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Home My WebLink AboutCOM 0513.000 2024-2026C. Kimo Alameda, Ph.D. Mayor William V. Brilhante, Jr. Managing Director Merrick Nishimoto Deputy Managing Director County of Hawaii- Office of the .%ayor 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 • Phone (808) 961-8211 • Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalole Hwy., Bldg C • Kailua-Kona, Hawaii 96740 Phone (808) 323-4444 • Fax (808) 323-4440 September 16, 2025 The Honorable Dr. Holeka Goro Inaba and Members of the County Council County of Hawaii 25 Aupuni Street Hilo, HI 96720 Dear Chair Dr. Holeka Goro Inaba and Council Members: SUBJECT: Change of Zone Amendment Application (PL-REZ-2025-000082) Amendment to Change of Zone Ordinance No. 2117 (REZ-2009-000103) Request: Amendment to Condition D (Time to Complete Construction) Applicant: Ikaika Ohana Tax Map Key: (3) 2-4-025:048, Kuknau, South Hilo, Hawaii n CDC-) o VT CD As required by Chapter 7, Sec. 6-7.5 (a)(3), Hawai`i County Charter, transmitted herewith for the County Council's consideration and action is the Windward Planning Commission letter regarding the above -referenced request. Sincerely, WILLIAM V. BRILHANTE, JR. Managing Director TCouncillkaika0hanaPL-REZ-2024-082 Enclosures cc: Planning Department y� L ak efb *7 Comm. No.J Ref. To: IBM County of Hawaii is an Equal Opportunity Provider and Employer. Ref. Date SEP 1_ Z �� C. Kimo Alameda, Ph.D. Mayor William V. Brilhante, Jr. Managing Director County of Hawaii WINDWARD PLANNING COM IISSION Aupuni Center • 101 Pauahi Street, Suite 3 • Hilo, Hawaii 96720 Phone (808) 961-8288 • Fax (808) 961-8742 September 15, 2025 The Honorable Dr. Holeka Goro Inaba and Members of the County Council County of Hawaii 25 Aupuni Street Hilo, HI 96720 Dear Chair Dr. Holeka Goro Inaba and Council Members: Louis Daniele III, Chair Chantel Perrin, Vice Chair Lauren Balog Wayne De Luz JoNelle Fukushima SUBJECT: Change of Zone Amendment Application (PL-REZ-2025-000082) Amendment to Change of Zone Ordinance No. 2117 (REZ-2009-000103) Request: Amendment to Condition D (Time to Complete Construction) Applicant: Ikaika Ohana Tag May Key: (3) 2-4-025:048, Knknau, South Hilo, Hawaii The Windward Planning Commission (Commission), at its duly held public hearing on September 4, 2025, considered the above -referenced application for a Change of Zone Amendment for a five (5) year time extension to Condition D (Complete Construction) of Ordinance No. 21 17. The subject property is located at 350 Kapi`olani Street, approximately 395 feet south of its intersection with Knkuau Street, Kukuau 1st, South Hilo, Hawaii. The Commission voted to forward a favorable recommendation to the County Council based on the Planning Director's recommendation. The Commission concurred with the Planning Director's following reasons for a favorable consideration of the request. Criteria for granting the favorable recommendation are shown below in bold print. The applicant, Ikaika Ohana is requesting a 5-year time extension to Condition D (complete construction) of Ordinance No. 21 17, which was approved by the County Council and effective on March 1, 2.021. www.planning.hawaiicounty.gov Hawaii County is an Equal Opportunity Provider and Employer planning@hawaiicomiy.gov The Honorable Dr. Holeka Goro Inaba and Members of the County Council County of Hawaii September 15, 2025 Page 2 Ikaika Ohana is a nonprofit 501(c)3 organization with a mission of developing and operating affordable housing, including projects on the mainland, Oahu, Maui, three existing affordable rental projects in Hilo and one in Waikoloa. Since the last amendment to the ordinance was approved in 2021, the applicant has been successful in complying with conditions of approval and obtaining the necessary permits and approvals to begin construction of the project. The request for a 5-year time extension to complete construction of the Kaiaulu O Kapi `olani affordable housing project is, in part, due to delays caused by additional financing requirements from the State of Hawaii. The project was expected to be completed by March 2026, however, the developer faced unforeseen challenges in securing necessary funding, including State and Federal Tax Credits and Federal Tax -Exempt Bonds Financing. The project applied for additional financing from Hawaii Housing Finance and Development Corporation (HHFDC) this year for State and Federal Tax Credits in the amount of $40,721,726 and Federal Tax - Exempt Bonds Financing in the amount of $38,326,000. An award letter is expected by August 2025, which would allow the applicant to start construction no later than January 2026, with an estimated completion timeline of 18-24 months. To ensure the project's successful completion and to accommodate potential delays, the developer is conservatively requesting an extension of the construction deadline to March 2031. Upon transfer of property ownership, Ikaika Ohana is proposing to develop Kaidulu O Kapiolani, a 64-unit, 100% affordable rental housing development (63 units with income restrictions between 30% and 60% of area median income and one (1) unrestricted manager's unit). The site plan for Final Plan Approval included twenty-eight (28), two (2)-bedroom units, twenty-nine (29), three (3)-bedroom units and seven (7), four (4)-bedroom units within nine (9), two (2)-story buildings. Also included are a community center building, play area, two (2) laundry facilities, two (2) community gardens, and 117 parking stalls including five (5) handicapped stalls. According to the requirements of the State's HHFDC funding, the affordable housing units must maintain affordability metrics for a minimum of 65 years, but the applicant indicated that they intend to make the housing affordable in perpetuity. Construction of the proposed affordable housing project is anticipated to begin in the first quarter of 2026, take 18-24 months to complete and is estimated to cost approximately $79 Million. The non-performance of timed conditions is the result of conditions that could not have been foreseen or are beyond the control of the applicants, successors or assigns, and that are not the result of their fault or negligence. The applicant has substantially complied with the conditions set forth in rezoning Ordinance No. 21 17 (amending Ordinance No. 10 32) for the Kaidulu O Kapi `olani affordable housing project. The Honorable Dr. Holeka Goro Inaba and Members of the County Council County of Hawaii September 15, 2025 Page 3 Since the ordinance's effective date of March 1, 2021, the applicant has completed key entitlement and infrastructure milestones, including subdivision and lot consolidation approvals, road dedication, water commitment deposits, and backflow preventer design/construction plan approvals. The applicant has also fulfilled cultural and environmental requirements, receiving approval on a Final Environmental Assessment and Finding of No Significant Impact (FEA-FONSI), receiving SHPD clearance and securing approvals for a solid waste management plan. As the project is a 100% affordable rental housing development, it has been granted fair share exemptions and finalized an affordable housing agreement with the Office of Housing and Community Development. Critical infrastructure components such as grading, drainage, and sewer system connection plans have been reviewed and approved by relevant County departments. Building and grading permits have been secured, financing applications have been submitted, and an updated purchase agreement has been executed with the landowner in preparation for construction. The Planning Department has received annual progress reports as required, and the documentation demonstrates continued good faith compliance. Based on the preceding, all ordinance conditions have been met or are in good standing, except for Condition D, which requires construction completion within five years (March 2026), which the applicant will not be able to meet. Due to delays related to affordable housing financing processes, the applicant is requesting an extension of the construction deadline from March 2026 to March 2031. The applicant anticipates securing the financing needed to construct the project in August 2025 and to begin construction in January 2026. Granting the time extension amendments would not be contrary to the General Plan or Zoning Code and the original reasons for granting the change of zone. The reasons for granting the original change of zone under Ordinance No. 10 32 and amended Ordinance No. 21 17 have not changed. Since the subject parcel was rezoned, there has not been any significant land use regulatory changes in this area. The current zoning (RM-1.5) continues to be consistent with Medium Density Urban (MDU) designation in the General Plan's Land Use Pattern Allocation Guide (LUPAG) map, which allows for a "Village and neighborhood commercial and single family and multiple family residential and related functions (multiple family residential -- up to 35 units per acre). " k -0 The Honorable Dr. Holeka Goro Inaba and Members of the County Council County of Hawaii September 15, 2025 Page 4 The proposed affordable housing project will be developed in accordance with the Zoning Code, other County Codes, and conditions of the pertinent rezone ordinances as is evidenced by the applicant's receipt of approved construction plans and building permits that ensure such compliance. In addition, the proposed amendment meets the concurrency requirements of the Zoning Code which addresses traffic, potable water, and Civil Defense requirements. The request is not contrary to Chapter 205A, Hawaii Revised Statues, relating to Coastal Zone Management. The project site is located approximately lh mile from the nearest shoreline and is not situated within the SMA. Previous flora and fauna surveys listed no threatened, or endangered plant, mammalian or avian species were found on the properties. A 2006 Archaeological Inventory Survey and September 2020 Archaeological Field Inspection determined the only historic or cultural resource on the property is SHPD Site 25547, which SHPD confirmed requires no further work or preservation. Lastly, this recommendation is made with the understanding that the applicant remains responsible for complying with all other applicable governmental requirements in connection with the proposed use, prior to its commencement or establishment upon the subject properties. Additional governmental requirements may include the issuance of building permits, compliance with the Fire Code, installation of improvements required by the American with Disabilities Act (ADA), among many others. Compliance with all applicable governmental requirements is a condition of this approval; failure to comply with such requirements will be considered a violation that may result in enforcement action by the Planning Department and/or the affected agencies. Based on the preceding findings, the Planning Director recommends a favorable recommendation for a 5-year time extension to Condition D be forwarded to the County Council. The accompanying draft bill to amend Ordinance No. 21 17 is provided for your consideration. Please note the proposed conditions of approval attached to the draft bill, including updates to conditions that have been complied with and to reflect current standard condition language. Material to be deleted is bracketed and struck through; new material is underscored. This recommendation does not, however, sanction the specific plans submitted with the application as they may be subject to change given specific code and regulatory requirements of the affected agencies. The Honorable Dr. Holeka Goro Inaba and Members of the County Council County of Hawaii September 15, 2025 Page 5 The Planning Department's background report, recommendation report, and PowerPoint presentation are available for review at the following Laserfiche Weblink address: https://records.hawaiicog=.gov/weblink/Browse.asi)x?dbid=l &startid=150259 The Commission hearing minutes of the September 4, 2025, meeting can be found at the following link once it is available: https://records.hawaiicou=. gov/weblink/Browse.aspx?dbid=l &startid=150624 Should there be any questions, please feel free to contact Planning Program Manager, Maija Jackson at (808) 961-8159. Sincerely, Louis Ui id e /// Louis Daniele III (Sep 15, 2025 07:02:11 HST) Louis Daniele III, Chairman Windward Planning Commission P\wp60\PC\PCC2025-3URaika0hanaPL-REZ 2025-082wpc Enclosure: Draft Bill cc w/enclosure via email: Grant Bigley, Ikaika Ohana Windward Planning Commission Jeffrey W. Darrow, Planning Director Deputy Corporation Counsel for Windward Planning Commission Deputy Corporation Counsel for Planning Department