City ‘going after’
group for backing
out of Ewa deal

Unity House missed the deadline for using its 'right to cancel,' but it made no deposit

By Gordon Y.K. Pang
Star-Bulletin

Unity House Inc. owes the city $5.5 million for 57 lots in Ewa Villages that the union organization no longer wants.

That's what city Budget Director Malcolm Tom told the City Council's Human Services Committee yesterday.

But when informed later of the city's demand, Unity House president Tony Rutledge said, "Good luck."

"If somebody doesn't want to buy something, you don't force them to buy it," he said.

Tom said Unity House had until Aug. 25 to notify the city that it was exercising its "right to cancel" plans to purchase the 57 lots at the city's troubled Ewa Villages site.

However, despite Rutledge's public pronouncements expressing disinterest in the property, Unity House's cancellation letter was not received by the city until Aug. 31, Tom said.

"We're hoping Unity House will follow through on their commitment and purchase the lots," Tom said after the Council meeting.

Rutledge acknowledged that Unity House should have notified the city by Aug. 25.

"We should have but it's not that important," he said. "There was no real penalty."

He added that a separate provision required Unity House to come up with a $100,000 deposit by Aug. 25 if it wanted to take the parcels.

Earlier this year, Unity House was selected to develop parcel A in the Ewa Villages site.

Unity House had been expected to purchase 153 lots in parcel A for $14.7 million, with the help of $7.3 million in federal block grant funds for affordable homes.

Later, however, Unity House chose to buy only 96 lots, leaving open the option of buying the remaining 57.

Council members criticized Mayor Jeremy Harris' administration for allowing Unity House to back out of the deal, noting the organization would use the federal block grants to purchase only $9 million worth of property.

But yesterday, Councilman John DeSoto praised Tom's recommended action.

"I think it's great that they're going after them," he said. "It's something they had agreed upon."

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City holds off
suing developers
of Harbor Court

A compromise will be attempted
over $12 million in fee interests

By Gordon Y.K. Pang
Star-Bulletin

Plans to sue the developers of Harbor Court have been put on hold by the City Council's Policy Committee.

The city is owed some $12 million on the fee-simple interests of about 90 residential units in the condominium complex.

The city, in 1994, agreed to allow the developer to purchase the fee interests by July 1997 after Harbor Court's initial offering of leasehold residential units proved unsuccessful.

Council members yesterday decided to hold off on litigation after G. Scott McCormack, vice president of Harbor Court Developers, pleaded for a compromise.

Policy Chairman Jon Yoshimura said he and colleagues want to give McCormack time to work out a settlement offer.

"I don't think we should move toward litigation without exhausting our options," Yoshimura said. "We should think about reconstructing our partnership in some way."

Under a tentative plan suggested by McCormack, the fee interests would be sold to individual residential purchasers based on current market values, not the prices negotiated in 1994.

Trinity Investment Trust, which holds the mortgage on the property, stands ready to foreclose on the project if the city sues, McCormack said.

"If the city were to proceed in trying to obtain a judgment against the developers, we would be unable to pay, and the city would be unable to collect," he said.

Councilwoman Donna Mercado Kim was miffed that Council members weren't told about the stalemate even though the administration and the developer had been negotiating unsuccessfully for three years.

McCormack said discussions during that time included giving the unoccupied Queen's Court building, across Bethel Street from Harbor Court, as part of its settlement.

Councilman Duke Bainum was unconvinced by McCormack's arguments and suggested that the city might get a better deal negotiating with Trinity.