State Audit: ‘Atmosphere Of Intimidation and Fear’ at Maui Housing Project

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BY JIM DOOLEY – An audit of the state-owned Honokowai Kauhale affordable housing project on Maui found residents living in “substandard conditions” and “an atmosphere of intimidation and fear,” according to state records released today.

Honokowai Kauhale on Maui

The audit was commissioned as a result of a series of Hawaii Reporter news stories about problems at the West Maui project, and verified the contents of those stories, the records show.


Among the findings of the audit:

  • “The overall physical condition of the project is clearly substandard.”
  • “Current Resident Manager has created an atmosphere of intimidation and fear of reprisals, as reported by tenants.”
  • Apparent discrimination against families with children through enforcement of “unwritten rules.”
  • Failure to actively market the availability of 40 vacant units ready for occupancy.
  • Inconsistent enforcement of house rules.
  • Favoritism in “steering” of selected tenants to certain vacant units.

The audit findings (which have been redacted by the state to remove the names of individuals) are here Audit Part One and here Audit Part Two.

Based on the findings of the audit, the Housing Finance and Development Corp., the state agency that owns the project, notified property manager Realty Laua LLC on Sept. 28 of its intent to cancel the management contract if deficiencies weren’t addressed within 10 days. (See the Sept. 28 Letter)

The primary requirement made of Realty Laua by the state was removal of resident manager Lisa Faleafine, a member of the family that owns Realty Laua.

Faleafine had previously been transferred from a similar job at another state-owned housing facility on the Big Island after residents there complained repeatedly about mismanagement and squalid living conditions.

On Oct. 17, the state cancelled Realty Laua’s contract, saying in a letter to company president Robert Faleafine that he had failed to remove Lisa Faleafine as Honokowai Kauhale manager. (See the Oct. 17 Letter)

Robert Faleafine had “verbally assured” the state that a new manager would be appointed, but later asked for “clarification” of the state’s position, the Oct. 17 letter said.

“HHFDC finds this response insufficient,” agency administrator Karen Seddon said in the letter.

“HHFDC required the immediate removal and replacement of (Faleafine) as Resident Manager of the Honokowai Kauhale rental project based on the various and serious allegations documented,” the letter said.

“Realty Laua has failed to act not only as required by HHFDC, but also notably in direct contrast to what Realty Laua LLC represented to be an action it was willing to take,” Seddon wrote.

Honokowai Kauhale

The three-year, $1.75 million management contract was awarded to Realty Laua last year. The contract was initially awarded to another firm, Hawaii Affordable Properties, but that award was overturned after Realty Laua formally protested HHFDC’s procurement procedures.

After Realty Laua’s contract was cancelled, HHFDC awarded a six-month, non-bid contract to Hawaii Affordable Properties to manage Honokowai Kauahale.

The state is paying Hawaii Affordable Properties $375,000 under the six-month contract — $128,000 more than it was paying Realty Laua for the same work.





  1. Today there were quite a few people I believe management companys bidding for Honokowai Kauhale. It’s good to know that things are moving on to a better place to live and many people would like to be living here once more.

  2. So now we have to ask why the state had to pay this spectrum company to do work that they should have been doing or could have done themselves! Is this just another example of Seddon and Miyasaki wasting our taxpayer dollars? And how much did Spectrum make on top of the vacation on Maui the receoved to do the states work!

    Norman was there any sighting of Seddon or Miyasaki the other day?

    Come Mr. Dooley there has to be more to this story.

  3. murray-according to a tenant they were a bunch of them looking like lawyers as well?. with brief cases and looking important. Cant say if Seddon or Miyasaki was there? I dont think the both of them would even try to attempt to even show their faces, besides were not good enough for them to appear?. What gets me is the State is putting out so much of our tax money to clean up their screw up’s again. I think Abercrombie needs to know whats really going on!…It’s very interesting to know when Spectrum was here before this case blew up in February, Ms. Churchill came here and did her routine inspection and she seen all of those empty units, runned down units exteriors, etc, and she did nothing to have it fixed then? It had to take a Maintenance Supervisor to whistle blow these clowns. That tells you a lot about our Government and how they like to play their executive calls and at the same time scramble to cover up their tracks so no more linking to the real crooks. In due time we will have them flushed out. In due time!…Yes murray I agree with you- there is so much more to this Investigation than we all expect. Come on Dooley press their asses to the wall!…We are all behind you.

  4. Norman I tried calling and asking for Seddon. Her secretary was quite rude and gave me the runaround. I got the feeling she doesn’t have a clue. Then I asked for Miyasaki and was told that he was busy. Didn’t even to bother to ask me if she could have one of them call me back just kind of hung up. I think her name was Marcia or Marissa but she sounded totally irritated with me.

  5. Hey, Murray good to hear from you again. Yep totally expected that will happen!. Tried that before and their office will divert the issue anything to stay away from questions, we recieved the same treatment the office actually passes the buck to (2) different people and some how they managed to disconnect the call and then when you call back-they connect you to a voicemail system screening the calls . Some professional huh?. They will not comment they are afraid to deal with the straight up facts. They are hiding from these questions and perhaps hoping to drag it till no one contest them. That’s the plan!. Let it die off, and then it’ll be history. Oh! Well I dont think so. It aint over till the fat lady sings baby, until the bitter end. We are in for the long haul.

  6. I was thinking and maybe we should round up all of the Honokowai residents and those that care and bombard the governor, Seddon and Miyasaki with phone calls and emails! Or better yet but this would cost us some money to get there but we could go to one of the monthly board of director meetings and tell them what is going on!

  7. murray-thats a great idea. The people need to know. HK tenants have the dam right to know. All taxpayers need to know what happened to our money. Where and when is this meeting going on. Great idea.

  8. I looked at the website and it only goes to the end of 2011 but if it stays the same it should be on the 2nd thursday which is January 12. We should ask them what Seddon and Miyasaki have told them about our situation. I bet it has been smoke and mirrors to save there jobs!

  9. I think we should make signs that say Seddon and Miyasaki need to go! The more people we can get behind us will force the governor and board to at least look deeper into the problem.

    Any updates on what it going on with the new management? Units being filled? Lisa and her Realty Luau thugs gone? We have to get more folks commenting on here to get Mr. Dooley back on the story! Help us get to the bottom of all of this Mr. Dooley!

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