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The Honolulu Advertiser
Posted on: Thursday, August 3, 2006

Kukui tenants reassured

By Gordon Y.K. Pang
Advertiser Staff Writer

After visiting several units in Kukui Gardens Apartments yesterday, Gov. Linda Lingle assured residents she is committed to ensuring they would be able to stay in their units for as long as possible at affordable rates.

"We're going to work with ... the (Clarence T.C.) Ching Foundation as well as with the city to make certain that this stays affordable," Lingle said. "Exactly what path that will take right now is not known. The Legislature made it clear they want this project to remain affordable. We agree with them."

The foundation owns the 22-acre parcel, and the board of the Kukui Gardens Corp. made the decision to sell the project to San-Francisco-based Carmel Partners during the spring. The board membership consists of representatives for the Clarence T.C. Ching Foundation, Chaminade University of Honolulu, Saint Louis School and St. Francis Healthcare System of Hawaii.

Lawmakers appropriated $200,000 for the administration to hire consultants to explore different scenarios that would allow the units to remain affordable — as defined by U.S. Department of Housing and Urban Development guidelines — beyond 2011, when a HUD agreement that keeps the units affordable is due to lapse.

While the state is willing to talk to the new and old owners, "if we had to, we would be able to come in and actually condemn the property, pay fair market value for it, but then keep it in the affordable range," Lingle said. "One thing is clear: We cannot afford to lose 857 affordable units and we're not going to."

Christopher Beda, managing partner and chief investment officer for Carmel Partners, and Kukui Gardens Corp. Chairman Lawrence Ching accompanied Lingle on her tour and then met with the governor and several members of her administration for about half an hour afterward.

"It's our intention to work with any federal, state or local officials about coming up with a solution that would extend affordability beyond 2011," Beda said.

Asked if that would mean all those now living in the complex would be eligible to stay, Beda said: "If it's determined that that's the highest priority, yes."

Carmel Partners has been looking at several approaches to keeping the units affordable beyond 2011, Beda said, including extending an existing property tax exemption offered by the city, extending a waiver of general excise taxes given by the state, and seeking rental vouchers for qualifying families by the federal government.

Residents were encouraged by the visit.

"Just knowing that (the governor) is going to try to keep it affordable is good," said Carol Anzai, president of the Kukui Gardens Community Association who has lived in the complex for 33 years.

Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com.