As sea levels rise due to climate change, one spot on Maui is particularly vulnerable: Kahana Bay.

Hundreds of residents of this beachside community on the island’s northwest coast are trying to save their properties from collapsing into the sea, as happened to a home on Oahu’s North Shore in February. Kahana Bay residents formed a steering committee and hired an engineering firm to develop a plan. Now, with a 1,041-page proposal in hand, they are pressing Maui County to authorize their use of a financing tool so they can get the job done.

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The funding mechanism is called a Community Facilities District, or CFD. It’s often used in places like California, Arizona and Florida when new housing developments go in, said Curt de Crinis of Columbia Capital Management who is advising Maui County on the financial instrument. But it would be a first for Maui.

A CFD generates money for capital improvement projects through the sale of government-issued bonds. The CFD bonds are repaid by special taxes levied on property owners within the district. The money raised pays for streets, sewer lines, drinking water systems, flood control and other infrastructure used by the public and owned by a government entity.

At Kahana Bay, the money would pay for beach restoration and stabilization. If nothing is done, a group of aging condo complexes at Kahana Bay might buckle or need to be condemned because of the threat to public safety.

Royal Kahana Maui
A view from the roof of the Royal Kahana Maui condo complex. Ludwig Laab/Civil Beat/2022

Community Facilities Districts are relatively new to Hawaii. In 1992, the Legislature passed a law allowing Hawaii counties to decide if they want to go forward with CFDs. The Kauai County Council adopted an ordinance in 2006 that allowed for the formation of CFDs.

The financing tool has only been used in the state once, for a development called Kukuiʻula on Kauai’s south shore. The assessment paid by Kukui‘ula property owners has gone toward improving roads and transportation access around the Koloa-Poipu region, as well as expanding water distribution and storage.

The Maui County Council authorized the use of CFDs in 2018, passing an ordinance with Kahana Bay in mind, said Michele McLean, Maui planning director.

If a CFD for Kahana Bay gets approved by the County Council, it would mark the first time Maui uses the funding vehicle and may serve as a model for similar projects on the island or in other counties.

Royal Kahana Maui Condos
Stabilization efforts are on display at the Royal Kahana Maui condos. Ludwig Laab/Civil Beat/2022

Some see it as a win-win: property owners pay to save their condos, and the public gets to enjoy a wider beach and better access to the ocean. Others question if it’s the right approach. They cite potential impacts on nearby beaches and surf breaks, and on marine creatures and corals in nearshore waters.

Others say the federal or state government should pay, arguing that Maui residents don’t own the ocean. Still others recommend a cost-sharing approach where funds come from property owners, businesses and government, pointing to examples in Waikiki on Oahu and Kaanapali on Maui.

Regardless of where funding for beach stabilization comes from, it’s clear that there’s a massive need. With 85% of Maui’s shorelines projected to erode over the long term, consideration of the CFD model is timely. Planners, civil engineers, scientists, policymakers and residents across Hawaii are actively debating whether and how to protect shoreline assets and who pays the bill.

At Rocky Point, on Oahu's North Shore, Hugo Villalobos walks up the sandy bluff alongside house after it collapsed and slid onto the beach below the night before,Tuesday, March 1, 2022. Villalobos said he lived in the house for nearly 30 years. (Ronen Zilberman photo Civil Beat)
Two weeks ago at Rocky Point on Oahu’s North Shore, a house collapsed and slid onto the beach below. Hugo Villalobos, pictured, said he had lived in the house for nearly 30 years. Ronen Zilberman/Civil Beat/2022

There’s no one-size-fits-all solution, state experts say. Mitigating coastal erosion can require different strategies depending on the situation. These can include ecological adaptation, beach protection, wetland protection and managed retreat, where existing buildings are moved inland or where new development is subject to setbacks and other requirements.

In Hawaii, “more than likely it’ll be a combination of strategies that moves us forward,” said Tara Owens of Hawaii Sea Grant.

Lauren Blickley, Hawaii regional manager for Surfrider Foundation, is among Maui residents who feel the focus should be on managed retreat.

“We know, particularly with what just happened on the North Shore of Oahu recently, that we really need to be pushing our state and local agencies to seriously consider how we can move away from the ocean,” said Blickley.

She has sympathy for the Kahana Bay property owners and doesn’t necessarily oppose the project if it provides them short-term relief from the threat of the ocean swallowing their homes. But in her view, Maui County officials should be acting with urgency to develop a long-term plan to move coastal buildings and infrastructure mauka.

‘There Was A Great Big Beach’

Scientists forecast that Hawaii could lose 40% of its beaches to sea level rise by 2050. West Maui, where Kahana Bay is located, is ground zero. About 14% of shoreline in West Maui has been completely lost to erosion, according to Hawaii Sea Grant. That’s the highest percentage of beach loss anywhere in Hawaii.

Ty Emanuel has watched it happen with his own eyes.

When Emanuel bought his condo at the Royal Kahana complex 25 or 30 years ago, “there was a great big beach,” he said.

Kahana Bay Steering Committee member Ty Emanuel
Kahana Bay Steering Committee member Ty Emanuel supports CFDs as a funding tool to protect the condos. Ludwig Laab/Civil Beat/2022

“You could step from the grassy lawn right onto the beach.”

Now, there are 8-to-10-foot drop-offs were it not for piles of sandbags that stabilize the bluff, he said.

Emanuel is a member of the Kahana Bay Steering Committee. He’s among those urging passage of a Community Facilities District so his condo and those of many others won’t be taken out by the next big storm. The condos are valued at more than half a billion dollars and generate about $10 million in tax revenue.

Besides the monetary value and emotional attachment people have to the condos, Emanuel wants the beach restored because it’s a public asset that benefits residents and visitors alike.

“There’s a kuleana to take care of it beyond where the property line ends,” Emanuel said.

The steering committee represents over 900 condo owners in nine complexes as well as a family who owns a nearby kuleana parcel. The committee has asked the Maui County Council to pass an ordinance establishing a CFD for Kahana Bay that would allow them to raise up to $40 million to pay for the erosion mitigation project.

The county’s administration and attorneys are currently reviewing technical aspects of the proposed CFD, McLean said.

This 1977 photo of the Pohailani shoreline at Kahana Bay shows the beach as it once was. Courtesy: Hawaiiana Management Company

If the council gives the green light, property owners in Kahana Bay would start paying a special tax, on top of their regular property tax, to cover the price of shoreline fortification.

It’s unclear exactly how much they would have to pay at this point. If the project ends up costing $30 million and there are about 1,000 property owners, that would mean $30,000 over 20 years. That works out to be $1,500 annually per owner or $125 a month, according to McLean.

That’s a conservative estimate right now, she added. The bond repayment period might be longer, the project cost might be higher, or other factors could affect the special tax.

Assuming the CFD wins approval and the money begins to flow, what planners envision for Kahana Bay is a combination of beach nourishment, berm enhancement and the placement of seven beach-stabilizing structures called T-groins perpendicular from shore and extending about 215 feet offshore.

Nourishing the beach would entail dredging and placing between 50,000 and 100,000 cubic yards of sand from offshore to restore the beach to its 1975 width.

The estimated project cost ranges between $26 million and $40 million, including construction and maintenance costs over 50 years.

Details of the CFD proposal are outlined in a draft environmental impact statement. In a letter last July to the chair of the council’s infrastructure and transportation committee, McLean said the administration supports the formation of a CFD for Kahana Bay, but it has “serious concerns” over the county’s ownership of the capital improvements made for beach restoration.

Kahana Bay shoreline
Temporary measures to hold back the ocean are in place along the Kahana Bay coastline. Ludwig Laab/Civil Beat/2022

The state manages small boat harbors with offshore structures like breakwaters, but the county doesn’t, McLean said.

“We don’t have county experts who can inspect the groins, like we can with our building inspectors or roadway engineers, so it’s a concern to be responsible for something for which we have little knowledge or expertise,” McLean said.

County Councilwoman Tamara Paltin, who represents West Maui, is evaluating the CFD proposal and talking to constituents about it. If the funding mechanism isn’t approved, Paltin said it’s highly likely that strong waves and rising seas will render the Kahana Bay buildings uninhabitable, possibly endangering lives.

Some of Paltin’s constituents have expressed concern that Maui taxpayers beyond the Kahana Bay district might somehow end up being held financially accountable if the buildings collapse and the bonds don’t get repaid, she said. That’s something she’s looking into.

Regardless, as the Maui County Council considers approving the CFD, the Kahana Bay Steering Committee should be required to produce an environmental assessment that addresses how and when the condo complexes will be demolished after the life of the CFD expires, Paltin said.

Eventually, the building will have to go, she said. The bottom line is pretty simple.

“They are too close to the ocean.”

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.

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