ROD THOMPSON / RTHOMPSON@STARBULLETIN.COM William and Henrietta Hanson look over a house in Hilo being built for the Department of Hawaiian Home Lands before the project stalled. The house shows an unusual mix of wood and steel construction.

Builder leaves beneficiaries high and dry, houses wet

The Department of Hawaiian Homelands says it is helping pay rent for the families

HILO » Department of Hawaiian Home Lands officials say they are working to help DHHL beneficiaries on three islands who were affected when the contractor building 66 homes abandoned the job.

Home buyers have been agonizing as their partially finished homes sit exposed to Hilo rain, while their financial burden mounts.

DHHL head Micah Kane said the department will provide financial assistance where months of delay have forced home buyers to pay unexpected rent, bank penalties and other costs. There will be no increase in the price of the homes, he said.

"Recently, Fredco Inc. removed their workers from the job site which has prompted DHHL to take necessary steps to assure the completion of your house," Kane wrote to the 66 home buyers on Nov. 30.

Fredco is a construction subsidiary of Menehune Development Co., owned by West Hawaii businessman Fred Yamashiro. He has said that rising costs stopped the project, but he couldn't be reached for further comment.

DHHL picked Yamashiro because he did good work for the department in the past, building three-bedroom houses at Kapolei for under $100,000, Kane said.

"He has a track record of success," Kane said.

The current project was to involve 132 families on the Big Island, Lanai and Kauai, but only 66 of them had started construction, Kane said.

One couple is Henrietta Hanson, 75, a DHHL beneficiary and retired warehouse worker, and her husband William, 76, a retired merchant seaman. When they signed up to receive a house in the Panaewa area of Hilo in 2006, it looked like a deal: three bedrooms, three baths, for $167,345.

When they signed papers in June 2006, the house was supposed to be completed by the following April. Instead, the Hansons had to accept three extensions, each one costing them bank penalties.

They currently rent a house for $850 a month, while also paying $923 a month and penalties on their construction loan, they said.

Another beneficiary, Eva Harris, described herself as a single mother with two sons in college and a younger child in a private preschool. Required to pay both rent and loan payments, she had to take a second job, she said.

Six months after signing papers, the Hansons knew things were going wrong. In January, Fredco had withdrawn $32,800 from their account, but the only thing built was a concrete slab. By April, when the house was supposed to be finished, another $32,800 was withdrawn but they still had only a slab.

Around April, the house design was changed. Instead of wood, the frame would be of metal imported from China. When William Hanson called for information, he was told Yamashiro was in China. Now, some of the unfinished houses show a mix of half wood, half metal.

Laura Henderson, buying one of the homes with her friend Julia Ke, said construction on her house stopped with no protection from the rain for the composite wooden roof sheathing. Metal roofing sat on the ground on the other side of the street. In three weeks, the glued wooden sheets started to come apart, and stains from it ran down the walls of her house.

William Hanson said he visited his home, eventually 95 percent completed, nearly daily. He thinks theft of material from the scattered job sites was another problem. A subcontractor, who asked that his name not be used, said there were shipping containers of toilets, bathtubs and lighting fixtures. It's not clear where they are now, he said.

After taking over the project, bonding company Hawaii Hardware posted a guard at the Panaewa job site to prevent further theft.