Surfrider Foundation v. Zoning Board of Appeal, City and County of Honolulu.

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Electronically Filed
Supreme Court
SCAP-13-0005781
23-SEP-2015
09:22 AM
IN THE SUPREME COURT OF THE STATE OF HAWAIʻI
---o0o---
SURFRIDER FOUNDATION; HAWAII’S THOUSAND
FRIENDS; KA IWI COALITION; and KAHEA – THE
HAWAIIAN-ENVIRONMENTAL ALLIANCE,
Petitioners/Plaintiffs-Appellants,
vs.
ZONING BOARD OF APPEALS, CITY & COUNTY OF HONOLULU;
DIRECTOR OF THE DEPARTMENT OF PLANNING &
PERMITTING, CITY & COUNTY OF HONOLULU; KYO-YA
HOTELS & RESORTS LP; AND 20,000 FRIENDS OF LABOR,
Respondents/Defendants-Appellees.
SCAP-13-0005781
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CAAP-13-0005781; CIV. NO. 13-1-0874-03)
September 23, 2015
NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.,
WITH RECKTENWALD, C.J., CONCURRING SEPARATELY
OPINION OF THE COURT BY POLLACK, J.
I. INTRODUCTION
In 1976, the Honolulu City Council established the
Waikiki Special Design District in response “to the rapid
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development of the 1960s and 1970s, and the changes produced by
that development.” The City Council found that “[t]o the world,
Waikiki is a recognized symbol of Hawaii [] and the allure of
Waikiki continues, serving as the anchor for the state’s tourist
industry.” The Council concluded that while “Waikiki needs to
maintain its place as one of the world’s premier resorts in an
international market [], the sense of place that makes Waikiki
unique needs to be retained and enhanced.” Accordingly, the
City Council developed specific requirements and design controls
“to guide carefully Waikiki’s future and protect its unique
Hawaiian identity.”
Among the provisions enacted to protect Waikiki’s
Hawaiian identity is a limitation on development next to the
shoreline. The Council established a coastal height setback
requirement because of the “need to step back tall buildings
from the shoreline to maximize public safety and the sense of
open space and public enjoyment associated with coastal
resources.” The Council also provided for a variance process
when compliance with the Land Use Ordinance would result in
unnecessary hardship.
In this case, we are called upon to determine whether
a variance granted for a proposed 26-story hotel and residential
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tower that permitted a 74 percent encroachment into the coastal
height setback along the Waikiki shoreline was properly issued. 1
II. BACKGROUND
A. The Waikiki Special District
The Land Use Ordinance of the City and County of
Honolulu (LUO) designates “certain areas in the community in
need of restoration, preservation, redevelopment or
rejuvenation” as special districts. Revised Ordinances of the
City and County of Honolulu (ROH) § 21-9.20 (1990). For each
special district, the LUO sets forth objectives, identifies
prominent view corridors and historic properties, and outlines
requirements and design controls to guide development to
“protect [and] enhance the physical and visual aspects of [the
district] for the benefit of the community as a whole.” ROH §
21-9.20-1.
The Honolulu City Council (City Council) designated
the Waikiki Special District 2 “to guide carefully Waikiki’s
future and protect its unique Hawaiian identity.” ROH § 21-
1
The quoted passages in the Introduction are from provisions of
the Land Use Ordinance of the City and County of Honolulu that will be
discussed later in this Opinion.
2
The Waikiki Special Design District was renamed the Waikiki
Special District. The boundaries of the WSD are defined by a map accessible
at: http://www.honolulu.gov/rep/site/ocs/roh/ROH_Chapter_21_Exh9.1-
9.18_art10__.pdf.pdf (last visited September 2, 2015). The WSD is bounded on
the north and west by Ala Wai Blvd. (including the piers in the Ala Wai Yacht
Harbor), on the south by the Pacific Ocean, and on the west by Kapahulu Ave.
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9.80. Within the Waikiki Special District (WSD), the City
Council recognized the need to step back buildings from the
shoreline in order to optimize “the sense of open space and
public enjoyment along the beach.” ROH § 21-9.80-4(g)(2). To
accomplish this objective, the City Council established the
following minimum setbacks that “apply to all zoning lots along
the shoreline” within the WSD:
(A) There shall be a building height setback of 100 feet in
which no structure shall be permitted. This setback shall
be measured from the certified shoreline;[ 3] and
(B) Beyond the 100-foot line there shall be a building height
setback of 1:1 (45 degrees) measured from the certified
shoreline.
ROH § 21-9.80-4(g)(2) (Coastal Height Setback).
The WSD requirements and design controls set forth in
the LUO are “supplemented by a design guidebook” (WSD Design
Guidebook) that “shall be used as a principal tool by the
director to express those . . . elements which demonstrate
consistency with the intent, objectives, guidelines, and
3
The certified shoreline is depicted in ROH Exhibit 21-1.15, and
defined within the Hawaii Administrative Rules § 13-222-2 (adopted December
13, 2002), as “a signed statement by the chairperson of the board of land and
natural resources that the shoreline is as located and shown on the map as of
a certain date.” “Shoreline” is defined as:
the upper reaches of the wash of the waves, other than
storm or seismic waves, at high tide during the season of
the year in which the highest wash of the waves occurs,
usually evidenced by the edge of vegetation growth, or the
upper limit of debris left by the wash of the waves.
Id.
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standards of the [WSD].” ROH § 21-9.80-4. With respect to the
Coastal Height Setback, the WSD Design Guidebook provides, “A
setback from the shoreline is required to maximize public
safety, the sense of open space, lateral access along the beach,
and the public enjoyment associated with our coastal resources.” 4
Additionally, the Coastal Height Setback is designed to
“contribute to a Hawaiian sense of place” by “reduc[ing] the
perception of crowding, enhanc[ing] the aesthetics of Waikiki
and impart[ing] a greater sense of Hawaiiana in the built
environment.” WSD Design Guidebook at 25.
Although the City Council enacted the LUO to “provide
reasonable development and design standards for the location,
height, bulk and size of structures,” a party may apply for a
variance on the basis of unnecessary hardship by submitting an
application to the Honolulu Department of Planning and
Permitting. Revised Charter of the City and County of Honolulu
(RCCCH) § 6-1517 (2000 Edition, 2003 Supp.). In order to
establish unnecessary hardship, the applicant must demonstrate
that the following three requirements as prescribed in the City
Charter have all been met:
4
Dep’t of Planning and Permitting, City and Cnty. of Honolulu, WSD
Design Guidebook (May 2002), http://www.honoluludpp.org/Portals/0/pdfs/zoning
/WSD.pdf (last visited September 2, 2015); ROH § 21-9.80-4(g)(2).
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(1) the applicant would be deprived of the reasonable use
of such land or building if the provisions of the zoning
code were strictly applicable;
(2) the request of the applicant is due to unique
circumstances and not the general conditions in the
neighborhood, so that the reasonableness of the
neighborhood zoning is not drawn into question; and
(3) the request, if approved, will not alter the essential
character of the neighborhood nor be contrary to the intent
and purpose of the zoning ordinance.
Id. Upon receipt of a variance application, the Director of the
Department of Planning and Permitting must hold a public
hearing. Id. If the variance application is granted, the
Director, in its decision, “shall specify the particular
evidence which supports granting of [the] variance.” Id.
B. Kyo-ya’s Variance Application to Encroach into the Coastal
Height Setback
Kyo-ya Hotels & Resorts LP (Kyo-ya) is the fee-simple
owner of the Moana Surfrider hotel complex, which contains three
hotel buildings--the Surfrider Tower, the Banyan Wing, and the
Diamond Head Tower (DHT)--on a combined zoning lot located on
Kalākaua Avenue along the Waikiki shoreline. In 2010, Kyo-ya
submitted a land use permit to redevelop the existing 8-story
DHT with a 26-story, 282 foot hotel and residential tower (the
Project). Due to the Project’s size, location, and design, the
Project required several permits and approvals, including a
variance to allow the Project to encroach into the Coastal
Height Setback.
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On March 19, 2010, Kyo-ya submitted variance
application No. 2010/VAR-9 (variance application) to the
Department of Planning and Permitting requesting that the
Project be allowed to encroach into the Coastal Height Setback.
As proposed, the Project would encroach about 40 feet into the
100-foot coastal setback at the building’s ewa corner 5 and about
60 feet at the Diamond Head corner. Additionally, a significant
portion of the building up to the 16th floor would encroach into
the 1:1 height setback measured from the certified shoreline,
and “from the 17th floor, the entire building encroaches into
the coastal height setback.” In total, “about 74.3 percent of
the building encroaches into the Coastal Height Setback”;
“Conversely, only 25.7 percent of the building complies with the
coastal height setback.”
In its variance application, Kyo-ya maintained that
although the Project was “unable to comply with the strict
requirements of [the Coastal Height Setback],” the Project
satisfied the three requirements for issuance of a variance.
5
“Ewa” is defined as a “[p]lace name west of Honolulu, used as a
directional term.” M. Pukui & S. Elbert, Hawaiian Dictionary 42 (rev. ed.
1986).
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i. First Requirement: Deprived of the Reasonable Use of the
Applicant’s Land or Building
Kyo-ya argued it would be deprived of the reasonable
use of its land if the LUO was strictly applied because the
ordinance would “reduce the buildable portion of the property to
roughly 11,283 square feet, or approximately 33% of the whole
lot area.” If the LUO “were strictly followed,” Kyo-ya
contended that it “would not even be able to rebuild the
existing [DHT].” 6
Kyo-ya maintained that the State of Hawaii entered
into an agreement in 1965 with the owners of certain beach front
parcels under which the State committed to expand the beach and
“[p]rotect and preserve all existing beach” in a designated area
(1965 Beach Agreement). 7 Although the contemplated beach
6
As discussed infra, the LUO allows for the renovation or
reconstruction of nonconforming uses and structures, subject to certain
conditions and approvals. See ROH § 21-9.80-4(e).
7
In the 1965 Beach Agreement, Line B represents the makai
property line and Line A designates the current certified shoreline. The
text of the agreement states, in part, as follows:
1. The State will use its best efforts to construct the
beach seaward of Line B in the Surfrider-Royal Hawaiian
Sector substantially in accordance with the Cooperative
Project.
. . .
3. The Owners will release and quitclaim to the State
forever all of their respective estate, right, title and
interest . . . in and to the Surfrider-Royal Hawaiian
Sector of Waikiki Beach now or from time to time
hereafter existing seaward of Line B, whether created by
(continued . . .)
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expansion was never completed, Kyo-ya asserted that had “the
beach been constructed by the State” pursuant to the 1965 Beach
Agreement, “it is likely that the beach fronting the [DHT] site
would be approximately 180 feet wider than it is today” and the
shoreline would have been recertified to reflect the increased
width. Additionally, if the beach had been extended, Kyo-ya
submitted that “almost no portion of the [Project] would
encroach into the coastal height setback.”
ii. Second Requirement: Unique Circumstances
Kyo-ya contended that the reasonableness of the
neighborhood zoning was not drawn into question by its variance
request because it was “forced” to apply for a variance due to
unique circumstances, rather than as a result of general
conditions in the neighborhood. For example, the Project site
(continued . . .)
construction or otherwise, reserving to the Owners . . .
full and free access between their respective abutting
lands and the sea across said beach and to use said
beach for a bathing beach and foot passage.
. . .
5. The State will release and quitclaim to the respective
Owners . . . severally in proportion to their respective
frontages along Line A . . . contemporaneously with the
Owners’ conveyance to the State . . . all the land of
the Surfrider-Royal Hawaiian Sector of Waikiki Beach
between Lines A and B . . . PROVIDED, HOWEVER, that said
land between lines A and B shall remain subject to the
public easement . . . until a beach at least seventy-
five (75) feet wide shall have been created seaward of
Line B.
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“is bounded on the Ewa side by the historic Banyan Wing,” which
is listed on the National and State Register of Historic Places.
Kyo-ya argued that it had foregone considerable financial gain
by choosing not to redevelop the Banyan Wing and that “[i]f Kyo-
ya chose to redevelop this portion of the complex, it could
develop a hotel or residential tower that meets all LUO, WSD and
[Planned Development-Resort (PD-R)] requirements.”
Additionally, Kyo-ya contended the Project site “is
among the narrowest parcels of land along Waikiki Beach” that is
subject to the Coastal Height Setback.” The narrowness of the
Project site “is exacerbated,” Kyo-ya argued, “by the absence of
the substantial beach which was to have been built by the State
per the 1965 Beach Agreement” in addition to the presence of the
historic Banyan Wing. Kyo-ya further argued that the parcel’s
“unique size and shape” caused the impact of the Coastal Height
Setback to be “greater than on any other parcel along Waikiki
Beach.”
iii. Third Requirement: Essential Character of the Neighborhood
and Intent and Purpose of the Ordinance
With respect to the third requirement, Kyo-ya
submitted that the variance “will not alter the essential
character of the locality nor be contrary to the intent and
purpose of the zoning code.” Kyo-ya characterized Waikiki as “a
densely developed, urbanized area, filled with large hotels,
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condominiums, and mixed-use projects which push (and in many
cases exceed) the limits of permitted heights, densities, and
other zoning and building regulations.” Kyo-ya argued that many
of the “existing hotels along Waikiki Beach already encroach
into the coastal height setback” and that allowing the Project
to similarly encroach would not alter the essential character of
Waikiki. Kyo-ya contended the Project’s “mauka-makai
orientation, increased public open space, improved beach access
and addition of surfboard racks should go a long way toward
restoring the character of Waikiki.”
Additionally, Kyo-ya asserted the Project was
consistent with WSD objectives to “[p]rovide for the ability to
renovate and redevelop existing structures which might otherwise
experience deterioration” and allow for “creative development
capable of substantially contributing to rejuvenation and
revitalization of the [WSD].” Kyo-ya maintained that the
Project was consistent with the WSD objective to “improve where
possible mauka views . . . and a visual relationship with the
ocean” and the objective to “[p]rovide people-oriented,
interactive, landscaped open spaces to offset the high-density
urban ambience.”
Finally, Kyo-ya argued that the impact of the
encroachment into the Coastal Height Setback would be mitigated
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by the State of Hawaii’s planned Waikiki Beach Maintenance
Project (Beach Maintenance Project) that is “expected to add
roughly forty-feet (40’) of dry beach to the beach fronting the
[DHT].”
C. Director’s Decision
The Director held a public hearing on Kyo-ya’s
variance application and subsequently issued Findings of Fact,
Conclusions of Law, and Decision and Order (Director’s Decision
or Decision) granting “Partial Approval” of Kyo-ya’s variance
application.
In his Decision, the Director described the variance
application as a request to allow the Project to encroach
approximately 74 percent into the Coastal Height Setback. The
Director noted that in addition to the variance request from the
Coastal Height Setback, the Project required additional
approvals and permits, including a Planned Development-Resort
(PD-R) Permit. 8
8
The purpose of a PD-R permit is described within the LUO as
follows:
[T]o provide opportunities for creative redevelopment not
possible under a strict adherence to the development
standards of the special district. Flexibility may be
provided for project density, height, precinct transitional
height setbacks, yards, open space and landscaping when
timely, demonstrable contributions benefiting the community
and the stability, function, and overall ambiance and
appearance of Waikiki are produced.
(continued . . .)
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The Director then set forth his analysis of the City
Charter variance test. As to the first requirement--that the
strict application of the zoning code would deprive Kyo-ya of
the reasonable use of its land or building--the Director noted
that Kyo-ya had argued the existing DHT is “extremely outdated”
and if not allowed to be redeveloped, it “would contribute to
the decline of the already aging structure.” Consequently, the
Director found that “the proposal is necessary to maintain
economic viability.” The Director also found that the proposal
was consistent with the WSD objectives “to provide opportunities
for creative development that contribute to the rejuvenation and
revitalization of the special district,” “to provide the ability
to renovate and redevelop existing structures which otherwise
might experience deterioration,” and “to facilitate the desired
character of Waikiki for areas susceptible to change.”
The Director noted Kyo-ya had indicated that if it
complied with all “required yard, height, and transitional
(continued . . .)
Reflective of the significance of the flexibility
represented by this option, it is appropriate to approve
projects conceptually by legislative review and approval
prior to more detailed review and approval by the
department.
ROH § 21-9.80-4(d). Kyo-ya’s PD-R application requested flexibility in
WSD standards to allow the Project to have greater density, increased
height, and less open space than otherwise would be required.
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height setbacks,” 9 the “building would have to take the form of a
massive monolithic wall.” The Director concluded that in
comparison, the Project “offers some important design advantages
that are more conducive to the WSD design objectives, but that
can only be accomplished by a trade-off in terms of coastal
setback encroachments.”
The Director addressed the physical constraints of the
site that restrict development along the shoreline. The
Director found that if the zoning code was strictly applied, the
buildable area of the DHT Lot “would be reduced to less than 35
percent” with a maximum height limit of about 170 feet.
Consequently, the Director found that if Kyo-ya were not granted
the requested variance, Kyo-ya “would not be able to develop in
accordance with the [PD-R] permit.”
Next, the Director found that the extent of Kyo-ya’s
requested 74 percent encroachment into the Coastal Height
Setback would have been significantly reduced “[i]f the beach
9
“Precinct transitional height setbacks” is a distinct requirement
under the LUO and separate from the Coastal Height Setback at issue in this
appeal. As set forth in ROH Table 21-9.6(B) and ROH § 21-9.80-6(c)(2),
precinct transitional height setbacks are as follows:
Transitional Height Setbacks. For any portion of a
structure above 40 feet in height, additional front, side
and rear height setbacks equal to one foot for each 10 feet
in height, or fraction thereof, shall be provided. Within
the height setback, buildings with graduated, stepped forms
shall be encouraged (see Figure 21-9.2).
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had been constructed and/or maintained as agreed to by the State
[under the 1965 Beach Agreement, because] the certified
shoreline would probably be located much farther seaward than
the existing shoreline.” The Director reasoned, “The proposal,
viewed in [the context of the 1965 Beach Agreement], is not
excessive.” The Director additionally found that under the
Waikiki Beach Maintenance Project, the beach would be increased
by 40 feet and that the certified shoreline “would likely
reflect the beach expansion.”
The Director concluded that “[f]or these and other
reasons,” Kyo-ya “would be denied reasonable use of the site if
not allowed to encroach into the present 100-foot coastal
setback and the coastal height setback.” However, the Director
also concluded that “the proposed setback encroachment exceeds
what would be allowed if the beach width were increased by 180
feet”; therefore, “the height of the [Project] should be reduced
to comply with the . . . coastal height setback as measured from
. . . (the beach width intended in the 1965 [Beach] Agreement).”
With regard to the second requirement of the variance
test, the Director found Kyo-ya’s application to be “supported
by unique circumstances” including that the Project lot is “one
of the narrowest lots along the shoreline in [the] area except
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for the public beach park lots.” 10 The Director noted that
compliance with the 20-foot front yard setback and the 100-foot
coastal setback effectively reduces the buildable area of the
DHT lot by 33 percent.
The Director found the shoreline to be another “unique
circumstance [of the site].” The Director stated that while the
“variance and/or encroachments are based on the existing
[certified] shoreline,” “the shoreline along the site is subject
to drastic change by artificial means, and, in fact, may move
seaward by roughly 40 feet under the planned [Waikiki Beach
Maintenance Project].” In light of the restoration plan, the
Director concluded, “It would be reasonable to allow full
development to proceed at this time, considering that the
encroachments will be reduced substantially once the beach
restoration is done.”
As to the third requirement of the variance test, the
Director concluded the Project would not alter the essential
character of the neighborhood. The Director found the
10
The Director noted that Kyo-ya’s Special Management Permit
required Kyo-ya to preserve the historic Banyan Wing for a minimum of 25
years and that “[t]he proposed encroachments would permit [Kyo-ya], in
effect, to transfer some of the development potential from the Banyan Wing
site to the DHT site.” The Director maintained this “transfer” would “be a
fair trade-off, since the proposal would also promote several important WSD
goals and objectives.” However, the Director also noted that Kyo-ya
“indicated that [it has] no intention of removing the historic Banyan Wing.”
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“established character of Waikiki” to be “a densely populated
and highly developed, urbanized area, which includes a wide mix
of land uses.” Further, the Director noted that “[m]any
existing structures are nonconforming and exceed the height
limit and maximum density [], encroach into required yards and
setbacks, and lack the minimum open space and landscaping.”
The Director additionally found the Project to be
“consistent with several important WSD objectives.” The
Director determined that “the new building is necessary to
replace an aging, declining structure with a new, more
attractive and functional structure, which will enhance Waikiki
as a visitor destination”; allow Kyo-ya to preserve the historic
Banyan Wing; and “provide[] public access to the beach, view
channels from Kalākaua Avenue to the ocean, as well as other
significant public benefits.”
After analyzing the variance test’s three
requirements, the Director made the following Conclusions of
Law:
1) There is evidence that the Applicant would be deprived
of a reasonable use of the land or building if the
provisions of the zoning code were strictly applied.
2) The request of the applicant is due to unique
circumstances and not to general neighborhood
conditions, and it does not question the reasonableness
of the neighborhood zoning.
3) The request will not alter the essential character of
the neighborhood nor be contrary to the intent and
purpose of the zoning ordinance.
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Accordingly, the Director granted partial approval of Kyo-ya’s
variance application to allow the Project to encroach
approximately 74 percent into the Coastal Height Setback. The
Director’s partial approval was conditioned on, inter alia,
submission of revised plans “which show the [Project] shall
comply with the 1-to-1 (45-degree angle) coastal height setback
as measured from . . . (the approximate beach width intended in
the [1965 Beach Agreement]).” 11
III. Appellate Proceedings
A. Zoning Board of Appeals 12
Surfrider Foundation, Hawaii’s Thousand Friends, Ka
Iwi Coalition, and KAHEA--The Hawaiian Environmental Alliance
(collectively, Surfrider) filed a petition (Petition) to the
Zoning Board of Appeals (ZBA) challenging the Director’s
findings and conclusion that Kyo-ya’s request for a variance
from the Coastal Height Setback met the requirements for
issuance of a variance as set forth by the City Charter. 13 In
11
According to Kyo-ya, the Director’s condition effectively reduced
the height of the Project by approximately six floors.
12
The ZBA held a hearing to decide motions to intervene filed by
numerous parties at which the ZBA granted intervenor status to Kyo-ya, 20,000
Friends of Labor, Hawaii’s Thousand Friends, Ka Iwi Coalition, Surfrider
Foundation, and KAHEA--The Hawaiian Environmental Alliance.
13
Kyo-ya filed a motion to dismiss Surfrider’s appeal, arguing that
Surfrider’s appeal was substantively and procedurally insufficient under
RCCCH § 6-1516.
(continued . . .)
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its position statement, Surfrider argued that the Director’s
conclusion that the Project satisfied the three requirements of
RCCCH § 6-1517 was based on erroneous findings of material
facts.
Surfrider maintained that Kyo-ya did not meet the
first requirement for issuance of a variance because “the record
indicates that [Kyo-ya] would not be deprived of reasonable use
of the property if the variance is denied.” Surfrider contended
that the “property is already occupied by a non-conforming, 8-
story hotel building that can be fully renovated without the
need for a variance under the [LUO],” that Kyo-ya was not
entitled to achieve all of the applicable maximum development
standards in the LUO, and that the 1965 Beach Agreement had not
been realized.
(continued . . .)
RCCCH § 6-1516 provides, in relevant part, as follows:
Section 6-1516. Zoning Board of Appeals –
. . . An appeal shall be sustained only if the board finds
that the director’s action was based on an erroneous
finding of a material fact, or that the director had acted
in an arbitrary or capricious manner or had manifestly
abused discretion.
The ZBA granted in part, and denied in part Kyo-ya’s motion. The ZBA found
that Surfrider “asserted in [its] Petition that the Director’s action in
partially approving the Variance Application was based upon one or more
erroneous findings of material fact” but that Surfrider “did not allege or
argue in the Petition that any aspect of the Director’s action . . . was
arbitrary or capricious or a manifest abuse of the Director’s discretion.”
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Surfrider argued that Kyo-ya failed to meet the second
requirement because the property is not particularly unique and
is typical of the general conditions of ocean-front property in
that part of Waikiki.” Thus, Surfrider maintained that the
reasonableness of the neighborhood zoning is in fact drawn into
question by the variance request.
Surfrider argued the third requirement was also not
met because “the request, if approved, will alter the essential
character of the locality and is contrary to the intent and
purpose of the zoning code.” Surfrider pointed out that the
Director’s findings “did not even address whether the project is
contrary to the intent and purpose of the WSD, whose objectives
center on maintaining Waikiki’s unique Hawaiian identity and
reducing the apparent height of buildings.”
Kyo-ya, the Director, and 20,000 Friends of Labor
(Friends of Labor) each filed a position statement with the ZBA.
Kyo-ya argued that Surfrider “fail[ed] to allege a single
finding of material fact to have been in error let alone
‘clearly erroneous.’” Kyo-ya maintained that the Director
specified the particular evidence that supported his granting of
the variance and properly concluded that all three requirements
for a zoning variance had been satisfied.
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As to the first variance requirement, Kyo-ya contended
that it would be denied reasonable use of its property if it
were not allowed to encroach into the Coastal Height Setback.
Kyo-ya asserted that the 1965 Beach Agreement conferred on it
“rights and expectation granted by the state” that must be
considered in determining what reasonable use it could expect of
its property. Kyo-ya additionally argued that it “has the right
under the current WSD and its PD-R to construct the
density/floor area it proposes” but that without the variance
the resulting building would be materially inconsistent with the
WSD objectives and guidelines.
With regard to the second requirement, Kyo-ya asserted
that the Moana Parcel has the greatest width-to-depth ratio of
any parcel along Waikiki Beach and includes a historic
structure. Thus, Kyo-ya argued the Director properly concluded
that the Moana Parcel has unique circumstances that do not call
into question the general zoning code.
In addressing the third requirement, Kyo-ya
maintained, “It cannot be disputed that Waikiki is a highly
urbanized area [] with many large and tall buildings in close
proximity to the Moana Parcel.” Kyo-ya therefore contended the
“essential character of the neighborhood is a dense urban area
full of tall hotel and condo buildings.”
21
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The Director in his position statement argued the
record demonstrates that his partial approval of Kyo-ya’s
variance application was based on clearly established facts and
was a reasonable exercise of his discretion. The Director
restated his findings and analysis as to the requirements of the
variance test from his Decision. He also reiterated his
conclusion that the Project satisfied the variance test with the
condition that the Project’s height should be reduced to comply
with the 1:1 coastal height setback measured from the beach
width intended by the 1965 Beach Agreement because the agreement
provided a basis to determine the parameters of a reasonable
height limitation.
The ZBA issued its Findings of Fact, Conclusions of
Law, and Decision and Order (ZBA Order) on February 14, 2013.
The ZBA found Surfrider “offered insufficient competent,
reliable and probative evidence to establish that the Director’s
Decision was clearly erroneous” or that any material fact relied
upon by the Director was clearly erroneous. The ZBA also found
that Surfrider “offered no competent, reliable and probative
evidence” to demonstrate the following:
103. That the 1965 Beach Agreement . . . was without legal
effect, had terminated by its terms, or had been
terminated by the parties or operation of law, [or]
that the Director was precluded from considering, or
in error for considering, the 1965 Beach Agreement to
aid in his determination of what would be reasonable
limits to the extent of the variance.
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Accordingly, the ZBA denied Surfrider’s appeal of the
Director’s Decision. 14 Surfrider timely filed a notice of appeal
to the Circuit Court of the First Circuit (circuit court) from
the ZBA Order.
B. Circuit Court
In its opening brief, 15 Surfrider argued that the
Director breached his duty to enforce the LUO when he granted
Kyo-ya a partial variance “contingent upon compliance with a
hypothetical certified shoreline 180 feet out to sea from the
current certified shoreline.” Surfrider contended that
“variances must be based on the current certified shoreline, not
some undetermined future shoreline.”
Surfrider next addressed the requirements for issuance
of a variance. As to the first requirement of the variance
test, Surfrider reasserted the following: (1) the Director did
not provide evidentiary support for its conclusion that Kyo-ya
would be deprived of the reasonable use of its land if it was
required to comply with the Coastal Height Setback; (2) the
Director erroneously found that the failure of the State to
14
The ZBA additionally noted Surfrider waived any argument that the
Director acted in an arbitrary or capricious manner or had manifestly abused
his discretion.
15
In its opening brief, Surfrider presented seventeen points of
error and identified nine erroneous findings with respect to the ZBA Order.
23
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implement the 1965 Beach Agreement amounts to a deprivation of
reasonable use; and (3) the other findings in the Director’s
analysis are not relevant to whether Kyo-ya would be denied
reasonable use. Surfrider further argued that reasonable use of
the land, within the meaning of the City Charter does not
necessarily mean “the use most desired by the owner” and the
fact that Kyo-ya might make a greater profit by using its
property in a manner prohibited by the ordinance is irrelevant.
Next, in regard to the second requirement of the
variance test, Surfrider argued that the Director addressed only
the unique circumstances aspect and did not address whether the
reasonableness of the neighborhood zoning would be drawn into
question “by the granting of a variance of unprecedented
magnitude.”
With respect to the third requirement, Surfrider
argued that, while the Director addressed the essential
character of the neighborhood in his Decision, he did not
address whether the Project is contrary to the intent and
purpose of the zoning ordinance. Surfrider conceded the Project
may be in conformity with the non-conforming buildings in the
neighborhood built before the WSD was adopted”; however,
Surfrider argued it is not in conformity with the historic
character of the neighborhood.
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In his answering brief, the Director restated his
findings of fact and analysis contained within his Decision and
reasserted his conclusions. The Director contended that,
contrary to Surfrider’s argument, he did not rely upon the 1965
Beach Agreement to determine whether Kyo-ya would be denied
reasonable use under RCCCH § 6-1517, but rather to consider the
reasonableness and impose a limit on the extent of the variance
permitted.
Kyo-ya and Friends of Labor argued in their respective
answering briefs that none of the alleged erroneous facts
Surfrider identified were actually erroneous or material to the
Director’s Decision. 16 Kyo-ya asserted that contrary to
Surfrider’s contention, the ZBA’s findings of fact were “more
than adequate” to support its conclusion.
Kyo-ya also contended that Surfrider “misconstrue[d]
the Director’s Decision,” which “did not grant a variance that
is ‘conditioned upon compliance with a hypothetical certified
shoreline.’” Kyo-ya further argued that Surfrider’s
interpretation of case law as requiring the applicant to prove
that it “would have been denied ‘any reasonable use’ but for”
16
In its reply brief to Friends of Labor, Surfrider maintained that
the Director did not evaluate the “economic viability of the proposed
structure as compared to other structural options” but rather based his
decision on “a series of hypothetical scenarios that amount to erroneous
facts.”
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the variance is misleading, would eliminate the Director’s
discretion, and “would bring an end to land use in Hawaii as it
has been practiced since statehood.”
After a hearing on Surfrider’s appeal, the circuit
court entered its Findings of Fact, Conclusions of Law, and
Decision and Order Affirming the Decision and Order of the ZBA
(circuit court’s Order). The circuit court concluded that
Surfrider “failed to satisfy [its] burden to demonstrate that
the Director’s action in partially approving the [Zoning]
Variance Application was based on any erroneous findings of
material fact.”
Surfrider filed a notice of appeal from the circuit
court’s Order affirming the ZBA Order. 17
C. Supreme Court 18
In its opening brief, Surfrider reiterates that it was
Kyo-ya’s burden to prove that its project satisfies all three
requirements of the variance test and that the Director’s
17
On April 10, 2014, Surfrider filed an application to transfer its
appeal to this court, which was granted on May 15, 2014.
18
Additionally, Surfrider contends the Director failed to
adequately support his findings and that evidence of insufficient material
support for a required factual finding that a variance requirement has been
met is evidence of an erroneous finding, not evidence of abuse of discretion.
Kyo-ya argues that Surfrider’s challenge to the Director’s reliance on the
1965 Beach Agreement, as well as to the Director’s determination of whether
the Project meets the three requirements of the variance test, involves the
Director’s discretion, and was thus waived.
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Decision “plainly indicate[s] that neither [Kyo-ya] nor the
Director met [their] burden.” 19 Surfrider again points out that
the 1965 Beach Agreement “does not provide a legal basis for a
variance” from the LUO “which requires building setbacks to be
measured from the current certified shoreline.” Surfrider asks
that this court reverse the circuit court’s Order and the
Director’s Decision and deny Kyo-ya’s variance application.
Kyo-ya responds that the Director did not rely on the
1965 Beach Agreement to justify the variance, but rather looked
to the agreement after the Director determined “a variance was
warranted” to determine the extent of the variance to grant. In
any event, Kyo-ya argues that “even if Surfrider could somehow
show that consideration of the 1965 Beach Agreement was
improper, this would not be sufficient to reverse the ZBA.”
With respect to finding deprivation of “reasonable use,” Kyo-ya
argues “this was not a situation where Kyo-ya was simply trying
to make a ‘greater profit’; instead, the Director found that the
variance was ‘necessary to maintain economic viability.’” Kyo-
19
Surfrider additionally argues that the Director does not have
discretion to grant variances from “mandatory zoning code requirements.”
Because Surfrider did not previously raise this argument, it is not
considered. Mizoguchi v. State Farm Mut. Auto. Ins. Co., 66 Haw. 373, 383,
663 P.2d 1071, 1077 (1983).
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ya additionally reasserts arguments that it previously made in
prior proceedings. 20
IV. Standards of Review
A. Findings and Conclusions
Review of a decision made by the circuit court upon
its review of an agency’s decision is a secondary appeal.
Korean Buddhist Dae Won Sa Temple of Hawaii v. Sullivan, 87
Hawaii 217, 229, 953 P.2d 1315, 1327 (1998). 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.
Id.
Under HRS § 91-14(g)(5) (1993), findings of fact are
reviewed to determine whether they are “[c]learly erroneous in
view of the reliable, probative, and substantial evidence on the
whole record.” A finding of fact is clearly erroneous when the
record lacks substantial evidence--i.e., credible evidence of a
sufficient quality and probative value to enable a person of
reasonable caution to support a conclusion--to support the
finding. Bremer v. Weeks, 104 Hawaii 43, 51, 85 P.3d 150, 158
20
The Director and Friends of Labor each filed their respective
answering briefs in which they asserted arguments that were submitted in the
proceedings below or presented by Kyo-ya in its answering brief.
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(2004); McPherson v. Zoning Bd. of Appeals, 67 Haw. 603, 606,
699 P.2d 26, 28 (1985).
A “[conclusion of law] that presents mixed questions
of fact and law is reviewed under the clearly erroneous standard
because the conclusion is dependent upon the facts and
circumstances of the particular case.” Price v. Zoning Bd. of
Appeals of City & Cnty. of Honolulu, 77 Hawaii 168, 172, 883
P.2d 629, 633 (1994). Because the Director’s conclusions of law
in this case presented mixed questions of fact and law, they are
reviewed “under the clearly erroneous standard to determine if
the agency decision was clearly erroneous in view of reliable,
probative, and substantial evidence on the whole record.” Poe
v. Hawaii Labor Relations Bd., 87 Hawaii 191, 195, 953 P.2d 569,
573 (1998).
B. Incompetent Evidence
“The admission of irrelevant or incompetent matter
before an administrative agency does not constitute reversible
error if there is substantial evidence in the record to sustain
the agency’s determination.” Shorba v. Bd. of Educ., 59 Haw.
388, 397, 583 P.2d 313, 319 (1979) (quoting Schyman v. Dep’t of
Registration & Educ., 133 N.E.2d 551, 525-26 (Ill. App. Ct.
1956)). However, if a petitioner can show prejudice resulting
from the admission of irrelevant or incompetent evidence, the
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admission of such evidence may be grounds for reversal. See
id.; Price, 77 Hawaii at 176, 883 P.2d at 637. “[P]rejudice
cannot be alleged to the admission of improper evidence unless
it be shown that the [agency] relied on it.” Shorba, 59 Haw. at
397, 583 P.2d at 319 (quoting Schyman, 133 N.E.2d at 561-562).
C. Interpretation of a Statute, Ordinance, or Charter
“The interpretation of a statute, ordinance or charter
is a question of law reviewable de novo.” Korean Buddhist, 87
Hawaii at 229, 953 P.2d at 1327 (alterations omitted) (quoting
State v. Arceo, 84 Hawaii 1, 10, 928 P.2d 843, 852 (1996))
(internal quotation marks omitted).
V. Discussion
The Director may grant a variance from a provision of
the LUO upon the ground of unnecessary hardship if the three
requirements set forth in RCCCH § 6-1517 have been satisfied:
(1) the applicant would be deprived of the reasonable use
of such land or building if the provisions of the zoning
code were strictly applicable;
(2) the request of the applicant is due to unique
circumstances and not the general conditions in the
neighborhood, so that the reasonableness of the
neighborhood zoning is not drawn into question; and
(3) the request, if approved, will not alter the essential
character of the neighborhood nor be contrary to the intent
and purpose of the zoning ordinance.
“The burden of establishing the factual foundation for the
foregoing legal preconditions rests with the applicant,” Korean
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Buddhist, 87 Hawaii at 234, 953 P.2d at 1332 (citing McPherson,
67 Haw. at 607, 699 P.2d at 28); however, it is the Director
who, prior to granting a variance, must “specify the particular
evidence which supports the granting of the variance.” RCCCH §
6-1517. 21 In its appeal, Surfrider argues that the circuit court
erred in affirming the ZBA Order and the Director’s Decision
because the Director’s findings and conclusions did not
demonstrate that Kyo-ya satisfied the three requirements for
issuance of the variance.
A. Deprived of the Reasonable Use of Land or Building
To satisfy the first variance requirement, the record
must show that “the applicant would be deprived of the
reasonable use of such land or building if the provisions of the
zoning code were strictly applicable.” RCCCH § 6-1517.
“Reasonable use,” within the meaning of the charter, “is not
necessarily the use most desired by the property owner”; rather,
to be deprived of the reasonable use of its property, the
property owner must establish an inability to make reasonable
21
The role of the Director in evaluating an application for a
variance from a provision of the LUO is greater than that of an impartial
arbiter of fact. “Unlike an ordinary court, the [Director] has the function
of serving as an advocate of the public interest.” Final Report of the
Charter Commission of the City and County of Honolulu 1971-1972 at 34
(citation omitted). The Director “should always place this consideration
foremost, rather than looking upon its duties as that of a simple arbitration
of disputes among private parties.” Id.
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use of its land or building without the variance. Korean
Buddhist, 87 Hawaii at 234-5, 953 P.2d at 1332-33 (applicant
failed to show that it could not make reasonable use of the land
or its hall without the requested variance); McPherson, 67 Haw.
at 605-06, 699 P.2d at 28 (finding the applicant had not
established deprivation of reasonable use because the record was
“devoid of any evidence that the applicant could not make
reasonable use of the land or buildings in conformity with the
[zoning code] or her pre-existing nonconforming use”); see also
RCCCH § 6-1517 n.30 (“[W]ithin the meaning of the charter,”
“reasonable use” “is not the use most desired by the property
owner; [the] property owner must show inability to make any
reasonable use of his land without the variance.”).
In this case, the Director concluded “[t]here is
evidence that [Kyo-ya] would be deprived of a reasonable use of
the land or building if the [Coastal Height Setback] was
strictly applied” for the following reasons: the Project is
necessary to maintain economic viability; the zoning code would
reduce the buildable area of the DHT lot; if not allowed the
variance, Kyo-ya would not be able to develop in accordance with
the PD-R permit; the 1965 Beach Agreement would have resulted in
a significantly different buildable area on the site; and the
current beach replenishment project will extend the beach width
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by a minimum of 40 feet and the certified shoreline will likely
reflect the beach expansion. 22
Surfrider challenges both the Director’s ultimate
conclusion that Kyo-ya satisfied this requirement of the
variance test, as well as several of the underlying findings the
Director based his conclusion upon. Surfrider specifically
contends that the Director erroneously found that Kyo-ya would
be denied reasonable use based on the 1965 Beach Agreement and
that the Project “is necessary to maintain economic viability.”
Each of the Director’s reasons for concluding that “there is
evidence” that Kyo-ya would be deprived of the reasonable use of
the land is addressed below.
i. Economic Viability 23
The Director based his conclusion that Kyo-ya would be
deprived of a “reasonable use” if the Coastal Height Setback was
strictly applied in part on his finding that the Project “is
22
The Director additionally mentioned several WSD objectives in his
discussion of the first requirement of the variance test. For example, the
Director stated that maintaining economic viability is consistent with the
WSD objective to “provide opportunities for creative development that
contribute[s] to the rejuvenation and revitalization of the special
district.” The Director’s discussion of the WSD objectives will be discussed
in relation to the third requirement of the variance test--the intent and
purpose of the LUO--as the objectives do not pertain to whether the record
establishes that Kyo-ya would be denied the reasonable use of its land under
the first requirement of the variance test.
23
Because the parties analyze one aspect of reasonable use of the
land or building in terms of economic viability, we apply this measure of
analysis in this case.
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necessary to maintain economic viability.” Surfrider argues
that the Director’s finding as to economic viability is
erroneous because it is not supported by the record. Kyo-ya,
the Director, and Friends of Labor argue that the Director
sufficiently found that the Project was necessary for economic
viability and that it was Surfrider’s burden to prove otherwise.
To reiterate, in order to demonstrate deprivation of
reasonable use within the meaning of the City Charter, the
property owner must establish an inability to make reasonable
use of its land or building without the requested variance.
Korean Buddhist, 87 Hawaii at 234-35, 953 P.2d at 1332-33;
McPherson, 67 Haw. at 605-06, 699 P.2d at 28; see also RCCCH §
6-1517 n.30; Final Report of the Charter Commission of the City
and County of Honolulu 1971-1972 at 33 (citation omitted)
(“[T]he property owner must be able to show, if he complies with
the provisions of the ordinance, that he cannot make any
reasonable use of his property.”). 24
24
In Korean Buddhist, the applicant sought a variance after the
fact for its newly constructed temple hall that exceeded the maximum height
allowed under the zoning code. 87 Hawaii at 234-35, 953 P.2d at 1332-33. In
affirming the Director’s denial of the variance, this court held, inter alia,
that “‘reasonable use’ of the land, within the meaning of the City Charter,
is not necessarily the use most desired by the owner.” Id. The court
reasoned that because the applicant failed “to establish that it could make
no reasonable use of the land or its Hall without” the height variance, the
first requirement of the variance test had not been satisfied. Id.
(continued . . .)
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Further, “the fact that [an applicant] might make a
greater profit by using his property in a manner prohibited by
the ordinance is considered irrelevant, since almost any
individual applicant could make that same showing.” Korean
Buddhist, 87 Hawaii at 234-35, 953 P.2d at 1332-33 (quoting
Final Report of the Charter Commission of the City and County of
Honolulu 1971-1972 at 33); see also 3 E.C. Yokley, Zoning Law &
Practice, § 20-7 (4th ed. 1979) (“Under this prong of the test,
the fact that another use would be more profitable to the
property owner is not a sufficient basis for a board to grant a
variance.”); Dep’t of Planning and Permitting, City and Cnty. of
Honolulu, Zoning Variance Guidebook (August 3, 2010),
http://www.honoluludpp.org/Portals/0/pdfs/zoning/zvar2.pdf
(“Variances cannot be given to . . . allow the applicant to save
money or make more money on a proposed project.”).
As Surfrider argues, although the Director found that
the variance was necessary to “maintain economic viability,”
(continued . . .)
Similarly, in McPherson, this court found the record to be
“devoid of any evidence that the applicant could not make reasonable use of
the land or buildings in conformity with the [zoning code] or her pre-
existing nonconforming use,” and thus we concluded that the ZBA’s contrary
finding was clearly erroneous. 67 Haw. at 605-06, 699 P.2d at 28. In other
words, because the applicant had not established that she could not make
other reasonable use of the land or buildings but for the variance, the court
held that the applicant failed to satisfy the first requirement of the
variance test. Id.35
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there is no financial data 25 in the record to support such a
finding; rather, it appears the Director merely recited
statements Kyo-ya made in its variance application: “[t]he
Applicant indicates” that the “facilities and amenities of the
existing [DHT] are extremely outdated”; if the DHT “is not
allowed to be redeveloped that would contribute to the decline
of the already aging structure”; and “[t]he Applicant suggests”
that an older hotel “cannot compete with other tourist
destinations that offer superior accommodations.” 26 However,
these statements are merely assertions of Kyo-ya unsupported by
the record. See McPherson, 67 Haw. at 606, 699 P.2d at 29
25
Although the Director did not make any economic findings as to
the existing DHT or the proposed Project, he did make findings as to the
economics of the Banyan Wing and a theoretical reconstructed Banyan Wing in
his analysis of the second requirement of the variance test. The Director
found that a reconstructed Banyan Wing may increase in value by 79 percent
compared with the current wing. However, as noted supra, the Banyan Wing is
a historic structure that cannot be redeveloped for a minimum of 25 years.
Additionally, the Director noted that Kyo-ya indicated “that they have no
intention of removing the historic Banyan Wing.” Thus, the economic findings
pertaining to the Banyan Wing are not relevant to whether Kyo-ya would be
denied the reasonable use of the land if not allowed a variance from the
Coastal Height Setback for the Project.
26
The entirety of the Director’s analysis pertaining to economic
viability of the DHT tower is as follows:
The Applicant indicates that the facilities and amenities
of the existing Diamond Head Tower are extremely outdated.
If the DHT is not allowed to be redeveloped, that would
contribute to the decline of the already aging structure.
The Applicant suggests that older hotels that offer
substandard visitor accommodations are not attractive to
the modern visitor and often cannot compete with other
tourist destinations that offer superior accommodations.
Thus, the proposal is necessary to maintain economic
viability.
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(“[T]he Charter limits the power of the [Director] to grant
variances to cases where a rather narrow and somewhat technical
set of facts must be established.”).
Moreover, even if the record established that the DHT
was “extremely outdated” and would continue to decline if not
allowed to be redeveloped, those “facts” alone would not support
the finding that the Project is necessary to maintain economic
viability because the LUO expressly allows existing
nonconforming buildings within the WSD to be repaired and
renovated as long as the level of nonconformity is not
increased. 27 See ROH § 21-9.80-4(e)(3) (“Nonconforming uses
shall not be limited to ‘ordinary repairs’ or subject to value
limits on repairs or renovation work performed.”).
Additionally, ROH § 21-9.80-4(e) allows a
nonconforming structure to be replaced by an entirely new
27
Other jurisdictions have held that if “the property has a
nonconforming use, there is an additional burden on the applicant to
establish that maintaining the nonconforming use will not allow the applicant
to realize a reasonable return.” 2 Am. Law. Zoning § 13:15 (5th ed.); see
also O’Connor v. Overall Laundry, 183 N.E. 134, 138 (Ind. App. 1932) (“It is
not a hardship or practical difficulty in the meaning of the statute when a
corporation’s business has outgrown its building to refuse to allow them to
add to their present building.”); Crossroads Recreation, Inc. v. Broz, 149
N.E.2d 65, 67-69 (N.Y. 1958) (upholding the denial of a variance to renovate
a nonconforming use, because the owner of a nonconforming gas station failed
to show he could not realize a reasonable return by converting the property
to a use permitted by the zoning ordinances); Goodman v. Zoning Bd. of Review
of Cranston, 254 A.2d 743 (R.I. 1969) (reversing the grant of a variance to
convert a nonconforming nursery into a car dealership because there was
insufficient proof that continued use of the nursery would deprive the owner
of all beneficial use of the land).
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structure, subject to certain conditions. Accordingly, even
assuming there was evidence in the record that established that
the existing DHT is not economically viable due to its aging
structure and “substandard accommodations,” renovation and or
replacement of a nonconforming building subject to certain
conditions is expressly authorized by the LUO. For this reason
also, there is insufficient evidence in the record to show that
the Project is necessary to maintain economic viability. See
ROH § 21-9.80-4(e).
The Zoning Variance Guidebook (Variance Guidebook)
provides sample cases to illustrate how each requirement of the
variance test may be properly applied. Zoning Variance
Guidebook, supra. The Variance Guidebook’s second sample case
provides a particularly relevant example of an applicant who
requested a variance to build an addition to a dwelling that
would encroach into the side yard setback. The Guidebook notes
in this hypothetical case, “The applicant argue[d] that the
encroachment is necessary because it is the most practical,
cost-effective solution.” In evaluating the variance request,
the Variance Guidebook notes that the applicant could build a
conforming addition in other locations on the lot. Id. at 4.
The Guidebook concludes that the “variance cannot be supported,”
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in part, because “the applicant is not deprived of reasonable
use, since alternatives are available.” Id. at 5.
The Variance Guidebook’s example is consistent with
the Korean Buddhist decision where this court held that an
applicant who sought a variance to construct a taller building
than that authorized by the ordinance had not demonstrated
deprivation of reasonable use because the record showed that the
applicant could have constructed a shorter, compliant building.
87 Hawaii at 234-35, 953 P.2d at 1332-33. Thus, the mere fact
that Kyo-ya cannot build the specific building design it desires
is not sufficient to support a finding that Kyo-ya would be
deprived of the reasonable use of its land or building. See
Singer v. Phila. Zoning Bd. of Adjustment, 29 A.3d 144, 150 (Pa.
Commw. Ct. 2011) (“It is well-settled that in order to establish
unnecessary hardship for a dimensional variance, an applicant
must demonstrate something more than a mere desire to develop a
property as it wishes or that it will be financially burdened if
the variance is not granted.”); Korean Buddhist, 87 Hawaii at
234-35, 953 P.2d at 1332-33.
As noted, the standard to evaluate deprivation of
reasonable use under the charter is that the property owner must
establish an inability to make reasonable use of its land or
building without the requested variance. Korean Buddhist, 87
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Hawaii at 234-35, 953 P.2d at 1332-33 (applicant for variance
failed to show that it could not make reasonable use of the land
or its hall); McPherson, 67 Haw. at 605-06, 699 P.2d at 28(accord). Kyo-ya apparently disputes the applicability of this
standard, arguing to this court that Surfrider’s interpretation
of Korean Buddhist is misleading and would eliminate the
Director’s discretion. However, the standard stated in the
Charter’s variance test is clear--an applicant has the burden of
establishing that the applicant would be deprived of the
reasonable use of land or buildings if the provisions of the
zoning code were strictly applicable. Korean Buddhist, 87
Hawaii at 234, 953 P.2d at 1332 (“The burden of establishing the
factual foundation for [each prong of the variance test] rests
with the applicant.”). Here, the reliable, probative, and
substantial evidence does not support the conclusion that the
variance is necessary for Kyo-ya to maintain economic viability
of its land or building.
ii. PD-R Permit Allowances
The next reason 28 stated by the Director to show denial
of reasonable use was that Kyo-ya would not be able to develop
28
The second reason given by the Director to show denial of
reasonable use merely stated the effect of the zoning code provisions on the
Project: the buildable area of the DHT lot would be reduced to less than 35
(continued . . .)
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in accordance with its PD-R permit if the variance was not
allowed. Under a PD-R permit, an applicant can apply to the
City Council and the Director for flexibility from specifically
enumerated provisions of the LUO within the WSD upon showing
that “timely, demonstrable contributions benefiting the
community and the stability, function, and overall ambiance and
appearance of Waikiki are produced.” ROH § 21-9.80-4(d). While
a PD-R permit allows an applicant to apply for flexibility from
requirements relating to density, height, precinct transitional
height setbacks, yards, open space, and landscaping, the permit
notably does not allow flexibility with respect to the Coastal
Height Setback provision.
Therefore, an applicant who wishes to build a denser,
taller building with less open space may apply for a PD-R permit
upon showing that the project will benefit the community and
contribute to the stability and overall ambience of Waikiki. On
the other hand, an applicant who wishes to build within the
Coastal Height Setback must apply for a variance and satisfy the
three requirements for issuance of a variance. By excluding the
Coastal Height Setback from the list of provisions that may be
(continued . . .)
percent with a density less than the existing DHT and the Coastal Height
Setback would limit the building to approximately 170 feet.
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given flexibility under a PD-R permit and requiring an applicant
to prove unnecessary hardship as a result of the setback
requirement, the City Council manifestly indicated that the
Coastal Height Setback is of greater significance and requires
greater protection than numerous other provisions in the LUO.
Here, the Director appears to have sidestepped the
City Council’s intent for an applicant to meet the distinct
three-part hardship test by defining and evaluating the
“reasonable use” of Kyo-ya’s property in terms of the PD-R
permit’s flexible provisions. Specifically, the Director used
Kyo-ya’s inability to obtain the full benefit from the PD-R
permit as a reason to find that Kyo-ya would be denied
reasonable use of the site if the Coastal Height Setback was
applied. 29 In other words, by obtaining the PD-R permit prior to
seeking the variance, Kyo-ya was able to argue that it was
deprived of the reasonable use of its land by pointing to the
loss of the increased density and height that the PD-R permit
allowed. Thus, the three requirements that must be satisfied to
obtain a variance from the Coastal Height Setback were
29
Kyo-ya’s PD-R permit allowed a 20 percent increase in density, an
increased building height of 308 feet, and a decrease in required open space
from 50 percent to 45 percent.
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subordinated to Kyo-ya achieving the benefits of the PD-R
permit.
The effect of coordinating the permits in this manner
resulted in the ostensible inclusion of the Coastal Height
Setback as being among the provisions that can be modified under
the PD-R permit. This is directly contrary to the intention of
the City Council: the Coastal Height Setback stands apart from
the PD-R permit, and an applicant seeking a variance from the
Coastal Height Setback requirements must independently satisfy
the unnecessary hardship test. Accordingly, the PD-R permit
should not have been considered as a basis for determining
reasonable use in order to satisfy the first requirement of the
variance test, as it enables circumvention of the Coastal Height
Setback.
Additionally, even if the PD-R permit were relevant to
the determination of “reasonable use,” the Director noted that
there was an alternative building design that would achieve the
increased density authorized by the PD-R permit without
encroaching into the Coastal Height Setback. 30 Thus, the
30
The Director found that if Kyo-ya “is not allowed to encroach
into the coastal height setback, the building design would have to be
drastically changed from a relatively tall, slender design to a shorter,
wider building with a larger footprint in order to achieve the density
permitted by the PD-R.” (Emphasis added). The Director disregarded the
alternative design after finding that it would obstruct views from Kalākaua
(continued . . .)
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Director expressly acknowledged that Kyo-ya could in fact
achieve the full density permitted by its PD-R permit with an
alternative design that would not encroach into the Coastal
Height Setback.
Additionally, aside from the single “monolithic”
building design hypothesized in the Director’s Decision, the
Director did not discuss any other alternative building designs
that would not require a 74 percent encroachment into the
Coastal Height Setback apparently because there was no evidence
in the record regarding alternatives. Thus, in effect, the
Director’s Decision presented an artificial “either/or” scenario
where Kyo-ya could only build either the proposed Project or a
“shorter, wider building.” This scenario resulted from the
absence of evidence regarding other available options, including
the renovation of the existing DHT, the construction of a
compliant building design, or a building design with a greater
degree of compliance with the Coastal Height Setback.
An applicant for a variance is not deprived of the
reasonable use of its land or buildings simply because the
applicant may not be able to utilize the maximum potential
(continued . . .)
Avenue and thus be contrary to the WSD objectives. We address this finding
with regard to the third requirement of the variance test.
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density of the site. See Korean Buddhist, 87 Hawaii at 234-35,
953 P.2d at 1332-33; Singer, 29 A.3d at 150. Accordingly, the
Director’s discussion of the PD-R permit was not relevant to the
analysis of reasonable use under the first requirement of the
unnecessary hardship test.
iii. 1965 Beach Agreement
Next, the Director found that Kyo-ya would be denied
reasonable use of its land because if the State had constructed
the beach as required by the 1965 Beach Agreement, “the size and
configuration of the buildable area of the site would be
significantly different.”
In 1965, the State and certain shoreline property
owners, including Kyo-ya’s parent company, entered into a
private agreement under which the State agreed to use its best
efforts to extend the beach approximately 180 feet seaward of
the current certified shoreline. The 1965 Beach Agreement was
not incorporated into the LUO or referenced in the provisions of
the subsequently enacted WSD. While there have been beach
replenishment projects in the years since the agreement, the
beach width envisioned by the 1965 Beach Agreement was never
realized. Therefore, the agreement had no effect on the
certified shoreline by which the Coastal Height Setback is
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measured. 31 Kyo-ya, the Director, and Friends of Labor
(collectively, Appellees) cite no authority that would authorize
the 1965 Agreement to have legal effect on a variance
application.
The Appellees contend that the Director did not rely
on the 1965 Beach Agreement to determine whether Kyo-ya would be
denied reasonable use; however, the plain language of the
Director’s Decision indicates otherwise. 32 In its variance
application, Kyo-ya acknowledged that the shoreline was never
extended pursuant to the terms of the 1965 Beach Agreement yet
contended that if the beach had been extended, “almost no
portion of the [Project] would encroach into the Coastal Height
Setback.” The Director adopted Kyo-ya’s reasoning in his
decision and concluded the variance, “viewed in [the context of
the 1965 Beach Agreement], is not excessive.” (Emphasis added).
Additionally, after the Director had extensively discussed the
31
See note 3 for the definition of “certified shoreline.”
32
Kyo-ya argued to the Director, the ZBA, and the circuit court
that the 1965 Beach Agreement conferred upon it certain rights and
expectations that must be considered in determining what reasonable use Kyo-
ya could expect of its property under the variance test. Kyo-ya also
contended that the agreement “altered real property law as it applied to the
Moana Parcel and the ‘bundle of legal sticks’ that [Kyo-ya] held as its
property.” During the variance application proceeding, Kyo-ya maintained
that “the Director was required to consider the shoreline that the State of
Hawaii is absolutely legally obligated to maintain for the benefit of Kyo-ya
and its adjoining landowners (and the general public)” and that if the
Director had done so, “there would have been a more permissive variance
issued.”
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Beach Agreement, the Director found that “[f]or these and other
reasons, it can be recognized that [Kyo-ya] would be denied
reasonable use of the site if not allowed to encroach into the
[Coastal Height Setback].” (Emphasis added).
By placing significant reliance on the 1965 Beach
Agreement as a basis for its conclusion that Kyo-ya would be
denied reasonable use if encroachment was not allowed, the
Director effectively evaluated the reasonable use of Kyo-ya’s
property in terms of the width of the beach intended by the 1965
Beach Agreement. Other statements in the Director’s Decision
further support the conclusion that the Director relied on the
1965 Beach Agreement to determine whether Kyo-ya would be
deprived of reasonable use of its land.
For example, after referencing the 1965 Beach
Agreement, the Director stated, “A closer look at the 1965
Agreement suggests that if the State had constructed the beach
as required, the size and configuration of the buildable area of
the site would be significantly different,” “the beach fronting
the [Project site] might be as much as 180 feet wider than it is
today,” and thus “the building setback and height encroachments
would be reduced significantly.” While there is no doubt that
the buildable area of the lot would be different if the beach
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had been extended, the fact is that the beach was not extended
180 feet, and the shoreline was never certified at that point.
Despite the Director’s findings relating to the
intended beach width under the 1965 Beach Agreement, the
variance must be based on the certified shoreline, and the
hardship must be established in consideration of the facts and
circumstances in effect at the time of the application. See ROH
§ 21-9.80-4(g)(2). Thus, consideration of the 1965 Beach
Agreement and its hypothetical effects on Kyo-ya’s land if the
shoreline had been extended 180 feet seaward were entirely
irrelevant to determining whether Kyo-ya would be deprived of
the reasonable use of its land.
The Director’s Decision demonstrates that he not only
considered the 1965 Beach Agreement to determine if Kyo-ya would
be deprived of the reasonable use its land, but that he also
considered the agreement when determining the extent of the
variance to grant. In fact, the Director’s partial approval was
conditioned on, inter alia, “compliance with the 1-to-1 (45-
degree angle) coastal height setback as measured from the face
of the existing concrete seawall/walkway structure [] 180 feet
seaward (the approximate beach width intended in the [1965 Beach
Agreement).” (Emphases added). By relying on “the beach width
intended in the 1965 Agreement,” the Director shaped the
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variance to match the 1965 Beach Agreement. However, the
governing conditions for the variance approval must be based on
valid criteria, not a hypothetical shoreline envisioned by an
unexecuted private contract with no legal effect on the
certified shoreline or the Coastal Height Setback. 33 The
Director’s conditioning of the variance on the shoreline
hypothesised by the 1965 Beach Agreement was therefore invalid.
Further, by conditioning the variance on a theoretical shoreline
derived from the 1965 Beach Agreement, the Director essentially
disregarded the certified shoreline.
The Director’s fifth reason for finding that Kyo-ya
would be deprived of reasonable use of its land or buildings was
because the Beach Maintenance Project would extend the beach by
40 feet and thus reduce the extent of the encroachment. As
discussed, the Coastal Height Setback must be measured from the
current certified shoreline and the hardship test met by the
circumstances in place at the time of the variance application.
33
The ZBA found that “[a]t no time prior to the closing of the
evidentiary portion of this proceeding did Petitioner’s [sic] offer any
competent, reliable or probative evidence that the 1965 Beach Agreement,
which had been entered into by the State of Hawaii and Applicant’s parent
company, was without legal effect, had terminated by its terms, or had been
terminated by the parties or operation of law.” Despite Kyo-ya’s arguments
and the ZBA’s findings, there is no legal basis for concluding that the 1965
Beach Agreement could be validly considered by the Director in evaluating the
Zoning Variance Application.
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Therefore, the Beach Maintenance Project was also improperly
considered by the Director.
Pursuant to ROH § 6-1517, the Director was required to
“specify the particular evidence which supports the granting of
a variance” with respect to each requirement of the variance
test. As to the first requirement, the Director was required to
conclude that Kyo-ya would not be able to make other reasonable
use of its land without a variance that allowed it to encroach
74 percent into the Coastal Height Setback. Korean Buddhist, 87
Hawaiʻi 217, 953 P.2d 1315. The Director not only failed to
apply this standard as stated in the Charter, but apparently
applied a different standard, concluding that Kyo-ya would be
deprived of “a” reasonable use.
Further, the Director’s finding that the variance was
necessary for economic viability of the land or building was
without evidentiary support in the record. The Director’s
remaining findings as to the PD-R permit, the 1965 Beach
Agreement, and the Beach Maintenance Project are not relevant to
determining whether Kyo-ya would be deprived of the reasonable
use of the property. Thus, because the reliable, probative, and
substantial evidence on the whole record does not support the
Director’s conclusion that the variance was necessary to
maintain economic viability, his conclusion as to the first
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requirement of the variance test was clearly erroneous. See
Bremer, 104 Hawaii at 51, 85 P.3d at 158.
Additionally, “[t]he admission of irrelevant or
incompetent matter before an administrative agency does not
constitute reversible error if there is substantial evidence in
the record to sustain the agency’s determination.” Shorba, 59
Haw. at 397, 583 P.2d at 319 (quoting Schyman, 133 N.E.2d at
525-26). However, if a petitioner can show prejudice resulting
from the admission of irrelevant or incompetent evidence, the
admission of such evidence may be grounds for reversal. See
id.; Price, 77 Hawaii at 176, 883 P.2d at 637. “[P]rejudice
cannot be alleged to the admission of improper evidence unless
it be shown that the [agency] relied on it.” Shorba, 59 Haw. at
397, 583 P.2d at 319 (quoting Schyman, 133 N.E.2d at 561-562).
Here, Surfrider has clearly demonstrated that the
Director placed great reliance on the 1965 Beach Agreement and
the Beach Maintenance Project to find that Kyo-ya would be
deprived of the reasonable use of its land or building if it was
required to comply with the Coastal Height Setback as measured
from the certified shoreline. While any reliance on the 1965
Beach Agreement and Beach Maintenance Project was error, the
reliance in this case was crucial to the Director’s finding of
deprivation of reasonable use, even to the extent that it
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provided the basis for the configuration of the variance that
was actually granted; thus, because the incompetent evidence was
significant to the Director’s conclusion, the admission of such
evidence was clearly prejudicial and “grounds for reversal.”
Id.B. Unique Circumstances
The second requirement of the City Charter’s variance
test requires a showing that “the request of the applicant is
due to unique circumstances and not the general conditions in
the neighborhood, so that the reasonableness of the neighborhood
zoning is not drawn into question.” RCCCH § 6-1517. The City
Charter provides the meaning for unique circumstances: unique
circumstances “has to do with whether specific attributes of the
parcel are present that justify the request for a variance.”
RCCCH § 6-1517 n.30 (emphasis added) (citing Korean Buddhist, 87
Hawaii 217, 953 P.2d 1315). Thus, an owner’s unusual plans for
a parcel do not, in themselves, constitute “unique
circumstances.” McPherson, 67 Haw. at 606, 699 P.2d at 28.
Surfrider argues that the Project site is not
particularly unique to justify the variance. In addition,
Surfrider argues the ZBA and Director’s Decision were clearly
erroneous because it shows the Director addressed only the
“unique circumstances” part of the variance test and “failed to
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address whether ‘the reasonableness of the neighborhood is []
drawn into question’ by the granting of a variance of
unprecedented magnitude.” The Appellees respond that the
Director properly found Kyo-ya’s lot contained unique
circumstances that presented development challenges. The
Appellees also contend that the phrase “so that the
reasonableness of the zoning is not drawn into question” merely
explains the purpose behind “unique circumstances.”
In his Decision, the Director concluded that Kyo-ya’s
variance application was based upon unique circumstances and not
general neighborhood conditions and that the variance would not
draw into question the reasonableness of the neighborhood
zoning. In support of his conclusion, the Director made the
following relevant findings: (1) the Project site is one of the
narrowest along the shoreline in the area with an average lot
depth of about 182 feet; (2) compared with the DHT tower and
Surfrider Tower, the Banyan Wing generates the least amount of
revenue per room; 34 (3) the Project site is subject to the 100-
foot coastal setback and an average 20-foot front yard setback
along Kalākaua Avenue, thereby reducing the buildable area by an
average of 120 feet; (4) the shoreline along the site is subject
34
We do not address this finding as it is not relevant to whether
the site has specific attributes that justify the request for a variance.
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to drastic change by artificial means compared with natural
beaches that cannot be altered; and (5) the Beach Maintenance
Project may extend the beach by roughly 40 feet and thus reduce
the Project’s encroachments by 40 feet.
i. Narrow Lot & Banyan Wing
Surfrider does not directly challenge the Director’s
finding that the Project site is one of the narrowest along the
shoreline, or that because Kyo-ya was prohibited from
redeveloping the historic Banyan Wing, Kyo-ya was limited to
developing the narrower DHT portion of the property.
Nevertheless, as made clear in the Variance Guidebook’s second
and third example cases, the narrowness of a lot may not be
sufficient, by itself, to find unique circumstances when
alternative building designs are available.
In the Variance Guidebook’s second example, discussed
above, because the applicant could build a conforming addition
in other locations on the lot, the guidebook concluded that the
“variance cannot be supported,” in part, because “alternatives
are available.” Zoning Variance Guidebook, supra.
In the third example of the Variance Guidebook, the
applicant “has a small, narrow lot, only 35 feet in width,”
while “[o]ther lots in the area are generally 50 feet wide.”
Id. at 5-6. “The applicant cannot raise the existing dwelling
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and add a new ground floor without a variance because the second
story would encroach slightly into the required height setback
along one side.” Id. (emphasis added). The Variance Guidebook
provides that the “variance can be supported,” because, in part,
the lot “is the only such narrow lot in the neighborhood, which
is a unique circumstance,” and because “[t]he structural
conditions and dimensions of the existing dwelling do not afford
a reasonable alternative.” Id. (emphasis added).
Here, Kyo-ya appears to have other alternatives that
would not require a 74 percent encroachment into the Coastal
Height Setback; thus, the relatively narrow lot does not alone
justify the variance. Additionally, the WSD allows for the
refurbishment and rebuilding of nonconforming structures so long
as the extent of its nonconformities does not increase. It
would appear that the Director recognized that the narrowness of
the site was not sufficient to support granting the variance,
and thus the Director evaluated and relied upon additional
factors, discussed below, to support the finding of unique
circumstances.
ii. Coastal Height Setback, Front Yard Setback
A significant reason underlying the Director’s
conclusion that Kyo-ya’s variance application was based upon
unique circumstances was that the Project site was subject to
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“the 100-foot coastal setback . . . and an average 20-foot front
yard setback along Kalākaua Avenue,” which together “reduce the
buildable area depth by an average of 120 feet.” However, as
Surfrider argues, both the Coastal Height Setback and the
average 20-foot front yard setback apply to all ocean front
properties in the WSD, and thus, the setbacks do not constitute
unique circumstances. See ROH § 21-9.80-4; LUO Table 21-9.6(B)
(front yard setbacks must be “an average of 20 feet for zoning
lots fronting Kuhio Avenue, Kalākaua Avenue, Ala Moana and Ala
Wai Boulevard within the resort mixed use precinct”); see also
Collins v. Carusone, 126 A.D.2d 847, 848 (N.Y. App. Div. 1987)
(since all properties near the subject property share the same
hardship, the hardship is not “unique”); accord Greenawalt v.
Zoning Bd. of Adjustment of Davenport, 345 N.W.2d 537, 544 (Iowa
1984).
By combining the footage of both setbacks and
determining the property’s buildable area would be reduced by
120 feet, the Director used generally applicable requirements to
find unique circumstances. However, since all shoreline
properties in Waikiki have their buildable area reduced by
setback requirements, this is not a unique attribute of Kyo-ya’s
parcel. See ROH § 21-9.80-4; LUO Table 21-9.6(B). Moreover, as
defined by the City Charter, “unique circumstances” “ha[ve] to
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do with whether specific attributes of the parcel are present
that justify the request for a variance.” RCCCH § 6-1517 n.30
(emphasis added) (citing Korean Buddhist, 87 Hawaii 217, 953
P.2d 1315). The provisions of a zoning ordinance are not
“specific attributes of [a] parcel,” but rather they are legal
requirements that prescribe how a parcel may be used and
developed. 35
The Director further based his finding that the
Project site was unique on the fact that the shoreline fronting
the property “is subject to drastic change by artificial means”
and the lot is subject to the 1965 Beach Agreement and the Beach
Maintenance Project. However, like the setback provisions of
the LUO, these characteristics of the shoreline are not unique
to the Project site but apply to all properties fronting Waikiki
Beach, and they are not “attributes” of the parcel.
Therefore, because the setbacks, shoreline, 1965 Beach
Agreement, and Beach Maintenance Project are not attributes of
the parcel, but rather are external conditions present in the
35
If, for example, a zoning ordinance imposed a maximum area height
of 350 feet above which no building could be constructed, that factor itself
would not constitute a unique circumstance. On the other hand, if a
particular parcel was graded 20 feet higher than other parcels in the
neighborhood, and an applicant sought a variance to construct a building on
that parcel with a maximum ground to ceiling height of 360 feet, the fact
that the parcel is 20 feet higher than neighboring parcels may be considered
a unique factor because it is a unique attribute of the parcel itself.
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neighborhood, the Director’s findings that these conditions are
“unique” attributes of Kyo-ya’s property are clearly erroneous.
The only remaining evidence supporting the Director’s
conclusion that the second requirement was satisfied due to
unique circumstances were his findings that the individual
Project site was narrow and that the lot contained the Banyan
Wing. However, because the record does not show that the unique
attributes of the lot--the narrowness and Banyan Wing--prevent
Kyo-ya from renovating the DHT or replacing it with a new
building that meets zoning requirements, the narrowness of the
lot and the Banyan Wing do not sufficiently demonstrate the
parcel’s “unique circumstances.”
Consequently, the reliable, probative, and substantial
evidence in the record does not support the Director’s
conclusion that the variance was necessary due to the unique
attributes of the property, and thus his conclusion as to the
second requirement of the variance test was clearly erroneous.
See Bremer, 104 Hawaii at 51, 85 P.3d at 158. Additionally,
because the Director significantly relied on external conditions
that are not relevant to the uniqueness of the parcel and are
commonly found in the neighborhood, the Director’s Decision was
based on incompetent evidence that significantly prejudiced
Surfrider. Shorba, 59 Haw. at 397, 583 P.2d at 319. Finally,
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the Director’s reliance on conditions commonly found in the
neighborhood necessarily draws the neighborhood zoning into
question as every property along the shoreline would be found to
have “unique” attributes and be potentially eligible for a
variance from the provisions of the LUO. Accordingly, the
Director’s conclusion that Kyo-ya satisfied the second
requirement of the variance test was clearly erroneous.
C. Essential Character of the Neighborhood and Intent and Purpose
of Zoning Ordinance
To satisfy the third requirement for granting a
variance, the record must show that “the request, if approved,
will not alter the essential character of the neighborhood nor
be contrary to the intent and purpose of the zoning ordinance.”
RCCCH § 6-1517 (emphasis added). Thus, in this case, the
pivotal determination is whether the 74.3 percent encroachment
into the Coastal Height Setback would alter the essential
character of the neighborhood or be contrary to the intent and
purpose of the zoning ordinance. See Korean Buddhist, 87 Hawaii
at 234-35, 953 P.2d at 1332-33 (court considered whether the
increased height of the temple hall, not the temple hall itself,
would alter the essential character of the neighborhood).
Notably, in contrast to the first two requirements of the
variance test requiring affirmative findings of deprivation of
the reasonable use of the property and unique circumstances of
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the property, the third requirement necessitates factual
findings that the variance will not alter the neighborhood’s
essential character and will not be contrary to the intent and
purpose of the variance test. 36
Surfrider argues that the Director erroneously found
that the Project, rather than the variance, would not alter the
essential character of the neighborhood and would not be
contrary to the intent and purpose of the zoning ordinance.
Surfrider additionally argues that the Director did not address
whether or not the 74.3 percent encroachment itself “might be
contrary to the intent and purpose of the WSD.” In response,
the Appellees argue that the Director properly considered the
intent of the zoning code, as well as the essential character of
the neighborhood, and correctly concluded that the variance
would be consistent with both.
i. Essential Character of the Neighborhood
The Director found, as characterized in the LUO, that
Waikiki is a “densely populated and highly developed, urbanized
area” with a wide mix of land uses, many of which are
36
Importantly, rather than making findings that the variance is
consistent with certain objectives, the variance test requires the Director
to make findings as to whether the variance request is not contrary to the
intent and purpose of the zoning ordinance. This analysis necessitates
first, determining the intent and purpose of the zoning ordinance, and then
evaluating the requested variance in light of such intent and purpose.
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“nonconforming and exceed the height limit and maximum density
[], encroach into required yards and setbacks, and lack the
minimum open space and landscaping.” Based on these findings,
the Director concluded that the Project would not alter the
essential character of the neighborhood. However, the
Director’s conclusion that the neighborhood’s essential
character would not be altered is flawed.
First, determining that the Waikiki neighborhood 37 is a
“densely populated and highly developed urbanized area” with
many nonconforming properties does not preclude the City Council
from enacting an ordinance targeted at altering the
neighborhood’s character when a sufficient basis exists to do
so. See Nine A, LLC v. Town of Chesterfield, 950 A.2d 197, 203
(N.H. 2008).
In Town of Chesterfield, the town determined that a
lake, a unique natural resource, needed protection and enacted a
special district to prevent, among other things, “the
overcrowding of, and undue concentration of population on and
37
We note that the Director’s Decision did not discuss the fact
that the WSD contains multiple neighborhoods. See ROH § 21-9.80-1(c)
(“Support the retention of a residential sector in order to provide stability
to the neighborhoods of Waikiki.” (emphasis added)). Thus, while the
Director’s characterization of the neighborhood may reflect general
attributes of the WSD, those attributes do not necessarily represent the
“essential character” of the neighborhood that will be affected by the 74.3
percent encroachment into the Coastal Height Setback.
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around, the lake.” Id. With the creation of the special
district, the town prohibited cluster residences around the lake
and set forth new minimum lot requirements and minimum frontage
requirements. Id. A developer sought a variance 38 to build
cluster residences within the district on the basis that cluster
housing was reflective of the current character of the
neighborhood. Id. In affirming the zoning board’s denial of
the applicant’s variance request, the Supreme Court of New
Hampshire held that although the town previously permitted
cluster residences in the lake district, the town rightfully
determined that “the need to preserve a unique natural resource
outweighed having the character of the neighborhood control the
zoning ordinance.” Id.
38
In Town of Chesterfield, to obtain a variance the applicant was
required to prove the following:
(1) the variance will not be contrary to the public
interest;
(2) special conditions exist such that literal enforcement
of the ordinance results in unnecessary hardship;
(3) the variance is consistent with the spirit of the
ordinance;
(4) substantial justice is done; and
(5) granting the variance will not diminish the value of
surrounding properties.
Town of Chesterfield, 950 A.2d at 201.
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Here, the City Council enacted the provisions of the
WSD, including the Coastal Height Setback, in response “to the
rapid development of the 1960s and 1970s, and the changes
produced by that development” to protect the unique identity of
Waikiki. ROH § 21-9.80. Accordingly, as in Town of
Chesterfield, it is evident that the City Council was greatly
concerned with the changing character of Waikiki and thus took
affirmative steps to preserve Waikiki’s unique Hawaiian
identity. Therefore, the fact that there are nonconforming
properties in the WSD that were built prior to the enactment of
the special district in 1976 does not provide a basis for a
finding that the variance is consistent with the essential
character of the neighborhood.
Further, the presence of nonconforming uses and
structures should not serve as the basis for further non-
conformance. Martin v. City of Alexandria, 743 S.E.2d 139, 146
(Va. 2013); Packer v. Hornsby, 267 S.E.2d 140-43 (Va. 1980). In
a factual context with some similarities to this case, the
Supreme Court of Virginia reviewed the zoning board’s approval
of an applicant-homeowners’ request for a variance 39 to encroach
39
The requirements to obtain a variance in Packer are similar to
the City Charter’s variance test in this case. In Packer, the zoning board
was permitted to authorize a variance only if “a literal enforcement of the
(continued . . .)
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73 percent into an oceanfront setback in order to expand their
house. Packer, 267 S.E.2d at 141. The applicants’ stated
reasons for the request were “improvement to existing structure
is needed” and “development of adjacent property makes adherence
to set back a hardship.” Id. at 141. The court noted that
“[t]he applicants already have a dwelling, . . . and they can
enlarge the house without violating the setback requirement by
adding to the west side of the structure,” but the applicants
preferred to expand to the east “in order to have a better floor
plan with a better view of the ocean.” Id. at 143. The zoning
board granted the variance on the basis that the applicant
“should be entitled to build as close to the ocean as ‘the
average of the houses along the block.’” Id. at 143. In
(continued . . .)
provisions (of a zoning ordinance) will result in unnecessary hardship” and
it finds:
(1) That the strict application of the ordinance would
produce undue hardship.
(2) That such hardship is not shared generally by other
properties in the same zoning district and the same
vicinity.
(3) That the authorization of such variance will not be of
substantial detriment to adjacent property and that the
character of the district will not be changed by the
granting of the variance.
Packer, 267 S.E.2d at 142.
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reversing the zoning board’s decision, the court cautioned as
follows:
If, as the Board concluded, one owner of the property
complying with a restriction should be allowed to conform
his structure to neighboring nonconforming structures, then
every such owner would be entitled to do so. A board of
zoning appeals could, by granting variances piecemeal,
ultimately nullify a zoning restriction throughout the
zoning district. But the statute provides that all
variances shall be in harmony with the intended spirit and
purpose of the ordinance . . . .
Id. (emphasis added). 40
The principle that existing nonconformity should not
serve as the basis for additional nonconformity is itself
reflected in the LUO, which provides while nonconforming uses
and structures may be repaired and rebuilt, “constraints are
placed on [the] nonconformities to facilitate eventual
conformity with the provisions of the [LUO].” ROH § 21-4.110.
Thus, although the LUO allows existing nonconforming uses to
continue, the expressed intent of the LUO is to reduce the
extent of nonconformity over time.
The Director’s finding of a “large number of
nonconforming uses and structures” in the area is not a valid
basis for granting another nonconforming use. If nonconforming
40
The Supreme Court of Virginia also noted that “[p]roximity to the
ocean is doubtless a ‘privilege or convenience’ coveted by every homeowner
along the beach,” “[b]ut a zoning restriction upon that privilege does not
constitute an ‘unnecessary hardship’ within the meaning of the Code.” Id. at
142.
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use is so pervasive that it is shared by the majority of
properties in a zoning district, the proper remedy is to seek an
amendment to the zoning ordinance, not a variance. See Levy v.
Bd. of Standards & Appeals of N.Y.C., 196 N.E. 284 (N.Y. 1935);
Appeal of Michener, 115 A.2d 367 (Pa. 1955). Thus, the presence
of existing nonconformities in the neighborhood to justify new
noncomformities constitutes incompetent evidence, and the
Director’s reliance on such evidence undermines the protection
of Waikiki’s unique identity and dilutes the intended effect of
the Coastal Height Setback.
Consequently, there is not reliable, probative, and
substantial evidence on the whole record supporting the
Director’s conclusion that Kyo-ya’s request to encroach 74
percent into the Coastal Height Setback would not alter the
essential character of the neighborhood, and thus the third
requirement of the variance test was not satisfied.
ii. Not be Contrary to the Intent and Purpose of the Zoning
Ordinance
Although we hold that the Director’s conclusion that
the third requirement of the variance test was met is clearly
erroneous, we also review whether the Director properly
concluded that the variance would not be contrary to the intent
and purpose of the zoning ordinance. Thus, we consider the
intent and purpose of the WSD and Coastal Height Setback and the
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Director’s conclusion that a 74 percent encroachment would not
be contrary to such intent and purpose.
a. Intent and Purpose of the WSD
The WSD was enacted by the City Council in 1976 in
response “to the rapid development of the 1960s and 1970s, and
the changes produced by that development,” in order “to guide
carefully Waikiki’s future and protect its unique Hawaiian
identity.” ROH § 21-9.80.
The Council stated, “Waikiki needs to maintain its
place as one of the world’s premier resorts in an international
market; yet, the sense of place that makes Waikiki unique needs
to be retained and enhanced.” Id. (emphasis added). The WSD
provides, “The design of buildings and structures in the [WSD]
should always reflect a Hawaiian sense of place, as outlined in
the [district’s] design controls.” ROH § 21-9.80.
“Just as there is no universally accepted definition
of ‘aloha,’ there is no universally accepted definition of a
Hawaiian sense of place.” WSD Design Guidebook at 3. Although
there is no universal definition of “Hawaiian sense of place,”
the guidebook contains the following discussion of what
“Hawaiian sense of place” means within the context of
development in the WSD:
The concern that Waikiki has lost some of its appeal as a
tropical beach resort raises many questions about its
future. A common opinion is that Waikiki needs to improve
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its physical attractiveness and enjoyment for residents,
employees and visitors, by restoring the images and
experiences which make it unique. A Hawaiian sense of
place is not just a particular architectural style which
echoes our historical past, but is also a reflection of
attitudes, experiences, place, spaces and symbols which we
have embraced as reminders of and contributors to a
uniquely Hawaiian experience.
WSD Design Guidebook at 5 (emphases added). In particular,
“[d]esign in Waikiki should compose spaces and elements in a way
that encourages experiencing the natural environment.” Id.
(emphasis added).
To contribute to the goal of establishing and
preserving a Hawaiian sense of place, “[a]ll projects in Waikiki
will be expected to make an appropriate contribution,” and
“[n]ew developments will be required to demonstrate a high
degree of compliance with applicable objectives, guidelines and
standards.” Id. (emphasis added). Additionally, “[t]he
renovation of existing buildings will be expected to comply to
the extent possible.” Id.
Consequently, the City Council’s intent and purpose in
establishing the WSD was first and foremost to protect, retain,
and enhance a Hawaiian sense of place by restoring the
experiences, places, and spaces that make Waikiki unique.
b. Intent and Purpose of the Coastal Height Setback
Although each provision of the WSD is designed to
reflect a Hawaiian sense of place, few can endeavor to achieve
this far-reaching goal as effectively as the Coastal Height
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Setback, which was designed to maximize public safety, the sense
of open space, lateral access along the beach, and public
enjoyment of Hawaii’s coastal resources. ROH § 21-9.80-4(g)(2);
WSD Design Guidebook at 4, 25. Additionally, the Coastal Height
Setback, together with the other provisions of the WSD, is
intended to reduce the perception of crowding, enhance the
aesthetics of Waikiki, and generally impart a greater sense of
Hawaiiana into the built environment. Id.
For example, although requirements pertaining to
landscaping and building materials undoubtedly affect the
Hawaiian sense of place in Waikiki, they do not directly impact
lateral access along the beach, the public’s enjoyment of
coastal resources, or the sense of open space and perception of
crowding. Thus, among the restrictions put in place by the WSD,
the Coastal Height Setback uniquely affects the preservation of
Waikiki’s Hawaiian sense of place.
c. Director’s Findings on Intent and Purpose of the Ordinance
The City Charter provides that the third requirement
is satisfied only if “the request, if approved, will not alter
the essential character of the neighborhood nor be contrary to
the intent and purpose of the zoning ordinance.” RCCCH § 6-1517
(emphases added). Accordingly, because Kyo-ya’s variance
application sought approval to encroach into the Coastal Height
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Setback, the Director’s evaluation should have focused on
whether granting the variance application--i.e., a requested 74
percent encroachment into the Coastal Height Setback--would be
contrary to the intent and purpose of the Coastal Height Setback
and the WSD. See N. Bergen Action Grp. v. N. Bergen Twp.
Planning Bd., 585 A.2d 939, 944 (N.J. 1991) (“Because zoning
restrictions are enacted to further municipal planning and
zoning objectives, it is fundamental that resolutions granting
variances undertake to reconcile the deviation authorized . . .
with the municipality’s objectives in establishing the
restriction.”).
However, rather than considering whether the variance
request--i.e., a 74 percent encroachment into the Coastal Height
Setback--was contrary to the intent and purpose of the WSD and
the Coastal Height Setback, the Director evaluated whether the
Project was consistent with three of the fourteen WSD
“objectives.” 41 Consequently, the Director made no findings and
41
Additionally, the three objectives relied upon by the Director do
not show that the Project would not be contrary to the intent and purpose of
the WSD. First, the Director found that the Project would “[p]rovide for the
ability to renovate and redevelop existing structures which otherwise might
experience deterioration.” However, this WSD objective, which concerns the
renovation of existing structures, has little bearing on the variance
application in this case because, as discussed, the record does not show that
the existing DHT may not be renovated or replaced without the variance.
Thus, consideration of this WSD objective is not implicated by the variance
application. See Ten Stary Dom P’ship v. Mauro, 76 A.3d 1236, 1245 (N.J.
2013).
(continued . . .)
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provided no analysis as to whether the 74 percent encroachment
would be contrary to the intent of the Coastal Height Setback,
which is to reduce the perception of crowding, and maximize the
sense of open space, lateral access along the beach, and public
enjoyment of the coastal resources. Nor did the Director’s
findings address whether the proposed 74 percent encroachment
would protect, retain, and enhance a Hawaiian sense of place by
restoring the experiences, places, and spaces that make Waikiki
unique. The Director appears to have misapprehended the
applicable legal standard set forth in the ordinance, having
made no findings with respect to the effects of the 74 percent
encroachment. Thus, the Director’s conclusion that the
(continued . . .)
The Director’s second finding that the Project is consistent with
the WSD objective for “creative development” did not reference the full text
of the objective, which requires the Project to be “able to facilitate the
desired character of Waikiki for areas susceptible to change.” LUO § 21-
9.80-1(h) (emphasis added). The enactment of the Coastal Height Setback
indicates that the City Council concluded that development close to the
shoreline was to be strictly limited. Accordingly, a building that
substantially encroaches into the Coastal Height Setback would not appear to
be consistent with the “desired character of Waikiki.”
The Director’s third finding was that the Project “provides a
better public access to the beach, [and] view channels from Kalakaua Avenue
to the ocean.” However, the objective relied upon begins as follows:
“Maintain, and improve where possible: mauka views from public viewing areas
in Waikiki, especially from public streets.” LUO § 21-9.80-1(j). Replacing
an 8-story building with a 26-story tower adjacent to the shoreline would not
appear to increase the mauka view from the public viewing area of Waikiki
Beach.
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encroachment would not be contrary to the intent and purpose of
the zoning ordinance is based on an error of law.
By the same token, the Director’s analysis must be
focused on “those purposes of zoning that are actually
implicated or triggered by the requested relief” rather than the
Project as a whole. See Ten Stary Dom P’ship v. Mauro, 76 A.3d
1236, 1245 (N.J. 2013) (“[N]ot every deviation from prescribed
bulk standards implicates the same concerns.”). Accordingly, as
stated, the Director’s findings should have evaluated the
impacts of a 74 percent encroachment into the Coastal Height
Setback on a Hawaiian sense of place, the perception of
crowding, sense of open space, and public enjoyment of the
coastal resources--purposes that are actually implicated by the
requested variance. Instead, the Director made findings as to
the Project’s compliance with selected objectives of the WSD
rather than on the impacts of the encroachment as related to the
intent and purpose of the Coastal Height Setback and WSD. Thus,
the Director’s findings did not, as required by the City
Charter, “specify the particular evidence which supports the
granting of the variance.” RCCCH § 6-1517.
Finally, even if consideration of the Project, rather
than the effects of granting the variance application, were the
correct measure for issuance of a variance, the Director’s
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summary findings as to the three WSD objectives were clearly
insufficient to support a conclusion that a 74 percent
encroachment is not contrary to the intent and purpose of the
Coastal Height Setback and the WSD. This is particularly true
when the magnitude of the variance is significant. “[I]t is
self-evident that the greater the disparity between the variance
granted and the ordinance’s restriction, the more compelling and
specific the proofs must be that the grant of the variance” will
not be contrary to the intent and purpose of the zoning
ordinance. N. Bergen Action Grp., 585 A.2d at 944.
As further explained by the Supreme Court of New
Jersey,
an impingement of the zoning restrictions may be of varying
degrees[;] [t]he less of an impact, the more likely the
restriction is not that vital to valid public interests.
Conversely, where the change sought is substantial, the
applicant will have to demonstrate more convincingly that
the variance will not be contrary to the public good and
general welfare expressed in the ordinance.
Chirichello v. Zoning Bd. of Adjustment of Monmouth Beach, 397
A.2d 646, 654 (N.J. 1979) (emphasis added); cf. McPherson, 67
Haw. at 606, 699 P.2d at 29 (holding that the requisite evidence
that must be adduced to satisfy the variance requirements
involves proof of a rather narrow and somewhat technical set of
facts).
In this case, because of the great disparity of Kyo-
ya’s request from the ordinance’s restriction--an encroachment
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of 74.3 percent into the Coastal Height Setback--“the more
compelling and specific the proofs must be that the grant of the
variance” will not be contrary to the intent and purpose of the
zoning ordinance. Thus, the findings set forth in the
Director’s Decision are markedly inadequate in light of the
magnitude of the requested encroachment into the Coastal Height
Setback. Further, the lack of specificity in the Director’s
findings does not allow this court to conduct a meaningful
review of the Director’s Decision regarding this aspect of the
third requirement of the variance test. 42 See also Gougeon v.
Bd. of Adjustment of Stone Harbor, 245 A.2d 7, 10 (N.J. 1968)
(“Supporting and explanatory facts and factual findings for the
conclusions must be set forth. Unless such facts and findings
are recited, a reviewing court cannot determine whether the
Board acted properly and within the limits of its authority.”).
In summary, in concluding that the Project was
consistent with the intent and purpose of the ordinance, the
Director erred for several reasons. First, the Director did not
make findings demonstrating that the variance request--a 74
42
The Director’s findings did not expressly take into consideration
the effects of the magnitude of the requested encroachment on the intent and
purpose of the Coastal Height Setback and WSD. Thus, on the face of the
Director’s Decision, it is not clear that the Director appropriately weighed
the extent of the proposed encroachment against the intent and purpose of the
ordinance.
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percent encroachment into the Coastal Height Setback--was not
contrary to the intent and purpose of the WSD and the Coastal
Height Setback, and instead the Director relied entirely on the
Project’s compliance with portions of three of fourteen WSD
objectives. Second, the Director did not evaluate the impacts
implicated by the variance request in relation to the purpose of
the zoning ordinance. Third, the Director’s analysis did not
expressly take into consideration the extent of the variance
requested, and thus his abbreviated findings were insufficient
to conclude that a 74 percent encroachment into the Coastal
Height Setback was not contrary to the intent and purpose of the
zoning ordinance.
Accordingly, the Director’s finding that the Project
is consistent with “several important WSD objectives”
misapprehended applicable law, and the Director’s conclusion
that a 74 percent encroachment into the Coastal Height Setback
was not contrary to the intent and purpose of the zoning
ordinance was not supported by findings that “specify the
particular evidence which supports the granting of the
variance.” RCCCH § 6-1517. Consequently, the third requirement
of the variance test was not satisfied.
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VI. Conclusion
In order for the Director to grant a variance request,
the applicant must satisfy each requirement of the variance
test. Here, none of the requirements were met. Accordingly,
the circuit court’s judgment, the ZBA Order, and the Director’s
Decision are reversed. See Town v. Land Use Comm’n, 55 Haw.
538, 550, 524 P.2d 84, 92 (1974).
Linda M. B. Paul /s/ Paula A. Nakayama
for petitioners
Surfrider Foundation et al. /s/ Sabrina S. McKenna
Peter T. Kashiwa, /s/ Richard W. Pollack
Lisa Woods Munger,
Randall C. Whattoff, /s/ Michael D. Wilson
David J. Hoftiezer and
Lisa A. Bail
for respondent Kyo-ya
Hotels & Resorts, LP
William Meheula and
Natasha Baldauf
for respondent 20,000
Friends of Labor
Donna Y. L. Leong,
Don S. Kitaoka and
Brad T. Saito
for respondent Department
of Planning and Permitting
City and County of Honolulu
76