Hokulia workers
face layoffsA court ruling over land use
for the Big Island project
could cost 150 their jobs
without an interim agreement
The developers of Hokulia, the billion-dollar residential community south of Kona, say they will lay off the majority of the 200 employees who have been working on the project in 30 days if the development cannot go forward.
The announcement comes in response to a Sept. 9 ruling in state Circuit Court by Big Island Judge Ronald Ibarra, who said the company cannot continue construction or development of the Hokulia project in its current form. The company must either seek state Land Use Commission re-classification from its current agricultural designation or obtain a declaratory ruling from the LUC regarding any changes to the entire project since the commission's last ruling, the judge said.
If an interim plan allowing the project to proceed is not reached, about 150 employees will be let go in a month's time, said Lyle Anderson, chair of the Arizona-based Lyle Anderson Company Inc., general partner in 1250 Oceanside Partners, the company that has been developing Hokulia.
"We are on the verge of layoffs," Anderson said.
He added about 200 workers employed with contractors working on the site were laid off the day after the ruling came down.
Anderson said yesterday that Judge Ibarra's ruling effectively cripples the project unless some interim solution can be reached. Anderson said the company is planning on appealing the decision to the state Supreme Court, but also is looking at other options that could resolve the problem sooner.
1250 Oceanside Partners was sued by Walter John Kelly, who was joined by the Protect Keopuka Ohana. The group includes descendants of Hawaiians buried on the project site.
The issue behind the case is whether the developer has been in compliance with state land use law. In order to qualify as an agricultural development, owners must plant a crop or crops on their lots. In the case of Hokulia, owners may choose from a list of crops approved by the developer. Owners can farm their own land, within those restrictions, or allow the homeowners' association to take care of their crops. The company set up a nursery of small coffee trees for owners to choose from, but those could not be used because of water issues. Currently, it has a nursery of about 7,000 native Hawaiian hardwood seedlings.
Ibarra found that Hokulia is not an agricultural development, but rather a luxury residential development. Company officials strongly disagree and say they have gone to great lengths to make sure they were in compliance with all rules and regulation pertaining to the development, especially community sentiment.
"Probably 3,000 (community members) have been down on the property, mostly from North and South Kona, and what we heard was that (people) really want this to look and feel rural," said Dick Frye, vice president for development for the Lyle Anderson Co.
Company officials said they already have sold about 200 lots in the development and three homes had begun construction before Ibarra's ruling. They believe those homes and other site work being done by the company cannot progress given the judge's order. The only areas exempted from the ruling are the development's shoreline park and golf course.
Hokulia is master planned for 730 lots of one acre or more. Lot prices in phase one, made up of 261 sites, range in price from $1 million to $3 million. Prices for phase two, made up of 98 lots, range from $1.5 million to $8 million.
Anderson said while the company wants to find a solution to the problem as soon as possible, he believes the judge's ruling could have a chilling effect on anyone considering investing in Hawaii.
"I think this has far-reaching implications, not just for our project but to the state," he said.
