Kamehameha Honolulu resident Robert Akutagawa hoped his one-bedroom unit in Coolidge Apartments would be a financial cushion in his retirement.
Schools may force
out longtime tenants
Residents on fixed incomes
By Gary T. Kubota
are unable to pay rents
jumping almost 750 percent
Star-BulletinBut Akutagawa said he and many other residents of the 20-unit Moiliili complex recently signed away ownership in the cooperative apartments after landowner Kamehameha Schools threatened to seek back rent on land leases plus interest totaling $85,000 each.
"We don't own the units anymore. They say you guys are just tenants now," said Akutagawa, 85, a retired school maintenance supervisor. "These guys are mean. They don't have no mercy for guys like us."
Kekoa Paulsen, Kamehameha Schools spokesman, said the age of the occupants has been a consideration among Kamehameha officials in arriving at a solution.
"They understand these folks, some of them are in dire situations financially," he said. "We're trying to reach as close to a win-win situation as possible."
The two-story apartment at Moiliili was built in 1957 on land leased from Bishop Estate, now known as Kamehameha Schools.While the actual land lease continues through 2011, renegotiations for lease rent were to have taken place in 1991.
Residents say the estate asked them to pay $522 a month per unit compared to the $73 a month each owner was paying. They told Bishop Estate they couldn't afford the amount, and renegotiations never went further.
Owners say the asking price for the lease rent on the 17,693-square-foot parcel in 1991, at the peak of Japanese speculation in Hawaii, was extraordinarily high and unreasonable.
They said Bishop Estate was unwilling to negotiate lower lease rents, and owners continued to pay under the old lease rent formula of about $73 a month.
The situation changed last December, when Bishop Estate threatened to take each owner to court to pay back lease rent plus interest totaling $1.7 million -- based on the difference between the old lease rent and the estate's asking price.
The trust says it's willing to forgive the $85,000 if the owners turn over the apartments by April 1.
Bishop Estate officials are asking each apartment owner to also pay $1,200 in legal fees to process the transaction and put up the first and last month's rent if they intend to remain in the unit.
Paulsen said the estate did talk with the owners about the lease rents in the early 1990s.
He said an underlying problem is the project is located in a highly desirable area where land values have increased considerably. "It's been a tough situation for us to be dealing with," Paulsen said.
Eight of the 20 units are owner-occupied, most residents older than 60 years of age and many living on fixed incomes.
Residents said Bishop Estate has agreed to charge $522 rent to residents living on fixed incomes and $650 to others for two years.
They're worried the rents will increase and they'll be forced to move. Residents say some will be unable to afford the rent increase.
"It's hard for other senior citizens," said Stanley Yokoyama, 80, a retired Pearl Harbor maintenance mechanic. "I got trouble with my own finances."
Some residents acknowledge they should have been more vigilant.
But they also feel Bishop Estate could have given them more notice about the eventual effect of the back rents from land leases.
"It's really sad," said Katie Thompson, a registered nurse and a tenant. "Basically, they're confiscating the houses and they're making like they're nice guys by letting them off the debt."
"I don't know where to go. Most of the people here are old. Everybody's scared," said Samantha Truong, 57, who lives with her 63-year-old husband, Kong, a taxicab driver. "We feel this is very unfair to put the one million on top of our heads."
Akutagawa said he bought the apartment for $25,000 after his retirement in 1968.
He said he and his wife live modestly and couldn't afford to pay the back lease rent of $85,000.