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Less commercial, more housing in project plans

Downtown Kihei project to have 223 affordable rentals in response to community requests

By Dakota Grossman 5 min read

Developers of a South Maui project are replacing previously approved commercial developments and a movie theater with more than 200 fully affordable rental units for low-income families.

Originally planning for restaurants, shops, medical offices, a parking structure, a movie theater and a hotel, the developers of the Downtown Kihei project located mauka of Liloa Drive want to increase the 100 percent affordable housing component of the project. While the hotel would remain, retail and commercial space would be significantly downsized.

On Tuesday, the Maui Planning Commission gave the green light to the proposed changes.

"I would just like to commend the applicant for the revisions that they made to support workforce housing or affordable housing," Commissioner Mel Hipolito Jr. said. "I appreciate them working with us and with the community."

The applicant and landowner is Krausz Companies California LLC.

The project site is about 27.4 acres and is bordered by Longs Drugs Kihei Center and the Azeka Mauka Shopping Center, Yee's Orchard, a single-family residential neighborhood, Pi'ilani Village Shopping Center, a multifamily residential neighborhood and various commercial and business centers.

Gwen Rivera of consultant Munekiyo Hiraga said Tuesday that the Maui Planning Commission granted a special management area use permit for the northern component on July 28, 2015, which allowed for the construction of a four-story, 93,000-square-foot hotel with 150 rooms as well as 257,098 square feet of leasable area to be used for businesses and medical offices, shops, parking and related improvements.

In 2016, the commission approved the southern component that would include a three-level parking structure, a 34,401-square-foot movie theater, about 83,243 square feet of commercial and retail area segmented in five, one- and two-story buildings, as well as parking, landscaping and related improvements, Rivera said.

However, Krausz Companies Principal Jay Krigsman said that they proposed to modify the Downtown Kihei Project after the Kihei Community Association, South Maui Advisory Council and government officials asked developers to reconsider their plans to address housing challenges.

The project would keep the previously approved select-service hotel, Rivera said, but the commercial and retail space has been reduced to 63,400 square feet in two, one-story buildings.

For the southern component, 223 affordable housing units in one four-story mixed-use building, two four-story residential buildings and four two-story residential buildings, as well as a community center with common resident facilities, would be constructed instead of the theater and parking structure.

The commercial and retail space, including small shops and eateries, would drop down to 28,075 square feet.

Also proposed are 873 parking stalls, down from 1,200 stalls, for tenants and guests. There will also be landscaping, roadway and other related infrastructure improvements.

"The justification responds to community preference for affordable housing with less commercial development, which helps to address the shortage of affordable housing on Maui," Rivera said.

Called Hale O Pi'ikea, the proposed 223 affordable rental units would be constructed in three phases as development financing is available. Previously presented as a 90-unit affordable rental project, Hale O Pi'ikea is listed as a priority project in the Maui County Comprehensive Affordable Housing Plan.

Developer 'Ikenakea Development LLC, which is partnering with the Hawaiian Community Development Board and 3 Leaf, received more than $10 million in county grants for the first two phases, with all phases anticipated to be completed during the second half of 2024, Development Associate Keegan Flaherty said.

Phase 1 involves the construction of two, four-story buildings, providing 90 affordable, long-term rental units for low-income Maui families making 60 percent or less of the area mean income, Flaherty said. It will consist of one-, two- or three-bedroom units.

Phase 2 involves the development of a four-story mixed-use building, providing 97 affordable senior rental units of one bedroom or a studio on the upper floors, with commercial space on the first level.

Phase 3 involves the development of four, two-story residential buildings, providing 36 affordable rental units, containing one, two or three bedrooms, as well as the community center and on-site parking spaces for tenants and guests. Financing for this phase is still in progress, he said.

Rivera said that wastewater demands would decrease from 186,780 gallons per day to 96,008, and on-site drainage retention remains within 32.2 cubic feet per second.

An additional water meter for the third phase of the affordable housing component will be needed and requested from the county Department of Water Supply.

Projected vehicle trips are anticipated to drop to 539 from 969, at peak hours. Roadway access to the project site would be reduced to two new intersections on Piikea Avenue, rather than four, she said.

Commissioner Kim Thayer supported the project, but requested that one of the conditions be that invasive plant species be removed from the landscape plans and that native species be planted.

"It's nice to see multifamily housing, an affordable residential project, because I think to really do affordable housing, we're going to have to look at multifamily instead of single housing, and that this is a good location," Thayer said. "It's walkable and close to other things. I would like to thank the developer for considering this and working to make it happen and I also very much appreciate going over to native plants."

Dale Thompson and Ashley Lindsey also voted in support of the amended project. Chairperson P. Denise La Costa, Kawika Freitas and Mark Deakos were excused.

"I think my comment is echoing my fellow commissioners that this looks like a win when development comes in, and it's really scaled here and the uses aren't necessarily needed or we don't want more of, and then you change it and you're willing to work with the community," Vice Chairperson Kellie Pali said. "Affordable housing rentals are a good place to start and I appreciate that."

* Dakota Grossman can be reached at dgrossman@mauinews.com.

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