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HomeMy WebLinkAbout09-09-2009 PH Bill 2298 PUBLIC HEARING SEPTEMBER 9, 2009 A public hearing of the Council of the County of Kauai was called to order by Jay Furfaro, Chair, Planning Committee, on Wednesday, September 9, 2009, at 1:34 p.m. at the Council Chambers, Historic County Building, 4396 Rice Street, Lihu`e, Kauai, and the presence of the following was noted: Honorable Tim Bynum Honorable Dickie Chang Honorable Jay Furfaro Honorable Daryl W. Kaneshiro Honorable Lani T. Kawahara Honorable Derek S. K. Kawakami Honorable Bill "Kaipo" Asing, Council Chair The Clerk read the notice of the public hearing on the following: BILL NO. 2298 - A BILL FOR AN ORDINANCE TO AMEND CHAPTER 8, KAUAI COUNTY CODE 1987, AS AMENDED, RELATING TO THE COMPREHENSIVE ZONING ORDINANCE AND SINGLE-FAMILY TRANSIENT VACATION RENTALS, which was passed on first reading and ordered to print by the Council of the County of Kauai on August 5, 2009, and published in The Garden Island newspaper on August 12, 2009. The following communications were received for the record: 1. Chris Moore, dated September 7, 2009 2. Lorna A. Nishimitsu, Belles Graham Proudfoot Wilson & Chung, LLP, dated September 9, 2009 3. Barbara Robeson email dated September 7, 2009, with attachments (2) dated September 8, 2009 4. James Bray email dated February 17, 2009 5. JoAnn A. Yukimura, dated September 9, 2009 Mr. Furfaro: For the audience, I would like to point out that this is a public hearing. This is a hearing that the council body will take testimony; it is not necessarily at this time the body's intent to engage in Q&A. We are to take testimony. It is possible that this public hearing will be followed up in committee on September 16 in the planning committee. Mr. Clerk, may I ask, do we have written testimony? 1 Mr. Nakamura: We have written testimony. I believe it's been distributed, Vice Chair. Mr. Furfaro: Thank you. Do we have speakers signed up for this hearing? Mr. Nakamura: We have registered speakers, Mr. Vice Chair. Mr. Furfaro: May I ask you to call out the speakers as registered? Mr. Nakamura: The first registered speaker is Ron Agor, followed by James E. Bray. The hearing proceeded as follows: RON AGOR: Aloha Councilmembers. My name is Ron Agor and I'll be shox•t and calm. I want to thank the Council for... anyway, taking a look at bill 864, and after about a year and a half, seeing what's been happening and then coming up with bill 2298, and I do strongly support bill 2298 for the reasons stated in the purpose and findings of the bill. And I urge the council to move this as quickly as possible. We have citizens that you do represent that are under the gun by the prosecutor's office, and they need some relief, and I urge you to pass this bill. Thank you. Mr. Furfaro: Are there any questions? If not... Chair Asing. Council Chair Asing: I have a question, and if I'm off base on the question, you let me know. Mr. Furfaro: I will raise my hand, sir. Council Chair Asing: Yes. Ron, you're on the board, the land board? Mr. Agor: Yes, but I'm speaking as an individual, yeah. Council Chair Asing: Yeah, so you're not speaking as a board member? Mr. Agor: Absolutely not. I signed up as a individual. Council Chair Asing: Okay, as an individual. Mr. Agor: Yes. Council Chair Asing: Okay. Now, what has happened, because I did not follow...follow the process to its finalization and entirety. What has happened to the vacation rental in the conservation district? Mr. Agor: People that were cited who have not... Council Chair Asing: So the end result, anyway, is that they're not allowed a vacation rental... Mr. Agor: Yeah, they are not allowed. Council Chair Asing: ...in the conservation district. Mr. Agor: They are not allowed. Council Chair Asing: Okay. That has been done, handled, and that's it. Mr. Agor: Yes. Council Chair Asing: Okay. I didn't know what happened, and it sort of ties in, but I wasn't sure. So thank you. Thank you Ron. Mr. Agor: Thank you. Mr. Furfaro: Next speaker please. JAMES E. BRAY: Thank you. My name's Jim Bray. All of you have probably been paying attention to this issue since before the ordinance was passed. I don't believe anyone here is happy with the potential pitfalls, no matter what side of the fence you look at it from. The county could be in for potential losses due to damages from stopping legitimate owner-operators with a cease and desist orders that have been issued. In addition to lost revenue from GET and TAT taxes, the TAT taxes paid to the county by TVRs are greater than the TAT taxes paid by the hotels, and that's the Kauai Visitors Bureau statistics. With the county already experiencing decline in tax revenue due to recession related issues, can we as a community really afford to do this to ourselves? And it seems to be your option. And I'd prefer to see the county keep its work staff and improve our roads and infrastructure. The vacation rental industry operates with no additional burden on the existing infrastructure and provides income to a variety of people which stays on the island. The term "illegal vacation rentals" has been misused to sway public sentiment. Could you please see some visual document that overturns the Kobayashi opinion? We've been asking for that for a long time, and maybe it exists, but it hasn't been public. As far as I know, it was requested of the county attorney and never happened. And what are the CZO stating regulation of the TVRs on ag land? 3 i The document doesn't say they need to be prohibited. I'd like to read from the deed to my property. This is a official legal document. It's issued to me upon purchase of my property. It says, the restriction at the unit shall be occupied and used only for permerted... sorry, permitted agricultural uses, as private residential dwellings by the respective owners thereof, their tenants, families, domestic servants, and social guests and for no other purposes. The unit shall not be rented for hotel purposes, which are defined as a rental for any period of time less than 7 days in which the occupants of the residential apartments are provided customary hotel services, such as room service for food and beverages, maid service, laundry and linen, or bellboy services. Short and long term vacation rentals without the ch~xracteristics of hotel's use are permitted. Similarly, the residential apartment shall not be used, leased, rented, or any undivided interest therein be transferred for any timesharing plan, agreement, or arrangement as the same is defined under Chapter 514E, Hawaii Revised Statutes, as amended. Except for hotel purposes and timesharing, the owners of the respective residential apartment shall have the absolute right to sell, lease, rent, or otherwise transfer such unit subject to all provisions of the declaration and bylaws recorded immediately following this declaration. That was...that's page 5, paragraph 14 of the deed to my property, and it's in the sample deed that went to the planning commission, the State real estate board, finance division, and one other one. So it's been around, approved-they had the opportunity to reject or accept it, and it was accepted. This is in a hundred and eighty members of the Kalihiwai Ridge subdivision's deeds. And I'd like to ask this council to rethink the position taken by the previous council. I cannot afford to spend my reduced wages... Mr. Furfaro: Could you hold on one moment please? Was that the 3 minutes time bell? Mr. Nakamura: Three minutes Mr. Vice Chair. Mr. Furfaro: Would you like to continue? I can give you another 3 minutes now. Mr. Bray: I don't need 3 minutes; I'm ready to sum. Mr. Furfaro: Well, if I give you a continuance, it'll go into your time and we allow people to speak twice. So I'm going to go ahead and give you that time right now. Mr. Bray: That's fine. Thank you. I ask this council to rethink the position taken by the previous council. I can ill afford to spend my reduced wages, given the recession, to defend my right to continue operation within the tourism industry, but I will if I need to. I started operating my business legally by every definition I know. I refuse to accept the label put on us by the former councilmember and current prosecuting attorney equating TVR, owners to drug dealers. Again, please rethink your current ordinance. 4 Mr. Furfaro: Thank you. Are there any questions? If not, may I ask if I can get for our committee a copy of your deed document? Mr. Bray: I can send you a pdf of the full deed. Mr. Furfaro: Okay, if you... Mr. Bray: Okay, could I get where I should send that to? Mr. Furfaro: I would prefer that since you...the portions that you read are in your hand, that's the portion that I'll enter into the record. So if we could just get a copy of what you have in your hand, I'd appreciate it. Mr. Bray: Certainly. Mr. Furfaro: Thank you very much. Ms. Kawahara: I have one more question. Mr. Furfaro: Wait, now you have a question. Hold up, I'm sorry. There is a question for you. Ms. Kawahara: Just one. Thank you chair...Vice Chair. I just wanted to clarify. Did you say there were no additional infrastructure demands made by vacation rentals in your testimony? Mr. Bray: Yes. Ms. Kawahara: No additional infrastructure demands on your property, but maybe not on all county services. Mr. Bray: Well, I'm using... Ms. Kawahara: Just your property. Mr. Bray: ...existing infrastructure. As in where hotels are created, there's new infrastructure needs to be created and has impact wherever it is. Ms. Kawahara: Okay, thanks. Mr. Furfaro: I would caution you on that term, because many of our resorts do provide their own wastewater systems and so forth. So it's sometimes a bad assumption that they're depending totally on county infrastructure. 5 Mr. Bray: It's not without impact to the national resources, though, correct? Mr. Furfaro: No. I don't disagree with anything other than your comment about infrastructure, because some of the provide their own. Okay. Can we get a copy of your piece? Mr. Bray: You did. Mr. Furfaro: No. I don't disagree with anything other than your comment about infrastructure, because some of the provide their own. Okay. Can we get a copy of your piece? Mr. Bray: You did. Mr. Furfaro: Thank you very much. Daryl, go ahead. Mr. Kaneshiro: Thank you Mr. Chair. Do you have any kind of a farm activity or deriving any kind of agriculture income off of your property? Mr. Bray: I used to. I applied for it and had the agricultural deduction initially, but when the goals changed...I had it up to 2001 or 2, because I complied with what was required, but when the rules changed, I said, well I'll just pay residential taxes at that point. And we do... Mr. Kaneshix•o: So you're not farming the property currently. Mr. Bray: We have an in-ground nursery, and we sell plants. We don't produce produce. Mr. Furfaro: Thank you. A nursery is part of the definition of agriculture. Thank you. Mr. Bray: If I could clarify something about the agriculture that I do live on... Mr. Furfaro: I'm going to say that we gave you your time, and we're posing only questions to you. When you respond to those questions, that's much appreciated, but we'll move on. Thank you. Mr. Bray: Thank you for your time. Mr. Furfaro: We'll move on. Thank you. Next speaker please. G DAN HEMPEY: Good afternoon Councilmembers. My name's Dan Hempey. I'm here today representing several owners of properties that had been used as TVR and an organization called KAVA, Kauai Alternative Vacation Owners Rental Association, and we're here to really express our support for 2298 at least as an interim measure and at least inasmuch as it's certainly, we believe, better than doing nothing. So we support the bill. We're asking to vote for it today. To give this just a little context, yesterday we were at planning commission meeting, and Mr. Aiu (I think) believed ...stated that about 45 people with ag properties applied for nonconforming use permits under the current TVR law 864. There was about 45 applications. They were all denied, of course, because they were on ag land, and of those, about 16 appealed. So that's really the numbers we're talking about. We're on talking about hundreds or thousands of TVRs on ag land. Of course 864, the TVR ordinance, does say now that TVRs are...on ag land are illegal and that they've always been illegal. But as I'm sure all of you are aware, two county attorneys have come to a different conclusion in the past. The State has accepted taxes from TVR use on ag lands. The State's accepted transient accommodations tax over the years. The 2000 general plan approved by the council directs that the county shall recognize and regulate TVRs on ag land. So my clients have been against the blanket prohibition against TVRs on ag land since the beginning. They are supporting this amendment because it adds a certain amount of fairness and it buys time. I can assure the council that I've been in constant communication lately with the county attorney and deputy county attorneys. We are actively trying to figure out a way that would both protect agriculture on Kauai and the constitutional rights of people who had been doing...using their properties as TVR in the past. So we're working towards a solution. Just to highlight, there are, you know, a few situations that I think the council, you know, might be interested in right now. I mean I've... among my clients, we got... some of them are actively engaged in farming...full-functioning farms. They've been denied a TVR, and we respectfully assert on behalf of them that taking away their supplemental income does nothing to promote ag use on the island and that ag use on the island isn't helped by the government regulating who's sleeping upstairs in the bedroom when there's already a farm. Mr. Nakamura: Three minutes Mr. Chair. Mr. Furfaro: Mr. Hempey, you've come up to your first 3 minutes. If you'd like, I'll go ahead and extend you a second 3 minutes. Mr. Hempey: Thank you Mr. Furfaro. Other situations we have are people who are on land that's zoned ag but it's...some of them are on lots in the neighborhood of 10,000 square foot lots. One that came up yesterday at planning, the man has a 9700 square foot lot; over 2,000 square feet of that are in marsh land under water, and when you take out the footprint of the house there's about 4,000 square feet left. It's unsuitable for any kind of farming or ag. That's why he of course supports putting this off until the important ag lands study is done. There's also a couple people who have land on `Anini beach that's completely unsuitable for ag use, but nonetheless, they were denied the nonconforming use permits because the land is zoned ag. So generally speaking, we think this is a good idea. Of course the council heard from Mr. Bray. There's a couple other families that are up in Kalihiwai Ridge area that it's right in the deed that says they can do it. So in any event, we think that 2298 is a good measure in the short term that could alleviate some of the problems with this, and we support it. Thank you. Mr. Furfaro: Thank you. Any questions? Mr. Bynum. Mr. Bynum: Thank you Mr. Hempey for your testimony. Are you familiar with the planning department's recommendation for amendments to this bill`? Mr. Hempey: Yes. I know the amendments are in there. I just actually learned today that the...what was another bill has sort of come incorporated into this with amendments, and we support it with the amendments. Again, anything... Yeah, everybody's actively working for a solution here that will protect ag and constitutional rights of people. I mean a lot of people literally saw the general plan, listened to previous county attorney's opinions, and invested their life savings in properties with the idea that they could supplement the mortgage, you know, by renting all or part of them. And so I know the amendments would allow people to apply for use permits based on agricultural activity and based on their ag use being ancillary to a farm, and I think that's a good idea. Mr. Bynum: Okay, just that there is the bill as originally written and the planning department made recommendations which, you know, arrives maybe at the same outcome, but takes a very different course of action to get there. So... Mr. Hempey: Yeah, and again, we don't think...my clients really, some of them aren't going to think this is good enough, but... Mr. Furfaro: Excuse me, Tim, we need to pose questions to them, rather than (inaudible)... Mr. Bynum: I just wanted to know if he is aware...if he was supporting the bill as written or... Mr. Furfaro: And I heard the answer. His answer was he supports the amendments as proposed. Is that what I heard? Mr. Hempey: As opposed to doing nothing, yes. Mx•. Bynum: Thank you. ~1. Furfaro: Any other questions? Councilwoman. 8 Ms. Kawahara: Thank you. Some people have been calling this bill the...a non-enforcement agreement. Can you tell me as an attorney what kind of issues come up with your doing anon-enforcement agreement of something that's already in an ordinance, and do you have issues with that, or are in support of the bill you're saying that that is something that is surmountable. Mr. Hempey: You know, here on the spot, I probably don't want to venture in to, you know, the legal opinion about, you know, whether a non-enforcement agreement works. I can just tell you, from my client's perspective, right now non-enforcement is a good thing while we are actively working with the county attorney, you know, to a solution. This doesn't solve all the problems. I know there are cases where there's problems with, you know, what had been called non-enforcement agreements in the past. I am assuming the county attorney, in the amendments that they've put forward to this...have analyzed it properly and that it's okay. That's obviously between you and your attorney, I think. Ms. Kawahara: Thank you. Mr. Furfaro: Any more questions? If not, thank you very much for your testimony. Mr. Hempey: Thank you. Mr. Furfaro: Next speaker Mr. Clerk. CAREN DIAMOND: Good afternoon Councilmembers, Caren Diamond. I'll stand on my testimony from August 5 and ask you to look at that again. And I'll ask you to please not magnify this problem that has occurred. The TVR, ordinance has created massive problems and the implementation of it has been a failure from planning. I don't know how you can ask planning to do anything else or implement another part of it when they have so utterly failed. So once again, I'm saying that really I think this council should require an audit per the county charter 3.17 county charter, the council has the only authority to ask for an audit of this implementation of this ordinance. And I'd ask all of you to really consider that. The amount of people that had come forward at the beginning and what was previously identified and the amount of people that have been granted permits are not the same thing, and I'd also ask you to map that. Wainiha and Hanalei had been mapped by this council before, and you can actually see what the difference is, and how many more people came to get their permits once you offered that permit. And so maybe you only have 45 or 17 people asking for this right now, but what happens when everybody wants the right to put a vacation rental on their ag land. And I'm not sure how we'll ever get our agricultural land back if it functions as a resort. And does that mean that the entire north shore, from Ha`ena all the way to Anahola is a resort? I don't understand. I thought we had visitor destination areas, and I'm not sure why... I certainly recognize the interest that people have the 9 problems that they have and needing to have more income. But I don't think our agricultural lands were the proper way. I think that you have to have a farm so that any vacation rental use has to be ancillary to a farm, and not that you develop a farm after the regulations are enacted; that you have had a farm that earns money. And you might look at the B&B regulations and expanding them to include this kind of use and include the use where people live in a place. But if you take the 10 bedroom, 10 bathroom vacation rentals that have been constructed on ag land and say you want a unenforcement agreement so...because maybe those ag lands will be zoned different in the future. I've never heard of the county or State making a law because something might change into the future, and I'd ask you to please make laws that are current of what our laws are now. There's always a time in the future to change, so that if those are not important ag lands, then they can be identified as resorts then. I really again ask you not to magnify the problems, and I ask you to exercise your jurisdiction oversight on what happened to the TVR, ordinance, what has happened to what was a community and what is now a resort, and I'd ask you not to make our ag lands a resort as well, and I thank you. Mr. Furfaro: Mr. Bynum. Mr. Bynum: Are you familiar with the amendment that the planning department recommended to this bill? Ms. Diamond: I'm not sure if they're new or they're the same amendments from last month. Mr. Bynum: It's the amendment that would encourage the council to create a situation where the units could be permitted under 205. Ms. Diamond: I'd have to read it, and I'll come back. Thank you. Mr. Furfaro: Any more questions of Caren? If not, thank you Caren. Next speaker please. GIGI GASTON: How do you do? I own a piece of property that... Mr. Furfaro: Excuse me. How do you do as well, but you have to give us your name first. Ms. Gaston: Oh, Gigi Gaston. Mr. Furfaro: Okay, perfect. Ms. Gaston: Thank you. Mr. Furfaro: Thank you Gigi. 10 Ms. Gaston: I own a piece of property on Larsen's Beach Road that's an agricultural...on agricultural land. The farming, I have not done quite as well on and have proceeded to probably kill a couple trees, avocado trees, because I guess I did the wrong thing as a farmer. I rent or have rented and I've paid all my TAT taxes, because I didn't know when I bought the property that you couldn't rent on agriculture land, and so I put all my savings into this property and thought I can rent to help supplement my income, because the farming wasn't covering it enough, and my rental is very small, it just has 2 bedrooms, if you can call one a second bedroom, it's very tiny, and I have rented to men coming back from Iraq, I have rented to friends down the street that wanted to put their in-laws up and didn't want them staying with them, I have rented basically moreso to neighbors. We've had a couple local weddings on my property, and I of course am here and supporting the 2298 and I'm really hoping that you could actually do the checking of the land to see if it is appropriate where my property is, because if I don't get to continue to rent, I'm going to have to give up 5 people who I employ right now that take care of the land and help me. There's going to be more job loss. I'll lose my land, which I guess is my responsibility, because I've been cut back in the profession that I do. My mother just broke her neck. She didn't have health insurance, so I gave her my second line of credit on the land towards helping my mother who's 97, and there's some people out there...I have not hurt the community, all the people in my CPR are completely for me renting it, they said I should come here screaming, you know, constitutional rights and all that stuff, but that's not what I'm here to scream about. I'm here just to say to you I hope that during this tough times that I won't have to lose my land and that, you know, I support the 2298 measure that you all have proposed. And I just think that, you know, maybe I could hire some more people to help me with my fruit trees, because I actually am not doing well with them. So I'm just here to say there's another side to this. I'm on 3 acres. I've never rented to partiers, you know, and it's just always been wonderful. Anyone who's come to the land has loved it, and been wonderful, and when I'm on the mainland taking care of my mom, it's just...it's really helped me out. So I just want to thank you and just I guess beg you humbly if you could just let us keep renting our land at till you figure out if it's good agricultural land or bad agricultural land. And that's it, and I thank you all for your time. Mr. Furfaro: Thank you Gigi. Mr. Bynum, you had a question? Mr. Bynum: You live on your property? Ms. Gaston: Not full-time, no. I'm now...I'm in Venice because of my mom's situation, but I got a frequent flyer ticket to come here today. Mr. Bynum: Were you renting... Was your property a vacation rental prior to last March when (inaudible). Ms. Gaston: Yes, and I've paid TAT taxes, I've been up board honest on everything, 11 Mr. Bynum: And did you apply for a use...for a permit? Ms. Gaston: Yes, I did. Mr. Bynum: And you were denied. Ms. Gaston: Yes, more or less. They said they would consider it, you know, that it was kind of up in the air, you know. And that's why I thought I should come to say, you know, that no one's complained of noise. I don't even think if someone screamed you'd hear it down there. Mr. Bynum: Thank you. Ms. Gaston: But yeah, they said they were thinking about maybe allowing it, but it had to be checked through all of you gentlemen and ladies up there. Mr. Bynum: Thank you very much. Ms. Gaston: Thank you sir. Mx~. Furfaro: One moment Gigi, we have another one. Council Chair Asing: Yes. How long have you had the property? Ms. Gaston: For 3 years. Council Chair Asing: Three years? Ms. Gaston: Yeah. Council Chair Asing: When you bought the property, was the house built on the property already? Ms. Gaston: Yes sir. Council Chair Asing: So you bought... When you bought it did you understand that it was being used as a vacation rental? Ms. Gaston: Yes I did, and I thought it was alright to keep using it as a vacation rental, because I just... I'm not a wealthy, wealthy person. I just...like I said, I put all my money in this to retire. That's my life's dream is to retire here on your island, and so no one told me when I bought it that oh you won't be able to rent it. They said, you probably won't want...probably people won't want 12 to rent it because it's way out down a dirt road. That's all I was told. I was never told I could not rent it. Council Chair Asing: So when you bought it, was your intent to live there or was your intent to continue vacation rental? Ms. Gaston: ~ My intent was to continue vacation rental and to get the agricultural property going more, and to come in when it wasn't rented, because I was told I wouldn't get a lot of rentals, and to stay, like to say when the rentals weren't happening, and then I was going to come and have come like for one month here and one month there, you know. That I have to...I have a mother I have to take care of right now in Los Angeles and another job there. Council Chair Asing: Thank you. Mr. Furfaro: Hold on, we have another question from Mr. Chang. Mr. Chang: Thank you. Hi Gigi. Ms. Gaston: Hi. Mr. Chang: Are you growing only avocado on your 3 acres? Ms. Gaston: No. There's avocado and then there's tangerine and mango. Mr. Chang: So you're selling those fruits at this time...your help is... Ms. Gaston: No, I don't have help...help... I've had help that have... mowing and who've taken care of the Jacuzzi and the people who've cleaned, and then Barbara who's in the back who manages the property who's a fabulous woman...Barbara Watts, and you know maintenance, and so those are the people I've been able to keep in business, and I know one gentleman, and Barbara could probably tell me better his name, who said he had to give up his business because so many people weren't being allowed to vacation rental, and so now we have a new family in there cleaning, but they all urged me to come because they said these are our jobs. I mean I literally have asked Barbara several times going well maybe I shouldn't mow the place, you know, because gardeners are quite expensive here compared to LA. And you know, this guy, he's so sweet, you know, it's like... I told him today, I said I'm going to keep it going as much as I can. And so what I was talking to Barbara about was to make into... Mr. Furfaro: Gigi, at this point you've given your testimony... 13 Ms. Gaston: Right. Mr. Furfaro: You need to respond to the question that's posed... Ms. Gaston: Oh, I have sold some, but it's not an active thing. I mean I just came back and found several trees dead, and I don't know why they're dead. So yes I have sold some, you know, avocados and some tangerines. Mr. Chang: Okay, thank you. Ms. Gaston: No mangos yet. Mr. Furfaro: Thank you. Next speaker. E.J. OLSSON: Good afternoon councilmembers. My name is E.J. Olsson, and I'm here to speak in behalf of support for bill 2298. I'm seeing through testimony I've witnessed and listened to over the months over the coming...over the past year and a half to two years that maybe what's happened is that there is a little bit of analysis paralysis and lost sight of the big picture. I urge the councilmembers to step back for a moment and look at what the goal behind ordinance 864 really was. What was that goal? It was to stop the proliferation of transient vacation rental units, as I understand it, go crack down on tax scoff laws, and you know what, that bill has already been a huge success. You've already managed, in my estimation and this is an eristic measurement, I don't have a scientific scale for it, but from what I'm hearing on the street that about half...only about half of the people that they expected even applied for an NCU. And of those, you know, right now it's just a pittance handful. So I urge the council to consider for ag TVRs the same thing that has been successful to the largest extent on activities on the Na Pali with the non-enforcement in relationship with the DLNR, and I'm using this not as a categorical reference, but I'm just trying to say it's a similar situation where okay look, it got x-number of... x-amount of commercial activity, why beat a dead horse on all these infinitesimal technicalities? Why not step back, look at the big picture, and try to surmise the goal. We are in a situation out there where it's pretty darned rough, and I'm just amazed that the real estate community hasn't been more vocal on this, to be honest with you. I...you know, what's...we're in a economic tailspin, and I just want to say I want to thank the councilmembers for listening to my testimony. Thank you. Mr. Furfaro: Let me see if there's any questions of anyone for you. Members`? Do you have a question? Go right ahead? Ms. Kawahara: When you speak about economic factors and the tailspin that we're in now, do you feel that there is a place in planning our long term sustainability and making bills that economics should be part of a long term policy thing, when we're talking about economics that's swinging back and forth? 14 Mr. Olsson: I do... Ms. Kawahara: Because when you say... When you say that we are in an economic downturn, that's going to be the case at several different times. And when we're on an economic upturn, do we change the legislation? I'm curious. Mr. Olsson: Well, two things. Thank you for asking; that's a good point. Two things. One is bill 864 has already stopped the proliferation, so in economic good times, you've already limited the number of TVRs by what you have done. You've already basically slashed, I would guess, to half or will have completed in not allowing about half of the pre-existing vacation rentals on the island. What I would say to your testimony is the bill 864, as I remember, or was that when it was a bill... Excuse me. The ordinance 864 did state at some point, as I recall, an opening...leaving an opening to analysis down the road that whereby there could be an additional allowance of TVR.s at a later date. I did read that somewhere, but that was just language later on in the bill that preceded the ordinance. Thank you. Mr. Furfaro: Excuse me. You know I'm...there's been a couple things said here I just want to make sure we're very clear on. First of all, the general plan is intended to not expand proliferation of vacation rentals. But the term that is used in the general plan is to regulate what we have. That's what's in the general plan. That was the mission. Second, I want to make sure that everybody understands, transient accommodation tax does not come to the county. Transient accommodation tax goes to the State, and if you recall recently, a possibility of the State not sharing with us was very real last year, and in fact, we're probably going to go through that episode again, because our share is legislated to us, it's not a guarantee. That tax is actually going and being collected by the State. So I just want to make some clarifications here, because I've heard a couple commentaries that perhaps didn't quite understand the flow of that tax. But your testimony today is, especially on the economic items, are very much appreciated. Mr. Olsson: Thank you. Mr. Furfaro: Next speaker. JOANN A. YUKIMURA: Council Chair, Councilmembers, JoAnn Yukimura for the record. As the drafter of bill 2298, I'd speak I favor of it with one exception. First, please allow me to provide some background on this bill. When the first State land use categories were created in 1969 and applied to lands throughout the State, the first identified were the urban areas around towns, and then the conservation areas based on watershed and environmental information. It's not clear to me how the rural lands were determined, but they were small in number. The remaining lands, a large amount of the land, were designated agriculture. Agriculture was a catchall category and over the past 40 years it's been used for miscellaneous uses that haVO undercut the main purpose of agriculture by allowing golf courses, at one 15 time residential subdivisions or country estates, churches, landfills, etc. The 1978 constitutional convention, in its wisdom, saw the necessity of identifying the prime ag lands within the larger catchall category, and regulating those lands more strictly and thus protecting them. Shamefully, the State legislature and the county of Kauai dragged their feet for over 30 years, ignoring the constitutional mandate, and when the State legislature finally passed legislation in 2005 it was also terribly flawed. Nonetheless, our county is finally embarking on the identification of prime ag land. It is disturbing that there is no plan for developing regulations once the land is identified, because existing ag regulations are totally inadequate. However, the identification of prime ag lands is a start, and presumably there will also be an identification of lands that should no longer be categorized or regulated as ag lands. It is these lands that are relevant to the bill before you today. Bill number 2298 proposes a holding action for pre-existing vacation rentals on ag land until it's determined whether the lands are agriculture or not. And by pre-existing, I mean vacation rentals that qualify for grandfathering under Act 864, except for the fact that they are on ag lands. That means that they should have been legally and lawfully operating as vacation rentals prior to passage of the law, except that they are on ag lands because of the issue of whether they are allowed on ag lands. So please be aware, as Mr. Hempey pointed out, that we are speaking of a limited set of vacation rentals. I have not seen the planning department's proposed amendments, but if they allow...they would allow ag permit for other than those qualifying for grandfathering, that would be a huge loophole. And I see Councilmember Bynum shaking his head, which means that they are limiting it, and in that case, it's better. Bill number 2298 allows the county to execute and enforcement agreement that holds everything in status quo, neither adding nor subtracting rights. Mr. Furfaro: JoAnn, it's my duty to let you know that that's the first three minutes, but I will extend the other three minutes to you now. 1VIs. Yukimura: Thank you councilmember. So it would neither add nor subtract rights while the county completes its important ag land study, and once the study's completed, the lands that are designated important ag, other ag prE~sumably, although I've not gotten that clear from planning, and not ag, then the vacation rentals on non-ag lands can claim a permanent grandfathering. For example, those R-4 lots that are across the road in `Anini and which are very likely not to be declared important ag lands and probably not even ag lands, and the vacation rentals on important ag lands will have to follow the applicable rules. Now that's why I'm so concerned that there's no plan for developing applicable rules. But assuming that vacation rentals are not allowed on ag lands of importance to the State, then all vacation rental use must cease on those lands. The portion of the bill that should be amended, in my mind, is the last phrase in proposed section 8-17.10(e)(3) of the county code, which allows the issuance of a special use permit, because this would not be in keeping with the status quo. It actually would 16 be adding a right. And thus, I would remove the wording (quote) or has received a special use permit under HRS 205-6. Thank you for the opportunity to testify. Mr. Furfaro: Let me see if there's any questions of you. Are there any questions from councilmembers? JoAnn, may I just thank you for reconfirming what I said about the issue being regulating what we have, and not intended to expand. And I think your testimony underlined that point. Ms. Yukimura: Thank you. I think Caren Diamond also... I think all of us feel that Act 864 did achieve its purpose in stopping the pro...uncontrolled proliferation of vacation rentals, and you just don't want to open that door again. But we're not talking about how we deal with this subset of exi...pre-existing vacation rentals on ag land. Thank you very much. Mr. Furfaro: Thank you JoAnn. You have a question for JoAnn? Mr. Bynum: Yeah, I just... You're aware that the important ag land study is just going to identify different ag lands. It's not going to be a mechanism that changes the zoning-that'll have to be done separately with ordinances. Correct? Ms. Yukimura: Yes. Even if they change the zoning, if the...there's not clear regulations for these different categories, we're still going to be in trouble. So there's a lot of work that needs to be done even beyond the important ag lands study. Mr. Bynum: Yeah, I just was hoping you shared my concern that there seems to be this concept that once we complete this study, everything will magically change, and it's more complicated than that. Ms. Yukimura: Well, and I think yourself, Councilmember Bynum, and myself when I was on the council was trying to pin down the planning department as to the whole course of planning with respect to important ag lands. Because if you just stop at identifying them, we're going to have the same problems we're having right now. Mr. Bynum: Right. Okay, thank you. Council Chair Asing: I have a question. Mr. Furfaro: Go ahead Mr. Chair. Council Chair Asing: JoAnn, your intent is that after the ag study has been completed and the important ag lands identified, as soon as there has been the identification of the important ag lands, then if these vacation rentals are not not in 17 the important ag lands category, they will be automatically able to continue their operations and be legal. Am I correct? Ms. Yukimura: No. Actually, they would be continuing now under an enforcement agreement, and then when it is determined... I mean I'm anticipating at least three categories: ag lands of importance to the State, other ag lands possibly, and then non-ag lands. To the extent that... Council Chair Asing: I'm only at this point, I'm not interested in anything other than the breakaway of ag...important ag land. If you fall in that category, and I'm not concerned about the other two or three or however they want to identify if, I'm not concerned about that, I'm concerned more on the important ag land category. If you fall within that category, you will now be automatically able to continue your vacation rental and you will be legal. Am I correct or... Ms. Yukimura: Oh no. If you are on what is determined to be important ag lands, then you would have to follow the rules which are applied to important ag lands, and what they would be is what I'm worried about, because there's not clarity in the ag land planning process about what's going to happen in terms of regulations. But it's a policy decision. Once...I mean... One of the...the constitutional convention said identify important ag lands because one thing is you will not be able to redesignate it something else without atwo-thirds vote. Right now it's majority vote, but atwo-thirds vote. So they're saying make it stricter. You need a super majority to change it out of ag land. But there's a whole slew of other regulations you're going to have to determine-will you allow vacation rentals, what will be the minimum lot sizes, you know, how will you define farm dwelling... all of those things will have to be determined with respect to important ag lands. That's a key piece. Mr. Furfaro: Okay, I need to... I need to kind of stop us there. Ms. Yukimura: Okay, but have I answered your question, Chair? Council Chair Asing: That's fine. I think I have an idea as to your intent. Ms. Yukimura: It would not... In all likelihood in my mind, it would not be allowed to continue if they are found to be on important ag lands. Council Chair Asing: That's what I wanted to hear. Ms. Yukimura: Okay. Council Chair Asing: Just what you said right now. Ms. Yukimura: Yes, alright. 18 Mr. Furfaro: And that is the intent of the bill. Ms. Yukimura: Okay, thank you. Mr. Furfaro: Thank you Mr. Chair. Do I have another speaker? We have no... Mr. Nakamura: No further registered speakers, Mr. Vice Chair. Mr. Furfaro: May I see by a show of hands how many individuals may want to speak on this? If not, I am going to... Oh, Jonathan. Would you come up? Is there anyone else? Thank you. Jonathan. JONATHAN CHUN: Sorry Mr. Chair. Jonathan Chun... and I'm going to be speaking in support of this bill, but I'll also like to make a few observations. This bill attempts to basically put on a hold pattern the issue of TVRs on ag land, and I think the intent is good. But what I think eventually is going to happen is it's just basically going to delay the decision, and what I'd like to offer an alternative to the council at least to consider it. The problem you're having right now is you're making a generalization over specific uses of ag land, similar to when the council was thinking of whether or not to allow dogs on the bike path, you were making a generalization that all dogs are bad and so we can't allow them. And of course you heard the outcry for people that you should look at the individuals, and it's not the dog that matters, it's how the dog is controlled. Similar over here, you know, you have a generalization that all ag lands can't have TVRs, because you can't be in agriculture use if you have a TVR. You need to look at that as specific, because there are situations specifically where the county has recognized ag use through their real property tax exemption, and at the same time, they are using TVRs...they have TVRs on those properties. So on one hand the county is saying yes, we recognize you're in a legitimate ag use. On the other hand they're saying, you're not a legitimate ag use because you have a TVR. You need to look at specifics, and I would suggest to the council that an amendment you should consider, if this one does not pass, is to allow all ag uses, all ag properties, to apply at least for the nonconforming use certificate. Right now by your ordinance 864 says you can't even apply, no matter whether you're using ag or not, you can't even apply. And that's where it's...that's where the log jam is and that's where you having all this testimony come out that what about me, what about me, I'm doing ag use, you know, I'm having this, and yet now it's not enough? So I would suggest as an alternative to look at the big picture and to solve the least the problem is to say ag people, we're going to amend the ordinance to allow you to apply. Planning department, you look at their specific situations, and if they have adequate ag use as required by the law, you should allow them a NCUC. If they don't, then you should not allow an NUC(sic), because they're not a nonconforming use. Plain and simple. The problem (inaudible) is it's going to take a lot of time and energy, but eventually it will have to be done, because I do appreciate those comments by 19 former councilmember Yukimura and Councilmem... Chair Asing. These are issues that you're going to have to address even afterwards. So that will be my suggestions to the council. Mr. Furfaro: Thank you Jonathan. We have a question, and I'll wait my turn last. Mr. Bynum. Mr. Bynum: Mr. Chun, are you familiar with the amendments that are recommended by the planning department? Mr. Chun: Not really. I've heard about it, but I haven't read about them. I believe they would want to have a special use permit, or allow a special use permit for ag land. I think in general, it's understandable, but again, it avoids the main issue, and that is are you in compliance now. What the planning department is saying is, well come in and ask for a special use permit and we'll ignore the issue of what you were doing in the past, but that's not the issue. The issue is are they in compliance with 205 now, and somebody needs to make a determination on a case by case basis as to that. Mr. Bynum: I would encourage you and others to...I mean the planning department sent over a staff report, you know, basically recommending that we amend the bill to allow them to go through the process you're suggesting of seeing whether they can permit them under 205, as Maui does now. Right? So and that's a little simple, but it's available...those documents are available and... Mr. Chun: I can do that and I'll submit written testimony to that. Mr. Bynum: Okay, thank you very much. Mr. Furfaro: Anymore questions of Mr. Chun? Mr. Chun, I don't want you to jump to any perceptions that this is the end of the task in front of the council, please. I think councilwoman(sic) Yukimura has brought up some very good points. We do, under 205 and State land use commission rules and so forth, have certain jurisdictions on property under the control of the county planning commission, especially those under 15 acres. We also have an opportunity as this evolves to really deal with a ag tourism plan that can be implemented and reviewed at the county level. But the intent here is to put us in a holding pattern so that we can allocate the right resources to address some of the things that you brought up. So I just wanted to make sure that we had this understanding that there are some of us here that are painfully aware of the methodical process that we need to go through. Mr. Chun: Yeah, understood. Yes. Mr. Furfaro: Thank you. Mr. Chun, thank you very much. 20 Mr. Chun: Thank you, Mr. Councilman Furfaro. Mr. Furfaro: Okay, I am going to go ahead and... Caren, did I give you your six minutes? Why don't you come up, I'll give you another three under the assumption that you did not use all your time. Ms. Diamond: Thank you. I just had a chance to read the planning amendments, so I just wanted to... Mr. Furfaro: Answer Mr. Bynum's questions? Ms. Diamond: Answer Mr. Bynum's question... Mr. Furfaro: Okay, go right ahead. Ms. Diamond: Which is, and basically the amendment says the dwelling in which the transient vacation rental activity is conducted is also located on and used in connection with a farm, where the property on which the dwelling is located provides agricultural income to the family occupying that dwelling. So I would say if you're going to consider anything like that, you'd have to define what a farm is and define what the adequate income is, and again, they'd have to already filed schedule F's, not that they decide to put in a farm afterwards. And I'd also urge you to put in any kind of dwelling size limitation, because again, as a 10 bedroom, 10 bathroom, really, is that suitable on ag land if you grow a couple avocados. And so I'd ask you to consider that. I actually don't think it's written very well, and I'd urge you not to really... I think once people get an approval, they consider that they have vesting. And then if those lands are considered important agriculture lands, and I think all of our agriculture lands are important, then I'm not sure how the county would ever take that away. But I also want to let you know that we've been studying the increased valuation of homes that have gotten the TVR approval, not only on this island but across the State, and generally they are 30 to 40% higher valued that that commercial use brings. And so I'm not sure, you know, we're having this problem with regular people not being able to afford farm land, and I don't know how this would ever help make farmland more affordable. Thank you. Mr. Furfaro: Thank you. Caren, I just want to make a comment. As you know we have a parallel bill going for workforce housing, and we are struggling with the definition that we get from the land use commission on, you know, the components that make up a farm. Very good point and it's a point not just for this bill, but other things we're working on. Are there any questions for Caren? No. Ms. Diamond: Thank you. 21 Mr. Furfaro: Thank you very much. I see no one else wanting to testify. I'm going to go ahead and close this public hearing. This will be going to committee on September 16. Thank you very much. There being no further testimony on this matter, the public hearing adjourned at 2:33 p.m. Res ectfully submitted, -- PETER A. NAKAMURA County Clerk /ao 22