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HomeMy WebLinkAboutPlanning 050216 MinutesKAUAI PLANNING COMMISSION SPECIAL MEETING May 2, 2016 The regular meeting of the Planning Commission of the County of Kauai was called to order by Chair Mahoney at 9:15 a.m., at the Lihu`e Civic Center, Mo`ikeha Building, in meeting room 2A -213. The following Commissioners were present: Chair Sean Mahoney Vice Chair Louis Abrams (present from 2: 00 p.m) Mr. Wayne Katayama (present from 2: 00 p.m) Mr. Roy Ho Mr. Kimo Keawe Absent and Excused: Ms. Glenda Nogami Streufert The following staff members were present: Planning Department — Michael Dahilig, Leslie Takasaki; Office of the County Attorney - Deputy County Attorney Jodi Higuchi Sayegusa (present from 9 :15 a.m. to 9:16 a.m), County Attorney Mauna Kea Trask (present from 2: 00 p.m.); Office of Boards and Commissions — Administrator Jay Furfaro (left at 2:11 p.m.), Commission Support Clerk Darcie Agaran Discussion of the meeting, in effect, ensued: CALL TO ORDER Chair Mahoney called the meeting to order at 9:15 a.m. ROLL CALL Planning Director Michael Dahilig Commissioner Keawe? Mr. Keawe: Here. Mr. Dahilig: Commissioner Katayama? Commissioner Ho? Mr. Ho: Here. Mr. Dahilig: Vice Chair Abrams? Commissioner Streufert? Chair Mahoney? Chair Mahoney: Here. Mr. Dahilig: Mr. Chair, we do not have quorum. The Department would recommend in the absence of quorum that we allow time for quorum to convene, and reconvene in this room at 2 o'clock, in this room, this afternoon. Chair Mahoney: Okay. Do we need a vote? Mr. Dahilig: No. Chair Mahoney: Okay. Well, seeing there is not a quorum at this time, we will reconvene at 2:00 p.m. in this room. Thank you. The Commission recessed this portion of the meeting at 9:16 a.m. The Commission reconvened this portion of the meeting at 2:00 p.m. Chair Mahoney: We'll reconvene the meeting. Monday, May 2, 2016. ROLL CALL Mr. Dahilig: Vice Chair Abrams? Mr. Abrams: Here. Mr. Dahilig: Commissioner Keawe? Mr. Keawe: Here. Mr. Dahilig: Commissioner Katayama? Mr. Katayama: Here. Mr. Dahilig: Commissioner Ho? Mr. Ho: Here. Mr. Dahilig: Commissioner Streufert? Chair Mahoney? Chair Mahoney: Here. Mr. Dahilig: Mr. Chair, you have five (5) members present. Chair Mahoney: Thank you. APPROVAL OF THE AGENDA Mr. Dahilig: Mr. Chair, the Special Meeting, you do have Item C, Approval of the Agenda. 2 Chair Mahoney: Chair will entertain a motion to approve the agenda. Mr. Abrams: Move to approve the agenda. Mr. Ho: Second. Chair Mahoney: It's been moved and seconded. Any further discussion? Hearing none. All in favor? (Unanimous voice vote) Opposed? (None) Motion carries 5:0. RECEIPT OF ITEMS FOR THE RECORD Mr. Dahilig: Thank you, Mr. Chair. Item D, Receipt of Items for the Record. There has been communication from Old Republic Title that has been circulated to the Commission dated for today that needs to be received for the record. Chair Mahoney: Chair will entertain a motion to receive. Mr. Abrams: Move to receive for the record. Mr. Ho: Second. Chair Mahoney: It's been moved and seconded. Any discussion? Hearing none. All in favor? (Unanimous voice vote) Opposed? (None) Motion carries 5:0. PUBLIC COMMENT Mr. Dahilig: Thank you, Mr. Chair. We are now on Item E, Public Comment, pursuant to HRS 92. I believe we have nobody signed up at this time. We would recommend making a final call for public comment on any agenda item listed for today's meeting. Chair Mahoney: Is there any member of the public that would like to testify on this agenda item? Seeing none. UNFINISHED BUSINESS Planning Director Michael A. Dahilig's Petition to Modify or Revoke Applicant Coco Palms Hui, LLC's Permits and Issue and Order to Show Cause and Set Hearing; Memorandum in Support of Petition; Declaration of Michael A. Dahilig; Notice of Meeting; Certificate of Service for Class IV Zoning Permit Z -IV- 2015 -8, Project Development Use Permit PDU- 2015 -7, Variance Permit V- 2015 -1 and Special Management Area Use Permit SMA(U)- 2015 -6 = Coco Palms Hui, LLC. Mr. Dahilig: Thank you, Mr. Chair. We are now on Item F. This is Unfinished Business. Planning Director Michael A. Dahilig's Petition to Modify or Revoke Applicant Coco Palms Hui, LLC's Pen-nits and Issue an Order to Show Cause and Set Hearing; Memorandum in Support of Petition; Declaration of Michael A. Dahilig; Notice of Meeting; Certificate of Service for Class IV Zoning Pen-nit Z -IV- 2015 -8, Project Development Use Pen-nit PDU- 2015 -7, Variance Permit V- 2015 -1, and Special Management Area Use Pen-nit SMA(U)- 2015 -6 for Coco Palms Hui, LLC; deferred 02/23/16 and deferred 04/26/16. Mr. Chair, given the received communication from Old Republic, I believe it probably is in the best interest of the Commission to first hear from the applicant regarding this matter. Chair Mahoney: Is there a member... representative for the applicant? Could you please come to the mic and state your naive for the record, please? Jon Pang: Good afternoon, Commissioners. Jon Pang, Case Lombardi & Pettit, for the applicant. Tyler Greene: Tyler Greene from Coco Palms Hui. Chair Mahoney: Thank you. So, could you enlighten us to what has happened since our last meeting? Mr. Pang: Well, this morning, as we have provided to the Commission, a confinnation from the escrow, that is for this transaction, has confinned receipt of all funds necessary for the applicant to acquire the property, as well as for the full amount of the contract to demolish the improvements on the property and to, I guess, prepare plans, construction plans, in order to get a building pennit, so we should be able to close. Right now, we have a tentative closing date of Thursday, and what needs to be done is we just need to snake sure all the documents are in order, we get clearances from all parties, and then for documents to be deposited into escrow on Wednesday morning before 8 o'clock to record on Thursday morning. Chair Mahoney: Okay. Are there any questions for the applicant? Mr. Keawe: So is this a new escrow? Because you had already opened one. Mr. Pang: Oh no, it's the same escrow. Mr. Keawe: Same escrow? Mr. Pang: Yes, same escrow officer. Mr. Keawe: Okay. Mr. Pang: So with all the funds that were previously deposited and the new funds, there is sufficient amount to close. 4 Mr. Keawe: So did the ... I think, the last time we were talking, the amount of the total was somewhere around $25 or $26 million. Did that change? I just added up (inaudible). Mr. Pang: Oh, it's actually $23 million, but as part of the purchase price, the seller is taking an interest in the applicant, so a $10 million ... for $10 million, they are retaining an interest in the ... not in the property, but in the company. Mr. Keawe: So they are taking an equity position in the company? Mr. Pang: Exactly right. You got it right. Chair Mahoney: Okay. Any other questions for the applicant by any members of the Commission? No? Could you just review that one more time? I want to just be clear. The seller is taking an active part in... Mr. Pang: No. Actually... Chair Mahoney: Try to clarify that for all of us; especially me. Thank you. Mr. Pang: Okay. For $10 million of the purchase price, the seller is taking a ... what we call a "profits interest "...in the company. So it actually has no voting, so it has no rights in the management of the company, but it does take an interest if there is a sale or a refinance of the property. Chair Mahoney: Okay. Mr. Pang: So it will get a portion of that. Chair Mahoney: Okay. Mr. Pang: They won't have ... they don't need to consent or to approve any of the operations, the construction, or what have you. It's kind of like non - voting preferred shares; like that, yeah. Mr. Keawe: Basically that's it, right? Mr. Pang: Yes. Mr. Keawe: (Inaudible) Mr. Pang: Right. Chair Mahoney: Okay. Any further questions? Mr. Keawe: Just one real quick one. You know, there were 28 conditions on the original approval, and I just wanted to get an update on the housing issue. I know they were working on it, but... 5 Mr. Pang: The housing ... I think the housing agreement has been recorded. It's been negotiated, signed, and recorded. And that's part of what we need to do as ... you're talking about workforce housing? Mr. Keawe: Yes. Mr. Pang: Right, right, right. So that is done. The agreement has been signed and recorded against the property. We need to then ... I think we need some zoning approvals because of...to be able to build the amount of units that needs to be done. And then once we get that, we can get finance for that construction. But that is, you know, kind of a specialized process. I do that part, too. I do affordable housing with govenimental funding through, like, HHFDC and HPHA. Or the County can do it, too. Yeah. Chair Mahoney: Okay. Any further questions? Any Commissioners? Commissioner Katayama. Mr. Katayama: Hi. With the documents provided this afternoon, it totals roughly about $10 million. So can you sort of give me a timeline now on where this takes the project, and the difference between that and the completion or the construction phase of the project? Mr. Pang: Well, as far as ... this allows us to acquire. Once we acquire, we can now proceed to the demolition. So at closing, the funds for Pacific Concrete to mobilize to demolish will be paid. They will also be getting the Notice to Proceed in which case they then submit the 10 -day notice to the Department of Health, and they can go forward. They also are going to be issued the Set Aside Letter from the lender, which allows them to get the payment and perfonnance bond for the project. So we'll have the money for the dcmolition in with the lender. We'll also have a payment and perfonnance bond to make sure the project is done. Mr. Katayama: For the demolition? Mr. Pang: For the demolition, right. And at that point in time, my understanding is that there is money ... well, I know there is money there that has ... in the ... as part of the loan to do the construction plans for the project, which will allow us to get the building plans (sic). Now as far as the financing is concerned, the financing is a bridge loan and we will be working immediately on a construction loan, which we'll need the construction plans for and the demolition to be done, so it will coincide with all of that getting done. So what a lender is going to look for is that the building plans (sic) have been issued. So, for it to go forward, we need to proceed with that. Mr. Katayama: So what is the time horizon, as you see it right now, based on the availability of funds in escrow? Mr. Pang: Well, the ... I think the ... well, this loan is nine (9) months, which goes to February I", I believe. And so we need to get the construction loan by then to take out this lender, so all the plans need to be done. What happens then is that once we get the plans finalized, building pen-nits issued, the construction lender—then we need a construction contract. Administrator Furfaro left the meeting at 2:11 p.m. 0 Mr. Pang: So we need to, at some point in time, bid that out, and determine, you know, how much that's going to be and how long that's going to take, so it depends on the plans. It depends on the contractor. So that's what needs to be done. I can't tell you an exact amount of the construction because we have to bid it out; including the finishing of the construction that will be, you know, part of the negotiation with the contractor because they will have to look at the plans and determine how long they need to finish and that sort of thing. Mr. Katayama: So... Mr. Pang: Okay, so the current plan is to open the hotel ... they are trying to push it to open it in the first quarter of 2018. Mr. Katayama: Will Prudential have any ... who will be on title? Will there be any liens on the property once the sale of the property is concluded? Mr. Pang: Only the lender. It's the lender's liens on there. Prudential will not have an interest in the property. I look at it as their interest in the company is they relinquish all rights they have in the real property for a personal property right, which essentially like stock; they own stock in the company. Mr. Katayama: Okay, good. Thank you. Chair Mahoney: Any further questions? Mr. Dahilig: I guess, Mr. Chair, given my review of the documents that have been provided from the Title Company, I think it's appropriate at this time to anticipate that there is sufficient wherewithal to believe a closing will be occurring, given the representations by Old Republic Title. Therefore, I would recommend to the Commission that we defer any action on the, I guess, the motion to intervene that has been filed, as well as the setting of a hearing date pending receipt of closing documents that have been recorded with the Bureau of Conveyances or the Land Court, so we can verify that that land transaction has been fully executed. So I would suggest maybe a deferral of the matter until the second meeting in May, I believe that is May 24`h, to, I guess, get a status report on the progress of closing at that point and make any decisions at that point whether to move forward with any further discussion on the matter. So that would be my recommendation, Mr. Chair. Chair Mahoney: Okay. Chair will entertain a motion. Mr. Katayama: Well, may I ask a question, please? Chair Mahoney: Yes, sure. Mr. Katayama: The applicant mentioned a bond for the demolition of the project. How is that going to be memorialized as part of this process? Because that is sort of a new item, I believe. Mr. Dahilig: Yeah, I'm not aware in terms of what the specific agreement between the contractor and the applicant is, and I guess in the interim, given that inquiry, Commissioner, we can try to understand what that is concerning a guarantee that the performance will be fulfilled. At this point, I'm not aware of any ... or I do not have any documents in hand to articulate what exactly the performance bond would look like in ternis of the agreement between the contractor and the applicant. Unless they can explain what that is. Mr. Katavama: Well, will you be willing to work with the applicant to get that ... some kind of substance that the Body could look at? Mr. Dahilig: Sure. That's something we can discuss. Mr. Katavama: Thank you. Chair Mahoney: Okay. Any further comment? Questions for the applicant? Mr. Pang: Just to elaborate, we do ... we did amend the construction contract for demolition where they would ... the contractor will get a bond, because the contractor gets the bond, but we will be paying for the premium for the bond. So they are contractually obligated to get it, and we are contractually obligated to pay for it. Mr. Keawe: Okay, and it's in the contract? Mr. Pang: It's in the contract. It was a specific amendment that was done, which I can give to Director Dahilig. Chair Mahoney: Okay. At this point, the Chair will entertain a motion. Mr. Abrams: Chair, I'd like to motion to defer the ... to the second meeting in May, which is May 24`h, the petition to modify or revoke applicant Coco Palms Hui, LLC's pen-nits and issue an Order to Show Cause. Mr. Keawe: I'll second. Chair Mahoney: Okay, it's been moved and seconded. Any further discussion? Hearing none. All in favor? (Unanimous voice vote) Opposed? (None) Motion carries 5:0. Thank you. Mr. Pang: Thank you very much. We appreciate the patience of the Commission. Mr. Greene: Thank you. We appreciate it. Chair Mahoney: Thank you. Mr. Dahilig: Mr. Chair, those are ... that is the only item left on the Special Meeting agenda for this afternoon. Chair Mahoney: Okay. Would a representative from the owner like to come to the ... please? State your name for the record. Jennifer Lim: Thank you. Good afternoon, Commissioners. It's Jennifer Lim and I represent the landowner, PR II Coco Palms LLC. Thank you for your patience. I know you've seen me in here several times and you've had this petition for intervention in front of you for several months. We are very pleased that things have worked out and that the funds have hit. And if, in fact, the documents record, which we fully expect them to do based on the fact that escrow confirmed all funds were received today, we would intend to withdraw that petition to intervene. We would no longer seek to intervene. We would have no interest in the property any longer. So, thank you and I hope I don't see you back on this matter. (Laughter in background) Chair Mahoney: Okay, thank you. Ms. Lim: Thank you. Chair Mahoney: Okay, no further business. Mr. Dahilig: I guess, you know, given the representation of the representative for the intervenor, would you like to, I guess, receive that communication that it's the representation that if we verify closing that the petition is automatically withdrawn? Mr. Abrams: Yeah. Mr. Dahilig: So I think, maybe, just receiving that... Chair Mahoney: Good idea to memorialize that is the... Mr. Dahilig: Would you have any objections to having that communication received for the record and having that self - effectuated upon verification of closing? Ms. Lim: None whatsoever. I'd be happy to prepare an order if you needed that for recordkeeping purposes, but if we can do it through a motion, that's fine. And I'll send you a letter as soon as the documents are closed. Mr. Dahilig: I think a letter would suffice, but just since that oral representation has been made on the record, just to formalize the acknowledgement from the Commission might be appropriate. So if that's what you're representing, then that would be fine, and then you can just follow -up with a letter just to conclude that. Ms. Lim: Okay. Mr. Dahilig: So maybe, Mr. Chair, I would recommend maybe having a motion to receive the oral communication from the intervenor. Chair Mahoney: Okay. Chair will entertain a motion. Mr. Abrams: Move to receive the representation from the owner of the property regarding the intervenorship. Chair Mahoney: Okay. Mr. Keawe: Second. Chair Mahoney: It's been moved and seconded. Any discussion? Hearing none. All in favor? (Unanimous voice vote) Opposed? (None) The motion carries 5:0. Thank you very much. Mr. Dahili &. I believe, Mr. Chair, that is all the business for this Special Meeting this afternoon. Chair Mahoney: Having no further business, meeting adjourned. Thank you. ADJOURNNIENT Chair Mahoney adjourned the meeting at 2:20 p.m. Respectfully submitted by: arcie Agaran, Commission Support Clerk ( ) Approved as circulated (add date of meeting approval) ( ) Approved as amended. See minutes of _. meeting. 10