Tab to fix Waiea luxury condo tower in Kakaako tops $100M

The developer of the most luxurious condominium tower in Kakaako has decided to pony up over $100 million to fix defects that have vexed homeowners in the 4-year-old building.

Howard Hughes Corp. intends to pay an estimated $114.5 million to repair a long list of problems in the 177-unit Waiea tower at Ward Village.

Texas-based Hughes Corp., which disclosed the decision in a recent financial report, expects to recoup its outlay from the tower’s general contractor, other responsible parties and insurance proceeds.

The company agreed to pay for fixing items that include jarring noises made by the tower’s distinctive wavy glass window wall, pursuant to a legal settlement with Waiea’s condo owners association, according to the report.

Jon Moore, senior vice president of design and construction management for Hughes Corp. at Ward Village, said paying for the repairs reflects a commitment to the success of Waiea and Ward Village, because the company is not legally obligated to do so.

“This level of commitment shown by Ward Village is unprecedented for a developer,” he said in a statement. “It is yet another example of how important our homeowners are to us and our dedication to the health, welfare and success of our community and valued customers.”

Bob Hines, president of Waiea’s owners association, credited the developer for agreeing to pay for the corrective work.

“They’re really standing up and doing the right thing,” he said.

Hines said repair work is still being contracted out, but if it goes smoothly then construction conceivably could begin in late February.

“It is great news,” he said. “We are pleased.”

While repairs to the building are on the cusp of being made, a tangled mess of litigation remains.

Hughes Corp. filed an initial lawsuit against Waiea general contractor Nordic PCL Construction in late 2017, a year after Waiea opened with about 160 of 177 units having sold for $3.6 million on average. As of September, 170 units have been sold and another two were under contract.

The developer alleged in its case filed in federal court that Waiea, the first of 16 planned towers built in Ward Village’s 60-acre master plan, had many defects.

The worst problem was what Hughes Corp. described as similar to sonic booms coming from the glass facade, particularly in the evenings and overnight hours.

“The sounds are exceptionally loud, jarring, and disturbing,” the lawsuit said. “The popping noises can be clearly heard inside numerous units in the building, and create a tremendous disturbance to the homeowners.”

Flooding from rain was another problem the suit highlighted.

Nordic has claimed the facade problem isn’t due to any failure by Nordic or other contractors to carry out design plans created by Hughes Corp. designers. The construction firm claimed it was sued because it threatened to place a lien on the tower after not receiving at least $39 million that was long overdue to the company and subcontractors for completed work.

A judge dismissed that case in 2018, ruling the developer didn’t follow necessary steps that include attempted mediation under a state law governing contractors.

Then in 2019, the association of Waiea condo owners filed a lawsuit against Nordic alleging more than 100 construction defects in the tower.

Alleged defects ranged from rather small things such as missing pool cabana door-latch bumpers and discolored pool grout to more major issues such as faulty air conditioning, inconsistent hot-water temperatures and a defective parking garage door.

Though Hughes Corp. was not a defendant in the owners association case, it became a participant when another lawsuit involving cross-claims filed by Waiea subcontractors was consolidated with the one filed by condo owners.

Most recently, a single Waiea condo owner, Christopher Kim, filed a lawsuit against the developer and contractor in November.

According to his complaint, Kim along with his wife, Sishi Yang, and her mother, Qian Yang, paid $5.1 million for a loft unit adjoining the tower’s base in 2016 but noticed a harsh chemical smell in the home when they were preparing to occupy the unit in 2018.

Later, Kim encountered other trouble that included water damage to the ceiling, low water pressure in the showers, wood flooring that had to be replaced because of water penetration through the front door, and an inoperable dishwasher and barbecue grill, the suit said.

As a result, Kim said the family had to buy another home in which to live.

“None of the underlying water intrusion issues have been permanently replaced,” the complaint said. “Instead, defendants continues (sic) to put band aids on their construction defects.”

Kim’s lawsuit asks a judge to include other condo owners with similar problems as plaintiffs.

Given that deficiencies in Waiea are now slated to be fixed, Kim’s lawsuit may become at least partially moot. Still, the case seeks punitive damages and provides a sense of frustration and impact on unit owners in the tower.

Meanwhile, the owners association case continues against Nordic and could end up being a drawn-out and costly battle.

Hughes Corp. noted in its financial report that its estimated total cost to develop Waiea had risen to $566 million at the end of September, up from $414 million at the end of 2016. The costs exclude land but include repair work along with continued marketing and legal fees.

The developer said it agreed to work with Waiea’s owners association to jointly pursue Nordic for repair cost recovery, with legal costs funded by Hughes Corp.

Nordic said in a statement that it is company policy not to comment on ongoing litigation.