City looks to sell affordable rentals to a developer

By Paula Akana
Published On: Oct 11 2012 06:49:00 PM HST

The Honolulu City Council votes to sell the city's affordable housing units to a private developer for $142 million.

HONOLULU -

Despite several concerns, the Honolulu City Council voted Thursday to pass a resolution approving a deal for the city to sell its affordable housing units to a private developer.

The city wants to get out of the affordable rental business and it hopes to do so by selling its 12 rental properties to Honolulu Affordable Housing Partners LLC for $142 million.

Developer Peter Savio was one of several Thursday who questioned the bidding process.

"The closing date is important.  If they were going to accept any date other than the end of the year, it should have been disclosed," said Savio.  "If they were going to do anything else, it should have been disclosed.  It's not a level playing field."

City officials say the closing date was listed in other documents besides the request for proposal most prospective buyers had seen.

"We believe we've run this process very straightforward.  Very up and up," said City Housing Director Keith Ishida.

The Carlisle Administration was pushing for a quick approval citing a possible change in interest rates and pointing out the city was losing about half a million dollars each month running the 12 properties.

"When do we realize these savings?  Best guess," asked councilman Nestor Garcia.  "Our best guess is the second quarter of next year," responded a city official.

In the end, despite concerns over the process and the possible displacement of some renters, the council passed the resolution.

Tom Berg and Romy Cachola voted against the resolution.  Ernie Martin, Nestor Garcia, Ann Kobayashi and Stanley Chang voted yes with reservations.

The council had grappled with this issue since August.

Other concerns raised today was the elimination of the gap group rental units.  Those market rentals would increase 10 percent annually.

The city says it will work with the developer and offer rental assistance to affected renters.  Council members say unless they would decide to reopen the entire bidding process, it didn't make sense to defer making a decision on the proposal.

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