An organization that provides programs in Waiahole Valley for at-risk youth and recovering addicts faces foreclosure after falling behind in payments on an 8-acre property.
The Pacific Cultural Institute, formerly known as Friends of Samoa, has been working on a payment plan to offset its debt — including $104,000 in lease rent payments to the Hawaii Housing Finance and Development Corp.
The matter has been an ongoing legal battle among the organization, the state and Hawai‘i La‘ieikawai Association since September 2009. On Oct. 30, Pacific Cultural is scheduled to present a payment plan to the state at Circuit Court to stave off foreclosure.
HHFDC, an agency of the state Department of Business, Economic Development and Tourism, owns two parcels of land in Waiahole Valley it leases to the Hawai‘i La‘ieikawai Association, a nonprofit corporation. The site includes two residential properties and farm land.
According to a civil foreclosure complaint filed by Hawai‘i La‘ieikawai against Pacific Cultural and HHFDC, Hawai‘i La‘ieikawai in November 2004 agreed to sell and transfer its interest in the land that was being leased for $133,000 to Pacific Cultural. Under the sale agreement, Pacific Cultural was to pay Hawai‘i La‘ieikawai about $1,400 a month from December 2004 to November 2014.
Also, the organization was to pay lease rent and property taxes to HHFDC. At the time, Pacific Cultural’s lease rent was about $1,500 a year for the residential property, $205 a year for the farm land and $78 a year for a hillside.
In June 2009, the annual lease rent for the property skyrocketed after the state increased it to $32,400 a year — $15,240 for the residential property, $15,120 for the farm land and $2,040 for a hillside. The terms were for a 10-year period from February 2008 to January 2018 following an appraisal process.
Pacific Cultural has since fallen behind in payments.
Since 2012, a motion for summary judgement by the state has been delayed multiple times to allow the organization to come up with a plan to offset its lease rent and to show the housing agency it could obtain a financial commitment from a lender or other party, according to the complaint.
As of last month, Pacific Cultural owed the state about $74,000 in principal and almost $30,000 in cumulative interest in lease rent payments. It is unclear how much the organization owes Hawai‘i La‘ieikawai.
Kent Miyasaki, spokesman for the HHFDC, declined to comment because of the ongoing litigation.
Attorneys representing Hawai‘i La‘ieikawai and Pacific Cultural could not be reached for comment.
Pacific Cultural, an organization comprising dozens of churches and community volunteers, teaches traditional and sustainable farming to at-risk youth. Its farm in Waiahole Valley is used as an outdoor classroom to grow breadfruit, mangoes, avocados and other fruits and vegetables.
In the last two years, nearly 100 youth have participated in the organization’s programs through its partnerships with other organizations such as the Youth Challenge Academy and Goodwill Hawaii.
“It is a very rewarding experience for these kids,” said board chairman Loia Fiaui.
The organization also collaborated with TJ Mahoney & Associates to provide rehabilitation for recovering addicts at the site with cultural programs and health and wellness education workshops.
Pacific Cultural provides food grown on the farm to the homeless and area churches and communities. It also allow families to farm the land and take home what they plant.
“We want to save the farm,” Fiaui said.
Hi‘ilei Aloha LLC, a nonprofit subsidiary of the Office of Hawaiian Affairs, is helping the organization research grants for which it might be eligible. “It will depend on their infrastructure which will determine their success on getting funding,” said Hi‘ilei Aloha staff member Peter Hanohano.
Hi‘ilei Aloha’s capacity-building program provides training and technical assistance to Native Hawaiians who want to establish a business or a nonprofit organization. Hanohano, capacity building program manager, said Pacific Cultural was advised to take an online assessment that will determine what services Hi‘ilei Aloha can provide.
