BY JIM DOOLEY – Residents and the redeveloper of Kuhio Park Terrace turned out in force Thursday to defend a planned $332 million refurbishment of the low income housing project in Kalihi.

A bill now pending in the state Senate questions the wisdom and practicality of a planned modernization that would mix low, moderate and market rate housing units without replacing the aging twin high-rise towers at the site that were built in 1965.

“My heart was broken when I found out about this bill,” Julia Talia, vice president of the KPT residents association, told members of the Senate Human Services Committee.

She forcefully urged the senators to step aside and let the modernization proceed.

“We’ve waited long enough. I feel like Moses: Let my people go!” Talia said.

Denise Wise, head of the Hawaii Public Housing Authority, testified that the state tried and failed several times to obtain federal “HOPE VI” grant money that has been used elsewhere around the country to demolish and replace high-rise public housing projects.

Now the agency is poised to deed the KPT site to Michaels Development, which has proposed a “public-private partnership” to refurbish the high rises and develop additional new housing at the site.

HPHA has already spent or committed some $10 million on repairs and refurbishment at Kuhio Park Terrace, including $5 million to modernize elevators that have regularly broken down and consigned residents to long waits or long climbs up stairwells.

The U.S. Department of Housing and Urban Development must approve the the deal with Michaels Development and Wise said all the necessary paperwork should be finalized and presented to HUD by the middle of next week.

She said she also hopes to sign the development agreement and other paperwork with Michaels by the end of March.

Wise said she believes the pending agreement with Michaels is “a good deal.”

But Lowell Kalapa, head of the Tax Foundation of Hawaii and a member of a competing development team that lost the KPT job to Michaels, questioned the financial viability of the current project plans.

He said it depends too heavily on tax credits that may not be financially viable in today’s market conditions.

“There is no appetite for them,” Kalapa told the committee.

“But the part that concerns me most is the lack of support services” for KPT residents such as child care, elder care and job training, he continued.

Public housing is designed to be transitional housing but without such programs, residents can’t begin to better themselves and find homes on the open market, Kalapa said.

Wise said the economic market for tax credits is “very dynamic and fluid but interestingly enough right now it’s very strong.”

But she said the developer and her agency must have a financial “Plan B” to fall back on.

Committee chairwoman Suzanne Chun Oakland deferred a vote on the bill until February 14, asking Wise to present back-up data on possible alternative financing and to consult with Gov. Neil Abercrombie about the proposed project.

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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at Jim@hawaiireporter.com