Star Advertiser: New Sky Ala Moana project moves ahead with affordable and market-priced units

(Source: Star Advertiser)

November 8, 2018

By: Allison Shaefers

Hawaii workers at Marriott-managed hotels marked the 31st day of their strike. They picketed in front of Honolulu Hale to insist on more affordable housing, a key union issue. The union and management returned to the bargaining table last Saturday but emerged without a contract. Bargaining will resume Thursday and Friday.

Video by Dennis Oda /

Avalon Group became the first local developer Wednesday to agree to a city requirement to set conditions that will keep the affordable units in its proposed mixed-use residential and commercial project affordable for 30 years.

The concession was required by Honolulu City Council’s Committee on Zoning and Housing as part of the developer’s quest for an Interim Planned Development-Transit (IPD-T) permit, which allows the city to “grant development rights not allowed under current zoning” in exchange for certain contributions, including long-term affordable housing, from the developer.

The give-and-take process, which aims to stimulate development, especially affordable housing and work opportunities around rail hubs, was made possible by the passage of Bill 58, which became an ordinance in June.

The two-tower Sky Ala Moana project sits on a 70,000-square foot parcel fronting Kapiolani immediately makai of Walmart. It will be near the Ala Moana Center Station, the rail’s terminus where passengers can transfer to buses that reach Waikiki and the University of Hawaii at Manoa.

The $510 million project is expected to deliver 300 condominium hotel units and 474 condominium units, of which 84 will be affordably priced. Avalon Group President and CEO Christine Camp said condominium hotel units and market-priced units are expected to range from $650,000 to $850,000.

Prices for affordable units likely will range well below market at $350,000 to $475,000, Camp said. The affordable units are designed to serve those earning from 100 to 120 percent of the area media income, currently ranging from $116,600 to $139,920 for a family of four in Honolulu. The development also is expected to create up to 810 construction jobs and upon opening 540 full-time jobs, 150 of which will be on-site, she said.

In exchange, Avalon Group wants lowered setbacks, extra density and extra height — the towers will soar to 400 feet. The project also will feature commercial space, residential space and 950 parking stalls. Avalon also is requesting condominium hotel space, an exemption that will require approval of a conditional use permit under the land use ordinance.

Camp said the condominium hotel component is needed to offset the risk involved with placing 30-year buyback restrictions on affordable units. Details are yet to be worked out, but in essence buyers would have to share some equity with the city if they sell during the buyback period.

“They could be very difficult to sell. Buyers might understand a 10-year buyback period, but some may see a 30-year buyback period as detrimental,” Camp said. “We’ll be the guinea pigs. Our target is to start selling in January, but we’ll need to hit 68 percent in pre-sales before we start construction.”

Honolulu City Council member Kymberly Pine, who chairs council’s zoning and housing committee, favored the project, but asked Avalon to add another 21 affordable housing units as a community benefit in exchange for concessions.

“This project exceeds the requirements of Bill 58 — it was 10 percent affordable housing now it’s 20 percent,” Pine said. “I really listened to (Unite Here) Local 5 and what they were trying to tell me before we had this hearing. It seems that the public wanted more affordable housing. The takeaway here is that this will be the first city project to remain affordable for 30 years. The council is committed to developing long-term affordable housing units.”

Still, the project caused a divide between the Hawaii Laborers Union Local 368, which waved signs in support of Sky Ala Moana, and Unite Here Local 5, which picketed City Hall to show dissatisfaction with the development.

Ryan Kobayashi, Hawaii Laborers Union Local 368 government and community relations director, testified in support of the project.

“The economy is not as good as we think it is for the construction industry. We have out-of-work members, “Kobayashi said. “Projects like this will provide an opportunity for them to work. Not only will they be building it, but they’ll also have a chance to purchase (an affordable unit).”

Even with the additional affordable housing, Local 5 said the project falls short. The city should count condominium hotels as part of the overall residential unit count that determines the percentage of units that are required under the affordable housing guidelines, said Local 5 researcher Ben Sadoski.

“We think we need something worthy of the exceptions to height, density and setbacks that they are giving,” Sadoski said.

Gavin Thornton, co-­executive director of the Hawai‘i Appleseed Center for Law and Economic Justice, said he’s also against an “ambiguous condominium hotel model which allows developers to exempt from affordable housing, park dedication and other requirements.”

Thornton said the city has invested billions of dollars of public money into rail, which will benefit developers. That’s why city officials should require longer buyback periods and prioritize affordable housing for those making much less than 100 to 120 percent of the area median income, he said.

“There are places that require buyback periods up to 100 years,” Thornton said. “We need to ensure that we are providing affordable housing for a long time and that it is being built for those that need it most.”

Hawaii needs 65,000 more units of housing by 2025 to meet demand, Thornton said, quoting from the 2016 Hawaii Housing Planning Study. The study, which was prepared by SMS Research for the state, said 47 percent of the demand was for households making less than $45,000 a year and 74 percent was for households making $75,000 or less, he said.

“Today was a positive step, but I don’t think that the city got us all the way there,” Thornton said.

Via: Star Advertiser


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