The Development of Maui
Looking over our island's past, present and future
May 17, 2007
Maui has become such a desirable place to visit and live, that it is experiencing serious growing pains. Current trends of skyrocketing median house prices and shortage of affordable housing, coupled with uncertain future scenarios for food, fuel and economic self-sufficiency, portend the need for critical changes in public policies.
Opportunities exist for significant positive changes in Maui's development future, but are unlikely to happen without an aggressive campaign of advocacy and education to sway the existing political climate. Short of that, the top-heavy tourism-based economy is bound to reach a point of diminishing returns, with trickle-down effects upon other economic sectors, as well as the overall quality of life.
Maui's resident population is approximately 140,000, though the daily visitor count of 40,000 or so increases the de facto count to 180,000. The population of Kihei is listed at 16,749, while the tally for Wailea/Makena is 5,671.
Maui has roughly 56,000 housing units, of which 25,000 (44 percent) are owner-occupied. Approximately 1,000 new single family units have been permitted each of the past three years, with an average of 200 multi-family units approved yearly. There are 2,350 planned time-share and hotel units on the books, though some are remodels of existing resort properties at Kapalua, Ka`anapali and Wailea.
It's said that the real estate market is always cyclical. The mid-1980's witnessed a boom in Maui real estate sales, which ebbed in the mid-1990's, corresponding to Japanese investment slowing with the weakening of the yen on the world market.
Certainly, the Maui real estate market has boomed in the past decade, particularly since 2001. Though the overall market may have cooled or leveled off in the past year, median home prices have reached unprecedented heights. The widening gap between the luxury home and condo markets and the shortfall of affordable homes and rentals precipitated landmark legislation in late 2006.
The Residential Workforce Housing Policy ordinance, adopted by the County Council over the Mayor's disapproval, set a formula of 40 percent to 50 percent affordable homes which must be provided along with any other newly approved resort or residential development proposal. (The bill neglected to assign a formula for development of affordable housing for commercial development, an omission which at least one analyst said could open the requirement to legal challenges.)
It remains to be seen to what degree the Workforce Housing Policy will affect the outlook of development in the next few years. It's likely that political tendencies of the new mayoral administration, as well as a County Council with three new members, may be revealed in the coming months.
Much of the land developed today for residential or resort purposes was designated for those uses two decades ago or longer. In South Maui, Makena and Wailea Resorts were "master-planned" in the 1970's.
Wailea Resort now encompasses over 1,500 acres along 1.5 miles of Maui's southern coastline. It includes three golf courses, six hotels with 2,500 rooms, 450 single-family home sites, 1,300 condominium apartments and the 156,000 square-foot Shops at Wailea retail center.
In 1989, Alexander & Baldwin sold its remaining interest in Wailea (consisting of 927 acres, including two golf courses) to Shinwa. A&B re-acquired Wailea properties in 2003 from Shinwa Golf Group at a price of $135 million. The assets include three golf courses and 270 acres of fully zoned, undeveloped land.
Earlier this year, Seibu Group of Japan sold Makena Resort, including the Maui Prince Hotel, for $575 million to a hui of veteran local developers. The local members are Everett Dowling of Dowling Co. and Trinity Investments, led by Honolulu lawyer Jon Miho and Charles "Chuck" Sweeney, who headed partnerships that built the Embassy Suites at Ka`anapali and the Kea Lani Resort in Wailea.
Dowling and Trinity are teaming with giant Morgan Stanley Real Estate, which has steered more than $100 billion in real estate investments since 1991. Dowling has said that the first order of business once the deal is closed will be to pursue the existing rezoning application for Makena Resort—a request to revise the resort master plan that has been stalled in the County Council Planning Committee.
Dowling also is developing the 14-acre Keaka LLC condominium project adjacent to Maluaka Beach and the Maui Prince (72 luxury condos, starting at $4 million), and owns land at Palauea, which is bordered by Makena Resort. He promised that future development would be "green," a theme of his Maui projects, under the slogan "Building in Balance."
But promises of green development alone may not be sufficient to convince County Council members to rezone as much as 150 acres of Makena resort. Over the past five years, community and environmental groups have challenged Makena rezoning requests, based on lack of available water, insufficient infrastructure, potential harm to coral reefs from runoff and fertilizers, and presence of cultural sites throughout the area.
Many of the same concerns are being expressed with the rezoning application for Wailea 670/Honua`ula, which has been on the planning books since 1980. The investment group WCPT/GW Land Associates LLC owns the land, having bought the property for $17.2 million in 2000 from Palauea Bay Partners.
WCPT/GW Land Associates involves partners: Lehman Brothers; the Cargill Group; Trimark Pacific Homes; managing partner Woodridge Capital; and Golden Wailea, the Japanese firm that previously owned the land and still holds a small percentage of the company.
It was generally understood that Wailea 670/Honua`ula would have its chance with the County Council Land Use Committee after it dealt with the massive rezoning request for Makena resort lands. While Wailea 670 was adopted as a Project District in the Kihei-Makena Community Plan years ago, it must seek Council approval for rezoning and for Project District Phase I status. This round of the review process began in early 2006, and faces further scrutiny and public hearings in summer, 2007.
Many local residents have expressed concerns that the plans for Wailea 670's 1,400 new units and a private golf course does not correspond with the true needs of the South Maui community. Broad efforts are underway to educate the community to the potential impacts of these and other proposed developments in South Maui, totaling 13,200 potential new units, according to data from the Maui County Department of Planning, Long Range Division.
County Council members may possibly delay approval of Wailea 670 based upon concerns over its private water system, placement of affordable housing (inside or outside the project), serious deficiencies in the capacity of the South Maui roadway system, unique native plant habitat and cultural sites and cumulative impacts of all planned and proposed new units.
Elsewhere on Maui, several large tracts of land are being conceived for future residential and mixed use purposes. Island-wide, the projections for new units total more than 50,000 units.
The dissolution of plantation operations in West Maui (Pioneer Mill) and Central Maui (Wailuku Sugar) brought about the sale of thousands of acres, and proposals for development of former agricultural lands. New large communities are proposed at Olowalu, Waikapu, Ma`alaea and Hali`imaile. There is an emerging trend to bring in nationally renowned planners and "New Urbanists" such as Andreas Duany and William McDonough to design "smart growth" communities in these areas.
Since the 1998 adoption of the Agricultural Zoning Ordinance, there are limitations to the number of parcels that can be subdivided from large ag lots. Previously, two-acre subdivisions in Kula, Haiku, Launiupoko and elsewhere gave rise to the term "gentlemen's estates" to describe ag zoned properties that had no bona fide agriculture. Maui Tomorrow and other community groups lobbied for the Ag Zoning Ordinance, fearing the continued loss of farmlands and abuse of existing zoning without fair-share payment for development impacts.
The Maui County Planning Department requires submittal of a farm plan before permits may be issued for a second farm dwelling on agriculturally zoned property. But this requirement has not necessarily served as an inducement for diversified farming.
Maui will continue to attract visitors and appeal to those who wish to become part-time or full-time residents. Yet there are indications that the island is changing from rampant development to more carefully planned, sustainable growth. Emerging world trends for renewable energy, resource conservation, and overall sustainability will help guide future growth on Maui, particularly with respect to its geographic isolation from outside imports of food, fuel and tourist dollars.
The changing demographic of new residents to Maui may be beneficial in helping to sway the old ways of doing business. Voter tallies indicate that the political process has been particularly weak on Maui, with less than 50 percent of registered voters participating in recent elections.
The widespread influence of plantation politics will not wither anytime soon, but is likely to face a slow, steady decline. Aggressive citizen advocacy efforts may be instrumental in guiding positive changes to Maui's burgeoning future as a sustainable island community.
With this time of transition from a tourism-based economy to a self-sufficient model, there exists a rare opportunity to implement a viable future. There must be dedicated efforts to implement desired changes, or else the prevailing status quo will lead us down an eventual road to ruin.
It's unlikely the large number of permitted, designated and proposed housing units currently on the books will be built in the near term, if ever. Rather, smaller development proposals incorporating smart growth elements and affordable housing are more likely to win approvals from elected and appointed decision makers.
Citizen groups like Maui Tomorrow and the Sierra Club-Maui Group may be instrumental in organizing the community. In this way, we can create a future in which Maui is a model for clean, sustainable living and a place where children could grow to lead successful and productive lives amongst family on the islands. MTW
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