Panel recommends bill allowing Puamana TVRs

WAILUKU – Maui Planning Commission members reviewed and recommended approval Tuesday of a bill to permit transient vacation rentals at the 230-unit Puamana oceanfront resort complex in Lahaina.

Puamana, however, isn’t mentioned in the measure. Instead, the bill spells out five conditions for transient vacation rentals to be allowed in a planned development, and those have been tailored to apply only to Puamana.

Commission Chairman Kent Hiranaga said he thought that if the aim were to allow vacation rentals only at Puamana, then it would be more straightforward to say that explicitly in the measure.

“This seems like a backwards way of legalizing TVRs,” he said.

When asked during the commission meeting about naming Puamana in the bill, Planning Department Deputy Director Michele Chouteau McLean said the department agreed that it should be named, but the County Council decided to have the measure apply through conditions without specifying Puamana.

Commissioners recommended the bill for approval by a 5-2 vote, with members Wayne Hedani and Warren Shibuya casting the two dissenting votes. Commission member Jack Freitas wasn’t present, and Hiranaga didn’t vote, which is the practice for the commission’s chairman unless there’s a tie in voting.

Shibuya objected to restricting the measure to complexes of at least 25 acres, arguing that it should apply to smaller developments if their communities agree to accept short-term rentals.

“We seem to be putting Band-Aids over irritation,” he said.

The bill returns to the County Council for more review and action.

Puamana has 60 buildings in clusters of multiunit structures. The gated complex has tennis courts, barbecue areas, three pools and 400 parking stalls. It was approved as a planned development in the mid to late 1960s. Although it has a long history as a vacation rental complex, the Maui County Code has not been amended to allow such rentals at Puamana.

The County Code was silent on the matter until April 20, 1981, when the County Council began regulating vacation rentals.

The current bill lists five specific conditions for allowing vacation rentals in a planned development. Those conditions are that the development:

* Received final approval under county ordinance on or before April 20, 1981.

* Had at least one dwelling unit operating as a transient vacation rental at that time.

* Have an area of at least 25 acres, with some residential zoning.

* Consist of duplex or multifamily dwelling units.

* Was privately funded.

Those conditions were crafted during a Sept. 17 meeting of the council’s Planning Committee.

During the September meeting, Lahaina resident Bob Bowlus said he’s been a Puamana homeowner since 1981, and he bought property there because it was “planned and designed and legally used as vacation rentals.”

“We’d like to treat Puamana like other multifamily developments that were built before TVR restrictions existed in 1981,” Bowlus said.

In his memo to the planning commission, Planning Director Will Spence said the use of individual units at Puamana for transient vacation rentals “has been a long and contentious issue.” He said former county Planning Director Michael Foley issued letters in September 2003 and April 2004 that allowed for vacation rental units throughout the Puamana complex.

Foley’s “determination that TVRs are allowed at Puamana as a whole has not been revised or rescinded,” he said.

Commission members heard testimony in favor of the measure from Puamana unit owners, and they received conflicting testimony from owners at the Kaanapali Plantation complex. Some were in favor and others opposed to including the Kaanapali development in the measure to permit vacation rentals.

Kaanapali Plantation owner Michael Sonnleitner told commission members that he purchased a unit there as a second home in 2010 with the understanding that “I would be able to rent my unit as needed as a ‘transient vacation rental.’ ”

“I believe this legislation is discriminatory against all but the Puamana development,” he said, because developments smaller than 25 acres wouldn’t qualify and would be prohibited from renting on a short-term basis. “If this legislation passes as currently worded, this action will certainly raise the value of units at Puamana and lower the value of units at Kaanapali Plantation.”

However, Kaanapali Plantation resident John Cote said he was opposed to including his complex in the bill because he wanted it to remain as a “small residential-zoned community of 62 homeowners, a large majority of which oppose TVRs.”

Cote said he had gathered letters from 34 other residents who opposed allowing vacation rentals in their complex, and he could have gotten more if he had taken more time to do so.

Puamana owner Mark Marchello said approximately 110 of Puamana’s units are rented. And, using a recent Hawaii Tourism Authority report that visitors spend an average of $203 per day, he estimated that visitors to Puamana stay at least 20 days per month and spend $133,980 per day, or more than $30 million per year.

Kula resident Jim Coon said he and his brother, Rand, have been Puamana owners for almost 30 years.

One of the primary reasons for purchasing the unit at Puamana “was the ability to rent this unit out as a vacation rental, which we did for several years,” he said. “It appears that Puamana’s unique status as one of the first planned developments in Maui County has left it out in the cold as far as official legislation relating to TVR rentals,” Coon said.

Puamana Community Association President David Medina, an owner since the 1980s, said Puamana owners have been renting their units since the late 1960s and early 1970s.

“I do not know of a single owner that was not aware of the fact that there are vacation rentals in Puamana prior to their purchasing their homes,” he said, adding that 95 percent of the owners support the right to rent units to vacationers.

Puamana is unique because it is isolated from other neighborhoods and has its own streets, parking and security, Medina said. Most people follow the rules, and there are few complaints, he said.

Medina pointed out that the short-term rental bill passed by the County Council in April did not include Puamana because that bill establishing a permit system for short-term rentals excluded multiunit structures.

Deputy Planning Director McLean said the caps established on short-term rentals in the most recent bill (West Maui has a cap of 88) would not apply to Puamana because the proposed measure would specifically make vacation rentals a permitted use there.

The measure returning to the County Council would not suddenly allow vacation rentals at Puamana because transient vacation rentals have been there a “very long time,” McLean said. The bill is “really codifying what has been a long-standing use.”

* Brian Perry can be reached at