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The Hawaii Supreme Court last week granted by the city that would have allowed�� Kyo-ya Hotels and Resorts to replace the aging eight-story Diamond Head wing of the Moana Surfrider hotel with a sparkling new 26-story hotel tower on the beach at Waikiki despite encroaching 74 percent into the coastal height setback.

The court’s decision was unanimous. Four of the five justices not only rejected the variance, but concluded the project failed to meet any of the three mandatory criteria spelled out in the rules of the Hawaii Special Design District, which had been established back in 1976 in an effort to forestall dangerous overdevelopment and retain a Hawaiian sense of place in the state’s most important destination area. The fifth justice, in , held that since each of the criteria had to be met, once the first test had been failed, it was unnecessary to continue with a detailed analysis of the remaining two requirements.

The Honolulu City Council had approved permits for the larger project that the proposed 26-story tower was part of in August 2010, and then-Planning Director David Tanouye approved the tower’s variance from the height setback shortly afterwards.

The variance was then upheld by the Zoning Board of Appeals, a decision that��was later affirmed following a Circuit Court trial.

The planning process is usually approached as an exercise in bargaining rather than the strict application of existing zoning requirements.

Any way you look at it, the Supreme Court’s decision was a rather stunning rejection of the way city officials�� reviewed this variance request. While the city said the project met the legal requirements, and that view was initially upheld in court when challenged by environmental groups, the Supreme Court’s majority found the city was wrong on each and every point.

The court’s ruling, in essence, means that the planning process utterly failed to enforce existing law and protect the public interest. And there’s no reason to think that this was a one-of-a-kind occurrence.

Unfortunately, the Supreme Court’s ruling doesn’t offer any hints at how the whole planning process went so thoroughly astray.

A Need for Speed

So the question now staring us all in the face is this: How did the city, with its multiple levels of review, get it all so wrong? And how is it that the review by the Circuit Court also gave the city and the hotel a pass? And what changes in the process are necessary so that this isn’t repeated?

It seems to me that a number of factors were at work.

First, there’s considerable political and economic pressure to approve new projects and the investments they represent.

For example, soon after taking office, Mayor Kirk Caldwell said one of the primary goals of his administration would be to work with developers to speed city approvals for new projects. Caldwell, who was managing director when Kyo-ya’s variance for the 26-story tower was approved, included it among the list of major projects which he said deserved expedited processing.

When specific legal requirements threatened the approval, they were simply sidestepped.

Caldwell told that speeding up approvals for these projects would boost the city’s income from real property taxes without having to raise tax rates. That seems to be a legitimate goal. The danger, though, is that from that perspective, approvals are apparently assumed, with the only remaining consideration being just how much faster they can be granted.

Second, what comes through in the dizzying array of documents, from the developer, the planning director, and the Zoning Board of Appeals, is that the planning process is usually approached as an exercise in bargaining rather than the strict application of existing zoning requirements.

In the case of the tower, the major concern appeared to be whether the overall package of public benefits would be enough to outweigh the negatives of the project. The assumption appears to have been that by extracting additional concessions from the developers, it would be possible to conclude that the tradeoffs would end up tipping the balance in favor of the project.

When specific legal requirements threatened the approval, they were simply sidestepped, again in the context of an overall balancing test.

For example, although the variance request should have focused on the 74 percent encroachment into the shoreline height setback, the planning director focused instead on how the project furthered several other objectives of the Waikiki Special Design Design District, including replacing an aging building with a modern one, retaining the historic Banyan Wing of the hotel, providing public beach access, “as well as other significant public benefits.”

In the process, though, specific requirements to be met before a variance from the height setback could be approved were lost in the shuffle or simply ignored.

Sometimes this sleight-of-hand went to the extreme, such as giving credence to Kyo-ya’s claim that its shoreline setback should be calculated on the basis of a 50-year-old state plan that hoped to extend the shoreline an additional 180 feet, although the plan was never implemented. If it had been built, the company said, its new tower would be legal. In essence, Kyo-ya said this fantasy shoreline — a nonexistent beach that theoretically might have extended hundreds of feet beyond the sands of Waikiki — provided the basis for granting their variance. And the planning director agreed, as did those other reviewers up the line.

Developers are Political Players

Just how this contorted logic became acceptable probably depends on additional factors.

A key one��is that the planning process is really an insiders’ game. There are��a handful of planning consultants who represent developers seeking permits or variances for their projects. Keith Kurahashi (Kusao & Kurahashi), represented Kyo-ya in this project.

According to city lobbyist records, Kurahashi also represents 20 other developers. He’s been a fixture in the hallways of the city for years, is familiar with all parts of the process, and perhaps more importantly, city officials are familiar with him.

As with all good lobbyists, Kurahashi’s long relationships with generations of city officials are played to his clients’ advantage.

And then there’s a long tradition of giving the planning director significant discretion when processing variance requests. Kyo-ya argued at several steps that strictly applying the applicable zoning standards would eliminate the director’s discretion and ““would bring an end to land use in Hawaii as it has been practiced since statehood.” That perhaps overstates the case, but there’s little doubt that others routinely defer to the director’s decisions.

Kyo-ya officials were clear insiders that the administration tried hard not to turn down when they came seeking a variance.

Another factor, certainly not to be overlooked, is politics.

Back in 2010, when the variance request was being processed by the city, several Kyo-ya officials and project consultants found time to be active in then-Mayor Mufi Hannemann’s gubernatorial campaign as well as to contribute directly to the candidate.

In March 2010, Victor Kimura, a director and corporate officer of several Kyo-ya companies, paid $1,503 for campaign T-shirts and was reimbursed by the campaign, according to reports filed with the Campaign Spending Commission. At the time, Kimura was also president of the Honolulu Firefighters Foundation, which at fire stations around the island.

On May 27, 2010, Hannemann’s campaign threw a $1,000 per person fundraiser at the home of Greg Dickhens, Kyo-ya executive vice-president, campaign records show. Others reimbursed for expenses for food and drinks for the fundraiser included Keala Dickhens, Greg Dickhens’ wife, and Robert Iopa, project architect for the proposed new tower.

Kyo-ya officers and employees contributed more than $15,000 to Hannemann’s 2010 gubernatorial campaign, more than to any other candidate, while project consultants added thousands more.

These aren’t amounts that would turn heads in the campaign world, but they add to the impression that Kyo-ya officials were clear insiders that the administration tried hard not to turn down when they came seeking a variance.

It’s likely that some combination of these sorts of factors, rather than a corrupt backroom deal, led to the breakdown of the planning process as it played out here.

If it weren’t for the dogged determination of the organizations that fought this case over a period of years — The Surfrider Foundation, Hawaii’s Thousand Friends, Ka Iwi Coalition, and Kahea: The Hawaiian-Environmental Alliance — we would be stuck with both a new 26-story tower on the beach and a weakened set of restrictions with which to defend what’s left of Waikiki’s special character.