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Council OKs $9.8M purchase of Maui News buildings

Some say move could save county rent, others worry about spending in pandemic

The Maui County Council passed legislation on Friday that will allow the administration to move forward with the acquisition of a 6.3-acre, $9.8 million parcel in Wailuku that includes The Maui News offices. — The Maui News / MATTHEW THAYER photo

The Maui County Council passed legislation on Friday that will allow the administration to move forward with the acquisition of a 6.3-acre, $9.8 million parcel in Wailuku that includes The Maui News offices.

The 7-2 vote, with Council Members Yuki Lei Sugimura and Kelly King dissenting, passed three bills that involve amending the fiscal year 2021 budget by adding the acquisition amount of $9,850,000, along with making the budget, bond and capital improvement project bills consistent.

One of the bills gives the council a “bargaining clause” with the administration and specifies that with the purchase, “Maui County Council must be granted an additional floor in the Kalana O Maui Building of at least 9,000 square feet and at least 30 parking spaces within two years or when the renovations of the property are complete.”

Over weeks of discussion, council members have expressed concerns about making a purchase of nearly $10 million during a pandemic when revenues have declined and many departments have been forced to cut back.

In voting against the acquisition Friday, Sugimura said she was more concerned with having adequate parking at the county’s main Kalana O Maui Building. She also said that county staff may continue to work from home, which would diminish the need for office space.

“I don’t think we need 9,000 extra square feet at this time,” said King, who has consistently opposed the acquisition, saying the plan to move county staff wasn’t hammered out and that the buildings at 100 Mahalani St. need too much work, among other concerns.

The majority of council members have pointed to the money the county could save if it moved away from renting and toward owning properties.

County Finance Director Scott Teruya said during a Budget, Finance and Economic Development Committee meeting that the debt service in acquiring the building would be about $600,000 per year, or about $50,000 per month. Savings from purchasing the parcel and moving county staff out of existing leases would generally be about $50,000 to $60,000 per month.

The county pays $285,681 per month, or $3,428,175 per year, not including escalation, for rent and maintenance for the 93,690 square feet it currently rents, according to county documents.

County staff in the following departments and agencies rent space: Office of the County Auditor; Environmental Management; Finance; Housing & Human Concerns; Management, which includes Information Technology Services Division and Office of the Mayor; Office of Economic Development; Planning; and Water Supply. Liquor Control, Public Works and Transportation currently rent and will be relocating to the new service center building in Kahului.

An appraisal report dated Oct. 29 by Fukuda Valuation & Consulting LLC said that the market value of the fee simple estate of The Maui News property is $10.2 million. If the sale goes through, The Maui News will lease 23,151 square feet in the rear building from the county and continue operating at its current location.

The county negotiated a lower sales price provided there’s no rent owed for the first two years. If The Maui News were to stay, the monthly rent would be $10,000 from months 25 to 36, Teruya said.

* Kehaulani Cerizo can be reached at kcerizo@mauinews.com.

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