Waikoloa Highlands development to face Land Use Commission

  • The entrance to the undeveloped Highlands Golf Estates near Waikoloa Village is overgrown with weeds. (Laura Ruminski/West Hawaii Today)
  • Waikoloa Highlands project map (as shown in LUC filings)
  • The entrance to the undeveloped Highlands Golf Estates near Waikoloa Village is overgrown with weeds. (Laura Ruminski/West Hawaii Today)
  • Waikoloa Stabbles can be seen from the entrance of the undeveloped Highlands Golf Estates. (Laura Ruminski/West Hawaii Today)
  • A fence marks the boundary of the undeveloped Highlands Golf Estates near Waikoloa Village. (Laura Ruminski/West Hawaii Today)
  • The entrance to the undeveloped Highlands Golf Estates near Waikoloa Village is overgrown with weeds. (Laura Ruminski/West Hawaii Today)
  • A fence marks the boundary of the undeveloped Highlands Golf Estates near Waikoloa Village. (Laura Ruminski/West Hawaii Today)
  • A fence marks the boundary of the undeveloped Highlands Golf Estates near Waikoloa Village. (Laura Ruminski/West Hawaii Today)

HILO — A 731-acre project that’s languished for a decade is at risk of being reverted to an agricultural land reclassification.

Developers of what’s planned to be a 398-lot residential subdivision are promising to get moving on the project under new management.

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They tell a sordid tale of a former director funneling tens of millions in investors’ money into movies and casinos and ultimately to a bank in the Republic of Armenia. Investors are awaiting extradition of the alleged embezzler from Russia to face civil and criminal complaints, they say.

The state Land Use Commission has scheduled an Oct. 24 hearing for Waikoloa Highlands Inc. to show cause why it should be able to keep the rural district classification granted to it in 2008 or lose that classification. The hearing is scheduled to begin at 10 a.m. at the Courtyard King Kamehameha Kona Beach Hotel, according to an LUC notice.

Waikoloa Highlands took over the property from Waikoloa Mauka LLC in 2014. Build-out of the project was supposed to be completed by June 10 of this year.

“We’re just asking for the chance to proceed with the development,” Steven Lim, attorney for Waikoloa Highlands, said Monday.

Lim said his client is asking that the project, which was zoned by the county into one-acre lots in 1990, get all its required county permits before going back to the LUC “to tie up loose ends.” He said developers have secured $45 million in funding and the project has taken care of the required county affordable housing contribution of land.

“For years, (Waikoloa Mauka’s) and later (Waikoloa Highlands’) efforts to advance the development of the project were significantly hindered — if not entirely undermined — by the gross mismanagement and fraud committed by the former director of both entities Stefan Martirosian, who was solely responsible for overseeing all aspects of the project,” Waikoloa Highlands said in an Aug. 8 response to the LUC order.

Waikoloa Highlands Inc. is a Glendale, California, company that lists Encino, California, consultant Natalia Batichtcheva as president, secretary, treasurer and director, according to state filings.

Several residents submitting testimony to the LUC expressed concerns about increased traffic at the Waikoloa Road- Paniolo Avenue – Pua Melia Intersection.

Julia Alos, chairwoman of the Waikoloa Community Leadership Council and member of the South Kohala Community Development Plan Action Committee, detailed her concerns in Aug. 21 testimony to the LUC, saying she was speaking as an invidiual and not in an official capacity.

“This big development project has been on the radar now for decades with not even a shovel touching the soil thus far. Waikoloa Highlands was to have 50 homes by March of 2018 with the balance of hundreds more within five years or by 2023,” Alos said.

“The infrastructure improvements outlined as diligence of this developer for the zoning they petitioned for long ago, continues to not be addressed and I am hopeful that LUC will be sure to include remedial steps to ensure our intersection is safe for our pedestrians and all vehicles traveling thru our community,” Alos added.

Hawaii County has not taken a position on the order, said Deputy Corporation Counsel Ron Kim. He said the county will be participating in the case to make sure its requirements are met.

“The chief concern for the county is whether the project is going to comply with the county conditions such as affordable housing and channelized intersection,” Kim said.

He said an intersection, with concrete islands directing traffic flow, is important to residents in the area.

Corporation Counsel Joe Kamelamela wanted to make it clear the county isn’t in partnership with the developer. The project faces various county requirements if it clears the LUC.

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“There’s always a question when the developer asserts we are in partnership with them. That is not our role,” Kamelamela said Monday. “Our role is to ensure compliance with the laws.”

Kamelamela’s comment follows an unsigned stipulation submitted to the LUC by the developers that included the county Planning Department and the state Office of Planning. The LUC included the document on its website, stating that it was an unofficial document that should not be given any weight.