UH housing bid
The revelation that the low bidder
has UH ties results in criticism
A prominent developer with close ties to the University of Hawaii is the leading contender to win a large contract to provide off-campus housing starting this fall, university officials said.
University regents chastised the UH-Manoa administration for not informing them that Bert Kobayashi, vice chairman of the UH Foundation and a former Board of Regents chairman, is an owner of the Queen Kapiolani Hotel, the low bidder for the deal to provide a minimum of 400 beds for students for the next five years.
"You are putting us and this institution at risk," said regent Kitty Lagareta.
Lagareta said a recent article in the Chronicle of Higher Education highlighted the problem of insider deals among university trustees and noted that trustees who approve deals above fair market value for a fellow trustee or affiliated foundations are subject to Internal Revenue Service sanctions.
"It appeared they were trying to hide something," Lagareta said after the meeting. "We went through this with Everett Dowling. We are personally liable. We deserve to have all the information, especially if the deal involves a sitting regent or the vice chairman of the University of Hawaii Foundation."
Dowling, a former regent, resigned from the board after Lagareta and regent Ted Hong raised conflict-of-interest questions over the sale and development of land he owned on Maui for a new Institute for Astronomy center.
Rodney Sakaguchi, the UH-Manoa vice president for administration, finance and operation, said it was known that Kobayashi was an owner of the hotel and that regents would have been informed once the company was selected and the contract was ready to be presented to the regents at next month's meeting.
He said the Queen Kapiolani hotel bid about $42 per night per room for the contract vs. the only other bid of about $50 a night from a Waikiki hotel owned by developer Peter Savio.
The cost to students who stay there has yet to be determined but is likely to be higher than current dorm rates near campus, interim Director for Student Housing Margit Watts said last month. Those rates range between $2,758 and $3,957 an academic year, based on two people per room.
"I don't care who owns the hotel," said regent Jane Tatibouet, a former hotel manager. "My biggest concern is that there was no budget attached."
Tatibouet, chairwoman of the regents' Finance and Facilities Committee, said she and regent Alvin Tanaka met with housing officials last Friday. She said her notes from the meeting indicate that with other costs included, the contract would be worth about $4.7 million annually.
She said she had concerns about whether issues such as mold in the rooms, technology upgrades for Internet access, the cost of maintenance for the rooms and the cost to refurbish the rooms when they are returned to the hotel are being addressed in contract negotiations.
Tatibouet said that depending on how the contract was written, the owner of the hotel might get "a new property at the expense of the university" if the university is required to return it to hotel conditions after use as a dorm.
She said housing officials did not tell her at the Friday meeting that Kobayashi was an owner of the hotel.
Lagareta complained that the regents had to push the administration into revealing that Kobayashi was involved in the deal.
She asked that the board and the administration come up with a policy to ensure disclosure of potential conflicts of interests between the university, regents and trustees of the UH Foundation, the private organization that raises funds for the university.
Because of the need for housing this fall, the regents agreed to allow negotiations to continue but asked that the Facilities Committee be updated in the next few weeks on the negotiations and that details of the contract be provided for approval at next month's board meeting.
Kobayashi did not return a call asking for comment.