HomeMy WebLinkAboutCOM 0966.002 2018-2020 P1 coumcn_
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Kohala Union Housing Corporation
451 Atkinson Drive `
Honolulu, HI 96814
Date: June 8, 2020
To: Office of the County Clerk
25 Aupuni Street
Hilo, HI 96720
Via Mail and Facsimile
From: Kohala Union Housing Corporation
Subject: Written Public Testimony
Lease Extension for Big Island Bond Partners LP
We respectfully request the Hawaii County Council's support of the Lease Extension for Yoshito
Takamine Ainakea Elderly through Big Island Bond Partners LP. Yoshito Takamine Ainakea
Elderly is presently owned by Kohala Union Housing Corporation. Kohala Union Housing
Corporation is a private non-profit corporation organized under Section 501(c)3 of the Internal
Revenue Code. Kohala Union Housing Corporation's mission and purpose is to develop, build,
own and operate affordable housing.
Yoshito Takamine Ainakea Elderly is a 21 unit affordable elderly housing property located at 53-
3996 Ainakea Drive, Kapaau, Hawaii. The property was originally built through a Section 202
loan from the U.S. Department of Housing Development (HUD). All units of the property are
covered by a Section 8 Housing Assistance Payments Contract which subsidizes tenant rents so
the tenant pays 30%of their adjusted gross income. The development and building of the
property was originally sponsored by the ILWU Local 142.
For some years now the non-profit owners have done their best to keep the property in good
condition and operating efficieritiy. Thirty plus year old properties have capital and
modernization needs which are beyond what rental income can support. In Hawaii (like the
rest of the country)the Low Income Housing Tax Credit (LIHTC) Program is the principal tool
developers use to acquire and rehabilitate affordable housing properties. As long time non-
profit owners of Yoshito Takamine Ainakea Elderly our central objectives are to assure the
property is preserved as affordable housing and that recapitalization proceeds are used to
rehabilitate and modernize the property. To this end, Ahe Group plans for$1,342,048 for
rehabilitation and modernization work at Yoshito Takamine Ainakea Elderly.
Yoshito Takamine Ainakea Elderly has project based Section 8 subsidies paid by HUD to the
owner on behalf of eligible tenants. Project based subsidies (Section 8) provide the tenant pays
30%of their adjusted gross income. HUD pays the owner on behalf of the tenant the difference
between the gross rent and the tenant's share of rent. The costs to recapitalize the property
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and to pay for rehabilitation and modernization work are built into the HUD approved rent
structure. HUD through its subsidies of tenant rent in effect pays the costs to recapitalize and
rehabilitate the property. Eligible tenant rent will remain the same (30%of adjusted gross
income) and other than annual recertification of income will not increase during this process.
LIHTC Program rules require an extended affordability commitment by the partnership. This
assures the renovated and rehabilitated property will remain as affordable housing for its use
life. LIHTC guidelines also require an extended period of site control to support the extended
affordability requirements. Extended affordability and extended site control in effect supports
the extended preservation of affordable housing.
In 2018 Kohala Union Housing Corporation (the owner) approached the Ahe Group to partner
with us in%revitalizing and;renovating Yoshito Takam-ine Ainakea Eldedy. Kohala'Urion Housing
Corporation will stay in the acquiring/ownership partnership entity through Jack Hall Hawaii
Community LLC as a special limited partner. In this new capacity we will continue providing
affordable housing to Hawaii County. Yoshito Takamine Ainakea Elderly is part of a portfolio
sale of six properties located in Honolulu and Hawaii County from each of the single purpose
owner entities to the Ahe Group.
The Ahe Group is an experienced Hawaii based developer and has done a number of affordable
housing new construction, preservation and rehabilitation projects in the State of Hawaii (and
on the mainland). The Ahe Group has singular experience in working with different affordable
housing programs and providers in the State of Hawaii.
As the original developer, owner and operator of our properties,we think a strong Hawaii
based developer will assure the long term preservation of the affordable housing assets we
worked hard to build and operate these many years.
Thank you for your consideration of this Lease Extension request.
If you have any questions, please contact Leonard Hoshijo at (808) 225-1835.
cc: Ahe Group
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