Maui Entrepreneur Says County Is Determined To Put Him Out Of Business

PAIA, Maui — White sand beaches, world-class surf breaks and yoga studios lend Paia a decidedly laid-back, hippy vibe.

A dharma center, vegan food offerings and a non-denominational temple enhance this coastal enclave’s peaceful energy. But Paia’s surface-level Zen contrasts sharply with a simmering feud between local businessman Michael Baskin and the Maui Planning Department, specifically its director.

The battle between Baskin and Planning Director Michele McLean has been churning for over a decade, according to interviews, public documents and court filings. And it’s moving toward a crescendo with an upcoming County Council vote on a zoning change that could put the Paia entrepreneur out of business.

Baskin owns Paia Inn, a historic building on Hana Highway in downtown Paia, along with three short-term rental units behind the inn, the Surf Club restaurant a few doors down and several commercial and residential properties in the area.

He has been caught up in major disputes with Maui County over permitting violations and parking issues, and had to pay the largest fine in county history at the time, $500,000 in 2015, according to news accounts.

Baskin has won some rounds in court against the county, allowing him to stay in business. But he’s now facing imminent threat from a proposed amendment to a zoning law that would prohibit the Paia Inn from operating after its county special use permit expires in December 2028.

The ordinance change, which has countywide implications, is designed to help defuse Maui’s tourism pressures by permanently capping new transient vacation rentals in various parts of the island. Paia Inn would be deemed nonconforming, eliminating Baskin’s right to apply for a permit renewal and effectively put him out of business.

Baskin sees this as the latest and most serious example of him being victimized by targeted, retaliatory zoning enforcement. He says it stems from a personal dispute with McLean and her husband that happened many years ago, a situation that allegedly involves physical violence. Baskin says he ultimately wants things to change so others don’t have to endure what he says he’s gone through.

McLean disputes Baskin’s allegations and says the Planning Department has done its job fairly and evenly in responding to numerous code infractions. Any trouble Baskin has had with the county he’s brought on himself, in her view.

“He’s had a lot of violations. He’s paid significant fines. To me, those speak for themselves,” McLean said.

‘We’re Not Outsiders’

Baskin, 59, moved to Paia with his parents at age 14. He graduated from Seabury Hall in 1981 and attended college and graduate school in California. Baskin and his wife, Sarah Sparks, have three children who attend Seabury, a private college preparatory school in Makawao. His 89-year-old father lives nearby.

“We’re not outsiders. We’re local kamaaina people who know the island,” he said.

After a career as a luxury home designer in Los Angeles, Baskin said he returned to Maui 20 years ago to put down roots. His passion is fixing up and restoring old buildings and turning them into stylish homes and travel lodging. He also builds high-end new construction, and that’s where Baskin’s battles with the Maui Planning Department began.

In the spring of 2012, Baskin said he was looking for a general contractor to build a cottage on oceanfront property owned by Hollywood actor Owen Wilson. The project budget totaled about $415,000, according to an ethics complaint Baskin filed against McLean in 2014.

Baskin, working as a design consultant for Wilson, knew the McLeans through pick-up soccer games. That’s where McLean’s husband, carpenter Paul McLean, learned about the job at Wilson’s property and put in a bid.

Through due diligence, Baskin said he discovered Paul McLean lacked an active contractor license, so he recommended to Wilson’s uncle, who was overseeing the project on behalf of his nephew, that the actor not hire him. It was too risky from an insurance and liability standpoint, Baskin said.

The decision to reject Paul McLean’s bid resulted in “substantial loss of potential income for McLean and her family. Paul McLean’s construction business also lost the considerable goodwill that would have been associated with a project of that stature,” according to the ethics complaint.

Michele McLean said her husband didn’t want the job but submitted the bid because Owen Wilson personally asked him to do so. He partnered with a friend who is a licensed contractor and together they worked on the bid and submitted it to Wilson, she said.

In Baskin’s view, the failed bid created bad blood with the McLeans, and triggered a series of events over the next decade that Baskin considers a personal vendetta against him by McLean, an allegation the planning director vehemently denies.

One year after the dispute with Paul McLean, Baskin received 28 violation notices relating to properties he owned. He says he was given seven days to correct the issues.

Baskin alleges that McLean teamed up with a group of neighbors to file complaints against his businesses, which McLean denies.

“There is no truth to conspiring with business competitor neighbors,” McLean said.

One of those neighbors is Francine Mapuana Kekahuna Aarona, 76, also known as Aunty Mopsy.

She has had court battles with Baskin, who lives next door. “He makes everyone feel that he is the victim, and he is not,” she said.

In the summer of 2013, Baskin applied to get Paia Inn’s special management area permit renewed. He said he learned through a county planning employee that McLean instructed the staffer to delay the permit’s issuance. He said he eventually got it while McLean was on vacation, but neighbors appealed and it led to fines and other penalties.

Again, McLean disputes Baskin’s assertions.

“I do not recall — and dispute — telling staff to delay permit issuance. The department’s long-standing practice has been that if a permit renewal is submitted prior to expiration, the permit remains valid until the renewal can be processed,” she said.

Baskin alleges that McLean collaborated with Aarona and other neighbors, some of whom are business competitors, to make things hard for him. In November 2013, Baskin was hit with violation notices, fines and permit revocations. He was in the middle of demolishing part of Paia Inn to convert office space into four new rooms when he was issued a stop work order.

“We were shut down for three months. We had to give people their money back,” Baskin said. “It was a complete nightmare.”

In Baskin’s opinion, it was all part of McLean’s scheme to target him, support his direct competitors, and drive him out of business with punitive enforcement actions.

McLean should have recused herself from any decisions involving the permitting of Baskin’s properties, he said, because she had a conflict of interest — her husband had allegedly assaulted Baskin, three times.

On May 31, 2016, Baskin was granted a two-year injunction against harassment from Paul McLean, according to court papers.

Paul McLean, through his attorney, denied assaulting Baskin.

McLean was accused of one misdemeanor count of harassment, according to court documents. But on June 1, 2018, a judge dismissed the case with prejudice, meaning Baskin could not refile the same claim against McLean in court.

Michele McLean said Baskin fabricated the alleged assaults.

As far as any conflict of interest, McLean said she recuses herself as much as possible when it comes to dealing with Baskin’s permit issues.

“I really strive to stay out of any permits he had pending, anything like that, unless staff needs my direction and then I do everything I can to be objective and I think I have been extremely fair and objective,” she said.

Numerous Roadblocks

Baskin’s roadblocks with the Planning Department involve thousands of pages of legal and regulatory documents.

In his opinion, it’s all been unnecessary. He views himself as a someone whose businesses, particularly the Paia Inn, contribute to Paia’s economy and lend the town an air of style.

“We have contributed significantly in the past five years to the town of Paia and have received excellent recommendations and reviews by The New York Times, Los Angeles Times, SF Chronicle, Sunset Magazine, Travel and Leisure, Hawaiian Airlines and 30 other press publications. These articles and word of mouth bring many people from all over the world to Paia,” Baskin wrote in July 2014 to the Paia Town Association.

In his letter Baskin requested to join the association’s board of directors, which included Michele McLean and Aarona. Baskin said he was turned down.

When things have gotten bogged down with the county, Baskin has turned to the courts for help and has found a favorable reception on at least two occasions.

Several years ago, when Baskin wanted to convert upstairs office space at the Paia Inn into four hotel rooms, he needed county permission.

The Planning Commission denied the permit Baskin needed so he appealed to the 2nd Circuit Court and won. The court  remanded the case back to the commission which again denied Baskin a permit.

Baskin returned to court and won yet again, with Judge Peter Cahill ordering the commission to approve the permit.

While he prevailed then, Baskin has found himself in another huge battle that could end his ownership of the Paia Inn.

The Planning Commission will be taking up a bill later this month that would repeal a two-year moratorium on the number of transient vacation rentals across nine zoning districts across the county and make the cap permanent. The council adopted the temporary cap on Jan. 7.

Paia Inn’s location is zoned as a country town business district. If the bill passes as written, the inn would have to close after its permit expires because any transient vacation rental with up to 12 rooms would be considered a “nonconforming use.”

Not only would that put him out of business, it would make it impossible for Baskin to sell Paia Inn. He questions who would want to buy a business destined for permanent closure in seven years.

He blames McLean for engineering the bill’s language to target him, but she said she had no role in drafting the bill, which was authored by County Council Vice Chair Keani Rawlins-Fernandez.

“Our position is that the policy details are under the purview of the council,” McLean said.

Paia Inn is the only business on Maui island that fits the criteria of zoning change: a transient vacation rental with up to 12 rooms, located in a country town business district, Baskin said.

The bill is not designed to put anyone out of business, Rawlins-Fernandez said. But she acknowledged including the provision that could kill Baskin’s inn after hearing concerns and reading testimony from some of his neighbors, including Aarona.

The provision could always be removed, she said, and the public will have the opportunity to weigh in during the Planning Commission meeting later this month and again when the council’s Planning and Sustainable Land Use Committee discusses it in October.

McLean has little sympathy for Baskin’s situation.

“If the bill passes, that’s the policy direction that County Council wants to see,” McLean said.

When it comes to special use permits with expiration dates, there’s never a guarantee they will be extended. That’s the nature of government permits — they expire, and it’s the Maui County Council’s prerogative whether to extend them or not.

If adopted, the bill would amend Maui’s comprehensive zoning rules countywide. This is not just about Baskin and Paia Inn, McLean said.

Aarona, who grew up on her grandparents’ property adjacent to Baskin’s, says she looks forward to the day Paia Inn eventually closes.

“There is light at the end of the tunnel,” she said.

The Maui Planning Commission is expected to review the ordinance amendment at a meeting on Sept. 27, Rawlins-Fernandez said.

The commission’s job is to come up with findings and recommendations for the Maui County Council to consider. The council’s Planning and Sustainable Land Use Committee is likely take them up during an Oct. 20 meeting, she said.

Civil Beat’s coverage of Maui County is supported in part by grants from the Nuestro Futuro Foundation and the Fred Baldwin Memorial Foundation.