REPORT FROM THE CITY & COUNTY OF HONOLULU —Mayor Peter Carlisle today signed a Purchase and Sale Agreement that will guide the transition of the City’s 12 rental housing complexes under the Honolulu Affordable Housing Preservation Initiative.
“This new public-private collaboration will create new opportunities to sustain and enhance our rental housing complexes for the benefit of the residents and all Honolulutaxpayers,” Carlisle said.
“I want to acknowledge the City Council’s vote to approve this transaction and express my appreciation to FACE, Faith Action for Community Equity for its support. I also want to commend our very own HAHPI Team which includes the departments of Community Services, Budget and Fiscal Services, Facility Maintenance, Corporation Counsel, and the Office of Housing; our real estate consultant CB Richard Ellis Inc.; and our legal counsel Schlack Ito.”
“We are honored to have been selected as long-term stewards of the City and County of Honolulu’s affordable housing portfolio and look forward to bringing quality improvements and upgrades to the properties that will benefit the residents for years to come,” said Bill Rice, partner, Honolulu Affordable Housing Partners, LLC (HAHP). “We greatly appreciate the vision, commitment, and hard work put in by the Mayor, his staff, the City Council, and the rest of the Honolulu Affordable Housing Preservation Initiative team who made this partnership a success.”
Signing the Purchase and Sale Agreement allows HAHP to begin a due diligence period during which HAHP will conduct detailed inspections and analysis of each property. HAHP will immediately make an initial deposit of $1 million against the $142 million lease premium owed to the City under the Purchase and Sale Agreement. Following the satisfactory conclusion of due diligence, HAHP will secure the financing necessary to close the transaction.
The members of HAHP include Highland Property Development, LLC, of Arcadia, California; local businessman Richard W. Gushman; and Honolulu attorney Stephen M. Gelber. In addition to paying $142 million to the City, HAHP has committed to investing up to $42 million for capital improvements to the rental housing complexes.
The transition is designed to improve the rental housing portfolio and keep it affordable for low-income residents, while relieving Honolulu taxpayers of approximately $500,000 per month in debt service.