The city is planning new senior affordable rental housing for Waikiki following the condemnation of a derelict apartment building sandwiched between the Watermark, one of Oahu’s toniest condominiums, and freshly renovated walk-up apartments.

The city spent about three years trying to acquire 1615 Ala Wai Blvd. from Norman Nip, a small-business owner who is known for Nip’s Potato Chips, and his siblings Alvin Nip and Donna Nip Chang.

After negotiations to purchase the property were unsuccessful, Mayor Rick Blangiardi on Oct. 12 signed a resolution introduced by Honolulu Council Chair Tommy Waters to acquire the property through condemnation. According to court documents, the city submitted a check to the court clerk in April for $3.04 million, the estimated just compensation for the property.

City Managing Director Michael D. Formby sent a letter Friday informing Waters and other Council members that the “city has obtained possession by court order of the above-described property. This parcel has been identified for the development of senior affordable rental housing. The city’s Department of Land Management is currently working to secure the property (with) fencing, evaluate security options and commence planning studies.”

Waters said he applauds the efforts to acquire the parcel, and wants to extend a warm mahalo to Blangiardi, the Waikiki Neighborhood Board and the many community supporters who advocated for this effort.

“It is my hope now that the city can work to provide much-needed senior affordable housing rentals and reduce the incidence of crime from the lack of management of this property.

“This is the culmination of years of work and the community coming together to address the long-standing issues brought about by this property,” Waters said. “Since taking office, I have heard concerns about 1615 Ala Wai Boulevard and criminal elements being attracted to the property.”

The building and lots, which have been vacant some 20 years, have had a history of complaints with the city Department of Planning and Permitting going back more than a decade. The condition of the roughly 9,500-square-foot, fee-simple property also has resulted in complaints to police.

As such, the building had become known as the scourge of the neighborhood. It’s the only undeveloped three-story walk-up in a complex of five that were built seven or eight decades ago.

Waikiki Neighborhood Board Chair Bob Finley said the acquisition of 1615 Ala Wai is the fulfillment of a long desire of the board.

“The property was dangerous and an eyesore. The guy that owned it would not talk to anyone about improving it. It got to the point that the City Council felt that the best thing to do would be to condemn it and renovate.”

The acquisition through condemnation will add to the city’s affordable housing efforts in Waikiki, which Finley said in 2018 saw the opening of 436 Ena Road, the first city-developed project in Waikiki that accepted Housing First vouchers.

In that case the city utilized Community Development Block Grant funds to acquire the eight-story building and parking structure, which now provides 33 units of affordable housing, as well as a facility to provide various services to low- and moderate-income households. Most of the rental units are earmarked for singles making $67,500 or less, or couples making $77,150 or less. However, 20% are reserved for homeless singles or couples from Waikiki.

Finley said some Waikiki residents have complained about the behavior of some of the formerly homeless people who have been housed in the Ena Road development. However, he said, “It’s better housing them in the community than on the street.”

State Rep. Adrian Tam (D, Waikiki-Ala Moana- Kakaako) said he supports converting 1615 Ala Wai into affordable senior housing.

“Hawaii continues to have an aging population, and after you retire you are on a fixed income,” Tam said. “That fixed income makes it very hard for seniors to tackle the cost of living, especially when prices are going up. Many people are leaving the state to try to make ends meet. I’m glad that this project is going up.”

Waters, the only one of his six siblings who is still living in Hawaii, lamented the dearth of affordable housing at the Waikiki Neighborhood Board meeting on Sept. 13.

“None of my siblings can afford to live (here). … Do you know how sad it is during Thanksgiving and Christmas? My dad born and raised here, Hawaiian, and ended up passing away on the mainland,” Waters said. “It scares me to death that my two kids might not be able to live and raise their kids here because they can’t afford it.”

But he said he believes that there are opportunities for affordable housing development in Waikiki.

Earlier this year Tam introduced a concurrent resolution, which passed, that urges the city to purchase 19 long-vacant plots of Waikiki land owned by Okada Trucking Co. for fair market value to earmark it for higher use.

“I want to see our vacant and derelict lots put to better use,” Tam said. “We continue to fight an affordable housing crisis. We also have a lack of green space in the urban core and a parking crisis, especially in Waikiki.”

Now that the city has acquired 1615 Ala Wai, Tam said he hopes that it might pursue the Okada Trucking lots.

The Okada Trucking land, which includes lots on Liliu­okalani Avenue, Mountain View Drive and Tusitala, Cleghorn and Kapili streets, has been vacant for years. It’s overgrown with grass and weeds at times, and smells from illegal dumping waft into the air. There’s also an aging foundation complete with protruding rebar that was poured decades ago for a building that was never constructed.

Okada Trucking, which bought the lots for $5 million in 1995, does not have them listed for sale and has declined to discuss future plans.

Waikiki Neighborhood Board member Jeff Merz said vacant properties in urban Waikiki should be developed to provide greater community benefits and more tax income for the city. He suggested city officials consider changing the tax code to incentivize building and discourage vacant lots.

He said Seattle’s decision to triple the tax rate for undeveloped properties led to the development of Belltown, a thriving area in North Seattle.

Waters is working with the Waikiki Improvement Association and other stakeholders on an update to the Waikiki Special District, a subsection of the Land Use Ordinance.

Waters has said that he would not support any measure that the community did not back. However, he said he thinks it’s worth having a discussion about adding additional height and density to encourage landowners to redevelop their properties.

Finley said, “I’ve heard that there are several properties that have been in the same family for generations that can’t be redeveloped because the square footage won’t let them build anything bigger — they won’t release them, either. Kaiu­lani to Kapahulu is prime for redevelopment. “