KAKA‘AKO — Hawai‘i architect Ken Chang received thanks from local government leaders Friday for recently completing a mainly mid-priced Honolulu condominium tower despite setbacks that turned the project into an eight-year endeavor.
The praise for Chang was delivered during a grand-opening ceremony for the 328-unit Ililani in Kaka‘ako, which was blessed by Kahu Kordell Kekoa, who previously had blessed the ground under the 42-story tower not once, but twice because of a failed first start on construction.
“We are very proud to have finally gotten here,” Chang said at the event. “It has not been an easy road.”
Chang first proposed a residential tower set back from the corner of Keawe and Halekauwila streets near a planned city rail station in 2016, hoping to comply with affordable-housing rules that were then in flux at a state agency governing development in Kaka‘ako.
The agency, the Hawai‘i Community Development Authority, said Chang’s application was incomplete and therefore likely would be subject to an expected new version of HCDA rules that the architect-turned-developer at the time said would ruin Ililani’s viability.
Chang later reworked his project to qualify for exemptions from Kaka‘ako zoning rules and county permit fees in return for making half the condo units affordable to moderate-income households under rules of a different state agency, the Hawai‘i Housing Finance and Development Corp.
This change allowed Ililani to be more than twice as dense and closer to an adjacent tower than allowed under HCDA rules. Yet, still more difficulties arose.
In 2019 a lottery for 165 moderate-priced units with one or two bedrooms priced from $312,000 to $657,100 attracted 952 qualified entrants, and a groundbreaking ceremony to kick off construction was held in October 2019.
But ensuing sales, including contracts for market-priced units with two bedrooms priced from $700,500 to $905,500, almost entirely fell through as the coronavirus pandemic took hold in 2020, and that derailed construction.
To help keep the project viable, Chang sought out and received exemptions to county water and wastewater utility connection fees and state general excise taxes on construction in return for converting 32 market-priced units to affordable units for moderate-income buyers. Chang also was allowed to add an extra floor to the tower’s parking garage to improve sales by offering more parking.
As the real estate market improved, it took about two years to acquire enough new sales and begin Ililani’s construction in early 2022. But then soaring mortgage interest rates in 2023 led to many sale cancellations and prompted a third effort by project brokerage firm Locations to sell many of the same units that had been sold twice before.
“They’ve been working very, very hard for their commissions and their remunerations — way above the call of duty here,” Chang said of Locations.
As of mid-month, 18 moderate-priced units and five market-priced units were still available.
Gov. Josh Green thanked Chang for his courage and work to see the project through.
“You have succeeded, and your commitment over these years has to be recognized,” Green said at the ceremony.
“This really is about perseverance,” added Honolulu Council member Matt Weyer, chair of the council’s Housing, Sustainability and Health Committee.
State Sen. Sharon Moriwaki, whose district includes Kaka‘ako where many new towers in recent years have been luxury projects for the wealthy, said Chang has added value to the community with a mixed-income residential tower.
“This is really for our local community,” she said. “These (homes) are for residents.”
New homeowners began moving into the tower April 18 and are scheduled to continue through May 31.
Chris Chu, a 28-year-old financial advisory representative, bought one of the moderate-priced units, which made him a first-time homeowner after most recently renting at the Pacifica Honolulu tower in Kaka‘ako.
“It’s good to have homeownership for the first time,” he said.
Corbett Kalama, CEO of Locations parent RESCO Inc., said there was a lot of anxiety and excitement throughout what became a very extended sales process that ultimately was successful.
“This is a starting point for many of our families to really build generational wealth,” he said. “Congratulations, everyone.”
