Opinion ID: 2633294
Heading Depth: 2
Heading Rank: 1

Heading: ROH Ch. 38 Applies To Mixed-Use Properties.

Text: The lessees argue that the circuit court erroneously legislated new law by finding that the [Admiral Thomas] was a `mixed use' project and therefore not eligible to utilize the benefits of [ROH ch.] 38 and that [t]his ruling created a new exception for applicability of [ROH ch.] 38, even though 148 residential units undisputably existed on the property. The lessees further contend that ROH ch. 38 does not limit its applicability to a project due to other non -residential uses that may exist on the same underlying fee simple lands. (Emphasis in original.) The lessees assert that nowhere in [ROH ch.] 38 does it state that the existence of a non-residential use on the property shall disqualify the entire project and its otherwise qualified residential units. The lessees aver that the declaration of the Admiral Thomas refers to the building as mixed use as a descriptive term to identify the purposes of the building. In this connection, the lessees argue, the term mixed use has no legal meaning. Finally, the lessees maintain that the Admiral Thomas was established with 148 residential units and only one specifically non-residential unit, that which expressly described certain new church facilities and an existing sanctuary that were labeled as Apartment Q. As such, the lessees contend that there is no genuine dispute that [the Admiral Thomas] is primarily a residential project created under HRS Chapter 514A as required by ROH ch. 38-1.1.
The City likewise argues that the circuit court erred in ruling that the inclusion of the words mixed use in the Admiral Thomas's condominium declaration provided a basis upon which to disqualify the residential leasehold units from lease-to-fee conversion under ROH ch. 38. The City contends that ROH ch. 38's applicability is not limited to condominium developments with exclusively residential uses. The City also insists that the mere fact that Admiral Thomas'[s] condominium documents include the words `mixed use' is of absolutely no legal significance. The City avers that the Admiral Thomas qualifies for lease-to-fee conversion pursuant to the plain language of ROH ch. 38 and that ROH ch. 38, by its express terms, applies to all condominium property regime developments. The City further argues that ROH ch. 38 applies to Admiral Thomas because pursuant to the ordinance's two requirements for `developments': (1) it was created under HRS Chapter 514A and (2) it contains condominium apartment units occupied under apartment leases or condominium conveyance documents. The City submits that the Church's overliteral reading of the term residential as meaning condominium property regimes that are exclusively residential contradicts the legislative intent behind ROH [ch.] 38 and leads to absurd results. The City continues by suggesting that any landowner would be free to dodge lease-to-fee conversion by merely adding a single non-residential use. The City notes, in support of its position, that ROH § 38-1.2 recognizes that non-residential units may exist on the property, and the City posits that the mere existence of one of these non-residential uses clearly does not disqualify the whole development from condemnation. The City points to this court's language in Kau v. City and County of Honolulu, 104 Hawai`i 468, 476 n. 7, 92 P.3d 477, 485 n. 7 (2004), which, in addressing whether a property met the requirements of ROH § 38-1.3, noted that [a]ll parties agreed that the Property contains residential apartment units. The City alleges, based on the foregoing, that this court has already refuted [the Church's] strained argument that the term `residential' requires that every single unit be residential. Finally, the City propounds that the circuit court erred in legislating and creating an exception for condemnation of the Admiral Thomas because its declaration contains the words mixed use. The City argues that [t]his arbitrary distinction improperly creates a new limitation not contemplated by the [City Council]: that a condominium development containing both residential and non-residential units may qualify for lease-to-fee conversion, but not if the words `mixed use' happen to appear in the condominium documents. The City insists that the circuit court overstepped its judicial role by improperly cresting an additional requirement to the conversion process not contemplated by the City Council[.]
The Church responds by arguing that ROH ch. 38 does not apply to the Admiral Thomas because it is a mixed use, and not a residential, project. The Church focuses on a detailed explanation that ROH ch. 38 applies only to residential condominium regimes. The Church stresses that ROH § 38-1.3, which pertains to Applicability, indicates that the entirety of ROH ch. 38 is intended to apply only to residential condominium property regimes because it includes the word residential in its purview. The Church counters that the City ignores the more general application of ROH § 38-1.3 in favor of the more specific ROH § 38-2.1, which delineates the applicability of only Article 2 to condominium property regimes. The Church argues that, pursuant to In re Water Use Permit Applications, 94 Hawai`i 97, 151, 9 P.3d 409, 463 (2000), [w]here [the legislature] includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that [the legislature] acts intentionally and purposely in the disparate inclusion or exclusion. (Citations omitted). Furthermore, the Church maintains that the City does not take into account that the definition it relies upon is a subsidiary one (under Article 2), and that the scope of the ordinance is still controlled by the definition of applicability for the chapter  found in ROH § 38-1.3. (Emphasis in original.) The Church responds to the City's reliance on Kau for the proposition that not all units in a condominium property regime need be residential by observing that the condominium project in Kau was a purely residential building. The Church points out that one-half of its fee land is devoted to non-residential purposes and argues that [t]here is nothing in Chapter 38 that would support condemning portions of a mixed-use project, a major portion of which is devoted to religious purposes. In support of its argument that the Admiral Thomas is not a residential condominium project, the Church notes that the Church itself pre-existed the creation of the condominium regime and that it created a residential project in order to financially support the activities of [the] Church. The Church contends that it is disingenuous for the City to argue that the Admiral Thomas is not a mixed use project with a substantial religious use component. The Church urges that the use of the property for religious purposes is not simply an incidental use, such as a snack shop or restaurant in the first floor of [a] high-rise condominium project.
This court has stated that [o]ur statutory construction is guided by established rules: When construing a statute, our foremost obligation is to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language contained in the statute itself. And we must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose. When there is doubt, doubleness of meaning, or indistinctiveness or uncertainty of an expression used in a statute, an ambiguity exists . . . . Coon, 98 Hawai`i at 245, 47 P.3d at 360. Moreover, legislative enactments are presumptively valid and `should be interpreted [in such a manner as] to give them effect.' Richardson v. City and County of Honolulu, 76 Hawai`i 46, 55, 868 P.2d 1193, 1202 (1994) (quoting State v. Spencer, 68 Haw. 622, 624, 725 P.2d 799, 800 (1986) (citation omitted)). Three articles in ROH ch. 38 are applicable to the present matter: Article 1, entitled General Provisions; Article 2, entitled Condemnation of Condominium Development Leaseholds; and Article 5, entitled Eminent Domain. Article 1, § 38-1.3 provides that [ROH ch.] 38 applies to all lands[] in the City and County of Honolulu on which are situated [] residential condominium property regime projects created under HRS Chapter 514A. . . . Article 2, § 38-2.1 provides that [condominium property regime] condemnation applies to developments that, at the time of acquisition by the City, are developed into [condominium property regimes] or occupied by residential lessees under leases of condominium conveyance documents executed before the effective date of this chapter. . . . Article 5, § 38-5.1 provides that eminent domain applies to developments which are created by condominium property regimes under HRS Chapter 514A. . . . Kau, 104 Hawai`i at 476, 92 P.3d at 485 (footnotes omitted). The Church attempts to extricate itself from the purview of ROH ch. 38 by insisting that the chapter applies only to purely residential condominium property regimes and that the Admiral Thomas is not such a regime. The Church seemingly argues that because its use of Apartment Q is religious in nature, the Admiral Thomas as a whole is exempt from condemnation. Pursuant to the plain language of ROH ch. 38, the Church is mistaken. The Church's entire argument is based on the assumption that the Admiral Thomas is not residential. In furtherance of its argument, the Church would have this court look exclusively to the language of ROH § 38-1.3, which pertains to residential condominium property regime projects, and ignore the language of ROH § 38-2.1, which applies to developments . . . [d]eveloped into condominium property regimes, including developments occupied by residential lessees under leases executed before the effective date of [ROH ch. 38]. The Church appears to consider the fact that the Admiral Thomas has been deemed a mixed use project as sufficient to establish that it is thereby not residential. Pursuant to the Admiral Thomas's declaration, in 1978, the Lessor and Developer . . . submit[ted] their interests in and to the Land and the Project to a Horizontal Property Regime established by [HRS] Chapter 514A. While Act 180, 1961 Session Laws of Hawai`i (Haw.Sess.L.), as amended, originally referred to condominiums as `horizontal property regimes,' in 1988 the legislature changed the language to `condominium property regimes' (CPR). 1988 Haw. Sess. L. Act 65 § 2. Kau, 104 Hawai`i at 471 n. 3, 92 P.3d at 481 n. 3. Condominium means a residential apartment, together with an appurtenant undivided interest in common elements, located on land subject to a declaration of condominium property regime as defined by HRS Chapter 514A, together with an appurtenant undivided interest in common elements, both used or occupied, or developed, devoted, intended, or permitted to be used or occupied as a principal place of residence for a single family. ROH § 38-1.2 (emphases added). The Admiral Thomas declaration designates a Residential Tower consisting of one hundred forty-eight apartments. ROH § 38-1.2 provides that `[c]ondominium property regime' means a condominium property regime project established under HRS Chapter 514A. ROH § 38-2.2 provides in relevant part that, [s]ubject to subsection (b) of this section, the department may designate all or that portion of a development containing residential condominium land for acquisition, and facilitate the acquisition of the applicable leased fee interests in that land by the city through the exercise of the power of eminent domain or by purchase under the threat of eminent domain. . . . . . . . (b) This land designated and acquired by the city may consist of a portion of or the entirety of the land area submitted to the declaration of condominium property. (Emphases added). ROH § 38-2.2's allowance for the condemnation of that portion of a development containing residential condominium land refutes the Church's argument that a project must be purely residential to be condemned under ROH ch. 38. The applicability of ROH ch. 38 to the Admiral Thomas depends primarily on its qualification as a residential project and on the chapter's express disqualification of certain units from conversion. Based on the foregoing, the Admiral Thomas is properly classified as residential, inasmuch as (1) it was established under HRS Chapter 514A, (2) it is a condominium property regime, and (3) condominiums are residential units. The Church's attempt to argue that the Admiral Thomas is not subject to condemnation because it is designated as a mixed use building in the declaration is disingenuous. Although this court has not yet had occasion specifically to address the condemnation of mixed use buildings, we agree with the lessees and the City that the term mixed use is an adjective that has no legal significance as it pertains to the Admiral Thomas's declaration of horizontal property regime. The term mixed use appears to be nothing more than a descriptor that seeks to define the purpose, or multiple purposes, of certain property. See Alford v. City and County of Honolulu, 109 Hawai`i 14, 122 P.3d 809 (2005) (The Waikiki Shoreline is a fifteen-floor, mixed-use, multi-family dwelling structure located on Waikiki Beach. Presently, the top fourteen floors are residential apartments and the bottom floor is commercial space.); Waters v. Cook, 2005 WL 2864806 (Mass.Land Ct. Nov.2, 2005) (86 Spring Street is a mixed use building, with its ground floor rented by Julio's Café . . . and its second and third floors divided into apartments.); L.A. Unified Sch. Dist. v. 3434 So. Grand Ave., LLC, 2005 WL 2722888 (Cal.Ct. App. Oct.24, 2005) (South Grand's intended use for the building was a `mixed use,' including retailing, apparel manufacturing, and `some sort of' communications.)
ROH ch. 38 applies to residential condominium property regimes within the City and County of Honolulu created under HRS Chapter 514A. Notwithstanding the Church's contentions to the contrary, the Admiral Thomas qualifies as a residential condominium property regime within the City and County of Honolulu that was created under HRS Chapter 514A. Inasmuch as there is no doubt, doubleness of meaning, or indistinctiveness or uncertainty of an expression used in [this] statute, Coon, 98 Hawai`i at 245, 47 P.3d at 360, no ambiguity exists. Therefore, we hold (1) that ROH ch. 38 does not provide an exception to the condemnation of the Admiral Thomas by virtue of the self-designation as a mixed use project contained in its declaration and (2) that the circuit court erred in concluding that ROH ch. 38 was inapplicable to the Admiral Thomas. Accordingly, we reverse the circuit court's June 30, 2004 order ruling that ROH ch. 38 is inapplicable to the Admiral Thomas.