Lots poised for affordable housing, health care workers | News, Sports, Jobs

Undeveloped lots along Puumakani Drive are pictured in March behind existing Palama Drive homes in Kahului. The county has long struggled to find a use for the lots, which it acquired in a settlement in 2011. Last month, Mayor Michael Victorino proposed giving 35 of the lots to two nonprofits to develop into affordable housing in perpetuity and homes for health care workers. A Maui County Council committee this week recommended approval; the decision will now advance to the full council. The Maui News / MATTHEW THAYER photo

More than 30 lots in the Fairways at Maui Lani — with a long history of litigation — are a step closer to becoming a mix of affordable housing and homes for health care professionals.

The county is proposing to give Na Hale O Maui 19 lots and the Maui Health Foundation 16 lots in the Kahului subdivision along Puumakani Street.

On Monday afternoon, the Maui County Council’s Budget, Finance and Economic Development Committee voted to recommend adoption of two resolutions to provide the lots to the two organizations. The resolutions will now be sent to the full council for its vote.

The properties make up some of the 51 lots the county acquired in a legal settlement amid a dispute over fill and grade heights for the homes more than a decade ago. For years the administration and the council have wrestled with the fate of the lots amid mounting carrying costs, with county officials in 2019 estimating that taxes, maintenance fees and association fees amounted to around $400,000.

The lots have also caused contention and concern in the community as truckloads of dirt from old Paia mill were transported over to create the fill, which towered over older houses along Palama Drive. Land preparation caused vibrations for neighbors along with dust and dirt stains from the fill, spawning other lawsuits involving residents, contractors and the county. Even after construction stopped, nearby residents have faced problems that include flooding, issues with fencing and walls falling apart from the development.

On March 11, Mayor Michael Victorino announced he would seek authority from the council to convey the lots to the organizations, noting a need for attracting highly qualified health care professionals along with providing affordable workforce housing.

Even with the unanimous 9-0 committee vote, Council Member Gabe Johnson, who chairs the Affordable Housing Committee, expressed some reservations. He said nearby residents, native Hawaiians and professionals such as the county archaeologist should determine if the lots are appropriate for homes.

Johnson said he “can’t be the one to answer” if iwi is found and building is allowed over it, or how to make “things right” for the Palama Drive residents next door to the development.

Committee Chairwoman Keani Rawlins-Fernandez said she agreed with Johnson.

“And as a council member, I will do my best to help support the departments to ensure that the residents on Palama Drive, their concerns after all these years, will be addressed,” she said.

She added that she would take the word of the nonprofit leaders that if iwi is found, construction will be stopped and appropriate actions will be taken.

Cassandra Abdul, executive director of Na Hale O Maui, a nonprofit community land trust providing affordable homes in perpetuity, told council members that it would be hard to give a timetable on the homes or to project their costs and which income groups would qualify.

She noted there are currently issues with delivery of materials and finding labor. Designs will also have to undergo review, and permits are also needed.

Na Hale will be given the 19 lots for affordable workforce housing in perpetuity, according to the resolution.

For the other 16 lots, the nonprofit Maui Health Foundation would develop and provide leasehold market-rate homes for health care professionals in perpetuity, according to the resolution. The nonprofit is also gathering input from Na Hale O Maui.

Maui Health Foundation Board President Tamar Goodfellow said it will be for active health care professionals, even those that do not work for Maui Health, the operators of Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital.

She said that with the land donations, the market-priced homes could be provided at lower costs for the health care providers.

County officials said the lots being given to the Maui Health Foundation are not the ones that immediately border Palama Drive.

Abdul said she and Goodfellow are reaching out to nearby residents and have met with one of the most vocal ones in the area.

The county acquired the lots in August 2011 for nearly $11.8 million in a settlement involving developer VP & PK LLC, whose construction plans faced public challenges and legal issues over fill and grade heights, county officials have said in the past.

In 2005, then-Mayor Alan Arakawa exempted some Maui Lani developers from the county building height ordinance at the time, which would have limited their ability to fill in the land. Instead, Arakawa overruled one of his directors and let the Fairways project proceed under rules prior to 1991, when the developers received initial permits.

The Fairways and the New Sand Hills subdivisions at Maui Lani had been planned for as high as 30 feet of fill before construction, reports said at the time.

In 2008, then-2nd Circuit Judge Joel August invalidated Arakawa’s 2005 decision and issued a permanent injunction preventing the county from approving the development based on Arakawa’s actions.

In 2011, after August’s ruling, the County Council passed an ordinance allowing building heights to be measured from the top of the structure to the finished grade in project districts or planned developments with initial permits before 1991, clearing the way for the development.

Legal action went all the way to the state Supreme Court, which ruled the issue moot because of the 2011 ordinance and lifted the injunction.

In late 2016, during Arakawa’s third mayoral term, he put together a task force on what to do with the lots. The task force recommended a public auction of the lots for $9.8 million, reasoning that it posed the least market risk to the county and was a quick way for the county to recoup some of the cost.

But in 2017, the council instead decided to put the lots up for sale for $8 million with affordable housing restrictions and other conditions, including requiring work on the homes to begin two years after the sale and the posting of a construction bond by developers.

However, there was no response or responsible bidders, and the council and administration have been trying to figure out a use for the lots ever since.

* Melissa Tanji can be reached at [email protected].

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