge Approval

BY ROBERT THOMAS – Last year, the Hawaii Land Use Commission granted district boundary amendment effecting the reclassification of land from the “agricultural” district to the “urban” district for Castle & Cooke Homes’ proposed Koa Ridge development, sited on agricultural land on the island of Oahu. Under Hawaii’s statewide zoning, a “boundary amendment” is a reclassification of land, similar to a rezoning at the county level. The Hawaii Chapter of the Sierra Club filed an agency appeal challenging the boundary amendment in state court under the Administrative Procedures Act.

Our friend Paul Schwind — who has guest blogged here on many occasions before on this case, the rail, and others — attended the agency appeal hearing at circuit court, and his report follows.

It’s good that Paul has stepped up. We haven’t been commenting on this case because we’ve got a stake in the game (our partner Greg Kugle is lead counsel for one of the parties).  Since we’re involved in this case, our usual disclaimer is probably more applicable than usual: these aren’t our words, our thoughts, or those of our clients.We’re not sure if we have formally introduced Paul to our audience before, but in the event we haven’t, here is more about him. Paul is an old hand in Hawaii land use and agricultural policy. Before he was called to the Bar in 2001, Paul was Chief Planner for the Hawaii Department of Agriculture for 15 years. Then, after graduating law school (from our alma mater the University of Hawaii), he served for four years he was Director of Research and Legal Affairs for the Land Use Research Foundation in Hawaii. In both positions he was heavily involved with Important Agricultural Land issues, including the enactment of the IAL legislation referred to in his post below. He has experienced the IAL conversation from the government, private sector, and legal perspectives. Paul had a life before the law, and has a Ph.D. from the University of Chicago.

Here’s his write up of the latest.

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Status of Appeal of Land Use Commission’s Koa Ridge Approval

by Paul J. Schwind*

In keeping with a long tradition in Hawaii that land use cases are litigated in court on procedural rather than substantive grounds, the agency appeal in Sierra Club, Hawaii Chapter et al. v. Castle & Cooke Homes Hawaii et al., No. 1CC-12-1-001999 (Haw. 1st Cir. 2012) was decided based on whether the appeal met the statutory tests for appeal under the Administrative Procedures Act, rather than on public policy grounds. Appellant Sierra Club Hawaii Chapter had earlier been granted intervenor status during the Land Use Commission’s (LUC) quasi-judicial hearings on developer Castle & Cooke Homes’ petition for district boundary amendment from agricultural to urban for its property at Koa Ridge on Oahu.

On July 20, 2012, Sierra Club appealed of the LUC’s decision and order granting the land use reclassification. On February 15, 2013, Circuit Judge Rhonda Nishimura heard argument on the appeal, and issued her ruling orally. The written Order will be drafted by counsel for the lead prevailing party (Castle & Cooke Homes).

Judge Nishimura began by asking Eric Seitz, Esq. (counsel for the Sierra Club) which of the LUC findings of fact and conclusions of law were in error, as a basis for vacating the decision and order. He responded “all of them.” The judge then asked Mr. Seitz whether designation of important agricultural land (IAL) was not before the court. He answered “yes” (i.e., designation of IAL was not the issue).

With the foregoing established on the record, Mr. Seitz began by stating that this is a case of first impression, in that it requires interpretation ofArticle XI, Section 3 of the Hawaii State Constitution, which requires that important agricultural lands be identified, conserved, and protected:

Section 3.  The State shall conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands. The legislature shall provide standards and criteria to accomplish the foregoing.

Lands identified by the State as important agricultural lands needed to fulfill the purposes above shall not be reclassified by the State or rezoned by its political subdivisions without meeting the standards and criteria established by the legislature and approved by a two-thirds vote of the body responsible for the reclassification or rezoning action.

Haw. Const. art. XI, § 3. Mr. Seitz conceded that the Sierra Club has no standing to reclassify land, but argued that the LUC members take an oath to follow the state constitution, and therefore cannot ignore Art. XI sec. 3 and its derivative statutory provisions. He acknowledged that the Hawaii Supreme Court has ruled that the constitutional provision is not self-executing. See Save Sunset Beach Coalition v. City and County of Honolulu, 102 Haw. 465, 78 P.3d 1 (2003) (until legislative standards and criteria are adopted, the constitutional section is legally inoperative). But standards and criteria both for identification and for reclassification and rezoning of IAL were in fact enacted by the Hawaii Legislature in 2005. See Haw. Rev. Stat. §§ 205-44, 205-50.

Since legislatively-enacted standards and criteria are now in place, Mr. Seitz argued that the LUC cannot now say that these standards and criteria are themselves inoperative just because the LUC has thus far failed to promulgate implementing administrative rules, and because the City and County of Honolulu has only begun the process of actually mapping IAL pursuant to Haw. Rev. Stat. § 205-47. The lands to be mapped by the City are then to be designated as IAL by the LUC pursuant to § 205-49. Note:  the only explicit reference to administrative rules in chapter 205 part III is in § 205-45 relating to petitions for IAL designation by farmers or landowners, and that provision is discretionary, not mandatory. See Haw. Rev. Stat. § 205-45 (a) (k).

So can – and should – the LUC go forward or not, given that legislative standards and criteria for IAL are in place, rules are not explicitly required for reclassification of IAL, but actual maps of designated IAL are not yet available?

Judge Nishimura asked whether anything exists that does set forth the procedure the LUC should follow in this case. Mr. Seitz responded, no, but it’s implied. That is, the LUC should refuse to reclassify IAL until bothrules and maps are in place. The LUC ignored what he described as the constitutional mandate to “wait.” He added that other findings of the LUC – such as the existence of other IAL (besides the subject property) that could be farmed – are purely hypothetical, as such “other” lands have no infrastructure for agriculture and have never been farmed.

Judge Nishimura then asked whether there was expert testimony during the LUC hearings in this case. Mr. Seitz responded that the testimony was exhaustive, and the LUC was entitled to make credibility determinations, but they deferred critical issues to other agencies down the road, such as whether the need for the project outweighs the need to conserve and protect IAL. He added that the record does not justify the “destruction of IAL forever.” Aloun Farms (currently on the subject property) “cut their own deal” for relocation, but there are no other productive alternative lands sitting around where relocation of agricultural production would be viable. Mr. Seitz went out of his way to emphasize that Castle & Cooke has asked for designation of some of its other lands as IAL. They are a responsible developer, but even the most responsible developer is bound by the constitutional mandate and should not be allowed to develop IAL.

Wyeth Matsubara, Esq. (co-counsel for Castle & Cooke Homes) argued that the appeal filed in this case is more a weighing of constitutional requirements than an appeal of findings of fact and conclusions of law, as allowed by Haw. Rev. Stat. § 91-14. Judge Nishimura noted that an issue on the record was the weighing of housing need versus the availability of alternative agricultural lands. Mr. Matsubara continued that the LUC is required to act, and that there was uncontroverted testimony on the record that suitable alternative agricultural lands were offered by the developer to their tenant, Aloun Farms. There was also ample uncontroverted  testimony as to the need for urban growth, and as to Castle & Cooke Homes’ mitigating measures in this case.

Sarah Hirakami, Esq. argued for the LUC that nothing in Act 183 requires the LUC to act sua sponte to designate IAL. See Haw. Rev. Stat. § 205-49(a). The LUC must first receive maps from the counties, with recommendations from the Department of Agriculture (DOA) and the Office of Planning (OP). Judge Nishimura added that under § 205-44.5, the DOA and the Department of Land and Natural Resources (DLNR) were to identify public lands for designation as IAL, by the end of 2009. The LUC can also act to designate these public lands only after it receives the maps from DOA and DLNR.

Ms. Hirakami continued that the DOA did not oppose the district boundary amendment petition in this case, and because the LUC imposed conditions on the boundary amendment, only the LUC has jurisdiction to revert the reclassification. Determination of the credibility of witness testimony is also for the LUC, not the court. Ultimately, the LUC must show that its decision and order is supported by the facts on the record.

Dawn Takeuchi, Esq. argued for the City and County of Honolulu that the City may employ the urban growth boundaries in its Sustainable Community Plans as part of the IAL designation process. See Haw. Rev. Stat. §§ 205-44(c)(6) (IAL designation must be consistent with county plans). See also City Council Resolution 12-23 CD1, FD1 (Feb. 15, 2012).  Accordingly, it is unlikely that the subject property would be designated IAL by the City.

Bryan Yee, Esq. argued for the State of Hawaii Office of Planning that although a two-thirds affirmative vote of the LUC is required to reclassify designated IAL, the land of the subject property has not been so designated yet. And the replacement land offered to Aloun Farms does have water infrastructure.

In rebuttal, Mr. Seitz responded that mitigation of Aloun Farms is not at issue here, since they were taken care of. The issue is the preservation of IAL for the long-term agricultural productivity of Hawaii.  The long-term agricultural sustainability of this State was the obvious objective of the framers of the constitutional amendment and, later, the Legislature.  No one else in this proceeding is concerned about that. Even the DOA, which is mandated (§ 205-44.5) to identify public lands that are IAL, hasn’t done it. But there is the City Council resolution, supra, that asks the City to move more rapidly to identify IAL, including lands within the urban growth boundary.

Judge Nishimura then announced her ruling as soon as the parties concluded their oral arguments. She stated that the court is constrained by the record on appeal and therefore cannot grant injunctive relief, as the appellant apparently had requested. Reversion of the LUC decision and order based on policy grounds is also not for the court. The court is limited to deciding whether the decision and order of the LUC is consistent with its findings of fact and conclusions of law, and whether these were arbitrary and capricious. There was no challenge in the record on appeal to the credibility of witnesses, nor was there evidence in the record contrary to the findings of fact and conclusions of law enunciated by the LUC.  Accordingly, the LUC’s decision and order is affirmed, and the appeal is dismissed.

The take-away from this proceeding? Notwithstanding the elegant and articulate passion of appellant’s counsel, you win or lose depending on whether you can raise objections to the decision below within the jurisdiction of the appellate court. In this case, the bottom line seems to be that despite all the constitutional and statutory policy in place, no important agricultural lands have yet been officially mapped and designated pursuant to Act 183.  Absent that result, it is difficult if not impossible to overturn a land use district boundary amendment as contrary to such a designation, when it does not yet exist. The Sierra Club’s appeal may be prescient, but it does not, and cannot yet, lead to a dispositive ruling grounded in the constitutional requirement to conserve and protect important agricultural lands.

Next stop, the Court of Appeals?

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*voluntarily inactive member of the Hawaii Bar

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