LIHU‘E — The Kaua‘i County Council in a five-to-two vote Wednesday approved significant revisions to affordable-housing conditions agreed upon five years ago by the developers of a major South Shore project. The original agreement — reached between the county, landowner
LIHU‘E — The Kaua‘i County Council in a five-to-two vote Wednesday approved significant revisions to affordable-housing conditions agreed upon five years ago by the developers of a major South Shore project.
The original agreement — reached between the county, landowner A&B Properties and developer Kukui‘ula Development Hawai‘i — guaranteed 75 affordable homes, mostly for employees of the project.
Qualified buyers would accrue one percent equity annually, plus improvements made on the property. Only after 90 years would owners attain full equity in the homes.
The revised agreement allows qualified buyers to accrue four percent equity each year. After 25 years, owners will have 100 percent equity in the house. If the house is sold before the 25-year period ends, the next buyer will go through the same 25-year buy-back period.
Another major change in the agreement allows developers to sell the affordable homes in the open market if no buyers qualify after a 14-month sales period.
Council members Lani Kawahara and Tim Bynum said the council had approved the changes in Kamamalu because the homes had already been built. The Kukui‘ula developers still have three years to build the homes and the economic crisis — the main reason alleged by the developers for asking for revisions — could be different then, they said.
“I am worried that this is skewing too much to the developer and giving them all of the concessions they want prematurely and unnecessarily,” Kawahara said. “There’s nothing making them build this now.”
Former Councilwoman JoAnn Yukimura helped craft the original agreement when she served on the council. In the last few months she has shown strong opposition to changing the conditions.
She asked the council to defer the decision to discuss alternatives to the proposed revisions.
“If after two weeks you’re still convinced that nothing will work, then you can go ahead and move on this,” Yukimura said Wednesday at Council Chambers in Nawiliwili.
Chair Kaipo Asing said the proposed conditions weren’t fair to Kukui‘ula when compared with changes in agreements the council had approved for other developments.
Kamamalu, built in Lihu‘e by developers of the Kaua‘i Lagoons Nawiliwili project, was supposed to go into the market as 99-year leasehold. After the council revised the conditions, the homes can be sold as fee-simple ownership, have a 20-year buy-back clause, and be sold in the open market if qualified buyers can’t be found after a six-month sales period.
Councilman Daryl Kaneshiro said the state sets buy-back limits as no less than 10 years. Honolulu and Big Island counties also adopt a 10-year buy-back clause. Maui County adopts a 25-year buy-back clause.
He said the Kukui‘ula project’s 90-year buy-back is excessive when compared with housing policies from other counties and from the state.
Councilman Derek Kawakami said the developers, besides meeting housing requirements, have given a lot to the community, including a 20-acre community park, the development of another park at Kukui‘ula Bay, plus several beach accesses and other concessions.
Councilman Jay Furfaro said the developers fulfilled their obligations in the 1990s.
“We came to them with extra requests,” said Furfaro, adding that the 75 workforce housing was in addition to the original request.
The project is in a Visitor Destination Area, but only half of the homes can be developed as vacation rentals, according to Furfaro.
Councilman Dickie Chang also supported the bill, but said as chair of the Housing Committee he would be supporting a two-week deferral.
Bynum said earlier he would ask for a two-week deferral after Kawahara’s motion to defer the issue to January 2013 didn’t pass. But Bynum said later he wouldn’t be making the motion anymore after learning Asing’s willingness to vote for the bill the same day.
Kawakami read an agreement stamped by the Housing Agency that said if the houses are to be sold in the open market, the agency supports the idea that part of the profits from the extra equity is given to the agency.
The revised agreement states that if an affordable home ends up in the open market, then the county takes 25 percent of the difference from the sales, minus the price of the home as an affordable unit.
Bynum wanted a representative from the county Housing Agency to clarify whether the agency supports the sale of the affordable homes in the open market.
Asing, however, saying council members had “enough discussion,” called for a vote. Only Bynum and Kawahara voted against the bill. Once Mayor Bernard Carvalho Jr. receives it from the County Clerk, he has 10 days to make a decision.
Go to www.kauai.gov for more information.
• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@kauaipubco.com.
