They clashed at permit hearings. They clashed in court. Now a Honolulu high-rise condominium developer and residents in an existing tower are clashing again.
Downtown Capital LLC, which is building two towers next to Royal Capitol Plaza in Kakaako, is lobbying Royal Capitol residents to drop their legal challenge to the second tower, calling the effort insanity and criticizing the Royal Capitol owner association board for spending money on "fabricating legal obstacles."
Some Royal Capitol unit owners say they feel harassed and insulted by the developer’s effort to convince them to have their board end the lawsuit filed in March 2014. The lawsuit asks the court to invalidate Downtown Capital’s construction permit for the second tower.
Downtown Capital, a firm led by local affordable-housing developer Marshall Hung, mailed four fliers over the last few months to Royal Capitol unit owners, encouraging them to pressure their board to cease the legal challenge to the developer’s 801 South St Building B tower.
"Stop the Insanity!" the fliers say, listing board members by name and urging residents to contact them. "Ask them to end the lawsuit. Go on the record. NOW. It’s time for you as an owner to get involved before even more of your money is wasted."
One of the fliers sent from "Friends of 801 South" at Downtown Capital’s business address questions whether Royal Capitol directors are representing the best interest of all unit owners as opposed to only those with units facing Ewa where views will be blocked by 801 South St B.
The flier also claims that Royal Capitol’s maintenance reserve fund will be $1.3 million short by the end of this year. "Don’t be surprised when you face a special assessment because your association’s funds have been raided to pay lawyer’s fees," the flier said.
Another flier claims that the Royal Capitol board has spent hundreds of thousands of dollars on the "quixotic" legal quest.
Ariel Salinas, a federal government engineer who owns a unit in Royal Capitol but hasn’t attended board meetings, said the campaign includes insulting lies with an aggressively threatening tone from a pseudo-anonymous source.
"I think the mailers are a blatant and carefully engineered propaganda campaign intended to intimidate residents and board members," he said. "My wife reads them and gets really upset whenever we get another one. I just simply ignore (them) and throw them out."
The Royal Capitol board referred comment to its attorney, Carl Varady, who did not respond to requests for comment.
Ryan Harada, a Downtown Capital principal, said the fliers intended to share issues that he understood were being raised by some Royal Capitol unit owners, and to remind them that the lawsuit, which stopped construction for about six months last year, remains active.
"It kind of baffles us that they are still trying to (advance their case)," he said, declining to say how much Downtown Capital has spent on the litigation.
Hung announced plans to build two towers at the makai-Diamond Head corner of South Street and Kapiolani Boulevard in 2012, and received a permit for the first tower that year from the Hawaii Community Development Authority.
But after Royal Capitol residents got a look at the positioning of the second tower parallel to theirs, they objected to Building B.
Some Royal Capitol residents urged HCDA, the state agency regulating development in Kakaako, to deny a permit for Building B on grounds that it didn’t meet affordability requirements and would be too dense, among other things.
HCDA concluded that the tower plan conformed to its rules, and approved the permit in December 2013. That prompted an appeal and then the lawsuit filed against HCDA by Varady on behalf of Royal Capitol.
Among allegations in the lawsuit are that HCDA’s approval was predetermined before public hearings, that the traffic impact from 1,700 parking stalls in 801 South’s two phases constitutes a public nuisance and that 801 South B violates HCDA requirements for recreation space, tower footprint size, driveway positioning, green building standards, curb cut spacing and other design details.
The lawsuit also contends that HCDA didn’t properly convene a contested-case hearing, didn’t follow state historic-preservation law and hurt community engagement by allowing the developer to present details on the second tower after the first tower was approved.
A state Circuit Court judge halted construction in May after hearing preliminary arguments and concluding that HCDA and the State Historic Preservation Division of Hawaii’s Department of Land and Natural Resources violated a law intended to protect burials when it didn’t require the developer to do an archaeological inventory survey.
In response, Downtown Capital did the survey, and construction was allowed to resume in November.
Currently, construction is focused on the building’s foundation. Meanwhile, activity in the lawsuit this year has included taking depositions and arguing over production of documents.
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