KAKAAKO, OAHU (HawaiiNewsNow) -
Under The Howard Hughes Corporation's plan, the corner of Ward Avenue and Halekauwila Street will be the site for a 424-unit, 43-story condominium called 988 Halekauwila. The developer originally intended the building to include 125 affordable units for sale.
"What we're asking for is the ability to satisfy our reserved housing requirements with for-rent units as opposed to for-sale units," Hughes Corporation senior vice president Dave Striph said.
Under Hughes' offer, the 375 rental apartments would meet state requirements for workforce housing for the developer's two Kakaako projects presently under construction and Phase 1 of its Kakaako Master Plan.
"Not only are we providing more units much earlier, but also to a lower income group," Striph said.
The Hawaii Community Development Authority's rule requires the rental units to remain affordable for 15 years. Now some on HCDA's board think it should be for 30 years.
"The one thing you don't want to have is after 15 years this goes on the market and now you've lost this affordable housing in Kakaako," HCDA vice chairman Steve Scott said.
Striph said building 988 Halekauwila will cost Hughes $85 million to $100 million in cash equity. He said Hughes can justify absorbing below market returns for 15 years but not 30.
"If the HCDA board forces us to do 30 years, we'll go back to re-evaluating and probably go to a for-sale project," he said.
Hughes Corporation could also take the building off the drawing board.
Scott believes a 30-year rule is fair.
"If there is a change it would apply to everyone," he said.
If the Development Authority grants Hughes Corporation's rental project proposal with a 15-year term, construction could begin later this year and be done in two years. HCDA will announce its decision on Hughes' request on May 13.