Buyers sue over
delay building Hokulia

CORRECTION Sunday, July 17, 2005 » The headline on an article on the Hokulia project in Kona on Page A6 on Friday incorrectly stated that property purchasers there had sued Hawaii County. Lawyers for the purchasers submitted a letter demanding money, with the implication that a suit will be filed if the money is not paid. The Honolulu Star-Bulletin strives to make its news report fair and accurate. If you have a question or comment about news coverage, call Editor Frank Bridgewater at 529-4791 or email him at corrections@starbulletin.com.

KAILUA-KONA » Lawyers for more than 100 lot owners in the controversial Hokulia residential development in Kona demanded $265 million from Hawaii County yesterday for the county's alleged failure to allow the project to move forward.

Hawaii County attorney Lincoln Ashida responded that the county has done nothing wrong, and attorney Alan Murakami said the real blame lies with project developer 1250 Oceanside Partners for deceiving its customers.

An Oceanside spokesman could not be reached for comment.

Located 10 miles south of Kailua-Kona, Hokulia is a 1,550-acre project that includes a golf course and 730 1-acre home sites priced at $650,000 to $2.5 million.

In 2003 and 2004, Kona Circuit Judge Ronald Ibarra ruled in a lawsuit that also involved Murakami that the project was an urban development being illegally constructed on agriculturally designated land.

The judge ordered Oceanside to halt work and go the state Land Use Commission to get the project approved as it is or have the land changed to urban designation. The developer appealed the judge's ruling to the state Supreme Court, where a determination is pending.

Meanwhile, Hawaii County was ordered not to grant any more permits for the project, which has been stopped for 20 months.

Oceanside has invested more than $300 million in the project, according to a company Web site.

California attorneys Robert Baker and Rollin Chippey II delivered an eight-page letter to the county yesterday demanding $265,829,764.43 for 182 lot owners. They said more names might be added later to a 12-page list they included.

The letter said the county has not provided necessary approvals and permits for lot owners to build houses, although it noted, along with a separate press release, that the county is obeying Ibarra's order that bans it from acting.

The letter also says the county was negligent when it entered into a contractlike development agreement with Oceanside in 1998 because it should have known details of the agreement were not legal.

County attorney Ashida responded: "We have maintained all along that the county has done nothing wrong in this case. That's about it. We've analyzed it thoroughly from a legal perspective."

In a news release, attorney Baker said the letter to the county is a first step in trying to invalidate Ibarra's rulings against the project. If that fails, the attorneys will try to recover money from Hawaii County, the state "and perhaps others." Baker has previously indicated that would be done through a lawsuit.

Attorney Murakami said he would not entirely dismiss the county's role in Oceanside's problems, but that the major blame lies with the company. He cited warnings from Oceanside's own attorneys and others that the project might have difficulties or be outright illegal.