Kawamoto sells Kahala Avenue, other properties

Kahala Avenue, one of Hawaii’s most valued stretches of beachfront residences, is in line for a makeover — and not the kind with nude nymph and muscled lion statues installed by enigmatic real estate tycoon Gen­shiro Kawa­moto.

The Japanese investor has sold his collection of 27 Kahala Avenue properties and four other parcels in Windward Oahu and on Maui to local real estate firm Alexander & Baldwin Inc. in a $98 million deal announced Tuesday.

A&B said it plans to clean up, refurbish and resell the parcels, some of which look like ruins with little more than the foundations of former homes, untended vegetation and swimming pools piled with rubble.

Kawamoto paid $177 million for the Kahala properties between 2003 and 2011, according to property rec­ords. The collection, which includes eight homes and 19 vacant lots, represents about 16 percent of all the residential parcels on the street, according to A&B.

Several area residents, including some former Kawa­moto neighbors, rejoiced at the news and looked forward to A&B’s plan, which includes removing dozens of statues Kawa­moto installed to the amusement, curiosity and consternation of others.

"A&B is a great friend to the community," said F.M. Scotty Anderson, a Wai­alae Nui resident who is on the Wai­alae-Kahala Neighborhood Board and has heard complaints about Kawa­moto at about every monthly meeting for the last six years. "I couldn’t be more excited."

Anderson said Kawa­moto was a "poison" in the community where his actions included leaving vandalized homes untended, letting vegetation grow wild or die, busting down walls and installing the statues that were supposed to be part of public gardens connected to homes showcasing Kawa­moto’s art collection.

"I wish him well in whatever his next endeavor is as long as it’s not in Hawaii," Anderson said.

Richard Turbin, a lawyer who lives next to a former Kawa­moto property, said he wanted to celebrate Tuesday with an expensive bottle of French Champagne. "It’s a new day for Kahala," he said.

Tom Kiely, a Kahala Avenue homeowner for more than 25 years, had Kawa­moto properties next to and across from his house, including one of Kawa­moto’s two garden properties where the silver-haired 81-year-old who often wore jeans and a sport coat was occasionally seen directing workers planting shrubs or positioning statues.

"He’s kind of been a blight on the neighborhood and certainly as far from the aloha spirit as a neighbor could be," he said.

Kawamoto began snapping up Kahala Avenue homes a decade ago, and in 2006 announced a plan he dubbed "Kahala Avenue Mission" to rent nine homes to nine Native Hawaiian families for $150 to $200 a month and transform other properties into art and garden museums.

"My focus in Hawaii is not about making money," he said in a written statement announcing his plan. "Hawaii is a place for me to release my creativity."

Kawamoto said there were too many walls and fences along Kahala Avenue and that he intended to beautify the street with his garden plan.

Complaints about housing discrimination led Kawa­moto to curtail the rental plan after he provided three homes to Hawaiian families for free in 2007. A&B said it will honor the terms of Kawa­moto’s lease with the families through March.

Randy Key, who lives in one of the homes with his wife, Leeann Gusman, and six children, expressed thanks to Kawa­moto for the housing gift. "Mahalo from us," he said.

Many other homes Kawa­moto had intended to rent or use for his museum plans fell into disrepair and racked up city fines. Several of these homes were demolished.

The city said it has issued 70 violation notices to Kawa­moto for his Kahala properties since 2005 and collected $53,000 in fines. Kawa­moto has one outstanding fine of $1,000 for a violation that was corrected, according to the city.

A&B initially made an offer to Kawa­moto about four years ago, but it didn’t lead to anything, according to Chris Benjamin, A&B’s president and chief operating officer. Earlier this year the company tried again and was successful.

Benjamin said he doesn’t know why Kawa­moto agreed to sell. Turbin suspects that Kawa­moto agreed because legal troubles in Japan prevent him from returning to Hawaii.

Kawamoto was arrested in Japan in March on suspected tax evasion. Japa­nese media reports said prosecutors allege Kawa­moto evaded about $9 million in corporate taxes from his Maru­gen group companies, which operate more than 50 buildings in places such as the Ginza in Tokyo and the Hakata and Kokura districts of Fuku­oka prefecture.

Kawamoto could not be reached for comment.

Benjamin estimates that improving the properties will take a few million dollars and would include renovations of some homes and demolition of others. It’s possible that the company will develop homes on some lots to sell, though most sales are envisioned to be vacant lot sales.

A&B said the city for property tax purposes values the land it owns on Kahala Avenue at $118 million.

The other four properties included in the sale are two residential lots and a preservation-zoned parcel in Kaha­luu on Oahu’s Windward side, and a 146-acre agricultural-zoned parcel in Kihei, Maui.

Benjamin said completing the resale plan could take three to five years, but in the short term the statues along Kahala Avenue will be removed from public view.