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Maalaea land that sat undeveloped for years is back in the hot seat

Private company buys 257 acres that county, nonprofit had eyed for conservation

For years, Doug Spencer said his family tried to get some type of housing project approved on 257 acres at the foothills of the West Maui Mountains in Maalaea.

Gone is the 1,100-unit affordable housing project that the family originally proposed after it was met with concerns over water, traffic and density.

Also scrapped was a smaller 113-unit/lot fast-track affordable housing development that again faced opposition from community groups and an adverse court ruling before plans for the development mauka of Honoapiilani Highway were finally abandoned in 2016.

And no longer on the table is a last-ditch attempt to downsize the property density to a 21-lot agricultural subdivision that the family hoped would finally go through in 2018, 10 years after they acquired the property. Bureaucratic processes and stalling ultimately sidelined this Hail Mary, said Spencer, whose family’s company is known for developments including Waikapu Gardens, along with Keonekai and Piilani Villages.

But as the family sold the lands earlier this month for $6 million to local developer Peter Martin, who beat the county to a purchase it hoped to make for preservation, Spencer still hopes that some type of housing can be built for local families.

“We felt Peter had the best opportunity to do some affordable housing, maybe there,” Spencer said earlier this week.

Spencer has faced criticism from county officials who say they were caught off guard by the sale. But Spencer said he’s waited for around two years for the county to buy the land, and after years of making numerous concessions to appease critics, and enduring a lengthy and unsuccessful process of reducing density on the property, the family was ready to move on.

Glenn Tremble of West Maui Land, one of Martin’s companies, confirmed the sale by buyers West Maui Construction and Hope Builders. Both are also part of Martin’s portfolio.

Martin, who is off-island, deferred comment on the Maalaea property to Josh Dean, president of West Maui Construction.

“I believe that Maalaea would be a great place for affordable housing,” Dean said in an email, though he noted that the “obstacles are tremendous.”

Housing vs. preservation

But for nearby residents and longtime opponents of Spencer-proposed housing projects in the area, the sale of the land to another private owner — instead of to the county for preservation — was “disappointing.”

“The subsequent sale and purchase of the property after all the necessary funding was secured from county and state is very disappointing,” said Lynn Britton, a founder and immediate past president of the Maalaea Village Association.

But she said that they acknowledge Spencer’s willingness to work with the Trust for Public Land and the community on purchase of the property.

“It is unfortunate that things took so long. We hope that the new owner will work diligently with the TPL to accomplish this long sought goal of preserving this valuable land for future generations,” Britton said.

Since 2020, the association has pushed for full public ownership of the land and joined other Maui community groups to gather support for purchasing the property to keep it in open space, Britton said.

Its predecessor, Maalaea Community Association, along with Sierra Club, Maui Tomorrow and other community groups, also advocated years ago to keep the lands in open space.

The Maalaea Village Association has described the 257 acres as “prime ag,” an alluvial plain, with some of Maui’s deepest soil deposits. The Lahaina Pali Trail terminus is on the site, and with the lands in preservation there could be on-site firebreaks and brush control. The association also said that the property is a “key area” to mitigate runoff and sediment into Maalaea Bay and a crucial area to mitigate the spread of wildfires from the slopes of Mauna Kahalawai.

Legal challenges over the years have derailed a number of attempts to develop the land.

In December 2015, Maui Tomorrow and the Maalaea Community Association filed a lawsuit challenging the Spencers’ second attempt at developing the property into 113 units, a reduction from the original plans calling for 1,100 units. The groups challenged the project’s environmental assessment, saying the report contained erroneous statements and lacked legally required information.

In February 2016, a 2nd Circuit Court judge imposed a preliminary injunction on work on the Spencers’ Maalaea Plantation housing subdivision. After the decision, the Spencers said they would commission an environmental impact statement as requested by project opponents. But then one month later, the family announced it would abandon the affordable housing development, following the death of its patriarch, Jesse Spencer, earlier that year.

On Friday, Maui Tomorrow stressed the need for preservation at the site.

Albert Perez, executive director of Maui Tomorrow, pointed out that even county planning directors have told several owners of the property throughout the years that “it was not a good place to develop.”

Issues included the harsh climate, with frequent high winds, heat and dust leading to higher maintenance costs and additional costs to put air conditioning in homes, as well as inconsistency with smart growth principles contained in the Maui Island Plan.

He also pointed to what he called the “disastrous” Maalaea fires in 2011, 2016 and 2019, which left the land bare and vulnerable to subsequent rainstorms that sent plumes of sediment far out into the ocean.

“This sends a clear message — that the land needed to be managed, not developed,” he said.

Holding out hope

When Martin bought the property earlier this month, government officials were finally closing in on the funding needed for the purchase.

In its fiscal year 2022 budget, the county included $5.5 million for a grant to the Trust for Public Land for the property acquisition, Mayor Michael Victorino said in a email earlier this week.

When the price came out higher than the budgeted amount during the Trust for Public Land’s commissioned appraisal, the Maui County Council unanimously approved a request to increase the grant to $6.2 million on May 6.

In anticipation of a $7.2 million sale price, the state Board of Land and Natural Resources approved $1 million from its Legacy Land Conservation Program, Victorino said. Plans were to have the state Department of Land and Natural Resources’ Division of Forestry and Wildlife manage the property.

Then, county officials learned that Martin had purchased the property.

Spencer said that he did keep Victorino and the Trust for Public Land, the entity that would acquire the property, in the loop regarding Martin’s contract with the family company.

Spencer said he told Victorino in March that he was in escrow with Martin and had a meeting with both Martin and Victorino in April.

A spokesperson for Victorino said on Friday afternoon that the mayor confirmed he met with Spencer and Martin on April 21 and learned of Martin’s interest in the property. However, the mayor was unware the property had been sold until Spencer called Victorino on May 6 saying Martin would close on the property on May 10, the spokesperson said.

Earlier this week, in an email, Victorino said that the situation “is both disappointing and frustrating.”

“However, the protection of these lands is important to the people of Maui County, so we will continue to work with the Trust for Public Lands to evaluate all available options to acquire these lands,” Victorino said.

Maui County Council Chairwoman Alice Lee said Friday that the council did not know about the purchase, but added that after the funding is approved the process is in the administration’s hands.

As for what will be done now that the property has been sold to a private entity, she said that is also up to the administration.

Lee, too, would like to know what the intentions are for the property, but said if it’s aimed for development, “it’s highly unlikely that will happen.”

“We have gone down that road before. To think the same council will change its mind is rather far fetched,” she said.

Leah Lani Rothbaum, sustainable Hawaii project manager for the Trust for Public Land, said they plan to connect with Martin when he returns to hear his intentions for the property.

“There may still be an opportunity for a voluntary conservation real estate transaction with the new owner that would put the Maalaea property under public ownership as part of the state forest reserve where it would be protected from development. We look forward to talking story with Mr. Martin and working out a solution that benefits the community and the resource values of the land,” Rothbaum said.

She added that the property is “extremely important to the community and that stewardship of this land is critical for supporting the Pohakea Watershed and improving water quality issues in Maalaea Bay.”

Rothbaum said with wildfires occurring, it underscores the urgency to protect the watershed properties and actively manage them to minimize damage from hazardous fires and floods.

Spencer said that through all of this, especially the sale, the family has “always been totally above board with everyone,” but that has not been the same for them in return.

“At the risk of tooting our own horn, everyone on Maui knows that our family has developed and built over 1,000 affordable homes on Maui, selling those homes for far less than what the Affordable Housing Guidelines would have allowed us to sell them for,” Spencer said. “Our family’s motivation was never to see how much money we could make, but to provide affordable housing for Maui’s working families and to keep doing that for generations to come.”

Spencer and his wife now live in Virginia and run a nonprofit, the Aloha House of Hope, which takes in children who have been abused, neglected and/or abandoned by their parents or other caregivers.

He admitted that the family has lost millions trying to develop the Maalaea property, none of which was recouped in the sale to Martin.

Spencer said that Martin told him he could not guarantee affordable housing on the site, though he hopes Martin can “just try do something even if it’s 50 homes.”

He said the family did not want to sell to Martin, not because they took issue with him but because their aim was to develop housing. He added that he “wouldn’t blame” Martin if he turned around and sold the property to the county.

“We are glad to get this sold. We can move on. It’s just sad, we didn’t get any affordable housing built out there,” Spencer said.

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

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