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Rob Perez

Raising Cane

By Rob Perez

Sunday, July 14, 2002



Complaints fly
at condo for seniors


The first thing you've got to understand is that the average age of condo residents at One Kalakaua is about 82.

Age matters here.

The next thing is that this is an environment in which personal slights, arguments, personality conflicts and the like tend to get magnified precisely because of the age of the feuding parties.

Many residents at this upscale condominium for senior citizens are retired and have lots of leisure time, meaning they also have lots of time to stew over disagreements.

Even taking those factors into account, however, something much more serious seems to be plaguing One Kalakaua.

Beyond the fumbling and feuding, something appears out of whack in the governance of this unique 166-unit, high-rise condominium at the corner of Beretania Street and Kalakaua Avenue. Some say laws are being broken -- a charge the condo association denies.

art
GEORGE F. LEE / GLEE@ STARBULLETIN.COM
One Kalakaua resident Alice Clay, in her unit on Friday, is a former president of the senior citizens' condominium complex, which has had its share of financial and soap opera-like intrigue.




One Kalakaua, which opened in 1997, is unique because it is more than just a pricey condominium (prime units have sold for nearly $600,000). It offers its residents a variety of wellness services such as blood pressure checks and nutrition classes, all covered by the regular condo dues.

For additional fees, residents can get assisted-living services such as help with personal hygiene or daily reminders to take medication. A skilled nursing facility operates on the premises, as well.

The extra services probably have come in handy recently.

In One Kalakaua's version of an emotionally charged soap opera featuring well-educated, financially well-off seniors, stress levels have soared as one controversy after another has erupted, creating turmoil and discontent and dividing neighbors who have known each other for years.

The signs of stress have been everywhere.

The condo association hired several off-duty police officers to show up at a recent board meeting after a temporary restraining order was issued against a 70-year-old board member.

Karen Moscatello, then-executive director of the association, obtained the restraining order against Arnold Widder in June after telling the court she feared for her safety because of alleged harassment by him.

Widder said the allegations were "completely fabricated" and designed to discredit him for being so outspoken.

Moscatello did not respond to requests for comment.

Other board meetings have featured heated exchanges, gavel-slamming and similar signs of tension.

A former condo president, Alice Clay, was kicked off the board in May by a vote of homeowners. Another director, Lila Chun Chrystal, faces a removal vote later this month. Widder also faced a recall vote, but recently resigned to settle the restraining-order case.

Clay said board members who persistently question what the majority does are ousted from the governing group, a sentiment echoed by Chrystal.

"Any time you speak up, you get recalled," Clay said.

Attorney James Wright, special counsel for the condo association, disputed that notion.

"The board does not remove directors. That's a decision of the owners," he said.

Clay and Chrystal sued the association in April, alleging that it was illegally running an assisted-living facility without a license. The state had told the condo it was required to have a license, and the organization is in the process of obtaining one.

The lawsuit further inflamed high tensions. Those tensions intensified when Hawaii First Inc., the condo's managing agent from January until it was abruptly fired last week, sued the association, its former administrator and individual board members, alleging breach of contract.

The company, claiming that it had discovered accounting irregularities and attempts to manipulate the books, is requesting that the court appoint a special master to take control of One Kalakaua's financial and management affairs. Hawaii First said the master should review concerns raised about the association and report back to the court.

"Their bookkeeping is like Enron's," said Hawaii First President Richard Emery, alluding to the accounting scandal dogging the energy giant.

George Van Buren, an association lawyer, denied the charges and likened the lawsuit to sour grapes.

"It is completely without merit," Van Buren said. "This is a case about a managing agent who has been replaced by Chaney Brooks -- one of the best, if not the best, managing agents in the state."

One Kalakaua's management has engaged in practices that, at best, deviate from the norm in the condo world and, at worst, are illegal, critics say.

The association, for instance, has not issued an audited annual financial report since 1998. State law requires such reports to be done annually.

Grant Thornton, the condo's auditor, has completed reports for 1999 and 2000, but they haven't been issued because of pending technical issues, none of which would result in material changes, according to Wright, the association's special counsel.

But because the reports are essentially complete, Thornton used the data from them to do the condo's tax returns for those years, Wright said, underscoring the association's confidence in the reliability of the numbers.

Many of the issues raised at One Kalakaua give some indication of the kinds of challenges Hawaii will increasingly face in the years ahead as the state's population continues to age and more seniors move into retirement homes.

What's unique about One Kalakaua, however, is that while it is governed like any other condominium association, with homeowners essentially calling the shots, it has the added responsibility of providing assisted-living services throughout the complex.

"You're in new water; you're in uncharted territory there," said Emmet White, president of Arcadia Retirement Residence, another seniors housing complex on Oahu.

The condo/assisted-living combination creates inherent difficulties about how to allocate common expenses, especially when some residents are in their late 50s and 60s and don't need as many services as those in their 80s and 90s, White said.

"They've got to struggle with that condo mentality," he said. "Really, in the end it's all about money."

At retirement communities like Arcadia, residents pay to stay but don't own their apartments. An outside board of directors calls the shots, with input from an advisory board of residents. Partly because of that arrangement, Arcadia does not have the acrimony and feuding similar to what's happening now at One Kalakaua, White said.

The accusations and disagreements at One Kalakaua have left many homeowners cautious and on edge, though some have chosen to ignore it all and have been largely unaffected.

But those questioning what's going on say there's too much secrecy, too much flouting of the rules and too much power-grabbing by those in control, leaving residents in the dark about how the association's money -- their money -- is being spent. They talk of a pervasive atmosphere of intimidation and fear.

"I'm horrified by it all," said Mary Jane McMurdo, a retired state legislator who moved to One Kalakaua in February.

Such talk, however, puzzles association representatives, who say the process at the condo is open, accessible and aboveboard.

Still, the suspicions remain, even if it's tough to figure out who may be the bad guys amid the conflicting accusations.

"I felt we reached bottom when we had to have police officers to keep order at a meeting," said Julie Taura, a One Kalakaua homeowner since the beginning. "You wonder where this is all heading."

As the soap opera continues, figuring out where to go from here may take months and likely will enrich a bevy of lawyers. As well-intentioned as the residents are, strained relations are bound to linger, too.

But as Arcadia's White said, "People have to get along and set aside their differences."

That's the only way, folks, that this will work.





Star-Bulletin columnist Rob Perez writes on issues
and events affecting Hawaii. Fax 529-4750, or write to
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. He can also be reached
by e-mail at: rperez@starbulletin.com.



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