Legal battle over Kakaako condo tower concludes

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BRUCE ASATO / MAY 5
A developer trying to build two condominium towers called 801 South St at the corner of South Street and Kapiolani Boulevard in Kakaako was ordered to stop work on the second tower on the right side of this photo. Ground preparation work for the second tower was halted May 30. A judge is expected to rule soon on whether construction on Building B can resume.

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Owners in the Royal Capitol Plaza condominium tower in Kakaako have dropped their lawsuit challenging a state permit for a tower under construction next door.

The association of apartment owners at Royal Capitol decided to end its legal fight after more than a year of work that included winning an injunction that halted construction of the adjacent tower, 801 South St. Building B, for six months last year.

A trial had been scheduled to start July 29.

State Circuit Judge Karl Sakamoto signed an order dismissing the case Tuesday afternoon, following a settlement agreement among the Royal Capitol association; the Hawaii Community Development Authority, the state agency that issued the 801 South permit; and 801 South developer Downtown Capital LLC, which intervened in the case filed against HCDA.

Terms of the settlement agreement were not disclosed.

According to the judge’s order, the parties will bear their own legal fees and may not appeal.

Carl Varady, a local attorney representing Royal Capitol, said he could not comment on the settlement.

Construction on 801 South B is not affected by the settlement, according to the developer, and is expected to be completed next year at the makai-Diamond Head corner of South Street and Kapiolani Boulevard on the Ewa side of Royal Capitol and mauka of an initial 801 South tower completed earlier this year.

The association of Royal Capitol owners did not oppose the first 801 South tower, but sued in April 2014 to stop the second tower that stands to block prime views.

Among allegations made in the suit were that 801 South B didn’t meet HCDA’s affordability requirements, that it violated state historic preservation law and should have been part of the permit for its sister tower.

Sakamoto ordered a stop to construction last 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.