County votes to settle impasse on Kona project

Legal solutions have eluded Hokulia, halted as illegal in 2003

HILO » The Hawaii County Council gave unanimous approval yesterday to a recommendation for a settlement of the Hokulia lawsuit, which has blocked construction of the $1 billion Kona residential project.

Developer Oceanside 1250 had $350 million invested in the 1,550-acre project when Circuit Court Judge Ronald Ibarra halted it in 2003, saying it was an urban project being illegally built on agricultural land.

Protect Keopuka Ohana and four individuals sued the developers and the county in 2000 to stop ocean pollution caused by storm water runoff from the project. The suit expanded to include the legality of the project.

An appeal of Ibarra's ruling has been pending since 2003 in the state Supreme Court. It is unclear how a settlement by the parties would satisfy Ibarra's ruling on the project's legality.

No details of the settlement were revealed yesterday, and people in the closed-door discussion gave different accounts of the recommendation.

County attorney Lincoln Ashida, who made the recommendation, told the Star-Bulletin that the meeting dealt only with "minor items related to a possible settlement."

But he also said the possibility of a settlement was "hot," requiring quick Council action.

Councilman Gary Safarik said the "points of the settlement" were discussed. "Once the settlement parameters are approved in court, we can talk about it," he said.

The extent of the recommendation is relevant, since the matter was added to an existing Council agenda just hours before the discussion. State law allows an addition only if it is not "of reasonably major importance."

Ashida said the item did not have major importance.

The Hokulia lawsuit has had statewide significance for 2 1/2 years. A variety of bills have been introduced in the Legislature since 2003 -- some still pending -- to provide a legislative solution where none seemed to be coming from the courts.

Observers said Judge Ibarra's blocking the project in midconstruction raised fears that other projects could be halted, even when they have apparently valid permits, as Hokulia did. The result could be investors unwilling to put money into the state economy, they said.

Since the basic illegality identified by Ibarra was a large residential project on agricultural land, observers said numerous similar projects on agricultural land, some completed decades ago, could also be challenged in court.

Meanwhile, a second lawsuit was filed last year against the state and county by about 150 people who bought 1-acre Hokulia lots costing $650,000 to $2.5 million. The suit seeks $264 million in damages.

Another concern was Ibarra's order halting work on a major highway through Hokulia. Traffic in Kona has become exceptionally bad, and developer Oceanside was building a $55 million highway as a requirement imposed for receiving county permits.

Hokulia President John De Fries said he could not comment on a possible settlement. "I'm completely obligated to remain in silence," he said.

Attorneys for the plaintiffs did not return calls.

Previous settlement attempts failed. In 2004, talks ended with opponents asking $50 million in benefits while Hokulia's top offer was $43 million for programs such as drug treatment and education.

Another attempt was made last year, with three plaintiffs, Charles Flaherty, Patrick Cunningham, and Michele Wilkins, engaging in talks. But two others, Jack Kelly and Jim Medeiros, both officers in Protect Keopuka Ohana, refused a settlement.