Behind the reflective glass windows of the twin Moana Pacific condominium towers in Honolulu, either an imminent catastrophe is being averted or a panicked and costly decision is being made.
The view largely depends on whether you believe the board of the condo association or the developer of the 5-year-old buildings.
The condo association board wants homeowners to pay $8,000 to $28,000 per unit for plumbing repairs, which the developer says are not needed.
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Perplexed by PEX
What is PEX?
A plastic tube system made from cross-linked polyethylene, or PE-X, used for waterlines behind walls in homes and other buildings.
What is the problem?
Some, but not all, PEX systems installed in recent years used brass connectors with high zinc content that corrodes, potentially leading to line breaks.
Where is the problem?
Two high-profile Honolulu condominium towers — Hokua and Ko‘olani — have replaced their PEX systems because of problems. A third high-rise, Moana Pacific, plans to do the same, but owners disagree about whether it is necessary.
How expensive is the problem?
Moana Pacific has 706 residential units, each with 30 to 50 brass connectors, or 21,180 to 35,300 in the two towers. The estimated cost to replace the PEX system is $8.2 million, or about $8,000 to $28,000 per unit.
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Both sides have attorneys, consultants and convincing arguments and are asking owners to back their position.
To say the least, homeowners are concerned.
Owners of other condos and buildings — not only high-rises — around the state also might find certain elements of the dispute relevant and perhaps troubling, including circumstances that allow homeowner association boards to make unilateral decisions.
The subject of the high-stakes disagreement at the two oval-shaped towers Diamond Head of McKinley High School is cross-linked polyethylene, or PE-X, a plastic tube system homebuilders are increasingly using for waterlines instead of traditional copper pipes snaking behind building walls.
Moana Pacific’s board decided to replace the PE-X, also known as PEX, with copper pipes at a cost of $8.2 million. That breaks down to $11,650 per unit on average.
But Moana Pacific’s developer, high-tech entrepreneur and University of Hawaii graduate Fred Chan of KC Rainbow Development, contends the board has misled owners and made a rash decision without what he says is a required vote by unit owners.
"I want people to hear both sides of the story," he said. "This is America. Let’s vote on it."
Chan lives at Moana Pacific and with his family owns close to 50 units in the two towers. His son, David, who was Moana Pacific’s director of construction, sent a letter to unit owners Feb. 24 saying the board hasn’t presented all the facts regarding the PEX system and the reasoning to replace it.
The developer also has passed out fliers, and organized a presentation for owners Monday by the system’s manufacturer and installer.
The board, which notified owners of its move to proceed with replacement in a Feb. 14 letter authored by project management firm Hawaiiana Management Co., held an informational meeting Saturday to communicate its point of view.
The battle to win condo owner support to make or not make a major building repair is unusual for a homeowner association. And there is a question as to whether the board and developer have profit or liability motives that don’t necessarily align with the best interests of most owners.
Chan said any liability as the building’s developer is not an issue. He also said the cost for him to replace the PEX in his family’s 50 units is of no concern. Chan emphasizes that he would favor replacing the lines if empirical evidence shows they will break.
"If you’re going to convince me, prove it," he said.
In its Feb. 14 letter, the board said the PEX system is defective based on a study it commissioned from Washington-based forensic engineering and inspection firm Kent Engineering LLC, which found brass connectors between the plastic lines are corroding and leaking and will eventually cause line connections to break.
"If the defective PEX systems are not replaced, these brass fittings will continue to deteriorate and these systems will catastrophically fail over time," the board’s letter said. "Such failures will result in massive water damage each and every time a PEX fitting fails."
Glenn Sato, a local attorney representing the board, said that based on only a small sample of connectors, minor leaks were found that will lead to certain catastrophic failure.
"People need to get rid of this type of fitting," he said. "They are corroding."
The study doesn’t predict when failure will occur.
The board has told owners that a legal settlement is being pursued with the PEX system’s manufacturer, Uponor Inc., and other responsible parties. Sato, who reached a settlement in a similar PEX case involving the Hokua condo tower in Kakaako, represents Moana Pacific’s board in its settlement effort.
In its letter, the board said replacement can’t wait for any potential legal settlement. The board has arranged a $10.1 million loan to cover the PEX work, legal fees and a separate issue regarding fire-stopping material.
A loan is subject to approval by at least half of unit owners, and would spread the cost over 10 years to reduce owner monthly payments to between $83 and $291 depending on unit size. That cost would be on top of regular monthly maintenance fees that range roughly from $450 to $1,600.
If enough owners don’t approve the loan, the board said it will impose a special one-time assessment for the total cost.
An attorney for Chan, Bruce Lamon of the firm Goodsill Anderson Quinn & Stifel, sent a letter to the board Feb. 27 demanding arbitration, claiming that if the board proceeds with the PEX replacement, it will be personally liable for the cost of the work on 20 units owned by Chan through Evershine VII.
The arbitration letter characterizes the loan offer as coercion to draw support for replacing the PEX system.
Unit owners have until March 31 to provide or withhold consent for the loan.
Sato said it’s in the best interest of all owners to replace the system, and he said any suggestion that he is profiting from scaring people into making unnecessary repairs and suing responsible parties is off-base.
The PEX industry has had problem products before and blamed lawyers, he said, adding, "That’s the standard mantra. I don’t make up the fact that (fittings) are corroding and that the industry has stopped selling them."
Similar systems at Hokua and Ko‘olani were proved to be a catastrophic risk by failing, and were replaced, Sato noted.
Chan, the developer, contends that the Kent Engineering study gives only a preliminary opinion, and that the manufacturer and design of Moana Pacific’s PEX system is different from the systems at Hokua and Ko‘olani, another luxury condo tower that recently replaced its PEX system after just a few years.
All three PEX systems used connectors made of yellow brass, which corrodes because of a high zinc content. Such brass fittings are no longer approved for plumbing.
The Hokua and Ko‘olani PEX systems were made by Watts, a Massachusetts plumbing supply firm, and used stainless-steel rings to clamp the plastic tubing over fittings. This design allowed water to leak as fittings corroded, and a leak in one Hokua unit corroded the clamp and caused the pipe to come apart and gush.
However, the Moana Pacific PEX system uses a plastic collar to squeeze the tubing over the fittings.
Local mechanical engineering firm Dorvin D. Leis Co. installed the PEX systems in all three high-rise projects and said the Moana Pacific system exists elsewhere and hasn’t failed.
Steve Burgess, contract administrator and risk manager for Leis Co., said Uponor has a 30-year track record with its PEX systems without a catastrophic failure.
"They have never had a failure anywhere," he said.
Burgess also said Uponor, a roughly $1 billion company based in Finland, stands behind a 25-year warranty on Moana Pacific’s PEX system and any damage caused by leaks. "If it wets your drywall, they will pay to replace it," he said. "If it ruins your floor or carpet, they will pay to replace it. Twenty-five years — you can’t get that with a copper system."
Uponor and Leis Co. representatives made a presentation to Moana Pacific’s board, but the board still decided to move ahead with replacement.
Sato, the board’s attorney, questioned whether Uponor might try to get out of its warranty claims, and said the design difference is insignificant because if enough brass corrodes, the tubing could separate even with an uncompromised plastic collar.
Burgess, with Leis Co., said if any leaks occurred they would be small, relatively easy to fix and covered by warranty. "It wouldn’t come apart and gush water," he said.
Chan disputes that any fittings are leaking at Moana Pacific. He said that until more definite evidence is presented, replacing PEX piping should be a personal choice of individual condo owners.
But Sato said leaving such a decision up to individual owners affects anyone living below an owner who decides against replacement. Such a situation would ruin the peace of mind — and potentially the property — of some owners, and affect the ability to sell units in the building.
Furthermore, if catastrophic failures did begin to happen, chaos would ensue because pipe replacement could take place in only a relatively few units at a time, Sato said.
There are an estimated 21,180 to 35,300 fittings in the building, or 30 to 50 per unit. To replace all the piping with copper pipes would take 465 working days, according to the board’s plan.
Because of this danger, the board doesn’t have to get approval of a majority of unit owners, according to Sato.
Chan contends that no imminent danger threatens anyone’s personal safety, so a majority vote is required.
Minette McCabe, a Moana Pacific unit owner, isn’t sure which side is right about the PEX defect issue. "I read all the notices, and I still don’t think that I’m fully informed," she said. "It’s very complicated."
