The state Office of Planning says it believes that the California landowner developing two Kihei shopping malls "has failed to substantially comply with its representations" of the project now under construction.
As a result, the office's director, Jesse Souki, said in a filing Friday that the state Land Use Commission should revisit the project because it has shifted from the light industrial subdivision approved in 1995 to what's being called the Kihei "mega-malls."
The Office of Planning is responsible for making recommendations to the Land Use Commission. Souki's filing was in response to a hearing request by the Maui Tomorrow Foundation, South Maui Citizens for Responsible Growth and Kihei resident Daniel Kanahele.
That hearing is set for either Aug. 23 or 24 before the Land Use Commission.
The community groups contend that Irvine, Calif.-based Eclipse Development Group's planned Maui Outlets and Piilani Promenade malls are dramatically different from the light industrial park previously approved for former landowner Kaonoulu Ranch.
Souki echoed that view in his filing: "There is a sufficient basis for concluding that the currently proposed project is not in substantial compliance with representations made in the original petition" to reclassify the land.
The community groups also claim that the developer has failed to abide by some of the 20 conditions the Land Use Commission imposed on Kaonoulu Ranch in granting a zoning change from agricultural to urban.
Eclipse has said that Maui Outlets will be a 300,000-square-foot shopping center on a 30-acre site, and Piilani Promenade will be a 400,000-square-foot retail complex on 68 acres. Dust fences have been erected and grading work has been going on for at least the past month at the site, mauka of the Piilani Highway-Kaonoulu Street intersection.
"It now appears (the landowner) is building apartment buildings and two shopping centers, with no apparent light industrial activity. . . . This new use was not accounted for in 1995, and consequently, the conditions imposed in 1995 may not reflect the impacts to issues of statewide concern caused by the new use," Souki wrote.
Maui attorney Tom Pierce, who is representing Maui Tomorrow and the other parties, said that he was pleased with Souki's recommendations in support of their request for a so-called order to show cause hearing.
"The Hawaii state Office of Planning agrees with our position - that the landowner is not developing the property consistent with the conditions placed on the property by the LUC in 1995," Pierce said. "Moreover, the Office of Planning is in agreement with us that the LUC's order, which encumbers the property, has the force and effect of law irrespective of the underlying county zoning."
Souki said that the Office of Planning is not taking a position at this time as to "whether the area should be reverted."
He also stressed that the Land Use Commission's interest would be focused on the 20 conditions imposed in 1995.
"The issue before the LUC is not whether the new use is consistent with county zoning or subdivision, rather, the issue is whether the new use is consistent with the LUC's 1995 order," Souki said.
He specifically cited one of those 20 conditions, which states that the developer "shall develop the property in substantial compliance with the representations made to the Land Use Commission. Failure to so develop the property may result in reversion of the property to its former classification or change to a more appropriate classification."
Souki said that "despite this clear notice, (the landowner) has deviated from its original representations."
Kaonoulu Ranch sold the property in 2005 - subject to the Land Use Commission's conditions - to Maui Industrial Partners. Maui Industrial Partners in turn sold three-fourths of the property in 2010 to Piilani Promenade North LLC and Piilani Promenade South LLC. (The registered business addresses for Piilani Promenade North and South are the same Skypark Circle address in Irvine as Eclipse Development Group.)
The remaining one-fourth was retained for workforce housing units for the Wailea 670 project.
Honolulu attorney Jonathan Steiner, who represents Piilani Promenade North and South, said that he was unable to comment on the Office of Planning's response.
Steiner said he would be filing a response to the community groups' original motion before Monday's deadline.
Souki's recommendation noted that the LUC, in approving the industrial park, determined that the project "would conform with the proposed light industrial designation for the property." He cited light industrial uses as warehousing, light assembly and service and craft-type industrial operations.
Charlie Jencks, a liaison for the Eclipse projects, previously told The Maui News that the approved zoning for the property allows for mixed uses, including commercial.
Souki noted in his recommendation that the LUC accepted a market study for the property that focused on future needs for additional light industrial uses. No new studies have been submitted to the LUC for retail and residential uses.
"The market study did not draw conclusions regarding the project's ability to fill a need in the residential market or even in the commercial market," Souki said. "It is not certain if the change . . . to apartment buildings and two large shopping malls affected the original analyses regarding traffic, job creation, scenic impacts, energy use, water use, solid waste, traffic or wastewater."
While changes in land use are not unheard of, Souki said landowners typically file amendments with the Land Use Commission to do so.
"The LUC and the parties are then given an opportunity to look at the new proposed use, determine whether the requirements for reclassification have still been met, and consider whether additional or different conditions should be imposed," he said. "In this case, (the landowner) has not filed a motion to amend."
Separately, the three parties also have appealed to the county Board of Variances & Appeals over two grading permits the Department of Public Works issued in April for the planned malls.
The board has set a hearing date of July 27 to hear a motion by the county to dismiss that appeal.
Deputy Corporation Counsel Jane Lovell, representing the Department of Public Works, said that the county believes that a third party cannot appeal the issuance of a grading permit, meaning the board would not have jurisdiction.
* Nanea Kalani can be reached at email@example.com.