The City and County of Honolulu says a three-story, 1940s-era Waikiki walk-up left abandoned for decades and that had become a target for squatters, graffiti taggers and vandals will be revitalized.

Following nearly two years of condemnation proceedings, Mayor Rick Blangiardi’s administration said in a news release Tuesday that the city finally assumed ownership of the derelict, 9,454-square-foot property at 1615 Ala Wai Blvd.

The city now plans to convert the dilapidated, 18-unit low-rise building, across the canal from the Ala Wai Promenade and near the high-rise condominium complex Watermark, into dedicated affordable housing.

“This was, simply put, an unacceptable situation in a highly-desired location at a time when our island’s housing needs cannot, and should not, be overstated,” Blangiardi said in a written statement. “In working with the Waikiki community, we believe that finalizing the condemnation of 1615 Ala Wai was the right thing to do for the public in the use of the city’s powers, and we look forward to transforming the property into affordable housing very soon.”

Later this year the city Department of Land Management will release a solicitation to see the project materialize, the news release states.

As part of the terms of the condemnation settlement, Honolulu agreed to pay $3.85 million to condemn the property utilizing the city’s Affordable Housing Fund. Established by voters, that fund sets aside 0.5% of the city’s annual real property tax revenue for affordable housing purposes.

The property in question — which suffered years of vandalism, including reported fire damage in 2006 — has been a Waikiki-area eyesore.

As the Honolulu Star- Advertiser reported in 2022, 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 proved unsuccessful, Blangiardi in October 2022 signed a resolution introduced by Honolulu City Council Chair Tommy Waters to acquire the site through condemnation.

According to court documents, the city submitted a check to the court clerk in April of that year for $3.04 million, the estimated just compensation for the property.

Currently, the residential property is valued at over $3.1 million, while the building’s value is assessed at $192,100, according to the city’s Real Property Assessment Division.

By September 2022, city Managing Director Mike Formby sent a letter informing Waters and other Council members that the “city has obtained possession by court order of the above- described property.”

In that letter, Formby also noted the parcel had been identified for the development of senior affordable rental housing.

This week Waters lauded the city’s purchase.

“It is among the City Council’s most fundamental kuleana to ensure that our residents can afford to live and thrive on Oahu,” Waters, who represents Waikiki, said in a written statement. “It is for this reason that I’m so grateful that we can finally move forward with the condemnation of this property in Waikiki to create more affordable housing, while at the same time addressing the longstanding crime in the area that has resulted from years of neglect.”

With the condemnation proceedings finalized, city officials are working to finalize a solicitation that will seek a development partner to transform the property into affordable housing, pursuant to a development agreement and a long-term ground lease, the city says.

In determining the best path to revitalize this property, “the city and potential development partners will explore various options, which could include the rehabilitation of the existing building, or full redevelopment of the parcel,” the city’s news release states.

This solicitation, according to the city, is one of at least four affordable housing solicitations that the Land Management Department anticipates issuing in 2024.

Nor is it the first affordable housing acquisition the city’s highlighted in recent weeks.

In early January the city announced it had closed a $51.5 million deal to purchase the Iwilei Center.

The city says that transaction will convert the existing center — now home to warehouses, loading docks, offices for lease and more than two dozen commercial tenants — to a new, city-owned affordable housing development, close to the pending rail line in the Iwilei and Kalihi areas.

Acquired from Iwilei Center LLC, an affiliate of Blacksand Capital, the purchase of the 3.8-acre industrial property — which the city deems an investment in affordable housing and transit-oriented development — includes addresses at 850 and 866 Iwilei Road and 505 Kaaahi St., respectively.

Meantime, a second property — once owned by First Hawaiian Bank — was also obtained for conversion into affordable housing, the city says.

On Dec. 29, the city says, it completed an $8.4 million purchase with First Hawaiian for a vacant former branch at 445 N. King St.

Scott Humber, the mayor’s communications director, previously told the Star-Advertiser that as far as new housing on the island was concerned, the “mayor has gone on record stating that he hopes to bring 18,000 total units over his two terms.”

Blangiardi, still in his first mayoral term though now facing an election year, took office Jan. 2, 2021.

———

Honolulu Star-Advertiser staff writer Allison Schaefers contributed to this report.