Court Opinion

ID: 4464242
Source: CourtListenerOpinion
Date Created: 2019-12-13 20:03:17.406907+00
Date Added: 2024-06-11T14:53:35.485510
License: Public Domain

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                                                              Electronically Filed
                                                              Supreme Court
                                                              SCAP-XX-XXXXXXX
                                                              13-DEC-2019
                                                              08:53 AM

           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                                ---o0o---

                         UNITE HERE! LOCAL 5,
                         Appellant-Appellant,

                                    vs.

 DEPARTMENT OF PLANNING AND PERMITTING/ZONING BOARD OF APPEALS,
   CITY AND COUNTY OF HONOLULU; LYLE ISHIDA, in his official
     capacity as Chairperson of the Zoning Board of Appeals,
                       Appellees-Appellees,

                                    and

                               PACREP 2,
                         Intervenor-Appellee.

                            SCAP-XX-XXXXXXX

       APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
              (CAAP-XX-XXXXXXX; CIV. NO. 15-1-2253)

                           DECEMBER 13, 2019

 RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

                OPINION OF THE COURT BY NAKAYAMA, J.

          This case involves Appellee-Appellee City and County of

Honolulu Department of Planning and Permitting’s (DPP) approval

of two Waikîkî Special District (WSD) permits for Intervenor-
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Appellee PACREP 2 and its affiliate PACREP, to develop a condo-

hotel at 2121 Kûhiô Avenue and 2139 Kûhiô Avenue.1

            When the Director of the DPP approved PACREP’s

application for a WSD permit at 2121 Kûhiô Avenue (2121 Kûhiô

Permit) in March 2013, he included several restrictive covenant

conditions in the permit to ensure compliance with the Land Use

Ordinance (LUO) should any hotel unit be converted to a

residential unit.     The Director placed these conditions in the

2121 Kûhiô Permit at the behest of Appellant-Appellant Unite

Here! Local 5 (Local 5), a union representing hotel and

restaurant employees, which had raised several concerns regarding

the use of the condo-hotel.       Neither PACREP nor Local 5 appealed

the 2121 Kûhiô Permit.

            In 2014, PACREP 2 applied for a WSD permit for the

second phase of the condo-hotel project at 2139 Kûhiô Avenue.

The Director approved the permit (2139 Kûhiô Permit) in July

2014, but did not include the same restrictive covenant

conditions that had previously been placed in the 2121 Kûhiô

Permit.

            Local 5 appealed the 2139 Kûhiô Permit to the Zoning

Board of Appeals (ZBA), and argued that the Director abused his

discretion when he approved the 2139 Kûhiô Permit without these

      1
            The now completed condo-hotel is managed by The Ritz-Carlton Hotel
Company, L.L.C., and is known as “The Ritz-Carlton Residences, Waikiki Beach.”

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conditions.   In response, the DPP stated that on a request from

PACREP, the Director removed the restrictive covenant conditions

from that permit in September 2013, prior to the approval of the

2139 Kûhiô Permit in July 2014.

            The ZBA concluded that (1) it did not have jurisdiction

to address any “modification” of the 2121 Kûhiô Permit in

Local 5’s appeal of the 2139 Kûhiô Permit, and (2) the Director’s

decision to approve the 2139 Kûhiô Permit was not an abuse of

discretion.   On appeal, the Circuit Court of the First Circuit

(circuit court) affirmed the ZBA’s decision.          Local 5 filed a

secondary appeal to the Intermediate Court of Appeals (ICA), and

this court granted Local 5’s subsequent application for transfer.

            When the Director removed certain conditions from the

2121 Kûhiô Permit, conditions that he knew Local 5 had advocated

for, Local 5 should have had an opportunity to challenge the

removal of those conditions from the permit.          However, Local 5

did not receive notice that the Director had removed these

conditions.   Under these circumstances, we conclude that

Local 5’s right to due process was violated, and pursuant to

Hawai#i Revised Statutes (HRS) § 91-14(g), we remand the

Director’s decision to remove these conditions from the 2121

Kûhiô Permit to the ZBA so that Local 5 may challenge this

decision.

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            Finally, because the 2139 Kûhiô project is fully

integrated with the 2121 Kûhiô project and the decision to

approve the 2139 Kûhiô Permit rested in part on the then-existing

2121 Kûhiô Permit, we also vacate the ZBA’s decision to approve

the Director’s approval of the 2139 Kûhiô Permit, and remand to

the ZBA to decide whether the Director’s decision to approve that

permit without the restrictive covenant conditions was an abuse

of discretion.

                               I.   BACKGROUND

A.    The Director Approves the 2121 Kûhiô Permit

            Because of its significance as “a recognized symbol of

Hawaii,” the LUO designates Waikîkî as a “special district” and

sets forth specific objectives and design controls “to guide

carefully Waikiki’s future and protect its unique Hawaiian

identity.”     Revised Ordinances of the City and County of Honolulu

(ROH) § 21-9.80 et. seq. (1999); see also Surfrider Found. v.

Zoning Bd. of Appeals, 136 Hawai#i 95, 98, 358 P.3d 664, 667

(2015).    Any planned development project in the Waikîkî Special

District must go through a “major permit” permitting process as

described in the LUO.       See ROH Table 21-9(C) (2003) and

§ 21-2.40-2 (1999).

            Pursuant to the LUO’s “major permit” permitting

provisions, in 2012, PACREP, a principal of PACREP 2, requested a

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WSD (Major) permit for a thirty-seven story, 350-foot-high condo-

hotel at 2121 Kûhiô Avenue in Waikîkî.

           On February 11, 2013, Local 5 submitted written

testimony to the DPP objecting to its consideration of PACREP’s

WSD permit.    Therein, Local 5 contended that PACREP had not taken

measures to ensure the building would be used solely for hotel

accommodations and had not ensured adequate parking on the

premises for guests and workers.          Additionally, Local 5 argued

that because the project’s draft Environmental Assessment was

currently being challenged, issuance of a WSD permit was

premature.2

           On March 19, 2013, the Director approved PACREP’s

application and issued the 2121 Kûhiô Permit.           Therein, the

Director noted that at the public hearing on PACREP’s

application, twenty-three people testified in opposition to the

project.   The Director also noted that a Local 5 representative

“commented on the discrepancies in the number of parking spaces,

job estimates, and unit types (hotel versus residence)

represented in the Final [environmental assessment] and the [WSD

permit] application.”      Pursuant to the Director’s findings of

     2
            Local 5 had previously requested that it be “made a consulted
party in the development of [the] Environmental Assessment,” and raised
concerns regarding PACREP’s draft environmental assessment. The DPP was aware
that Local 5 had challenged the draft environmental assessment.

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fact and conclusions of law, the Director approved the PACREP’s

application for a WSD permit, “subject to [certain] conditions.”

            Two conditions placed restrictive covenants on the

project to ensure compliance with the LUO should any of the hotel

units be converted to residential units.          As the Director

explained,
                  For purposes of establishing off-street parking (and
            park dedication) requirements, a declaration of restrictive
            covenant (“Declaration”) indicating the number of units to
            be placed in a hotel pool should be required as a condition
            of approval, and should be filed prior to the issuance of
            any building permits.[ 3] Subsequent to the construction of
            the Project, if any hotel unit is converted to a residential
            unit, then one parking space must be provided for each
            residential unit. While this is an LUO requirement, it
            should also be enforced as a condition of approval through
            the Declaration.

The Director therefore imposed two conditions, Conditions C and

G, which provided:
            C.    Prior to the issuance of any building permits:

                  1.    A declaration of restrictive covenant
                        (Declaration) indicating the (dwelling and/or
                        lodging) units to be placed in a hotel pool for
                        the Project shall be submitted to the DPP for
                        its review and approval. Once approved, the
                        Declaration shall be filed at the State Bureau
                        of Conveyances; and, a certified copy of the
                        Declaration shall be submitted to the DPP. For
                        each unit that is designated as a residential
                        unit:

                        (a)   One parking space per residential unit
                              shall be provided; and

                        (b)   Compliance with park dedication shall be
                              required.

                  . . . .

      3
            The Director may require fee owners to record restrictive
covenants on the title to a property “[t]o record special conditions attached
to a permit, variance, or zone change.” DPP Rules § 8-1(a)(1) (1993).

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            G.    Prior to the conversion of any hotel (dwelling and/or
                  lodging) unit to a residential (multi-family dwelling)
                  unit, the owner of the unit shall provide to the DPP
                  documentation of ownership of one parking space that
                  is compliant with all relevant Land Use Ordinance
                  (LUO) requirements, and shall comply with any park
                  dedication requirements.

            As Local 5 argues, these conditions were important to

ensuring that any conversion of units from hotel use to

residential use comply with the LUO.         The LUO prescribes

different requirements for developments described as “multi-

family dwellings” and developments described as “hotels.”4               For

example, in the Waikîkî Special District, hotels are only

required to provide one parking space for every four dwelling or

lodging units, while multi-family dwellings require one parking

space for every dwelling unit.        See ROH Ch. 21 Table 21-6.3

(2003).

      4
            A “hotel” is defined by the LUO as

            a building or group of buildings containing lodging and/or
            dwelling units offering transient accommodations, and a
            lobby, clerk’s desk or counter with 24 hour clerk service,
            and facilities for registration and keeping of records
            relating to hotel guests. A hotel may also include
            accessory uses and services intended primarily for the
            convenience and benefit of the hotel’s guests, such as
            restaurants, shops, meeting rooms, and/or recreational and
            entertainment facilities.

ROH § 21-10.1 (2010).

            In 2010, the LUO definition of “hotel” was amended from its
initial definition in 1999, which previously stated that a “‘[h]otel’ means a
building or group of buildings containing lodging and/or dwelling units in
which 50 percent or more of the units are lodging units. . . .” ROH § 21-10.1
(1999) (emphasis added).

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          Additionally, ROH chapter 22 article 7 requires that

every developer, as a condition precedent to issuance of a

building permit for a multi-family development, “shall provide

land in perpetuity or dedicate land for park and playground

purposes, for the joint use by the occupants of lots or units in

subdivisions as well as by the public.”          ROH § 22-7.3(a) (1996).

This park dedication requirement applies “to any conversion in

use of any existing non-dwelling unit to dwelling units, and such

conversion shall not be undertaken unless the provisions of this

article have been met.”       ROH § 22-7.3(i).     However, under the

LUO, a “hotel” is excluded from the definition of “multi-family

development.”     ROH § 22-7.2 (1983).      Therefore, hotels need not

comply with the park dedication requirements of ROH chapter 22

article 7.     Conditions C and G of the 2121 Kûhiô Permit addressed

the possible conversion of hotel units to multi-family dwelling

units to ensure that these converted units adhered to LUO

requirements.

          The 2121 Kûhiô Permit also contained the following

general conditions regarding any modification of the permit:
          A.      Except as may otherwise be required by these
                  conditions of approval, the operation and development
                  of the site shall be in conformance with the approved
                  Project, as described herein and shown on plans and
                  drawings attached hereto . . . and comprehensively
                  contained in the SDP application “Waikiki Special
                  District Permit, Major 2121 Kuhio,” dated December
                  2012, on file at the DPP. Any modification to the
                  Project and/or approved plans, design concept, and/or
                  the environmental character of the Project shall be

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                  subject to the prior review of and approval by the
                  Director of the DPP. Minor modifications shall be
                  processed in accordance with Land Use Ordinance (LUO)
                  Section 21-2.20(k). [5] Major modifications shall
                  require a new SDP (Major).

                  . . . .

            L.    The Director may modify the conditions of this permit
                  by imposing additional conditions, modifying existing
                  conditions, or deleting conditions deemed satisfied
                  upon a finding that circumstances related to the
                  approved Project have significantly changed so as to
                  warrant a modification to the conditions of approval.

            While Local 5 was not copied on the Director’s letter

to PACREP approving the 2121 Kûhiô Permit, Local 5 was aware that

the Director had approved the 2121 Kûhiô Permit with Conditions C

      5
            ROH § 21-2.20(k) (2010) describes the administrative procedures
regarding modifications to approved permits. It provides:

            (k)   (1)   Except as otherwise provided herein, the
                  director may administratively authorize minor
                  alterations, additions, or modifications to any
                  approved permit required by this chapter,
                  provided that the minor modification request:
                        (A)   Is reasonable, and consistent with the
                              intent of the respective permit;
                        (B)   Does not significantly increase the
                              intensity or scope of the use; and
                        (C)   Does not create adverse land use impacts
                              upon the surrounding neighborhood.

                  (2)   Subdivision (1) does not apply to:
                        (A)   Zone changes; and
                        (B)   Council approvals pursuant to Sections 21-
                              2.110-2 (Planned development) and 21-2.120
                              et seq. (Plan review uses), except to the
                              extent that minor modifications are
                              permitted by the express language of the
                              council’s approving resolution.

                  (3)   Major alterations, additions, or modifications,
                        and other alterations, additions, or
                        modifications excepted by subdivision (2), will
                        be processed under the provisions for the
                        applicable permit or approval.

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and G.    Local 5 did not appeal the Director’s approval of the

2121 Kûhiô Permit.

B.    The Director Removes Conditions from the 2121 Kûhiô Permit

            Some time after the Director approved the 2121 Kûhiô

Permit, PACREP verbally requested that Conditions C and G, the

restrictive covenant conditions, be waived.            In a letter sent to

PACREP on September 6, 2013 (September 6 Letter), the Director

removed the restrictive covenant conditions.            He concluded,

“[b]ecause we agree that the project qualifies as a condo-hotel,

submission of declarations of restrictive covenants regarding

this issue will not be required.”

            Local 5 was not aware of the existence of the

Director’s September 6 Letter removing 2121 Conditions C and G

until the ZBA held a contested case hearing on its appeal of the

2139 Kûhiô Permit in 2015.        Accordingly, Local 5 contends that it

did not appeal the Director’s “modification” to the ZBA within

thirty days as required by ROH § 21-1.40 because it was not

notified,6 nor did it file a complaint for declaratory or

      6
            ROH § 21-1.40 (1999) provides: “Appeals from the actions of the
director in the administration of the provisions of the LUO shall be to the
zoning board of appeals as provided by Section 6-1516 of the charter. Appeals
shall be filed within 30 days of the mailing of service of the director’s
decision.”

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injunctive relief in the circuit court as provided by HRS § 632-

1.7

C.     The Director Approves the 2139 Kûhiô Permit

             On April 1, 2014, PACREP 2 submitted an application for

a WSD (Major) permit for a 350-foot tall, 39-story condo-hotel at

2139 Kûhiô Avenue.       In its permit application, PACREP 2 stated

that the proposed tower would be connected to the previously

approved development at 2121 Kûhiô Avenue, and “share common

amenities, including vehicle access . . . and off-street parking,

within the connected 8-story building podium.”

             On July 14, 2014, the Director approved PACREP 2’s WSD

permit application and issued the 2139 Kûhiô Permit.               In the

permit, the Director noted that at the public hearing on PACREP

2’s application, a Local 5 representative commented that
             there were no guarantees from the Applicant that the condo-
             hotel would not be converted into a multi-family dwelling or
             not operate as a hotel. With the concept of condo-hotels
             there is no guarantee that many of the hotel employees will
             have job security or if there will be enough off-street
             parking stalls.

             The Director also examined the Project’s off-street

parking spaces, and concluded that
             there may not be adequate off-street parking to support
             partial multi-family (condominium) uses provided by the

       7
            HRS § 632-1 (1993) is the declaratory judgment provision, which
may be granted in civil cases “where an actual controversy exists between
contending parties . . . and the court is satisfied also that a declaratory
judgment will serve to terminate the uncertainty or controversy giving rise to
the proceeding.”

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          Project. Therefore, the permit approval should be based on
          the use of both the 2121 Kuhio and 2139 Kuhio developments
          to hotel use. In the event that use of the site, or
          portions of the site are changed to multi-family dwellings,
          then the residential (dwelling or lodging) units will have
          to comply with residential parking requirements.

The Director also required that in the event that any portion of

the development is converted to a multi-family dwelling, “then

the residential (dwelling or lodging) units will have to comply

with park dedication requirements.”

          The Director then placed several conditions in the 2139

Kûhiô Permit.   However, the conditions imposed did not include

the restrictive covenant conditions regarding off-street parking

stalls or park dedication that had been in the 2121 Kûhiô Permit,

i.e. 2121 Conditions C and G.       In other words, there was no

condition that required residential or multi-family units to be

placed in a hotel pool, no condition that the developer provide

one parking space per residential unit, and no condition that the

developer comply with park dedication requirements.

          Instead, the Director imposed Condition I, which

stated:
          I.    Upon issuance of a COO [Certificate of Occupancy], the
                Project shall institute and make available:

                1.    Valet service for at least 80 percent of the
                      total required off-street parking.

                2.    All units shall receive full hospitality,
                      housekeeping, building maintenance, and room
                      services.

                3.    A centralized mail and phone service for all
                      units.

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                  Furthermore, these requirements shall be extended as
                  conditions of approval to all units in the 2121 Kuhio
                  development, authorized by SDP No. 2012-SDD-73.

            Local 5 was copied on the Director’s letter approving

the 2139 Kûhiô Permit, and thus received notice that the Director

had approved the 2139 Kûhiô Permit.

D.    Appeal to the Zoning Board of Appeals

            On August 13, 2014, Local 5 timely appealed the

Director’s decision to approve the 2139 Kûhiô Permit to the ZBA

pursuant to ROH § 21-1.40.        Local 5 explained that its appeal was

narrow in scope:
            Local 5 objects to the lack of conditions reasonably
            necessary to insure that the project being approved as a
            hotel is in fact used as a hotel and that the individual
            buyers of each unit do not convert to a multi-family
            dwelling without satisfying the more stringent LUO multi-
            family requirements, such as 1:1 parking and park
            dedication. The Director imposed such conditions on the
            sister tower located at 2121 Kuhio - including the
            requirement that units be placed into the hotel rental pool
            and any units removed from hotel use demonstrate compliance
            with LUO requirements for parking and park dedication - and
            the failure to impose similar conditions is arbitrary,
            capricious and an abuse of discretion.

(Emphasis in original.)

            Local 5 alleged that the Director’s decision to issue

the 2139 Kûhiô Permit was an abuse of discretion in two ways:

that (1) 2139 Condition I was vague and ambiguous; and (2) there

was no condition in the 2139 Kûhiô Permit comparable to the

condition in the 2121 Kûhiô Permit which imposed parking and park

dedication requirements.        Local 5 explained that in the 2121

Kûhiô Permit, the Director concluded that restrictive covenants

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should be required as a condition of approval for purposes of

establishing off-street parking and park dedication requirements.

However, Local 5 argued that “[t]here is no condition in the 2139

Kuhio Permit that is comparable to Condition C of the 2121 Kuhio

Permit.”

           Accordingly, Local 5 alleged that it was arbitrary and

capricious and a manifest abuse of discretion for the Director to

issue the 2139 Kûhiô Permit without the same condition that had

been imposed in the 2121 Kûhiô Permit.         Local 5 requested that

the ZBA “[a]dd Condition C from the 2121 Kuhio Permit as a new

condition to the 2139 Kuhio Permit verbatim[.]”

           In response, the DPP noted that on September 6, 2013,

the Director sent a letter to PACREP which removed the

restrictive covenant conditions in the 2121 Kûhiô Permit, because

he concluded that “the approved Project was limited to hotel

units and the conditions in the Director’s Decision provide[d]

adequate means of preventing hotel units from being converted to

multi-family dwelling use absent compliance with the [LUO].”

Because the Director removed the conditions from the first permit

before the second permit was approved on July 14, 2014, the DPP

stated that the two WSD permits were not inconsistent.

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     1.    Contested Case Hearings

           The ZBA held several contested case hearings on the

matter.   At the hearings, Local 5 explained to the ZBA why the

restrictive covenant conditions in the 2121 Kûhiô Permit needed

to be included in the 2139 Kûhiô Permit.         Local 5 stated that

when the Director had considered the WSD permit for the 2121

Kûhiô project, he recognized that “conditions were necessary to

ensure that the buyers of the individual hotel units within this

building did not use the hotel units for residential use[.]”

Local 5 argued that the conditions which required any converted

residential units to comply with one-to-one parking and park

dedication were reasonable.      On the other hand, Local 5 contended

that 2139 Condition I, which only required housekeeping services,

building maintenance, centralized mail, and phone service, would

not similarly ensure that individual hotel units would not be

used for residential use.

           Local 5 continued:
           [W]hen the director considers different projects, different
           facts and different situations, he can apply different
           conditions. That’s absolutely true. But that’s not the
           case in this case. As I said, it’s the same project, two
           phases of the same project, same property, shared amenities,
           shared facilities and shared ownership. The very definition
           of arbitrary and capricious is to be faced with the exact
           same situation and do something totally different.

           Local 5 also noted that the Director’s decision to

waive the restrictive covenant conditions in the 2121 Kûhiô

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Permit “was done in secret without any notice to Local 5 despite

Local 5 being a very active participant in the permitting process

for both of these structures. . . . [M]oreover, the waiver is

just ineffective as a matter of law[.]”

           a.    Sadoski’s Testimony

           Local 5 first called Benjamin Sadoski (Sadoski), an

employee of Local 5 who followed the two development projects, to

testify.   Sadoski stated that the 2121 Kûhiô project and the 2139

Kûhiô project were essentially the same project, and cited PACREP

2’s Public Report for a Condominium to the Real Estate Commission

(Real Estate Commission Report), which provided:
           6.   Tower 1 Development. Developer is an affiliate of
           Pacrep LLC (“Tower 1 Developer”), the developer of the
           adjacent [2121 Kûhiô] condominium project (the “Tower 1
           Project”). Developer and Tower 1 Developer anticipate that
           the Project and the Tower 1 Project will be integrated,
           sharing the use of parking services and amenities, initially
           through a reciprocal easement and license agreement, and
           subsequently, through the merger of the Project and the
           Tower 1 Project (meaning both the Project and the Tower 1
           Project will be treated as a single condominium project).

Sadoski further testified that Local 5 “pretty consistently

raised concerns . . . that units that will be used as residential

units will not - will end up creating a larger parking burden,

will end up creating a larger infrastructure burden.”

           Sadoski stated that the Director’s September 6 Letter

removing conditions from the 2121 Kûhiô Permit was never sent to

Local 5, and he had never seen it before PACREP 2 placed it into

evidence in the current ZBA appeal of the 2139 Kûhiô Permit.                On

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cross-examination, when asked by DPP whether Local 5 ever

requested that it be provided with correspondence between the DPP

and PACREP 2, Sadoski responded, “I think we requested to be made

a consulted party with regards to the environmental assessment

process.    So to that extent, yes.”

            b.    Director Atta’s Testimony

            Local 5 then called Director George Atta (Director

Atta), the Director who modified the 2121 Kûhiô Permit and

approved the 2139 Kûhiô Permit, to testify.           Director Atta

explained that 2121 Conditions C and G          were placed in the 2121

Kûhiô Permit because at that time, the DPP was unsure whether the

2121 Kûhiô tower would operate as a hotel or as a multi-family

residence.    After further design details emerged, Director Atta

stated that PACREP verbally told him that the project “would be a

hundred percent hotel.”       Director Atta also testified that it was

also brought to his attention that there was a potential “SEC

question” that might jeopardize the project’s financing.8

Director Atta believed that his communications with PACREP were

“mostly verbal communications,” and that he could not recall

      8
            The “SEC question” appears to have been a concern by PACREP that
the project’s condo-hotel units might potentially create a securities issue.
Neither the DPP nor PACREP 2 specifically explained the problem in briefing on
appeal.
            The ZBA concluded that the Director did not make an erroneous
finding about a potential securities problem. However, on appeal, the circuit
court determined that there was insufficient evidence to substantiate the
potential for a securities problem and struck the ZBA’s conclusion on the
issue from the ZBA’s order, and neither party has appealed this decision.

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receiving any letter by PACREP stating that the condo-hotel would

operate as “a hundred percent hotel” or that there might be an

SEC issue.

           From these verbal communications, Director Atta

concluded that none of the units would be used as multi-family

residences.   Director Atta further testified that he had his

staff look into the SEC issue, “and the staff concluded that

there was a potential for an SEC condition.”          Based on that

potential, Director Atta decided to waive the restrictive

covenant conditions.

           When asked whether he complied with 2121 Condition L

when he removed the restrictive covenant conditions from the 2121

Kûhiô Permit, Director Atta responded that even if he “didn’t

write it in there,” there was a change of condition that made it

unnecessary to have a restrictive covenant requiring certain

conditions if the tower was operated as a residence rather than a

hotel.   Director Atta believed the letter that removed the

conditions was a “minor” modification, “in the sense that it’s

primarily a clarification.”      Director Atta acknowledged that the

conditions that were removed were important to Local 5.            On

cross-examination, Director Atta stated that he “[didn’t] recall

[Local 5] making [a] specific request [to be provided with copies

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of correspondence between DPP and PACREP 2] but there’s a lot of

letters and communications going on at that time . . . .”

     2.   ZBA Decision and Order

          On October 15, 2015, the ZBA affirmed the Director’s

decision to approve the 2139 Kûhiô Permit.         The ZBA concluded

that the Director’s “conditional approval of the project

described in the 2139 Application as a hotel, as provided in the

2139 Permit, is not based on an erroneous finding of fact, was

not arbitrary and capricious, and was not an abuse of

discretion.”   Specifically, the ZBA made the following

conclusions of law:
                18. The primary and predominant use of the project
          described in the 2139 Permit and the 2139 Application is
          “hotel” as defined by the LUO.

                19. Under the LUO, a “hotel” may include some units
          that are used for other than transient rentals. Such use
          does not automatically convert the “hotel” designation to a
          “multi-family dwelling” designation under the LUO if the
          predominant use of the building is a hotel.

                . . . .

                21. The Director did not act arbitrarily or
          capriciously, and did not abuse his discretion, when he did
          not include in the 2139 Permit conditions similar to the
          restrictive covenant condition of Condition C in the 2121
          Permit.

                . . . .

                24. The Director did not act arbitrarily or
          capriciously, and he did not abuse his discretion, when he
          approved Condition I of the 2139 Permit.

                25. Condition I of the 2139 Permit requires that the
          specified hotel amenities be made available to the units in
          the project.

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                  26. Local 5 has failed to satisfy its burden of proof
            as required under Section 6-1516 of the Charter to justify
            overturning the Director’s decision.

The ZBA also concluded that it did not have jurisdiction to

address any modification of the 2121 Kûhiô Permit:
                  3. The ZBA does not have jurisdiction in this appeal
            to determine the validity of any modification or removal of
            conditions of the 2121 Permit.

                  . . . .

                  28. The conditions placed on the 2121 Kuhio project
            involve a different permit and application than the 2139
            Permit and the 2139 Application that are the subject of this
            appeal. As a result, any arguments of improper actions
            involving the 2121 Permit were not considered in this
            appeal.

E.    Appeal to the Circuit Court

            Local 5 filed a notice of appeal to the circuit court

on November 20, 2015.9       On March 9, 2016, Local 5 filed an

opening brief alleging four issues:
            1.    Omission of Condition C from the 2139 Permit was an
                  abuse of discretion, arbitrary and capricious.

            2.    Modification of the 2121 Permit was an abuse of
                  discretion, arbitrary, and capricious.

            3.    Failure to follow the Land Use Ordinances’ (“LUO”)
                  procedure for the modification of the 2121 Permit
                  violated Local 5’s constitutional right to procedural
                  due process.

            4.    The LUO definition of Hotel is unconstitutionally
                  vague and ambiguous.

            First, Local 5 alleged that removing 2121 Condition C

was an abuse of discretion, arbitrary and capricious because

      9
            The Honorable Rhonda A. Nishimura presided.

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without 2121 Condition C, it would be “near impossible to enforce

the off-street parking requirements of the LUO.”

          Second, Local 5 argued that the DPP failed to comply

with the LUO’s minor or major permit modification procedures when

it deleted Conditions C and G from the 2121 Kûhiô Permit.             Local

5 stated that, according to the LUO, the Director was required to

make three specific findings if he wished to make a minor

modification to a permit.      (Citing ROH § 21-2.20(k)(1)10.)        Local

5 maintained that the Director made no such findings.            To the

contrary, Local 5 contended that the modification of the 2121

Kûhiô Permit was unreasonable, significantly increased the

intensity or scope of the use, and created adverse land impacts

on the surrounding neighborhood; hence the removal of the

conditions were a major modification.          Under the LUO’s procedure

for major modifications, PACREP 2 would have had to submit a new

permit for approval.     (Citing ROH § 21-2.20(k)(3).)

          Third, Local 5 contended that because it was already an

interested and participating party in the 2121 Kûhiô Permit

proceedings, “the Director’s modification of the conditions in

the 2121 Permit without providing Local 5 with notice and a

hearing to contest the modification” violated its due process

rights.

     10
          See supra note 5.

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          Finally, Local 5 alleged that the LUO’s definition of

“hotel” is unconstitutionally vague and ambiguous, because it

allowed for subjective interpretation and application.

Specifically, Local 5 maintained that the ZBA erred when it found

that “there is no quantum of units that must be in [hotel] use in

order for the building to qualify as a hotel.”

          In their respective answering briefs, PACREP 2 and the

DPP contested each point of error alleged by Local 5.

          With respect to the modification of the 2121 Kûhiô

Permit, PACREP 2 and the DPP first explained that the circuit

court lacked jurisdiction to adjudicate the modification of the

2121 Kûhiô Permit.    Assuming arguendo that the modification was

properly before the ZBA, PACREP 2 and the DPP both argued that

the Director’s modification was not arbitrary and capricious.

PACREP 2 contended that LUO modification procedures were

inapplicable to this case, because the Director merely modified a

condition of the permit, and not the actual permit itself.

          Regarding Local 5’s due process argument, PACREP 2 and

the DPP contended that Local 5’s due process rights were not

violated when it did not receive notice of the Director’s

modification.   PACREP 2 stated that a procedural due process

challenge requires a claimant’s alleged interest to be considered

“property” within the meaning of the due process clause of the

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Hawai#i Constitution.    Citing our opinion in Sandy Beach Def.

Fund v. City and Cty. of Honolulu, 70 Haw. 361, 377, 773 P.2d
250, 260 (1989), PACREP 2 stated that “[t]o have a property

interest in a benefit, a person clearly must have more than an

abstract need or desire for it.       He must have more than a

unilateral expectation of it.       He must, instead, have a

legitimate claim of entitlement to it.”         The DPP concluded that

Local 5 “ha[d] a marginal interest, at best, in the 2121 Kuhio

Project.”   Additionally, the DPP stated that interested parties

must request notice of the Director’s decisions, DPP Rules § 6-2,

and argued that a requirement that interested parties receive

automatic notice of the Director’s decisions without a request

would “result in a waste of resources by DPP and undermine the

court’s analysis in [Citizens Against Reckless Dev. v. Zoning Bd.

of Appeals (CARD), 114 Hawai#i 184, 159 P.3d 143 (2007)].”

            The circuit court held a hearing on September 23, 2016.

At the hearing, the circuit court asked DPP how Local 5 could

have appealed the Director’s decision to remove Conditions C and

G from the 2121 Kûhiô Permit.       DPP responded that under the ICA’s

decision in Hoku Lele, LLC v. City and Cty. of Honolulu, 129

Hawai#i 164, 296 P.3d 1072 (App. 2013), Local 5 was not required

to exhaust its administrative remedies, and could have filed a

declaratory action in the circuit court once it discovered the

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existence of the Director’s September 6 Letter.           The DPP stated

that Local 5 “had notice for quite some time now, and they

haven’t moved to do that.”

           The DPP further stated that the Director had not relied

on the removal of the conditions in the 2121 Kûhiô Permit when he

issued the 2139 Kûhiô Permit without those conditions.            However,

the DPP also conceded that it could be assumed that the Director

was aware that the conditions had been removed from the 2121

Kûhiô Permit, because he had been the one to remove them.

           On rebuttal, Local 5 contended that this court’s

decision in CARD was distinguishable from the facts in this case,

“because there, that was a conditional use permit that the

plaintiff in the case participated in, and then chose not to

appeal.”   More importantly, Local 5 continued, “Local 5 was a

participant in the 2121 proceeding.        It had submitted letters in

opposition.   It had testified at hearings, which resulted in the

condition that it [sic] was satisfactory to it.”           Local 5 also

reiterated that the Director’s action in approving the 2139 Kûhiô

Permit without similar conditions to 2121 Conditions C and G was

arbitrary and capricious.      Finally, Local 5 argued that even if

the Director reserved to himself the right to later modify

certain conditions in a permit, he was still required to follow

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the LUO procedures regarding permit modification:11 “either major

permit modification, which requires a new application, or minor

modification, which requires certain findings to be made.”

            On October 9, 2017 the circuit court entered its

Findings of Fact, Conclusions of Law, and Decision and Order

Modifying and Affirming the Decision of the ZBA (Circuit Court

Order).    Regarding the ZBA’s jurisdiction over the 2121 Kûhiô

Permit and its own jurisdiction over the 2121 Kûhiô Permit, the

circuit court concluded:
                  2. The ZBA did not have jurisdiction over the 2121
            Kuhio Permit in Case No. 2015/ZBA-5 because it was not
            designated as an “action of the Director” in Local 5’s
            Petition.

                  3. The ZBA did not err in concluding that “[t]he ZBA
            does not have jurisdiction in this appeal to determine the
            validity of any modification or removal of conditions on the
            2121 Permit.”

                  4. This Court has appellate jurisdiction over the
            ZBA’s Order pursuant to HRS § 91-14, which allows a person
            aggrieved by a final decision and order from a contested
            case to appeal the same to the Circuit Court.

                  5. The Court does not have jurisdiction over the 2121
            Kuhio Permit, the modification of the 2121 Kuhio Permit, or
            the effects of the 2121 Kuhio Permit modification on
            Local 5’s due process rights pursuant to HRS § 91-14, in
            this case.

            Additionally, notwithstanding the circuit court’s

finding that there was no substantial evidence to indicate a

“securities law issue,” the circuit court concluded that the

valid findings of fact and conclusions of law “amply support[ed]

      11
            ROH § 21-2.20(k) provides the LUO procedures for modifying an
approved permit. See supra note 5.

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the ZBA’s decision to affirm the Director’s approval of the 2139

Kuhio Permit.”

            Local 5 filed a notice of appeal to the ICA.            On

July 27, 2018, we granted Local 5’s application for transfer.

                         II.   STANDARDS OF REVIEW

A.    Secondary Appeals

                  Review of a decision made by the circuit court upon
            its review of an agency’s decision is a secondary appeal.
            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.

CARD, 114 Hawai#i at 193, 159 P.3d at 152.

            Pursuant to HRS § 91-14(g),
                  (g) Upon review of the record the court may affirm the
            decision of the agency or remand the case with instructions
            for further proceedings; or it may reverse or modify the
            decision and order if the substantial rights of the
            petitioners may have been prejudiced because the
            administrative findings, conclusions, decisions, or orders
            are:
                  (1)   In violation of constitutional or statutory
                        provisions; or
                  (2)   In excess of the statutory authority or
                        jurisdiction of the agency; or
                  (3)   Made upon unlawful procedure; or
                  (4)   Affected by other error of law; or
                  (5)   Clearly erroneous in view of the reliable,
                        probative, and substantial evidence on the whole
                        record; or
                  (6)   Arbitrary, or capricious, or characterized by
                        abuse of discretion or clearly unwarranted
                        exercise of discretion.

HRS § 91-14(g) (2012).

            Accordingly,
            [c]onclusions of law are reviewed de novo, pursuant to
            subsections (1), (2) and (4); questions regarding procedural
            defects are reviewable under subsection (3); findings of
            fact (FOF) are reviewable under the clearly erroneous

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            standard, pursuant to subsection (5), and an agency’s
            exercise of discretion is reviewed under the arbitrary and
            capricious standard, pursuant to subsection (6).

Kauai Springs, Inc. v. Planning Comm’n of Cty. of Kaua#i, 133

Hawai#i 141, 164, 324 P.3d 951, 974 (2014).

            Courts reviewing agency determinations for abuse of

discretion must engage in a two-step inquiry.
                  When determining whether an agency abused its
            discretion pursuant to HRS § 91-14(g)(6), the court must
            first “determine whether the agency determination under
            review was the type of agency action within the boundaries
            of the agency’s delegated authority.” If the determination
            was within the agency’s realm of discretion, then the court
            must analyze whether the agency abused that discretion. If
            the determination was not within the agency’s discretion,
            then it is not entitled to the deferential abuse of
            discretion standard of review.

Kolio v. Hawai#i Pub. Hous. Auth., 135 Hawai#i 267, 271, 349 P.3d
374, 378 (2015) (citing Paul’s Elec. Serv., Inc. v. Befitel, 104

Hawai#i 412, 417, 91 P.3d at 494 (2004)).

            Additionally, “it is well settled that in an appeal

from a circuit court’s review of an administrative decision the

appellate court will utilize identical standards applied by the

circuit court.”      Kauai Springs, 133 Hawai#i at 164, 324 P.3d at

974 (internal citations and internal quotation marks omitted).

B.    Statutory Interpretation

            “The interpretation of a statute[, ordinance, or

charter] is a question of law reviewable de novo.”             Korean

Buddhist Dae Won Sa Temple of Hawaii v. Sullivan, 87 Hawai#i 217,

229, 953 P.2d 1315, 1327 (1998) (alterations in original).

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                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. . . .
                In construing an ambiguous statute, “the meaning of
          the ambiguous words may be sought by examining the context,
          with which the ambiguous words, phrases, and sentences may
          be compared, in order to ascertain their true meaning.” HRS
          § 1-15(1) [(1993)]. Moreover, the courts may resort to
          extrinsic aids in determining legislative intent. One
          avenue is the use of legislative history as an interpretive
          tool.

Id. at 229-30, 953 P.2d at 1327-28 (citing Gray v. Admin. Dir. of

the Court, 84 Hawai#i 138, 148, 931 P.2d 580, 590 (1997)).
                The general principles of construction which apply to
          statutes also apply to administrative rules. As in
          statutory construction, courts look first at an
          administrative rule’s language. If an administrative rule’s
          language is unambiguous, and its literal application is
          neither inconsistent with the policies of the statute the
          rule implements nor produces an absurd or unjust result,
          courts enforce the rule’s plain meaning.

CARD, 114 Hawai#i at 194, 159 P.3d at 153 (citing Allstate

Ins. Co. v. Ponce, 105 Hawai#i 445, 454, 99 P.3d 96, 105 (2004)).

                            III.   DISCUSSION

          On secondary appeal to this court, Local 5 reiterates

the points of error it raised in the circuit court.           It argues

that: (1) the circuit court erred when it concluded that it

lacked jurisdiction over the modification of the 2121 Kûhiô

Permit; (2) the circuit court erred when it failed to decide that

the modification was illegal; (3) the circuit court erred in

concluding that the Director’s decision to approve the 2139 Kûhiô

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Permit without conditions similar to the 2121 Kûhiô Permit was

not arbitrary and capricious; and (4) the definition of “hotel”

as defined in the LUO is unconstitutionally vague.

            In other words, Local 5 challenges two “decisions” by

the Director: the Director’s September 6 Letter removing certain

restrictive covenant conditions from the 2121 Kûhiô Permit, and

the Director’s July 14, 2014 approval of the 2139 Kûhiô Permit

without those conditions.

            For the following reasons, we vacate and remand.

A.    Local 5 was entitled to notice of the Director’s September 6
      Letter removing certain conditions from the 2121 Kûhiô
      Permit.

            Local 5 alleges that the Director’s purported

modification of the 2121 Kûhiô Permit was improper in two ways.

First, Local 5 contends that the Director’s September 6 Letter

was not a proper modification under ROH § 21-2.20(k).              Second,

Local 5 argues that the DPP’s failure to provide notice of the

Director’s September 6 Letter modifying the 2121 Kûhiô Permit

“prejudiced Local 5’s substantial rights.”           Because courts have

the power to modify a decision or order of an administrative

agency “[w]here an administrative agency, by failure to follow

its rules, prejudices the substantial rights of a party before

it,” Local 5 requests a remedy that will allow it to properly

appeal the Director’s purported modification.            (Citing Nakamine

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v. Bd. of Trustees of the Emp. Ret. Sys., 65 Haw. 251, 255, 649
P.2d 1162, 1165 (1982).)

           On the facts of this case, we agree with Local 5 that

it was substantially prejudiced when it did not receive notice

that the Director had removed two important conditions from the

2121 Kûhiô Permit.     This court has consistently noted that the

principle of due process
           is not a fixed concept requiring a specific procedural
           course in every situation. Rather, due process is flexible
           and calls for such procedural protections as the particular
           situation demands. The basic elements of procedural due
           process of law require notice and an opportunity to be heard
           at a meaningful time and in a meaningful manner.

Price v. Zoning Bd. of Appeals, 77 Hawai#i 168, 172, 883 P.2d
629, 633 (1994) (citations omitted).

           The record indicates that the Director was well aware

that Local 5 had specific concerns regarding compliance with the

LUO should the units in the 2121 Kûhiô project be converted to

multi-family units.     After PACREP had applied for a WSD permit

for the 2121 Kûhiô tower, Local 5 registered its opposition to

the Director’s approval.      The 2121 Kûhiô Permit makes specific

reference to Local 5’s complaints regarding the possible impact

that usage of the units for residential, rather than hotel

purposes, might have on parking, employment, and housing in

Waikîkî.   Indeed, the Director acknowledged that he had been

aware of Local 5’s concerns; he knew it was an issue “that [Local

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5 was] concerned about.”      Therefore, when the Director approved

the 2121 Kûhiô Permit, he included restrictive covenant

conditions that would ensure that any conversion of hotel units

to residential units would comply with LUO requirements.

Nevertheless, merely seven months after approving the 2121 Kûhiô

Permit, the Director removed these hard-fought restrictive

covenant conditions without any notice to Local 5.

           The DPP contends it was not required to give

affirmative notice to Local 5 that the Director had removed these

conditions.   The DPP notes that DPP Rules § 6.2 provides that

“[t]he director shall mail the written decision to the applicant

and, upon request, shall give notice of the decision to other

interested persons.”     (Emphasis in original.)       Because Local 5

was not the applicant and never formally requested notice of the

Director’s actions on the 2121 Kûhiô Permit, the DPP argues that

Local 5 cannot claim that the DPP violated its due process

rights.   The DPP further argues that CARD, 114 Hawai#i 184, 159
P.3d 143, forecloses Local 5’s due process argument because Local

5 did not request notice under DPP Rules § 6.2.

           DPP’s reliance on CARD is misplaced because CARD did

not involve a denial of due process based on lack of notice, but

whether a petition for declaratory ruling can be used to seek

review of agency decisions after the fact.         While the appellants

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in CARD attended every public meeting discussing the applicant’s

application for a conditional use permit and the applicant

specifically reported at the meetings that it was “going through

the permitting process,” the appellants failed to request notice

of the decision under DPP Rules § 6.2.         Id. at 187, 159 P.3d at

146.   The appellants untimely appealed the Director’s approval of

the conditional use permit, and the ZBA dismissed the appeal.

Id. at 187-88, 159 P.3d at 146-47.        The appellants then sought

review of the issuance of the permit by requesting declaratory

rulings from the Director.      Id. at 190-01, 159 P.3d at 149-50.

We affirmed the Director’s later refusal to issue a declaratory

ruling in favor of the appellants because we concluded that “the

declaratory ruling procedure may not be used as a means for

review of decisions that have come before the board and been

properly decided.”    Id. at 200, 159 P.3d at 159.

           We are presented with a different situation here.

Local 5 actively participated in the public hearing process for

the 2121 Kûhiô Permit.     While Local 5 was not formally notified

by the DPP that the Director had approved the 2121 Kûhiô Permit,

Local 5 was aware that the 2121 Kûhiô Permit had been approved

with the conditions for which it had advocated.           Having satisfied

itself that the project was approved with conditions, Local 5 had

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no reason to request notice of action pursuant to DPP Rules §

6.2.

          The 2121 Kûhiô Permit was not modified using the normal

procedures for a modification.       There is no evidence in the

record to suggest that PACREP, the applicant, had publicly

announced or filed a written request seeking to modify the 2121

Kûhiô Permit.   Cf. CARD, 114 Hawai#i at 187, 159 P.3d at 146

(noting that the applicant had informed the public of its plans

to develop, had applied for a conditional use permit, and had

publicly reported that it was “going through the permitting

process”).   To the contrary, the record indicates only that

PACREP verbally asked the Director to remove the conditions, and

the Director later obliged.      There is also no evidence in the

record to indicate that the September 6 Letter was available at

the DPP for review by the public.

          In these particular circumstances, we disagree that

Local 5’s failure to formally request notice under DPP Rules

§ 6.2 forecloses its right to challenge the Director’s

September 6 Letter.     Where the record demonstrates that the

interested party advocated for certain conditions in a permit,

the permit was approved with those conditions, and the permitting

authority knew the importance of the conditions to the interested

party, that interested party is entitled to heightened procedural

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protections regarding later decisions to modify that permit.                 See

Price, 77 Hawai#i at 172, 883 P.2d at 633.          These protections

include “notice and an opportunity to be heard at a meaningful

time and in a meaningful manner.”         Id.   In this unique

circumstance, we conclude that Local 5 was entitled to these

heightened due process protections.

            Therefore, pursuant to HRS § 91-14(g), we remand these

issues to the ZBA to decide whether the Director’s September 6

Letter was a proper modification of the 2121 Kûhiô Permit under

ROH § 21-2.20(k) and ZBA Rules § 22-8.12

      12
            Local 5 argues that the ZBA lacks jurisdiction to address any
“modification” of a permit, because it is not an “action of the Director”
under ZBA Rules § 21-1. Revised Charter of the City and County of Honolulu
(RCCCH) § 6-1516, however, gives broad powers to the ZBA to “hear and
determine appeals from the actions of the director in the administration of
the zoning ordinances[.]” Modification of permits are expressly provided in
the LUO as an “administrative procedure.” See ROH § 21-2.20; cf. Hoku Lele v.
City and Cty. of Honolulu, 129 Hawai#i at 167-68, 296 P.3d at 1075-76
(concluding that a zoning verification is not an “action of the Director”
because nothing in the LUO addresses it).
            Accordingly, in the ordinary case, a modification of a permit made
under ROH § 21-2.20(k) is an “action of the Director” as contemplated by RCCCH
§ 6-1516 and ROH § 21-1.40, and can be appealed to the ZBA. To the extent
that ZBA Rules § 21-1 states otherwise, it contradicts the broader language
and purpose of RCCCH § 6-1516. See Colony Surf. Ltd. v. Dir. of Dep’t of
Planning & Permitting, 116 Hawai#i 510, 515, 174 P.3d 349, 354 (2007).
            Finally, while Local 5 requests that we determine, in the first
instance, whether any such “modification” was improper, we note that no agency
or court has ruled on the issue. Although there was an admitted modification,
because there has been no ruling in this case, it must be remanded. It is
therefore appropriate that the ZBA decide whether the Director’s September 6
Letter was a proper modification of the 2121 K ûhiô Permit pursuant to ROH
§ 21-2.20(k) and ZBA Rules § 22-8.

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B.    The Director’s subsequent approval of the 2139 Kûhiô Permit
      must also be remanded.

            Local 5 also contends that the circuit court erred when

it affirmed the ZBA’s decision to affirm the approval of the 2139

Kûhiô Permit.     Its principal argument on this point is that the

circuit court’s affirmance of the 2139 Kûhiô Permit without

conditions similar to the 2121 Kûhiô Permit was arbitrary,

capricious, and an abuse of discretion.           In other words, the

issue here is whether the ZBA erred when it concluded that “[t]he

Director did not act arbitrarily or capriciously, and did not

abuse his discretion, when he did not include in the 2139 Permit

conditions similar to the restrictive covenant condition of

Condition C in the 2121 Permit.”

            Because the record demonstrates that the 2139 Kûhiô

project is operated jointly and fully integrated with the 2121

Kûhiô project, the specific facts of this case require us to

remand the approval of the 2139 Kûhiô Permit.            The record makes

clear that both the 2121 Kûhiô tower and the 2139 Kûhiô tower are

operated as a single condo-hotel.          In the first paragraph of its

application for the 2139 Kûhiô Permit, PACREP 2 states that the

proposed project “will share an 8-story building podium with the

adjacent 2121 Kûhiô tower that is currently under construction.

The building podium will contain shared resident services,

recreational amenities, vehicle access and off-street parking.”

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The shared amenities in the building podium will include

“commercial spaces, concierge desk, spa, theatre, kids’ room,

indoor and outdoor spaces for events, food, and beverage

preparation area and a business center.”         Moreover, the 8-story

building podium will provide vehicle access to both the 2121

Kûhiô tower and the 2139 Kûhiô tower from Kâlaimoku Street.

           Similarly, in PACREP 2’s Real Estate Commission Report,

PACREP 2 specifically stated that the two towers will be

integrated, “sharing the use of parking services and amenities,

initially through a reciprocal easement and license agreement and

subsequently, through the merger of the [2139 Kûhiô] Project and

the Tower 1 Project (meaning both the Project and the Tower 1

Project will be treated as a single condominium project).”

           The Director also recognized the integrated nature of

the two projects when he approved the 2139 Kûhiô Permit.            He

noted that the tower’s eight-story podium “will be shared with

the adjacent 2121 Kuhio condo-hotel, which is currently under

construction.”    With respect to off-street parking, the Director

specifically instructed that the approval of the 2139 Kûhiô

Permit “should be based on the use of both the 2121 Kuhio and

2139 Kuhio developments to hotel use,” because the building’s

podium will contain all of the jointly-developed parking lot

spaces.   Accordingly, 2139 Condition I provides that the valet,

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housekeeping, building maintenance, and room service conditions

“shall be extended as conditions of approval to all units in the

2121 Kuhio development[.]”

          Both PACREP 2 and the DPP have acknowledged that the

2139 Kûhiô project was intended to be operated jointly with the

2121 Kûhiô project as one condo-hotel.         The DPP appears to have

recognized the value of including similar conditions in each

permit when it argued in the ZBA that one of the reasons why the

Director’s approval of the 2139 Kûhiô Permit was not arbitrary

and capricious was because it contained the same conditions as

the earlier-modified 2121 Kûhiô Permit.         Further, it conceded

that the Director had knowledge of the September 6 Letter when he

approved the 2139 Kûhiô Permit, as he was the one who issued the

letter.

          Because the decision to approve the 2139 Kûhiô Permit

rested in part on the Director’s removal of the restrictive

covenant conditions from the 2121 Kûhiô Permit, which we are

remanding to the ZBA to determine whether that modification was

proper under the LUO, we also conclude that, pursuant to

HRS § 91-14(g), the ZBA’s decision to approve the Director’s

July 14, 2014 approval of the 2139 Kûhiô Permit must similarly be

vacated and remanded to the ZBA to decide whether the Director

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abused his discretion by approving the permit without those

conditions.13

                              IV.   CONCLUSION

            When PACREP submitted its application for a WSD permit

for the 2121 Kûhiô project to the DPP, Local 5 raised concerns

regarding how the condo-hotel would comply with LUO requirements

if any hotel units were converted to residential units.              In

response to those concerns, the Director placed restrictive

covenant conditions in the 2121 Kûhiô Permit that required the

condo-hotel to provide a sufficient number of parking stalls,

comply with park dedication provisions, and meet other LUO

requirements.     Local 5 knew that the Director had approved the

project, and, satisfied with the conditions placed on the permit,

did not appeal the decision.

            Yet several months later, after an oral request by

PACREP, the Director removed these conditions from the 2121 Kûhiô

Permit without any notice to Local 5.          On the particular facts of

this case, we conclude that the process for modifying the 2121

Kûhiô permit did not provide Local 5 with notice, such that

       13
             We therefore need not decide whether the definition of “hotel” in
the LUO is unconstitutionally vague, and do not address Local 5’s fourth
argument on appeal. See DW Aina Le#a Dev. v. Bridge Aina Le#a, LLC, 134
Hawai#i 187, 217, 339 P.3d 685, 715 (2014) (“[I]f a case can be decided on
either of two grounds, one involving a constitutional question, the other a
question of statutory construction or general law, . . . [this court] will
decide only the latter.” (second alteration in original)).

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Local 5 was unable to later challenge the Director’s decision to

remove these conditions and violating its due process rights.

Accordingly, we remand Local 5’s challenge of the Director’s

September 6 Letter to the ZBA for further proceedings.

Additionally, because the 2139 Kûhiô tower is fully integrated

with the 2121 Kûhiô tower, shares certain facilities and parking

stalls with the 2121 Kûhiô tower, and the permit for its

development was based in part on the previously-approved 2121

Kûhiô Permit, we also vacate the ZBA’s decision that approved the

Director’s granting of the 2139 Kûhiô Permit and remand the case

to the ZBA.

          We therefore vacate the circuit court’s October 9, 2017

Findings of Fact, Conclusions of Law, and Decision and Order

Modifying and Affirming the Decision of the Zoning Board of

Appeals in Case No. 2014/ZBA-5, which affirmed the ZBA’s

October 15, 2015 Findings of Fact, Conclusions of Law, Decision

and Order, and remand to the ZBA to resolve Local 5’s challenges

to (1) the Director’s September 6, 2013 letter removing certain

restrictive covenant conditions from the 2121 Kûhiô Permit; and

(2) the Director’s July 14, 2014 approval of the 2139 Kûhiô

Permit without those conditions.

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Gregory W. Kugle, Loren A.            /s/ Mark E. Recktenwald
Seehase, and Joanna C.
Zeigler for appellant-                /s/ Paula A. Nakayama
appellant
                                      /s/ Sabrina S. McKenna
Brad T. Saito, for appellee-
appellee City and County of           /s/ Richard W. Pollack
Honolulu Department of
Planning and Permitting               /s/ Michael D. Wilson

Terence J. O’Toole, Sharon V.
Lovejoy and Maile S. Miller
for Intervenor-Appellee
PACREP 2 LLC

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