The private company that claims to own some of Kakaako’s most poorly maintained roads has been hit with a quarter-million-dollar fine for charging to park on them while failing to repair them.
Kakaako Land Company has until May 15 to pay that penalty due to substandard management of parts of Cummins, Kawaiahao, Clayton, Queen and Ilaniwai streets, under an April 18 order from the Hawaii Community Development Authority. The $250,000 total represents $500-per-day penalties for each of the five streets over a 100-day period.
KLC will face more penalties if it doesn’t fix those roads to city standards immediately, according to the HCDA order.
Officials at that state agency, which oversees Kakaako development, believe it’s the first time KLC has been fined in the years-long dispute over the streets it currently controls.
The company is owned by brothers Cedric and Calvert Chun. When a process server delivered the order to them Thursday, one of the brothers threw it in the trash, according to an email written by Garett Kamemoto, HCDA’s interim director for planning and development. The email was sent to Kakaako’s legislators, House Speaker Scott Saiki and Sen. Sharon Moriwaki.
KLC’s attorney, Jonathan Ortiz, and Calvert Chun did not respond to requests for comment Monday.
KLC has charged for parking and towed cars on the streets it controls for nearly a decade without repairing or maintaining them, stoking the ire of businesses, customers and area property owners.
Robert Emami, who owns The Car Store on Kawaiahao Street, said he’s seen more aggressive patrols by tow trucks and more vehicles towed in the past six weeks.
“They just tow. It’s getting really really annoying. People are getting upset — angry. This is really out of control,” Emami said Monday. “Finally, after all that pressure, HCDA is making moves.”
KLC and the Chuns face legal attacks on several fronts as state officials aim to wrest control of those roads from them and return it to the city. The HCDA fines are based on a 2018 law that requires any owner of private streets in Kakaako that charges for parking to maintain them to city standards.
Additionally, the state attorney general earlier this year issued a quitclaim deed that looks to override Kakaako Land Company’s claim to the streets. The company also faces a lawsuit in state court from private businesses.
“KLC knows the end is near,” Saiki said Monday.
‘The Height Of Hypocrisy’
The company claims that the 2018 law its fine was based on is unconstitutional and contradicts previous Hawaii case law. The law “was obviously tailored to target KLC,” Ortiz wrote in a Jan. 14 letter to the HCDA after his client received a notice of violation.
Since the public has an easement to drive over the KLC-controlled roads, “the easement-holder, not the fee owner, is responsible for maintenance,” Ortiz wrote, citing the state case Wemple v. Dahman.
KLC started charging for parking in 2010 “at the urging of HCDA” to help prevent the homeless from taking shelter on those streets, Ortiz wrote. That HCDA would penalize KLC now is “the height of hypocrisy,” he said.
Saiki said that KLC is desperate.
“They’re just floundering right now and raising whatever argument they can cling to,” the House speaker said Monday.
KLC doesn’t oppose the city acquiring the streets from the company, and considers that the best way to resolve the dispute, Ortiz’ letter states. The City Council approved a resolution in 2016 to acquire the KLC-controlled streets through eminent domain, but it’s unclear where that stands.
Each street should not be worth more than $1, Saiki said. It’s “cost-prohibitive” to allow the company to make a profit on them since the needed repairs are expensive, he said.
KLC has 30 days to call for a contested case hearing in the matter, and it’s not clear how long those proceedings could take.
“These people, they really think they own the streets. We feel like we’re hostages,” said Emami, whose company pays $120 a month to use a stall in front of its building to park. “We feel like we’re living in no man’s land.”
Read the HCDA order against KLC here:
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