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Date: June 15, 2020
To: Office of the County Clerk
25 Aupuni Street
Hilo, HI 96720
Via e-mail (counciltestimonti'd)hawaiicouand facsimile (808-961-8912)
From: Makani Maeva, principal of Ahe Group, LLC -
.r
Subject: Written Public Testimony in Support of Res. 662-20
Multi-Year Lease Agreement with Big Island Bond Partners LP for the Rehabilitation of
Ainakea Elderly Housing Located in the District of North Kohala Hawaii
Aloha Councilmembers. My name is Makani Maeva and I am the principal of Ahe Group, LLC, a Hawaii-
based affordable housing developer. I write to respectfully request the Hawaii County Council's support
of the multi-year lease agreement with Big Island Bond Partners LP for the rehabilitation of Ainakea
Elderly Housing ("Ainakea Elderly") in North Kohala, Hawaii.
Ainakea Elderly, located at 3996 Ainakea Drive, Kappau, Hawaii, is a 21-unit affordable rental housing
project for seniors built on land leased from the County of Hawaii. Ainakea Elderly is presently owned
by the Kohala Union Housing Corporation ("KUHC"). KUHC is a private non-profit corporation organized
under Section 501(c)3 of the Internal Revenue Code whose mission and purpose is to develop, build,
own and operate affordable housing. KUHC has agreed to transfer its interest in Ainakea Elderly to Big
Island Bond Partners LP, an Ahe Group affiliate, in order to facilitate necessary capital improvements of
the property.To ensure continuity, an affiliate of KUHC will continue on as a special limited partner of
Big Island Bond Partners LP.
Ahe Group is an experienced, active, Hawaii-based developer who specializes in affordable housing.
Ahe Group's projects include new construction, preservation and rehabilitation, and adaptive reuse
projects throughout the State of Hawaii. Over the past 25 years, I have developed over 9,000 affordable
rental units in 17 states.Since forming my own company in 2015, 1 have built or renovated 10
properties in Hawaii. Ahe Group is currently overseeing three active construction projects(one on Oahu
and two on Kauai) that will add 161 new affordable rental units to Hawaii's inventory over the next
year.The Ahe Group has deep experience working with different affordable housing financing programs
and providers in the State of Hawaii.
By way of background,Ainakea Elderly was originally constructed in 1991. Over the last 29 years, KUHC
has been a good steward of this valuable affordable housing asset. Ainakea Elderly is now in need of
substantial capital improvements due to its age, and the cost of the required renovations are a ove and
beyond what the rental income can support. Comm. No•
106.1
Ref. T
Ro#., a AN 1 7 2020
�
� \1
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Written Public Testimony inSupport nfRes. 662'30
Page
AheGroup plans tofinance the$1,3UU,0OOofcapital improvements using the Low-Income Housing Tax
Credit("LIHTC") program set forth in the Section 42 of the Internal Revenue Code.Through the LIHTC
program, we have successfully secured over$74,000,000 in tax credit equity for eight affordable rental
projects in the past 5 years alone. A multi-year lease agreement will allow Big Island Bond Partners LP
to secure the Low-income Housing Tax Credits necessary to renovate Ainakea Elderly. Significantly, the
L|HTCfunding will require that the project: /1\ berentedon|y1oseniorsvvhoearnnonnorethon6O96of
the Area Median Income, as defined by HUD; and (2) remain affordable for an extended period of 61
years.
|ti3important tonote that 20ofthe 7Iunits aiAinakeaElderly are covered under aSection 8project-
based oontractandoneunitisreservedforanun-siteresidentmnanager/otaff. Project-based5eution8
rental subsidies ensure that the 20 tenants pay only 30% of their adjusted gross income for rent. HUD
pays the owner the difference between the gross rent and the tenant's 30%share. The costs to
recapitalize the property and to pay for rehabilitation and modernization work are built into the HUD
approved rent structure.The Section 8 contract guarantees that tenants' portion of their rent will
remain the same after the renovations are complete.
Ahe Group's continued partnership with the original owner, developer, and operator will ensure that
AinakeaElderly isasafe, affordable home for generations ofkupuna.
Thank you for your consideration of this lease. If you have any questions, please don't hesitate to
contact K4akaniMoevoat (OOQ) 38l-5958orJoe||eChiu et(OOO) 778-79lO.
cc: Koha|aUnion Housing Corporation
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