801 South’s tower No. 2 put on hold

A state judge has barred construction of a recently sold-out Kaka­ako condominium tower after finding that two state agencies failed to follow state law protecting historic places and burials.

The ruling by Circuit Court Judge Karl Saka­moto on Friday stops work on 801 South St.’s second phase, known as Building B.

On Wednesday, 801 South developer Downtown Capital LLC said all 410 units in Building B have been sold, adding that 100 percent of the buyers are local residents. Sales of the units, priced from $352,000 to $699,000, began in March and were restricted to those earning no more than 140 percent of Hono­lulu’s median income.

Sakamoto decided to halt the proj­ect in response to a lawsuit filed in March by owners of a neighboring tower, Royal Capitol Plaza, who argued 801 South B shouldn’t have been granted a development permit in December by the Hawaii Community Development Authority, the state agency regulating development in Kaka­ako, for a variety of reasons. The lawsuit was filed against HCDA and not 801 South’s developer.

Sakamoto issued a preliminary injunction that halts construction primarily because of the issue of whether an archaeological inventory survey should have been done on the tower site.

The judge agreed that the developer should have done such a survey but didn’t.

Carl Varady, the attorney representing Royal Capitol, said he expects Saka­moto will issue a written order that invalidates HCDA’s permit for 801 South B and will require the agency to hold new public hearings and issue a new decision on the proj­ect with 410 moderate-priced condos.

The validity of the permit, however, was unclear after Friday’s verbal ruling.

Vertical construction on 801 South B was slated to start this summer, though some demolition and site work has already progressed, including tearing down about half of the former News Building, built in 1929, to make room for a parking garage.

Sakamoto’s decision does not affect construction of the proj­ect’s first phase, a 635-unit tower that has been built to the 32nd of 46 floors.

The developer reserved comments about the judge’s decision until it can discuss the ruling with HCDA.

Jesse Ryan Allen, a spokes­man for 801 South B opposition group Kaka­ako Cares, said Saka­moto’s ruling validated the group’s contention that HCDA has been "pushing" proj­ects through the permitting process.

"We really feel that justice has been served," he said.

Varady used letters between HCDA and the State Historic Preservation Division, an agency that is responsible for enforcing state historic preservation law, to help convince Saka­moto that neither agency fulfilled its duties to uphold state historic preservation law. Varady also used a declaration from a former SHPD employee who unsuccessfully challenged HCDA over its treatment of historic property on the 801 South St. site.

The ex-employee, Angie Westfall, was SHPD’s architecture branch chief when she wrote to HCDA in August complaining that Downtown Capital demolished a more than 50-year-old Hono­lulu Advertiser printing press building for its first 801 South tower without proper SHPD consultation.

Westfall requested that HCDA reject Downtown Capital’s permit application for the second tower until the developer and HCDA met historic requirements under state law. Westfall noted that consultation with and written concurrence from SHPD are required by HCDA rules before a developer submits a proj­ect application affecting historical or culturally significant properties.

William Aila Jr., director of the state Department of Land and Natural Resources, who also oversees SHPD as State Historic Preservation officer, said in an Oct. 9 letter to Downtown Capital that SHPD wanted an archaeological inventory survey done for the Building B site.

Aila’s letter also said mitigation commitments for the site including the historic former News Building needed to be negotiated with SHPD and spelled out in a detailed mitigation plan.

However, two days before HCDA’s board approved 801 South B’s permit Dec. 4, Aila sent a letter to HCDA Executive Director Anthony Ching that said SHPD agreed to HCDA’s mitigation recommendations.

"Mitigation is now complete and the role of SHPD is pau," Aila said in the letter.

Westfall contended in her declaration that SHPD can’t accept or approve a mitigation plan without the requested archaeological inventory survey.

"Because the developer did not conduct (the survey), did not develop detailed mitigation plans, did not carry out the mitigation commitments and did not submit verification of completion of the tasks, there was no factual basis from which Director Aila could accept or evaluate the ‘mitigation’ plan or determine that the non-existent archaeological mitigation was unnecessary or complete," said Westfall, who left SHPD in December to take a job at Pulama Lana‘i.

Lori Tanigawa, a deputy attorney general representing HCDA, submitted a declaration from Aila saying he rescinded the archaeological inventory survey request because he concluded there was a low likelihood for burials on the site based on ground borings the developer made for engineering purposes for phase one and part of phase two that revealed no burial material.

Downtown Capital said SHPD did not require an archaeological inventory survey for 801 South’s first phase because most of the site was covered by warehouse buildings.

Varady, however, said that isn’t a good reason on which to base the likelihood of burials in Kaka­ako, where numerous cases of burials have been discovered, including along Queen Street, at a former Whole Foods Market site at Ward Centers and during construction of the Ko‘o­lani and Wai­ho­nua condo towers.

Varady called Aila’s declaration "highly convenient" and told Saka­moto, "It should be given no weight whatsoever."

Sakamoto said an inventory survey should have been done. "This was not done," he said.