HomeMy WebLinkAboutCOM 0967.001 2018-2020 i
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Date: June 15,2020
To: Office of the County Clerk
25 Aupuni Street
Hilo, HI 96720
Via e-ma,,(,ccunciltestimonyhawaiicounty Dov}and facsimile (808-961-8912)
From: Makani Maeva, principal of Ahe Group, LLC
Subject: Written Public Testimony in Support of Res. 663-20
Multi-Year Lease Agreement with Pahala Holei Partners LP for the Rehabilitation of
Pahala Elderly Housing Located in the District of Ka'u 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 Pahala Holei Partners LP for the rehabilitation of Pahala Elderly
Housing("Pahala Elderly") in Ka'u, Hawaii.
Pahala Elderly, located at 96-1183 Holei Street, Pahala, Hawaii, is an 8-unit affordable rental housing
project for seniors built on land leased from the County of Hawaii. Pahala Elderly is presently owned by
the Ka'u Housing Corporation ("KHC"). KHC 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. KHC has agreed to transfer its interest in Pahala Elderly to Pahala Holei Partners LP,
an Ahe Group affiliate, in order to facilitate necessary capital improvements of the property.To ensure
continuity,an affiliate of KHC will continue on as a special limited partner of Pahala Holei 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, Pahala Elderly was originally constructed in 1985. Over the last 35 years, KHC
has been a good steward of this valuable affordable housing asset. Pahala Elderly is now in need of
substantial capital improvements due to its age, and the cost of the required renovations are above and
beyond what the rental income can support.
Comm. No. ®_
Rlef. o: I Wh
Ref. ate _JUN 1 7 2020
Written Public Testimony inSupport ofRes. 6G3'2O
Page
Ahe Group plans to finance the$500,000 of capital improvements through a grant from the Federal
Home Loan Bank AHP Program and a construction loan from First Hawaiian Bank.Ahe Group has
already secured both of these funding sources.Accordingly, approval of a multi-year lease agreement
will allow Pahala Holei Partners LP to begin the substantial renovations almost immediately.Ahe
Group's construction team has completed it's required inspections and isprepared tostart construction
within 6Odays ofofully-executed lease agreement.
It is important to note that all 8 units at Pahala Elderly are covered under a Section 8 project-based
contract. Project-based Section 8 rental subsidies ensure that the 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 oftheir 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
Paha|aElderly ixasafe,affordable home for generations ofkupuna.
Thank you for your consideration of this lease. If you have any questions, please don't hesitate to
contact MakaniK4aevaat (OU8)]Q1'5958orJoe||eChiu at(8U8) 778'7920.
cc: Ka`u Housing Corporation