The state has fined the owner of a boat moored at the Ala Wai Small Boat Harbor $30,000 for allowing a family to live aboard the boat without the required permitting.

The State Board of Land and Natural Resources approved the unprecedented fine for William G. Friel III, who will have all his DLNR Division of Boating and Ocean Recreation permits revoked and will not be allowed to obtain permits for the next two years.

The state is alleging that Friel allowed the boat’s co-owner, her husband, and their child to live on the Sun II without required permitting. DLNR said officers from DOBOR and the DLNR Division of Conservation and Resources Enforcement found indications during six evening inspections from September to March that someone was aboard the vessel without the required notification and a valid stay-aboard permit.

The unprecedented fine comes as DLNR is facing a legal challenge in 1st Circuit Court to the substantially higher mooring fees that it imposed in 2019. According to legal documents obtained by the Honolulu Star- Advertiser, the suit was filed in January 2020 by local attorney Erik Rask, who has been a live-aboard at the Ala Wai Small Boat Harbor since 2013. A hearing is scheduled for 10:30 a.m. June 30. Both parties declined to discuss the pending litigation, which is now on its third complaint.

Act 42, which Gov. David Ige signed into law in 2021, raised live-aboard fees sharply, on top of other already significant boating fee increases over the past few years. It required that recreational vessels used for principal habitation would not pay mooring fees, but would pay a live-aboard fee that was equivalent to double the mooring fees assessed for a vessel of the same size. The higher boating fees mean that DLNR has even more of an obligation to ensure that all boaters and live-aboards are paying their fair share.

The aggressive fine follows efforts by the state over the past several years to transition away from allowing live-aboards at the Ala Wai Small Boat Harbor and the Ke‘ehi Small Boat Harbor.

It also precedes the expected issuance this year of a request for proposals to find a developer to enter into a public-private partnership with the state to redevelop Ala Wai Small Boat Harbor. In the meantime DOBOR has been beefing up harbor enforcement.

DLNR said Friel will soon be required to remove his boat from the harbor. Ed Underwood, DOBOR administrator, says other illegal live-aboard cases are under investigation and will be brought to the BLNR. State law allows fines of up to $5,000 for each instance of illegally using a vessel as a place of principal habitation.

Friel, a North Shore resident, told the Star-Advertiser that he intends to appeal the fine and that he is encountering hardships in trying to move the boat. Friel said the boat’s name was changed from II Shea to Sun II a few months ago when the co-ownership papers were drawn up.

“I don’t have a place for it. I’ve called every harbor on the island, and there’s no spot. I’ve called every yacht club. It’s putting us in a difficult situation,” he said.

DOBOR said in a May 27 submittal to BLNR that “DOBOR staff believes unless there are consequences for violating restrictions under Hawaii Revised Statues and Hawaii Administrative Rules, people do not have an incentive to abide by the rules or directions.”

Underwood said in a statement, “We appreciate the important step the BLNR took in addressing this issue, as well as the support we received from DOCARE to document this case and for future ones.”

“Over the course of many years, DOBOR staff have observed people illegally using their vessels as places of principal habitation,” he said. “We’ve also received numerous complaints regarding individuals illegally living on their vessels in the Ala Wai and Ke‘ehi Small Boat Harbors.”

BLNR’s recent enforcement against illegal live-aboards coincides with the dwindling of live-aboard permitees at the Ala Wai Small Boat Harbor and the Ke‘ehi Small Boat Harbor.

Under HAR, the Ala Wai Small Boat Harbor is allowed 129 live-aboards, and the Ke‘ehi Small Boat Harbor is allowed 35. But DOBOR previously told the Star-Advertiser that it had not issued a new live-aboard permit to anyone at either harbor for approximately three years “due to the fact the majority of the liveaboards were not in compliance with the Hawaii Revised Statutes and Hawaii Administrative Rules.”

DOBOR said Monday that those with current legal live-aboard permits that are expiring would be allowed to renew their live-aboard status.

However, in less than a year, the number of live-aboards with permits at the Ala Wai harbor has dropped by nearly 32%, and it has dropped by about 18% at the Ke‘ehi harbor. In July the Ala Wai Small Boat Harbor had 66 live-aboard permittees, and on Monday DOBOR said that there were 45. In July there were 17 permittees at Ke‘ehi harbor, and on Monday DOBOR said there were 14.

Pat Kesling-Wood said she and her husband, Gordon Wood, gave up their live-aboard status Nov. 1, a month after their fees doubled to more than $1,400 monthly. The couple are now living in a Waikiki condominium, where their $1,800 monthly rent is less than their live-aboard fees and maintenance costs.

Kesling-Wood said they are selling their Celestial 48 cruising boat, the Orion, which has been moored at the Ala Wai Small Boat Harbor since 2009.

“We were live-aboards for about 20 years, first at Ko Olina and then at the Ala Wai. But we were priced out,” Kesling-Wood said.

Kesling-Wood said the pair are wary of the state legislation that approved the live-aboard fee hike, as it also allows DOBOR to easily implement future fee increases.

“I think there are numerous boats for sale. If you walk through the harbor, you can see all the empty slips and brokerage signs,” she said.

Kesling-Wood said the difficulty in getting a slip at Ala Wai Small Boat Harbor and DOBOR’s decision to stop issuing live-aboard permits are creating hardships.

“People made an offer on our boat and withdrew it because they could not get a timeline on when they could get a slip,” she said.

Kesling-Wood said the difficulty in obtaining live-aboard permits and the price hikes potentially contribute to violations. She said people who want live-aboard permits but can’t get them might overstay their welcome. Those who are on fixed incomes might not be able to pay the higher fees, she added.

“They obviously have this idea that they are going to run around with a big stick and beat everybody over the head. Before they give someone a $30,000 fine, they need to make sure that all the live-aboard permits have been given out,” she said.

Friel said he had inquired about getting a live-aboard permit when he got the slip for his boat, then known as the II Shea, about a year and a half ago, but was told that DOBOR wasn’t issuing any more live-aboard permits.

DOBOR told the Star- Advertiser that the family who had been illegally living on Friel’s boat had not applied for a live-aboard permit.

In the past, some boaters have openly criticized DOBOR for the fee increases, which some have viewed as a way to hurry the attrition process, potentially to more easily attract a developer willing to enter into a public- private partnership at the Ala Wai harbor.

Kesling-Wood said it would make more sense if DOBOR filled all of the Ala Wai harbor’s slips and live-aboard permits.

“What you want to do if you want to get a private person interested in running the harbor is to show that there are many people that want to keep boats there,” she said.

DOBOR begin trying to redevelop Ala Wai Small Boat Harbor sites, including the current harbormaster’s office, the adjacent parking lot and the old fuel dock, more than a decade ago.

The state’s first attempt at a public-private partnership failed after Honey Bee USA went bankrupt in 2016, leaving fewer harbor amenities for boaters and a wake of creditors, including the state.

In 2019 DOBOR came up empty-handed after a committee reviewed proposals for redevelopment of the Ala Wai Small Boat Harbor. DOBOR said Monday that it expects to issue a new request for proposal “sometime this year.”