The long-awaited sale of Kukui Gardens affordable rental complex has been completed, the parties announced yesterday.

The 22-acre complex of 857 low-cost apartments was sold by Kukui Gardens Corp. to San Francisco-based Carmel Partners for $131 million.

The deal ensures that nearly half the units will remain as low-income housing for at least 55 years, while the remaining apartments will continue to be at existing rents until 2011. The rents of the latter group of apartments will then increase to serve households earning no more than 140 percent of the median income.

Kukui Gardens has been at the center of controversy for nearly two years since owner Kukui Gardens Corp. announced it was selling the property because it could not afford to pay for much-needed repairs. In April 2006, Kukui Gardens Corp. announced it had found a buyer, Carmel, which said it would demolish the apartments and build 3,700 residential units and retail and office space.

The plans angered many Kukui Gardens residents, many of whom had lived at the 37-year-old complex for decades and said they could not afford to live elsewhere. The state also was concerned because of the potential loss of hundreds of affordable rental units.

The Legislature and Gov. Linda Lingle stepped in, and a measure was passed to allow the state to exercise its power of eminent domain to acquire the buildings. Since then, the state, Kukui Gardens Corp., Carmel and the U.S. Department of Housing and Urban Development had been negotiating a sale that would keep the units affordable.

Carol Anzai has lived in Kukui Gardens for 34 years and said she's thrilled that the sale was finally completed.

"It's just such as relief that's it's finally going to be over, especially (for) our seniors, who aren't going to have to worry about what's going to happen in 2011," Anzai said. "There's going to be a lot of transition, but that's a small price to pay for them to still live in their homes."

Jack Tsui, Kukui Gardens Corp. president, said all parties worked hard to reach the agreement.

"We are delighted by the outcome, which preserves affordable rental units for Kukui Gardens tenants in memory of Clarence Ching, Lawrence Ching and their legacy."

Clarence Ching built the project in 1970 with HUD funding and agreed to keep the units affordable until 2011. Ching died in 1985.

Reach Curtis Lum at culum@honoluluadvertiser.com.