HB2918 HD1.DOC

SECTION 1. The legislature finds that predictability in the development approval process would encourage maximum efficient use of resources with the least economic impact to the public. This predictability is especially important because of the substantial investment development projects require and the more conservative lending and investment practices that have resulted from the recent economic crisis.

Public benefits derived from implementing master plans in the Kakaako community development district include expanded open space and recreational opportunities for Hawaii’s residents, newly-constructed market and reserved housing, major private sector investments to stimulate economic growth, and on- and off-site infrastructure and other improvements that support the broader community. Such master plans are intended to create well-designed communities that improve the urban environment in Honolulu. These benefits may not be realized, however, unless uncertainty regarding the applicability of new laws and regulations is eliminated, and the development rights of the landowners are assured.

Development agreements are a mechanism to strengthen the implementation of an approved master plan. Such agreements encourage private and public participation in the implementation of the master plan, reduce the economic cost of development, and allow for the orderly construction of recreational and publicly available facilities by providing an increased level of stability for the development of the balance of the projects.

As an administrative act, development agreements also help assure an applicant for a particular development project in the master plan area that, upon approval of the master plan, the applicant may proceed with the project in accordance with all applicable statutes, ordinances, resolutions, rules, regulations, and policies then in existence with a reasonable expectation that the project will not be restricted or prohibited by the State or county's subsequent enactment or adoption of laws, ordinances, resolutions, rules, regulations, or policies, except where necessary to protect the public health and safety of residents and the surrounding community.

The purpose of this Act is to enable the Hawaii community development authority to enter into development agreements in the Kakaako community development district.

SECTION 2. Chapter 206E, Hawaii Revised Statutes, is amended by adding nine new sections to part II to be appropriately designated and to read as follows:

"§206E-A Definitions for development agreements. As used in this part unless the context clearly indicates otherwise:

"Development agreement" means any agreement entered into pursuant to a master plan permit, including any amendments, modifications, or supplements, necessary for the implementation of the master plan permit.

"Person" means an individual, group, partnership, firm, association, corporation, trust, governmental agency, governmental official, administrative body, or tribunal, or any form of business or legal entity.

"Principal" means a person who has entered into a development agreement pursuant to the procedures specified in this part, including a successor in interest.

§206E-B Development agreements; general authorization. The executive director of the authority is authorized to enter into a development agreement with any person having a legal or equitable interest in real property located in the Kakaako community development district, as established in section 206E-32, for purposes of development in accordance with this section; provided that:

(1) An application is submitted by or on behalf of persons having a legal or equitable interest in the real property in accordance with this part;

(2) A public hearing on the application is held by the authority; provided that a public hearing held in connection with the approval process for the master plan shall be sufficient for this purpose;

(3) The executive director of the authority administers the agreements after such agreements become effective;

(4) The executive director of the authority conducts a review of compliance with the terms and conditions of the development agreement on a periodic basis as established by the development agreement;

(5) The development agreement does not exceed the term of the master plan, as may be extended; and

(6) The time periods for the review and appeal of modifications of the development agreement are consistent with those for master plans.

§206E-C Negotiating development agreements. (a) The executive director of the authority may make such arrangements as may be necessary or proper to enter into development agreements, including negotiating and drafting individual development agreements.

(b) The final draft of each individual development agreement shall be presented to the authority for approval or modification prior to execution.

§206E-D Periodic review; termination of agreement. (a) If, as a result of a periodic review, the authority finds and determines that the principal has committed a material breach of the terms or conditions of the development agreement, the authority shall serve notice in writing upon the principle within thirty days after the periodic review, setting forth the nature of the breach and the evidence supporting the finding and determination. This notice shall provide the principal a period of at least ninety days, as determined by the authority, in which to cure such material breach; provided that the authority may grant an extension as the authority sees fit.

(b) If the principal fails to cure the material breach within the time period provided, including any extensions, then the authority may unilaterally terminate or modify the agreement; provided that the authority shall first give the principal the opportunity to:

(1) Rebut the finding and determination; or

(2) Consent to amend the agreement to meet the concerns of the authority with respect to the authority's finding and determination.

§206E-E Development agreement; provisions. (a) The development agreement shall:

(1) Describe the land subject to the development agreement, which shall include the land comprising the master plan area;

(2) Specify the permitted uses of the land, the density or intensity of use, the maximum height and size of proposed buildings, and the reserved housing requirements; provided that the reserved housing requirements shall be as follows:

(A) For land areas more than twenty thousand but less than eighty thousand square feet, the reserved housing requirement for any:

(i) Residential square footage shall be twenty per cent; and

(ii) Commercial building square footage shall be ten per cent;

and

(B) For land areas eighty thousand square feet or more, the reserved housing requirement for any:

(i) Residential building square footage shall be thirty per cent; and

(ii) Commercial building square footage shall be twenty per cent;

(3) Provide, where appropriate, the public dedication requirements and public dedication credits consistent with the master plan in effect at the time the development agreement is entered into; and

(4) Provide a termination date for no less than the length of the term of the master plan; provided that the parties shall not be precluded from extending, for good cause, the termination date by mutual agreement or from entering into amendments, modifications, or supplements to the development agreement to implement the master plan.

(b) The development agreement may provide commencement dates and completion dates; provided that such dates as may be set forth in the agreement may be extended at the discretion of the authority at the request of the principal upon good cause shown subject to subsection (a)(4).

(c) The development agreement may incorporate by reference the terms and conditions of the approved master plan; provided that if any inconsistencies exist between the approved master plan and the development agreement, the development agreement shall control.

(d) The development agreement may also cover any other matter not inconsistent with this chapter, nor prohibited by law.

(e) In addition to the authority and the principal, any county, federal, or local government agency or body may be included as a party to the development agreement. If more than one government body is made party to an agreement, the agreement shall specify which agency shall be responsible for the overall administration of the agreement.

§206E-F Enforceability; applicability. (a) Except as provided in subsection (b), notwithstanding any change in any applicable law adopted by the State or county subsequent to the execution of the original development agreement which alters or amends the laws, ordinances, resolutions, rules, regulations, or policies specified in this part, a development agreement and any amendment, modification, or supplement thereto, once entered into, shall be enforceable by any party thereto, or their successors in interest, unless terminated pursuant to section 206E-D or canceled pursuant to section 206E-G.

(b) A development agreement shall not prevent a government body from requiring the principal from complying with laws, ordinances, resolutions, rules, regulations, and policies of general applicability enacted subsequent to the date of the development agreement if they could have been lawfully applied to the property that is the subject of the development agreement at the time of execution of such development agreement if the government body finds it necessary to impose the requirements because a failure to do so would place the residents of the residential project or of the immediate community, or both, in a condition perilous to the residents' health, safety, or both.

§206E-G Amendment or cancelation. A development agreement may be amended or canceled, in whole or in part, by mutual consent of the parties to the agreement, or their successors in interest; provided that if the authority determines that a proposed amendment would substantially alter the original development agreement, a public hearing on the amendment shall be held by the authority before it consents to the proposed amendment.

§206E-H Administrative act. Each development agreement shall be deemed an administrative act of the government body made party to the agreement.

§206E-I Filing or recordation. The authority shall file or record a copy of the development agreement or an amendment to the agreement, or a short form thereof, in the office of the assistant registrar of the land court of the State of Hawaii or in the bureau of conveyances, or both, whichever is appropriate, within twenty days after the authority enters into a development agreement or an amendment to such an agreement. The burdens of the agreement shall be binding upon, and the benefits of the agreement shall inure to, all successors in interest to the parties to the agreement."

SECTION 3. For purposes of this Act, the Hawaii community development authority may adopt rules without regard to chapter 91.

SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

HOUSE OF REPRESENTATIVES	H.B. NO.	2918
TWENTY-FIFTH LEGISLATURE, 2010		H.D. 1
STATE OF HAWAII