Kamaole Pointe Development Lp v. County of Maui

• Decision Date: 03 July 2008
• Docket Number: No. CV. 07-00447 DAE-LEK.,CV. 07-00447 DAE-LEK.
• Citation: 573 F.Supp.2d 1354
• Parties: KAMAOLE POINTE DEVELOPMENT LP; Alaku Pointe LP, Plaintiffs, v. COUNTY OF MAUI, Council Chair G. Riki Hokama; Council Vice-Chair Danny A. Mateo; Councilmember Michelle Anderson; Councilmember Gladys Coelho Baisa; Councilmember Jo Anne Johnson; Councilmember Bill Kauakea Medeiros; Councilmember Michael J. Molina; Councilmember Joseph Pontanilla; Councilmember Michael P. Victorino; Mayor Charmaine Tavares; Vanessa A. Medeiros, Director, Maui County Department of Housing And Human Concerns, Defendants.
• Court: U.S. District Court — District of Hawaii

Page 1354

573 F.Supp.2d 1354

KAMAOLE POINTE DEVELOPMENT LP; Alaku Pointe LP, Plaintiffs, v. COUNTY OF MAUI, Council Chair G. Riki Hokama; Council Vice-Chair Danny A. Mateo; Councilmember Michelle Anderson; Councilmember Gladys Coelho Baisa; Councilmember Jo Anne Johnson; Councilmember Bill Kauakea Medeiros; Councilmember Michael J. Molina; Councilmember Joseph Pontanilla; Councilmember Michael P. Victorino; Mayor Charmaine Tavares; Vanessa A. Medeiros, Director, Maui County Department of Housing And Human Concerns, Defendants.

No. CV. 07-00447 DAE-LEK.

United States District Court, D. Hawai`i.

July 3, 2008.

COPYRIGHT MATERIAL OMITTED

Christopher J. Cole, Dayna H. Kamimura, Lisa W. Cataldo, Robert G. Klein, McCorriston Miller, Mukai, MacKinnon, LLP, Honolulu, HI, for Plaintiffs.

Jane E. Lovell, Madelyn S. D'Enbeau, Department of the Corporation Counsel, Wailuku, HI, for Defendants.

ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT DECLARING ORDINANCE 3418 VOID ON ITS FACE UNDER THE DOCTRINE OF UNCONSTITUTIONAL CONDITIONS; AND ORDER GRANTING IN PART AND DENYING IN PART COUNTY DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT

DAVID ALAN EZRA, District Judge.

On June 2, 2008, the Court heard Plaintiffs' and Defendants' respective motions for summary judgment. Robert G. Klein, Esq., Christopher J. Cole, Esq., and Lisa W. Cataldo, Esq., appeared at the hearing on behalf of Plaintiffs; Madelyn S. D'Enbeau, Deputy Corporation Counsel, appeared at the hearing on behalf of County Defendants. After reviewing the motions and the supporting and opposing memoranda, the Court DENIES Plaintiffs' Motion for Partial Summary Judgment Declaring Ordinance 3418 Void on its Face Under the Doctrine of Unconstitutional Conditions ("Plaintiffs' Motion") (Doc # 27) and GRANTS IN PART and DENIES IN PART County Defendants' Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment ("County Defendants' Motion") (Doc. # 35).

BACKGROUND

Plaintiffs Kamaole Pointe Development LP ("KPLP") and Alaku Pointe LP ("APLP") (collectively "Plaintiffs") are the owners of TMK Nos. (2) 3-9-20:10, 11, 12, & 13 ("Parcel One") and (2) 3-9-20:04 ("Parcel Two"), which are both vacant parcels in the urban district of Kîhei, Maui. Prior to December 2006, Plaintiffs and their partners or predecessors-in-interest invested hundreds of thousands of dollars in architectural, planning, and other professional fees and expenses towards the development of two multi-family residential projects on both Parcels One and Two totaling 124 units and 127 units, respectively.

In May 2006, KPLP, through one of its partners, applied for a Special Management Area permit issued by the Maui Planning Commission per state law for its Kamaole Pointe project on Parcel One. At that time, the Maui County Council (the "Council") was considering a bill for an ordinance imposing a 30% affordable housing exaction on applicable residential projects.

On or about December 5, 2006, the Council passed Ordinance No. 3418, entitled the "Residential Workforce Housing Policy" (the "Ordinance"), over Mayor Alan Arakawa's veto. The Ordinance was adopted in an environment in which it was widely understood that the price of housing in Maui County had risen significantly between 1997 and 2006. The purpose of the Ordinance was to address the "critical shortage of affordable housing, making home acquisition by the majority of County resident workers extremely difficult, and creating a shortage of affordable rental units." (The Ordinance, Ex. A at 2, attached to Defs.' Motion.) The Ordinance requires developers seeking to build five or more residential units on their land to enter into a Residential Workforce Housing Agreement (the "Agreement") with Maui County's (the "County") Department of Housing and Human Concerns ("DHHC") before final subdivision approval or building permits are issued. The terms of the Agreement are detailed in the Ordinance.

The Ordinance requires that: "[w]hen fifty percent or more of the dwelling units and/or new lots in the development are offered for sale for $600,000 or more, fifty percent of the total number of units and/or lots shall be sold or rented to residents within the income-qualified groups established by this ordinance." (The Ordinance at 7.)¹ In lieu of providing units, the Ordinance provides that the developer may satisfy the requirement by either: (1) paying an in-lieu fee at the rate of 30% of the total project sales; (2) donating unimproved land valued at 200% of the in-lieu fee; or (3) donating improved land valued at 100% of the in-lieu fee, which would be documented in the Agreement between the developer and the County. (Id. at 7-11.) The Ordinance's income-qualified groups are families with incomes between 100% and 160% of the of the County's median family income as set forth by the United States Department of Housing and Urban Development.² DHHC has no discretion in calculating the applicable sale or rental requirements of the Ordinance.

A developer of any development subject to the Ordinance may appeal to the Council for a reduction, adjustment, or waiver of the requirements described above. (Id. at 6.) The developer bears the burden of proving the absence of any reasonable relationship or nexus between the impact of the development and the number of residential workforce housing units required. (Id.) The Council has ninety days from the conclusion of the developer's appeal to approve or disapprove the appeal by resolution, with the presumption that on the ninety-first day the appeal is deemed approved. (Id.)

After the Ordinance was enacted, Plaintiffs sought advice from various professionals regarding its impact on their plans to develop Parcels One and Two. Plaintiffs were advised to appeal for a waiver, which they did on February 23, 2007. On `May 25, 2007, Plaintiffs presented evidence in support of their appeal and the matter was placed on the Council's agenda. On July 24, 2007, the Council's Policy Committee met to consider Plaintiffs' appeal. On August 21, 2007, the Council rejected Plaintiffs' appeal in Resolution 07-100, finding that there was a reasonable nexus between the impact of Defendants' proposed developments and the need for affordable housing. (Resolution 07-100, Ex. 12 at 2, attached to Pls.' Motion.)

On August 23, 2007, Plaintiffs filed their Complaint (Doc. # 1), which was subsequently amended on September 6, 2007 (the "First Amended Complaint" or "FAC") (Doc. # 5). In the FAC, Plaintiffs assert the following claims pursuant to 42 U.S.C. § 1983: deprivation of constitutional rights (Count 1); the Ordinance, on its face, effects an impermissible taking (Count 2); the Ordinance, on its face, violates Plaintiffs' substantive due process and equal protection rights (Count 3); the Ordinance violates the Hawai'i Constitution (Count 4); and Defendants lacked authority to enact the Ordinance because imposition of a development exaction for affordable housing by way of in-lieu fees is not authorized by State statute (Count 5). Plaintiffs also seek to enjoin enforcement of the Ordinance (Count 6).

On September 25, 2007, County Defendants filed a motion to dismiss the FAC (Doc. # 10). On October 5, 2007, Plaintiffs filed a motion to strike the motion to dismiss (Doc. # 12), which this Court granted on October 26, 2007 (Doc. #15). The Court found that County Defendants' motion did not comply with the Local Rules.

On February 28, 2008, Plaintiffs filed their motion for partial summary judgment and, on April 2, 2008, County Defendants filed their motion for summary judgment. The parties each filed oppositions on May 15, 2008 (Doc. ## 46 & 47). On May 22, 2008, the parties filed their respective replies (Doc. ## 53 & 54).

STANDARD OF REVIEW

Rule 56 requires summary judgment to be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Porter v. Cal. Dep't of Corrections, 419 F.3d 885, 891 (9th Cir.2005); Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir.2000). A main purpose of summary judgment is to dispose of factually unsupported claims and defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Summary judgment must be granted against a party that fails to demonstrate facts to establish what will be an essential element at trial. See Id. at 323, 106 S.Ct 2548. A moving party without the ultimate burden of persuasion at trial has both the initial burden of production and the ultimate burden of persuasion on a motion for summary judgment. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir.2000). The burden initially falls upon the moving party to identify for the court those "portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (citing Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548).

Once the moving party has carried its burden under Rule 56, the nonmoving party "must set forth specific facts showing that there is a genuine issue for trial" and may not rely on the mere allegations in the pleadings. Porter, 419 F.3d at 891 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). In setting forth "specific facts," the nonmoving party may not meet its burden on a summary judgment motion by making general references to evidence without page or line numbers. S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir.2003); Local Rule 56.1(f) ("When resolving motions for summary judgment, the court shall have no independent duty to search and consider any part of...