Ewa Villages
bailout plan
proceeds

Harris moves forward despite a
critical audit and a cloud of scandal

By Gordon Y.K. Pang
Star-Bulletin

Mayor Jeremy Harris is pushing ahead with his bailout plan to pump another $11.9 million into the Ewa Villages Revitalization Project despite a scalding independent audit and the recent arrests of 11 people linked to a relocation scam.

Harris submitted his plan to the City Council yesterday shifting $11.9 million in federal community development block grant monies from other projects. In addition, he has added $1.5 million for Ewa Villages' drainage problems.

Council Chairman John DeSoto, who represents the Ewa region, likes the plan; former Budget Chairman Duke Bainum, the project's major critic, does not.

The $11.9 million would go to three nonprofit groups that have agreed to help the city abandon its original Ewa Villages plan; they would develop four housing projects for low-income families, the elderly and people with permanent illnesses.

Unity House, the Self-Help Housing Corp. of Hawaii and the EV Community Development Corp. were selected to buy four lots totaling 76.8 acres at a combined cost of $34.1 million. The groups would apply the $11.9 million to the cost of the land.

Unity House plans 77 affordable homes and 75 market-priced homes in one project, and about 75 multifamily homes and 200 elderly rental units in another. Self-Help Housing proposes 61 homes for gap-group families and 65 homes for low-moderate-income families. EV plans a care home for those with Alzheimer's disease or other types of dementia.

The original plan for Ewa Villages would have renovated aging plantation homes of Oahu Sugar workers with profits from new homes in the area. But the plan fizzled when new-home sales lagged.

City Budget Director Malcolm Tom said the $11.9 million would be "coming from projects that have been stalled or projects that no longer need the funds."

Specifically, Tom said, $4 million is from the Kahuku Village conversion project, $5.4 million from Ewa Villages' old scheme, $1.5 million from leftover encumbrances from earlier projects, $800,000 in unused Kekaulike redevelopment funds and $150,000 from special needs housing projects that are surplus.

He said the $1.5 million for drainage improvements would come from new highway bonds.

DeSoto called the plan a good "first step" toward restoring the trust of Ewa Villages residents, whom the city promised would be able to buy affordable homes. He said he met with residents for more than two hours Tuesday and took their concerns to Tom and Managing Director Bob Fishman.

Bainum, however, said "the bottom line is that we're giving the nonprofits money to buy our own lands with."

The plan shifts money from what block grant monies should be used for, he said, such as improving accessibility for the disabled and building special-needs housing.

Bainum said the plan also ignores the audit and the arrests.

Last Friday, KPMG Peat Marwick said the city stands to lose $26.6 million from five housing projects, including $9.6 million from Ewa Villages alone. It concluded that costs were underestimated, profits overstated and the programs generally ill-conceived.

The administration has objected to the report, saying it is inaccurate, untimely and ignored recent sales and the value of properties yet to be sold.

Meanwhile, 11 people have been arrested since Friday by white-collar crime police who say two city housing officials rigged relocation contracts for Ewa Villages' tenants in favor of friends and business associates.