State working to keep rents affordable for Lahaina complex

No condemnation action yet at Front Street Apartments

Residents of Front Street Apartments in Lahaina are waiting to see what happens next as the Hawaii Housing Finance and Development Corp. — which now has the option to exercise the power of eminent domain — continues to evaluate proposed lease terms to ensure the affordability of the project, whose owners want to covert the complex to market rates.

In October, Gov. David Ige announced that the state purchased the land under the complex for $15 million from 3900 LLC, a Weinberg Foundation affiliate. The sale was done under a law approved by the Legislature last June in which the state also would initiate negotiations with the owners of the Front Street Apartments to keep units affordable for the tenants of the 142-unit complex. The residents include senior citizens and people with disabilities and who work more than one job.

Front Street Affordable Housing Partners, which holds the lease for the apartments, has said it plans to convert the complex to market-rate units before the end of its 50-year affordability commitment to low-income tenants. A 2012 change in federal tax law allows them to be released from their low-income commitments after 15 years if no buyer can be found within a certain time frame.

An attorney for Front Street Affordable Housing Partners could not be reached for comment this week.

The June law not only directed the HHFDC to initiate negotiations but also gave the housing agency the right to use the power of eminent domain to acquire Front Street Apartments if the ground lease was not renegotiated by Dec. 31.

Kent Miyasaki, HHFDC’s housing information specialist, said in an email earlier this week that his agency “has not taken any steps toward condemnation of the property but is currently evaluating proposed lease terms to ensure that the affordability of the project is maintained for all current and future tenants of the Front Street Apartments.”

The state and county each have put in $250,000 for the condemnation proceedings.

Back in October, Gov. David Ige’s office said that with the state acquisition of the land, HHFDC will try to work with Front Street Affordable Housing Partners on a ground lease that will include, at a minimum, retaining current tenants and rent protections for existing affordable units.

Miyasaki said he could not “comment on specifics of negotiations” with a related lawsuit pending. Tenants filed a lawsuit in 2018 challenging the developer’s attempt to convert the complex to market-rate units before the end of its 50-year affordability commitment.

The suit against the state and the apartment owners only seeks to keep affordable rents in place and no other damages.

Lance Collins, attorney for the tenants, said earlier this week that they are set to file their cross motions for summary judgment with a hearing in the spring.

The conversion to market rates originally was slated to begin last August but parties in the lawsuit agreed to hold off on any increases until HHFDC becomes the owner of the apartments or until four months after the court issues a final judgment.

For now, the residents wait.

Resident Helen Bullion said Friday that HHFDC told residents in a fall meeting that “everything is still in the working process.”

“But we are still waiting patiently; our rent is still as it is,” she said.

“Some people are afraid it may go higher,” Bullion added, while others would like to see rents be reworked.

“We are just waiting for the other shoe to drop. It could be good news, it could be something else,” she said.

* Melissa Tanji can be reached at mtanji@mauinews.com.


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