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New law impacts some vacation rentals and Grand Wailea expansion

Moratorium pauses new visitor lodgings, but some may still be developed under bill’s exceptions

The Grand Wailea is shown in 2018. The South Maui resort, which has proposed a 137-room expansion, is one of the visitor lodgings that will be impacted by a new law that puts a temporary pause on all new transient accommodations on Maui. Four short-term rental homes and 13 transient vacation rentals in Kihei will also not move forward due to the new law, which was spurred by concerns with overtourism. The Maui News / MATTHEW THAYER photo

Four short-term rental homes, 13 transient vacation rentals in Kihei and Grand Wailea’s proposed 137-room expansion are all impacted by the recently implemented moratorium on new transient accommodations on Maui.

Under the new law, which went into effect on Jan. 7, new transient accommodations, such as hotels, timeshares, short-term rental homes and transient vacation rental units, are prohibited in all zoning districts on Maui. No permit applications or permits for new transient accommodations may be accepted or granted by any board, commission or agency.

The bill, which survived a veto by Mayor Michael Victorino when the Maui County Council overrode the action on Jan. 7, says that the council has found that underregulated growth in transient accommodations and continued development of transient accommodations directly relate to an increase in tourism, which negatively impacts the environment, overwhelms existing county infrastructure and negatively impacts residents’ quality of life.

According to the Maui Island Plan, the daily visitor population should not exceed one-third of the resident population. Maui “dramatically exceeded” the ratio, with an average daily visitor census of nearly 70,000 in 2019 and a population well under 150,000 at that time, the bill says.

The recently passed moratorium will be in place for two years, or — depending on whichever is sooner — until legislation is enacted by a council-established temporary investigative group that determines a transient accommodation limit by type and by community plan area.

County Planning Director Michele McLean said there are four pending short-term rental home applications that will not be approved with the new law in place.

There are also two projects, Grand Wailea’s 137-room expansion and Kihei Marketplace’s proposed 13 transient vacation rentals, that are in the pipeline for special management area major permits.

In consultation with county attorneys, McLean said that under the moratorium, SMA permits cannot be issued for new transient vacation rental units.

But McLean acknowledged that Grand Wailea, for example, could proceed with parts of its application that don’t have transient vacation rental use, though those components have to be completely removed from the expansion project.

Officials with Kihei Marketplace at 1975 S. Kihei Road across from Kalama Park could not immediately be reached for comment Friday.

An attorney for Grand Wailea said the resort would focus on parts of the project not impacted by the new law.

“As allowed by Bill 148, Grand Wailea will continue to seek approval from the Maui Planning Commission for portions of the project that are not covered by the moratorium, as well as the new guest rooms that would first require the development of workforce housing units at an equivalent ratio,” William Meheula said.

The bill does offer exceptions that would allow development of transient accommodations, including if new affordable housing units are built at a ratio of at least one housing unit for every one transient accommodation unit.

The housing units would have to be affordable to various incomes, made available for occupancy prior to or concurrent with the new transient accommodations and be located in the same community plan area.

Housing credits may not be issued to or used by the developer to satisfy the requirements, the bill says.

The Grand Wailea’s project, however, is on hold before the Maui Planning Commission after three community groups intervened on the resort’s expansion plans. Malama Kakanilua, Ho’oponopono O Makena and the Pele Defense Fund said that the expansion would create future disturbance on a property where iwi kupuna, or ancestral bones, have been discovered in the past. The resort and the community groups are awaiting a report from a hearings officer.

The proposal includes 137 new rooms — scaled back from 224 rooms over community concerns earlier in the process — adds parking, including 30 beach parking stalls; renews aging infrastructure; and retains the Grand Wailea’s Seaside Chapel that had originally been slated for removal.

“We started the process more than three years ago to get permission for Grand Wailea’s first major renovation and enhancement,” said J.P. Oliver, managing director of Grand Wailea, a Waldorf Astoria Resort. “Our plans have been shaped by feedback from community members and our commitments to stewardship and a more sustainable future.”

“This project is critical for Grand Wailea to sustain and grow our impact for the hundreds of local residents who work here, more than 75 Maui businesses who supply us, and countless other beneficiaries across the island,” Oliver added.

Some other projects may still be able to move forward if they received their last discretionary approval prior to the enactment of the moratorium.

McLean said projects that qualify are Maui Coast’s planned expansion of 170 rooms and the new 136-room Maui Palms hotel slated for the parcel next door to Maui Beach Hotel. She said the projects received SMA permits for expansion or redevelopment before the moratorium took effect.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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