The federal government on Tuesday approved the selection of a mainland-backed company to buy the low-income rental project in downtown Honolulu.
To Pacheco, the decision means rents for her two-bedroom apartment and the 379 other units in the building will remain affordable for years - assuming the sale goes through.
"We're very happy," said Pacheco, a nine-year tenant who pays $530 in monthly rent. "(The deal) is there for the people, and to me that's what counts."
But to tenant Sarah Adamson, the news wasn't good at all.
She vehemently opposes Kukui Kauhale Inc.'s proposal to buy the project for $51.6 million from THC-Ginza Joint Venture.
Adamson, president of the building's resident council, was among those who favored a competing plan for residents to form a cooperative to purchase the project. Their goal: home ownership.
"I know one side's gotta win and one's side gotta lose, but the way they won wasn't very nice," Adamson said. "They've taken away tenants' rights."
It was up to the U.S. Department of Housing and Urban Development to decide whether the owner followed proper procedures in selecting Kukui Kauhale as the buyer and whether the company's offer was bona fide.
HUD determined the proposal was legitimate and met all agency requirements, including having the support of a majority of tenants, said Michael Flores, HUD's director of multifamily housing locally.
An offer by the resident group was determined to be invalid because it, among other things, didn't include a required $57,000 deposit, Flores said.
The owner needs HUD approval for the sale because it intends to transfer the federally-backed mortgage used to build the complex to Kukui Kauhale. The tower was built in the mid-1970s with a loan of roughly $11 million.
To come up with the rest of the purchase price, Kukui Kauhale plans to seek a federal grant of close to $40 million under a program designed to preserve affordable housing.
If the sale goes through, Kukui Kauhale, backed by the not-for-
profit Ecumenical Association for Housing in California, must keep the project affordable for not less than 50 years, Flores said. Minimum rents currently range from $383 to $423, including utilities, for the one- and two-bedroom units.
Ronnie Warner, an EAH manager, said she was puzzled by the controversy over the proposed deal. She said her group went to great lengths to inform residents, including translating written materials into several languages and providing interpreters at meetings. Many immigrants and elderly residents live in the project.
"We tried to make every effort to meet with residents and answer questions," Warner said.
HUD still must approve details of Kukui Kauhale's offer before the project can be included on the list of eligible projects for a preservation grant.
Flores said time is of essence. At last count, only about $400 million remained in the national program, and federal officials believe there won't be enough money to cover expected demand. Projects will be considered on a first-come, first-serve basis until Aug. 15.
"The focus now has got to be let's get this to funding," Flores said. "Otherwise all this work is for naught."
But opponents of the deal aren't ready to concede. Adamson said her group plans to appeal Tuesday's decision to HUD officials in Washington.
"It's not over," she said.