PRINCEVILLE — The owner of two restaurants in Hanalei Bay Resort in Princeville has sued the individual owner of one of the condo units there in the latest development in a protracted dispute over parking and other issues that erupted more than four years ago.
The litigation pits the restaurant owner, Jimit Mehta, against a California couple, Dewitt and Virginia Richards, who, like most of the condo owners at the development, rent both the main part of their unit and an adjacent “lockout” unit separately.
The ongoing controversy has left county Planning Department Director Ka‘aina Hull bewildered. “This is comparable to a resort version of the Hatfields and the McCoys,” he said over the weekend.
Mehta owns the Happy Talk Lounge in the resort that has been in operation since 2016, and Bali Hai, a restaurant space also in the resort that has been closed for several years for renovations. Mehta also owns the Kalypso restaurant in Hanalei. Both Happy Talk and Kalypso are currently closed because of the COVID-19 crisis.
For several years, Mehta has pursued litigation and regulatory action against Hanalei Bay Resort in a dispute over the development’s failure to construct enough parking spaces to meet a zoning requirement that dates to before the resort opened in the 1970s. When it was originally constructed, HBR was supposed to provide 249 parking stalls, but only 160 were ever built.
When Mehta took over the Happy Talk space and reopened it in 2016, parking congestion became an issue of high controversy. The resort put gates across the entrances to its parking lots. Mehta took to sitting in a chair with a key card to open the lot to restaurant customers. Ultimately, HBR introduced a valet parking service, for which Mehta contended he was being grossly overcharged.
Late last year, the county Planning Commission ordered HBR to rectify the parking deficit within 90 days. Two visits to the resort by The Garden Island in the last two weeks found little evidence of any parking expansion. Employees said the resort had, so far, not provided the additional spaces required by the county.
Through the dispute, Mehta has also questioned whether a unique design feature in HBR’s architecture permits condo owners to illegally rent out two separate halves of their units, raising the number of units permitted at the resort from the 134 it was developed for to more than 260 in actual practice.
Units at HBR actually have two separate front doors, individually numbered. A door connects the two separated halves of each unit. The lawsuit, filed Friday in Fifth Circuit Court in Lihu‘e, alleges that dual-unit system violates relevant county rules. But the Richards couple, the complaint alleged, took the design issue one step further by removing the door and sealing its opening, making the ostensibly single unit into two parts that have no common entrance.
In a phone interview from his home in California, Dewitt Richards acknowledged that he had the door removed because “I was tired of having it blow shut, and for the cross ventilation. It also was done for sound.”
He said he and his wife bought the unit in 2006. “I’ve never seen a lawsuit before,” Richards said. “I can’t make any sense of it.”
Jeff King, president of the Association of Apartment Owners of Hanalei Bay Resort, said that, though his organization isn’t named as a defendant in Mehta’s lawsuit, “with respect to our resort’s operations, the (association) has worked closely with the county Planning Department on the parking issues, and has reached agreement with the county with respect to both parking and lock-offs. Our understanding is that (the association), with the county’s oversight, is in compliance on both issues.”
The suit contends that the lockout rental practice effectively doubles the number of vehicles that can be parked for each unit in the resort, and that the practice is at least in part responsible for the allegedly chronic shortage of parking.
The suit alleges that the doorway alteration and the resulting permanent creation of physically separate units violates documents that govern the affairs of King’s apartment owners’ group and of the association that governs the entire Princeville community. It was not clear if owners of other HBR units have similarly modified their condos.
Mehta had previously tried to convince the county to declare that the entire scheme of operating the resort as, essentially, more than 260 hotel rooms, put the development in violation of its original zoning variance, issued in the 1970s.
For a while, Mehta’s position appeared to have prevailed. A lengthy arbitration resulted in an opinion that the resort’s parking system violated applicable county rules. The arbitrator also ruled in Mehta’s favor regarding the rental of lockout units.
“Over the years, the Planning Department and the commission have been pulled into this dispute,” Hull said. “I have made it abundantly clear that I will not have the patience to have the Planning Department drawn into civil disputes. There are, however, issues that warrant the attention of the commission and the department.”
HBR, he said, “did not provide as many parking stalls as required and they were issued a violation notice and we (initially) sided with (Mehta) that the lockouts were illegal and needed to be rectified.”
Hull said the lockout practice would not be permitted under county zoning rules that exist today. But he said his perspective on the dispute changed once he learned that the original permits for HBR were applied for in 1971 and granted in 1972 — long before the county imposed requirements that could bear on the lockout dispute and some of the parking issues.
“That’s where I began to backtrack,” Hull said. “The fact of the matter is the (resort) structure is nonconforming (by today’s county codes.) But when I go back to the permit, it’s silent on that issue. If it’s designed to be rented separate and apart, it could be allowed. I agree this is a gray and nebulous area.”
He said Mehta and his lawyers could still petition the Planning Commission to challenge the original permits from the 1970s, but if they did and eventually prevailed, the restaurant spaces are inseparable from the rest of the resort and, if Mehta was successful in any effort to get the permits revoked, the entire resort would have to be shut down, taking his spaces with it.
Hull said he had not seen the new lawsuit filed Friday by Mehta — at least in part because the Planning Department has largely deployed resources to detect any illegal vacation-rental activities that may crop up during the COVID-19 crisis. He said his agency, like virtually the entirety of county government, is so preoccupied with COVID-19 that addressing other issues as top priorities is unlikely, at least for the moment.
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Allan Parachini is a Kilauea resident, furniture-maker, journalist and retired public relations executive who writes periodically for The Garden Island.
