Howard Hughes, Japanese developers to present plans for Honolulu’s Kewalo Basin Harbor next week

The Hawaii Community Development Authority is scheduled to hear plans from The Howard

The Hawaii Community Development Authority is scheduled to hear plans from The Howard

The Howard Hughes Corp. and Kewalo Waterfront Partners Inc., a partnership between two Japanese firms, are expected to unveil two separate commercial development plans next week for the land surrounding Honolulu’s Kewalo Basin Harbor, an executive with the Hawaii Community Development Authority confirmed to PBN.

The state agency overseeing development in the Kakaako area, as part of its July 9 meeting, is scheduled to hear from the two developers regarding their proposals for the small boat harbor, which are likely to include waterfront retail, restaurants and a live entertainment venue.

The three parcels aimed for development include the former McWayne Marine Supply site, the charter boat building site and the former National Oceanic and Atmospheric Administration lot.

The HCDA plans to make a decision on which proposal to choose on Aug. 5, Aedward Los Banos, the agency’s chief operating officer, told PBN.

However, he noted that the Aug. 5 decision-making hearing may be pushed back to the agency’s September meeting.

Kewalo Waterfront Partners, which includes Good Luck International Corp. and Hinamari Hawaii Inc., has plans to renovate four buildings totaling 45,000 square feet at the former McWayne Marine Supply site.

Plans for the site include retail stores and small restaurants, as well as a live entertainment venue, a bar, a cafe, office space, a multipurpose hall and a 250-stall parking garage, according to the project’s draft environmental assessment.

The Howard Hughes Corp. (NYSE: HHC), which has development rights for a total of 22 high-rise condominiums across the street and took control of the Kewalo Basin Harbor in September, plans to submit a proposal for all three parcels.

The Texas-based developer, through its senior director of development, Race Randle, has said that its plans for the harbor could include a restaurant that serves fresh fish caught from the commercial boats based at the harbor.

Other ideas presented at community meetings earlier this year included developing an oceanfront community center on the makai, or ocean, end of the harbor, which sits directly across from the developer’s 60-acre Ward Village master-planned community.

In the meantime, Japan-based Bellavita Inc. has scrapped its plans to develop a 6,000-square-foot Italian restaurant called Napule in the Kewalo Basin Harbor area, Los Banos told PBN.

He pointed out that the HCDA board may end up choosing Howard Hughes’ or Kewalo Waterfront Partners’ plan, or just the Texas-based developer’s proposal for all three sites.

The board also may end up choosing none of the proposals.

Duane Shimogawa
Pacific Business News

Hawaii Community Development Authority board poised for developing Kakaako the right way

Some of the key members of the new Hawaii Community Development Authority board

Some of the key members of the new Hawaii Community Development Authority board

It’s been only a few months since a new board has been in place at the Hawaii Community Development Authority, the stage agency regulating developing in the growing Honolulu neighborhood of Kakaako.

But talk to people in the community, small-business owners in the area, state lawmakers and individuals on the new board, as I’ve done, and you’ll see that it’s already evident that the way Kakaako is being developed with scores of new high-rises being built, is beginning to change.

And for some, it’s a better, more smarter way of developing the area between Downtown Honolulu and Waikiki.

“Certainly, I do think our current board is no shrinking violets,” Tom McLaughlin, a self-employed private consultant and current board member told PBN. “Everyone is willing to speak up in public and ask questions. Some questions that appear to be shy, this current board shows no hesitancy in asking the tough questions.”

He noted that the board, which is mostly made up of small-business owners chosen under a new selection model, has been actively engaged in putting together a set of objectives going forward, involving issues of transacting the future of Kewalo Basin Harbor and how that portion of Kakaako is developed, and also reserved housing and taking a report on that issue done by the previous board and implementing it.

Then there’s the transient-oriented development process and the homeless issue that they are dealing with.

McLaughlin, an Ala Moana/Kakaako Neighborhood Board member, said the key point is that the HCDA does not get enough money from the legislature to work on these projects.

“We need to find a way to prioritize or figure out where you get the biggest bang for your buck,” he said. “That’s the focus. It’s identifying what to do and come and prepare a legislative request for funding. When folks are clamoring and yelling about the homeless problem, and you’ve got no money to work on that issue, it’s a tough situation.”

Kalani Capelouto, who also is a board member, told PBN that he is hopeful that the HCDA places a higher emphasis on community when thinking about developments, while understanding the responsibility it has been asked to take regarding developing infrastructure to support needs in Hawaii.

“Development needs to work closely with the community to determine their needs and long-term goals,” the Makakilo/Kapolei/Honokai Hale board member said. “Development should only press forward when the infrastructure is present to support it. What we see on Oahu is the stress caused to the community and lower quality of life when development outpaces the ability of the infrastructure to support it.”

Read more about the new board and its plans for Kakaako in Friday’s cover story in the print edition of Pacific Business News.

Duane Shimogawa
Pacific Business News

Developer plans to start construction on $40M Kakaako condo in January

803 WaimanuCalifornia developer MJF Development Corp. plans to start construction on its $40 million Kakaako condominium mid-rise project in January 2016, to be completed in March 2017, according to public documents recently filed.

The developer said, in the 803 Waimanu St. draft environmental assessment, that it will finance the project by applying for a dwelling unit revolving fund loan through the Hawaii Housing Finance and Development Corp. and through conventional debt and equity.

Additionally, the sale of the condo units will be the “take-out” source, meaning that the revenue will be used to pay off the interim construction financing.

The seven-story condo will consist of 153 studio, one- and two-bedroom units and 91 parking stalls located between Waimanu and Kawaiahao Streets near Dreier Street.

The site is currently occupied by a warehouse with light industrial tenants and auto repair shops.

A total of 101 units are priced as affordable to the households between 80 percent of area median income (a person making $53,700 annually) and 140 percent of area median income (a person making $93,940 annually). The remaining 52 units are market rate.

In March, MJF Development acquired three properties where it plans to build its 803 Waimanu St. project in the Honolulu neighborhood of Kakaako for about $5 million.

The Hawaii Community Development Authority, which oversees the redevelopment of Kakaako, approved the project about a year ago.

MFJ Development is headed up by developer Franco Mola, who is also developing another Honolulu condo project at 929 Pumehana St.

“Ohana Hale” is a 21-story, 180-unit affordable and workforce condo project on a 14,400-square-foot lot.

Duane Shimogawa
Pacific Business News

Hawaii agencies could join to develop ‘Kakaako Makai Innovation Block’

The area where a new economic accelerator is being planed in Kakaako Makai near the UH

The area where a new economic accelerator is being planed in Kakaako Makai near the UH

Two state agencies — one promoting Hawaii’s economic diversification through venture capital investment partnerships and the other that oversees development in Kakaako — are looking to join forces to develop an economic accelerator in the growing Honolulu neighborhood, a spokeswoman for one of the agencies confirmed to PBN.

The “Kakaako Makai Innovation Block,” a partnership between the High Technology Development Corp. and the Hawaii Community Development Authority, is planned for a 5.5-acre lot with an allowable floor area of 360,000 square feet near the University of Hawaii John A. Burns School of Medicine campus on what is now being used as a parking lot.

The block would offer synergy and connection with the medical school and the University of Hawaii Cancer Center, according to an information briefing on the project to the HCDA this week.

The project would be done in three phases. The first phase would be an “Entrepreneur’s Sandbox,” a collaboration space for technology and enterprise, and an “Innovation Hale,” which would house technology and enterprise resources.

The hale would include a stand-alone commercial office and retail mall and DataHouse Consulting, one of the biggest information technology firms in Hawaii, as well as Fisher Hawaii, one of the largest home and office product supply warehouse and retail stores in the state.

Other potential tenants could come from health care, technology, education and data services.

The second phase would consist of the “Kewalo Incubation Center,” a place for the High Technology Development Corp. facilities and a regional parking facility that would increase parking in the area from 400 stalls at grade to 600 to 900 stalls in a parking structure.

The center would cater to start-ups, with space rents backloaded and customized for flexibility.

The third phase includes a learning center with up to 150,000 square feet of facilities and the “Keawe Courtyard,” an outdoor gathering place.

The HCDA is expected to hear more about the project at a future meeting.

“[The collaborations] are aimed at improving business and economic development in Hawaii, especially in Kakaako,” Lindsey Doi, spokeswoman for the HCDA, told PBN in an email.

Duane Shimogawa
Pacific Business News

Hawaii agency board to make final decision on Howard Hughes residential project in June

This rendering shows The Howard Hughes Corp.'s planned 988 Halekauwila project

This rendering shows The Howard Hughes Corp.’s planned 988 Halekauwila project

The Howard Hughes Corp. is not quite sure what its next step would be after a Hawaii agency unanimously struck down its request to move ahead with its previously approved Kakaako residential project at 988 Halekauwila as a rental project, the Texas-based developer told PBN.

However, a spokeswoman for the Hawaii Community Development Authority told PBN Thursday that the developer’s lawyers indicated that they will file exceptions to their application, so the board will take final action on June 24.

On Wednesday, the HCDA, which has a new set of board members, voted to deny the developer’s request to change the Ward Village project from a mostly affordable for-sale project to a rental project.

Steven Scott, vice chair of the HCDA and owner of Scott Hawaii, told PBN Thursday that the developer should abide by its original permit, which includes building a tower with 424 for-sale units, including 375 reserved units.

The project’s development permit was set to expire on July 17, although the HCDA voted Wednesday to approve an extension for two years.

David Striph, senior vice president for Hawaii for The Howard Hughes Corp. (NYSE: HHC), told PBN in an email that an approval of the developer’s request would have extended the length of regulations keeping the units affordable to 15 years for tenants at 80 percent to 100 percent of area median income, compared to for-sale units that would only remain affordable for two to five years for buyers at 100 percent to 140 percent of area median income.

For a single person, the Honolulu area median income at 80 percent is $46,256, while it’s $57,820 at 100 percent and $80,948 at 140 percent, according to the U.S. Department of Housing and Urban Development.

“This new board has stated their intention to listen to the voice of our community, and public testimony was overwhelmingly in support of approving the project for 15 years,” Striph said in an email to PBN. “We are disappointed the project was not approved because our community suffers when the delivery of much-needed affordable housing is slowed down or stopped.”

He noted that, in spite of this setback, Howard Hughes is dedicated to providing a wide range of housing in Honolulu for local residents.

“[We] look forward to exploring alternatives to satisfy our reserved housing requirements for Ward Village,” Striph said. “There is much greater need for affordable housing in Honolulu than there is for for-sale condominiums. Approximately five times the number of households on Oahu would have qualified to rent at 988 Halekauwila versus those that are qualified to buy.”

Under the HCDA’s old rules, projects could be utilized as rentals for a minimum of 15 years or longer. But in 2011, new rules came into effect that set the timer period for affordable rentals at a fixed 15 years.

“Under the Howard Hughes plan that it inherited from [General Growth Properties Inc.], it’s a minimum of 15 years,” Scott said. “Then when they went to get their permit in April 2013 for Waiea and Anaha, they said they would be building 375 reserved units for sale at 988 Halekauwila. That would satisfy their affordable requirements.”

Then in January, Howard Hughes said it wanted to make the change from a for-sale to a rental project for 15 years.

“The previous board had put out a study in March, which recommended that if it is a rental project, it should be for 30 years, and that the area median income percentage should be reduced from 140 percent to 120 percent,” Scott said. “When this proposal came to us on April 1, the sentiment was that 15 years is too short. In terms of affordable housing, it should be longer, and in 15 years, they could turn around and sell those units at fair market value, turning it from a co-op to a condo.”

In February, Howard Hughes officially requested the ability to proceed with its 988 Halekauwila project, which will be built across from Sports Authority on Ward Avenue, as a rental development.

The developer previously told PBN that if the request was approved, it would in no way impact the number of reserved housing units — 375 — provided at 988 Halekauwila, which represent three times the number of units required for phase one of Ward Village.

The project, which is being planned on what is the former site of the Kanpai Bar & Grill and the current California Rock ‘N Sushi, is part of the developer’s first phase of its 60-acre Ward Village master plan.

Scott told PBN that under the current rules, Howard Hughes can’t move people into its Waiea and Anaha luxury condos, which are also part of phase one, until it puts financial assurance that it will build 988 Halekauwila, or starts construction on the project.
Duane Shimogawa
Pacific Business News

Hawaii agency chief says 35% of Kakaako’s housing units ‘affordable’

The 801 South St. project in Kakaako is one of the workforce housing projects being developed in the area. The head of the Hawaii Community Development Authority says 35 percent of the housing being developed in the area are "affordable."

The 801 South St. project in Kakaako is one of the workforce housing projects being developed in the area. The head of the Hawaii Community Development Authority says 35 percent of the housing being developed in the area are “affordable.”

A little more than one-third of the more than 4,200 units being developed in the growing Honolulu neighborhood of Kakaako are not being built for the ultra-rich, the head of the Hawaii agency overseeing the redevelopment of the area said Wednesday.

With scores of high-end condominiums being built in Kakaako, much of the talk has centered around local residents being aced out of area because of not being able to afford such sky-high prices.

Anthony Ching, executive director of the Hawaii Community Development Authority, said at the agency’s monthly meeting amongst a brand new board of directors and new office and meeting spaces at the American Brewery Building in Honolulu, said that 35 percent of all housing units in Kakaako will be for qualified income households.

This means that there is a chunk of units in Kakaako that will be reserved for those in two categories, reserved housing and workforce housing.

Reserved housing is for low or moderate income groups. The majority of “affordable housing” in Kakaako falls under this program.

These developments are available to households making anywhere from 30 percent to 140 percent of area median income, which translates to a person with an annual income between $20,150 and $80,950.

Workforce housing, unlike reserved housing, is not a requirement for residential developers under HCDA rules.

To be called a workforce housing project, the requirements are having at least 75 percent of residential units set aside for those earning between 100 percent and 140 percent area median income, which translates to an annual income for one person between $57,800 and $80,950.

Ching recently told PBN that while the condos being built in Kakaako are all high-value properties, each one has different price points and there is strong local purchase.

“Local investors, as well as occupiers, are part of the significant growth of Kakaako,” he said. “We’re focusing on trying to produce rental units — Halekauwila Place is a good example. It was built with tax credits. The tax credit program is responsible for 90 percent of all low-income housing.”

Duane Shimogawa Reporter – Pacific Business News

Forest City’s plans for Kakaako’s 690 Pohukaina may include a school

A file rendering of Forest City's 690 Pohukaina project in Kakaako showed what the building may have looked like at 650 feet. The project, which will top out at 418 feet, may also include a school.

A file rendering of Forest City’s 690 Pohukaina project in Kakaako showed what the building may have looked like at 650 feet. The project, which will top out at 418 feet, may also include a school.

Forest City’s $500 million 690 Pohukaina mixed-use project in Honolulu’s Kakaako neighborhood, one of the first projects out of the gate at the start of the current condominium boom, could include a public elementary school, the head of the state agency overseeing the redevelopment of the area told PBN.

Anthony Ching, executive director of the Hawaii Community Development Authority, recently told PBN that the 690 Pohukaina project will include a mix of uses, including market-rate rentals, below market-rate rentals — and perhaps an educational component.

Ching declined to go more into detail regarding a school site at 690 Pohukaina, although the Kakaako area, which will gain thousands of new residents in at least a dozen or so condos being built in the coming years, will likely need more schools.

Seagulls Schools plans to build a new preschool campus in Kakaako near the intersection of Kelikoi and Cooke streets that may include kindergarten through third grade classes as well, as first reported by PBN. The “Kakaako First School” is expected to start construction in the middle of this year.

Linda Schatz, development manager for Forest City, recently told PBN that its 690 Pohukaina project, which at one time was to include the state’s tallest building at 650 feet but will top out at 418 feet according to local laws, is still in the discussion phase with the HCDA.

“[We are] working things out with the HCDA,” she said. “We want to get something done soon, like in a year.”

Schatz referred comment regarding the prospects of including a school as part of the project to the HCDA.

Forest City has said its the 690 Pohukaina project would include 800 rental units, including both affordable and market-rate units.

In late 2012, the HCDA selected Forest City to develop 690 Pohukaina, which is to be built on state land under a 65-year ground lease. During that time, Forest City and the HCDA began an 18-month development process, which includes doing an environmental assessment, that ended in May 2014.

Duane Shimogawa Reporter – Pacific Business News

Honolulu’s Auahi Street to unite Kamehameha Schools, Howard Hughes projects

Auahi Street, looking toward Downtown Honolulu from Ward Avenue will be opened up when the Hawaii Community Development Authority moves the city's coning unit branch to another spot in Kakaako.

Auahi Street, looking toward Downtown Honolulu from Ward Avenue will be opened up when the Hawaii Community Development Authority moves the city’s coning unit branch to another spot in Kakaako.

Auahi Street, an important route through the growing Honolulu neighborhood of Kakaako that currently separates The Howard Hughes Corp.’s 60-acre Ward Village master-planned community from Kamehameha Schools’ properties, is getting connected.

Anthony Ching, executive director of the Hawaii Community Development Authority, the state agency regulating the redevelopment of Kakaako, said this week at its regularly scheduled meeting that the plan to open up Auahi Street should gain some traction during the first quarter of this year.

Currently, Auahi Street, which starts and ends on Queen and South streets, is cut off almost in the middle from Kamani to Koula streets by the City and County of Honolulu’s Department of Facility Management’s sidewalk-nuisance ordinance and stored property ordinance program and coning unit branch.

The connection of Auahi Street from Kamani and Koula streets would prove useful to both Kamehameha Schools and The Howard Hughes Corp. (NYSE: HHC) — and would connect the two developers’ mixed-use communities, providing pedestrian, bicycle and vehicular circulation.

But the HCDA has proposed moving the city’s coning unit branch to the state agency’s former Look Lab Facility in Kakaako Makai, which consists of an 18,000-square-foot warehouse and 29,560-square-foot open yard space.

Ching said that this property, which was previously leased by the University of Hawaii until 2003 and has since been vacant except for short-term tenants, would be a perfect fit for the branch because it would provide the city with a needed facility and enforcement of the sidewalk-nuisance ordinance program in the Kakaako Makai area.

“The proximity of the branch will impact the homeless population in the area,” he said, noting that opening up Auahi Street would be a full-service effort, painting lines to show bike and pedestrian lanes.

Duane Shimogawa Reporter – Pacific Business News

Stanford Carr’s $50M Honolulu affordable rental project approved

Developer Stanford Carr of Honolulu-based Stanford Carr Development talks about his Keauhou Lane project in this file photo. His Hale Kewalo project affordable rental project gained regulatory approval Wednesday.

Developer Stanford Carr of Honolulu-based Stanford Carr Development talks about his Keauhou Lane project in this file photo. His Hale Kewalo project affordable rental project gained regulatory approval Wednesday.

Hawaii developer Stanford Carr’s plan to develop a $50 million, 128-unit affordable rental project near Ala Moana Center in the Honolulu neighborhood of Kakaako received the approval of Hawaii regulators on Wednesday.

The Hawaii Community Development Authority, which oversees the redevelopment of Kakaako, voted 8-0 to approve the assignment of reserved housing for Alexander & Baldwin Inc.’s Waihonua at Kewalo condominium to Carr, who said that the “Hale Kewalo” project is expected to break ground in about a year.

Carr noted that his company, Honolulu-based Stanford Carr Development, has completed a draft environmental impact statement for the project, and has submitted it to the Hawaii Housing Finance and Development Corp.

Additionally, Stanford Carr Development has submitted its application with the U.S. Department of Housing & Urban Development’s San Francisco Regional Office.

A sewer connection application also has been recently granted, Carr said.

The project will mostly be financed by the sale of state and federal tax credits.

Pittsburgh-based PNC Bank has agreed to purchase the tax credits, said Anthony Ching, executive director of the HCDA.

“This is a significant step, [and] while this seems to be a tortuous path, the production of rental housing units at deep affordability of any quantity is something that is important,” he said.

Hale Kewalo, which will be located at the corner of Piikoi and Kona streets, is targeted at Hawaii residents earning no more than about $40,260 for a single person, or $57,480 for a family of four.

Rental rates have not been finalized, although they may likely range from $500 per month to a little more than $1,389 per month for a three-bedroom unit, depending on unit size and number of bedrooms.

The 128 residences comprise 27 one-bedroom units, 72 two-bedroom units and 29 three-bedroom units. There also will be 77 parking spaces at the project.

The rental project at 404 Piikoi St. is meant to satisfy A&B’s affordable housing requirement for its 43-story Waihonua at Kewalo condominium.

PBN first reported that Carr was taking over the affordable housing development from A&B.

Duane Shimogawa Reporter – Pacific Business News

$40M waterfront restaurant, retail venue at Kewalo Basin to start construction in September

A Japanese partnership is planning to start construction in September on a $40 million multi-use facility at Kewalo Basin in Honolulu that would include waterfront retail, restaurants and a live entertainment venue.

Kewalo Waterfront Partners Inc., which was formed by Japan-based Good Luck International Corp., and fellow Japan firm Hinamari Hawaii Inc., said in a draft environmental assessment that the project is anticipated to be completed by December 2016. The entity also said that it will provide the primary financing for the project, which includes four buildings totaling 45,000 square feet.

The developers are still negotiating lease terms with the Hawaii Community Development Authority, according to Kevin Cockett, a Honolulu public relations executive working with Kewalo Waterfront Partners. If a lease is secured, the developers also still need to secure a development permit.

“We’re hoping to give a presentation regarding the project to the HCDA in February at a regularly scheduled meeting,” Cockett told PBN, noting that the construction timeline will likely change.

Located on about two acres between Kewalo Basin Harbor and Ala Moana Beach Park on what is now a surface parking lot, the buildings would be built no more than 45 feet near the waterfront.

The first building, which would be located near Ala Moana Boulevard, will have commercial uses including waterfront retail consisting of various retail stores and small restaurants. The second building would have similar uses as the first building.

The third building would include a live entertainment venue and a restaurant and bar on the ground floor, and office space and open decks on the second floor.

A fourth building, which would be separated from the other buildings by a 24-foot wide drive aisle and would be located east of the third building, would have a cafe on the ground floor and a multipurpose hall on the second level.

A 250-stall garage in a two-level structure would be located between the first and third buildings.

Honolulu-based Environmental Risk Analysis LLC submitted the draft environmental assessment to the Hawaii Office of Environmental Quality Control, with an anticipated finding of no significant impact to the environment.

Duane Shimogawa Reporter – Pacific Business News

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