Construction of an affordable rental apartment tower in Kakaako called Halekauwila Place has begun after a four-year delay largely over financing. But in overcoming the challenge, the project acquired a silver lining that will benefit lower-income residents.
The 19-story tower with 204 units will be limited to tenants earning no more than 60 percent of Honolulu’s median family income, which equates to about $43,000 for a single person or $62,000 for a couple with two children.
Monthly rents will likely range from about $850 for studios to about $1,400 for three-bedroom units.
"This is truly workforce rentals," said Stanford Carr, a local developer building the $70 million project. "It’s been a long and arduous process, but we’re glad to be here."
Plans for Halekauwila Place were announced in 2007, and construction was projected to start in 2008. At that time, apartments were going to be available for tenants earning 80 percent to 140 percent of the median family income in Honolulu.
Under that income range, a couple with two children could earn between roughly $80,000 and $115,000 a year and qualify for an apartment.
But the market for tax-exempt bonds initially lined up to finance the tower was obliterated by the global financial crisis that emerged as Halekauwila Place attempted to get off the ground.
Finding new financing proved difficult, and at one point included a deal for a $70 million loan from an electrical worker pension plan that fell through in 2009.
Ultimately, Carr secured $28 million in federal and state low-income housing tax credits and a $26 million loan from the federal Department of Housing and Urban Development. The Hawaii Community Development Authority, a state agency governing development in Kakaako, also committed to making a $17 million loan. The loan package closed last month.
The low-income housing tax credit program requires that housing units created by the credits be occupied by households earning no more than 60 percent of the median income. Carr said he will rent all the units in the project to tenants at that income limit.
"That’s really what’s needed in the marketplace," he said. "We are so far behind on (satisfying) the need for this kind of rental units."
Karen Seddon, director of the Hawaii Housing Finance and Development Corp., a state agency that helps produce affordable housing, praised Halekauwila Place for overcoming its challenges and adding to affordable-housing inventory in the urban core close to where people work.
"A lot of people worked very hard to see this project through the negative economy after the near meltdown of the financial services sector, so it is very fulfilling to see the start of construction," she said in a statement.
Carr is principal of Stanford Carr Development, a local firm that has produced residential projects including The Peninsula at Hawaii Kai, Trovare in Ewa, Kekuilani and Iwalani in Kapolei, and several on Maui and Hawaii island.
HHFDC selected Carr’s plan for Halekauwila Place in early 2007 among four competing proposals to build affordable housing on a 1.25-acre site owned by the agency and leased to the developer for 75 years for $1 a year.
The property is on a nearly 7-acre block that also includes Mother Waldron Park and another state-owned parcel slated for a 650-foot tower known as 690 Pohukaina, or the Super Tower.
Carr’s project stood out in part because of a relatively high glass-to-concrete ratio uncharacteristic of many past concrete monoliths on Oahu erected for affordable housing. The tower design also includes a four-story parking garage fronted in part with townhouse-style residential units.
However, some unit sizes at Halekauwila Plaza are small. Studios range from 395 to 424 square feet. Square footage ranges from 535 to 597 for one-bedroom units, from 684 to 782 for two-bedroom units and from 1,093 to 1,511 for three-bedroom units.
Carr said he anticipates being ready to take rental application in about a year. Construction is scheduled for completion in April 2014.
