Emotions were running high Friday at Makaeo Pavilion as the Department of Land and Natural Resources held a lottery to determine which four surf schools could operate at Kahalu‘u Beach.
Each of the 17 companies entered received a bingo number with the corresponding balls being placed in a hopper and Division of Boating and Ocean Recreation Administrator Ed Underwood announcing the winners. The first four numbers drawn were to receive the coveted spots, with the rest being put on a wait list in case the winners were not able to complete the permit process with the county and state by the Dec. 4 deadline. Underwood said this was the first time a lottery system for awarding permits has been used at DOBOR.
After the drawing, it was learned that three of the four winning entries, Hinaea Iliahi LLC, Kauakea LLC and Kona Town Adventures LLC were all owned by the same individual, Wesley Moore. In all, Moore submitted eight LLC companies to compete in the lottery. The other winner was Kahalu‘u Bay Surf and Sea.
That left the remaining 7 surf school operators in disbelief, especially since there is no appeal process in place for the lottery.
“I’m still trying to process how this is legally followed, for an individual to have multiple entries unbeknownst to the rest of the companies,” said Tifani Stegehuis from Hawaii Lifeguard Surf Instructors. “The parameters of qualifications were vague and open to interpretation. The verbiage led to loopholes.”
“My business has been there for 23 years and three generations. With all due respect, liability falls on you guys for permit holders that will be out there who are hiring instructors who are not lifeguard certified. The state is saying to the public that they selected these people to be safe. It did not seem to be a well thought out process,” she told Underwood. “It’s a huge punch in the gut for being born and raised here.”
To qualify for the lottery, a school had to have a GET license, certificate of compliance from the Department of Taxation, be in good standing with DCCA and have liability insurance and documentation proving at least five years experience providing surfing instruction.
Underwood said they went to the Legislature to select the four permit holders based on seniority. HB 1090 made it through the legislature but was vetoed by Gov. Green.
Rep. Kirstin Kahaloa, whose district includes Kahalu‘u Beach, is dismayed by the process used by DLNR to select the permit holders.
“I’m frustrated. Generally the goal of the process was to better manage the number of people using the bay. The goal was better management,” she said. “After the process unfolded I am concerned about issuing three of the four permits to the same operator. Consider all of the surf instructors that will be out of work this holiday season. They deserve better.”
Kahaloa said the system is flawed and she is prepared to ask DLNR hard questions to see how to solve the situation.
“The intent of what this was supposed to be didn’t happen,” she said.
Underwood said when they received all of the applications from one owner, albeit though separate LLC’s, they checked with the Attorney General’s office who determined it was legal.
He explained that this did not prevent the other surf schools from obtaining a commercial use permit anywhere else on the island, but was met with rebuttal that Kahalu‘u was the safest spot.
Underwood said if permit holders are observed breaking the rules set, a report can be made through DOBOR or DOCARE. For an entity that continues to use Kahalu‘u for a surf school and not a permit holder, a citation and cease and desist will be issued along with fines of $5,000 for the first offense, $10,000 for the second and $15,000 for a third violation as determined by the land board.
Stegehuis is worried about the community events she holds at the bay now that she doesn’t have a permit.
“The future of all of our extracurricular ventures with our community givebacks, Surf for Special Needs and Special Olympics surf team, are in jeopardy,” she said.
The permits are transferrable, but only after one year, and only if the business entity is sold.
Stegehuis penned a letter to elected public officials after the lottery urging lawmakers to revise the entire process and framework of the permit process.
“I strongly urge you to deem the entire process flawed. The applicant list and results clearly show an unfair and heavy-handed lottery,” the letter states. “Furthermore , this process is objectionable because one individual was able to outweigh all other applicants by submitting multiple applications which were all vetted and approved by DOBOR officials prior to the lottery drawing.”
Wesley Moore declined to comment on the lottery.
“This is messed up,” said Stegehuis.
