Unite Here! Local 5 v. Department of Planning and Permitting/Zoning Board of Appeals. ( 2019 )

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Electronically Filed
Supreme Court
SCAP-XX-XXXXXXX
13-DEC-2019
08:53 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
UNITE HERE! LOCAL 5,
Appellant-Appellant,
vs.
DEPARTMENT OF PLANNING AND PERMITTING/ZONING BOARD OF APPEALS,
CITY AND COUNTY OF HONOLULU; LYLE ISHIDA, in his official
capacity as Chairperson of the Zoning Board of Appeals,
Appellees-Appellees,
and
PACREP 2,
Intervenor-Appellee.
SCAP-XX-XXXXXXX
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CAAP-XX-XXXXXXX; CIV. NO. 15-1-2253)
DECEMBER 13, 2019
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.
OPINION OF THE COURT BY NAKAYAMA, J.
This case involves Appellee-Appellee City and County of
Honolulu Department of Planning and Permitting’s (DPP) approval
of two Waikîkî Special District (WSD) permits for Intervenor-
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Appellee PACREP 2 and its affiliate PACREP, to develop a condo-
hotel at 2121 Kûhiô Avenue and 2139 Kûhiô Avenue.1
When the Director of the DPP approved PACREP’s
application for a WSD permit at 2121 Kûhiô Avenue (2121 Kûhiô
Permit) in March 2013, he included several restrictive covenant
conditions in the permit to ensure compliance with the Land Use
Ordinance (LUO) should any hotel unit be converted to a
residential unit. The Director placed these conditions in the
2121 Kûhiô Permit at the behest of Appellant-Appellant Unite
Here! Local 5 (Local 5), a union representing hotel and
restaurant employees, which had raised several concerns regarding
the use of the condo-hotel. Neither PACREP nor Local 5 appealed
the 2121 Kûhiô Permit.
In 2014, PACREP 2 applied for a WSD permit for the
second phase of the condo-hotel project at 2139 Kûhiô Avenue.
The Director approved the permit (2139 Kûhiô Permit) in July
2014, but did not include the same restrictive covenant
conditions that had previously been placed in the 2121 Kûhiô
Permit.
Local 5 appealed the 2139 Kûhiô Permit to the Zoning
Board of Appeals (ZBA), and argued that the Director abused his
discretion when he approved the 2139 Kûhiô Permit without these
1
The now completed condo-hotel is managed by The Ritz-Carlton Hotel
Company, L.L.C., and is known as “The Ritz-Carlton Residences, Waikiki Beach.”
2
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conditions. In response, the DPP stated that on a request from
PACREP, the Director removed the restrictive covenant conditions
from that permit in September 2013, prior to the approval of the
2139 Kûhiô Permit in July 2014.
The ZBA concluded that (1) it did not have jurisdiction
to address any “modification” of the 2121 Kûhiô Permit in
Local 5’s appeal of the 2139 Kûhiô Permit, and (2) the Director’s
decision to approve the 2139 Kûhiô Permit was not an abuse of
discretion. On appeal, the Circuit Court of the First Circuit
(circuit court) affirmed the ZBA’s decision. Local 5 filed a
secondary appeal to the Intermediate Court of Appeals (ICA), and
this court granted Local 5’s subsequent application for transfer.
When the Director removed certain conditions from the
2121 Kûhiô Permit, conditions that he knew Local 5 had advocated
for, Local 5 should have had an opportunity to challenge the
removal of those conditions from the permit. However, Local 5
did not receive notice that the Director had removed these
conditions. Under these circumstances, we conclude that
Local 5’s right to due process was violated, and pursuant to
Hawai#i Revised Statutes (HRS) § 91-14(g), we remand the
Director’s decision to remove these conditions from the 2121
Kûhiô Permit to the ZBA so that Local 5 may challenge this
decision.
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Finally, because the 2139 Kûhiô project is fully
integrated with the 2121 Kûhiô project and the decision to
approve the 2139 Kûhiô Permit rested in part on the then-existing
2121 Kûhiô Permit, we also vacate the ZBA’s decision to approve
the Director’s approval of the 2139 Kûhiô Permit, and remand to
the ZBA to decide whether the Director’s decision to approve that
permit without the restrictive covenant conditions was an abuse
of discretion.
I. BACKGROUND
A. The Director Approves the 2121 Kûhiô Permit
Because of its significance as “a recognized symbol of
Hawaii,” the LUO designates Waikîkî as a “special district” and
sets forth specific objectives and design controls “to guide
carefully Waikiki’s future and protect its unique Hawaiian
identity.” Revised Ordinances of the City and County of Honolulu
(ROH) § 21-9.80 et. seq. (1999); see also Surfrider Found. v.
Zoning Bd. of Appeals, 136 Hawai#i 95, 98, 358 P.3d 664, 667
(2015). Any planned development project in the Waikîkî Special
District must go through a “major permit” permitting process as
described in the LUO. See ROH Table 21-9(C) (2003) and
§ 21-2.40-2 (1999).
Pursuant to the LUO’s “major permit” permitting
provisions, in 2012, PACREP, a principal of PACREP 2, requested a
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WSD (Major) permit for a thirty-seven story, 350-foot-high condo-
hotel at 2121 Kûhiô Avenue in Waikîkî.
On February 11, 2013, Local 5 submitted written
testimony to the DPP objecting to its consideration of PACREP’s
WSD permit. Therein, Local 5 contended that PACREP had not taken
measures to ensure the building would be used solely for hotel
accommodations and had not ensured adequate parking on the
premises for guests and workers. Additionally, Local 5 argued
that because the project’s draft Environmental Assessment was
currently being challenged, issuance of a WSD permit was
premature.2
On March 19, 2013, the Director approved PACREP’s
application and issued the 2121 Kûhiô Permit. Therein, the
Director noted that at the public hearing on PACREP’s
application, twenty-three people testified in opposition to the
project. The Director also noted that a Local 5 representative
“commented on the discrepancies in the number of parking spaces,
job estimates, and unit types (hotel versus residence)
represented in the Final [environmental assessment] and the [WSD
permit] application.” Pursuant to the Director’s findings of
2
Local 5 had previously requested that it be “made a consulted
party in the development of [the] Environmental Assessment,” and raised
concerns regarding PACREP’s draft environmental assessment. The DPP was aware
that Local 5 had challenged the draft environmental assessment.
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fact and conclusions of law, the Director approved the PACREP’s
application for a WSD permit, “subject to [certain] conditions.”
Two conditions placed restrictive covenants on the
project to ensure compliance with the LUO should any of the hotel
units be converted to residential units. As the Director
explained,
For purposes of establishing off-street parking (and
park dedication) requirements, a declaration of restrictive
covenant (“Declaration”) indicating the number of units to
be placed in a hotel pool should be required as a condition
of approval, and should be filed prior to the issuance of
any building permits.[ 3] Subsequent to the construction of
the Project, if any hotel unit is converted to a residential
unit, then one parking space must be provided for each
residential unit. While this is an LUO requirement, it
should also be enforced as a condition of approval through
the Declaration.
The Director therefore imposed two conditions, Conditions C and
G, which provided:
C. Prior to the issuance of any building permits:
1. A declaration of restrictive covenant
(Declaration) indicating the (dwelling and/or
lodging) units to be placed in a hotel pool for
the Project shall be submitted to the DPP for
its review and approval. Once approved, the
Declaration shall be filed at the State Bureau
of Conveyances; and, a certified copy of the
Declaration shall be submitted to the DPP. For
each unit that is designated as a residential
unit:
(a) One parking space per residential unit
shall be provided; and
(b) Compliance with park dedication shall be
required.
. . . .
3
The Director may require fee owners to record restrictive
covenants on the title to a property “[t]o record special conditions attached
to a permit, variance, or zone change.” DPP Rules § 8-1(a)(1) (1993).
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G. Prior to the conversion of any hotel (dwelling and/or
lodging) unit to a residential (multi-family dwelling)
unit, the owner of the unit shall provide to the DPP
documentation of ownership of one parking space that
is compliant with all relevant Land Use Ordinance
(LUO) requirements, and shall comply with any park
dedication requirements.
As Local 5 argues, these conditions were important to
ensuring that any conversion of units from hotel use to
residential use comply with the LUO. The LUO prescribes
different requirements for developments described as “multi-
family dwellings” and developments described as “hotels.”4 For
example, in the Waikîkî Special District, hotels are only
required to provide one parking space for every four dwelling or
lodging units, while multi-family dwellings require one parking
space for every dwelling unit. See ROH Ch. 21 Table 21-6.3
(2003).
4
A “hotel” is defined by the LUO as
a building or group of buildings containing lodging and/or
dwelling units offering transient accommodations, and a
lobby, clerk’s desk or counter with 24 hour clerk service,
and facilities for registration and keeping of records
relating to hotel guests. A hotel may also include
accessory uses and services intended primarily for the
convenience and benefit of the hotel’s guests, such as
restaurants, shops, meeting rooms, and/or recreational and
entertainment facilities.
ROH § 21-10.1 (2010).
In 2010, the LUO definition of “hotel” was amended from its
initial definition in 1999, which previously stated that a “‘[h]otel’ means a
building or group of buildings containing lodging and/or dwelling units in
which 50 percent or more of the units are lodging units. . . .” ROH § 21-10.1
(1999) (emphasis added).
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Additionally, ROH chapter 22 article 7 requires that
every developer, as a condition precedent to issuance of a
building permit for a multi-family development, “shall provide
land in perpetuity or dedicate land for park and playground
purposes, for the joint use by the occupants of lots or units in
subdivisions as well as by the public.” ROH § 22-7.3(a) (1996).
This park dedication requirement applies “to any conversion in
use of any existing non-dwelling unit to dwelling units, and such
conversion shall not be undertaken unless the provisions of this
article have been met.” ROH § 22-7.3(i). However, under the
LUO, a “hotel” is excluded from the definition of “multi-family
development.” ROH § 22-7.2 (1983). Therefore, hotels need not
comply with the park dedication requirements of ROH chapter 22
article 7. Conditions C and G of the 2121 Kûhiô Permit addressed
the possible conversion of hotel units to multi-family dwelling
units to ensure that these converted units adhered to LUO
requirements.
The 2121 Kûhiô Permit also contained the following
general conditions regarding any modification of the permit:
A. Except as may otherwise be required by these
conditions of approval, the operation and development
of the site shall be in conformance with the approved
Project, as described herein and shown on plans and
drawings attached hereto . . . and comprehensively
contained in the SDP application “Waikiki Special
District Permit, Major 2121 Kuhio,” dated December
2012, on file at the DPP. Any modification to the
Project and/or approved plans, design concept, and/or
the environmental character of the Project shall be
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subject to the prior review of and approval by the
Director of the DPP. Minor modifications shall be
processed in accordance with Land Use Ordinance (LUO)
Section 21-2.20(k). [5] Major modifications shall
require a new SDP (Major).
. . . .
L. The Director may modify the conditions of this permit
by imposing additional conditions, modifying existing
conditions, or deleting conditions deemed satisfied
upon a finding that circumstances related to the
approved Project have significantly changed so as to
warrant a modification to the conditions of approval.
While Local 5 was not copied on the Director’s letter
to PACREP approving the 2121 Kûhiô Permit, Local 5 was aware that
the Director had approved the 2121 Kûhiô Permit with Conditions C
5
ROH § 21-2.20(k) (2010) describes the administrative procedures
regarding modifications to approved permits. It provides:
(k) (1) Except as otherwise provided herein, the
director may administratively authorize minor
alterations, additions, or modifications to any
approved permit required by this chapter,
provided that the minor modification request:
(A) Is reasonable, and consistent with the
intent of the respective permit;
(B) Does not significantly increase the
intensity or scope of the use; and
(C) Does not create adverse land use impacts
upon the surrounding neighborhood.
(2) Subdivision (1) does not apply to:
(A) Zone changes; and
(B) Council approvals pursuant to Sections 21-
2.110-2 (Planned development) and 21-2.120
et seq. (Plan review uses), except to the
extent that minor modifications are
permitted by the express language of the
council’s approving resolution.
(3) Major alterations, additions, or modifications,
and other alterations, additions, or
modifications excepted by subdivision (2), will
be processed under the provisions for the
applicable permit or approval.
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and G. Local 5 did not appeal the Director’s approval of the
2121 Kûhiô Permit.
B. The Director Removes Conditions from the 2121 Kûhiô Permit
Some time after the Director approved the 2121 Kûhiô
Permit, PACREP verbally requested that Conditions C and G, the
restrictive covenant conditions, be waived. In a letter sent to
PACREP on September 6, 2013 (September 6 Letter), the Director
removed the restrictive covenant conditions. He concluded,
“[b]ecause we agree that the project qualifies as a condo-hotel,
submission of declarations of restrictive covenants regarding
this issue will not be required.”
Local 5 was not aware of the existence of the
Director’s September 6 Letter removing 2121 Conditions C and G
until the ZBA held a contested case hearing on its appeal of the
2139 Kûhiô Permit in 2015. Accordingly, Local 5 contends that it
did not appeal the Director’s “modification” to the ZBA within
thirty days as required by ROH § 21-1.40 because it was not
notified,6 nor did it file a complaint for declaratory or
6
ROH § 21-1.40 (1999) provides: “Appeals from the actions of the
director in the administration of the provisions of the LUO shall be to the
zoning board of appeals as provided by Section 6-1516 of the charter. Appeals
shall be filed within 30 days of the mailing of service of the director’s
decision.”
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injunctive relief in the circuit court as provided by HRS § 632-
1.7
C. The Director Approves the 2139 Kûhiô Permit
On April 1, 2014, PACREP 2 submitted an application for
a WSD (Major) permit for a 350-foot tall, 39-story condo-hotel at
2139 Kûhiô Avenue. In its permit application, PACREP 2 stated
that the proposed tower would be connected to the previously
approved development at 2121 Kûhiô Avenue, and “share common
amenities, including vehicle access . . . and off-street parking,
within the connected 8-story building podium.”
On July 14, 2014, the Director approved PACREP 2’s WSD
permit application and issued the 2139 Kûhiô Permit. In the
permit, the Director noted that at the public hearing on PACREP
2’s application, a Local 5 representative commented that
there were no guarantees from the Applicant that the condo-
hotel would not be converted into a multi-family dwelling or
not operate as a hotel. With the concept of condo-hotels
there is no guarantee that many of the hotel employees will
have job security or if there will be enough off-street
parking stalls.
The Director also examined the Project’s off-street
parking spaces, and concluded that
there may not be adequate off-street parking to support
partial multi-family (condominium) uses provided by the
7
HRS § 632-1 (1993) is the declaratory judgment provision, which
may be granted in civil cases “where an actual controversy exists between
contending parties . . . and the court is satisfied also that a declaratory
judgment will serve to terminate the uncertainty or controversy giving rise to
the proceeding.”
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Project. Therefore, the permit approval should be based on
the use of both the 2121 Kuhio and 2139 Kuhio developments
to hotel use. In the event that use of the site, or
portions of the site are changed to multi-family dwellings,
then the residential (dwelling or lodging) units will have
to comply with residential parking requirements.
The Director also required that in the event that any portion of
the development is converted to a multi-family dwelling, “then
the residential (dwelling or lodging) units will have to comply
with park dedication requirements.”
The Director then placed several conditions in the 2139
Kûhiô Permit. However, the conditions imposed did not include
the restrictive covenant conditions regarding off-street parking
stalls or park dedication that had been in the 2121 Kûhiô Permit,
i.e. 2121 Conditions C and G. In other words, there was no
condition that required residential or multi-family units to be
placed in a hotel pool, no condition that the developer provide
one parking space per residential unit, and no condition that the
developer comply with park dedication requirements.
Instead, the Director imposed Condition I, which
stated:
I. Upon issuance of a COO [Certificate of Occupancy], the
Project shall institute and make available:
1. Valet service for at least 80 percent of the
total required off-street parking.
2. All units shall receive full hospitality,
housekeeping, building maintenance, and room
services.
3. A centralized mail and phone service for all
units.
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Furthermore, these requirements shall be extended as
conditions of approval to all units in the 2121 Kuhio
development, authorized by SDP No. 2012-SDD-73.
Local 5 was copied on the Director’s letter approving
the 2139 Kûhiô Permit, and thus received notice that the Director
had approved the 2139 Kûhiô Permit.
D. Appeal to the Zoning Board of Appeals
On August 13, 2014, Local 5 timely appealed the
Director’s decision to approve the 2139 Kûhiô Permit to the ZBA
pursuant to ROH § 21-1.40. Local 5 explained that its appeal was
narrow in scope:
Local 5 objects to the lack of conditions reasonably
necessary to insure that the project being approved as a
hotel is in fact used as a hotel and that the individual
buyers of each unit do not convert to a multi-family
dwelling without satisfying the more stringent LUO multi-
family requirements, such as 1:1 parking and park
dedication. The Director imposed such conditions on the
sister tower located at 2121 Kuhio - including the
requirement that units be placed into the hotel rental pool
and any units removed from hotel use demonstrate compliance
with LUO requirements for parking and park dedication - and
the failure to impose similar conditions is arbitrary,
capricious and an abuse of discretion.
(Emphasis in original.)
Local 5 alleged that the Director’s decision to issue
the 2139 Kûhiô Permit was an abuse of discretion in two ways:
that (1) 2139 Condition I was vague and ambiguous; and (2) there
was no condition in the 2139 Kûhiô Permit comparable to the
condition in the 2121 Kûhiô Permit which imposed parking and park
dedication requirements. Local 5 explained that in the 2121
Kûhiô Permit, the Director concluded that restrictive covenants
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should be required as a condition of approval for purposes of
establishing off-street parking and park dedication requirements.
However, Local 5 argued that “[t]here is no condition in the 2139
Kuhio Permit that is comparable to Condition C of the 2121 Kuhio
Permit.”
Accordingly, Local 5 alleged that it was arbitrary and
capricious and a manifest abuse of discretion for the Director to
issue the 2139 Kûhiô Permit without the same condition that had
been imposed in the 2121 Kûhiô Permit. Local 5 requested that
the ZBA “[a]dd Condition C from the 2121 Kuhio Permit as a new
condition to the 2139 Kuhio Permit verbatim[.]”
In response, the DPP noted that on September 6, 2013,
the Director sent a letter to PACREP which removed the
restrictive covenant conditions in the 2121 Kûhiô Permit, because
he concluded that “the approved Project was limited to hotel
units and the conditions in the Director’s Decision provide[d]
adequate means of preventing hotel units from being converted to
multi-family dwelling use absent compliance with the [LUO].”
Because the Director removed the conditions from the first permit
before the second permit was approved on July 14, 2014, the DPP
stated that the two WSD permits were not inconsistent.
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1. Contested Case Hearings
The ZBA held several contested case hearings on the
matter. At the hearings, Local 5 explained to the ZBA why the
restrictive covenant conditions in the 2121 Kûhiô Permit needed
to be included in the 2139 Kûhiô Permit. Local 5 stated that
when the Director had considered the WSD permit for the 2121
Kûhiô project, he recognized that “conditions were necessary to
ensure that the buyers of the individual hotel units within this
building did not use the hotel units for residential use[.]”
Local 5 argued that the conditions which required any converted
residential units to comply with one-to-one parking and park
dedication were reasonable. On the other hand, Local 5 contended
that 2139 Condition I, which only required housekeeping services,
building maintenance, centralized mail, and phone service, would
not similarly ensure that individual hotel units would not be
used for residential use.
Local 5 continued:
[W]hen the director considers different projects, different
facts and different situations, he can apply different
conditions. That’s absolutely true. But that’s not the
case in this case. As I said, it’s the same project, two
phases of the same project, same property, shared amenities,
shared facilities and shared ownership. The very definition
of arbitrary and capricious is to be faced with the exact
same situation and do something totally different.
Local 5 also noted that the Director’s decision to
waive the restrictive covenant conditions in the 2121 Kûhiô
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Permit “was done in secret without any notice to Local 5 despite
Local 5 being a very active participant in the permitting process
for both of these structures. . . . [M]oreover, the waiver is
just ineffective as a matter of law[.]”
a. Sadoski’s Testimony
Local 5 first called Benjamin Sadoski (Sadoski), an
employee of Local 5 who followed the two development projects, to
testify. Sadoski stated that the 2121 Kûhiô project and the 2139
Kûhiô project were essentially the same project, and cited PACREP
2’s Public Report for a Condominium to the Real Estate Commission
(Real Estate Commission Report), which provided:
6. Tower 1 Development. Developer is an affiliate of
Pacrep LLC (“Tower 1 Developer”), the developer of the
adjacent [2121 Kûhiô] condominium project (the “Tower 1
Project”). Developer and Tower 1 Developer anticipate that
the Project and the Tower 1 Project will be integrated,
sharing the use of parking services and amenities, initially
through a reciprocal easement and license agreement, and
subsequently, through the merger of the Project and the
Tower 1 Project (meaning both the Project and the Tower 1
Project will be treated as a single condominium project).
Sadoski further testified that Local 5 “pretty consistently
raised concerns . . . that units that will be used as residential
units will not - will end up creating a larger parking burden,
will end up creating a larger infrastructure burden.”
Sadoski stated that the Director’s September 6 Letter
removing conditions from the 2121 Kûhiô Permit was never sent to
Local 5, and he had never seen it before PACREP 2 placed it into
evidence in the current ZBA appeal of the 2139 Kûhiô Permit. On
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cross-examination, when asked by DPP whether Local 5 ever
requested that it be provided with correspondence between the DPP
and PACREP 2, Sadoski responded, “I think we requested to be made
a consulted party with regards to the environmental assessment
process. So to that extent, yes.”
b. Director Atta’s Testimony
Local 5 then called Director George Atta (Director
Atta), the Director who modified the 2121 Kûhiô Permit and
approved the 2139 Kûhiô Permit, to testify. Director Atta
explained that 2121 Conditions C and G were placed in the 2121
Kûhiô Permit because at that time, the DPP was unsure whether the
2121 Kûhiô tower would operate as a hotel or as a multi-family
residence. After further design details emerged, Director Atta
stated that PACREP verbally told him that the project “would be a
hundred percent hotel.” Director Atta also testified that it was
also brought to his attention that there was a potential “SEC
question” that might jeopardize the project’s financing.8
Director Atta believed that his communications with PACREP were
“mostly verbal communications,” and that he could not recall
8
The “SEC question” appears to have been a concern by PACREP that
the project’s condo-hotel units might potentially create a securities issue.
Neither the DPP nor PACREP 2 specifically explained the problem in briefing on
appeal.
The ZBA concluded that the Director did not make an erroneous
finding about a potential securities problem. However, on appeal, the circuit
court determined that there was insufficient evidence to substantiate the
potential for a securities problem and struck the ZBA’s conclusion on the
issue from the ZBA’s order, and neither party has appealed this decision.
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receiving any letter by PACREP stating that the condo-hotel would
operate as “a hundred percent hotel” or that there might be an
SEC issue.
From these verbal communications, Director Atta
concluded that none of the units would be used as multi-family
residences. Director Atta further testified that he had his
staff look into the SEC issue, “and the staff concluded that
there was a potential for an SEC condition.” Based on that
potential, Director Atta decided to waive the restrictive
covenant conditions.
When asked whether he complied with 2121 Condition L
when he removed the restrictive covenant conditions from the 2121
Kûhiô Permit, Director Atta responded that even if he “didn’t
write it in there,” there was a change of condition that made it
unnecessary to have a restrictive covenant requiring certain
conditions if the tower was operated as a residence rather than a
hotel. Director Atta believed the letter that removed the
conditions was a “minor” modification, “in the sense that it’s
primarily a clarification.” Director Atta acknowledged that the
conditions that were removed were important to Local 5. On
cross-examination, Director Atta stated that he “[didn’t] recall
[Local 5] making [a] specific request [to be provided with copies
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of correspondence between DPP and PACREP 2] but there’s a lot of
letters and communications going on at that time . . . .”
2. ZBA Decision and Order
On October 15, 2015, the ZBA affirmed the Director’s
decision to approve the 2139 Kûhiô Permit. The ZBA concluded
that the Director’s “conditional approval of the project
described in the 2139 Application as a hotel, as provided in the
2139 Permit, is not based on an erroneous finding of fact, was
not arbitrary and capricious, and was not an abuse of
discretion.” Specifically, the ZBA made the following
conclusions of law:
18. The primary and predominant use of the project
described in the 2139 Permit and the 2139 Application is
“hotel” as defined by the LUO.
19. Under the LUO, a “hotel” may include some units
that are used for other than transient rentals. Such use
does not automatically convert the “hotel” designation to a
“multi-family dwelling” designation under the LUO if the
predominant use of the building is a hotel.
. . . .
21. The Director did not act arbitrarily or
capriciously, and did not abuse his discretion, when he did
not include in the 2139 Permit conditions similar to the
restrictive covenant condition of Condition C in the 2121
Permit.
. . . .
24. The Director did not act arbitrarily or
capriciously, and he did not abuse his discretion, when he
approved Condition I of the 2139 Permit.
25. Condition I of the 2139 Permit requires that the
specified hotel amenities be made available to the units in
the project.
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26. Local 5 has failed to satisfy its burden of proof
as required under Section 6-1516 of the Charter to justify
overturning the Director’s decision.
The ZBA also concluded that it did not have jurisdiction to
address any modification of the 2121 Kûhiô Permit:
3. The ZBA does not have jurisdiction in this appeal
to determine the validity of any modification or removal of
conditions of the 2121 Permit.
. . . .
28. The conditions placed on the 2121 Kuhio project
involve a different permit and application than the 2139
Permit and the 2139 Application that are the subject of this
appeal. As a result, any arguments of improper actions
involving the 2121 Permit were not considered in this
appeal.
E. Appeal to the Circuit Court
Local 5 filed a notice of appeal to the circuit court
on November 20, 2015.9 On March 9, 2016, Local 5 filed an
opening brief alleging four issues:
1. Omission of Condition C from the 2139 Permit was an
abuse of discretion, arbitrary and capricious.
2. Modification of the 2121 Permit was an abuse of
discretion, arbitrary, and capricious.
3. Failure to follow the Land Use Ordinances’ (“LUO”)
procedure for the modification of the 2121 Permit
violated Local 5’s constitutional right to procedural
due process.
4. The LUO definition of Hotel is unconstitutionally
vague and ambiguous.
First, Local 5 alleged that removing 2121 Condition C
was an abuse of discretion, arbitrary and capricious because
9
The Honorable Rhonda A. Nishimura presided.
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without 2121 Condition C, it would be “near impossible to enforce
the off-street parking requirements of the LUO.”
Second, Local 5 argued that the DPP failed to comply
with the LUO’s minor or major permit modification procedures when
it deleted Conditions C and G from the 2121 Kûhiô Permit. Local
5 stated that, according to the LUO, the Director was required to
make three specific findings if he wished to make a minor
modification to a permit. (Citing ROH § 21-2.20(k)(1)10.) Local
5 maintained that the Director made no such findings. To the
contrary, Local 5 contended that the modification of the 2121
Kûhiô Permit was unreasonable, significantly increased the
intensity or scope of the use, and created adverse land impacts
on the surrounding neighborhood; hence the removal of the
conditions were a major modification. Under the LUO’s procedure
for major modifications, PACREP 2 would have had to submit a new
permit for approval. (Citing ROH § 21-2.20(k)(3).)
Third, Local 5 contended that because it was already an
interested and participating party in the 2121 Kûhiô Permit
proceedings, “the Director’s modification of the conditions in
the 2121 Permit without providing Local 5 with notice and a
hearing to contest the modification” violated its due process
rights.
10
See supra note 5.
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Finally, Local 5 alleged that the LUO’s definition of
“hotel” is unconstitutionally vague and ambiguous, because it
allowed for subjective interpretation and application.
Specifically, Local 5 maintained that the ZBA erred when it found
that “there is no quantum of units that must be in [hotel] use in
order for the building to qualify as a hotel.”
In their respective answering briefs, PACREP 2 and the
DPP contested each point of error alleged by Local 5.
With respect to the modification of the 2121 Kûhiô
Permit, PACREP 2 and the DPP first explained that the circuit
court lacked jurisdiction to adjudicate the modification of the
2121 Kûhiô Permit. Assuming arguendo that the modification was
properly before the ZBA, PACREP 2 and the DPP both argued that
the Director’s modification was not arbitrary and capricious.
PACREP 2 contended that LUO modification procedures were
inapplicable to this case, because the Director merely modified a
condition of the permit, and not the actual permit itself.
Regarding Local 5’s due process argument, PACREP 2 and
the DPP contended that Local 5’s due process rights were not
violated when it did not receive notice of the Director’s
modification. PACREP 2 stated that a procedural due process
challenge requires a claimant’s alleged interest to be considered
“property” within the meaning of the due process clause of the
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Hawai#i Constitution. Citing our opinion in Sandy Beach Def.
Fund v. City and Cty. of Honolulu, 70 Haw. 361, 377, 773 P.2d
250, 260 (1989), PACREP 2 stated that “[t]o have a property
interest in a benefit, a person clearly must have more than an
abstract need or desire for it. He must have more than a
unilateral expectation of it. He must, instead, have a
legitimate claim of entitlement to it.” The DPP concluded that
Local 5 “ha[d] a marginal interest, at best, in the 2121 Kuhio
Project.” Additionally, the DPP stated that interested parties
must request notice of the Director’s decisions, DPP Rules § 6-2,
and argued that a requirement that interested parties receive
automatic notice of the Director’s decisions without a request
would “result in a waste of resources by DPP and undermine the
court’s analysis in [Citizens Against Reckless Dev. v. Zoning Bd.
of Appeals (CARD), 114 Hawai#i 184, 159 P.3d 143 (2007)].”
The circuit court held a hearing on September 23, 2016.
At the hearing, the circuit court asked DPP how Local 5 could
have appealed the Director’s decision to remove Conditions C and
G from the 2121 Kûhiô Permit. DPP responded that under the ICA’s
decision in Hoku Lele, LLC v. City and Cty. of Honolulu, 129
Hawai#i 164, 296 P.3d 1072 (App. 2013), Local 5 was not required
to exhaust its administrative remedies, and could have filed a
declaratory action in the circuit court once it discovered the
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existence of the Director’s September 6 Letter. The DPP stated
that Local 5 “had notice for quite some time now, and they
haven’t moved to do that.”
The DPP further stated that the Director had not relied
on the removal of the conditions in the 2121 Kûhiô Permit when he
issued the 2139 Kûhiô Permit without those conditions. However,
the DPP also conceded that it could be assumed that the Director
was aware that the conditions had been removed from the 2121
Kûhiô Permit, because he had been the one to remove them.
On rebuttal, Local 5 contended that this court’s
decision in CARD was distinguishable from the facts in this case,
“because there, that was a conditional use permit that the
plaintiff in the case participated in, and then chose not to
appeal.” More importantly, Local 5 continued, “Local 5 was a
participant in the 2121 proceeding. It had submitted letters in
opposition. It had testified at hearings, which resulted in the
condition that it [sic] was satisfactory to it.” Local 5 also
reiterated that the Director’s action in approving the 2139 Kûhiô
Permit without similar conditions to 2121 Conditions C and G was
arbitrary and capricious. Finally, Local 5 argued that even if
the Director reserved to himself the right to later modify
certain conditions in a permit, he was still required to follow
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the LUO procedures regarding permit modification:11 “either major
permit modification, which requires a new application, or minor
modification, which requires certain findings to be made.”
On October 9, 2017 the circuit court entered its
Findings of Fact, Conclusions of Law, and Decision and Order
Modifying and Affirming the Decision of the ZBA (Circuit Court
Order). Regarding the ZBA’s jurisdiction over the 2121 Kûhiô
Permit and its own jurisdiction over the 2121 Kûhiô Permit, the
circuit court concluded:
2. The ZBA did not have jurisdiction over the 2121
Kuhio Permit in Case No. 2015/ZBA-5 because it was not
designated as an “action of the Director” in Local 5’s
Petition.
3. The ZBA did not err in concluding that “[t]he ZBA
does not have jurisdiction in this appeal to determine the
validity of any modification or removal of conditions on the
2121 Permit.”
4. This Court has appellate jurisdiction over the
ZBA’s Order pursuant to HRS § 91-14, which allows a person
aggrieved by a final decision and order from a contested
case to appeal the same to the Circuit Court.
5. The Court does not have jurisdiction over the 2121
Kuhio Permit, the modification of the 2121 Kuhio Permit, or
the effects of the 2121 Kuhio Permit modification on
Local 5’s due process rights pursuant to HRS § 91-14, in
this case.
Additionally, notwithstanding the circuit court’s
finding that there was no substantial evidence to indicate a
“securities law issue,” the circuit court concluded that the
valid findings of fact and conclusions of law “amply support[ed]
11
ROH § 21-2.20(k) provides the LUO procedures for modifying an
approved permit. See supra note 5.
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the ZBA’s decision to affirm the Director’s approval of the 2139
Kuhio Permit.”
Local 5 filed a notice of appeal to the ICA. On
July 27, 2018, we granted Local 5’s application for transfer.
II. STANDARDS OF REVIEW
A. Secondary Appeals
Review of a decision made by the circuit court upon
its review of an agency’s decision is a secondary appeal.
The standard of review is one in which this court must
determine whether the circuit court was right or wrong in
its decision, applying the standards set forth in HRS
§ 91-14(g) to the agency’s decision.
CARD, 114 Hawai#i at 193, 159 P.3d at 152.
Pursuant to HRS § 91-14(g),
(g) Upon review of the record the court may affirm the
decision of the agency or remand the case with instructions
for further proceedings; or it may reverse or modify the
decision and order if the substantial rights of the
petitioners may have been prejudiced because the
administrative findings, conclusions, decisions, or orders
are:
(1) In violation of constitutional or statutory
provisions; or
(2) In excess of the statutory authority or
jurisdiction of the agency; or
(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record; or
(6) Arbitrary, or capricious, or characterized by
abuse of discretion or clearly unwarranted
exercise of discretion.
HRS § 91-14(g) (2012).
Accordingly,
[c]onclusions of law are reviewed de novo, pursuant to
subsections (1), (2) and (4); questions regarding procedural
defects are reviewable under subsection (3); findings of
fact (FOF) are reviewable under the clearly erroneous
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standard, pursuant to subsection (5), and an agency’s
exercise of discretion is reviewed under the arbitrary and
capricious standard, pursuant to subsection (6).
Kauai Springs, Inc. v. Planning Comm’n of Cty. of Kaua#i, 133
Hawai#i 141, 164, 324 P.3d 951, 974 (2014).
Courts reviewing agency determinations for abuse of
discretion must engage in a two-step inquiry.
When determining whether an agency abused its
discretion pursuant to HRS § 91-14(g)(6), the court must
first “determine whether the agency determination under
review was the type of agency action within the boundaries
of the agency’s delegated authority.” If the determination
was within the agency’s realm of discretion, then the court
must analyze whether the agency abused that discretion. If
the determination was not within the agency’s discretion,
then it is not entitled to the deferential abuse of
discretion standard of review.
Kolio v. Hawai#i Pub. Hous. Auth., 135 Hawai#i 267, 271, 349 P.3d
374, 378 (2015) (citing Paul’s Elec. Serv., Inc. v. Befitel, 104
Hawai#i 412, 417, 91 P.3d at 494 (2004)).
Additionally, “it is well settled that in an appeal
from a circuit court’s review of an administrative decision the
appellate court will utilize identical standards applied by the
circuit court.” Kauai Springs, 133 Hawai#i at 164, 324 P.3d at
974 (internal citations and internal quotation marks omitted).
B. Statutory Interpretation
“The interpretation of a statute[, ordinance, or
charter] is a question of law reviewable de novo.” Korean
Buddhist Dae Won Sa Temple of Hawaii v. Sullivan, 87 Hawai#i 217,
229, 953 P.2d 1315, 1327 (1998) (alterations in original).
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When construing a statute, our foremost obligation is
to ascertain and give effect to the intention of the
legislature, which is to be obtained primarily from the
language contained in the statute itself. And we must read
statutory language in the context of the entire statute and
construe it in a manner consistent with its purpose.
When there is doubt, doubleness of meaning, or
indistinctiveness or uncertainty of an expression used in a
statute, an ambiguity exists. . . .
In construing an ambiguous statute, “the meaning of
the ambiguous words may be sought by examining the context,
with which the ambiguous words, phrases, and sentences may
be compared, in order to ascertain their true meaning.” HRS
§ 1-15(1) [(1993)]. Moreover, the courts may resort to
extrinsic aids in determining legislative intent. One
avenue is the use of legislative history as an interpretive
tool.
Id. at 229-30, 953 P.2d at 1327-28 (citing Gray v. Admin. Dir. of
the Court, 84 Hawai#i 138, 148, 931 P.2d 580, 590 (1997)).
The general principles of construction which apply to
statutes also apply to administrative rules. As in
statutory construction, courts look first at an
administrative rule’s language. If an administrative rule’s
language is unambiguous, and its literal application is
neither inconsistent with the policies of the statute the
rule implements nor produces an absurd or unjust result,
courts enforce the rule’s plain meaning.
CARD, 114 Hawai#i at 194, 159 P.3d at 153 (citing Allstate
Ins. Co. v. Ponce, 105 Hawai#i 445, 454, 99 P.3d 96, 105 (2004)).
III. DISCUSSION
On secondary appeal to this court, Local 5 reiterates
the points of error it raised in the circuit court. It argues
that: (1) the circuit court erred when it concluded that it
lacked jurisdiction over the modification of the 2121 Kûhiô
Permit; (2) the circuit court erred when it failed to decide that
the modification was illegal; (3) the circuit court erred in
concluding that the Director’s decision to approve the 2139 Kûhiô
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Permit without conditions similar to the 2121 Kûhiô Permit was
not arbitrary and capricious; and (4) the definition of “hotel”
as defined in the LUO is unconstitutionally vague.
In other words, Local 5 challenges two “decisions” by
the Director: the Director’s September 6 Letter removing certain
restrictive covenant conditions from the 2121 Kûhiô Permit, and
the Director’s July 14, 2014 approval of the 2139 Kûhiô Permit
without those conditions.
For the following reasons, we vacate and remand.
A. Local 5 was entitled to notice of the Director’s September 6
Letter removing certain conditions from the 2121 Kûhiô
Permit.
Local 5 alleges that the Director’s purported
modification of the 2121 Kûhiô Permit was improper in two ways.
First, Local 5 contends that the Director’s September 6 Letter
was not a proper modification under ROH § 21-2.20(k). Second,
Local 5 argues that the DPP’s failure to provide notice of the
Director’s September 6 Letter modifying the 2121 Kûhiô Permit
“prejudiced Local 5’s substantial rights.” Because courts have
the power to modify a decision or order of an administrative
agency “[w]here an administrative agency, by failure to follow
its rules, prejudices the substantial rights of a party before
it,” Local 5 requests a remedy that will allow it to properly
appeal the Director’s purported modification. (Citing Nakamine
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v. Bd. of Trustees of the Emp. Ret. Sys., 65 Haw. 251, 255, 649
P.2d 1162, 1165 (1982).)
On the facts of this case, we agree with Local 5 that
it was substantially prejudiced when it did not receive notice
that the Director had removed two important conditions from the
2121 Kûhiô Permit. This court has consistently noted that the
principle of due process
is not a fixed concept requiring a specific procedural
course in every situation. Rather, due process is flexible
and calls for such procedural protections as the particular
situation demands. The basic elements of procedural due
process of law require notice and an opportunity to be heard
at a meaningful time and in a meaningful manner.
Price v. Zoning Bd. of Appeals, 77 Hawai#i 168, 172, 883 P.2d
629, 633 (1994) (citations omitted).
The record indicates that the Director was well aware
that Local 5 had specific concerns regarding compliance with the
LUO should the units in the 2121 Kûhiô project be converted to
multi-family units. After PACREP had applied for a WSD permit
for the 2121 Kûhiô tower, Local 5 registered its opposition to
the Director’s approval. The 2121 Kûhiô Permit makes specific
reference to Local 5’s complaints regarding the possible impact
that usage of the units for residential, rather than hotel
purposes, might have on parking, employment, and housing in
Waikîkî. Indeed, the Director acknowledged that he had been
aware of Local 5’s concerns; he knew it was an issue “that [Local
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5 was] concerned about.” Therefore, when the Director approved
the 2121 Kûhiô Permit, he included restrictive covenant
conditions that would ensure that any conversion of hotel units
to residential units would comply with LUO requirements.
Nevertheless, merely seven months after approving the 2121 Kûhiô
Permit, the Director removed these hard-fought restrictive
covenant conditions without any notice to Local 5.
The DPP contends it was not required to give
affirmative notice to Local 5 that the Director had removed these
conditions. The DPP notes that DPP Rules § 6.2 provides that
“[t]he director shall mail the written decision to the applicant
and, upon request, shall give notice of the decision to other
interested persons.” (Emphasis in original.) Because Local 5
was not the applicant and never formally requested notice of the
Director’s actions on the 2121 Kûhiô Permit, the DPP argues that
Local 5 cannot claim that the DPP violated its due process
rights. The DPP further argues that CARD, 114 Hawai#i 184, 159
P.3d 143, forecloses Local 5’s due process argument because Local
5 did not request notice under DPP Rules § 6.2.
DPP’s reliance on CARD is misplaced because CARD did
not involve a denial of due process based on lack of notice, but
whether a petition for declaratory ruling can be used to seek
review of agency decisions after the fact. While the appellants
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in CARD attended every public meeting discussing the applicant’s
application for a conditional use permit and the applicant
specifically reported at the meetings that it was “going through
the permitting process,” the appellants failed to request notice
of the decision under DPP Rules § 6.2. Id. at 187, 159 P.3d at
146. The appellants untimely appealed the Director’s approval of
the conditional use permit, and the ZBA dismissed the appeal.
Id. at 187-88, 159 P.3d at 146-47. The appellants then sought
review of the issuance of the permit by requesting declaratory
rulings from the Director. Id. at 190-01, 159 P.3d at 149-50.
We affirmed the Director’s later refusal to issue a declaratory
ruling in favor of the appellants because we concluded that “the
declaratory ruling procedure may not be used as a means for
review of decisions that have come before the board and been
properly decided.” Id. at 200, 159 P.3d at 159.
We are presented with a different situation here.
Local 5 actively participated in the public hearing process for
the 2121 Kûhiô Permit. While Local 5 was not formally notified
by the DPP that the Director had approved the 2121 Kûhiô Permit,
Local 5 was aware that the 2121 Kûhiô Permit had been approved
with the conditions for which it had advocated. Having satisfied
itself that the project was approved with conditions, Local 5 had
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no reason to request notice of action pursuant to DPP Rules §
6.2.
The 2121 Kûhiô Permit was not modified using the normal
procedures for a modification. There is no evidence in the
record to suggest that PACREP, the applicant, had publicly
announced or filed a written request seeking to modify the 2121
Kûhiô Permit. Cf. CARD, 114 Hawai#i at 187, 159 P.3d at 146
(noting that the applicant had informed the public of its plans
to develop, had applied for a conditional use permit, and had
publicly reported that it was “going through the permitting
process”). To the contrary, the record indicates only that
PACREP verbally asked the Director to remove the conditions, and
the Director later obliged. There is also no evidence in the
record to indicate that the September 6 Letter was available at
the DPP for review by the public.
In these particular circumstances, we disagree that
Local 5’s failure to formally request notice under DPP Rules
§ 6.2 forecloses its right to challenge the Director’s
September 6 Letter. Where the record demonstrates that the
interested party advocated for certain conditions in a permit,
the permit was approved with those conditions, and the permitting
authority knew the importance of the conditions to the interested
party, that interested party is entitled to heightened procedural
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protections regarding later decisions to modify that permit. See
Price, 77 Hawai#i at 172, 883 P.2d at 633. These protections
include “notice and an opportunity to be heard at a meaningful
time and in a meaningful manner.” Id. In this unique
circumstance, we conclude that Local 5 was entitled to these
heightened due process protections.
Therefore, pursuant to HRS § 91-14(g), we remand these
issues to the ZBA to decide whether the Director’s September 6
Letter was a proper modification of the 2121 Kûhiô Permit under
ROH § 21-2.20(k) and ZBA Rules § 22-8.12
12
Local 5 argues that the ZBA lacks jurisdiction to address any
“modification” of a permit, because it is not an “action of the Director”
under ZBA Rules § 21-1. Revised Charter of the City and County of Honolulu
(RCCCH) § 6-1516, however, gives broad powers to the ZBA to “hear and
determine appeals from the actions of the director in the administration of
the zoning ordinances[.]” Modification of permits are expressly provided in
the LUO as an “administrative procedure.” See ROH § 21-2.20; cf. Hoku Lele v.
City and Cty. of Honolulu, 129 Hawai#i at 167-68, 296 P.3d at 1075-76
(concluding that a zoning verification is not an “action of the Director”
because nothing in the LUO addresses it).
Accordingly, in the ordinary case, a modification of a permit made
under ROH § 21-2.20(k) is an “action of the Director” as contemplated by RCCCH
§ 6-1516 and ROH § 21-1.40, and can be appealed to the ZBA. To the extent
that ZBA Rules § 21-1 states otherwise, it contradicts the broader language
and purpose of RCCCH § 6-1516. See Colony Surf. Ltd. v. Dir. of Dep’t of
Planning & Permitting, 116 Hawai#i 510, 515, 174 P.3d 349, 354 (2007).
Finally, while Local 5 requests that we determine, in the first
instance, whether any such “modification” was improper, we note that no agency
or court has ruled on the issue. Although there was an admitted modification,
because there has been no ruling in this case, it must be remanded. It is
therefore appropriate that the ZBA decide whether the Director’s September 6
Letter was a proper modification of the 2121 K ûhiô Permit pursuant to ROH
§ 21-2.20(k) and ZBA Rules § 22-8.
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B. The Director’s subsequent approval of the 2139 Kûhiô Permit
must also be remanded.
Local 5 also contends that the circuit court erred when
it affirmed the ZBA’s decision to affirm the approval of the 2139
Kûhiô Permit. Its principal argument on this point is that the
circuit court’s affirmance of the 2139 Kûhiô Permit without
conditions similar to the 2121 Kûhiô Permit was arbitrary,
capricious, and an abuse of discretion. In other words, the
issue here is whether the ZBA erred when it concluded that “[t]he
Director did not act arbitrarily or capriciously, and did not
abuse his discretion, when he did not include in the 2139 Permit
conditions similar to the restrictive covenant condition of
Condition C in the 2121 Permit.”
Because the record demonstrates that the 2139 Kûhiô
project is operated jointly and fully integrated with the 2121
Kûhiô project, the specific facts of this case require us to
remand the approval of the 2139 Kûhiô Permit. The record makes
clear that both the 2121 Kûhiô tower and the 2139 Kûhiô tower are
operated as a single condo-hotel. In the first paragraph of its
application for the 2139 Kûhiô Permit, PACREP 2 states that the
proposed project “will share an 8-story building podium with the
adjacent 2121 Kûhiô tower that is currently under construction.
The building podium will contain shared resident services,
recreational amenities, vehicle access and off-street parking.”
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The shared amenities in the building podium will include
“commercial spaces, concierge desk, spa, theatre, kids’ room,
indoor and outdoor spaces for events, food, and beverage
preparation area and a business center.” Moreover, the 8-story
building podium will provide vehicle access to both the 2121
Kûhiô tower and the 2139 Kûhiô tower from Kâlaimoku Street.
Similarly, in PACREP 2’s Real Estate Commission Report,
PACREP 2 specifically stated that the two towers will be
integrated, “sharing the use of parking services and amenities,
initially through a reciprocal easement and license agreement and
subsequently, through the merger of the [2139 Kûhiô] Project and
the Tower 1 Project (meaning both the Project and the Tower 1
Project will be treated as a single condominium project).”
The Director also recognized the integrated nature of
the two projects when he approved the 2139 Kûhiô Permit. He
noted that the tower’s eight-story podium “will be shared with
the adjacent 2121 Kuhio condo-hotel, which is currently under
construction.” With respect to off-street parking, the Director
specifically instructed that the approval of the 2139 Kûhiô
Permit “should be based on the use of both the 2121 Kuhio and
2139 Kuhio developments to hotel use,” because the building’s
podium will contain all of the jointly-developed parking lot
spaces. Accordingly, 2139 Condition I provides that the valet,
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housekeeping, building maintenance, and room service conditions
“shall be extended as conditions of approval to all units in the
2121 Kuhio development[.]”
Both PACREP 2 and the DPP have acknowledged that the
2139 Kûhiô project was intended to be operated jointly with the
2121 Kûhiô project as one condo-hotel. The DPP appears to have
recognized the value of including similar conditions in each
permit when it argued in the ZBA that one of the reasons why the
Director’s approval of the 2139 Kûhiô Permit was not arbitrary
and capricious was because it contained the same conditions as
the earlier-modified 2121 Kûhiô Permit. Further, it conceded
that the Director had knowledge of the September 6 Letter when he
approved the 2139 Kûhiô Permit, as he was the one who issued the
letter.
Because the decision to approve the 2139 Kûhiô Permit
rested in part on the Director’s removal of the restrictive
covenant conditions from the 2121 Kûhiô Permit, which we are
remanding to the ZBA to determine whether that modification was
proper under the LUO, we also conclude that, pursuant to
HRS § 91-14(g), the ZBA’s decision to approve the Director’s
July 14, 2014 approval of the 2139 Kûhiô Permit must similarly be
vacated and remanded to the ZBA to decide whether the Director
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abused his discretion by approving the permit without those
conditions.13
IV. CONCLUSION
When PACREP submitted its application for a WSD permit
for the 2121 Kûhiô project to the DPP, Local 5 raised concerns
regarding how the condo-hotel would comply with LUO requirements
if any hotel units were converted to residential units. In
response to those concerns, the Director placed restrictive
covenant conditions in the 2121 Kûhiô Permit that required the
condo-hotel to provide a sufficient number of parking stalls,
comply with park dedication provisions, and meet other LUO
requirements. Local 5 knew that the Director had approved the
project, and, satisfied with the conditions placed on the permit,
did not appeal the decision.
Yet several months later, after an oral request by
PACREP, the Director removed these conditions from the 2121 Kûhiô
Permit without any notice to Local 5. On the particular facts of
this case, we conclude that the process for modifying the 2121
Kûhiô permit did not provide Local 5 with notice, such that
13
We therefore need not decide whether the definition of “hotel” in
the LUO is unconstitutionally vague, and do not address Local 5’s fourth
argument on appeal. See DW Aina Le#a Dev. v. Bridge Aina Le#a, LLC, 134
Hawai#i 187, 217, 339 P.3d 685, 715 (2014) (“[I]f a case can be decided on
either of two grounds, one involving a constitutional question, the other a
question of statutory construction or general law, . . . [this court] will
decide only the latter.” (second alteration in original)).
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Local 5 was unable to later challenge the Director’s decision to
remove these conditions and violating its due process rights.
Accordingly, we remand Local 5’s challenge of the Director’s
September 6 Letter to the ZBA for further proceedings.
Additionally, because the 2139 Kûhiô tower is fully integrated
with the 2121 Kûhiô tower, shares certain facilities and parking
stalls with the 2121 Kûhiô tower, and the permit for its
development was based in part on the previously-approved 2121
Kûhiô Permit, we also vacate the ZBA’s decision that approved the
Director’s granting of the 2139 Kûhiô Permit and remand the case
to the ZBA.
We therefore vacate the circuit court’s October 9, 2017
Findings of Fact, Conclusions of Law, and Decision and Order
Modifying and Affirming the Decision of the Zoning Board of
Appeals in Case No. 2014/ZBA-5, which affirmed the ZBA’s
October 15, 2015 Findings of Fact, Conclusions of Law, Decision
and Order, and remand to the ZBA to resolve Local 5’s challenges
to (1) the Director’s September 6, 2013 letter removing certain
restrictive covenant conditions from the 2121 Kûhiô Permit; and
(2) the Director’s July 14, 2014 approval of the 2139 Kûhiô
Permit without those conditions.
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Gregory W. Kugle, Loren A. /s/ Mark E. Recktenwald
Seehase, and Joanna C.
Zeigler for appellant- /s/ Paula A. Nakayama
appellant
/s/ Sabrina S. McKenna
Brad T. Saito, for appellee-
appellee City and County of /s/ Richard W. Pollack
Honolulu Department of
Planning and Permitting /s/ Michael D. Wilson
Terence J. O’Toole, Sharon V.
Lovejoy and Maile S. Miller
for Intervenor-Appellee
PACREP 2 LLC
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