Hokulia bypass settlement inked

WHO BUILDS THE ROAD? ‘IT’S GOING TO BE THE COUNTY’

BY ERIN MILLER

WEST HAWAII TODAY

emiller@westhawaiitoday.com

Hawaii County will be responsible for building the Mamalahoa bypass, the county’s top attorney said Friday.

“Who fronts the money and builds the road?” Corporation Counsel Lincoln Ashida said. “Realistically, it’s going to be the county that finishes the project.”

Hawaii County will take $12.5 million in cash and $20 million worth of lots in the defunct Hokulia project, according to the terms of a settlement finalized Friday afternoon. That property secures a $20 million promissory note 1250 Oceanside Partners must pay within two years. The $12.5 million must be paid by March 23. Ashida said the county filed suit against the development company while Oceanside still had assets and collateral to take.

Oceanside 1250 is in receivership.

“It could only get worse,” Ashida said. “There were assets we could grab.”

The agreement, signed by 13 parties, including 1250 Oceanside Partners, American Motorists Insurance Co., The Club at Hokulia and the Hokulia Community Association, resulted from two 3rd Circuit Court civil cases and a federal court case regarding bonds securing road and other infrastructure development.

Hawaii County withdrew its request to have Judge Ronald Ibarra rule who should actually build the road, Ashida said after the hearing. The settlement is not substantively different from earlier drafts previously reported on, he added.

Oceanside officials told the county the property could be worth up to $50 million. Ashida said the county would get an independent appraisal of the property, and if the land offered in what was the project’s second phase is not enough to secure $20 million, Oceanside will offer land from its third phase, and then possibly its Keopuka lands.

Does the county expect to get cash in the next two years or just land when that period is over?

“It’s really up to Oceanside,” Ashida said. “We’re either getting $20 million cash from them or land worth that much.”

Oceanside does not have the $20 million in cash available to pay the county, attorney William Meheula said.

The agreement “provides funds for the county to use as it deems appropriate,” Meheula said. “It’s a fair settlement for all parties, particularly for the community.”

The settlement “will bring completion” of the road soon, he added.

Charles Flaherty, who was part of one of the earlier lawsuits in the case, resulting in a settlement agreement in 2006, filed a last-minute motion to intervene in the case. He told Ibarra during the hearing he was concerned about the impact Friday’s settlement would have on the earlier agreement.

“The settlement agreement in this case is going to impede on our ability to have the terms” of the earlier settlement, Flaherty said.

Ibarra did not rule on the motion, which was filed about 40 minutes prior to the start of Friday’s hearing and had not been served on the other parties.

“You certainly have a remedy in the (previous) case,” Ibarra said, before ruling to dismiss the two lawsuits.

Flaherty said after the hearing Oceanside still owes more than $30 million in improvements, including 100 affordable housing units and a baseline water study from Hookena to Keauhou.

At issue is the remaining portion of the Mamalahoa bypass road, which now runs from Alii Drive in Keauhou to Halekii Street in Kealakekua. The remaining portion of the road, to Napoopoo Junction, is estimated to cost $27 million to complete.

One final parcel of land must be purchased before construction may begin. An attempt to reach that landowner Friday was unsuccessful.