Abuse Chronicles 2

As we continue our investigation into idiosyncratic North Shore Kauai transient vacation rental (TVR) permits, our attention turns to two tiny A-frames that were built in 1972, right across the street from windswept Kepuhi Point.

Though they are no longer tiny, having experienced the vacation rental-induced mushrooming effect of so many houses in these parts. One of the A-frames is called Rainbows End, and is owned by Joseph and Patricia Gernard of Texas. The other is called Ka Hale Poo O' Kauai and is owned by Ron Seiple of Oahu and his wife, Mary Elizabeth.

In his Oct. 6, 2010, application to the Kauai County Planning Department for a nonconforming use (NCU) permit to operate a TVR, Seiple submits a notarized affidavit in which swears that he has operated a vacation rental on the property since 1972. Under the county ordinance, a unit must have been in use as a TVR prior to 2008 to qualify for a permit. Seiple also added a note that read, in part:

We have owned this property since 1972. It was a legal [sic] vacation rental managed by Kauai Real Estate and Vacation Rentals, Napali and Prosser from that time until it was seriously damaged by hurricane Iniki [in 1992]. After Iniki we rented this property as a long term rental unit until a few years ago. Two years ago we began a major re-building of our property as it was long overdue.

The “major re-building” he is referencing was a $243,000 expansion that added 2,111 square feet to the existing 1,178-square-foot house. It was allowed under a building permit that was first issued in 2007, revoked on June 24, 2008 and then re-issued on Aug. 14, 2009.

The county zoning ordinance states:

“If any nonconforming use ceases for any reason for a continuous period of 12 calendar months or for 1 season if use be seasonal, then the use should not be resumed and any use of the building or property thereafter shall be in full conformance with the provisions of this chapter.”

Yet despite acknowledging that his property had not been in vacation rental use for the previous 18 years, and had been under construction for the past two years — two admissions that proved the nonconforming use had ceased for more than a year — Seiple was still given a TVR permit. Curiously, the TVR permit was issued before the final building inspection on June 30, 2011.

Seiple clearly had, by his own admission, ceased his non-conforming use for more than a year, yet still he was allowed to resume it. What's more, a review of county tax records show his property taxes are calculated according to the original square footage, not the expansion.

Meanwhile, after the county adopted the first TVR ordinance in 2008, the Gernards applied for an NCU permit to legally operate Rainbows End, which they had purchased in September 2000 for $600,000. In his notarized affidavit, Gernard claims the house had been used as a vacation rental since Jan. 1, 2001, and swears:

“No building permits have been issued since then [the original in 1972]. The house has not been modified since it was built. A previous owner modified a garage storage area to accommodate an “Ohana Unit”. It is not known to us if these modifications were permitted by the county. This “Ohana unit” is presently unused and is being reverted to storage in accordance with the regulations for TVR.”

The county conducted an inspection, as the initial TVR ordinance required, and found that the “ohana unit” was an illegal dwelling unit with a full kitchen — as in an installed range, not just a rice cooker.

The county ordered the Gernards to cease and desist TVR uses on the property, and stop using the storage shed as a living unit. The Gernards also were ordered to “submit plans and applications along with filing fees for review by the department for all illegal construction additions and alterations. Such construction, additions and alterations without proper approval shall be demolished and removed.”

The Gernards responded by getting a building permit valued at $54,000 on May 28, 2009. The Planning Department reviewed the permit and made the comment, “Violation exists.” That permit was subsequently closed. On July 26, 2010, the Gernards were issued a building permit for a lanai, garage and bedroom addition that essentially encompassed the illegal structure into the original 1,577-square-foot residence, enlarging it by 1,234 feet. 

However, it appears that even more work was done, as a current ad for Rainbows End states, emphasis added: "Everything in the 3 bedroom 3 bath house is new." The original house had just one bath. The property is served by a cesspool.

In 2010, the county revised the TVR ordinance, removing the mandatory inspection and other requirements, and allowing agricultural properties to apply. On Sept. 23, 2010, when the house was still under re-construction, the Gernards resubmitted their application. This time, it was granted, on April 5, 2011, even though, like Hale Poo, the non-conforming use had ceased for more than a year. Like Hale Poo, the permit was approved months before the final building inspection, which took place on Sep. 21, 2011, when the certificate of occupancy was also granted. 

And like Hale Poo, Rainbows End was able to accommodate many more guests than in the original structure. Non-conforming uses are supposed to be brought into compliance, not expanded.

A review of the TVR files shows no record of either owner submitting any documentation to prove the houses had been used as vacation rentals prior to 2008, such as leases or a record of paying general excise or transient occupancy taxes. 

Furthermore, it appears that Seiple is currently not using his house as a TVR, which raises the question: are people allowed to “bank” these valuable permits until they're ready to sell the property and take advantage of the higher prices that can be gained by having a lifetime TVR permit? As we saw in the first installment of "Abuse Chronicles," a TVR permit can add $1 million to the value of a house.

Next, the King and the Princess.