WAILUKU - It has taken six years, but Sterling Kim has gotten his final construction approvals from Maui County for phase one of his Hale Mua affordable housing project on about 200 acres mauka of Happy Valley.
Now, if he can find financing, he can go ahead, and in about two years start delivering homes, some priced as low as about $200,000, with an average for the affordable homes of about $275,000. But that would be if he gets state approval for water.
That average price is the "zero" limit, he said in a telephone interview from Honolulu on Tuesday. "We might even have to take it a little bit in the shorts" on the affordable homes to make it work, he said.
The other half of the project, the market-priced homes, would have to carry the load with the bankers, he said. "If there's not some profit in it, they don't want to be lending."
He said he has had exploratory discussions with several lenders. He does not have a firm estimate on the prices for the market homes.
If he can proceed, it will put about 200 construction people to work, as well as provide housing and what he calls "social benefits" - the kind of housing that would allow people such as nurses, teachers and police officers to stay on Maui instead of "taking a higher-paid position in Portland."
The hundreds of houses also would add to the county's property tax revenue. Under the circumstances, he said, "I had expected a lot more support."
In August, he organized a rally in front of the Kalana O Maui Building in Wailuku to press for movement on his applications. By that time, he had gone through the Act 201-G (fast-track affordable housing) process, the Land Use Commission, the Maui Planning Commission and the County Council, but he was tied up over water.
Although the Department of Water Supply has not stopped issuing meters in Central Maui, it held up his application for review, citing the Show Me the Water ordinance for large developments. Kim contended he wasn't covered by that bill because it was enacted after he submitted his proposals.
In December, the department concluded its review and signed off. Kim said he will work with the department as co-applicants to the state Commission on Water Resource Management for a withdrawal permit for a surface water treatment plant, the water to come from the streams of Na Wai Eha.
Water department spokeswoman Jacky Takakura confirmed that the department ended its review of Kim's application, although it is not assuring or agreeing that he will get water.
Former Mayor Alan Arakawa, who was in office when Kim introduced Hale Mua and who hopes to return after this year's elections, spoke at the August rally. This week, he said: "Affordable housing is something the County of Maui has needed for a number of years, and Sterling was one of the first to step up to the plate and voluntarily do something.
"Even now the County Council is debating a low requirement (for percentage of affordable homes in new projects), they haven't set it but a very low number like 20 or 25 percent, and Sterling still will do 51 percent.
"I am very happy that Sterling is going ahead. We tried to help him, and he jumped through every hoop we put before him."
Mayor Charmaine Tavares could not be reached for comment, but in August she had confirmed that the county would apply along with Kim to the state water commission, while denying that the county had ever committed to provide water.
She said she supported the project, if it had water.
Kim has about 200 acres mauka of Happy Valley, and development of the whole project would add 466 homes to the island's inventory, plus a site for an elementary school and a park.
Phase one, for which he now has construction approval, would be about 185 dwellings, half affordable. Kim said he plans to deliver affordable homes "one for one" along with the market-priced houses.
The affordable homes are to be built on 5,000-square-foot lots on the lower part of the property, and the market homes on 10,000-square-foot lots above, where there are ocean views.
The project is beyond the reach of the county sewer system, so it will have its own wastewater treatment plant.
Kim said he is "very grateful to have finished the permitting process."
The developer maintains his belief that the project is still possible, despite the enormous changes in the local housing market and the worldwide recession that have occurred since he first proposed his project. Delivering houses at the average target of around $275,000 will be "tight as a drum," he said.
* Harry Eagar can be reached at heagar@mauinews.com.
