Surfrider Foundation v. Zoning Board of Appeal, City and County of Honolulu.
358 P.3d 664, 2015 Haw. LEXIS 235, 136 Haw. 95 (2015)
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Rule of Law:
To obtain a zoning variance on the grounds of unnecessary hardship, an applicant must satisfy all three prongs of the governing test: deprivation of reasonable use, unique circumstances of the property, and consistency with the ordinance's intent. Economic inconvenience, the desire for a more profitable design, or reliance on hypothetical conditions do not constitute a deprivation of reasonable use.
Facts:
- Kyo-ya Hotels & Resorts LP (Kyo-ya) owns the Moana Surfrider hotel complex in Waikiki, which is located within the Waikiki Special Design District (WSD).
- The WSD ordinance includes a Coastal Height Setback, requiring a 100-foot no-build zone from the certified shoreline and a 1:1 height setback beyond that point to preserve open space.
- Kyo-ya proposed to redevelop its 8-story Diamond Head Tower with a new 26-story hotel and residential tower.
- The proposed new tower was designed in such a way that approximately 74.3 percent of the building would encroach into the legally mandated Coastal Height Setback.
- The property lot is relatively narrow and is adjacent to the historic Banyan Wing of the hotel, which Kyo-ya had committed to preserving.
- In 1965, the State of Hawaii and shoreline property owners, including Kyo-ya's parent company, entered into an agreement for the state to expand the beach by about 180 feet, but this expansion was never completed.
Procedural Posture:
- Kyo-ya Hotels & Resorts LP applied to the Honolulu Department of Planning and Permitting for a variance from the Waikiki Special District's coastal height setback.
- The Director of the Department of Planning and Permitting (a city agency) granted a partial approval of the variance.
- Surfrider Foundation and other organizations (Surfrider, appellants) appealed the Director's decision to the Zoning Board of Appeals (ZBA).
- The ZBA, an administrative appellate body, denied Surfrider's appeal and upheld the Director's decision.
- Surfrider appealed the ZBA's order to the Circuit Court of the First Circuit (a state trial court).
- The circuit court affirmed the ZBA's order.
- Surfrider appealed the circuit court's decision, and the case was transferred to the Supreme Court of Hawai'i (the state's highest court) for review.
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Issue:
Did the Director of the Department of Planning and Permitting err in granting a zoning variance allowing a hotel project to encroach 74 percent into a coastal height setback by finding the applicant had demonstrated unnecessary hardship under the city charter's three-part test?
Opinions:
Majority - Pollack, J.
Yes. The Director erred in granting the variance because the applicant failed to satisfy any of the three mandatory requirements for establishing unnecessary hardship. First, Kyo-ya was not deprived of reasonable use of its land, as it failed to show an inability to make any reasonable use, such as renovating the existing structure or constructing a compliant building; a desire for the most profitable use is insufficient. The Director improperly relied on irrelevant evidence, including the unfulfilled 1965 Beach Agreement and a future beach maintenance project, as variances must be based on the current certified shoreline, not a hypothetical one. Second, the circumstances were not unique to the property; the setback requirements apply to all shoreline properties, and general conditions cannot justify a variance. Third, the 74% encroachment is fundamentally contrary to the intent and purpose of the WSD ordinance, which was specifically created to prevent overdevelopment along the shoreline, preserve open space, and enhance Waikiki's unique Hawaiian character. The existence of prior non-conforming buildings does not justify creating new, more significant non-conformities.
Concurring - Recktenwald, C.J.
Yes. The Director clearly erred in concluding that Kyo-ya would be deprived of the reasonable use of its property. The Director's reliance on the irrelevant 1965 Beach Agreement and the unsupported conclusion that the variance was necessary for economic viability are sufficient grounds for reversal. Because the applicant failed to meet the first requirement of the variance test, it is unnecessary to reach the second or third requirements.
Analysis:
This decision significantly reinforces the stringent nature of the 'unnecessary hardship' standard for zoning variances, making it more difficult for developers to deviate from protective zoning ordinances. The court's ruling clarifies that an applicant must demonstrate an inability to make any reasonable use of their property, not merely that a compliant use is less profitable or desirable. By invalidating reliance on hypothetical future conditions, unfulfilled private agreements, and the existence of other non-conforming properties, the court establishes a clear precedent that variances must be justified based on current, tangible, and unique physical attributes of the parcel itself. This holding strengthens the power of zoning ordinances designed to protect environmental and aesthetic resources, such as coastal setbacks, against challenges based on economic arguments.
Unlock the full brief for Surfrider Foundation v. Zoning Board of Appeal, City and County of Honolulu.