Maui County and its B&Bs caught in legal fray

Visitors to Maui, Lanai and Molokai will have far fewer lodging choices beginning Jan. 1, when county officials say nearly all of the estimated 1,000 bed-and-breakfasts and vacation rentals must shut down for failing to hold the appropriate licenses.

In reaction, the owners of the B&Bs and rental homes are suing Maui County -- which encompasses all three islands -- claiming that county officials who took office earlier this year, the county mayor included, have broken promises made by their predecessors to allow unlicensed properties to remain open, pending an overhaul of the permit process.

For your information

The county of Maui has developed a list of the 21 B&Bs and vacation rentals with permits: www.co.maui.hi.us/departments/Planning/pdf/092407-PrmtdTVRBBSpread.

The Maui Vacation Rental Assn. regularly updates information about its battle with the county, at www.mvra.net.

Beginning Jan. 1, “visitors will be able to stay in hotels, resorts and in any of the 21 permitted home-based accommodations,” says David Dantes, president of the Maui Vacation Rental Assn. and the leader of the legal action against the county. “Most of the visitors who prefer to avoid hotels or commercial settings won’t have a place to stay.”

Homeowners are seeking an injunction to stop the county -- at least temporarily -- from closing the nearly 1,000 unlicensed properties.

County inspectors began their crackdown in July, ordering about 20 properties to close. Officials refuse to say how many more have been shut down since, but Dantes said the inspectors have been focusing on the Upcountry and North Shore areas.

Claudia Ledesma, who operates a vacation rental in the North Shore community of Haiku, was among the first to be contacted.

“We got a phone call on July 6 from one of the enforcement inspectors,” she recalled. “He said, ‘You have to stop advertising, and you cannot take any new reservations.’ ”

Claudia and her husband, Kevin, say they were told they could honor existing reservations through the end of the year but that after Dec. 31, no non-permitted properties -- theirs included -- could accept guests.

The Ledesmas are among about 70 owners who have permit applications pending before the county. Dantes says a majority were filed between 1998 and 2002 but that action on them was postponed amid discussions between the rental association and the former planning director about streamlining the procedures. As the rules are now written, “the process is burdensome, not only on the applicant, but also on the county,” Dantes says.

“People who are staying in bed-and-breakfasts and vacation rentals won’t stay in hotels,” says Sande Greene, the owner of Ocean Breeze Hideaway in Kihei, one of the handful of licensed B&Bs. “They’re a whole different clientele. They like the small, intimate feel. They’ll go somewhere else.”

On her website, Greene has posted her B&B license number. “Our Bed and Breakfast has been operating as one of the few licensed and legal B&Bs on Maui since 1999,” it also notes. She says she no longer refers would-be guests to unlicensed properties -- not because of their status with the county but because so many of them face closure.

Randy Parole and his family loved their vacation last August on Maui, where they rented a home for a week. But they probably won’t be back.

“It’s my heaven,” the Newport Beach businessman said of the vacation rental. “It was the most relaxing experience.”

The Paroles count themselves among those who now eschew the hotel scene. “I would not go back to Maui and stay in a hotel,” Parole says. “It’s not the Hawaiian experience.”

Maui County Mayor Charmaine Tavares declined to be interviewed, on the advice of counsel.

Tavares, who took office in January, appears worried that the rental properties are disrupting the lifestyle of some neighborhoods, particularly in traditional communities. She addressed the issue earlier this year, in an interview for “Inside Maui,” a Web-based public affairs program.

Rental homes “may generate income for the North Shore, but at what cost . . . to the residents?” she said. “The residents who are having to deal with the impact of the vacation rentals, they should count too.”

“There are a few such neighborhoods where people have bought homes and started vacation rentals and they have caused problems,” Dantes said. But “you could count the number of neighborhoods where that’s happened on the fingers of one hand.”

County Planning Director Jeff Hunt says part of the problem is the growing size of the B&B industry. He told the Maui News that the number of properties is increasing by 14% each year. “As the number of rentals increased, public support for them shifted,” he said in a September interview.

A federal judge in Honolulu will hear the case on Wednesday. If he sides with the county, B&B owners will be legally bound to host their last guests on New Year’s Eve.

Even if the judge agrees with the innkeepers, Dantes says, he expects further salvos from the county.

Meanwhile, the Ledesmas haven’t accepted a single reservation since that first phone call five months ago. They have been further frustrated by a letter they received from the county on Nov. 1, ordering them to shut down by Nov. 15. They say it came out of the blue.

“It was a two-week notice to cease and desist all operations,” Kevin Ledesma says, adding that he honored the reservations of guests who booked over Thanksgiving and plans to do the same for Christmas, ignoring the latest order. “We’re not going to do that. That’s contrary to the Aloha spirit, and we refuse to be a part of that.”