In
this case, it's Lorna Nishimitsu, who successfully appealed —
stretching the truth and threatening “a taking” in the process —
when the planning department quite properly denied her client's
application for a TVR certificate.
Her
client was William Morgan, a Realtor from Del Mar., Calif., who
developed two other TVRs in the same Wainiha neighborhood — Hale
Hina and Banana Beach, previously detailed in Abuse Chronicles 10 and
12, respectively. In June 2004, Morgan and three others bought the
property they later named Pulelehua for $1.47 million. He then
proceeded to flip it several times through a series of tax-free
property exchanges involving numerous tenants in common, the same
timeshare-type investment strategy he employed with the other two
properties.
When
Morgan initially bought the Pulelehua property, the structures were
not fully legit. In 1997, the county's engineering department had
issued a violation notice for illegal ground floor alterations and
additions to the main house and guest house. The files also state
“elevation certificate has not been submitted to date.”
Photos
published on the 2004 real estate listing document the continued
existence of those violations. This picture of the illegally enclosed
ground floor bedroom actually bore the caption “downstairs
storage:”
Another
photo shows the guest cottage's illegal full kitchen with stove:
In
October 2004, Morgan, through his agent, Matt Hunter, sought a
$71,000 building permit ostensibly to remove the illegal downstairs
enclosures and replace them with “breakaway walls.” The previous
month, prior to any alterations being done, architect Ron Agor had
helpfully provided an elevation certificate for “finished
construction.” The work got its final approval in July 2005.
On
Sept. 30, 2008, Morgan applied for a TVR certificate, claiming the
use started on April 1, 2006. Though the law required him to document
TVR use prior to March 2008 through a rental reservations log, proof
that general excise and transient accommodation taxes had been paid,
and a sworn affidavit, his application included none of this.
Instead, he submitted only copies of a GE and TAT license for an
unnamed business that was started April 1, 2005.
On
April 24, 2009, planning inspector Bambi Emayo sent Morgan a letter
informing him of several violations, including a full kitchen within
the guest house, constructing the kitchen without proper permits and
use of the guesthouse as an additional dwelling unit. Morgan was
ordered to immediately cease and desist all vacation rental
activities and use of the guest house as a dwelling unit. He was
directed to remove cabinets, cooking appliances and the electrical
and gas supplies to cooking appliances. He was also directed to
submit an “acceptable plan for compliance.”
On
May 7, Lorna Nishimitsu sent a letter to the planning department on
Morgan's behalf in which she submits a “plan for compliance” that
is essentially a denial that anything is wrong. In one section she
claims (emphasis added):
Having
expended approximately $100,000 to bring the guest house into
compliance with the Planning Department's directions so that the
registration of the single-family dwelling as a transient vacation
rental could proceed, our client would not have placed the coffee
maker and microwave oven within the guest house structure such that it
would result in denial of the nonconforming use certificate for the
dwelling (i.e., the main house.)
Curiously,
the building permit on record for the guest house renovations was
valued at just $28,000.
Lorna
also argued that only the main house needed to be in compliance to
get a TVR certificate, not the entire property. Under this reasoning,
you could be running an auto wrecking yard in a residential zone, but
never mind, so long as the house itself is in compliance.
On
May 12, Lorna submitted a formal appeal to the planning department.
In it, she makes at least two spurious claims. One is that Morgan had
shown “by a preponderance of the evidence” that the house was
being used as a TVR prior to March 2008, and he had “satisfied all
the requirements” of the TVR ordinance. In fact, as I noted
earlier, his application was missing nearly all of the requirement
documentation.
Another
is that Morgan had been unable to bring the cottage into compliance
because it was being occupied under a rental agreement issued by the
previous owner — an agreement that he could not terminate until its
term expired on March 1, 2008. In fact, the house was being rented
under a month-to-month agreement, one that had begun in March 2006, under Morgan's ownership. He ultimately gave the tenant a vacate notice effective
March 1, 2008, even though the woman was just about to give birth and
had nowhere else to go.
Lorna
then goes on to claim that denial of the TVR certificate “will
result in a substantial decrease in the value of the subject
property,” even though it wasn't a TVR when Morgan bought it. As a
result, Lorna claims, the “denial represents a taking without just
compensation” in violation of the state and U.S. constitutions.
That's
right. Not being given something you wanted, but never actually had —
and never even proved you were qualified to receive — amounts to “a
taking” in Lorna's world.
Worse,
the planning department caved and went along. In a June 26, 2009
letter, former planning director Ian Costa advised Lorna his office
had reviewed her appeal and decided that Morgan's application “will
now be recommended for approval before the Planning Commission.”
The
planning commission affixed its rubber stamp on July 14, 2009, with
the staff-recommended caveat that the TVR certificate “is not
evidence of compliance with any and all pertinent zoning and use
regulations.”
So
Morgan got his TVR certificate.
And though multi-family rentals are
illegal on the North Shore, Lorna continues to submit the renewal applications as if the owner is also entitled to rent out the cottage
that she previously claimed was not part of the original application:
“The
SFR is rented either independently of the guest house or with the
guest house. The guest house is not a stand along rental.”
The
internet ads, meanwhile, tell the real story, that this is an illegal
multi-family rental:
We
had two families for a total of 10 people and we had plenty of room
in the kitchen and living area. We also used the "tree house"
which was nice as well. The tree house is detached from the main
house and you can feel a little disconnected from the main house.
Internet ads also tell of visitors using the “tree tunnel” — a
dedicated beach access that Morgan has heavily landscaped to
discourage public use — to reach “Banana Beach” so
they can swim, body surf, boogie board and snorkel in waters that are
extremely dangerous and lacking any lifeguard:
We
were so excited to "discover" the "tunnel"
leading to the almost private beach where we spent almost all of our
time.
A beach that many residents no longer want to use, because it's now filled with the visitors from the three mini-resorts that Morgan developed and all the other TVRs along that stretch of sand.
Oh, and btw, do those look like "break -away" walls on the "downstairs storage" to you?










