But though Michaels was the first, he certainly wasn’t the only Kauai real estate speculator to lowball the cost of renovations to avoid complying with 1981 National Flood Insurance Program rules that required new, or substantially improved, buildings in the flood zone to be elevated.
Tom Brooks, an Orange County, Calif., builder, spotted a similar opportunity when he purchased a three-bedroom, three-bath house at 4445 Alamoo Rd., Wainiha — just around the corner from Michaels’ Blue Lagoon vacation rental — in January 2006.
Brooks, who is also a director of the stalled Kulana ag subdivision in Kapaa, paid $1.1 million for the 2,640-square-foot house, which was built in 1977 — prior to the more stringent flood rules.
The MLS listing offered two photos of the house and a description:
Remarks: Spacious and bright cedar home enjoys beach access steps away. Permitted ground floor living areas offer lots of potential and multiple living arrangements. Huge covered lanai is bright and breezy. Hear the surf while gazing at the mountain view. Open beam ceiling upstairs complement the thick 3" cedar single wall construction. Upgrades are due as downstairs and some exterior areas reflect deferred maintenance.
Private remarks: Sold "as is" only. Original owner occupant seller, no vacation rental history.
Brooks quickly got to work, and within four months of purchasing the house got a building permit for alterations and repairs valued at $60,000 on a house that had inexplicably expanded to 2,900 square feet.
Although the scope of work detailed in the permit was limited to “Replace Roof, siding, windows, cabinets, drywall, and Repair Electrical,” it wasn’t long before the house looked nothing like its former simple self:
County records show that the house passed all of its inspections. But half were waived, and the rest were done on the same day — April 25, 2007 — raising the question of how framing and final inspections could be conducted concurrently.
In August of that year, Brooks got a building permit for the 178-square-foot porte cochere that is evident in this photo, which was taken prior to issuance of the permit:
The planning department allowed the porte cochere to be built under an amended previous SMA minor permit. County records show no inspections were conducted.
County records also show how both the renovation and porte cochere were determined to be “unsubstantial improvements,” based on their purported combined value of $73,800 and the house’s assessed value of $159,000.
Its transformation complete, the former three-bedroom, three-bath structure was renamed “Hale Pohaku” and turned into a luxury vacation rental — an entirely new use with a now fully enclosed downstairs and an additional bedroom and bath.
Fabulous, newly built 4 bedroom, 4 bath home n Haena on Kauai’s famous north shore near Tunnels Beach. Privacy is not an issue at this gated, two story custom built home, perfect for your families vacation.
Totally brand new, this wonderful home features a large living room with a big screen satellite TV and surround-sound speakers, open kitchen with breakfast bar, hardwood floors, and large windows facing the magnificent mountains.
Even more intriguing were the references to two kitchens, where previously there had been just one, and the suggestion of a multifamily dwelling, which is prohibited under the North Shore Plan:
High ceiling, hard-wood floors, A/C and a gourmet kitchen are just a few things that add to the elegance of this property. The upper level is complete with two separate lanais furnished with comfortable furniture to bar-be-cue and take in the views of the majestic mountains. Both bedrooms with queen beds are equipped with flat panel TVs.
The Lower level features a suite with 2 twins, separate kitchen, and bathroom with Jacuzzi tub and shower combination. A separate bedroom with queen bed, flat screen satellite TV and detached bath with shower stall completes the downstairs.
Here’s a photo of that downstairs kitchen, which was posted on a vacation rental website:
Remember, this total makeover — including the addition of living quarters on the newly enclosed ground floor — was presented by Brooks as an “unsubstantial improvement” valued at just $78,000.
And because it was determined to be unsubstantial, the Department of Health did not require Brooks to install a septic tank. Instead, it allowed him to keep using the original cesspool, even though the house is now a multifamily dwelling sleeping eight.
On Sept. 8, 2009, Pohaku House was one of 30 properties that went before the county Planning Commission for a non-conforming use permit to operate a transient vacation rental. Under the newly enacted county ordinance, Brooks had to sign an affidavit swearing the house was used as a TVR prior to March 7, 2008.
The county planning department recommended blanket approval of the entire batch. Caren Diamond and Barbara Robeson of Protect Our Neighborhood `Ohana objected, in part because planners had offered no details on why the applicants, some of whom had been previously denied, were now getting the green light.
Next: What happened at the Planning Commission.
Comments accepted at Kauai Eclectic.
Construction photos by Caren Diamond
