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From the March 2, 2001 print edition
Big, small developers team up to push a unified agenda
Lyn Danninger

A burgeoning construction industry has prompted two major trade groups to bond together in hopes of pushing a more development-friendly agenda.

The Hawaii Developers Council and the Developers Association are combining to form a 160-member group that will be known as The Hawaii Developers Council. The combined organization will hold its first meeting this month.

The newer and more active of the two organizations, the council was originally formed to address the concerns of smaller developers, says Realtor Andres Albano, past president of the council and a member of both organizations.

The Developers Association was formed in the 1970s and primarily has been made up of large, active developers of that era, such as Amfac, Kamehameha Schools, the Gentry Cos. and Herbert Horita, says Albano. But with little development activity taking place during the state's economic slump, the organization became less active, he says.

As immediate past president of the council and also a former president of the Developers Association, Albano says one of his goals was to bring the two organizations together.

"I hated to see the wisdom of the older and larger developers not being shared with the newer ones," he says. "It was a resource that needed saving."

While both nonprofit groups have met to discuss common issues, neither addressed development issues as a group, even though both have similar goals, says Albano.

"In the past, the nature of real estate developers has been to fight their own battles in terms of things like rules, regulations and exemptions," he says.

But with development increasing, the number of critical issues is on the rise, says Christine Camp, current president of the Developers Association.

Camp says one of her goals for the new group will be to not only work on education and information, but to create a forum where ideas and suggestions can be shared with those connected to the industry.

The mix of new young developers and older more experienced companies will be better able to address common concerns, such as land use, impact fees, permitting, planning and zoning, Camp says.

"We'll now have a consolidated voice," she says.

With more rules and regulations, many of them enacted in the past few years, both Camp and Albano say that the combined group could be an effective voice on some of the issues critical to development.
For example, Albano says impact fees can be levied on a project, such as a golf course, even though the rationale for imposing the fees may have little direct connection to the development.

Camp singles out so-called park dedication fees that must be paid by all residential project developers. Initially those fees were intended to acquire land for new parks, but that's not always the case now, she says.

Camp says the fees makes sense in areas such as new neighborhoods where there is room to add a park, but in high-density urban areas where it's unlikely a park would ever be built, she wonders how the money collected from developers is being used.

Further, she says it does not make sense for developers to pay higher park dedication fees on single-family housing projects, which already include backyards, vs. condominium projects with no yards.
"Rather than having a schedule based on the number of units, it should be based on the needs of the particular community," she says.

Both Albano and Camp are also concerned about lingering infrastructure problems, such as the aging sewage system in Waikiki, Moiliili and the McCully area.

They are areas that need revitalizing, yet in spite of appropriate zoning, little can be done, both say.
"Not much can be done because, in effect, we are waiting for the infrastructure to catch up. It's like the heart and soul is not being worked on," says Albano.

Another issue of concern to developers is what is referred to as a unilateral agreement, where conditions are agreed to by a developer in exchange for a zoning change. Those conditions are contained in the agreement but it is only signed by the developer, not the other party involved, the City and County of Honolulu, says Albano.

"It's a one-way agreement that shouldn't be a condition for zoning, but rather a condition for development," he says. "It should be a development agreement signed by both parties when the developer is ready to move forward."

Another major issue for all developers is the number of laws and ordinances that have been passed in recent years, some of which, they say, are detrimental to development and a number open to costly legal challenges.

Albano cites the recent case at Sandy Beach where a developer had received appropriate zoning, only later -- and after some investment -- to have the project downzoned by the City Council.
"The project came to a halt and was subsequently downzoned after an investment had already been made," he says.

Legal action and a recent court decision in favor of the developer could have costly consequences for the City and County.

Albano believes these kinds of events harm not only developers who are already here, but also send a strong message to potential developers and others who may want to invest in Hawaii.

"It is difficult to encourage good development when a developer can spend money on a project only to find out later that the rules and regulations that he thought he was operating under have now been changed," Albano says.

Reach Lyn Danninger by e-mail to ldan ninger@bizjournals.com or by phone at 955-8043.

Pacific Business News (Honolulu) - March 5, 2001



© 2001 American City Business Journals Inc.



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