BREAKING NEWS!

Posted 4/25/2024

Aloha,

Coco Palms and the developers interest in utilizing the State land acreage (two revocable permit parcels and a large coconut grove that would add 14.5 acres to the resort’s 22+ acres of fee simple land) will be heard by the Board of Land and Natural Resources (BLNR) in Honolulu, April 26, 2024. BLNR will also consider an application filed by a non-profit Kauai organization, I Ola Wailuanui, who plan to restore and develop the state lands into a historic public site. The issue before the Board will be whether or not to allow state lands to enhance and support Reef Capital Partner’s RP21 Coco Palms, LLC 350 room resort development. They want the state land to expand the foot print of the new resort hotel they plan to build at the former Coco Palms site.

Friends of Mahaulepu filed strong testimony in support of I Ola Wailuanui’s plan to develop a public site that features and develops the historic properties of these lands, once home to and the seat of the Hawaiian royalty on Kauai. The testimony we filed on behalf of our members to preserve and protect the historic features on the state lands, its environmental health, the Wailua River and the Wailua Beach Park and ocean is below in two separate emails to BLNR. There have been several rather egregious irregularities in the way public officials have dealt with the latest in a string of would be developers, which we invite you to take the time to read as our testimonies below contain facts that all residents should be aware of.

If you want to watch the meeting, click the link below:

Link to watch Board of Land and Natural Resources Coco Palms hearing tomorrow.
Agenda Item D1, likely to be heard after 10:00 am.

If you want to participate and testify, watch the YouTube broadcast and after the Chair announces Agenda Item D1, call 1-253-205-0468 and enter meeting ID #817 0609 2300.

We anticipate that many will testify in favor of the non-profit I Ola Wailuanui. Some of us will be there in person.

The following link includes recent Hawaii News Now coverage on the flooding experienced at the Coco Palms site.

Link to watch Hawaii News Now coverage of flooding at historic Coco Palms

FOM Testimony 1:

Aloha Dawn N. S. Chang,
Director Department of Land and Natural Resources and
Michael Cain, Administrator Office of Conservation and Coastal Lands

When we last appeared before the Land Board there were questions asked of  representatives for RP21 Coco Palms, LLC, the current “would be” developer of a 350 room resort hotel on the site of the former Coco Palms resort, destroyed by hurricane Iniki on September 11, 1992. RP21 representative/owner John Day told the Land Board that the use of state lands was not essential to their “restoration of the historic site”. When asked if the coconut palms were an important historic feature of the site, the developer’s answer was equivocal, claiming to not even realize the site was both a recognized property with features of historic significance, fish pond and numerous burials/iwi kupuna. The property is also included on the National Historic Registry. The developer’s responses December 15, 2023 suggested that the removal of the coconut palm trees was something done in the recent past as Mr Day suggested that the developer now intends to be a good steward and do things right to preserve this significant historic site.

In sharp contrast to that assertion, I invite you to review the inspection report from the Department of Health, released just 5 days after the Land Board last met to consider the Coco Palms development. In its report, you will see numerous photos taken by the DOH site inspection team. There are also development maps offered by RP21 Coco Palms, LLC that identify intended development on state land despite their claim that the state lands were not “essential” to the restoration plans. Of great concern, however, were the developer’s submittals marking numerous coconut palms with a red X to indicate more coconut palms intended for removal as of November 2023. See pages 9-11 in the DOH report. This is well described as well as other violations which I believe you will find of interest since the report was prepared after an unannounced inspection by a sister State Agency. There are also photographs of areas that have been cleared of any trees earlier with pictures of root balls and stumps. DOH photographs also document the heavy ground disturbing equipment on site and the trailers and structures that were not admitted to when responding to Land Board Member question on December 15, 2023. Nearly one acre of vegetation remains on conservation land off Koki Road. It is not obvious that you would otherwise receive the report. Since it contains evidence of multiple environmental violations ongoing at the end of November 2023, during the DOB inspection, which you also addressed in your letter of April 19, 2023, we share the Hawaii Department of Health Clean Water Branch Complaint Inspection Report in the event you have not previously received this report.

Mahalo nui,

Bridget Hammerquist

FOM Testimony 2:

Friends of Maha’ulepu             friendsofmahaulepu.org                                   4/24/2024

Aloha Chair Dawn NS Chang and Members of the Board of Land and Natural Resources,

RE: Approve One or More Dispositions to Applicants RP21 Coco Palms LLC and/or I Ola Wailuanui, Inc. and/or Sale of Lease at Public Auction, or No Action for Parcel B, Wailua, Kawaihau, Kauai, TMK: (4) 4-1-003:017. Approve One or More Dispositions to Applicants RP21 Coco Palms LLC and/or I Ola Wailuanui, or No Action for Parcel C, Wailua, Kawaihau, Kauai, TMK: (4) 4-1-005:017.

Please accept this testimony offered on behalf of all the members of Friends of Maha’ulepu which include nearby residents of the historic Coco Palms site as well as more than 1,000 members who reside island wide. We strongly favor public access, use and disposition of the State lands which are on the agenda for consideration by the Board of Land and Natural Resources (BLNR) Friday, April 26, 2024.

Agenda item D1 could not have been presented in a more confusing manner. Staff have masterfully offered five potential options/actions by the BLNR for revocable permits on parcels identified as B (TMK: (4) 4-1-003:017) and C (TMK: (4) 4-1-005:017). Not only are these five options confusing but they are once again weighted to benefit RP21 Coco Palms, LLC because when the option gives use to I Ola Wailuanui, the 501c 3, an applicant for these lands, they always provide that I Ola Wailuanui will be subject to an easement right/co-sharing of the parcel with RP21 Coco Palms, LLC. The converse, however, is not true! When the use is to be approved for RP21 Coco Palms, LLC, it is not suggested that I Ola Wailuanui will have an easement right.

We strongly support and recommend that BLNR approve I Ola Wailuanui a one year month to month revocable permit (RP) of parcels B and C, an entity that is not in violation or under investigation for violation of any county, state or federal laws. Affording I Ola Wailuanui a one year month to month revocable permit will allow the BLNR to evaluate the public benefit derived from the proposed historic preservation of this sites ancient past and connection to Hawaiian royalty, a history that spanned hundreds of years. It only really operated as a resort hotel between 1972 and 1992. Even during that time, as one of the descendants children, Ivan Ako, stated in the Declaration, the hotel had a lot of problems with ground water flooding that required sump pump operation 24 hours a day, 7 days a week. (See Declarations filed in support of a Petition to Revoke the County Development permits).

Offered for your consideration and material to the public’s interest is a Kauai County Council Resolution adopted by a majority of Council Members in response to substantial public outcry and objection to any resort development at the former Coco Palms site because of significant infrastructure short comings; traffic, waste water, threats to endangered sea birds and endemic species, sea level rise and threat of county beach park and state land encroachment that will likely adversely impact this historic and revered coastal land and the quality of life for residents of Kauai. When Kauai County Council met, the clear wording of the Kauai County Resolution supports public versus commercial use for the State lands at issue, see May 2023 County Council Resolution here. Under the laws of our State and Hawaii Constitution, State lands are given a preference for public use. Consequently, while development permits are vested with the County for the fee lands, BLNR can and should support public use over commercial use of the nearby state lands. The BLNR is not obligated nor does the law support preferential treatment of a commercial enterprise over the public use and enjoyment of State lands especially those with significant historic roots.

This is especially true when it comes to Agenda Item D1 for Friday which was Agenda Item D6 in December 15, 2023. The developer’s representative, John Day, made it abundantly clear when he responded to questioning by the Land Board that the State lands were not essential or necessary for their development of a resort hotel on the former Coco Palms fee simple lands:

BLNR Meeting December 15, 2023 Agenda Item D6

01:22:00
Chair Chang asks “Are these three. Are these three State parcels are they critical to your development”.

John Day responds “They are not essential and itʻs fair to call it a development Chair, we think of it as a restoration of a property that is on the Hawaii Register of National of Historic Places and so we think of it as a restoration of a historic site but I understand but I understand your meaning when you refer to it as development. Yes we will restore the historic Coco Palms regardless of what happens with these three parcels, they are not essential to restoring the historic Coco Palms. You know that being said, they are valuable um to the public in terms of providing parking um to the public and access to the public which we will provide. But they are not essential to restoring the historic Coco Palms”

Chair Chang “My followup question. Have you represented to the County in your development plans that these parcels these three revocable these three parcels are part of your project?”

John Day “Well I mean, they are part of our site plan. Our hope is to be able to use these parcels as part of the restoration of the historic Coco Palms. They are not essential to the project. The project will move forward either way”.

Chair Chang “So since they have been on your site plans, if you do not get these three RPs does that jeopardize your approvals before the County?”

John Day “Iʻm not aware that it would”.

Chair Chang “One final question. You mentioned the historic, you were here to restore the historic Coco Palms. Itʻs not a development. The Coconut trees that were cut down, you understood that those were part of the historic property”.

Mauna Kea Trask interrupts “Chairman”

Chair Chang “Iʻm going to ask Mr Day. If he cannot answer the question Mauna Kea, thatʻs okay. Thatʻs okay but Iʻm going to ask Mr Day. Are you? Cause you are the principal now. You represented to us that you are going to steward these lands and that you, you are here, you are present and I appreciate that you are present. So I am going to ask you the question. Did you understand that the coconut trees that were cut down were part of the historic property and the historic character and nature of the property?”

John Day “Well thatʻs a, thatʻs a long conversation. Um”.

Chair Chang “Just yes or no?”

John Day “At the time the trees were cut down no one on or team, and I mean we had archeological monitors, right, people who had worked at SHPD for a couple of decades. You know. People who were very experienced and No one was aware the previous owner had put the property on the Hawaii register of historic places. So they were unaware. Cause remember we foreclosed in 2022. Thatʻs when we took over. The previous owner that we foreclosed on put the property on the historic register. With respect to those trees, we were unaware that it was on the Hawaii historic register.”

Ends 01:26:00
BLNR December 15, 2023

Absent BLNR approval of RPs for parcels B and C for I Ola Wailuanui, we strongly support and recommend no action by BLNR at this time because of the following irregularities that have casts a negative and biased pall on this process.

Historic Background

Coco Palms Ventures, LLC, a Delaware Corporation that purchased the fee simple lands of the former Coco Palms Resort in 2006 from PRII (Prudential) was the last entity named on the State lease for the coconut grove and the three State RP parcels under consideration. In December 2023, Coco Palms Ventures, LLC interest in the RP parcels A, B and C, were terminated by BLNR Action. The lease between the State and Coco Palms Ventures, LLC was assigned by Coco Palm Ventures, LLC to PRII who then assigned the lease to Coco Palms Hui, LLC. While BLNR approved the assignment, there was never a transfer of the lease and the RPs were never put in the name of Coco Palms Hui, LLC. As Mr Tsuji explained when BLNR met April 14, 2023 Coco Palms Hui, LLC, never produced/provided the tax clearance and other documents necessary to perfect the prior Board approval. The coconut grove lease is still in the name of Coco Palms Ventures, LLC, an entity whose Hawaii State registered status was terminated December 4, 2017. None of the existing Coco Palms entities have any relationship with Coco Palms Ventures, LLC. When Coco Palms Ventures, LLC (Ventures) experienced financial hardship and were unable to satisfy the terms of Prudential’s sale of Coco Palms to them, they returned a deed to Prudential in lieu of foreclosure. Thus, the prior BLNR approval of an assignment from Ventures back to Prudential who then was assigning their interest to Coco Palms Hui, LLC was never perfected: Russell Tsuji at 53:40 BLNR April 14, 2023

Not only did Coco Palms Hui, LLC fail to pay property taxes on the RP lands from 2017 to 2023, but as Alison Neustein reported April 14, 2023, she was sending out a Notice of Deficiency for failure to pay property taxes during the same interval on the State leased coconut grove land. See Alison Neustein’s comments at 58:00 in the above link.

This is where the irregularities began. Ms Neustein did not send the Notice of Deficiency to attorneys for Coco Palms Hui, LLC and I Ola Wailuanui, rather she directed the Notice of Deficiency to Mauna Kea Trask depriving I Ola Wailuanui a fair and equal opportunity to satisfy the deficiency. Rather, staff indirectly selected the applicant who would be allowed to cure the deficiency and ensure the State land parcels while ignoring I Ola Wailuanui’s application that had been filed at the same time in February 2023.

Reef Capital through its loan servicing entity Private Capital Group (PCG) initiated foreclosure proceedings against Coco Palms Hui, LLC and its operators Chad Waters and Tyler Green who had also signed a personal guarantee for the loan brokered to them by PCG representing 6 or 7 Reef Capital investors. When the foreclosure proceeding was conducted, it was conducted by PCG, an agent for the lender.

Coco Palms Hui, LLC challenged the foreclosure in the Appellate Court along with their loan broker Paul Honkavaaro. That challenge has been on appeal since 2022. RP21 received a commissioner’s deed to the fee parcels in the course of the foreclosure proceeding, leaving Chad Waters, Tyler Green and Coco Palms Hui, LLC with a foreclosure appeal as their only asset.

In March of this year, the Reef Capital Lenders agreed to release Chad Waters and Tyler Green from their personal guarantee of the loan to buy the fee property from Prudential. In return, Chad Waters and Tyler Green agreed to dismiss their appeal and the only entity still contesting the foreclosure against Coco Palms Hui, LLC is Mr Honkavaaro.

In the meantime, Coco Palms Hui, LLC has no assets and owns nothing in fee.

Friends of Maha’ulepu filed a Petition to Revoke the Coco Palms permits for violations of many of the County permit conditions. In April 14, 2023 BLNR meeting, Ms Neustein Exhibit E, which shows that all the building permits have expired, most as of June 27, 2023. The Planning Director’s report, admits that many of the development conditions have not been met but it was his recommendation that the Planning Commission not revoke the development permits.

The second major irregularity in this matter occurred at the Planning Commission hearing March 12, 2024 when Mauna Kea Trask produced a lease that he suggested to the Planning Commission was about to be signed by this Board.

See the AG “Approved as to form” lease which Ms Neustein was instrumental in obtaining and delivering to Mr Trask. This document was produced less than a month before our Petition to Revoke hearing. Ms Neustein was not identified on the agenda as someone the Commission would be addressing. She appeared at 4:00 pm after an all day proceeding before the Kauai County Planning Commission and went into an Executive Session without prior notice to the public. Friends of Maha’ulepu objected to her entry into the Executive Session and we were told that she was there to help the Planning Commission understand the workings of the BLNR. When the public was brought back into the hearing, it was clear the Executive Session discussion was about the lease and Commissioner Ako actually asked Ms Neustein on the record if it was possible that BLNR would not sign the lease that she and Mr Trask were representing as an “all but done deal”. She responded that she couldn’t imagine that happening as she hadn’t seen that before. The exchange between Planning Commission Ako and Ms Neustein occurred during the last hour. March 12, 2024 Planning Commission Hearing on Petition to Revoke Coco Palms development permits.

One big problem, the lease presented to the Kauai County Planning Commission is in the name of Coco Palms Hui, LLC, an entity that owns none of the fee lands. Consequently, their status is similar to that of I Ola Wailuanui, in that they are also not an owner in fee property adjacent to the State RPs or coconut grove. Unlike I Ola Wailuanui, they do not have a public interest in restoration of the property for its public and historic benefit. The former Coco Palms Hui, LLC, a bankrupt entity with no ownership interest in the lands adjacent to the State lands, would not likely be an entity to be awarded the State coconut grove lease. However, when Mr Trask and Ms Neustein presented the Unsigned Unapproved Alleged AG Lease to Coco Palms Hui LLC dated 02/13/2024, it sure muddied the waters on our Petition to Revoke Hearing. At the end of the hearing, the Planning Commission found that Friends of Maha’ulepu had no standing to bring the Petition to Revoke. We have since filed an Appeal of their Decision on our Standing and have also appealed the irregularity associated with Ms Neustein’s entry into the Executive Session. Please see the objection we filed to that irregularity which was filed prior to our Notice of Appeal.

Mahalo nui,

Bridget Hammerquist, President
Friends of Maha`ulepu, a 501(c)(3)
Kia`i Wai o Wai`ale`ale, Co-founder
PO Box 1654
Koloa, HI 96756
Donate
friendsofmahaulepu.org
[email protected]
(808) 742-1037 home
(808) 346-1973 cell

Posted 3/25/2024

Aloha,

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