Tuesday, January 6, 2009

Mitigation Allows Surf School to Continue as Nonconforming Use

Save Diamond Head Waters, LLC v. Hans Hedemann Surf, Inc., ICA No. 27804, December 19, 2008, is a recent Hawaii zoning case involving nonconforming uses. The underlying points of law in this case are that nonconforming uses can be changed, but they cannot be expanded.  Also, an accessory use must be secondary to the allowed primary use.  The Surf School in this case was allowed to continue, because it was not an accessory use but a changed nonconforming use.

Hans Hedemann Surf, Inc. (“Hedemann”), operates Hans Hedemann Surf School (“Surf School”). The Surf School is located on the ground floor in a space called “Shop #7” of the New Otani Kaimana Beach Hotel.

The Hotel was constructed in 1950 and expanded in 1962. When built, zoning at the site allowed “commercial uses other than businesses that primarily served the tenants and occupants of the buildings in which they were located, known as ‘accessory uses’” Current zoning at the site is “A-2 Medium Density Apartment District designation. Hotel and accessory uses are not permitted in A-2 districts. However, because hotel use was acceptable at the time of the Hotel's construction and the Hotel has continued to be used as a hotel, hotel use survives as a nonconforming use.”

Neighbors protested the Surf School’s operation at the Hotel and sought a declaratory order from the Director of the Department of Planning and Permitting. The Director ruled in favor of the Surf School as follows:
. . . [t]he Hotel itself is a nonconforming use and although "accessory" commercial businesses are allowed within the Hotel, the operation of the Surf School was not an accessory use, because it did not draw its students/customers primarily from the Hotel. The Director also ruled that the Surf School's operation did not represent an expansion of the nonconforming use as there had been no physical expansion of the existing structure, no extension of operating hours insofar as the Hotel operated on a 24-hour basis, no evidence of an increase of "visitor units" within the Hotel or any other increase in density or intensity of use on the site. The Director concluded that the Surf School was more properly characterized as a change of use rather than an expansion of the nonconforming use and that the activities conducted on-site --assembly and registration of, and distribution of surfboards to students, as opposed to actual instruction -- was an "office" use. The ZBA agreed with the Director on these matters.  (Emphasis added.)
The neighbors appealed to the first circuit court, which reversed the Director’s decision. The Surf School appealed to the intermediate court of appeals (“ICA”), which reversed the first circuit and upheld the Director’s decision.

The question before the ICA was “whether the Director, in response to [the neighbors’] petition for a declaratory ruling, acted beyond his authority to issue that ruling when it set the permissible limits of a lessee's use of its leased space under the [Land Use Ordinance].” 

In affirming the Director’s decision, the ICA approved that the Director “set the standard for the impact of a surfing class as ‘no greater than if it operated as an accessory use of the hotel’ and focused on determining ‘the level of activity or intensity of use which results in greater adverse effects.’” The Director’s decision was not an abuse of discretion, because his “ruling was reasonably based on the evidence before [him] and constituted a reasonable application of the applicable zoning ordinance and the DPP's previous interpretation of that ordinance.”

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