A&B purchases 31 properties for $98M — 1 in Kihei
HONOLULU – One of Hawaii’s largest property owners said Tuesday that it has bought dozens of mansions in the high-end Honolulu neighborhood of Kahala from eccentric Japanese real estate investor Genshiro Kawamoto, who had angered neighbors by allowing many of the parcels to fall into disrepair.
A&B Properties Inc., a subsidiary of Alexander & Baldwin Inc., bought 31 Kawamoto properties – including 146 acres in Kihei – for about $98 million.
Twenty-seven of the parcels are located on Kahala Avenue. Many are either on the ocean or have easy access to the beach. Together they represent 16 percent of all properties on the street.
“We’re just very excited about what we think is a great acquisition of some of the nicest real estate in Hawaii at an attractive price,” said Chris Benjamin, A&B’s president and chief operating officer. “We’re heartened by the reaction that we’re getting from the community. It seems like a win, win, win, and everyone seems to be very happy about the transition.”
Benjamin said A&B will refurbish the properties and sell them, though not all at once. Some properties won’t need much work, while some structures may need to be torn down. The community should start to see visible signs of the work in a couple weeks, Benjamin said.
Kawamoto is holding on to three parcels he owns in Kahala, Benjamin said. One has a home on it.
Kawamoto owns dozens of office buildings in downtown Tokyo under the name Marugen and his been buying and selling U.S. real estate in Hawaii and California since the 1980s.
In 1989, Kawamoto purchased the Kihei site for $19 million, county property tax records show. The site is mauka of Piilani Highway, beginning on the north side at the Keonekai Road intersection with Piilani Highway and extending south to Maui Meadows.
Kawamoto proposed projects with hundreds of single and multifamily units in the early 1990s and the early 2000s but they never reached fruition. The first attempt at a 1,050-unit development on the land fell through in 1995 when he said the County Council wanted too much money for water, sewers and drainage, according to published reports.
He reportedly sold the property for $1.5 million but bought it back for $1.15 million in 1998, property tax records show.
The developer tried to revive his earlier housing project but was unsuccessful in the early 2000s, according to published reports.
The land that is zoned agriculture was assessed by the county at $5.8 million, records show.
An attempt by The Maui News to reach A&B officials late Tuesday afternoon was unsuccessful.
In 2007, Kawamoto had low-income Native Hawaiian families who were homeless or on the verge of losing their homes move into five of the Kahala homes rent-free. He said he wasn’t concerned about losing money doing so, as it was “pocket money” to him.
But he has angered many Kahala residents by allowing weeds to grow in yards, buildings to be tagged with graffiti and renovations to sit unfinished.
He recently announced he wanted to set up an art museum on Kahala Avenue and had nude statues installed near the road.
In March, Kawamoto was indicted in Tokyo on charges of evading more than 1 billion yen, or $10 million dollars, in corporate taxes, Kyodo News reported. Kawamoto denied the charges.
Three of the properties A&B bought are occupied by tenants Kawamoto allowed to live rent-free. A&B will honor the terms of their leases, which expire next year, Benjamin said. The company also plans to help the families find new housing when the leases end, or before then if they want to move out sooner, Benjamin said.
As for the statues, A&B plans to remove them so they’re not as visible and then dispose of them, though Benjamin said he’s not sure how.
The other parcels that were sold include two residential lots and a preservation-zoned parcel in windward Oahu.