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Something Stinks in Hilo

Something Stinks in Hilo      

A developer's connections,  government shortcomings and raw sewage add up to a mess for some Hilo homeowners. And a bill for taxpayers.

      By Rob Perez       Star-Bulletin      

      

HILO -- Raw sewage has seeped into homes and yards in a state-financed subdivision where cesspools were installed despite indications before and during construction that the underground waste pits could overflow.      

The new houses were sold in the early 1990s even though the developer, Ala Kai Piihonua Partners, didn't obtain state approvals required before the cesspools could be used.      

The partnership, headed by prominent Hilo Realtor Yukio Takeya, also wasn't registered to do business in Hawaii when it built the homes on state land and received a state loan to do so, according to government records.      

The case of Piihonua Meadows, a quiet, country-like subdivision of 37 "affordable" homes in upper Hilo, depicts a state government that failed to provide adequate oversight and a politically well-connected developer who was able to do work without meeting key state requirements.      

Since March 1994, 11/2 years after residents started moving into the subdivision, cesspools have failed in eight of the 37 homes, creating health and safety hazards for residents, according to state records.      

In some cases, raw sewage has backed up through tub drains and toilets, overflowing onto floors and carpets, residents say.      

"This is serious," said Dennis Tulang, manager of the state Department of Health's wastewater branch. "Nobody wants to live with backed-up sewage."      

Tulang said he wasn't aware of any health problems stemming from the cesspool failures.      

Six cesspools have since been replaced with septic tanks by the state, and that seems to have solved the problem for those homeowners.      

But the remaining cesspools in the subdivision have the potential to malfunction because of underground water, the state disclosed in court documents. Two cesspools failed as recently as June.

Every time it rains hard -- a common occurence in Hilo, where annual rainfall averages 129 inches -- Piihonua residents say they worry about sewage backups.      

"It is a very horrible way to live," said Sharyl Arizumi, one of the homeowners whose cesspool failed and eventually was replaced. "We will never forgive the state for it."      

Aside from the hazards and inconvenience that Piihonua residents have endured, the problem will cost taxpayers a bundle.      

The state Housing Finance and Development Corp., which loaned $3.6 million to Takeya's partnership for the project, has projected spending a minimum of roughly $500,000 to replace the cesspools with septic tanks.      

A pending settlement of a lawsuit brought by 50 Piihonua residents against HFDC, the developer and others could cost taxpayers even more.      

There were warning signs

      Although state regulations permitted cesspools when the project received final approval in early 1991, warning signs about potential problems were evident.      

Homes in two nearby communities, Akolea and Ainako, had been having sporadic cesspool failures for years because of underground water conditions -- the very problem plaguing Piihonua today, according to former and current state wastewater officials.      

The ground in upper Hilo contains impermeable rock layers, and many cesspools lie above those layers, according to the wastewater officials.      

During heavy rains, underground rivers form atop the impermeable layers, and as those waters rise, the cesspools fill from the bottom, creating the potential for overflows.      

In an August 1990 memo to Hawaii County, Aaron Ueno, then-state supervising sanitarian for the Department of Health, expressed concern about the issue:      

"Applicant (for the Piihonua project) should be informed that developments in this area have encountered groundwater problems during construction of individual wastewater systems," Ueno wrote.      

His words proved prophetic.      

During construction of Piihonua the following year, several cesspools started filling with water from below -- well before the pits were even used.      

"It seemed like there was an underground river," said developer Takeya.      

Yet the discovery apparently didn't trigger a reassessment of cesspool use. Instead, the holes were filled and new ones dug elsewhere on the lots.      

Takeya said the project's cesspool subcontractor was told by a state inspector to change the locations of the affected cesspools to see if that solved the water problem.      

"The inspector was there, and when we dug 10 feet away there was no problem," Takeya said.      

But George White, an HFDC spokesman, disputed Takeya's account. He said the decision to relocate the cesspools was made by the project's contractor and cesspool subcontractor.      

The agency was informed about the water problem and told the subcontractor had addressed it, White said.      

       

Buyers weren't told

      Whoever's account is accurate, one thing is undisputed: Buyers, some of them low income, weren't told about the problem when they purchased the $99,500-to-$115,000 homes.      

Nor were they told that cesspools had been relocated.      

Homeowner Glenn Spencer said he accidentally discovered the whereabouts of his cesspool when he was grading his back yard for a planned house extension.      

The cesspool was on the opposite side of the yard where his plot plan showed it should be, he said.      

"We were just happy to be able to buy a home, then all these problems come up," Spencer said.      

When asked why buyers weren't informed about the water problem or cesspool relocations, Takeya, whose Ala Kai Realty handled the home sales, said, "Maybe we overlooked that."      

Takeya also acknowledged that the partnership failed to get the required Department of Health approvals -- which he called routine -- for using the cesspools.      

He said a dispute between the contractor and subcontractor apparently resulted in neither filing the necessary documents.      

But Takeya said the cesspools, as well as other aspects of the project, were regularly inspected by HFDC during construction.      

Everything was done according to state-approved standards, and any changes to construction plans received HFDC's blessing, Takeya said

      "All the cesspools were dug to standards. Guaranteed," he said.      

HFDC's White said the agency's inspections were done primarily to check progress of construction -- information needed to release loan      funds.      

The inspector checked for general compliance to plans and specifications but not in minute detail, he said. The county handled building-code inspections.      

"The developer had full responsibility for design, approval and construction of the project," White said. HFDC's primary role was "as a lender and landowner."      

The development agreement, however, required the developer to submit to HFDC satisfactory evidence that the partnership followed all applicable laws and regulations. Sewage approvals were mentioned specifically.      

But the agency didn't check for Department of Health documentation.      

White said HFDC was satisfied with the developer's "representation" that approvals for the cesspools were obtained, although he couldn't say what form that representation took.      

The agency also didn't ask for documents showing that the partnership was registered to do business in Hawaii. Ala Kai was required to provide the documents -- but only if HFDC asked for them.      

Yet the partnership didn't register with the state Department of Commerce and Consumer Affairs until August 1992 -- eight months after construction was completed, state records show.      

Takeya said Ala Kai filed the required papers with DCCA when the partnership was formed in April 1990. But because of a technicality -- an ampersand was used instead of the word "and" in one of the partner's      names -- the registration was delayed, he said.      

Residents said they were inconvenienced because the registration problem delayed closing of the home sales.      

White said HFDC signed the development agreement knowing that Ala Kai's principal partners, Ala Kai Realty and C and E Partners, were properly registered, had done previous work for the state and were familiar to the agency's board members.      

Indeed, Takeya was a member of another state board, the Real Estate Commission, when he helped negotiate the development agreement. Like the HFDC board members, Takeya had been appointed to the commission by then-Gov. John Waihee.      

Takeya and C and E principals Norman Egusa and Howard Chai signed the agreement on behalf of the then-unregistered partnership.      

Asked how HFDC could lend money to an entity not registered to do business here, White said, "In this situation, the board was comfortable enough with the principal partners."      

For some residents, the situation appeared too comfortable. They said the developer got favored treatment because of political connections -- a charge White denied.      

       

Relations chilled

      If the HFDC and developer seemed too cozy then, that's hardly the case today.      

The agency under Gov. Ben Cayetano, who inherited the Piihonua mess from the Waihee administration, has demanded $700,000 from Ala Kai to fix it.      

Takeya's response: "They must be out of their minds."      

He said fixing the problem is HFDC's responsibility, not his. The agency disagrees.      

The dispute is one reason the problem has dragged on for more than three years, angering many residents. When the first failure was reported in 1994, it took months to get anything done, partly because of the finger-pointing.      

Takeya eventually agreed to dig the homeowner another cesspool, but that one couldn't get Health Department approval. It took in too much underground water.      

As more cesspools started to fail, HFDC realized the problem was not isolated to one or two homes. For health and safety reasons, White said, the agency decided to take responsibility to fix the problem and try recovering costs later.      

Residents said the July 1996 filing of the lawsuit, which alleges faulty construction, prodded the state to act more quickly.      

Takeya said soil testing done prior to construction -- four to six drywells were dug 30 feet deep -- didn't detect any underground water.      

He said he didn't consider using septic tanks for the project, partly because of cost and because cesspools  were the accepted alternative if connection to Hilo's main sewage system was out of the question.      

Cesspools cost about $1,500 per home to install, while septic tanks run $4,000 to $6,000 minimum, according to Takeya, who said the partnership earned only a $1,500 profit per home at the HFDC project.      

Despite the cesspool problems, Takeya says Piihonua still is one of the best developments in Hilo. "I think we did a good job."      

Likewise, White said his agency performed like it was supposed to. "HFDC feels that, given its role in the project, it did meet its responsibilities," he said.      

Piihonua, as it turned out, was one of the last Hilo developments to use cesspools.      

Even as the project was making its way through the HFDC approval process, the Health Department was compiling data and drafting rules that would have prohibited the use of cesspools in subdivisions like Piihonua.      

Those rules were adopted in August 1991 -- seven months after the Piihonua development contract was signed.

‘We went throughthe worst’      

Some couldn't do laundry, flush, or bathe at home

      By Rob Perez       Star-Bulletin      

      

HILO -- For two years, little Jordon Arizumi was afraid to flush the toilet.      

As a 5-year-old, he became so traumatized when a toilet he was using backed up that he ran into a nearby closet and hid. His mother says he wouldn't flush again until he was 7.      

A few weeks before the toilet incident, Jordon pulled back a shower curtain to take a bath, only to find black liquid spewing from the tub drain.      

It was raw sewage.      

In both cases the problem was the family's backyard cesspool. It had overflowed, causing the blackened waste to ooze back into the home.      

Until the state fixed the problem more than six months later, installing a septic tank, the Arizumis lived like no one should have to, especially after paying more than $100,000 for a new home.      

Fearful of another overflow, they didn't do laundry in their house.      

They didn't flush toilets after urinating.      

They didn't use water elsewhere in the home if someone was taking a shower.      

"We went through the worst," said Jon Arizumi, Jordon's father.      

They weren't the only ones.

      Since March 1994, cesspools have failed in eight of the 37 homes in the state-financed Piihonua Meadows subdivision where the Arizumis live.      

One family had to use the bathroom at a nearby park and bathe at relatives' houses after their cesspool failed, according to state records.      

The failures were due largely to a buildup of underground water that forced waste from the buried pits to back up into the homes.      

Many of the other houses in the subdivision have cesspools that are in danger of failing, especially during heavy rains.      

The state already has replaced six with septic tanks. But it has said in court documents that replacing the other cesspools will take until late next year.      

In the meantime, residents say they worry, wondering if the next heavy rainfall will bring raw sewage with it.      

"The state better replace them before anything backs up into my house," said Tyler Arizumi, Jon Arizumi's neighbor but no relation.      

Glenn Spencer, another homeowner, said one neighbor had to open the clean-out valve to his cesspool to prevent sewage from backing up into his house.      

But so much spewed from the valve that the waste flowed into another neighbor's yard, creating a stinky mess, Spencer said.      

The homeowner eventually called a company to pump out the cesspool, and two truckloads of waste and wastewater were hauled away, Spencer said.      

The next day, the cesspool was nearly full again, he said.      

During heavy rains, "this becomes like a swimming pool," he said, motioning to his and his neighbor's yard. Spencer dug a shallow trench through the middle of his back yard, hoping to prevent his cesspool from overflowing.      

So far that has worked.      

A walk through this upper Hilo subdivision offers few clues of the dread that these residents have endured the past several years.      

It is a quiet, peaceful neighborhood with tidy yards, though some homeowners have put off landscaping until the state finishes the cesspool replacements.      

Dogs are hunkered in carports and back yards, while kids ride bikes or play ball in the streets, not having to worry about city traffic.      

Residents say neighbors look out for each other in Piihonua, ready when needed to lend a helping hand. They say they love the community -- if only the cesspool problem could go away.      

As horrifying as the problem sounds, the story of Piihonua has gone largely untold because many residents won't talk about it.      

The homeowner association has shunned publicity, fearful that could jeopardize settlement negotiations with the state, residents say.      

As of late May, only one issue remained to be resolved, according to court documents. The state Housing Finance and Development Corp., which oversaw development of the project, refuses to reimburse homeowners for damages resulting from cesspool backups.      

"Our role is not that of an insurer," said HFDC spokesman George White.      

Melody Parker, the association president, didn't return phone calls seeking comment.      

Some homeowners say they are glad the story finally is coming out. If nothing else, they say, it will put public pressure on the government to move quickly.      

"This will really get the state off its butt," one resident said. "The problem has gone on way too long."

THE DEVELOPER

Yukio Takeya stands by his reputation

      By Rob Perez       Star-Bulletin      

      

He was the deal maker. The money man. The guy who made things happen.      

When a proposal to build affordable homes on state land in upper Hilo stalled in the late 1980s, the developer turned to Yukio Takeya to revive the project.      

He did just that.      

Takeya, whose company Ala Kai Realty became general managing partner in the venture, helped negotiate a 1991 deal with the Housing Finance and Development Corp., securing a $3.6 million state loan to build 37 homes on nearly 11 acres of state land.      

That Takeya was able to resurrect the project was not surprising. He was a man with considerable connections and an impressive resume. At the time the deal was negotiated, he was a prominent Hilo Realtor and a member of the state Real Estate Commission, the government body that regulates the industry.      

He served on the commission from 1983 through June 1991, having been appointed by former Govs. George Ariyoshi and John Waihee. Takeya said he supported and contributed to the campaigns of both governors.      

The decorated war veteran also was past president of the 442nd veterans club of the Big Island and later became president of the Japanese Chamber of Commerce. In real-estate circles, brokers say Takeya is well respected. His expertise often is sought by lawmakers and industry officials.      

One indication of his stature: Takeya, 71, recently was elected 1998 president of the Hawaii Association of Realtors, the trade group that represents Realtors statewide.      

"He's thought of very highly," said Edith Crabb, president-elect of the Hawaii Island Board of Realtors. "He's considered a very ethical broker."      

In fact, Takeya, as head of the Real Estate Commission's laws and rules committee, was considered instrumental in getting tighter rules for brokers adopted in 1991. The regulations still are referred to as the "Takeya      Rules."      

Before Takeya got involved with the Piihonua Meadows project, which received County Council approval in 1986, it had been dormant for several years because of lack of money. Takeya said he was brought in for his ability to get financing.      

Takeya's company and one of the project's original partners, C and E Partners, formed Ala Kai Piihonua Partners to develop the project. C and E's principals were contractor Norman Egusa and Howard Chai.      

Takeya said he doesn't expect the Piihonua controversy to hurt his reputation. He said he's been in the business for so many years that people already know the quality of his work.


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