The California landowner developing two large shopping centers in Kihei says plans for the property have always included the possibility of retail despite a legal challenge that contends the land was exclusively intended for a light industrial park.
Eclipse Development Group of Irvine, Calif., has proposed the Maui Outlets, a 300,000-square-foot shopping center on a 30-acre site, and Piilani Promenade, a 400,000-square-foot retail complex on 68 acres, both mauka of the Piilani Highway-Kaonoulu Street intersection. The projects, currently under construction, would add about 90 shops and restaurants to South Maui.
The Eclipse development is the target of a challenge before the state Land Use Commission by the Maui Tomorrow Foundation, South Maui Citizens for Responsible Growth and Kihei resident Daniel Kanahele.
The parties claim that the retail centers - which opponents refer to as the Kihei "mega-malls" - are dramatically different from the light industrial park previously approved in 1995 for former landowner Kaonoulu Ranch.
The groups also contend that Eclipse has failed to abide by some of the 20 conditions the Land Use Commission imposed on Kaonoulu Ranch in granting a reclassification from agricultural to urban.
But Honolulu attorney Jonathan Steiner, representing the landowners, argues commercial uses have always been part of the discussion. He also says the previously proposed industrial park was conceptual at the time.
Steiner filed a response this week opposing the community groups' request for a so-called order to show cause hearing before the LUC.
The LUC has set a hearing for that request Aug. 23 or 24.
"Nowhere in the petition (to reclassify the land) does Kaonoulu ever represent that the planned use of the property would be solely light industrial," Steiner's filing said. "To the contrary, in virtually every instance, the proposed project is described as commercial and light industrial. . . . It was expressly noted that retail development was permitted and a possibility. Furthermore, the LUC did not include any condition limiting the property to any particular use."
The response comes days after the state Office of Planning recommended that the LUC should revisit the project because the landowner "has failed to substantially comply with its representations" of the project now under construction.
Jesse Souki, director of the Planning Office, said in a filing last week that "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.
After the LUC reclassified the land as urban, Kaonoulu Ranch obtained a light industrial zoning designation. The area also is classified as light industrial in the county's Kihei-Makena community plan that took effect in 1998.
Kaonoulu sold the property in 2005 to Maui Industrial Partners, which 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.)
Charlie Jencks, a liaison for the Eclipse projects, believes that the record is clear.
"I think when you evaluate the record in detail, and you look at the actual discussions that took place between the Land Use Commission and the county, it's real clear that there was more than ample discussion with regard to the types of uses anticipated for the property," he said. "I think trying to relive what was said or not said to support one's unhappiness with the project takes up a lot of public time and isn't necessarily the best use of public time."
Maui attorney Tom Pierce, who represents Maui Tomorrow and the other parties, said he was pleased with the Office of Planning's support.
"Our view of the facts and law have now been supported by the Hawaii Office of Planning, the chief planning agency for the state. We are hopeful the LUC will find the Office of Planning's findings more persuasive than the developers' arguments," Pierce said.
The landowners contend that they are in compliance with all of the LUC's conditions on the property.
"Piilani has complied with every condition of the (Land Use Commission's) order, and the project which Piilani proposes, although admittedly not identical, remains substantially similar to the project described in Kaonoulu's conceptual plan," Steiner's filing said.
The developer points to a market feasibility study completed by the former landowner that includes references to a mix of uses for the property.
The 1994 market study - which was presented to the LUC when seeking the urban designation - "discussed the need for a variety of different space sizes, and in that context discussed the possibility of shopping mall types of businesses," according to Steiner.
"The expectation is that other investors will purchase the land, develop improvements for multitenant use and have a long-term lease with occupants," the study says. "Examples of these occupants are: Discount retailers, auto part sales, furniture and appliance sales, sportswear and equipment, wholesale food distributors, fast food outlets, etc. . . . The success of marketing these parcels will depend on the success of obtaining popular and internationally recognized outlets to occupy the larger parcels."
The study also pointed out that the light industrial district allows for more than 30 uses, including a variety of warehousing and manufacturing activities, wholesale business and apartment houses.
The zoning also allows for dozens of additional uses under the neighborhood business, community business, and central business district zones. Those designations allow for everything from churches and drugstores to gas stations, banks, restaurants and retail stores.
Souki said that the Office of Planning is not taking a position at this time as to "whether the area should be reverted," and 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 in his filing.
He specifically pointed to 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."
Eclipse says it is in compliance with that condition.
"This condition recognizes that the use proposed to the LUC may not be exactly that which is ultimately developed. It only requires that the property be developed in substantial compliance with representations made to the LUC," Steiner wrote. "Piilani respectfully submits that the proposed use of the parcels is in substantial compliance with all representations made to the LUC."
* Nanea Kalani can be reached at nkalani@mauinews.com.
