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IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

---o0o---

SURFRIDER FOUNDATION; HAWAII’S THOUSAND

FRIENDS; KA IWI COALITION; and KAHEA – THE 

HAWAIIAN-ENVIRONMENTAL ALLIANCE,

Petitioners/Plaintiffs-Appellants, 

vs.

ZONING BOARD OF APPEALS, CITY & COUNTY OF HONOLULU;

DIRECTOR OF THE DEPARTMENT OF PLANNING &

PERMITTING, CITY & COUNTY OF HONOLULU; KYO-YA

HOTELS & RESORTS LP; AND 20,000 FRIENDS OF LABOR,

Respondents/Defendants-Appellees.

SCAP-13-0005781

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT

(CAAP-13-0005781; CIV. NO. 13-1-0874-03)

September 23, 2015

NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.,

WITH RECKTENWALD, C.J., CONCURRING SEPARATELY

OPINION OF THE COURT BY POLLACK, J.

I. INTRODUCTION

In 1976, the Honolulu City Council established the 

Waikiki Special Design District in response “to the rapid 

Electronically Filed

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SCAP-13-0005781

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09:22 AM
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development of the 1960s and 1970s, and the changes produced by 

that development.” The City Council found that “[t]o the world, 

Waikiki is a recognized symbol of Hawaii [] and the allure of 

Waikiki continues, serving as the anchor for the state’s tourist 

industry.” The Council concluded that while “Waikiki needs to 

maintain its place as one of the world’s premier resorts in an 

international market [], the sense of place that makes Waikiki

unique needs to be retained and enhanced.” Accordingly, the 

City Council developed specific requirements and design controls 

“to guide carefully Waikiki’s future and protect its unique 

Hawaiian identity.”

Among the provisions enacted to protect Waikiki’s 

Hawaiian identity is a limitation on development next to the 

shoreline. The Council established a coastal height setback 

requirement because of the “need to step back tall buildings 

from the shoreline to maximize public safety and the sense of 

open space and public enjoyment associated with coastal 

resources.” The Council also provided for a variance process 

when compliance with the Land Use Ordinance would result in 

unnecessary hardship. 

In this case, we are called upon to determine whether 

a variance granted for a proposed 26-story hotel and residential 
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tower that permitted a 74 percent encroachment into the coastal 

height setback along the Waikiki shoreline was properly issued.1 

II. BACKGROUND

A. The Waikiki Special District 

The Land Use Ordinance of the City and County of 

Honolulu (LUO) designates “certain areas in the community in 

need of restoration, preservation, redevelopment or 

rejuvenation” as special districts. Revised Ordinances of the 

City and County of Honolulu (ROH) § 21-9.20 (1990). For each 

special district, the LUO sets forth objectives, identifies 

prominent view corridors and historic properties, and outlines 

requirements and design controls to guide development to 

“protect [and] enhance the physical and visual aspects of [the 

district] for the benefit of the community as a whole.” ROH §

21-9.20-1. 

The Honolulu City Council (City Council) designated 

the Waikiki Special District2 “to guide carefully Waikiki’s 

future and protect its unique Hawaiian identity.” ROH § 21-

 1 The quoted passages in the Introduction are from provisions of 

the Land Use Ordinance of the City and County of Honolulu that will be 

discussed later in this Opinion. 

2 The Waikiki Special Design District was renamed the Waikiki 

Special District. The boundaries of the WSD are defined by a map accessible 

at: http://www.honolulu.gov/rep/site/ocs/roh/ROH_Chapter_21_Exh9.1-

9.18_art10__.pdf.pdf (last visited September 2, 2015). The WSD is bounded on 

the north and west by Ala Wai Blvd. (including the piers in the Ala Wai Yacht 

Harbor), on the south by the Pacific Ocean, and on the west by Kapahulu Ave.
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9.80. Within the Waikiki Special District (WSD), the City 

Council recognized the need to step back buildings from the 

shoreline in order to optimize “the sense of open space and 

public enjoyment along the beach.” ROH § 21-9.80-4(g)(2). To 

accomplish this objective, the City Council established the 

following minimum setbacks that “apply to all zoning lots along 

the shoreline” within the WSD: 

(A) There shall be a building height setback of 100 feet in 

which no structure shall be permitted. This setback shall 

be measured from the certified shoreline;[3

] and 

(B) Beyond the 100-foot line there shall be a building height 

setback of 1:1 (45 degrees) measured from the certified 

shoreline. 

ROH § 21-9.80-4(g)(2) (Coastal Height Setback). 

The WSD requirements and design controls set forth in 

the LUO are “supplemented by a design guidebook” (WSD Design 

Guidebook) that “shall be used as a principal tool by the 

director to express those . . . elements which demonstrate 

consistency with the intent, objectives, guidelines, and 

 3 The certified shoreline is depicted in ROH Exhibit 21-1.15, and 

defined within the Hawaii Administrative Rules § 13-222-2 (adopted December 

13, 2002), as “a signed statement by the chairperson of the board of land and 

natural resources that the shoreline is as located and shown on the map as of 

a certain date.” “Shoreline” is defined as:

the upper reaches of the wash of the waves, other than 

storm or seismic waves, at high tide during the season of 

the year in which the highest wash of the waves occurs, 

usually evidenced by the edge of vegetation growth, or the 

upper limit of debris left by the wash of the waves. 

Id. 
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standards of the [WSD].” ROH § 21-9.80-4. With respect to the 

Coastal Height Setback, the WSD Design Guidebook provides, “A 

setback from the shoreline is required to maximize public 

safety, the sense of open space, lateral access along the beach, 

and the public enjoyment associated with our coastal resources.”4

Additionally, the Coastal Height Setback is designed to 

“contribute to a Hawaiian sense of place” by “reduc[ing] the 

perception of crowding, enhanc[ing] the aesthetics of Waikiki

and impart[ing] a greater sense of Hawaiiana in the built 

environment.” WSD Design Guidebook at 25. 

Although the City Council enacted the LUO to “provide 

reasonable development and design standards for the location, 

height, bulk and size of structures,” a party may apply for a 

variance on the basis of unnecessary hardship by submitting an 

application to the Honolulu Department of Planning and

Permitting. Revised Charter of the City and County of Honolulu 

(RCCCH) § 6-1517 (2000 Edition, 2003 Supp.). In order to 

establish unnecessary hardship, the applicant must demonstrate 

that the following three requirements as prescribed in the City 

Charter have all been met: 

 4 Dep’t of Planning and Permitting, City and Cnty. of Honolulu, WSD 

Design Guidebook (May 2002), http://www.honoluludpp.org/Portals/0/pdfs/zoning

/WSD.pdf (last visited September 2, 2015); ROH § 21-9.80-4(g)(2). 
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(1) the applicant would be deprived of the reasonable use 

of such land or building if the provisions of the zoning 

code were strictly applicable;

(2) the request of the applicant is due to unique 

circumstances and not the general conditions in the 

neighborhood, so that the reasonableness of the 

neighborhood zoning is not drawn into question; and 

(3) the request, if approved, will not alter the essential 

character of the neighborhood nor be contrary to the intent 

and purpose of the zoning ordinance. 

Id. Upon receipt of a variance application, the Director of the 

Department of Planning and Permitting must hold a public 

hearing. Id. If the variance application is granted, the 

Director, in its decision, “shall specify the particular 

evidence which supports granting of [the] variance.” Id.

B. Kyo-ya’s Variance Application to Encroach into the Coastal 

Height Setback 

Kyo-ya Hotels & Resorts LP (Kyo-ya) is the fee-simple 

owner of the Moana Surfrider hotel complex, which contains three 

hotel buildings--the Surfrider Tower, the Banyan Wing, and the 

Diamond Head Tower (DHT)--on a combined zoning lot located on 

Kalākaua Avenue along the Waikiki shoreline. In 2010, Kyo-ya

submitted a land use permit to redevelop the existing 8-story 

DHT with a 26-story, 282 foot hotel and residential tower (the 

Project). Due to the Project’s size, location, and design, the 

Project required several permits and approvals, including a 

variance to allow the Project to encroach into the Coastal 

Height Setback. 
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On March 19, 2010, Kyo-ya submitted variance 

application No. 2010/VAR-9 (variance application) to the 

Department of Planning and Permitting requesting that the

Project be allowed to encroach into the Coastal Height Setback. 

As proposed, the Project would encroach about 40 feet into the 

100-foot coastal setback at the building’s ewa corner5 and about 

60 feet at the Diamond Head corner. Additionally, a significant 

portion of the building up to the 16th floor would encroach into 

the 1:1 height setback measured from the certified shoreline, 

and “from the 17th floor, the entire building encroaches into 

the coastal height setback.” In total, “about 74.3 percent of 

the building encroaches into the Coastal Height Setback”;

“Conversely, only 25.7 percent of the building complies with the 

coastal height setback.”

In its variance application, Kyo-ya maintained that 

although the Project was “unable to comply with the strict 

requirements of [the Coastal Height Setback],” the Project 

satisfied the three requirements for issuance of a variance.

 5 “Ewa” is defined as a “[p]lace name west of Honolulu, used as a 

directional term.” M. Pukui & S. Elbert, Hawaiian Dictionary 42 (rev. ed. 

1986).
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i. First Requirement: Deprived of the Reasonable Use of the 

Applicant’s Land or Building

Kyo-ya argued it would be deprived of the reasonable 

use of its land if the LUO was strictly applied because the 

ordinance would “reduce the buildable portion of the property to 

roughly 11,283 square feet, or approximately 33% of the whole 

lot area.” If the LUO “were strictly followed,” Kyo-ya 

contended that it “would not even be able to rebuild the 

existing [DHT].”6

Kyo-ya maintained that the State of Hawaii entered 

into an agreement in 1965 with the owners of certain beach front 

parcels under which the State committed to expand the beach and 

“[p]rotect and preserve all existing beach” in a designated area 

(1965 Beach Agreement).7 Although the contemplated beach 

 6 As discussed infra, the LUO allows for the renovation or 

reconstruction of nonconforming uses and structures, subject to certain 

conditions and approvals. See ROH § 21-9.80-4(e). 

7 In the 1965 Beach Agreement, Line B represents the makai 

property line and Line A designates the current certified shoreline. The 

text of the agreement states, in part, as follows:

1. The State will use its best efforts to construct the 

beach seaward of Line B in the Surfrider-Royal Hawaiian 

Sector substantially in accordance with the Cooperative 

Project.

. . . 

3. The Owners will release and quitclaim to the State 

forever all of their respective estate, right, title and 

interest . . . in and to the Surfrider-Royal Hawaiian 

Sector of Waikiki Beach now or from time to time 

hereafter existing seaward of Line B, whether created by 

(continued . . .)
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expansion was never completed, Kyo-ya asserted that had “the 

beach been constructed by the State” pursuant to the 1965 Beach 

Agreement, “it is likely that the beach fronting the [DHT] site 

would be approximately 180 feet wider than it is today” and the 

shoreline would have been recertified to reflect the increased 

width. Additionally, if the beach had been extended, Kyo-ya 

submitted that “almost no portion of the [Project] would 

encroach into the coastal height setback.”

ii. Second Requirement: Unique Circumstances

Kyo-ya contended that the reasonableness of the 

neighborhood zoning was not drawn into question by its variance 

request because it was “forced” to apply for a variance due to 

unique circumstances, rather than as a result of general 

conditions in the neighborhood. For example, the Project site 

 

(continued . . .)

construction or otherwise, reserving to the Owners . . . 

full and free access between their respective abutting 

lands and the sea across said beach and to use said 

beach for a bathing beach and foot passage.

. . .

5. The State will release and quitclaim to the respective 

Owners . . . severally in proportion to their respective 

frontages along Line A . . . contemporaneously with the 

Owners’ conveyance to the State . . . all the land of 

the Surfrider-Royal Hawaiian Sector of Waikiki Beach 

between Lines A and B . . . PROVIDED, HOWEVER, that said 

land between lines A and B shall remain subject to the 

public easement . . . until a beach at least seventyfive (75) feet wide shall have been created seaward of 

Line B.
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“is bounded on the Ewa side by the historic Banyan Wing,” which 

is listed on the National and State Register of Historic Places. 

Kyo-ya argued that it had foregone considerable financial gain 

by choosing not to redevelop the Banyan Wing and that “[i]f Kyoya chose to redevelop this portion of the complex, it could 

develop a hotel or residential tower that meets all LUO, WSD and 

[Planned Development-Resort (PD-R)] requirements.”

Additionally, Kyo-ya contended the Project site “is 

among the narrowest parcels of land along Waikiki Beach” that is 

subject to the Coastal Height Setback.” The narrowness of the 

Project site “is exacerbated,” Kyo-ya argued, “by the absence of 

the substantial beach which was to have been built by the State 

per the 1965 Beach Agreement” in addition to the presence of the 

historic Banyan Wing. Kyo-ya further argued that the parcel’s

“unique size and shape” caused the impact of the Coastal Height 

Setback to be “greater than on any other parcel along Waikiki

Beach.”

iii. Third Requirement: Essential Character of the Neighborhood 

and Intent and Purpose of the Ordinance

With respect to the third requirement, Kyo-ya 

submitted that the variance “will not alter the essential 

character of the locality nor be contrary to the intent and 

purpose of the zoning code.” Kyo-ya characterized Waikiki as “a 

densely developed, urbanized area, filled with large hotels, 
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condominiums, and mixed-use projects which push (and in many 

cases exceed) the limits of permitted heights, densities, and 

other zoning and building regulations.” Kyo-ya argued that many

of the “existing hotels along Waikiki Beach already encroach 

into the coastal height setback” and that allowing the Project 

to similarly encroach would not alter the essential character of 

Waikiki. Kyo-ya contended the Project’s “mauka-makai 

orientation, increased public open space, improved beach access 

and addition of surfboard racks should go a long way toward 

restoring the character of Waikiki.”

Additionally, Kyo-ya asserted the Project was 

consistent with WSD objectives to “[p]rovide for the ability to 

renovate and redevelop existing structures which might otherwise 

experience deterioration” and allow for “creative development 

capable of substantially contributing to rejuvenation and 

revitalization of the [WSD].” Kyo-ya maintained that the 

Project was consistent with the WSD objective to “improve where 

possible mauka views . . . and a visual relationship with the 

ocean” and the objective to “[p]rovide people-oriented, 

interactive, landscaped open spaces to offset the high-density 

urban ambience.”

Finally, Kyo-ya argued that the impact of the 

encroachment into the Coastal Height Setback would be mitigated 
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by the State of Hawaii’s planned Waikiki Beach Maintenance 

Project (Beach Maintenance Project) that is “expected to add 

roughly forty-feet (40’) of dry beach to the beach fronting the 

[DHT].”

C. Director’s Decision

The Director held a public hearing on Kyo-ya’s 

variance application and subsequently issued Findings of Fact, 

Conclusions of Law, and Decision and Order (Director’s Decision

or Decision) granting “Partial Approval” of Kyo-ya’s variance 

application.

In his Decision, the Director described the variance 

application as a request to allow the Project to encroach 

approximately 74 percent into the Coastal Height Setback. The 

Director noted that in addition to the variance request from the 

Coastal Height Setback, the Project required additional 

approvals and permits, including a Planned Development-Resort 

(PD-R) Permit.8

 8 The purpose of a PD-R permit is described within the LUO as 

follows: 

[T]o provide opportunities for creative redevelopment not 

possible under a strict adherence to the development 

standards of the special district. Flexibility may be 

provided for project density, height, precinct transitional 

height setbacks, yards, open space and landscaping when 

timely, demonstrable contributions benefiting the community 

and the stability, function, and overall ambiance and 

appearance of Waikiki are produced.

(continued . . .)
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The Director then set forth his analysis of the City 

Charter variance test. As to the first requirement--that the 

strict application of the zoning code would deprive Kyo-ya of 

the reasonable use of its land or building--the Director noted 

that Kyo-ya had argued the existing DHT is “extremely outdated” 

and if not allowed to be redeveloped, it “would contribute to 

the decline of the already aging structure.” Consequently, the 

Director found that “the proposal is necessary to maintain 

economic viability.” The Director also found that the proposal 

was consistent with the WSD objectives “to provide opportunities 

for creative development that contribute to the rejuvenation and 

revitalization of the special district,” “to provide the ability 

to renovate and redevelop existing structures which otherwise 

might experience deterioration,” and “to facilitate the desired 

character of Waikiki for areas susceptible to change.”

The Director noted Kyo-ya had indicated that if it 

complied with all “required yard, height, and transitional 

 

(continued . . .)

Reflective of the significance of the flexibility 

represented by this option, it is appropriate to approve 

projects conceptually by legislative review and approval 

prior to more detailed review and approval by the 

department. 

ROH § 21-9.80-4(d). Kyo-ya’s PD-R application requested flexibility in 

WSD standards to allow the Project to have greater density, increased 

height, and less open space than otherwise would be required.
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height setbacks,”9 the “building would have to take the form of a 

massive monolithic wall.” The Director concluded that in 

comparison, the Project “offers some important design advantages 

that are more conducive to the WSD design objectives, but that 

can only be accomplished by a trade-off in terms of coastal 

setback encroachments.”

The Director addressed the physical constraints of the 

site that restrict development along the shoreline. The 

Director found that if the zoning code was strictly applied, the 

buildable area of the DHT Lot “would be reduced to less than 35 

percent” with a maximum height limit of about 170 feet. 

Consequently, the Director found that if Kyo-ya were not granted 

the requested variance, Kyo-ya “would not be able to develop in 

accordance with the [PD-R] permit.”

Next, the Director found that the extent of Kyo-ya’s 

requested 74 percent encroachment into the Coastal Height 

Setback would have been significantly reduced “[i]f the beach 

 9 “Precinct transitional height setbacks” is a distinct requirement 

under the LUO and separate from the Coastal Height Setback at issue in this 

appeal. As set forth in ROH Table 21-9.6(B) and ROH § 21-9.80-6(c)(2), 

precinct transitional height setbacks are as follows:

Transitional Height Setbacks. For any portion of a 

structure above 40 feet in height, additional front, side 

and rear height setbacks equal to one foot for each 10 feet 

in height, or fraction thereof, shall be provided. Within 

the height setback, buildings with graduated, stepped forms 

shall be encouraged (see Figure 21-9.2).
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had been constructed and/or maintained as agreed to by the State

[under the 1965 Beach Agreement, because] the certified 

shoreline would probably be located much farther seaward than 

the existing shoreline.” The Director reasoned, “The proposal, 

viewed in [the context of the 1965 Beach Agreement], is not 

excessive.” The Director additionally found that under the 

Waikiki Beach Maintenance Project, the beach would be increased 

by 40 feet and that the certified shoreline “would likely 

reflect the beach expansion.”

The Director concluded that “[f]or these and other 

reasons,” Kyo-ya “would be denied reasonable use of the site if 

not allowed to encroach into the present 100-foot coastal 

setback and the coastal height setback.” However, the Director 

also concluded that “the proposed setback encroachment exceeds 

what would be allowed if the beach width were increased by 180 

feet”; therefore, “the height of the [Project] should be reduced 

to comply with the . . . coastal height setback as measured from 

. . . (the beach width intended in the 1965 [Beach] Agreement).”

With regard to the second requirement of the variance 

test, the Director found Kyo-ya’s application to be “supported 

by unique circumstances” including that the Project lot is “one 

of the narrowest lots along the shoreline in [the] area except
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for the public beach park lots.”10 The Director noted that 

compliance with the 20-foot front yard setback and the 100-foot 

coastal setback effectively reduces the buildable area of the

DHT lot by 33 percent. 

The Director found the shoreline to be another “unique 

circumstance [of the site].” The Director stated that while the 

“variance and/or encroachments are based on the existing 

[certified] shoreline,” “the shoreline along the site is subject 

to drastic change by artificial means, and, in fact, may move 

seaward by roughly 40 feet under the planned [Waikiki Beach 

Maintenance Project].” In light of the restoration plan, the 

Director concluded, “It would be reasonable to allow full 

development to proceed at this time, considering that the 

encroachments will be reduced substantially once the beach 

restoration is done.” 

As to the third requirement of the variance test, the 

Director concluded the Project would not alter the essential 

character of the neighborhood. The Director found the 

 10 The Director noted that Kyo-ya’s Special Management Permit 

required Kyo-ya to preserve the historic Banyan Wing for a minimum of 25 

years and that “[t]he proposed encroachments would permit [Kyo-ya], in 

effect, to transfer some of the development potential from the Banyan Wing 

site to the DHT site.” The Director maintained this “transfer” would “be a 

fair trade-off, since the proposal would also promote several important WSD 

goals and objectives.” However, the Director also noted that Kyo-ya 

“indicated that [it has] no intention of removing the historic Banyan Wing.”
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“established character of Waikiki” to be “a densely populated 

and highly developed, urbanized area, which includes a wide mix 

of land uses.” Further, the Director noted that “[m]any 

existing structures are nonconforming and exceed the height 

limit and maximum density [], encroach into required yards and 

setbacks, and lack the minimum open space and landscaping.”

The Director additionally found the Project to be 

“consistent with several important WSD objectives.” The 

Director determined that “the new building is necessary to 

replace an aging, declining structure with a new, more 

attractive and functional structure, which will enhance Waikiki

as a visitor destination”; allow Kyo-ya to preserve the historic 

Banyan Wing; and “provide[] public access to the beach, view 

channels from Kalākaua Avenue to the ocean, as well as other 

significant public benefits.”

After analyzing the variance test’s three 

requirements, the Director made the following Conclusions of 

Law:

1) There is evidence that the Applicant would be deprived

of a reasonable use of the land or building if the 

provisions of the zoning code were strictly applied.

2) The request of the applicant is due to unique 

circumstances and not to general neighborhood 

conditions, and it does not question the reasonableness 

of the neighborhood zoning.

3) The request will not alter the essential character of 

the neighborhood nor be contrary to the intent and 

purpose of the zoning ordinance.
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Accordingly, the Director granted partial approval of Kyo-ya’s 

variance application to allow the Project to encroach 

approximately 74 percent into the Coastal Height Setback. The 

Director’s partial approval was conditioned on, inter alia, 

submission of revised plans “which show the [Project] shall 

comply with the 1-to-1 (45-degree angle) coastal height setback 

as measured from . . . (the approximate beach width intended in 

the [1965 Beach Agreement]).”11

III. Appellate Proceedings 

A. Zoning Board of Appeals12

Surfrider Foundation, Hawaii’s Thousand Friends, Ka

Iwi Coalition, and KAHEA--The Hawaiian Environmental Alliance 

(collectively, Surfrider) filed a petition (Petition) to the 

Zoning Board of Appeals (ZBA) challenging the Director’s 

findings and conclusion that Kyo-ya’s request for a variance 

from the Coastal Height Setback met the requirements for 

issuance of a variance as set forth by the City Charter.13 In 

 11 According to Kyo-ya, the Director’s condition effectively reduced 

the height of the Project by approximately six floors.

12 The ZBA held a hearing to decide motions to intervene filed by 

numerous parties at which the ZBA granted intervenor status to Kyo-ya, 20,000 

Friends of Labor, Hawaii’s Thousand Friends, Ka Iwi Coalition, Surfrider 

Foundation, and KAHEA--The Hawaiian Environmental Alliance.

13 Kyo-ya filed a motion to dismiss Surfrider’s appeal, arguing that 

Surfrider’s appeal was substantively and procedurally insufficient under 

RCCCH § 6-1516.

(continued . . .)
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its position statement, Surfrider argued that the Director’s 

conclusion that the Project satisfied the three requirements of 

RCCCH § 6-1517 was based on erroneous findings of material 

facts.

Surfrider maintained that Kyo-ya did not meet the 

first requirement for issuance of a variance because “the record 

indicates that [Kyo-ya] would not be deprived of reasonable use 

of the property if the variance is denied.” Surfrider contended 

that the “property is already occupied by a non-conforming, 8-

story hotel building that can be fully renovated without the 

need for a variance under the [LUO],” that Kyo-ya was not 

entitled to achieve all of the applicable maximum development 

standards in the LUO, and that the 1965 Beach Agreement had not 

been realized.

 

(continued . . .)

RCCCH § 6-1516 provides, in relevant part, as follows:

Section 6-1516. Zoning Board of Appeals –

. . . An appeal shall be sustained only if the board finds 

that the director’s action was based on an erroneous 

finding of a material fact, or that the director had acted 

in an arbitrary or capricious manner or had manifestly 

abused discretion. 

The ZBA granted in part, and denied in part Kyo-ya’s motion. The ZBA found 

that Surfrider “asserted in [its] Petition that the Director’s action in 

partially approving the Variance Application was based upon one or more 

erroneous findings of material fact” but that Surfrider “did not allege or 

argue in the Petition that any aspect of the Director’s action . . . was 

arbitrary or capricious or a manifest abuse of the Director’s discretion.”
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Surfrider argued that Kyo-ya failed to meet the second 

requirement because the property is not particularly unique and 

is typical of the general conditions of ocean-front property in 

that part of Waikiki.” Thus, Surfrider maintained that the 

reasonableness of the neighborhood zoning is in fact drawn into 

question by the variance request. 

Surfrider argued the third requirement was also not 

met because “the request, if approved, will alter the essential 

character of the locality and is contrary to the intent and 

purpose of the zoning code.” Surfrider pointed out that the 

Director’s findings “did not even address whether the project is 

contrary to the intent and purpose of the WSD, whose objectives 

center on maintaining Waikiki’s unique Hawaiian identity and 

reducing the apparent height of buildings.”

Kyo-ya, the Director, and 20,000 Friends of Labor

(Friends of Labor) each filed a position statement with the ZBA. 

Kyo-ya argued that Surfrider “fail[ed] to allege a single 

finding of material fact to have been in error let alone 

‘clearly erroneous.’” Kyo-ya maintained that the Director

specified the particular evidence that supported his granting of 

the variance and properly concluded that all three requirements 

for a zoning variance had been satisfied.
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As to the first variance requirement, Kyo-ya contended 

that it would be denied reasonable use of its property if it 

were not allowed to encroach into the Coastal Height Setback. 

Kyo-ya asserted that the 1965 Beach Agreement conferred on it 

“rights and expectation granted by the state” that must be 

considered in determining what reasonable use it could expect of 

its property. Kyo-ya additionally argued that it “has the right 

under the current WSD and its PD-R to construct the 

density/floor area it proposes” but that without the variance 

the resulting building would be materially inconsistent with the 

WSD objectives and guidelines.

With regard to the second requirement, Kyo-ya asserted 

that the Moana Parcel has the greatest width-to-depth ratio of 

any parcel along Waikiki Beach and includes a historic 

structure. Thus, Kyo-ya argued the Director properly concluded 

that the Moana Parcel has unique circumstances that do not call 

into question the general zoning code.

In addressing the third requirement, Kyo-ya 

maintained, “It cannot be disputed that Waikiki is a highly 

urbanized area [] with many large and tall buildings in close 

proximity to the Moana Parcel.” Kyo-ya therefore contended the 

“essential character of the neighborhood is a dense urban area 

full of tall hotel and condo buildings.”
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The Director in his position statement argued the 

record demonstrates that his partial approval of Kyo-ya’s 

variance application was based on clearly established facts and 

was a reasonable exercise of his discretion. The Director 

restated his findings and analysis as to the requirements of the

variance test from his Decision. He also reiterated his 

conclusion that the Project satisfied the variance test with the 

condition that the Project’s height should be reduced to comply 

with the 1:1 coastal height setback measured from the beach 

width intended by the 1965 Beach Agreement because the agreement 

provided a basis to determine the parameters of a reasonable 

height limitation.

The ZBA issued its Findings of Fact, Conclusions of 

Law, and Decision and Order (ZBA Order) on February 14, 2013. 

The ZBA found Surfrider “offered insufficient competent, 

reliable and probative evidence to establish that the Director’s

Decision was clearly erroneous” or that any material fact relied 

upon by the Director was clearly erroneous. The ZBA also found

that Surfrider “offered no competent, reliable and probative 

evidence” to demonstrate the following:

103. That the 1965 Beach Agreement . . . was without legal 

effect, had terminated by its terms, or had been 

terminated by the parties or operation of law, [or] 

that the Director was precluded from considering, or 

in error for considering, the 1965 Beach Agreement to 

aid in his determination of what would be reasonable 

limits to the extent of the variance. 
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Accordingly, the ZBA denied Surfrider’s appeal of the 

Director’s Decision.14 Surfrider timely filed a notice of appeal 

to the Circuit Court of the First Circuit (circuit court) from 

the ZBA Order. 

B. Circuit Court

In its opening brief,15 Surfrider argued that the 

Director breached his duty to enforce the LUO when he granted 

Kyo-ya a partial variance “contingent upon compliance with a 

hypothetical certified shoreline 180 feet out to sea from the 

current certified shoreline.” Surfrider contended that 

“variances must be based on the current certified shoreline, not 

some undetermined future shoreline.”

Surfrider next addressed the requirements for issuance 

of a variance. As to the first requirement of the variance 

test, Surfrider reasserted the following: (1) the Director did 

not provide evidentiary support for its conclusion that Kyo-ya 

would be deprived of the reasonable use of its land if it was

required to comply with the Coastal Height Setback; (2) the 

Director erroneously found that the failure of the State to 

 14 The ZBA additionally noted Surfrider waived any argument that the 

Director acted in an arbitrary or capricious manner or had manifestly abused 

his discretion.

15 In its opening brief, Surfrider presented seventeen points of 

error and identified nine erroneous findings with respect to the ZBA Order.
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implement the 1965 Beach Agreement amounts to a deprivation of 

reasonable use; and (3) the other findings in the Director’s 

analysis are not relevant to whether Kyo-ya would be denied 

reasonable use. Surfrider further argued that reasonable use of 

the land, within the meaning of the City Charter does not 

necessarily mean “the use most desired by the owner” and the 

fact that Kyo-ya might make a greater profit by using its

property in a manner prohibited by the ordinance is irrelevant.

Next, in regard to the second requirement of the 

variance test, Surfrider argued that the Director addressed only 

the unique circumstances aspect and did not address whether the 

reasonableness of the neighborhood zoning would be drawn into 

question “by the granting of a variance of unprecedented 

magnitude.” 

With respect to the third requirement, Surfrider 

argued that, while the Director addressed the essential 

character of the neighborhood in his Decision, he did not 

address whether the Project is contrary to the intent and 

purpose of the zoning ordinance. Surfrider conceded the Project 

may be in conformity with the non-conforming buildings in the 

neighborhood built before the WSD was adopted”; however,

Surfrider argued it is not in conformity with the historic 

character of the neighborhood. 
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In his answering brief, the Director restated his 

findings of fact and analysis contained within his Decision and 

reasserted his conclusions. The Director contended that,

contrary to Surfrider’s argument, he did not rely upon the 1965 

Beach Agreement to determine whether Kyo-ya would be denied 

reasonable use under RCCCH § 6-1517, but rather to consider the 

reasonableness and impose a limit on the extent of the variance 

permitted.

Kyo-ya and Friends of Labor argued in their respective 

answering briefs that none of the alleged erroneous facts

Surfrider identified were actually erroneous or material to the 

Director’s Decision.16 Kyo-ya asserted that contrary to

Surfrider’s contention, the ZBA’s findings of fact were “more 

than adequate” to support its conclusion. 

Kyo-ya also contended that Surfrider “misconstrue[d]

the Director’s Decision,” which “did not grant a variance that 

is ‘conditioned upon compliance with a hypothetical certified 

shoreline.’” Kyo-ya further argued that Surfrider’s 

interpretation of case law as requiring the applicant to prove 

that it “would have been denied ‘any reasonable use’ but for” 

 16 In its reply brief to Friends of Labor, Surfrider maintained that 

the Director did not evaluate the “economic viability of the proposed 

structure as compared to other structural options” but rather based his 

decision on “a series of hypothetical scenarios that amount to erroneous 

facts.” 
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the variance is misleading, would eliminate the Director’s 

discretion, and “would bring an end to land use in Hawaii as it 

has been practiced since statehood.” 

After a hearing on Surfrider’s appeal, the circuit 

court entered its Findings of Fact, Conclusions of Law, and 

Decision and Order Affirming the Decision and Order of the ZBA 

(circuit court’s Order). The circuit court concluded that 

Surfrider “failed to satisfy [its] burden to demonstrate that 

the Director’s action in partially approving the [Zoning] 

Variance Application was based on any erroneous findings of 

material fact.”

Surfrider filed a notice of appeal from the circuit 

court’s Order affirming the ZBA Order.17 

C. Supreme Court18

In its opening brief, Surfrider reiterates that it was 

Kyo-ya’s burden to prove that its project satisfies all three 

requirements of the variance test and that the Director’s 

 17 On April 10, 2014, Surfrider filed an application to transfer its 

appeal to this court, which was granted on May 15, 2014.

18 Additionally, Surfrider contends the Director failed to 

adequately support his findings and that evidence of insufficient material 

support for a required factual finding that a variance requirement has been 

met is evidence of an erroneous finding, not evidence of abuse of discretion. 

Kyo-ya argues that Surfrider’s challenge to the Director’s reliance on the 

1965 Beach Agreement, as well as to the Director’s determination of whether 

the Project meets the three requirements of the variance test, involves the 

Director’s discretion, and was thus waived.
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Decision “plainly indicate[s] that neither [Kyo-ya] nor the

Director met [their] burden.”19 Surfrider again points out that 

the 1965 Beach Agreement “does not provide a legal basis for a 

variance” from the LUO “which requires building setbacks to be 

measured from the current certified shoreline.” Surfrider asks 

that this court reverse the circuit court’s Order and the 

Director’s Decision and deny Kyo-ya’s variance application.

Kyo-ya responds that the Director did not rely on the 

1965 Beach Agreement to justify the variance, but rather looked 

to the agreement after the Director determined “a variance was 

warranted” to determine the extent of the variance to grant. In 

any event, Kyo-ya argues that “even if Surfrider could somehow 

show that consideration of the 1965 Beach Agreement was 

improper, this would not be sufficient to reverse the ZBA.” 

With respect to finding deprivation of “reasonable use,” Kyo-ya 

argues “this was not a situation where Kyo-ya was simply trying 

to make a ‘greater profit’; instead, the Director found that the 

variance was ‘necessary to maintain economic viability.’” Kyo-

 19 Surfrider additionally argues that the Director does not have 

discretion to grant variances from “mandatory zoning code requirements.” 

Because Surfrider did not previously raise this argument, it is not 

considered. Mizoguchi v. State Farm Mut. Auto. Ins. Co., 66 Haw. 373, 383, 

663 P.2d 1071, 1077 (1983). 
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ya additionally reasserts arguments that it previously made in 

prior proceedings.20 

IV. Standards of Review

A. Findings and Conclusions

Review of a decision made by the circuit court upon 

its review of an agency’s decision is a secondary appeal. 

Korean Buddhist Dae Won Sa Temple of Hawaii v. Sullivan, 87 

Hawaii 217, 229, 953 P.2d 1315, 1327 (1998). The standard of 

review is one in which this court must determine whether the 

circuit court was right or wrong in its decision, applying the 

standards set forth in HRS § 91-14(g) to the agency’s decision. 

Id. 

Under HRS § 91-14(g)(5) (1993), findings of fact are 

reviewed to determine whether they are “[c]learly erroneous in 

view of the reliable, probative, and substantial evidence on the 

whole record.” A finding of fact is clearly erroneous when the 

record lacks substantial evidence--i.e., credible evidence of a 

sufficient quality and probative value to enable a person of 

reasonable caution to support a conclusion--to support the 

finding. Bremer v. Weeks, 104 Hawaii 43, 51, 85 P.3d 150, 158 

 20 The Director and Friends of Labor each filed their respective 

answering briefs in which they asserted arguments that were submitted in the 

proceedings below or presented by Kyo-ya in its answering brief.
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(2004); McPherson v. Zoning Bd. of Appeals, 67 Haw. 603, 606, 

699 P.2d 26, 28 (1985).

 A “[conclusion of law] that presents mixed questions 

of fact and law is reviewed under the clearly erroneous standard 

because the conclusion is dependent upon the facts and 

circumstances of the particular case.” Price v. Zoning Bd. of 

Appeals of City & Cnty. of Honolulu, 77 Hawaii 168, 172, 883 

P.2d 629, 633 (1994). Because the Director’s conclusions of law

in this case presented mixed questions of fact and law, they are 

reviewed “under the clearly erroneous standard to determine if 

the agency decision was clearly erroneous in view of reliable, 

probative, and substantial evidence on the whole record.” Poe 

v. Hawaii Labor Relations Bd., 87 Hawaii 191, 195, 953 P.2d 569, 

573 (1998). 

B. Incompetent Evidence

“The admission of irrelevant or incompetent matter 

before an administrative agency does not constitute reversible 

error if there is substantial evidence in the record to sustain 

the agency’s determination.” Shorba v. Bd. of Educ., 59 Haw. 

388, 397, 583 P.2d 313, 319 (1979) (quoting Schyman v. Dep’t of 

Registration & Educ., 133 N.E.2d 551, 525-26 (Ill. App. Ct. 

1956)). However, if a petitioner can show prejudice resulting 

from the admission of irrelevant or incompetent evidence, the 
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admission of such evidence may be grounds for reversal. See

id.; Price, 77 Hawaii at 176, 883 P.2d at 637. “[P]rejudice

cannot be alleged to the admission of improper evidence unless 

it be shown that the [agency] relied on it.” Shorba, 59 Haw. at 

397, 583 P.2d at 319 (quoting Schyman, 133 N.E.2d at 561-562). 

C. Interpretation of a Statute, Ordinance, or Charter

“The interpretation of a statute, ordinance or charter 

is a question of law reviewable de novo.” Korean Buddhist, 87 

Hawaii at 229, 953 P.2d at 1327 (alterations omitted) (quoting 

State v. Arceo, 84 Hawaii 1, 10, 928 P.2d 843, 852 (1996))

(internal quotation marks omitted). 

V. Discussion

The Director may grant a variance from a provision of 

the LUO upon the ground of unnecessary hardship if the three 

requirements set forth in RCCCH § 6-1517 have been satisfied: 

(1) the applicant would be deprived of the reasonable use 

of such land or building if the provisions of the zoning 

code were strictly applicable; 

(2) the request of the applicant is due to unique 

circumstances and not the general conditions in the 

neighborhood, so that the reasonableness of the 

neighborhood zoning is not drawn into question; and 

(3) the request, if approved, will not alter the essential 

character of the neighborhood nor be contrary to the intent 

and purpose of the zoning ordinance. 

“The burden of establishing the factual foundation for the 

foregoing legal preconditions rests with the applicant,” Korean 
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Buddhist, 87 Hawaii at 234, 953 P.2d at 1332 (citing McPherson,

67 Haw. at 607, 699 P.2d at 28); however, it is the Director 

who, prior to granting a variance, must “specify the particular 

evidence which supports the granting of the variance.” RCCCH § 

6-1517.21 In its appeal, Surfrider argues that the circuit court 

erred in affirming the ZBA Order and the Director’s Decision 

because the Director’s findings and conclusions did not 

demonstrate that Kyo-ya satisfied the three requirements for 

issuance of the variance. 

A. Deprived of the Reasonable Use of Land or Building

To satisfy the first variance requirement, the record

must show that “the applicant would be deprived of the 

reasonable use of such land or building if the provisions of the 

zoning code were strictly applicable.” RCCCH § 6-1517. 

“Reasonable use,” within the meaning of the charter, “is not 

necessarily the use most desired by the property owner”; rather, 

to be deprived of the reasonable use of its property, the 

property owner must establish an inability to make reasonable 

 21 The role of the Director in evaluating an application for a 

variance from a provision of the LUO is greater than that of an impartial 

arbiter of fact. “Unlike an ordinary court, the [Director] has the function 

of serving as an advocate of the public interest.” Final Report of the 

Charter Commission of the City and County of Honolulu 1971-1972 at 34 

(citation omitted). The Director “should always place this consideration 

foremost, rather than looking upon its duties as that of a simple arbitration 

of disputes among private parties.” Id. 
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use of its land or building without the variance. Korean 

Buddhist, 87 Hawaii at 234-5, 953 P.2d at 1332-33 (applicant 

failed to show that it could not make reasonable use of the land 

or its hall without the requested variance); McPherson, 67 Haw. 

at 605-06, 699 P.2d at 28 (finding the applicant had not 

established deprivation of reasonable use because the record was 

“devoid of any evidence that the applicant could not make 

reasonable use of the land or buildings in conformity with the 

[zoning code] or her pre-existing nonconforming use”); see also

RCCCH § 6-1517 n.30 (“[W]ithin the meaning of the charter,” 

“reasonable use” “is not the use most desired by the property 

owner; [the] property owner must show inability to make any

reasonable use of his land without the variance.”).

In this case, the Director concluded “[t]here is 

evidence that [Kyo-ya] would be deprived of a reasonable use of 

the land or building if the [Coastal Height Setback] was 

strictly applied” for the following reasons: the Project is 

necessary to maintain economic viability; the zoning code would 

reduce the buildable area of the DHT lot; if not allowed the 

variance, Kyo-ya would not be able to develop in accordance with 

the PD-R permit; the 1965 Beach Agreement would have resulted in 

a significantly different buildable area on the site; and the 

current beach replenishment project will extend the beach width 
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by a minimum of 40 feet and the certified shoreline will likely 

reflect the beach expansion.22 

Surfrider challenges both the Director’s ultimate 

conclusion that Kyo-ya satisfied this requirement of the 

variance test, as well as several of the underlying findings the 

Director based his conclusion upon. Surfrider specifically 

contends that the Director erroneously found that Kyo-ya would 

be denied reasonable use based on the 1965 Beach Agreement and 

that the Project “is necessary to maintain economic viability.” 

Each of the Director’s reasons for concluding that “there is 

evidence” that Kyo-ya would be deprived of the reasonable use of 

the land is addressed below.

Economic Viability23 i.

The Director based his conclusion that Kyo-ya would be 

deprived of a “reasonable use” if the Coastal Height Setback was 

strictly applied in part on his finding that the Project “is 

 22 The Director additionally mentioned several WSD objectives in his 

discussion of the first requirement of the variance test. For example, the 

Director stated that maintaining economic viability is consistent with the 

WSD objective to “provide opportunities for creative development that 

contribute[s] to the rejuvenation and revitalization of the special 

district.” The Director’s discussion of the WSD objectives will be discussed 

in relation to the third requirement of the variance test--the intent and 

purpose of the LUO--as the objectives do not pertain to whether the record 

establishes that Kyo-ya would be denied the reasonable use of its land under 

the first requirement of the variance test. 

23 Because the parties analyze one aspect of reasonable use of the 

land or building in terms of economic viability, we apply this measure of 

analysis in this case.
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necessary to maintain economic viability.” Surfrider argues 

that the Director’s finding as to economic viability is 

erroneous because it is not supported by the record. Kyo-ya, 

the Director, and Friends of Labor argue that the Director 

sufficiently found that the Project was necessary for economic 

viability and that it was Surfrider’s burden to prove otherwise.

To reiterate, in order to demonstrate deprivation of 

reasonable use within the meaning of the City Charter, the 

property owner must establish an inability to make reasonable 

use of its land or building without the requested variance. 

Korean Buddhist, 87 Hawaii at 234-35, 953 P.2d at 1332-33; 

McPherson, 67 Haw. at 605-06, 699 P.2d at 28; see also RCCCH § 

6-1517 n.30; Final Report of the Charter Commission of the City 

and County of Honolulu 1971-1972 at 33 (citation omitted)

(“[T]he property owner must be able to show, if he complies with 

the provisions of the ordinance, that he cannot make any 

reasonable use of his property.”).24 

 24 In Korean Buddhist, the applicant sought a variance after the 

fact for its newly constructed temple hall that exceeded the maximum height 

allowed under the zoning code. 87 Hawaii at 234-35, 953 P.2d at 1332-33. In 

affirming the Director’s denial of the variance, this court held, inter alia, 

that “‘reasonable use’ of the land, within the meaning of the City Charter, 

is not necessarily the use most desired by the owner.” Id. The court 

reasoned that because the applicant failed “to establish that it could make 

no reasonable use of the land or its Hall without” the height variance, the 

first requirement of the variance test had not been satisfied. Id.

(continued . . .)
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Further, “the fact that [an applicant] might make a 

greater profit by using his property in a manner prohibited by 

the ordinance is considered irrelevant, since almost any 

individual applicant could make that same showing.” Korean 

Buddhist, 87 Hawaii at 234-35, 953 P.2d at 1332-33 (quoting

Final Report of the Charter Commission of the City and County of 

Honolulu 1971-1972 at 33); see also 3 E.C. Yokley, Zoning Law & 

Practice, § 20-7 (4th ed. 1979) (“Under this prong of the test, 

the fact that another use would be more profitable to the 

property owner is not a sufficient basis for a board to grant a 

variance.”); Dep’t of Planning and Permitting, City and Cnty. of 

Honolulu, Zoning Variance Guidebook (August 3, 2010), 

http://www.honoluludpp.org/Portals/0/pdfs/zoning/zvar2.pdf

(“Variances cannot be given to . . . allow the applicant to save 

money or make more money on a proposed project.”). 

As Surfrider argues, although the Director found that 

the variance was necessary to “maintain economic viability,” 

 

(continued . . .)

Similarly, in McPherson, this court found the record to be 

“devoid of any evidence that the applicant could not make reasonable use of 

the land or buildings in conformity with the [zoning code] or her preexisting nonconforming use,” and thus we concluded that the ZBA’s contrary 

finding was clearly erroneous. 67 Haw. at 605-06, 699 P.2d at 28. In other 

words, because the applicant had not established that she could not make 

other reasonable use of the land or buildings but for the variance, the court 

held that the applicant failed to satisfy the first requirement of the 

variance test. Id.
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there is no financial data25 in the record to support such a 

finding; rather, it appears the Director merely recited 

statements Kyo-ya made in its variance application: “[t]he 

Applicant indicates” that the “facilities and amenities of the 

existing [DHT] are extremely outdated”; if the DHT “is not 

allowed to be redeveloped that would contribute to the decline 

of the already aging structure”; and “[t]he Applicant suggests” 

that an older hotel “cannot compete with other tourist 

destinations that offer superior accommodations.”26 However, 

these statements are merely assertions of Kyo-ya unsupported by 

the record. See McPherson, 67 Haw. at 606, 699 P.2d at 29 

 25 Although the Director did not make any economic findings as to 

the existing DHT or the proposed Project, he did make findings as to the 

economics of the Banyan Wing and a theoretical reconstructed Banyan Wing in 

his analysis of the second requirement of the variance test. The Director 

found that a reconstructed Banyan Wing may increase in value by 79 percent 

compared with the current wing. However, as noted supra, the Banyan Wing is 

a historic structure that cannot be redeveloped for a minimum of 25 years. 

Additionally, the Director noted that Kyo-ya indicated “that they have no 

intention of removing the historic Banyan Wing.” Thus, the economic findings 

pertaining to the Banyan Wing are not relevant to whether Kyo-ya would be 

denied the reasonable use of the land if not allowed a variance from the 

Coastal Height Setback for the Project. 

26 The entirety of the Director’s analysis pertaining to economic 

viability of the DHT tower is as follows:

The Applicant indicates that the facilities and amenities 

of the existing Diamond Head Tower are extremely outdated. 

If the DHT is not allowed to be redeveloped, that would 

contribute to the decline of the already aging structure. 

The Applicant suggests that older hotels that offer 

substandard visitor accommodations are not attractive to 

the modern visitor and often cannot compete with other 

tourist destinations that offer superior accommodations. 

Thus, the proposal is necessary to maintain economic 

viability.
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(“[T]he Charter limits the power of the [Director] to grant 

variances to cases where a rather narrow and somewhat technical 

set of facts must be established.”). 

Moreover, even if the record established that the DHT 

was “extremely outdated” and would continue to decline if not 

allowed to be redeveloped, those “facts” alone would not support 

the finding that the Project is necessary to maintain economic 

viability because the LUO expressly allows existing 

nonconforming buildings within the WSD to be repaired and 

renovated as long as the level of nonconformity is not 

increased.27 See ROH § 21-9.80-4(e)(3) (“Nonconforming uses 

shall not be limited to ‘ordinary repairs’ or subject to value 

limits on repairs or renovation work performed.”). 

Additionally, ROH § 21-9.80-4(e) allows a 

nonconforming structure to be replaced by an entirely new 

 27 Other jurisdictions have held that if “the property has a 

nonconforming use, there is an additional burden on the applicant to 

establish that maintaining the nonconforming use will not allow the applicant 

to realize a reasonable return.” 2 Am. Law. Zoning § 13:15 (5th ed.); see 

also O’Connor v. Overall Laundry, 183 N.E. 134, 138 (Ind. App. 1932) (“It is 

not a hardship or practical difficulty in the meaning of the statute when a 

corporation’s business has outgrown its building to refuse to allow them to 

add to their present building.”); Crossroads Recreation, Inc. v. Broz, 149 

N.E.2d 65, 67-69 (N.Y. 1958) (upholding the denial of a variance to renovate 

a nonconforming use, because the owner of a nonconforming gas station failed 

to show he could not realize a reasonable return by converting the property 

to a use permitted by the zoning ordinances); Goodman v. Zoning Bd. of Review 

of Cranston, 254 A.2d 743 (R.I. 1969) (reversing the grant of a variance to 

convert a nonconforming nursery into a car dealership because there was 

insufficient proof that continued use of the nursery would deprive the owner 

of all beneficial use of the land).
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structure, subject to certain conditions. Accordingly, even

assuming there was evidence in the record that established that 

the existing DHT is not economically viable due to its aging 

structure and “substandard accommodations,” renovation and or 

replacement of a nonconforming building subject to certain 

conditions is expressly authorized by the LUO. For this reason 

also, there is insufficient evidence in the record to show that

the Project is necessary to maintain economic viability. See

ROH § 21-9.80-4(e). 

The Zoning Variance Guidebook (Variance Guidebook) 

provides sample cases to illustrate how each requirement of the 

variance test may be properly applied. Zoning Variance 

Guidebook, supra. The Variance Guidebook’s second sample case 

provides a particularly relevant example of an applicant who 

requested a variance to build an addition to a dwelling that 

would encroach into the side yard setback. The Guidebook notes 

in this hypothetical case, “The applicant argue[d] that the 

encroachment is necessary because it is the most practical, 

cost-effective solution.” In evaluating the variance request, 

the Variance Guidebook notes that the applicant could build a 

conforming addition in other locations on the lot. Id. at 4. 

The Guidebook concludes that the “variance cannot be supported,” 
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in part, because “the applicant is not deprived of reasonable 

use, since alternatives are available.” Id. at 5.

The Variance Guidebook’s example is consistent with 

the Korean Buddhist decision where this court held that an 

applicant who sought a variance to construct a taller building 

than that authorized by the ordinance had not demonstrated 

deprivation of reasonable use because the record showed that the 

applicant could have constructed a shorter, compliant building. 

87 Hawaii at 234-35, 953 P.2d at 1332-33. Thus, the mere fact 

that Kyo-ya cannot build the specific building design it desires 

is not sufficient to support a finding that Kyo-ya would be 

deprived of the reasonable use of its land or building. See

Singer v. Phila. Zoning Bd. of Adjustment, 29 A.3d 144, 150 (Pa. 

Commw. Ct. 2011) (“It is well-settled that in order to establish 

unnecessary hardship for a dimensional variance, an applicant 

must demonstrate something more than a mere desire to develop a 

property as it wishes or that it will be financially burdened if 

the variance is not granted.”); Korean Buddhist, 87 Hawaii at 

234-35, 953 P.2d at 1332-33. 

As noted, the standard to evaluate deprivation of 

reasonable use under the charter is that the property owner must 

establish an inability to make reasonable use of its land or 

building without the requested variance. Korean Buddhist, 87 
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Hawaii at 234-35, 953 P.2d at 1332-33 (applicant for variance 

failed to show that it could not make reasonable use of the land 

or its hall); McPherson, 67 Haw. at 605-06, 699 P.2d at 28

(accord). Kyo-ya apparently disputes the applicability of this 

standard, arguing to this court that Surfrider’s interpretation

of Korean Buddhist is misleading and would eliminate the 

Director’s discretion. However, the standard stated in the 

Charter’s variance test is clear--an applicant has the burden of 

establishing that the applicant would be deprived of the 

reasonable use of land or buildings if the provisions of the 

zoning code were strictly applicable. Korean Buddhist, 87 

Hawaii at 234, 953 P.2d at 1332 (“The burden of establishing the 

factual foundation for [each prong of the variance test] rests 

with the applicant.”). Here, the reliable, probative, and 

substantial evidence does not support the conclusion that the 

variance is necessary for Kyo-ya to maintain economic viability 

of its land or building. 

ii. PD-R Permit Allowances

The next reason28 stated by the Director to show denial 

of reasonable use was that Kyo-ya would not be able to develop 

 28 The second reason given by the Director to show denial of 

reasonable use merely stated the effect of the zoning code provisions on the 

Project: the buildable area of the DHT lot would be reduced to less than 35 

(continued . . .)
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in accordance with its PD-R permit if the variance was not 

allowed. Under a PD-R permit, an applicant can apply to the 

City Council and the Director for flexibility from specifically 

enumerated provisions of the LUO within the WSD upon showing 

that “timely, demonstrable contributions benefiting the 

community and the stability, function, and overall ambiance and 

appearance of Waikiki are produced.” ROH § 21-9.80-4(d). While

a PD-R permit allows an applicant to apply for flexibility from 

requirements relating to density, height, precinct transitional 

height setbacks, yards, open space, and landscaping, the permit 

notably does not allow flexibility with respect to the Coastal 

Height Setback provision. 

Therefore, an applicant who wishes to build a denser, 

taller building with less open space may apply for a PD-R permit 

upon showing that the project will benefit the community and 

contribute to the stability and overall ambience of Waikiki. On 

the other hand, an applicant who wishes to build within the 

Coastal Height Setback must apply for a variance and satisfy the 

three requirements for issuance of a variance. By excluding the 

Coastal Height Setback from the list of provisions that may be 

 

(continued . . .)

percent with a density less than the existing DHT and the Coastal Height 

Setback would limit the building to approximately 170 feet.
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given flexibility under a PD-R permit and requiring an applicant 

to prove unnecessary hardship as a result of the setback 

requirement, the City Council manifestly indicated that the 

Coastal Height Setback is of greater significance and requires 

greater protection than numerous other provisions in the LUO. 

Here, the Director appears to have sidestepped the 

City Council’s intent for an applicant to meet the distinct 

three-part hardship test by defining and evaluating the 

“reasonable use” of Kyo-ya’s property in terms of the PD-R 

permit’s flexible provisions. Specifically, the Director used 

Kyo-ya’s inability to obtain the full benefit from the PD-R 

permit as a reason to find that Kyo-ya would be denied 

reasonable use of the site if the Coastal Height Setback was 

applied.29 In other words, by obtaining the PD-R permit prior to 

seeking the variance, Kyo-ya was able to argue that it was 

deprived of the reasonable use of its land by pointing to the 

loss of the increased density and height that the PD-R permit 

allowed. Thus, the three requirements that must be satisfied to 

obtain a variance from the Coastal Height Setback were 

 29 Kyo-ya’s PD-R permit allowed a 20 percent increase in density, an 

increased building height of 308 feet, and a decrease in required open space

from 50 percent to 45 percent.
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subordinated to Kyo-ya achieving the benefits of the PD-R 

permit.

The effect of coordinating the permits in this manner 

resulted in the ostensible inclusion of the Coastal Height 

Setback as being among the provisions that can be modified under 

the PD-R permit. This is directly contrary to the intention of 

the City Council: the Coastal Height Setback stands apart from 

the PD-R permit, and an applicant seeking a variance from the 

Coastal Height Setback requirements must independently satisfy 

the unnecessary hardship test. Accordingly, the PD-R permit 

should not have been considered as a basis for determining 

reasonable use in order to satisfy the first requirement of the 

variance test, as it enables circumvention of the Coastal Height 

Setback. 

Additionally, even if the PD-R permit were relevant to 

the determination of “reasonable use,” the Director noted that 

there was an alternative building design that would achieve the 

increased density authorized by the PD-R permit without

encroaching into the Coastal Height Setback.30 Thus, the 

 30 The Director found that if Kyo-ya “is not allowed to encroach 

into the coastal height setback, the building design would have to be 

drastically changed from a relatively tall, slender design to a shorter, 

wider building with a larger footprint in order to achieve the density 

permitted by the PD-R.” (Emphasis added). The Director disregarded the 

alternative design after finding that it would obstruct views from Kalākaua 

(continued . . .)
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Director expressly acknowledged that Kyo-ya could in fact 

achieve the full density permitted by its PD-R permit with an 

alternative design that would not encroach into the Coastal 

Height Setback. 

Additionally, aside from the single “monolithic” 

building design hypothesized in the Director’s Decision, the 

Director did not discuss any other alternative building designs 

that would not require a 74 percent encroachment into the 

Coastal Height Setback apparently because there was no evidence 

in the record regarding alternatives. Thus, in effect, the 

Director’s Decision presented an artificial “either/or” scenario 

where Kyo-ya could only build either the proposed Project or a 

“shorter, wider building.” This scenario resulted from the 

absence of evidence regarding other available options, including 

the renovation of the existing DHT, the construction of a 

compliant building design, or a building design with a greater 

degree of compliance with the Coastal Height Setback. 

An applicant for a variance is not deprived of the 

reasonable use of its land or buildings simply because the 

applicant may not be able to utilize the maximum potential 

 

(continued . . .)

Avenue and thus be contrary to the WSD objectives. We address this finding 

with regard to the third requirement of the variance test. 
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density of the site. See Korean Buddhist, 87 Hawaii at 234-35, 

953 P.2d at 1332-33; Singer, 29 A.3d at 150. Accordingly, the 

Director’s discussion of the PD-R permit was not relevant to the 

analysis of reasonable use under the first requirement of the 

unnecessary hardship test. 

iii. 1965 Beach Agreement

Next, the Director found that Kyo-ya would be denied 

reasonable use of its land because if the State had constructed 

the beach as required by the 1965 Beach Agreement, “the size and 

configuration of the buildable area of the site would be 

significantly different.”

In 1965, the State and certain shoreline property 

owners, including Kyo-ya’s parent company, entered into a 

private agreement under which the State agreed to use its best 

efforts to extend the beach approximately 180 feet seaward of 

the current certified shoreline. The 1965 Beach Agreement was 

not incorporated into the LUO or referenced in the provisions of 

the subsequently enacted WSD. While there have been beach 

replenishment projects in the years since the agreement, the 

beach width envisioned by the 1965 Beach Agreement was never 

realized. Therefore, the agreement had no effect on the 

certified shoreline by which the Coastal Height Setback is 
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measured.31 Kyo-ya, the Director, and Friends of Labor 

(collectively, Appellees) cite no authority that would authorize 

the 1965 Agreement to have legal effect on a variance 

application. 

The Appellees contend that the Director did not rely 

on the 1965 Beach Agreement to determine whether Kyo-ya would be 

denied reasonable use; however, the plain language of the 

Director’s Decision indicates otherwise.32 In its variance 

application, Kyo-ya acknowledged that the shoreline was never 

extended pursuant to the terms of the 1965 Beach Agreement yet 

contended that if the beach had been extended, “almost no 

portion of the [Project] would encroach into the Coastal Height 

Setback.” The Director adopted Kyo-ya’s reasoning in his 

decision and concluded the variance, “viewed in [the context of 

the 1965 Beach Agreement], is not excessive.” (Emphasis added). 

Additionally, after the Director had extensively discussed the 

 31 See note 3 for the definition of “certified shoreline.” 

32 Kyo-ya argued to the Director, the ZBA, and the circuit court 

that the 1965 Beach Agreement conferred upon it certain rights and 

expectations that must be considered in determining what reasonable use Kyoya could expect of its property under the variance test. Kyo-ya also 

contended that the agreement “altered real property law as it applied to the 

Moana Parcel and the ‘bundle of legal sticks’ that [Kyo-ya] held as its 

property.” During the variance application proceeding, Kyo-ya maintained 

that “the Director was required to consider the shoreline that the State of 

Hawaii is absolutely legally obligated to maintain for the benefit of Kyo-ya 

and its adjoining landowners (and the general public)” and that if the 

Director had done so, “there would have been a more permissive variance 

issued.”
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Beach Agreement, the Director found that “[f]or these and other 

reasons, it can be recognized that [Kyo-ya] would be denied 

reasonable use of the site if not allowed to encroach into the 

[Coastal Height Setback].” (Emphasis added). 

By placing significant reliance on the 1965 Beach 

Agreement as a basis for its conclusion that Kyo-ya would be 

denied reasonable use if encroachment was not allowed, the 

Director effectively evaluated the reasonable use of Kyo-ya’s 

property in terms of the width of the beach intended by the 1965 

Beach Agreement. Other statements in the Director’s Decision 

further support the conclusion that the Director relied on the 

1965 Beach Agreement to determine whether Kyo-ya would be 

deprived of reasonable use of its land. 

For example, after referencing the 1965 Beach 

Agreement, the Director stated, “A closer look at the 1965 

Agreement suggests that if the State had constructed the beach 

as required, the size and configuration of the buildable area of 

the site would be significantly different,” “the beach fronting 

the [Project site] might be as much as 180 feet wider than it is 

today,” and thus “the building setback and height encroachments 

would be reduced significantly.” While there is no doubt that 

the buildable area of the lot would be different if the beach 
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had been extended, the fact is that the beach was not extended 

180 feet, and the shoreline was never certified at that point. 

Despite the Director’s findings relating to the 

intended beach width under the 1965 Beach Agreement, the 

variance must be based on the certified shoreline, and the 

hardship must be established in consideration of the facts and 

circumstances in effect at the time of the application. See ROH 

§ 21-9.80-4(g)(2). Thus, consideration of the 1965 Beach 

Agreement and its hypothetical effects on Kyo-ya’s land if the 

shoreline had been extended 180 feet seaward were entirely 

irrelevant to determining whether Kyo-ya would be deprived of 

the reasonable use of its land.

The Director’s Decision demonstrates that he not only 

considered the 1965 Beach Agreement to determine if Kyo-ya would 

be deprived of the reasonable use its land, but that he also 

considered the agreement when determining the extent of the 

variance to grant. In fact, the Director’s partial approval was 

conditioned on, inter alia, “compliance with the 1-to-1 (45-

degree angle) coastal height setback as measured from the face 

of the existing concrete seawall/walkway structure [] 180 feet 

seaward (the approximate beach width intended in the [1965 Beach 

Agreement).” (Emphases added). By relying on “the beach width 

intended in the 1965 Agreement,” the Director shaped the 
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variance to match the 1965 Beach Agreement. However, the 

governing conditions for the variance approval must be based on 

valid criteria, not a hypothetical shoreline envisioned by an 

unexecuted private contract with no legal effect on the 

certified shoreline or the Coastal Height Setback.33 The 

Director’s conditioning of the variance on the shoreline 

hypothesised by the 1965 Beach Agreement was therefore invalid. 

Further, by conditioning the variance on a theoretical shoreline 

derived from the 1965 Beach Agreement, the Director essentially 

disregarded the certified shoreline. 

The Director’s fifth reason for finding that Kyo-ya 

would be deprived of reasonable use of its land or buildings was 

because the Beach Maintenance Project would extend the beach by 

40 feet and thus reduce the extent of the encroachment. As 

discussed, the Coastal Height Setback must be measured from the 

current certified shoreline and the hardship test met by the 

circumstances in place at the time of the variance application. 

 33 The ZBA found that “[a]t no time prior to the closing of the 

evidentiary portion of this proceeding did Petitioner’s [sic] offer any 

competent, reliable or probative evidence that the 1965 Beach Agreement, 

which had been entered into by the State of Hawaii and Applicant’s parent 

company, was without legal effect, had terminated by its terms, or had been 

terminated by the parties or operation of law.” Despite Kyo-ya’s arguments 

and the ZBA’s findings, there is no legal basis for concluding that the 1965 

Beach Agreement could be validly considered by the Director in evaluating the 

Zoning Variance Application.
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Therefore, the Beach Maintenance Project was also improperly 

considered by the Director. 

Pursuant to ROH § 6-1517, the Director was required to 

“specify the particular evidence which supports the granting of 

a variance” with respect to each requirement of the variance 

test. As to the first requirement, the Director was required to 

conclude that Kyo-ya would not be able to make other reasonable 

use of its land without a variance that allowed it to encroach 

74 percent into the Coastal Height Setback. Korean Buddhist, 87 

Hawaiʻi 217, 953 P.2d 1315. The Director not only failed to 

apply this standard as stated in the Charter, but apparently 

applied a different standard, concluding that Kyo-ya would be 

deprived of “a” reasonable use. 

Further, the Director’s finding that the variance was 

necessary for economic viability of the land or building was 

without evidentiary support in the record. The Director’s 

remaining findings as to the PD-R permit, the 1965 Beach 

Agreement, and the Beach Maintenance Project are not relevant to 

determining whether Kyo-ya would be deprived of the reasonable 

use of the property. Thus, because the reliable, probative, and 

substantial evidence on the whole record does not support the 

Director’s conclusion that the variance was necessary to 

maintain economic viability, his conclusion as to the first
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requirement of the variance test was clearly erroneous. See

Bremer, 104 Hawaii at 51, 85 P.3d at 158. 

Additionally, “[t]he admission of irrelevant or 

incompetent matter before an administrative agency does not 

constitute reversible error if there is substantial evidence in 

the record to sustain the agency’s determination.” Shorba, 59 

Haw. at 397, 583 P.2d at 319 (quoting Schyman, 133 N.E.2d at 

525-26). However, if a petitioner can show prejudice resulting 

from the admission of irrelevant or incompetent evidence, the 

admission of such evidence may be grounds for reversal. See

id.; Price, 77 Hawaii at 176, 883 P.2d at 637. “[P]rejudice 

cannot be alleged to the admission of improper evidence unless 

it be shown that the [agency] relied on it.” Shorba, 59 Haw. at 

397, 583 P.2d at 319 (quoting Schyman, 133 N.E.2d at 561-562).

Here, Surfrider has clearly demonstrated that the 

Director placed great reliance on the 1965 Beach Agreement and 

the Beach Maintenance Project to find that Kyo-ya would be 

deprived of the reasonable use of its land or building if it was 

required to comply with the Coastal Height Setback as measured 

from the certified shoreline. While any reliance on the 1965 

Beach Agreement and Beach Maintenance Project was error, the 

reliance in this case was crucial to the Director’s finding of 

deprivation of reasonable use, even to the extent that it 
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provided the basis for the configuration of the variance that 

was actually granted; thus, because the incompetent evidence was 

significant to the Director’s conclusion, the admission of such 

evidence was clearly prejudicial and “grounds for reversal.” 

Id. 

B. Unique Circumstances

The second requirement of the City Charter’s variance 

test requires a showing that “the request of the applicant is 

due to unique circumstances and not the general conditions in 

the neighborhood, so that the reasonableness of the neighborhood 

zoning is not drawn into question.” RCCCH § 6-1517. The City 

Charter provides the meaning for unique circumstances: unique 

circumstances “has to do with whether specific attributes of the 

parcel are present that justify the request for a variance.” 

RCCCH § 6-1517 n.30 (emphasis added) (citing Korean Buddhist, 87 

Hawaii 217, 953 P.2d 1315). Thus, an owner’s unusual plans for 

a parcel do not, in themselves, constitute “unique 

circumstances.” McPherson, 67 Haw. at 606, 699 P.2d at 28. 

Surfrider argues that the Project site is not 

particularly unique to justify the variance. In addition, 

Surfrider argues the ZBA and Director’s Decision were clearly 

erroneous because it shows the Director addressed only the 

“unique circumstances” part of the variance test and “failed to 
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address whether ‘the reasonableness of the neighborhood is []

drawn into question’ by the granting of a variance of 

unprecedented magnitude.” The Appellees respond that the 

Director properly found Kyo-ya’s lot contained unique 

circumstances that presented development challenges. The 

Appellees also contend that the phrase “so that the 

reasonableness of the zoning is not drawn into question” merely 

explains the purpose behind “unique circumstances.” 

In his Decision, the Director concluded that Kyo-ya’s 

variance application was based upon unique circumstances and not 

general neighborhood conditions and that the variance would not 

draw into question the reasonableness of the neighborhood 

zoning. In support of his conclusion, the Director made the 

following relevant findings: (1) the Project site is one of the 

narrowest along the shoreline in the area with an average lot 

depth of about 182 feet; (2) compared with the DHT tower and 

Surfrider Tower, the Banyan Wing generates the least amount of 

revenue per room;34 (3) the Project site is subject to the 100-

foot coastal setback and an average 20-foot front yard setback 

along Kalākaua Avenue, thereby reducing the buildable area by an 

average of 120 feet; (4) the shoreline along the site is subject 

 34 We do not address this finding as it is not relevant to whether 

the site has specific attributes that justify the request for a variance.
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to drastic change by artificial means compared with natural 

beaches that cannot be altered; and (5) the Beach Maintenance 

Project may extend the beach by roughly 40 feet and thus reduce 

the Project’s encroachments by 40 feet. 

i. Narrow Lot & Banyan Wing

Surfrider does not directly challenge the Director’s 

finding that the Project site is one of the narrowest along the 

shoreline, or that because Kyo-ya was prohibited from 

redeveloping the historic Banyan Wing, Kyo-ya was limited to 

developing the narrower DHT portion of the property. 

Nevertheless, as made clear in the Variance Guidebook’s second 

and third example cases, the narrowness of a lot may not be 

sufficient, by itself, to find unique circumstances when 

alternative building designs are available. 

In the Variance Guidebook’s second example, discussed 

above, because the applicant could build a conforming addition 

in other locations on the lot, the guidebook concluded that the 

“variance cannot be supported,” in part, because “alternatives 

are available.” Zoning Variance Guidebook, supra.

In the third example of the Variance Guidebook, the 

applicant “has a small, narrow lot, only 35 feet in width,” 

while “[o]ther lots in the area are generally 50 feet wide.” 

Id. at 5-6. “The applicant cannot raise the existing dwelling 
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and add a new ground floor without a variance because the second 

story would encroach slightly into the required height setback 

along one side.” Id. (emphasis added). The Variance Guidebook

provides that the “variance can be supported,” because, in part, 

the lot “is the only such narrow lot in the neighborhood, which 

is a unique circumstance,” and because “[t]he structural 

conditions and dimensions of the existing dwelling do not afford 

a reasonable alternative.” Id. (emphasis added).

Here, Kyo-ya appears to have other alternatives that 

would not require a 74 percent encroachment into the Coastal 

Height Setback; thus, the relatively narrow lot does not alone 

justify the variance. Additionally, the WSD allows for the 

refurbishment and rebuilding of nonconforming structures so long 

as the extent of its nonconformities does not increase. It 

would appear that the Director recognized that the narrowness of 

the site was not sufficient to support granting the variance, 

and thus the Director evaluated and relied upon additional

factors, discussed below, to support the finding of unique 

circumstances.

ii. Coastal Height Setback, Front Yard Setback 

A significant reason underlying the Director’s 

conclusion that Kyo-ya’s variance application was based upon 

unique circumstances was that the Project site was subject to 
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“the 100-foot coastal setback . . . and an average 20-foot front 

yard setback along Kalākaua Avenue,” which together “reduce the 

buildable area depth by an average of 120 feet.” However, as 

Surfrider argues, both the Coastal Height Setback and the 

average 20-foot front yard setback apply to all ocean front 

properties in the WSD, and thus, the setbacks do not constitute 

unique circumstances. See ROH § 21-9.80-4; LUO Table 21-9.6(B)

(front yard setbacks must be “an average of 20 feet for zoning 

lots fronting Kuhio Avenue, Kalākaua Avenue, Ala Moana and Ala 

Wai Boulevard within the resort mixed use precinct”); see also

Collins v. Carusone, 126 A.D.2d 847, 848 (N.Y. App. Div. 1987) 

(since all properties near the subject property share the same 

hardship, the hardship is not “unique”); accord Greenawalt v. 

Zoning Bd. of Adjustment of Davenport, 345 N.W.2d 537, 544 (Iowa 

1984).

By combining the footage of both setbacks and 

determining the property’s buildable area would be reduced by 

120 feet, the Director used generally applicable requirements to 

find unique circumstances. However, since all shoreline 

properties in Waikiki have their buildable area reduced by 

setback requirements, this is not a unique attribute of Kyo-ya’s 

parcel. See ROH § 21-9.80-4; LUO Table 21-9.6(B). Moreover, as 

defined by the City Charter, “unique circumstances” “ha[ve] to 
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do with whether specific attributes of the parcel are present 

that justify the request for a variance.” RCCCH § 6-1517 n.30 

(emphasis added) (citing Korean Buddhist, 87 Hawaii 217, 953 

P.2d 1315). The provisions of a zoning ordinance are not 

“specific attributes of [a] parcel,” but rather they are legal 

requirements that prescribe how a parcel may be used and 

developed.35 

The Director further based his finding that the

Project site was unique on the fact that the shoreline fronting 

the property “is subject to drastic change by artificial means” 

and the lot is subject to the 1965 Beach Agreement and the Beach 

Maintenance Project. However, like the setback provisions of 

the LUO, these characteristics of the shoreline are not unique 

to the Project site but apply to all properties fronting Waikiki

Beach, and they are not “attributes” of the parcel. 

Therefore, because the setbacks, shoreline, 1965 Beach 

Agreement, and Beach Maintenance Project are not attributes of 

the parcel, but rather are external conditions present in the 

 35 If, for example, a zoning ordinance imposed a maximum area height 

of 350 feet above which no building could be constructed, that factor itself 

would not constitute a unique circumstance. On the other hand, if a 

particular parcel was graded 20 feet higher than other parcels in the 

neighborhood, and an applicant sought a variance to construct a building on 

that parcel with a maximum ground to ceiling height of 360 feet, the fact 

that the parcel is 20 feet higher than neighboring parcels may be considered 

a unique factor because it is a unique attribute of the parcel itself. 
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neighborhood, the Director’s findings that these conditions are 

“unique” attributes of Kyo-ya’s property are clearly erroneous. 

The only remaining evidence supporting the Director’s 

conclusion that the second requirement was satisfied due to 

unique circumstances were his findings that the individual 

Project site was narrow and that the lot contained the Banyan 

Wing. However, because the record does not show that the unique 

attributes of the lot--the narrowness and Banyan Wing--prevent 

Kyo-ya from renovating the DHT or replacing it with a new 

building that meets zoning requirements, the narrowness of the 

lot and the Banyan Wing do not sufficiently demonstrate the 

parcel’s “unique circumstances.” 

Consequently, the reliable, probative, and substantial 

evidence in the record does not support the Director’s 

conclusion that the variance was necessary due to the unique 

attributes of the property, and thus his conclusion as to the 

second requirement of the variance test was clearly erroneous. 

See Bremer, 104 Hawaii at 51, 85 P.3d at 158. Additionally, 

because the Director significantly relied on external conditions 

that are not relevant to the uniqueness of the parcel and are 

commonly found in the neighborhood, the Director’s Decision was 

based on incompetent evidence that significantly prejudiced 

Surfrider. Shorba, 59 Haw. at 397, 583 P.2d at 319. Finally, 
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the Director’s reliance on conditions commonly found in the 

neighborhood necessarily draws the neighborhood zoning into 

question as every property along the shoreline would be found to 

have “unique” attributes and be potentially eligible for a 

variance from the provisions of the LUO. Accordingly, the 

Director’s conclusion that Kyo-ya satisfied the second 

requirement of the variance test was clearly erroneous.

C. Essential Character of the Neighborhood and Intent and Purpose 

of Zoning Ordinance

To satisfy the third requirement for granting a 

variance, the record must show that “the request, if approved, 

will not alter the essential character of the neighborhood nor 

be contrary to the intent and purpose of the zoning ordinance.” 

RCCCH § 6-1517 (emphasis added). Thus, in this case, the 

pivotal determination is whether the 74.3 percent encroachment 

into the Coastal Height Setback would alter the essential 

character of the neighborhood or be contrary to the intent and 

purpose of the zoning ordinance. See Korean Buddhist, 87 Hawaii

at 234-35, 953 P.2d at 1332-33 (court considered whether the 

increased height of the temple hall, not the temple hall itself, 

would alter the essential character of the neighborhood). 

Notably, in contrast to the first two requirements of the 

variance test requiring affirmative findings of deprivation of 

the reasonable use of the property and unique circumstances of 
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the property, the third requirement necessitates factual 

findings that the variance will not alter the neighborhood’s 

essential character and will not be contrary to the intent and 

purpose of the variance test.36 

Surfrider argues that the Director erroneously found 

that the Project, rather than the variance, would not alter the 

essential character of the neighborhood and would not be 

contrary to the intent and purpose of the zoning ordinance. 

Surfrider additionally argues that the Director did not address 

whether or not the 74.3 percent encroachment itself “might be 

contrary to the intent and purpose of the WSD.” In response, 

the Appellees argue that the Director properly considered the 

intent of the zoning code, as well as the essential character of 

the neighborhood, and correctly concluded that the variance 

would be consistent with both. 

i. Essential Character of the Neighborhood

The Director found, as characterized in the LUO, that 

Waikiki is a “densely populated and highly developed, urbanized 

area” with a wide mix of land uses, many of which are 

 36 Importantly, rather than making findings that the variance is 

consistent with certain objectives, the variance test requires the Director 

to make findings as to whether the variance request is not contrary to the 

intent and purpose of the zoning ordinance. This analysis necessitates 

first, determining the intent and purpose of the zoning ordinance, and then 

evaluating the requested variance in light of such intent and purpose. 
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“nonconforming and exceed the height limit and maximum density 

[], encroach into required yards and setbacks, and lack the 

minimum open space and landscaping.” Based on these findings, 

the Director concluded that the Project would not alter the 

essential character of the neighborhood. However, the 

Director’s conclusion that the neighborhood’s essential 

character would not be altered is flawed.

First, determining that the Waikiki neighborhood37 is a 

“densely populated and highly developed urbanized area” with 

many nonconforming properties does not preclude the City Council 

from enacting an ordinance targeted at altering the 

neighborhood’s character when a sufficient basis exists to do 

so. See Nine A, LLC v. Town of Chesterfield, 950 A.2d 197, 203 

(N.H. 2008). 

In Town of Chesterfield, the town determined that a 

lake, a unique natural resource, needed protection and enacted a 

special district to prevent, among other things, “the 

overcrowding of, and undue concentration of population on and 

 37 We note that the Director’s Decision did not discuss the fact 

that the WSD contains multiple neighborhoods. See ROH § 21-9.80-1(c) 

(“Support the retention of a residential sector in order to provide stability 

to the neighborhoods of Waikiki.” (emphasis added)). Thus, while the 

Director’s characterization of the neighborhood may reflect general 

attributes of the WSD, those attributes do not necessarily represent the 

“essential character” of the neighborhood that will be affected by the 74.3 

percent encroachment into the Coastal Height Setback. 
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around, the lake.” Id. With the creation of the special 

district, the town prohibited cluster residences around the lake 

and set forth new minimum lot requirements and minimum frontage 

requirements. Id. A developer sought a variance38 to build 

cluster residences within the district on the basis that cluster 

housing was reflective of the current character of the 

neighborhood. Id. In affirming the zoning board’s denial of 

the applicant’s variance request, the Supreme Court of New 

Hampshire held that although the town previously permitted 

cluster residences in the lake district, the town rightfully 

determined that “the need to preserve a unique natural resource 

outweighed having the character of the neighborhood control the 

zoning ordinance.” Id.

 38 In Town of Chesterfield, to obtain a variance the applicant was 

required to prove the following:

(1) the variance will not be contrary to the public 

interest;

(2) special conditions exist such that literal enforcement 

of the ordinance results in unnecessary hardship;

(3) the variance is consistent with the spirit of the 

ordinance;

(4) substantial justice is done; and

(5) granting the variance will not diminish the value of 

surrounding properties.

Town of Chesterfield, 950 A.2d at 201.
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Here, the City Council enacted the provisions of the 

WSD, including the Coastal Height Setback, in response “to the 

rapid development of the 1960s and 1970s, and the changes 

produced by that development” to protect the unique identity of 

Waikiki. ROH § 21-9.80. Accordingly, as in Town of 

Chesterfield, it is evident that the City Council was greatly 

concerned with the changing character of Waikiki and thus took 

affirmative steps to preserve Waikiki’s unique Hawaiian 

identity. Therefore, the fact that there are nonconforming 

properties in the WSD that were built prior to the enactment of 

the special district in 1976 does not provide a basis for a 

finding that the variance is consistent with the essential 

character of the neighborhood. 

Further, the presence of nonconforming uses and 

structures should not serve as the basis for further nonconformance. Martin v. City of Alexandria, 743 S.E.2d 139, 146 

(Va. 2013); Packer v. Hornsby, 267 S.E.2d 140-43 (Va. 1980). In 

a factual context with some similarities to this case, the 

Supreme Court of Virginia reviewed the zoning board’s approval 

of an applicant-homeowners’ request for a variance39 to encroach 

 39 The requirements to obtain a variance in Packer are similar to 

the City Charter’s variance test in this case. In Packer, the zoning board 

was permitted to authorize a variance only if “a literal enforcement of the 

(continued . . .)
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73 percent into an oceanfront setback in order to expand their 

house. Packer, 267 S.E.2d at 141. The applicants’ stated 

reasons for the request were “improvement to existing structure 

is needed” and “development of adjacent property makes adherence 

to set back a hardship.” Id. at 141. The court noted that

“[t]he applicants already have a dwelling, . . . and they can 

enlarge the house without violating the setback requirement by 

adding to the west side of the structure,” but the applicants 

preferred to expand to the east “in order to have a better floor 

plan with a better view of the ocean.” Id. at 143. The zoning 

board granted the variance on the basis that the applicant 

“should be entitled to build as close to the ocean as ‘the 

average of the houses along the block.’” Id. at 143. In 

 

(continued . . .)

provisions (of a zoning ordinance) will result in unnecessary hardship” and 

it finds: 

(1) That the strict application of the ordinance would 

produce undue hardship.

(2) That such hardship is not shared generally by other 

properties in the same zoning district and the same 

vicinity. 

(3) That the authorization of such variance will not be of 

substantial detriment to adjacent property and that the 

character of the district will not be changed by the 

granting of the variance.

Packer, 267 S.E.2d at 142. 
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reversing the zoning board’s decision, the court cautioned as 

follows: 

If, as the Board concluded, one owner of the property 

complying with a restriction should be allowed to conform 

his structure to neighboring nonconforming structures, then 

every such owner would be entitled to do so. A board of 

zoning appeals could, by granting variances piecemeal, 

ultimately nullify a zoning restriction throughout the 

zoning district. But the statute provides that all 

variances shall be in harmony with the intended spirit and 

purpose of the ordinance . . . .

Id. (emphasis added).40

The principle that existing nonconformity should not 

serve as the basis for additional nonconformity is itself 

reflected in the LUO, which provides while nonconforming uses 

and structures may be repaired and rebuilt, “constraints are 

placed on [the] nonconformities to facilitate eventual 

conformity with the provisions of the [LUO].” ROH § 21-4.110. 

Thus, although the LUO allows existing nonconforming uses to 

continue, the expressed intent of the LUO is to reduce the 

extent of nonconformity over time. 

The Director’s finding of a “large number of 

nonconforming uses and structures” in the area is not a valid 

basis for granting another nonconforming use. If nonconforming 

 40 The Supreme Court of Virginia also noted that “[p]roximity to the 

ocean is doubtless a ‘privilege or convenience’ coveted by every homeowner 

along the beach,” “[b]ut a zoning restriction upon that privilege does not 

constitute an ‘unnecessary hardship’ within the meaning of the Code.” Id. at 

142.
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use is so pervasive that it is shared by the majority of 

properties in a zoning district, the proper remedy is to seek an 

amendment to the zoning ordinance, not a variance. See Levy v. 

Bd. of Standards & Appeals of N.Y.C., 196 N.E. 284 (N.Y. 1935); 

Appeal of Michener, 115 A.2d 367 (Pa. 1955). Thus, the presence 

of existing nonconformities in the neighborhood to justify new 

noncomformities constitutes incompetent evidence, and the 

Director’s reliance on such evidence undermines the protection 

of Waikiki’s unique identity and dilutes the intended effect of 

the Coastal Height Setback. 

Consequently, there is not reliable, probative, and 

substantial evidence on the whole record supporting the 

Director’s conclusion that Kyo-ya’s request to encroach 74 

percent into the Coastal Height Setback would not alter the 

essential character of the neighborhood, and thus the third 

requirement of the variance test was not satisfied. 

ii. Not be Contrary to the Intent and Purpose of the Zoning 

Ordinance 

Although we hold that the Director’s conclusion that 

the third requirement of the variance test was met is clearly 

erroneous, we also review whether the Director properly 

concluded that the variance would not be contrary to the intent 

and purpose of the zoning ordinance. Thus, we consider the 

intent and purpose of the WSD and Coastal Height Setback and the 
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Director’s conclusion that a 74 percent encroachment would not 

be contrary to such intent and purpose.

a. Intent and Purpose of the WSD 

The WSD was enacted by the City Council in 1976 in 

response “to the rapid development of the 1960s and 1970s, and 

the changes produced by that development,” in order “to guide 

carefully Waikiki’s future and protect its unique Hawaiian 

identity.” ROH § 21-9.80. 

The Council stated, “Waikiki needs to maintain its 

place as one of the world’s premier resorts in an international 

market; yet, the sense of place that makes Waikiki unique needs 

to be retained and enhanced.” Id. (emphasis added). The WSD 

provides, “The design of buildings and structures in the [WSD] 

should always reflect a Hawaiian sense of place, as outlined in 

the [district’s] design controls.” ROH § 21-9.80.

“Just as there is no universally accepted definition 

of ‘aloha,’ there is no universally accepted definition of a 

Hawaiian sense of place.” WSD Design Guidebook at 3. Although 

there is no universal definition of “Hawaiian sense of place,”

the guidebook contains the following discussion of what 

“Hawaiian sense of place” means within the context of 

development in the WSD: 

The concern that Waikiki has lost some of its appeal as a 

tropical beach resort raises many questions about its 

future. A common opinion is that Waikiki needs to improve 
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its physical attractiveness and enjoyment for residents, 

employees and visitors, by restoring the images and 

experiences which make it unique. A Hawaiian sense of 

place is not just a particular architectural style which 

echoes our historical past, but is also a reflection of 

attitudes, experiences, place, spaces and symbols which we 

have embraced as reminders of and contributors to a 

uniquely Hawaiian experience. 

WSD Design Guidebook at 5 (emphases added). In particular, 

“[d]esign in Waikiki should compose spaces and elements in a way

that encourages experiencing the natural environment.” Id.

(emphasis added).

To contribute to the goal of establishing and 

preserving a Hawaiian sense of place, “[a]ll projects in Waikiki

will be expected to make an appropriate contribution,” and 

“[n]ew developments will be required to demonstrate a high 

degree of compliance with applicable objectives, guidelines and 

standards.” Id. (emphasis added). Additionally, “[t]he 

renovation of existing buildings will be expected to comply to 

the extent possible.” Id.

Consequently, the City Council’s intent and purpose in 

establishing the WSD was first and foremost to protect, retain, 

and enhance a Hawaiian sense of place by restoring the 

experiences, places, and spaces that make Waikiki unique. 

b. Intent and Purpose of the Coastal Height Setback 

Although each provision of the WSD is designed to 

reflect a Hawaiian sense of place, few can endeavor to achieve 

this far-reaching goal as effectively as the Coastal Height 
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Setback, which was designed to maximize public safety, the sense 

of open space, lateral access along the beach, and public 

enjoyment of Hawaii’s coastal resources. ROH § 21-9.80-4(g)(2); 

WSD Design Guidebook at 4, 25. Additionally, the Coastal Height 

Setback, together with the other provisions of the WSD, is 

intended to reduce the perception of crowding, enhance the 

aesthetics of Waikiki, and generally impart a greater sense of 

Hawaiiana into the built environment. Id. 

For example, although requirements pertaining to 

landscaping and building materials undoubtedly affect the 

Hawaiian sense of place in Waikiki, they do not directly impact 

lateral access along the beach, the public’s enjoyment of 

coastal resources, or the sense of open space and perception of 

crowding. Thus, among the restrictions put in place by the WSD, 

the Coastal Height Setback uniquely affects the preservation of

Waikiki’s Hawaiian sense of place.

c. Director’s Findings on Intent and Purpose of the Ordinance 

The City Charter provides that the third requirement

is satisfied only if “the request, if approved, will not alter 

the essential character of the neighborhood nor be contrary to 

the intent and purpose of the zoning ordinance.” RCCCH § 6-1517

(emphases added). Accordingly, because Kyo-ya’s variance 

application sought approval to encroach into the Coastal Height 
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Setback, the Director’s evaluation should have focused on 

whether granting the variance application--i.e., a requested 74

percent encroachment into the Coastal Height Setback--would be 

contrary to the intent and purpose of the Coastal Height Setback 

and the WSD. See N. Bergen Action Grp. v. N. Bergen Twp. 

Planning Bd., 585 A.2d 939, 944 (N.J. 1991) (“Because zoning 

restrictions are enacted to further municipal planning and 

zoning objectives, it is fundamental that resolutions granting 

variances undertake to reconcile the deviation authorized . . . 

with the municipality’s objectives in establishing the 

restriction.”). 

However, rather than considering whether the variance 

request--i.e., a 74 percent encroachment into the Coastal Height 

Setback--was contrary to the intent and purpose of the WSD and 

the Coastal Height Setback, the Director evaluated whether the 

Project was consistent with three of the fourteen WSD 

“objectives.”41 Consequently, the Director made no findings and 

 41 Additionally, the three objectives relied upon by the Director do 

not show that the Project would not be contrary to the intent and purpose of 

the WSD. First, the Director found that the Project would “[p]rovide for the 

ability to renovate and redevelop existing structures which otherwise might 

experience deterioration.” However, this WSD objective, which concerns the 

renovation of existing structures, has little bearing on the variance 

application in this case because, as discussed, the record does not show that 

the existing DHT may not be renovated or replaced without the variance. 

Thus, consideration of this WSD objective is not implicated by the variance 

application. See Ten Stary Dom P’ship v. Mauro, 76 A.3d 1236, 1245 (N.J. 

2013). 

(continued . . .)
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provided no analysis as to whether the 74 percent encroachment

would be contrary to the intent of the Coastal Height Setback, 

which is to reduce the perception of crowding, and maximize the 

sense of open space, lateral access along the beach, and public 

enjoyment of the coastal resources. Nor did the Director’s 

findings address whether the proposed 74 percent encroachment 

would protect, retain, and enhance a Hawaiian sense of place by 

restoring the experiences, places, and spaces that make Waikiki

unique. The Director appears to have misapprehended the 

applicable legal standard set forth in the ordinance, having 

made no findings with respect to the effects of the 74 percent 

encroachment. Thus, the Director’s conclusion that the 

 

(continued . . .)

The Director’s second finding that the Project is consistent with 

the WSD objective for “creative development” did not reference the full text 

of the objective, which requires the Project to be “able to facilitate the 

desired character of Waikiki for areas susceptible to change.” LUO § 21-

9.80-1(h) (emphasis added). The enactment of the Coastal Height Setback 

indicates that the City Council concluded that development close to the 

shoreline was to be strictly limited. Accordingly, a building that 

substantially encroaches into the Coastal Height Setback would not appear to 

be consistent with the “desired character of Waikiki.” 

The Director’s third finding was that the Project “provides a 

better public access to the beach, [and] view channels from Kalakaua Avenue 

to the ocean.” However, the objective relied upon begins as follows: 

“Maintain, and improve where possible: mauka views from public viewing areas 

in Waikiki, especially from public streets.” LUO § 21-9.80-1(j). Replacing 

an 8-story building with a 26-story tower adjacent to the shoreline would not 

appear to increase the mauka view from the public viewing area of Waikiki 

Beach.
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encroachment would not be contrary to the intent and purpose of 

the zoning ordinance is based on an error of law. 

By the same token, the Director’s analysis must be 

focused on “those purposes of zoning that are actually 

implicated or triggered by the requested relief” rather than the 

Project as a whole. See Ten Stary Dom P’ship v. Mauro, 76 A.3d 

1236, 1245 (N.J. 2013) (“[N]ot every deviation from prescribed 

bulk standards implicates the same concerns.”). Accordingly, as 

stated, the Director’s findings should have evaluated the 

impacts of a 74 percent encroachment into the Coastal Height 

Setback on a Hawaiian sense of place, the perception of 

crowding, sense of open space, and public enjoyment of the 

coastal resources--purposes that are actually implicated by the 

requested variance. Instead, the Director made findings as to

the Project’s compliance with selected objectives of the WSD 

rather than on the impacts of the encroachment as related to the 

intent and purpose of the Coastal Height Setback and WSD. Thus, 

the Director’s findings did not, as required by the City 

Charter, “specify the particular evidence which supports the 

granting of the variance.” RCCCH § 6-1517. 

Finally, even if consideration of the Project, rather 

than the effects of granting the variance application, were the 

correct measure for issuance of a variance, the Director’s 
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summary findings as to the three WSD objectives were clearly 

insufficient to support a conclusion that a 74 percent 

encroachment is not contrary to the intent and purpose of the 

Coastal Height Setback and the WSD. This is particularly true 

when the magnitude of the variance is significant. “[I]t is 

self-evident that the greater the disparity between the variance 

granted and the ordinance’s restriction, the more compelling and 

specific the proofs must be that the grant of the variance” will 

not be contrary to the intent and purpose of the zoning 

ordinance. N. Bergen Action Grp., 585 A.2d at 944. 

As further explained by the Supreme Court of New 

Jersey, 

an impingement of the zoning restrictions may be of varying 

degrees[;] [t]he less of an impact, the more likely the 

restriction is not that vital to valid public interests. 

Conversely, where the change sought is substantial, the 

applicant will have to demonstrate more convincingly that 

the variance will not be contrary to the public good and 

general welfare expressed in the ordinance.

Chirichello v. Zoning Bd. of Adjustment of Monmouth Beach, 397 

A.2d 646, 654 (N.J. 1979) (emphasis added); cf. McPherson, 67 

Haw. at 606, 699 P.2d at 29 (holding that the requisite evidence 

that must be adduced to satisfy the variance requirements 

involves proof of a rather narrow and somewhat technical set of 

facts). 

In this case, because of the great disparity of Kyoya’s request from the ordinance’s restriction--an encroachment 
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of 74.3 percent into the Coastal Height Setback--“the more 

compelling and specific the proofs must be that the grant of the 

variance” will not be contrary to the intent and purpose of the 

zoning ordinance. Thus, the findings set forth in the

Director’s Decision are markedly inadequate in light of the 

magnitude of the requested encroachment into the Coastal Height 

Setback. Further, the lack of specificity in the Director’s 

findings does not allow this court to conduct a meaningful 

review of the Director’s Decision regarding this aspect of the 

third requirement of the variance test.42 See also Gougeon v. 

Bd. of Adjustment of Stone Harbor, 245 A.2d 7, 10 (N.J. 1968)

(“Supporting and explanatory facts and factual findings for the 

conclusions must be set forth. Unless such facts and findings 

are recited, a reviewing court cannot determine whether the 

Board acted properly and within the limits of its authority.”).

In summary, in concluding that the Project was 

consistent with the intent and purpose of the ordinance, the 

Director erred for several reasons. First, the Director did not 

make findings demonstrating that the variance request--a 74 

 42 The Director’s findings did not expressly take into consideration 

the effects of the magnitude of the requested encroachment on the intent and 

purpose of the Coastal Height Setback and WSD. Thus, on the face of the 

Director’s Decision, it is not clear that the Director appropriately weighed 

the extent of the proposed encroachment against the intent and purpose of the 

ordinance. 
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percent encroachment into the Coastal Height Setback--was not 

contrary to the intent and purpose of the WSD and the Coastal 

Height Setback, and instead the Director relied entirely on the 

Project’s compliance with portions of three of fourteen WSD 

objectives. Second, the Director did not evaluate the impacts 

implicated by the variance request in relation to the purpose of 

the zoning ordinance. Third, the Director’s analysis did not 

expressly take into consideration the extent of the variance 

requested, and thus his abbreviated findings were insufficient 

to conclude that a 74 percent encroachment into the Coastal 

Height Setback was not contrary to the intent and purpose of the 

zoning ordinance. 

Accordingly, the Director’s finding that the Project

is consistent with “several important WSD objectives” 

misapprehended applicable law, and the Director’s conclusion 

that a 74 percent encroachment into the Coastal Height Setback 

was not contrary to the intent and purpose of the zoning 

ordinance was not supported by findings that “specify the 

particular evidence which supports the granting of the 

variance.” RCCCH § 6-1517. Consequently, the third requirement 

of the variance test was not satisfied.
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VI. Conclusion

In order for the Director to grant a variance request, 

the applicant must satisfy each requirement of the variance 

test. Here, none of the requirements were met. Accordingly, 

the circuit court’s judgment, the ZBA Order, and the Director’s

Decision are reversed. See Town v. Land Use Comm’n, 55 Haw. 

538, 550, 524 P.2d 84, 92 (1974).

Linda M. B. Paul

for petitioners

Surfrider Foundation et al.

Peter T. Kashiwa,

Lisa Woods Munger, 

Randall C. Whattoff,

David J. Hoftiezer and 

Lisa A. Bail

for respondent Kyo-ya 

Hotels & Resorts, LP 

William Meheula and 

Natasha Baldauf 

for respondent 20,000 

Friends of Labor

Donna Y. L. Leong,

Don S. Kitaoka and 

Brad T. Saito

for respondent Department 

of Planning and Permitting 

City and County of Honolulu 

/s/ Paula A. Nakayama

/s/ Sabrina S. McKenna

/s/ Richard W. Pollack

/s/ Michael D. Wilson