State grants Kahala resort continued use of public beach

A decision by the state Board of Land and Natural Resources could mean that the Kahala Hotel &Resort can now legally use more of the public lands adjacent to its property for commercial purposes.

The board agreed Friday to allow the hotel’s owner, Resorttrust Hawaii LLC, to renew and amend its revocable permit, which expires at year’s end. The new permit allows the property to keep 40 items in the public area, including cabanas, showers, trash cans, hammocks, canoes, beach chairs and storage. The board also approved allowing the resort to overflow its restaurant seating into the public space 14 days a year.

The board required the Kahala Hotel to allocate two 20-foot buffers around its hotel seating to allow the public to traverse from mauka to makai. The board clarified that the resort isn’t allowed to hold weddings or offer surf lessons or boating in the permitted area.

But the board said Resorttrust won’t be able to act on the new terms of its permit until it gets city approval. Once that happens the state will raise the revocable permit monthly fee from $1,244 a month to $6,300 a month, or 3 percent of the gross receipts from the permitted land.

BLNR Chairwoman Suzanne Case said, “Our job is to decide from the state standpoint what is and isn’t allowed on this piece of land. Part of this piece of land is in the city’s (special management area) zone, so if they want to do something, they’ll also have to get the city’s permission.”

The city became involved in the controversy over state public beach space last month when the city’s acting Department of Planning and Permitting Director Kathy Sokugawa gave the resort until Nov. 1 to remove 10 cabanas and their paver foundations.

The structures are gone now, and Sokugawa says they can’t return to the 40-foot shoreline setback until the Kahala conducts an environmental assessment and obtains a city permit. As for the resort’s clamshell loungers, lawn chairs and towel caddies, Sokugawa said they are portable, so they don’t require a shoreline setback variance. However, “commercial activity within the shoreline setback and special management area is still subject to approval,” she said.

The resort’s attorney, Jennifer Lim, said the resort is still “determining what the necessary actions are with the city.”

Still, BLNR’s decision was a step forward for the resort, which has been battling to codify its long-held use of public space since voluntarily rescinding a nonexclusive easement request last year. The resort couldn’t get past the community protests that mounted from those who feared that the easement could erode Hawaii’s hard-won public beach rights.

The Sierra Club, Hawaii’s 1000 Friends, Livable Hawaii Kai Hui, The Surf­rider Foundation and the Hawaii Kai Neighborhood Board have all been part of a grass-roots group of Oahu residents seeking to stop the state from reissuing a permit to Resorttrust.

BLNR board member Keone Downing said, “I don’t believe that the resort is trying to do anything illegal. If anything, I think they are trying to do it right. It’s just that there’s a bad past history that’s the problem.”

Kahala resort manager Joe Ibarra said the hotel is “just asking to continue what we’ve been doing during our 54 years as a luxury resort.”

“We’re thankful to the board. We want to be good stewards,” Ibarra said. “It was important for us to get clarification.”

But critics, who view the resort’s latest request as a way to get some of the protections that it previously sought in the failed nonexclusive easement attempt, were sorely disappointed by the board’s ruling. Nor were they pleased with BLNR’s decision, which came earlier in the meeting, to deny a request for a contested hearing.

One of those critics, Diamond Head resident Linda Wong, said, “I think the board was trying, but they fell short. I think they precluded public discussion by denying the contested case hearing.”

Wong and others, including Kahala resident Tyler Ralston, also questioned why BLNR renewed the permit when the resort still has outstanding issues with the city and the state.

That’s because none of them have resulted in any formal notices of violations, said Russell Tsuji, state Department of Land and Natural Resources Land Division administrator.

Ralston said BLNR should have considered warnings and outstanding issues. Even the state DLNR’s submittal to the board includes information about how Restorttrust was violating its revocable permit by holding weddings and other commercial events on state lands without prior approval, he said.

Wong said the state Department of Health’s clean water branch also issued a warning letter Aug. 2 ordering the resort to fix a leaky pipe that it first noted in 2016. The pipe, which is distributing water from the resort’s air-conditioning system and its dolphin tanks at the shoreline, is still leaking. State Department of Health spokeswoman Janice Okubo said the Kahala had told officials that Resorttrust expected to complete the repair by Sept. 23 but discovered an additional leak while repairing what it believed was the only leak.

“Proper operation and maintenance of any DOH- regulated system is important,” Okubo said. “This includes ensuring that all pipes associated with ocean outfalls are in working condition. DOH Clean Water Branch staff are scheduling a meeting with the hotel to go over their findings.”

Since the discharge from the Kahala Hotel is noncontact cooling water that also serves the hotel’s dolphin lagoon, Okubo said “there did not appear to be a high risk to human or environmental health caused by the leak in the outfall pipe.”

DOH is not likely to issue a notice of violation unless the hotel fails to complete the repair, she said.

The hotel most comply with both city and state laws, so a notice of violation would threaten its revocable permit.

David Kimo Frankel, the attorney who sought a contested case hearing, said one of the reasons that he objected to the issuance of a new permit or continuation of the old one is that “the hotel clearly violated the law.”

“Allowing Resorttrust to continue to use public land for commercial purposes when it has clearly violated the law would be an outrageous breach of the BLNR’s public trust duties,” he said.