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City may pay
$200 million in
Sandy Beach case

The city owes Kamehameha
Schools and a developer for
losses when 30 acres were
zoned for conservation

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By Gordon Y.K. Pang
Star-Bulletin

A court ruling this week means the city may have to pay as much as $200 million to Kamehameha Schools and developer Maunalua Associates for losses suffered when the city downzoned 30 acres of land across from Sandy Beach.

The land along the Ka Iwi shoreline, which has been the subject of preservation battles since the 1980s, is supposed to become a park, and the city budgeted $5 million for its purchase last year based on its value under current conservation zoning.

But Circuit Judge Sabrina S. McKenna ruled Monday that downzoning the land from residential to conservation resulted in an "inverse condemnation" and the city must pay for the potential revenues lost since the Council's actions in 1989.

McKenna previously ruled that any condemnation price needs to be based on the properties' value as residential land, rather than conservation land.

"The zoning is bad," said Ken Kupchak, Maunalua's attorney. "They violated due process in both the procedural aspect of how they adopted it and in the substance of what they did."

Kupchak refused to estimate what Maunalua believes it is owed. Arguments over the purchase price are expected to take place this summer, although the two sides could reach an agreement before that.

East Honolulu Councilman John Henry Felix said the ruling makes no difference to the city's intent.

"We've made a commitment to preserve the entire Ka Iwi shoreline for future generations," he said.

Dave Matthews, a founding member of the Save Sandy Beach Coalition, said the city should pay whatever the property is determined to be worth.

"To me, you can't put a price on that land," he said. "It's all that's left of the eastern part of Oahu, and it should be left alone."

The city is expected to appeal the decision.

Kamehameha Schools spokesman Kekoa Paulsen said the trust is pleased by the ruling and "would like all further issues through mutual agreement."