Whether the end justifies the means is a question swirling around a mysterious senior-living project proposed for somewhere in Hawaii Kai. The development by Luana Kai — A Life Plan Community, just convinced the state Legislature to issue it up to $500 million worth of tax-exempt special purpose revenue bonds (SPRBs), even though many lawmakers profess to know few specifics about where the project will be located and who’s behind it.
House Bill 869, now on Gov. David Ige’s desk, won near-unanimous approval. In legislative written testimony, Luana Kai outlines preliminary plans for a 366-unit senior-living community, to include 260 independent-living apartments, 40 assisted-living apartments, 30 memory-care apartments and 36 private skilled-nursing suites.
If issued, the SPRBs would not impact the state’s financial condition, nor put the state at risk of bond repayment, nor put Hawaii citizens at risk of repayment or higher taxes. But with the state acting as conduit, the bonds provide tax-exempt financing for the project, and SPRBs mean the state could lose out on collecting income tax from investors.
Basically, SPRBs can be approved for uses of public health, safety and general welfare. And while the purposes of providing more elderly housing and continuum of care are certainly in the public interest, the vagueness around this particular project is concerning.
According to business records, Luana Kai was formed in October — but its legislative testimony does not list any person or principal. And at a Hawaii Kai Neighborhood Board meeting last week, few additional details were forthcoming on the project or site, stirring uneasiness and mistrust.
Clearly, powerful political forces are at work here, to convince most of the 76-member Legislature to approve HB 869, enabling the issuance, starting July 1, of up to a half-billion dollars in special-purpose revenue bonds for this project. Hawaii Kai Sen. Stanley Chang, who chaired a committee that approved the bill, said he understood the Luana Kai nonprofit to be represented by Blake Oshiro, the former legislator and one-time deputy chief of staff to Gov. Neil Abercrombie. Oshiro is now executive vice president at lobbying firm Capitol Consultants of Hawaii (CCH), whose executive team includes Bruce Coppa, former Abercrombie chief of staff, and Ross Yamasaki, current chairman of the Stadium Authority.
Power players aside, the issue here is that the public deserves to know what it is getting for a half-billion-dollars’ worth of tax-free financing. Absent more project details soon, too little is known about the scope and sturdiness of this venture.
