Lawmakers, concerned about the potential loss of hundreds of affordable housing units downtown, have proposed using government powers to acquire Kukui Gardens.

Kukui Gardens Corp., owner of the 857-unit apartment complex, began looking for a buyer in January, raising concern that a new owner would tear down the complex and build more expensive housing.

A measure seeking to condemn the complex that is home to about 2,500 residents was passed by the state House of Representatives last week. The Senate is considering a separate resolution calling for Kukui Gardens Corp. to sell the property to a nonprofit that would maintain it as an affordable housing complex.

The City Council is also looking at the issue. City Councilman Rod Tam said he plans to introduce a resolution Monday calling for the city to condemn the complex and work with a private developer who would keep the units affordable.

Carol Anzai, president of the Kukui Gardens Association and a tenant for 33 years, said she was glad to have the support of lawmakers in seeking a way to keep the apartments affordable. Anzai said the owner didn't respond to a petition signed by about 900 occupants, asking for assurances that the complex would remain affordable.

"We're worried because we have a lot of seniors on fixed income and poor families who are just starting their lives," Anzai said.

Kukui Gardens Corp. President Lawrence Ching did not return several calls yesterday seeking comment. The company's spokeswoman, Elisa Yadao, also did not return several calls.

R. Stevens Gilley, whose firm CB Richard Ellis is handling the sale, also did not return calls yesterday.

When it announced plans to sell the complex, Kukui Gardens Corp. said the proceeds will go to the Clarence T.C. Ching Foundation. Clarence Ching was Lawrence Ching's father and founder of the Kukui Gardens Corp.

The foundation benefits the Saint Louis School, Chaminade University and St. Francis Medical Center.

The 36-year-old apartment complex charges tenants between $444 and $1,100 a month for one- to four-bedroom units. It houses about 2,500 residents.

Kukui Gardens Corp. built the project using funding from the U.S. Department of Housing and Urban Development.

In exchange for the HUD financing, the owner agreed to keep the units affordable until 2011.

Tenants such as Anzai said they are worried that a buyer will be able to persuade HUD to void the agreement.

Buck Bagot, a San Francisco-based affordable housing expert who is working with tenants, said he recently spoke with a representative at CB Richard Ellis, who told them that Kukui Garden Corp. was seeking a minimum bid of $130 million for the 22-acre parcel.

The price, which translates into $130 per square foot, would make it too costly to operate the property as an affordable project, Bagot said.

Rep. Michael Kahikina D-44th (Honokai Hale, Nanakuli, Lualualei), who authored the House bill seeking to condemn Kukui Gardens, said the developer should not be able to opt out of its obligation to provide affordable housing because they received low-interest loans and other incentives from the federal government.

"The big picture is that all of those families will have to move and we don't have anywhere to put them," said Kahikina.

Kahikina's bill will be heard next week by the Senate Commerce, Consumer Protection and Housing Committee. The committee's chairman, state Sen. Ron Menor, introduced a resolution yesterday urging Kukui Gardens Corp. to sell the apartments to a nonprofit that would maintain them as affordable housing.

Menor, D-17th (Mililani, Mililani Mauka, Waipi'o), said yesterday it's important for the Legislature to take swift action since the seller appears to have put the sales process on a fast track.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.