A state agency has committed to finance the first of three affordable senior housing towers planned on the Hawaii Public Housing Authority’s outdated Liliha­-Palama administrative campus.

Board members of the Hawaii Housing Finance and Development Corp. on Oct. 14 unanimously approved a $136 million tentative financing package for the first phase of the project, which has been six years in the making and would help provide critically needed affordable housing with monthly rents as low as $556.

An affiliate of the Retirement Housing Foundation, a California-based nonprofit developer selected in 2016 to build and operate the towers on the site leased from the state, expects to start construction on the first tower with 250 rental apartments in July and finish in January 2024.

Two more towers with 550 additional apartments plus retail space could take the better part of a decade or so to produce.

“We’re very excited about this project,” Anders Plett, the foundation’s vice president of acquisitions and development, said during the HHFDC board meeting.

Hakim Ouansafi, executive director of the public housing agency, told HHFDC’s board that the financing arrangement and anticipated construction follows six years of tireless work from the agency and the developer along with help from the state Legislature, the City Council and others.

“Our respective staffs and consultants are definitely committed in getting these units built and delivered as expeditiously as possible,” he said.

The public housing agency solicited proposals in 2015 to redevelop its headquarters site at 1002 N. School St. where 13 sin-gle-­story office buildings dating to 1953 cover 6 acres of land.

Initially, the agency pursued a goal of producing as many as 2,000 rental homes on the site, but it scaled back the vision to no more than 1,000 homes after hearing community concerns over traffic, views and other things.

After more community meetings in 2017, the public housing agency settled on a plan to produce 800 homes, with all of them reserved for low-income seniors. A signed development agreement with Retirement Housing followed in 2019.

Plett said the site is ideal for seniors in part because it’s next to the Lanakila Senior Center, a health center, a bus line and a district park. “It’s a great great location for seniors housing,” he said at the HHFDC meeting.

Other efforts to advance the project included state funding for planning work, production of an environmental impact statement finalized in 2018 and regulatory waivers from the City Council in 2020.

The city waivers include permission for the towers to rise up to 270 feet on land where zoning allows a maximum height of only 25 feet. The Council also waived fees for building permits, park dedication and other things valued at about $10 million.

The initial tower is designed to be 15 stories, or about 150 feet, connected to a six-story wing topped by an activity deck featuring garden plots, a fire pit, barbecue grills, cabanas and an outdoor movie screen and seating area.

Amenities planned in other parts of the building include a community room, internet cafe, arts and crafts room, exercise room and library.

A new administration building for the public housing agency also is part of the redevelopment plan, but isn’t included in the first three phases.

HHFDC’s financing includes a $40 million loan the Legislature made possible this year, $71.5 million in tax-exempt bonds and a mix of state and federal tax credits that can be sold to investors for an estimated $65 million that would be used to repay much of the bonds.

This financing requires that rents remain affordable to low-income seniors for 55 years.

Tenants would have to be at least 62 years old and earn no more than 60% of the median household income for Honolulu, though 151 units would be reserved for seniors with even lower incomes — 125 units at a 50% level and 26 units at a 30% level.

This year 60% of Hono­lulu’s median household income equates to $50,760 for a single person and $58,020 for a couple.

Initial monthly rents will be tied to median income levels when the tower opens. If the tower were open today, maximum monthly rents would range from $634 for a studio at the 30% income level to $1,632 for a two-bedroom apartment at the 60% income level.

Of the 250 apartments, 208 will be one-bedroom units where the current monthly rent limit ranges from $679 to $1,359.

The developer also plans to provide a monthly utility allowance, reducing monthly rent by $78 to $130, depending on the apartment size.