Huge city financial deal "on the verge of collapse"

By Lara Yamada
Published On: Jan 19 2014 12:26:24 PM HST
Ember Shinn_Affordable Housing Sale_01_14_14

Managing Dir. Ember Shinn updates members of the City Council on the sale of the city's 12 affordable housing complexes.

HONOLULU -

“I thought it was a done deal,” said Lynne Ditchen, a Winston Hale Resident in Chinatown, and she wasn’t the only one who felt that way.

At a meeting at Honolulu Hale, acting Mayor Ember Shinn told council members, what she considers their best offer to buy 12 city-owned affordable housing properties for $142 million, is about to tank.
 
“(The primary bidder) is feeling insecure. We're willing to work them them and consider and all options,” she told council members.
 
She said Council Chair Ernie Martin's resolution to try to kill the deal in December, spooked financial backers and their primary bidder.
 
“I think the buyer was looking for a convenient excuse to bail out of the deal. I still think there are other interested buyers that would be willing to purchase the package,” said Chair Ernie Martin.
 
Shinn said the revenue would pay for the city's Housing First Initiative, a Multi-Service center, non-profit projects, a rental housing trust fund and other city programs.
 
And, she said, their top bidder was not only willing to keep the vast majority as low-income housing, but input $50 million more in sorely needed improvements.
 
“That building is falling apart, I've lived there for three years. At Winston Hale, all I smell is mold coming out of my kitchen,” said Ditchen.
 
She also said the next potential bidder told residents he would raise rental rates 30 percent a year -- effectively bumping her out.
 
Despite clear apprehension by some council members, they ended the day willing to "wait and see."

Shinn said the buyer has until Monday to tell the city if he can still find the money to make the deal work by a March 31st deadline.
 
“There is very little likelihood we will get a better deal the next time around,” said Shinn.

Martin says they may consider a short extension beyond March 31st, but he said, that would be cutting it very close to the end of their fiscal year.

Shin said if this deal does fall through, it will likely mean the city will have to pay millions of dollars in legal costs, and she said, another deal would likely take at least another two years.
 

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