HAWSCT Oral Arguments In Hoopili - Is The State Prohibited From Rezoning "Potential" Important Ag Land?
by Robert Thomas, InverseCondemnation, December 28, 2015
Barista's note: last week, the Hawaii Supreme Court issued a 4-1 ruling in Friends of Makakilo v. D.R. Horton-Schuler Homes, LLC, No. SCAP-13-0002266, holding that the State Land Use Commission was not prohibited from adopting a boundary amendment (akin to a rezoning under Hawaii's state-heavy land classification scheme) while the process for designating Important Agricultural Lands plays out.
Earlier this year, on June 25, 2015, court heard oral arguments, and our colleague Paul Schwind, who has guest posted before on this and other important cases, kindly attended the arguments, and had the the following report, which we're posting while we digest the majority and dissenting opinions.
According to the Judiciary web site summary of the case, here are the issues:
In this case, Appellants Sierra Club and Clayton Hee appeal from the Decision and Order of the Circuit Court of the First Circuit, which dismissed their appeal from the Land Use Commission’s (“LUC”) Findings of Fact, Conclusions of Law, and Decision and Order, which approved Appellee D.R. Horton-Schuler Homes’ Petition for District Boundary Amendment (as amended). The LUC reclassified approximately 1525.516 acres of Appellee’s land from the state agricultural land use district to the state urban land use district. The land is slated for development of the Ho`opili project.
Appellants argue that the reclassification violated Article XI, Section 3 of the Hawai`i State Constitution, which provides the following:
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.
Appellants also argue that the reclassification violated Act 183, HRS § 205-41 through -52, which are the statutory provisions implementing Article XI, Section 3’s mandate, and which govern land use on important agricultural lands (“IALs”). They contend that the LUC should not reclassify lands that could potentially qualify as IALs until the City and County of Honolulu has completed the formal process of identifying Oahu’s IALs.
Lastly, Appellants argue that the reclassification violated Hawai`i Administrative Rules (“HAR”) § 15-15-77, which requires conformance to the Hawai`i State Plan. They also contend that the reclassification violated HAR § 15-15-77(6), which requires the LUC to consider whether taking land in “intensive agricultural use for two years prior to the date of a filing of a petition [for a district boundary amendment] or lands with a high capacity for intensive agricultural use” out of the agricultural district “[w]ill not substantially impair actual or potential agricultural production in the vicinity of the subject property or in the county of State; or . . . [i]s reasonably necessary for urban growth. . . .”
The oral argument recording is here, if you'd like to listen:
http://www.courts.state.hi.us/courts/oral_arguments/archive/oasc13_2266.html (or here: https://archive.org/details/SCOA062515132266)
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Hawaii Supreme Court Oral Argument on Land Use Commission's Hoopili Approval
by Paul J. Schwind*
When we last visited this case on November 30, 2012, Circuit Court Judge Rhonda Nishimura had granted motions to dismiss an attempt by Friends of Makakilo to cross-appeal, in the agency appeal by the Sierra Club Hawaii Chapter and [now former] Senator Clayton Hee, from the Land Use Commission’s (LUC’s) order granting a district boundary amendment effecting the reclassification of land from the “agricultural” district to the “urban” district for D.R. Horton-Schuler Homes' proposed Ho`opili development. The Hawaii Supreme Court affirmed the lower court’s dismissal of the “cross-appeal” as untimely; see Friends of Makakilo v. D.R. Horton-Schuler Homes, LLC et al., slip op., No. SCAP-13-0002408 (Haw. Oct. 30, 2014).
Subsequent to the November 2012 preliminary skirmish, on May 8, 2013, Judge Nishimura heard oral argument on the Sierra Club’s and Senator Hee’s appeal-in-chief. She dismissed that appeal and affirmed the LUC’s decision. The court’s written decision and order and final judgment were filed on June 27, 2013, and were promptly appealed by the Sierra Club and Senator Hee. After having originally been filed in the Intermediate Court of Appeals, the appeal was transferred to the Hawaii Supreme Court and is now designated The Sierra Club et al. v. D.R. Horton-Schuler Homes, LLC et al., No. SCAP-13-0002266 (Haw. May 1, 2014).
The Supreme Court heard oral argument on this appeal on June 25, 2015. Sitting in on this case were Supreme Court Chief Justice Mark E. Recktenwald, Associate Justices Paula A. Nakayama, Sabrina S. McKenna, and Richard W. Pollack, with Circuit Court Judge Gary W. B. Chang assigned in place of Justice Simeon R. Acoba, recused [and since retired].
Appellants’ Arguments
Eric A. Seitz, Esq., began by arguing for Appellants Sierra Club and Senator Hee that the subject property of the reclassification is the “best and most productive” agricultural land in Hawaii and perhaps in the entire United States. The property represents 32 percent of the most productive land on the island of Oahu, and 13 percent of such land statewide. Chief Justice Recktenwald immediately asked (evidently referring to the record on appeal), what about alternative agricultural lands said to be available? Mr. Seitz responded that the lands referred to have no infrastructure [such as farm roadways and irrigation systems], and are not a substitute for the subject property. The contrary findings of fact in the record (such as “no significant impact” to agriculture) are therefore “100 percent wrong”, and it would be “inconceivable” – a violation of law and the constitutional mandate to conserve and protect important agricultural lands (Article XI, Section 3 of the Hawaii State Constitution) – to take these lands.
Mr. Seitz asserted that the appellants do not dispute the need for housing. But the statutory mandate to the LUC is to achieve “balance” in its decision-making, and it did not do that, in “utter disregard” to the policies in the law. There are already 40,000 new housing units permitted for development in the Ewa region. The subject property is not needed for housing, and the LUC made no finding that a need for housing there outweighed the need to preserve agricultural land. Unlike in the Koa Ridge [reported here on June 1, 2015], the developers here have consistently misrepresented and lied about their case. The alternative agricultural land they proposed was in small plots and gulches and other unproductive land. They gave no indication of the jobs that would be created, except in food service. And most of the homes to be developed will be “overpriced”.
In response to a series of questions from the Justices, Mr. Seitz stated that the appellants challenge all of the LUC’s findings of fact, and appeal the entire process for violation of law and the standards of review in Haw. Rev. Stat. §91-14. They are no longer arguing whether 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 and does not act as a barrier to reclassification) is applicable. The LUC reclassification action didnot meet the tests required under Haw. Rev. Stat. § 205-4(h) (the proposed boundary must be “reasonable, not violative of section 205‑2 [standards for districting and classification of lands] and part III of [chapter 205 (§§ 205‑41 through 205-52 relating to important agricultural lands)], and consistent with the policies and criteria established pursuant to sections 205‑16 [conformance to the provisions of the Hawaii State Plan] and 205-17 [LUC decision-making criteria]”). Mr. Seitz conceded that the subject property is within the City and County of Honolulu’s urban growth boundary, but he contended that the LUC nevertheless has a binding obligation to “stay its hand” pending the City’s mapping of important agricultural lands. He further conceded that the Hawaii State Plan does not favor agriculture over other land uses, but added that former Board of Agriculture Chairman Russell Kokubun’s testimony in this case acknowledged that there is no substitute for the agricultural lands in the subject property. He concluded that pursuant to City Council Resolution 12-23 CD1, FD1 (Feb. 15, 2012), the agricultural productivity of the subject property should be considered, even though it is within the urban growth boundary.
Appellees’ Arguments
Gregory W. Kugle, Esq., then argued for Appellee D.R. Horton-Schuler Homes by beginning that this case is about planning: “he who fails to prepare, prepares to fail”. The City and County of Honolulu’s adopted General Plan and Ewa Development Plan have long since determined that the region of the subject property is intended for urban development. In Kaiser Hawaii Kai Development Co. v. City and County of Honolulu, 70 Haw. 480, 483, 486, 777 P.2d 244, 246, 248 (1989), the Hawaii Supreme Court affirmed the statutory requirement in Haw. Rev. Stat. § 46-4(a) that “[z]oning in all counties shall be accomplished within the framework of a long range, comprehensive general plan prepared or being prepared to guide the overall future development of the county”, and there has been no change in legislative intent since this language of the Zoning Enabling Act was first enacted in 1957. Here, the LUC is implementing City plans in place since the 1970’s. Today, the Court has heard nothing about long-range planning. Under the standard of review for appeals (Haw. Rev. Stat. § 91-14), the LUC’s decision and order has the presumption of validity. The appellants must specifically identify findings of fact that are “clearly erroneous”, but they have not done so, and the Court cannot otherwise re-weigh the facts. The site of the proposed Ho`opili project is surrounded on the north by the H-1 freeway, to the east and south by existing urban development, and to the west by the University of Hawaii West Oahu Campus.
In response to questions from Chief Justice Recktenwald, Mr. Kugle continued that the City’s urban growth boundary was drawn to protect 3,000 acres of important agricultural lands in Ewa outside that boundary. There are 30,000 acres of such prime land that are not being farmed on Oahu. Horton-Schuler’s consultant testified that the City is making improvements to the Lake Wilson irrigation system, and wells are also being developed on the north shore which can service alternative agricultural sites. The reclassification to urban met the tests required under Haw. Rev. Stat. § 205-4(h) by virtue of the fact that important agricultural lands (IAL) have not yet been formally identified by the City and designated by the LUC pursuant to the criteria set forth in Haw. Rev. Stat. § 205-42(a); therefore the subject property cannot be treated as IAL. Further, as land within the City’s urban growth boundary, the subject property is specifically excluded from such consideration by Haw. Rev. Stat. §205‑47(a) (Counties required to map IAL within their jurisdictions) and § 205‑46(e) (incentives for IAL apply only to lands so designated).
In response to questions from Justice Pollack, Mr. Kugle added that the LUC findings of fact support the conclusion that the reclassification has met the “not substantially impair” [agricultural production] and “reasonably necessary” [to meet the need for housing] standards of HAR § 15-15-77(6) (supra). Since the 1970’s, it has been a conscious policy decision of the City to direct growth to Ewa, and “keep the country country” elsewhere on Oahu. The Ho`opili project meets the need for primary residences, unlike some previously committed projects that will develop second homes and vacation units. The reclassification to urban also meets the standard of Haw. Rev. Stat. § 205-2 for urban districts by providing a sufficient reserve area of suitable lands for foreseeable urban growth on an incrementally phased basis. By so doing at this location, the reclassification serves to give the “greatest possible protection” to other agricultural lands elsewhere that are arguably better, based on historical crop yields.
Don S. Kitaoka, Esq., argued next for Appellee City and County of Honolulu, Department of Planning and Permitting. There is “a time and place for everything” in the land use process, he said, within which the City’s General Plan and Development Plans must be given deference. The General Plan directs growth to the Ewa plain, which inevitably requires that agricultural land within the urban growth boundary be used for housing. Yet 3,000 acres of agricultural land is protected in Ewa, together with 30,000 acres of prime land in the rural Sustainable Community Plan areas. The most recent Ewa Development Plan is the result of a deliberative process and full public comment. Accordingly, the Court should not give “short shrift” to the City’s plans.
Finally, Bryan C. Yee, Esq., argued for Appellee State Office of Planning that the planning process must allow adequate land for development. In this case, the LUC made findings of fact that agricultural lands are available for farm tenants in the Kunia Agricultural Park and in the “Galbraith lands” purchased by the State in Central Oahu. The standard in the law does not require a quid pro quo substitution of acreage or quality of agricultural land to replace the area reclassified to urban. In response to a question from Justice Pollack, Mr. Yee added that the standards and criteria for reclassification or rezoning of important agricultural lands in Haw. Rev. Stat. § 205‑50 (as linked through § 205-17) do not apply to every LUC reclassification action. Nevertheless, prime agricultural land does get consideration even if it has not been formally designated as IAL. Where conflict arises, that is where planning comes in. In conclusion, he asked the Court to consider that the LUC is a group of volunteers who donate their time to consider the dockets before them.
Appellants’ Rebuttal
In rebuttal, Mr. Seitz contended that the reference in the LUC findings of fact to 30,000 acres of prime agricultural land with water was entirely hypothetical. He reiterated that City Council Resolution 12-23 CD1, FD1 (Feb. 15, 2012), as amended on January 19, 2012, specifically requires “that the [City’s] process of identification and mapping of important agricultural lands also consider agriculturally productive lands within urban growth boundaries that are classified as prime agricultural lands, provided adequate water supply is available”, and this applies to both the Ho`opili and Koa Ridge properties. He added that there was testimony from a former Campbell Estate employee that agricultural lands within the Ewa plain should be preserved. He concluded that this Court has required a high degree of scrutiny when reviewing agency decisions affecting the environment.
This writer does not pretend to have a crystal ball, let alone a clear one, to divine the outcome of this case. However, it seems likely that it may be a split decision, based primarily on conformance to statutory provisions but with a nod toward policy choices, and based primarily on the record on appeal but with some acknowledgment of extrinsic facts and arguments.
Watch this space for further reportage.
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*voluntarily inactive member of the Hawaii Bar