90-unit affordable rental project gets nod from committee
Developers seeking $6 million in county funds to help acquire land
Developers of a 90-unit affordable housing project in Kihei are seeking nearly $6 million from the county’s Affordable Housing Fund to help acquire land for the project.
The Maui County Council’s Budget, Finance and Economic Development Committee voted 9-0 Wednesday to recommend the funds, which would go to the Hawaiian Community Development Board to purchase about 9 acres at Piikea Avenue and Liloa Drive.
The parcel is the future site for Hale O Pi’ikea, a proposal by developer ‘Ikenakea Development LLC in partnership with Hawaiian Community Development Board and 3 Leaf Holdings for two four-story buildings with one-, two-, and three-bedroom apartments. A community resource center and other common areas would be included.
Project developers are planning to construct 90 units, with nine designated for residents earning at or below 30 percent of the area median income, nine at or below 50 percent AMI, 71 units at or below 60 percent AMI and one unit for an on-site property manager. The affordability period is 61 years, according to county documents.
Net monthly rent would range from $420 in the 30 percent AMI category to $1,293 in the 60 percent AMI category, based on the Department of Housing and Human Concerns’ 2020 Affordable Rent Guidelines.
Despite the project’s initial affordability period, some council members had questions during Wednesday’s meeting over whether affordability could be maintained in perpetuity.
Testifier La’akea Low said that when a development is using county money, affordable prices should not have an end date.
Council Member Tamara Paltin questioned developers over what would happen after 61 years. Paltin, who holds the West Maui residency seat, pointed to the Front Street Apartments where developers reneged on a promise of affordability, jeopardizing the homes of 250 low-income tenants.
“We don’t want no Front Street Apartment situation or anything like that,” she said.
When asked by Paltin about extending the affordability period, Christopher Flaherty, executive officer of 3 Leaf Holdings, said 61 years has already been agreed on by lenders and equity investors.
Kali Watson, Hawaiian Community Development Board president and CEO, said developers have similar projects on Oahu that were resyndicated and fixed up. As a result, the projects “have been around for quite a few years.”
“That’s kind of what we do, try to preserve affordable housing versus turning it around and selling it at the market,” Watson said.
At the end of the 61 years, additional Low Income Housing Tax Credit Program funding might be used to upgrade the project and extend the affordability period, developers said at an Affordable Housing Committee meeting in October.
Overall, the developers are planning to build a larger, mixed-use project in Kihei that would construct 218 affordable housing units in total and cost about $45.8 million.
Hale O Pi’ikea is the first phase of the project and is scheduled for March 2023 completion.
Phase two includes 96 senior housing rental units, and phase three calls for 32 townhomes. Timelines for completing latter phases were not outlined in documents for Wednesday’s meeting.
Last year, the developers applied to the county Department of Housing and Human Concerns, requesting $5,768,650 from the county Affordable Housing Fund for Hale O Pi’ikea land acquisition costs. The nearly $6 million represents 12.6 percent of the total $45.8 million in financing for the project, according to county documents.
The developers said county funding would increase the project’s score when applying for $22 million from the State Rental Housing Revolving Fund, $14.3 million from the State Low Income Housing Tax Credit Program and a $3.6 million permanent loan, according to an Affordable Housing Committee report. The developers said the application for the state funding would be made in February 2021.
The proposal to amend the fiscal year 2021 budget now heads to full council.
Linda Munsell, Department of Housing and Human Concerns deputy director, said council members will be considering funding for phase two of the project in the current budget session.
Other developers and projects that have revolving or special funds allocated under the county’s Affordable Housing Fund include:
• Lanai Affordable Housing Project, up to $2 million for planning, design, engineering, construction and construction.
• Hale Mahaolu, up to $4 million for the acquisition of the Lokenani Hale affordable senior rental housing units. The 62 one-bedroom, one-bath units will include four units at or below 30 percent AMI, 57 units at or below 50 percent AMI and one unit for an on-site property manager. The affordability period is in perpetuity.
• Ikaika Ohana, up to $1,508,558 for the acquisition, planning and design and professional services for the Kaiaulu O Halelea project at Lipoa Parkway in Kihei, a 64-unit multifamily rental project that will include 14 units at or below 40 percent AMI, 49 units at or below 60 percent of the AMI and one unit for an on-site property manager. The affordability period is 65 years.
• Liloa Senior Housing LP, up to $4.3 million for the planning, design and construction for the Liloa Hale project at Welakahao Road in Kihei. The 150-unit multifamily senior rental project will include 11 units at or below 30 percent AMI, 138 units at or below 60 percent of the AMI and one unit for an on-site property manager. The affordability period is 60 years.
• Aloha House, up to $900,000 for the acquisition of two separate residential buildings to be used as special needs, long- term housing for substance abuse treatment, to serve 16 individuals at or below 50 percent AMI. The affordability period is in perpetuity.
• Up to $3 million for the acquisition and renovation of an existing building and property at 95 South Kane St., Kahului, to provide additional shelter beds. A developer was not listed.
• Up to $707,258 for the acquisition of real property at the Kahoma Residential Subdivision.
* Kehaulani Cerizo can be reached at email@example.com.