PUBLIC NOTICE
Community Development Block Grant Program
Intent to Change Use of Real Property
CHINATOWN GATEWAY, CHINATOWN, HONOLULU, OAHU, HAWAII
CHINATOWN MANOR, CHINATOWN, HONOLULU, OAHU, HAWAII
HARBOR VILLAGE, KAPUUKOLO, HONOLULU, OAHU HAWAII
MARIN TOWER, CHINATOWN, HONOLULU, OAHU, HAWAII
WINSTON HALE, CHINATOWN, HONOLULU, OAHU, HAWAII
KULANA NANI, KANEOHE, HONOLULU, OAHU, HAWAII
WESTLAKE APARTMENTS, MOANALUA, OAHU, HAWAII
PAUAHI HALE, CHINATOWN, HONOLULU, OAHU, HAWAII
NOTICE IS HEREBY GIVEN that the City and County of Honolulu (“City”) is proposing to change the use of real property acquired and or improved in part with Community Development Block Grant (“CDBG”) funds from housing, commercial development and parking, which meet the national objectives of benefitting low and moderate income families and preventing slum and blight, to affordable housing which meets the national objective of benefitting low- and moderate-income families. The change in use is being pursued pursuant to the provisions of 24 Code of Federal Regulations §570.505.
The real property (collectively known as the “Properties”) is described as follows:
Chinatown Gateway is located in Chinatown, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 2-1-002-038 and contains 38,902 square feet of land. The City provided $7,940,804 in CDBG funds for land acquisition, planning, construction and relocation costs for commercial and parking components of the development. Pursuant to the proposed change of use, Chinatown Gateway will be comprised of an Affordable Rental Housing Component (119 units), a Market Rental Housing Component (81 units), a Commercial Rental Component, a Public Parking Component and a Resident Parking Component, all as further discussed below.
Chinatown Manor is located in Chinatown, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 1-7-003-032 and contains 19,946 square feet of land. The City provided a total of $14,336,749 in CDBG funds for multiple purposes including acquisition, planning and acquisition and development of the commercial and parking component as well as ninety (90) apartments. Pursuant to the proposed change of use, Chinatown Manor will be comprised of an Affordable Rental Housing Component (90 units) and a Commercial Rental Component, as further discussed below.
Harbor Village is located in Kapuukolo, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 1-7-002-027 and contains 28,388 square feet of land. The City provided $4,217,963 in CDBG funds for the acquisition and redevelopment of the commercial and parking component. Pursuant to the proposed change of use, Harbor Village will be comprised of an Affordable Rental Housing Component (60 units), a Market Rental Housing Component (30 units), a Commercial Rental Component, a Public Parking Component and a Resident Parking Component, all as further discussed below.
Marin Tower is located in Chinatown, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 1-7-002-004 and contains 44,697 square feet of land. The City provided $76,253 in CDBG funds for planning, engineering and construction costs in the commercial, residential and parking areas of the project. Pursuant to the proposed change of use, Marin Tower will be comprised of an Affordable Rental Housing Component (161 units), a Market Rental Housing Component (75 units), a Commercial Rental Component, a Public Parking Component and a Resident Parking Component, all as further discussed below.
Winston Hale is located in Chinatown, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 1-7-003-044 and contains 16,740 square feet of land. The City provided $4,966,898 in Urban Renewal and CDBG funds for acquisition, planning and engineering and rehabilitation in the commercial and residential components of the project. Pursuant to the proposed change of use, Winston Hale will be comprised of an Affordable Rental Housing Component (94 units) and a Commercial Rental, as further discussed below. Winston Hale is slated for possible redevelopment.
Kulana Nani is located in Kaneohe, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 4-6-031-015 and contains 185,699 square feet of land. The City provided approximately $8,045,657 in CDBG funds for leasehold acquisition, mortgage expenses and rehabilitation costs for this residential apartment complex. Pursuant to the proposed change of use, Kulana Nani will be comprised solely of an Affordable Rental Housing Component (160 units).
Westlake Apartments is located in Moanalua, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 1-1-060-008 and contains 77,620 square feet of land. The City provided $3,066,000 in CDBG funds for land and building acquisition. Pursuant to the proposed change of use, Westlake Apartments will be comprised solely of an Affordable Rental Housing Component (96 units).
Pauahi Hale is located in Chinatown, Honolulu, Oahu, Hawaii. The property is identified as Tax Map Key No. (1) 1-7-004-029 and contains 6,467 square feet of land. The City provided $1,280,702 in CDBG funds for land and building acquisition and rehabilitation costs. Pauahi Hale is slated for possible redevelopment and, unless otherwise agreed by the City, will be comprised solely of residential rental units.
In order to facilitate the preservation of its affordable rental housing portfolio, the City has contracted to enter long term leases of each of the Properties to Honolulu Affordable Housing Partners, LLC (“HAHP”), a private developer with the resources and experience to operate and maintain the Properties over the long term. HAHP was selected as the purchaser of the lease interests through a competitive process. HAHP will rehabilitate and preserve the Properties and will maintain a majority of the units at the individual Properties as long-term affordable rental housing. As a condition of the long term leases, in addition to the CDBG restrictions, HAHP will agree to maintain a majority of the residential units at each of the Properties as housing affordable to families with incomes at or below 60% of the area median income for a period of 65 years (the “City Affordability Restriction”).
All of the Properties include affordable housing units, but some of the Properties also include market-rate rental housing units, commercial tenant spaces and commercial parking facilities. For purposes of the proposed acquisition of the leasehold interests by HAHP, the Properties will be each composed of some or all of the following component types: Affordable Rental Housing Components, Market Rental Housing Components, Commercial Rental Components, Public Parking Components and Redevelopment Components. The Affordable Rental Housing Components of the Properties will be comprised of all units that will be subject to the City Affordability Restriction. In the case of Properties slated for redevelopment, all redeveloped units in the Redevelopment Component will be subject to the City Affordability Restrictions. The City must approve any redevelopment plan of any of the Properties slated for possible redevelopment, and the City has stipulated that any redevelopment of these Properties must replace existing rental housing units on a minimum of a one-to-one basis with the City Affordability Restriction intact.
HAHP intends to acquire and rehabilitate the Properties using different financing sources for the various components. To facilitate the financing and redevelopment of all components of the Properties, the City will cooperate with HAHP to create condominium units for each of the projects components at the Properties. For example, at Chinatown Manor all affordable units will be part of one or more condominium units. The individual apartments within the Affordable Rental Housing Component condominium units will remain as rental housing.
To accommodate the redevelopment of all components of the Properties while ensuring that the national objective of assisting low and moderate income families through the provision of affordable housing is met, the City is proposing to change the designated use of the mixed use (multi-component) Properties from the existing use to affordable housing that principally benefits low and moderate income families. Where the use is already affordable rental housing, the City proposes to continue that use. The use will be implemented on only the Affordable Rental Housing or Redevelopment Components of the Properties and will mean that for a period of five years following the closing of the long term lease transaction at least 51% of the units in the Affordable Rental Housing Component will be restricted to residents with incomes at or below 80% of the area median income and will have rents affordable to families with incomes at or below 80% of area median income, as such rent levels are established by the City Department of Planning and Permitting. The five-year CDBG use restriction period may be extended if capital improvements force the properties to temporarily take CDBG affordable rental housing units off line. The effect of this change of use is that HAHP may proceed with the planning, financing and rehabilitation of the Properties with CDBG program restrictions and encumbrances on the Affordable Rental Housing and Redevelopment Components and without any CDBG program restrictions and encumbrance on the other components of the Properties. THIS CHANGE OF USE IS CONDITIONED UPON THE CLOSING OF THE LONG TERM LEASE TRANSACTION WITH HAHP. IF THE LONG TERM LEASE TRANSACTION DOES NOT CLOSE, THE CITY WILL NOT CHANGE THE USE OF THE PROPERTIES AS DESCRIBED IN THIS NOTICE.
The rationale for the redesignation of use includes:
1. Designating the use of the Affordable Rental Housing Component or Redevelopment Component of the Properties as affordable housing to benefit low and moderate income families meets a national objective under the CDBG program and furthers the City’s goal of preserving its affordable rental housing stock.
2. Designating the use of the Affordable Rental Housing Components of the Properties as affordable housing will permit the CDBG program restrictions to encumber only the Affordable Rental Housing Components of the Properties, leaving the other components of the Properties unencumbered, which will facilitate their financing and rehabilitation which in turn promotes the development and retention of mixed income, mixed use communities.
3. Without a change in the designation of the Properties, the current CDBG program restrictions and encumbrances would make it difficult or prevent HAHP from obtaining financing to redevelop the other components of the Properties which in turn would hinder the proposed transaction and the City’s ability to preserve its stock of affordable rental housing.
4. As part of the long term lease transaction that will be facilitated by the proposed change of use, HAHP will go above and beyond the CDBG restrictions and will agree to restrict ALL units in the Affordable Rental Housing Component or Redevelopment Component of each of the Properties to families with incomes at or below 60% of the area median income for a period of 65 years. This is a deeper affordability restrictionon a greater number of units for a longer period of time than the CDBG restrictions, but this deeper restriction can only be achieved if the proposed change of use is made to facilitate the financing for the long term lease transaction.
Public comments on the proposed change in use of real property at the above described Properties will be accepted by the City and County of Honolulu until August 12, 2013. Written comments may be forwarded by mail to Department of Community Services, 715 South King Street, Suite 311, Honolulu, Hawaii 96813. Comments may also be submitted via facsimile to (808)768-7792. Questions regarding this matter may be directed to Keith Ishida at (808)768-7750 or kishida@honolulu.gov.
(SA538891 7/13/13)~
