Homesteaders eye dispute between Fevella, Aila

Hawaii Tribune-Herald

“I understand the frustration, because there’s nothing the department has created except controversy.”

Keaukaha Community President Patrick Kahawaiolaa was referring to a letter sent Monday by state Sen. Kurt Fevella, the Senate minority leader, to U.S. Attorney General Merrick Garland and Interior Secretary Deb Haaland requesting a federal investigation of the state Department of Hawaiian Home Lands.

Fevella, the Senate’s lone Republican, believes the DHHL should be using $125 million in trust funds appropriated by the state Legislature to build homestead lots for Native Hawaiian beneficiaries who are on a lengthy wait list.

He said in a statement Wednesday the DHHL’s decision to deposit the funds into a savings account “highlights the need for reform and renewed leadership at DHHL.”

“Your assistance is needed to review and investigate the actions of DHHL and determine whether DHHL has met its fiduciary duty to the Native Hawaiians beneficiaries,” wrote Fevella, who represents Oahu’s Ewa Plain, in his letter to Garland and Haaland.

Fevella — who actively opposed an unsuccessful bill in the Legislature to build a casino on DHHL land in Kapolei, Oahu — called it “disingenuous and misleading” for the department to seek additional state and federal funds “when they already possess a large sum of monies that can be used to build homes and construct needed infrastructure for beneficiaries.”

“If Fevella is right that the Legislature gave that money for infrastructure, and (the DHHL) failed to do it, then it’s exacerbating the problems of the people on the wait list on this island. It’s statewide, but on this island, as well,” Kahawaiolaa said Thursday.

William Aila, Hawaiian Homelands Commission chairman and DHHL director, said in a statement Monday the development of over 4,000 new homestead lots since 1995 leaves the DHHL with “over a half a billion dollars in private lending contingent liability that it is responsible for,” and the deposit of the $125 million is consistent with the Legislature’s Act 14 settlement in 1995 “to establish an endowment to serve the trust.”

Act 14 required the Legislature to pay $600 million to DHHL in 20 yearly payments of $30 million.

“It is our fiduciary kuleana to be sure the trust has enough money in its reserve to mitigate this risk against the state,” said Aila. “This commission, as well as previous commissions, has acted prudently in its fiduciary responsibility of this trust to ensure that homestead lots are developed in perpetuity.”

The DHHL said it was allocated $78 million by the Legislature for capital improvement projects this past legislative session — the largest capital improvement budget appropriation in the program’s history, but less than the $460 million the department said is needed.

Kahawaiolaa called the dispute between Fevella and Aila “sad.”

“I think there’s just a misunderstanding on Fevella’s part, but he’s on the right track. Fevella does not have obligations to the Native Hawaiian. Aila does. And that’s the missing part of the equation,” Kahawaiolaa said.

“They, the Department of Hawaiian Homes, were required to create a fund by the state Legislature for risk mitigation, for people who borrowed money from private lenders,” he said. “In ’83, I got a loan from the (DHHL) to build a home. At that particular point in time, they were morphing into ‘go borrow money from the outside.’”

Kahawaiolaa said it’s difficult for homesteaders to get loans from commercial lenders because the land is on 99-year leases for $1 a year and title belongs to the DHHL.

“On that type of loan, the lender cannot foreclose,” he said.

County Councilwoman Sue Lee Loy, who lives with her husband, Ian, on a Panaewa homestead lot, also noted “the lending problem that we have on Hawaiian Home Lands.”

“A lot of conventional mortgages are not available to beneficiaries on Hawaiian Home Lands because the banks don’t want to lend on leasehold, especially DHHL,” Lee Loy said. “And so DHHL is kind of stuck by saying, ‘OK, we’ll carry the mortgage for you folks.’”

Lee Loy didn’t take sides in the Fevella-Aila dust-up, but noted Big Island DHHL projects are in need of financing.

“We have a number of opportunities right here on the Big Island, whether it’s the project out in Honomu (or the) scattered lots program in Panaewa and some other programs that could use the funding and help Native Hawaiian beneficiaries realize housing,” she said.

The Honomu project for subsistence agriculture lots is in the environmental review process, where it’s been for a number of years.

“Honomu’s been waiting. That came up four years ago and there’s nothing going on there,” Kahawaiolaa said. “You’re going to put people on there without road and water? In 2021, we’re asking people, ‘Hey, we’ve got land out here in Honomu, but we’re going to do it with gravel roads and water catchment?

“There may be people who want to live that way, but I’m not one of those, nor would I want my children to do that.”

Six bids were received in March for the Panaewa project, which involves subdividing a 10-acre parcels on Mahiai Street into 16 subsistence ag lots with a new road and infrastructure improvements.

Judge may vacate East Maui water diversion permits

Maui News
by Melissa Tanji –

Circuit Court said contested case should have been held before the state land board

Revocable permits granted last year for diverting water from East Maui streams for Mahi Pono’s farming and other uses may be in jeopardy unless a First Circuit Court judge hears a formal request to stay the order.

Saying that “the court does not wish to create unintended consequences or chaos by vacating the permits without knowing the practical consequences of such an order,” First Circuit Judge Jeffrey P. Crabtree ordered the state Board of Land and Natural Resources, which granted the permits on Nov. 13, to hold a contested case hearing on the matter “as soon as practicable.”

The BLNR initially denied Sierra Club’s request for a contested case hearing on the permits, but Crabtree said Friday in an interim decision on appeal that the board violated the Sierra Club’s “due process rights” by not holding the hearing and that the club had new information to present regarding the permits.

The orders are the latest developments in the Sierra Club’s appeal against the BLNR, Alexander & Baldwin Inc. and East Maui Irrigation Co.

On Nov. 13, the BLNR approved another round of one-year permits, allowing A&B to divert 45 million gallons of water per day using the East Maui Irrigation system on state lands for Mahi Pono crops this year. A&B co-owns the water diversion system with Mahi Pono.

Water from the East Maui system is also diverted for other users, including the county Department of Water Supply for municipal purposes such as domestic water use.

Crabtree said he is not vacating the revocable permits yet and that “the court reserves jurisdiction to consider any additional requests from the parties on whether or not the court should modify the existing permits, and how, or whether the court should leave the existing permits in place until their current expiration date.”

He added that if “no such further requests” are filed by 4 p.m. June 30 then the revocable permit “shall automatically be vacated.”

“The court’s order means that for the first time, the Board of Land and Natural Resources will be required to make A&B fulfill its burden of proof before receiving any permits to use public resources,” Sierra Club attorney David Kimo Frankel said in a news release Monday. “It also means that the Sierra Club will be given an opportunity to show how much harm the diversion of our streams is causing. A&B cannot justify draining streams dry when most of the water it takes is wasted.”

For more than 150 years, A&B diverted East Maui streams for sugar operations in Central Maui and Upcountry. After the sugar plantation closed down in 2016, some of those stream flows were restored. In June 2018, the state water commission set in-stream flow standards for East Maui streams diverted by A&B through subsidiary East Maui Irrigation Co.

A&B, whose water permits are nontransferable, had been granted one-year revocable permits for more than a decade for sugar operations. The company would not have been allowed to apply for a revocable permit beyond 2019 were it not for the Intermediate Court of Appeals in June of that year overturning a lower court decision in a lawsuit filed by East Maui taro farmers and practitioners against the BLNR, A&B and the County of Maui.

In November, the BLNR unanimously approved the permit. Following Crabtree’s decision, the Sierra Club will have a chance to get a hearing before the board.

“Our East Maui communities who depend upon the dozen streams left out of previous restoration decisions, will finally have a chance to make a case to restore the life-giving waters to our streams and fisheries,” East Maui resident and Sierra Club Maui Group Executive Committee Chairperson Lucienne de Naie said.

Sierra Club Director Marti Townsend added that the court’s decision “does not jeopardize Upcountry users of East Maui water.”

“The Sierra Club has repeatedly committed to ensuring that water continues to flow to domestic users of the water like those in Upcountry,” Townsend said.

Both the county and the state declined to comment on the decision, with Department of Land and Natural Resources spokesperson Dan Dennison saying that the department “cannot comment on pending legal proceedings.”

Maui County spokesperson Brian Perry said that “Mayor (Michael) Victorino has no comment while he’s reviewing the First Circuit order and looking out for the best interests of the people of Maui County.”

A spokeswoman for Mahi Pono also said the company did not “have a statement at this time.” Mahi Pono, which owns half of EMI and purchased 41,000 acres of former sugar cane lands from A&B in 2018, has sought to differentiate itself from its predecessor’s plantation-era water use.

A&B also did not provide a comment by Tuesday evening.

Judge orders new hearing on Maui water permits

Star Advertiser
By Timothy Hurley –

A Circuit Court judge says he’s prepared to revoke Alexander &Baldwin’s annual permit allowing it to divert up to 45 million gallons per day from dozens of streams in East Maui.

Judge Jeffrey Crabtree, in a ruling issued Friday, ordered the Board of Land and Natural Resources to hold a contested case hearing about the revocable permit and said he would cancel it June 30 unless he sees a formal request to stay his order.

The Sierra Club asked the Land Board in November to hold a contested case hearing on Alexander & Baldwin Inc. and East Maui Irrigation’s request to continue using about 33,000 acres of public land and divert 45 million gallons per day from East Maui streams for the year 2021.

The board denied the request and approved the continuation of the permits, prompting an appeal by the Sierra Club.

On Friday the court concluded in an interim decision that the board violated the nonprofit’s due process rights and ordered a contested case hearing as soon as practicable.

“The court’s order means that for the first time, the Board of Land and Natural Resources will be required to make A&B fulfill its burden of proof before receiving any permits to use public resources,” Sierra Club’s attorney David Kimo Frankel said in a statement.

Frankel said the Sierra Club finally will be given an opportunity to show how much harm the diversions are causing the streams.

“A&B cannot justify draining streams dry when most of the water it takes is wasted,” he said.

Asked for comment, BLNR spokesman Dan Dennison said the agency doesn’t comment on legal issues prior to settlement. A spokesperson for Alexander &Baldwin could not be reached Monday.

In his ruling, Crabtree said he didn’t buy arguments from the board that allowing contested case hearings on annual revocable permits could mean requiring such hearings on virtually everything BLNR decides.

Crabtree said new information, issues and developments pertinent to the stream diversions have come up recently and are worthy of a closer look in a contested case hearing.

“Our environmental law system has a goal that the decision-makers will hear from stake-holders before decisions are made, to help decision-makers reach sound policy decisions examined from multiple perspectives,” the judge said in his ruling.

“The new information and issues,” he wrote, “are relevant, and are not insignificant.”

Crabtree is the same judge who in April sided with BLNR and Alexander & Baldwin in a similar case challenging the 2018 and 2019 permits.

Following a three-week trial, Crabtree ruled that the board acted properly when it allowed the diversion of stream water in those permits, saying Hawaii’s public-trust doctrine imposes a dual mandate on the state to both protect water resources and make maximum reasonable beneficial use of those resources.

The parties remain in mediation over the final order.

Sierra Club Director Marti Townsend said the upcoming contested case should provide a full hearing on the issues, including the amount of wasted water in the aging system and the fact that the diversions are making the streams run dry too much of the time, causing immense ecological damage.

“We’re trying to use all remedies available to us to make sure we protect those resources,” she said.

Townsend said the court’s decision will not affect Upcountry Maui users of the stream water. “The Sierra Club has repeatedly committed to ensuring that water continues to flow to domestic users of the water like those in Upcountry,” she said.

DLNR News Release: Instream Flows Set for Traditional Kalo Farming Communities on Kaua’i and Maui

David Ige, Governor, State of Hawaii

With support of written and virtual testimony from cultural practitioners, lineal descendants, keiki and kupuna on the importance of stream flow to support their livelihood and the ‘āina, the Hawai‘i Commission on Water Resource Management adopted instream flow standards for Wai‘oli Stream, in Halele‘a, North Kaua‘i, and for Honokōhau, Honolua, and Kaluanui Streams in West Maui.

In April 2018, the Wai‘oli Valley Taro Hui suffered considerable damage to their ‘auwai when record-breaking rainfall fell on North Kaua‘i. As the taro farmers worked to repair their ‘auwai with legal and technical support from Ka Huli Ao Center for Excellence in Native Hawaiian Law, they also worked with Commission staff to ensure water from Wai‘oli Stream was being properly managed in consideration of instream and non-instream uses.

On Tuesday, the Commission approved a measurable instream flow standard of 4.0 million gallons per day which is based upon the Native Hawaiian custom of keeping half of the stream’s flow remaining in the stream. Commissioner Dr. Kamanamaikalani Beamer stated that “This is a great example of us working alongside and with a community to help empower and resolve some long-standing issues.”

The Commission also considered instream flow standards for Honokōhau, Honolua, and Kaluanui Streams, the latter being a tributary of Honokōhau Stream, in West Maui. Prior Commission actions approved the abandonment of irrigation system diversions on Honolua and Kaluanui Streams by Maui Land and Pineapple Company (MLP), resulting in the Commission approving of natural streamflow conditions to serve as the instream flow standard (IIFS).

For Honokōhau Stream, the Commission approved a two-phase approach which will establish a Phase One IIFS of 8.6 million gallons per day within 120 days, allowing MLP to make the necessary system improvements. The restored streamflow is expected to meet the existing needs of taro farmers in Honokōhau Valley, while also protecting aquatic life, recreation, and domestic uses on Honokōhau Stream.

The Commission also approved a water reservation by the Department of Hawaiian Home Lands for 2.0 million gallons from Honokōhau Stream. Upon implementation of DHHL’s Regional Plan, the Phase Two IIFS will be initiated and water from Honokōhau Stream will be mixed with R1 recycled wastewater to meet non-potable water demands for agriculture and communal areas in DHHL’s planned West Maui developments. The resulting IIFS would then vary based on half the available streamflow in Honokōhau Stream.

Following these decisions, Commission Chair Suzanne Case said, “We truly appreciate the efforts of community members, including private water users and other government agencies, in working collaboratively with our staff in seeking balanced solutions to sharing our limited water resources. Working closely with the Wai‘oli Valley Taro Hui resulted in a decision for Wai‘oli Stream that will maintain taro farming there for generations to come, while the West Maui decision represents a win-win solution for the protection of traditional Hawaiian practices and protection of instream uses in Honokōhau Valley while meeting the needs of MLP, DHHL, and the County of Maui.”