HomeMy WebLinkAboutCOM 0967.002 2018-2020 PIWJNCX
Ka'u Housing Corporation v
451 Atkinson Drive ? �,3. ( lG k
Honolulu, HI 96814
Date: June 8, 2020
To: Office of the County Clerk
25 Aupuni Street
Hilo, HI 96720
Via Mail and Facsimile
From: Ka'u Housing Corporation
Subject: Written Public Testimony
Lease Extension for Pahala Holei Partners LP
We respectfully request the Hawaii County Council's support of the Lease Extension for Pahala
Elderly through Pahala Holei Partners LP. Pahala Elderly is presently owned by Ka'u Housing
Corporation. Ka'u Housing Corporation is a private non-profit corporation organized under
Section 501(c)3 of the Internal Revenue Code. Ka'u Housing Corporation's mission and purpose
is to develop, build, own and operate affordable housing.
Pahala Elderly is an 8 unit affordable elderly housing property located at 96-1183 Holei Street,
Pahala, Hawaii. The property was built with a Section 202 loan from the U.S. Department of
Housing and Urban 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 efficiently. Thirty plus year old properties have capital and
modernization needs which are beyond what rentai income can support. As long time non-
profit owners of Pahala 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$502,816 for rehabilitation and modernization
work at Pahala Elderly. To accomplish the planned rehabilitation and modernization work, Ahe
has secured a $400,000 grant from the Federal Home Loan Bank and a loan from First Hawaiian
Bank of$326,000. From our past experience, small projects in very rural areas are tough to
finance, own and operate effectively. We think the extended site control requested will
provide improved prospects for the successful long term preservation of affordable housing.
Pahala Elderly has project based Section 8 subsidies paid by the 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
Comm. N. , qui.
Ref. To: Umcl
Ref. note ,JUN 1 7 2020
the gross rent and the tenant's share of rent. The costs to recapitalize the property 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 rents will remain the same (301 of adjusted gross income) and other
than annual recertification of income will not increase during this process.
In 2018 Kau Housing Corporation (the owner) approached the Ahe Group to partner with us in
revitalizing and renovating Pahala Elderly. Kau 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. Pahala 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