Opinion ID: 2993776
Heading Depth: 2
Heading Rank: 1

Heading: The Waikiki Special District

Text: 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 District 2 “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. 3 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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. 4 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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). 5 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER (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. 6 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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 corner 5 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). 7 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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 . . .) 8 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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. 9 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER “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, 10 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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 11 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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 . . .) 12 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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. 13 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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). 14 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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 15 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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.” 16 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER “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. 17 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 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