Kukui Gardens bond issue gains favor
The proposal would enable the residential complex to continue as affordable housing
Lawmakers appear poised to approve $25 million in general obligation bonds toward the purchase of Kukui Gardens -- a key step in the state's effort to acquire the 22-acre complex and maintain the 857 units as affordable housing.
The financial commitment from the Legislature is needed before negotiations on the complex can continue, said Orlando "Dan" Davidson, executive director of the Hawaii Housing Finance and Development Corp.
DEADLINE LOOMS FOR LEGISLATURE
As the Legislature moves into its final four days, House and Senate members have still not made final decisions on issues ranging from the state budget and taxes to new programs to support the state economy.
But lawmakers are working on a way to save the low-income Kukui Gardens housing project and also opening a new special investigation into problems at the state Bureau of Conveyances.
"We're hopeful that we'll get positive action on the (funding)," Davidson said. "It'll give us the opportunity, then, to continue to complete the negotiations."
While the final proposal was still being reviewed yesterday, House Finance Chairman Marcus Oshiro said the prospect of the funding coming through "looks good."
"This is one of the top priorities for both the House and the Senate," said Oshiro (D, Wahiawa-Poamoho). "I think we have worked with (the community) and the administration and come out with a win-win for everybody."
Lawmakers have until midnight to complete work on all bills ahead of next week's close of the legislative session.
Among the proposals is House Bill 667, which would authorize the state to spend $25 million in general obligation bonds to buy land and make improvements at Kukui Gardens.
The complex was built with federal Housing and Urban Development funds that require it to remain as affordable housing until loan terms expire in May 2011.
Kukui Gardens Corp. announced plans in January 2006 to sell the property to California-based Carmel Partners, raising concerns that the property prices could go to market value and displace about 2,500 residents. Advocates say at least 75 percent of residents there make 80 percent or less than the average median income.
The Kukui Gardens Residents Association and the nonprofit Faith Action for Community Equity had sued to stop the transaction.
Earlier this year, the resident groups reached an agreement allowing them to purchase half of the property for $55 million, but the state would have to subsidize the money.
If the $25 million in bonds is approved this year, the remainder would have to be requested by lawmakers next year.
"In the broad scheme of trying to keep our affordable-housing stock on the islands, this is an enormously important project," said Rep. Karl Rhoads (D, Kakaako-Downtown), whose district includes Kukui Gardens.
The "structured transaction" being pursued by the Hawaii Housing Finance and Development Corp. would split the complex into two roughly even parcels.
One parcel of 389 units would be owned by the state and be maintained as affordable units.
The rest of the units would go to Carmel, which would be able to gradually raise rents starting in May 2011, when the current loan terms expire, through May 2013. After that, all units would be subject to HUD guidelines aimed at keeping the rents affordable for at least 55 years, according to Davidson.