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Paia Inn developer still in hot water over fines, permits, parking

County says owner in breach of his agreement; Baskin says county drags out permit process

Pedestrians take cover from the rain Saturday as they walk by the Paia Inn on Hana Highway. Inn owner Michael Baskin is going before the Maui Planning Commission on Tuesday to seek a special use permit to operate a nine-bedroom transient vacation rental at the inn. That is opposed by Wailuku attorney Isaac Hall, representing neighbor Francine Aarona. Hall maintains the hotel is prohibited in the Paia-Haiku Community Plan. The Maui News / MATTHEW THAYER photo

After settling fines and violations in late July 2015 for $500,000 — the largest amount ever levied by the Maui County Department of Planning — Paia businessman Michael Baskin has missed the original deadline for full payment by more than four months.

Baskin still owes the county $190,000 to settle fines and penalties, Planning Department Director William Spence said last week, adding that the businessman has been given an extension to make full payment by the end of January.

The original deadline for full payment was a year from the July 31, 2015, date of the executed settlement.

According to Spence, Baskin “just says he doesn’t have the money,” and the terms of his settlement agreement with the county say it “cannot unreasonably withhold that extension.”

He said he considers Baskin in “breach of the agreement” for being late in payment and for failing to make required corrections to resolve notices of violations, “but we’re not pursuing it yet.”

Baskin denied he was behind in the payments. He said the county needed to act in good faith in processing his permits in a timely fashion, but that didn’t happen. County officials “agreed to provide us an extension on payments,” he said.

When asked about Baskin’s response, Spence disagreed. But, he said, “I cannot disclose more since the only time those reasons were ever discussed was during mediation where both parties are bound by confidentiality.”

Overall, as the result of an investigation launched in May 2013, the county issued 30 notices of violation as of July 2015 against Baskin, operator of the Paia Inn and other short-term rental properties. The notices were for violations of short-term rental, special management area, zoning and building code laws, the county said.

Not only has Baskin failed to complete projects to resolve notices of violation covered by the settlement agreement, now there have been new violations, Spence said.

Baskin opened a Paia Inn Cafe without adding three new parking stalls required by the county code and without going through a special management area permit review process, he said.

The county cited Baskin for not providing the required parking, he said.

A number of signs were put up without permits, he said, and an awning was erected that doesn’t comply with country-town design guidelines.

“That’s something we talked to him about more than a year ago,” he said.

On Tuesday, the Maui Planning Commission will take up Baskin’s request for a special use permit to operate a nine-bedroom transient vacation rental, the Paia Inn, with a first-floor lobby at 93 Hana Highway in Paia.

The Planning Department issued a one-line recommendation, saying it “does not oppose the county special use permit application.”

On the same commission agenda, Wailuku attorney Isaac Hall, representing Paia neighbor Francine Aarona, has submitted a petition to deny Baskin’s applications “because the proposed uses are prohibited by the community plan,” or, alternatively, to intervene and participate in a contested case proceeding.

According to Hall’s petition, Aarona has had the “misfortune” of owning and living on land adjacent to and within 500 feet of property and businesses owned or controlled by Baskin.

“Mr. Baskin’s campaign to expand and legitimize, after-the-fact, his hotel/resort development has made life miserable for Ms. Aarona,” Hall writes. “Mr. Baskin has destroyed the residential character of the neighborhood. Ms. Aarona is now surrounded by Mr. Baskin’s developments.”

Hall lists those businesses as the Paia Life Beachcomber short-term rental home at 23 Nalu Place, the Paia Place short-term rental at 95 Hana Highway and the Paia Pad short-term rental at 40 Ae Place — “all of which are operated as components of the Paia Inn.”

“Mr. Baskin’s hotel uses are incompatible with the surrounding areas,” he says. “Ms. Aarona no longer has neighbors; instead, she no longer knows who will be in her neighborhood from one day to the next; she has a new neighbor every day that she has never seen before.

“She finds Mr. Baskin’s hotel guests relaxing on her property and his workers sitting at her picnic table and patio. Everything is for their entertainment.”

In an email response to a request for comment from The Maui News, Baskin said Aarona’s contention about preserving the Paia neighborhood is at odds with her actions.

“She has arrangements with nearby vacation rentals to go though her property to the beach,” he said. “Therefore, it does not appear that she is concerned about changing the character of the neighborhood.”

Baskin said he’s tried to “reach out” to Aarona, “but she refuses to respond to us stating she is on a ‘mission.’ She has an arrangement with local vacation rental operators, which is contrary to her statements.”

Addressing violations, Baskin said he started a permit process more than six years ago to add on four office rooms at the Paia Inn.

“It took several years for the county to issue the permits,” he said. “We began construction with all necessary permits when a neighbor complained about the construction. It was learned that the (special management area) permit had expired while the building permits were being approved. Therefore, the county of Maui made a mistake and issued us a permit to begin construction when the SMA permit had expired.”

The contractor had already begun construction with county-approved plans, he said.

“The Planning Department issued a violation for work being conducted without a SMA permit even though we had all necessary building permits with the Planning Department sign off,” he said. “We filed an appeal against the county for wrongfully issuing a violation. This was later settled.”

Commenting on Hall’s contention that Baskin was building “hotel-resort development,” the Paia businessman denied it.

“We are not,” he said. “We are simply changing the use of something already existing and already permitted with certificate of occupancies as office.”

Office use would be more intensive than a transient vacation rental, Baskin said.

“In office use, there could be a lawyer, or therapist, accounting offices, real estate or other office use that could have multiple clients coming to the town looking for parking and with lots of staff,” he said. “We think that one or two people sleeping in a room is much less intensification. Also, TVR accommodations require less parking then office use. Therefore, there will be less traffic and parking.”

Baskin said obtaining permits for work in old buildings “is a very difficult process with the county.”

“The county has too much discretion on who they want to fine, and it is very arbitrary and capricious,” he said. “We have seen firsthand how there is not a level playing field.”

Baskin said it was “very positive” that voters approved a charter amendment for the Maui County Council to confirm of county directors and deputy directors.

“This will ensure the public is better served,” he said.

Baskin said he’s been operating the Paia Inn since 2008, and for the past eight years the inn has been rated as “one of Maui’s highest hospitality accommodations on the island.”

The inn was originally built as a Japanese Inn in 1927, he said, and “we are proud to have renovated and restored the building to keep with its original historic operations.”

* Brian Perry can be reached at bperry@mauinews.com.