Civil Beat's recent report on the mayor's plan to demolish the Waikiki Natatorium War Memorial, a salt-water swimming pool erected to honor those who served in "the Great War," not only brought back some childhood memories (I swam there as a kid) but reminded us of the cost of preservation. When the thing or property sought to be preserved -- or, to use the bumper-sticker vernacular, "saved" -- is public property like the Natatorium, the discussion usually involves the cost of doing so balanced against the desire to keep it.
But when the property involved is private property, you usually hear very little about the burdens placed on the owner, or the cost to the public of preservation. Which brings us to the tile of this post, which was inspired by a recent column by Howard Dicus "What do you want to save in Honolulu that's old?" He lists several well-known examples of successful preservation operations, identifying the so-called "Sandy Beach" case from the late 1980's as the exemplar:
There are wins and losses in the game of saving what we feel is part of our paradise. "Save Sandy Beach" succeeded. The hotel proposed there was defeated and it looks like we've got a good shot of saving a little bit of rugged wilderness from Sandy Beach to Makapu'u Point forever. Excellent.
First, some factual clarification (my Damon Key colleagues and I were counsel to the property owner in the "Sandy Beach" cases). Those cases involved two parcels separated by Kealahou Street, across the highway from Wawamalu Beach. The parcels were bounded on one side by the highway, another side by the Hawaii Kai golf course and a residential development, and on the other by a sewage treatment plant. They were never zoned for hotel use, but were zoned "Residential" since 1954, the year Honolulu adopted its first zoning code. Yes, the parcels are near Sandy Beach Park, but the development which the City Council permitted when it approved a Special Management Area Use Permit in 1986 after literally years of public hearings and study never actually did much of anything to Sandy Beach.
But "Save Land Near Wawamalu Beach" doesn't quite have the same ring as "Save Sandy Beach," does it?
After the Council issued the SMA permit (which vested rights law fans realize is the "last discretionary act" for these parcels, and thus triggered the owner's right to rely), the voters by a margin of 2-1 adopted an initiative ordinance downzoning the parcels from "Residential" to "Preservation" which prohibited the already-approved homes. When the Hawaii Supreme Court rejected challenges to the SMA permit (Sandy Beach Defense Fund v. City & County of Honolulu, 70 Haw. 361, 773 P.2d 250 (1989)),and struck down the initiative downzoning ordinance (Kaiser Hawaii Kai Dev. Co. v. City and County of Honolulu, 70 Haw. 480, 777 P.2d 244 (1989)), the Council saw the political handwriting on the wall and adopted a "confirmation" ordinance that did the same thing as the initiative downzone ordinance, despite warnings that the Piper (more specifically the Fifth Amendment Piper) was going to be paid.
And what the column does not mention is that the eventual cost to the city and state taxpayers of "saving" these two parcels was in the neighborhood of $80 million. Because that's the value of the judgment the circuit court entered against the city in the successful lawsuit the landowner filed asserting the SMA permit was vested, and the confirmation ordinance took that property without compensation. It would have cost the city a lot more than that, but it agreed to a land swap and sale in lieu of taking the case to trial. If that figure had been heard during the run-up to the initiative vote, might the good citizens of Honolulu have balked at the price?
Even if the column intended to discuss the nearby Queen's Beach parcel (which is down the highway and even further from Sandy Beach than the "Sandy Beach" parcels, but which was zoned "Resort" and not "Residential"), the same thoughts apply. Even there the taxpayers ended up footing the bill, although as Gideon Kanner recently noted, the city got quite a bargain. At least in that case the City eventually stopped trying to take "a shorter cut than the constitutional way of paying for the change," see Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416 (1922), and condemned the land rather than trying to get it "saved" for free by resticting its use by zoning.
The lesson from these cases is whenever there's talk about "preserving" or "saving" private property from development, or "landmarking" it to freeze its historial use, an integral part of the conversation must be how much doing so will cost the taxpayers. Unfortunately, that part of the conversation is usually missing until guys like me bring it up in Count I of an inverse condemnation complaint.
