NEWS | Council District 7 – Honolulu City Council |

(Star Advertiser) HART employees to be questioned in federal probe

(Source: Honolulu Star Advertiser)

The agency overseeing construction of the city’s $9.2 billion rail system already was slammed with three federal subpoenas for records, and now several employees have been served subpoenas and asked to meet with federal investigators about possible wrongdoing and irregularities.

Andrew Robbins, executive director and chief executive officer for the Honolulu Authority for Rapid Transportation, on Wednesday confirmed that “a few” HART employees have been served with subpoenas asking that they meet with federal authorities for questioning.

The employees have not been asked to appear in a courtroom, Robbins said. “My understanding is it’s for interviews,” he said.

Robbins declined to identify the employees, which section of the authority they work in or even how many were contacted, stating that he wants to respect their privacy. He said that he, personally, was not among those served.

The employees have approached the Department of Corporation Counsel, the city’s chief civil law arm, about receiving legal representation from that office or a city-paid private attorney. Under city law, employees are entitled to legal representation as needed on issues dealing with actions taken during the scope of their duties as city employees.

If Corporation Counsel believes it must represent the interests of the city as a whole and that those interests may conflict with those of an employee, it typically will recommend the Honolulu City Council approval funding to hire a private law firm for the worker.

HART, as an agency, received three subpoenas for records from federal investigators in February tied to potential wrongdoing involving the project, whose price tag skyrocketed to $9.2 billion from $5.3 billion.

The first subpoena sought tens of thousands of documents in connection with the East Kapolei-to-Ala Moana rail line. Those documents dealt with the initial stages of the project. The second subpoena sought information on the the project’s relocation program, from which an internal review found overpayments to owners or tenants. The third subpoena calls for the minutes from HART board of directors meetings from 2011 through 2018, including those of discussions that took place in executive sessions closed to the public. State Auditor Les Kondo had earlier sought the same records and was rebuffed by the agency.

Councilman Ron Menor, chairman of the Executive Matters and Legal Affairs Committee, said Wednesday that the City Council had not yet received requests to pay for the legal fees of HART employees subject to questioning by federal officials.

Menor and several other Council members have already voiced displeasure that the Corporation Counsel’s budget is being tapped to deal with HART’s legal issues. The committee last month was asked by Acting Corporation Counsel Paul Aoki to authorize funding for a special deputy corporation counsel to represent HART in its dealings tied to the subpoenas.

Menor said his committee did not take action because he and several colleagues preferred HART tap into a $44 million subsidy that the Council approved in June 2018.

“I would have a difficult time providing additional city monies for HART to respond to the federal investigation which our constituents would strongly oppose, especially sinceit relates to potential wrongdoing by former HART and city officials,” he said.

“It would be helpful for (the employees) to be advised by (Corporation Counsel) or a special deputy because they could be asked about matters that relate to agency business or matters,” he said. “But again, who pays for outside counsel? That is the issue that Council needs to resolved.”

At its monthly meeting in Kapolei Hale Wednesday, the Council voted to shelve a resolution that would have led to the dissolution of HART. Council Chairman Ikaika Anderson last month introduced Resolution 19-170, asking that Oahu voters in the 2020 general election be asked to dissolve HART and transfer its duties to the city Department of Transportation Services, an agency directly under the control of the mayor. Such an arrangement would make the project more accountable to the mayor and the Council, and ultimately the voters, he said.

Anderson said he’s been frustrated by a lack of communication between HART and the Council, noting that Robbins and a board member delivered a key document to the Federal Transit Administration without ever having asked Council members to join them.

Robbins testified Wednesday that he would work on improving communications with Council members.

Anderson’s resolution was met with opposition from HART’s board, represented by Chairman Damien Kim, former Mayor Mufi Hannemann, state Sen. Kurt Fevella (R, Ewa Beach-Iroquois Point), and a number of construction labor unions who all said they worry shifting responsibility in mid-stream would cause additional problems for the project.

Among the concerns raised were uncertainty for potential bidders of a public-private partnership for the project, and the potential for jeopardizing federal and state funding for the project.

City Managing Director Roy Amemiya said the Caldwell administration had no formal position on the resolution. However, he said, the Council should proceed cautiously “and not make the situation worse.”

Anderson said he and his staff will work on drafting a new resolution. “to put into writing some of the agreements, Mr. Robbins, that should be understood between this Council and HART.”

(Star Advertiser) Editorial: Blaisdell P3 plan needs hard look

(Source: Honolulu Star-Advertiser)

By this time next year, the city hopes to have a private-sector partner in place for its envisioned $772 million redevelopments of Neal S. Blaisdell Center. Last week, Honolulu Hale issued a call for candidates interested in teaming up to shoulder design and construction as well as operation and maintenance responsibilities.

There are some compelling potential benefits to financing through a public-private partnership for all involved. Such collaboration can prime a large-scale government project for more front-end cost efficiency and a quicker construction pace — or make a pipe-dream makeover a possibility in the first place.

Potential drawbacks include risks for both partners. For private enterprise: construction cost overruns, technical defects and an inability to meet quality standards.

For the public partner, agreed-upon usage fees it pays to the private enterprise for site operation and maintenance may not be supported by community demand for facility use. In Blaisdell’s case, proceeds from ticket sales and vendor fees would be among the obvious funding sources.

Mayor Kirk Caldwell appears to be convinced that the plan for Blaisdell’s overhaul is worthy of a public-private gamble. What’s more, he recently warned that in the absence of an upgrade: “Honolulu will no longer be able to attract the kinds of arts, culture, entertainment and sporting events that our citizens enjoy.”

While that sentiment seems a tad overblown, it’s clear that the 22-acre Blaisdell complex, which opened in 1964, is looking dated. In response, rather than opting for a frugal sprucing, the city has spent years mapping out a master plan, with community input, that envisions a gathering place on par with the great civic centers of the world.

Under the latest timeline, Blaisdell would close in November 2020 for about three years. Among the facilities on the demolition-and-replacement list: the exhibition hall, parking garage, shops along with sidewalks and landscaping. The new design folds in roomier public spaces and hundreds of additional parking stalls.

The concert hall and arena would undergo major renovations, with arena seating increasing. Add to that a new performance hall and sports pavilion as well as garden walkways, water features and five restaurants or bars.

While the proposed expansions in seating and the addition of venues looks enticing on paper, it’s unclear whether there’s a community demand for them. If the master plan yields a complex that exceeds demand, upkeep of empty seats and underused venues could result in higher ticket prices and vendor fees, and, possibly, force the city to routinely dig into its coffers to cover the private-sector partner’s set usage fees.

So far, the City Council has allocated slightly more than $12 million for Blaisdell demolition work, which will complete about half of the proposed work. Future budgeting will serve as opportunity for city leaders and the public to continue to weigh in on the scope of redevelopment. Also, before a deal is sealed with a private- sector partner, the city’s Department of Land Management will hold a public hearing on the proposal.

Observers of the private-public trend say some 37 states are now embracing these partnerships. In California, they’re in place for a civic center slated for Long Beach as well as new academic buildings, recreational facilities and student housing at University of California, Merced, among other pursuits.

They hold potential to serve as viable economic drivers. In Honolulu’s case, as the city grapples with other financial questions, including uncertainty tied to the price tag for future rail operations and maintenance, the City Council and others should proceed with extreme caution in shaping Blaisdell’s “next-generation” profile.

(Hawaii News Now) Fort Street Mall satellite city hall relocating to bigger location

(Source: Hawaii News Now)

Fort Street Mall satellite city hall relocating to bigger location
(Source: HNN File)

HONOLULU, Hawaii (HawaiiNewsNow) – The Fort Street Mall satellite city hall is relocating.

The city says the location will close this coming Friday and will reopen Monday around the corner at the Chinatown Gateway Plaza.

The new location will be renamed the Downtown Satellite City Hall, and will have twice as much space inside as well as better parking.

It’s expected to serve roughly 300 customers a day.

The new location will continue to service the public’s need for basic government documents such as motor vehicle registration, bus pass sales, registration of bicycle and moped registrations, dog licensing and vehicle junking services. Disability placards, fireworks permits and much more will also be handled at the location.

“The downtown area was deserving of a larger, more comfortable space and we are pleased that we can offer our basic government services at this new street level location,” said Customer Services Director Sheri Kajiwara. “The site will soon offer our AlohaQ appointment system with a planned seating area and we are excited to welcome our Oahu residents who live and work in the downtown community.”

The Downtown Satellite City Hall office hours are Mondays through Fridays, from 8 a.m. to 4 p.m. Appointments are available online at alohaq.org.

Copyright 2019 Hawaii News Now. All rights reserved.

(Star Advertiser) Federal grant helps dozens of Oahu’s homeless find homes

(Source: Honolulu Star-Advertiser)

  • JAMM AQUINO / JAQUINO@STARADVERTISER.COM

    Keith Mitchell sits inside the living room at his new apartment on Wednesday in Palolo. A former U.S. Navy sailor, Mitchell, 60, has been chronically homeless since 1994, falling in and out of various shelters and programs.

The nonprofit Steadfast Housing Development Corp. and ‘Ohana Health Plan have teamed up for the first time on a $554,000 federal grant to fund Housing First, market-rate rental units for at least 32 of Oahu’s most chronically homeless.

The first 10 people — including 60-year-old Navy veteran Keith Mitchell — moved into their new homes starting July 1, according to Linda Ahue, executive director for Steadfast Housing Development Corp., which does business as Steadfast Pacific Corp.

Depending on the cost of each unit and when they’re rented, “We can potentially serve more clients,”Ahue said. “We could go up to as many as the funding would allow. It could be 41. It could be 34.”

The partnership made sense to ‘Ohana Health Plan, which oversees care services for 5,000 Hawaii adults with serious mental illnesses but does not specialize in housing, according to Theresa Lyons, behavioral health director at ‘Ohana Health Plan, which has offices in Kapolei, Honolulu, Hilo and Kahului.

The organization serves an estimated 42,000 Medicaid members, 5,000 Medicare Advantage members and 1,000 Medicare Prescription Drug Plan members across the islands.

“We’re highly specialized in what we do,” Lyons said. “We deal with mental health and health care needs, but our direct experience with managed care with Housing First is limited. So Linda approached us to partner to apply for this funding for permanent housing.”

Both organizations are now working on a second grant through the U.S. Department of Housing and Urban Development to continue the funding for a second year.

The money is aimed at housing some of Oahu’s homeless who have been on the streets the longest, such as Mitchell, who said he’s been homeless “off and on” since 1994.

Mitchell, a former Navy petty officer third class who served aboard the aircraft carrier USS America, moved into his one-bedroom, one-bath apartment in the back of Palolo Valley on July 24 and loves it.

On the first night, “I got a lot of sleep,” Mitchell said, as a cool breeze blew in through his new apartment. “It’s nice and quiet. I’m more relaxed than being on the street, less agitated.”

Part of his homelessness was due to alcohol and drugs, and Mitchell insisted he’s not going to blow his chance on a place of his own. He said he’s been clean and sober since moving in and plans to join a treatment program this week to keep it that way.

Asked if he might slip up and go back to being homeless, Mitchell said, “No, no, no.”

He is adamant he will not return to a life where he was surrounded by “a lot of noise, a lot of traffic, a lot of drinking, sometimes fighting.”

Housing First is a national model that’s been embraced by Gov. David Ige and Mayor Kirk Caldwell to find market-rate units to reduce the country’s highest per capita rate of homelessness, even in high-priced housing markets like Honolulu.

The concept relies on landlords who are guaranteed monthly rent, along with social workers who provide so-called “wrap-around services” to deal with any tenant problems.

In Mitchell’s case, the HUD money managed by Steadfast Pacific Corp. and ‘Ohana Health Plan pays the bulk of his $1,200 monthly rent in his seven-unit apartment complex. Mitchell’s Social Security benefits pay $113 toward his rent and he’s responsible for the utility bills.

Mitchell sleeps on a futon in his living room but plans to go furniture shopping. So far he’s been dining on microwaved burritos but Mitchell is looking forward to preparing his first home-cooked meal in his own kitchen.

“I love cooking,” he said.

Mitchell is happy to sleep in the living room because he’s already turning the bedroom into an art studio to create watercolor paintings. Three of his sketches that he plans to paint hung on a white wall in the bedroom. One of them looked down from a high-rise building at a homeless person buried in a grave.

Mitchell said he had not intentionally considered the perspective of his drawing — looking down at a homeless person.

Asked if he ever painted while on the street, Mitchell said his paints and brushes always got stolen.

He got help finding his new home through Deni Ramiro, a housing specialist with the Steadfast Housing Development Corp.

Ramiro and her colleagues are now working on finding other market-rate apartments to house at least 22 more of Oahu’s chronically homeless, and possibly more.

(Civil Beat) Short-Term Rental Owners Consider Options: Lease, Sell Or Leave It Vacant?

(Source: Civil Beat)

The one-bedroom unit attached to Ben Richards’ home was initially meant for his daughter’s grandparents.

When they visited from the mainland, the grandparents stayed close by on the Kaneohe property but still had their privacy. When they went home, the unit sat empty.

That changed 18 months ago when Richards and his wife Cristi listed the space on Airbnb. It was an easy way to offset mortgage costs, Richards said, and a great way to meet people from around the world. Pastries in Paradise, as it was advertised, was an old fashioned B&B. Cristi, a pastry chef, served breakfast every morning.

“Everyone says it’s the best visit to Hawaii they’ve ever had and they can’t wait to come back,” said Richards, who earned enough five-star reviews to reach Super Host status.

What the couple didn’t know until recently, Richards said, is that their Windward Coast vacation destination was illegal. In June, Mayor Kirk Caldwell signed Bill 89allowing the city to slap fines of up to $10,000 a day on people who advertise short-term rentals without a valid registration number. Enforcement started on Thursday. The Department of Planning and Permitting will issue registration numbers to 1,700 units but not until October 2020.

The timeline is forcing short-term rental operators to make tough decisions about their businesses. Should they rent to a long-term tenant, leave the unit empty except for friends and family or sell the property altogether?

The city is already noticing a change. DPP sent out letters to 5,000 properties suspected of running illegal vacation rentals. While hundreds of letter recipients said they were wrongly targeted by the city’s imprecise preliminary investigation, the city said on Thursday that the number of ads has dropped by 17.7 percent. Some operators have canceled their reservations and edited their postings to say “30-day minimum.”

Preliminary data suggests those short-term rentals may be converting to long-term leases or going up for sale. In Honolulu, there was a significant spike in long-term rental and home sale ads in July, the month after Bill 89 passed, according to Joshua Clark, a HotPads economist who looked at data from HotPads, Zillow and affiliated sites. The number of “for sale” postings in July was among the highest its been in four years, Clark said.

The influx of long-term lease and sale postings suggests the legislation is working as intended to reduce the number of tourists in residential neighborhoods and make units available to local residents, although HotPads noted correlation doesn’t necessarily mean causation.

Owners Lament The Lost Benefits Of Renting Short-Term

It may be welcome news for Bill 89 advocates, but short-term rental operators say they and their customers feel a sense of loss. Georgietta Chock, who has rented out a floor of her Kaimuki home since last year, shut down her webpage. She said some of her would-be guests are changing their vacation destinations.

“They’re really upset,” she said. “It’s just a fiasco right now.”

Things are also in flux for Kate Bliss, who has run a short-term rental out of the St. Louis Heights home she shares with her husband and his children.

“We really don’t know what we’re going do,” she said. “We wouldn’t be able to own without this.”

Like Richards, Bliss appreciated the flexibility of short-term renting. Her property includes two studios. One has had a long-term tenant, and Bliss liked having the other one available for friends and family from the mainland when she wasn’t hosting travelers. Bliss is leaning toward listing her property for more than a month at a time to comply with the law.

“We’ve enjoyed when we have guests longer than 30 days,” she said. “We invite them to dinner, take them hiking. We get to know them.”

Richards signed a long-term lease with a tenant this week. He deactivated his listing on Airbnb.

“Our plan right now is to convert the unit over to a long-term rental until we see what the ramifications of Bill 89 are and what happens in the next year or so,” he said.

He hoped to get a city permit next year, but it’s no guarantee. Registered short-term rentals can’t be within 1,000 of each other, and they will be limited in number by region.

“It’s disappointing for a lot of us who were trying to operate within what we thought the legal constraints were and offer a high-quality product to people visiting Hawaii who don’t want to stay in a cookie-cutter hotel chain and want to experience more of true Hawaii,” Richards said.

Kailua resident Tina Reed purchased a Hauula studio three years ago and listed it on Airbnb at the suggestion of her realtor. She understood the arrangement to be legal, she said. Finding a long-term tenant interested in living a nearly hour-long drive from downtown – and at a price that will cover condo fees – is going to be tough, she said, and so is selling it.

She feels the city’s enforcement date came too quickly.

“If you make an investment, it’s always a risk,” she said. “My concern with this law is that people don’t have enough time to deal with having the rug pulled out from under them.”

‘They Lumped Us All Together’

Running a mini-hotel business in residentially zoned areas has been outlawed in Honolulu since the 1980s, but the Department of Planning and Permitting has failed to enforce its own rules. Catching an operator in the act of renting for less than 30 days required stakeouts of the property, which DPP hasn’t had the resources to do, officials said.

If the city wasn’t outright inviting short-term rentals, the lack of action sent a mixed signal to operators.

“It was unclear what was legal and what was not, what was enforced and what was not,” Richards said. Since Richards and his wife were paying general excise and transient accommodation taxes, they thought they were operating legally.

As Airbnb gained popularity worldwide in recent years, DPP estimated as many as 10,000 illegal vacation rentals popped up across Oahu. Residents say residential areas, particularly in Kailua and the North Shore, became flooded with tourists who are changing the fabric of communities and overwhelming infrastructure. Observers say the problem has been exacerbated by out-of-state investors who buy multiple properties and rent them out short-term, collecting much more money than could be earned through long-term leases.

When the city proposed legislation that would crack down on short-term rentals, the Richards and other mom-and-pop operators were pleased, thinking it wouldn’t apply to them.

“The initial reaction was that regulation was mainly focused on off-island investors that had properties that were solely used as short-term rentals, and properties that had an owner occupant who was renting out an ohana unit would be grandfathered in,” Richards said.

Chock also thought she would be exempt. She recalled City Council Chairman Ikaika Anderson told her in a public meeting that she was not the target of the law.

“Ikaika Anderson said: Mrs. Chock, I want to let you know the bill doesn’t affect you,” she said.

But it did. Bill 89 prohibits all advertisements for rentals less than 30 days except for units in resort zones and properties that have non-conforming use certificates from the 1980s, at least until next year.

City Council Communications Director Louise Kim McCoy said Anderson told Chock during a committee meeting that Bill 89 will allow owner-occupied short-term rentals like hers to apply for a permit.

“As Bill 89 indeed establishes a permitting process for owner-occupied short-term rentals, the chairman is correct that owner-occupants like Ms. Chock will be allowed to apply for permits,” she said.

Investors, Too, Say Their Financial Plans Are Derailed

Civil Beat spoke to two California-based investment property owners who are also debating how to proceed with their units, but they declined to speak on the record to avoid criticism. One owner said his entire retirement was invested in Oahu’s short-term rental market.

He believes he’ll lose money renting to long-term renters, but without a better option, that’s what he will do. The other owner also worries a long-term lease won’t cover his mortgage. In addition, he is concerned that if he opts to sell, he’ll be competing in a market flooded with other properties hit by the new law that no one will want to buy if they can’t rent the units short-term.

Caldwell says most of the short-term rentals on Oahu are owned by people who don’t live on the property, but rental operators dispute that. There is a lack of reliable data. Listings labeled as whole-home rentals on Airbnb may have the appearance of an investment property, but in many cases, they are ohana units or dwellings attached to a host’s home that have private entrances.

“There’s a lot of other people in my situation that live on the premises,” Chock said. “They lumped us all together.”

The Hawaii Tourism Authority said it’s too soon to analyze data on the effects of Bill 89, but Chock feels it’s bad for tourism.

“We’re already known for being the worst place to do business,” Chock said. “Now we’re going to be the worst place to be a tourist.”

For Richards, having a long-term tenant won’t be so bad, he said. While the unit will gross less income per month, he and his wife will save on the expenses of running their Airbnb, including taxes, buying breakfast food for guests and maintaining the unit.

“Maybe this ends up working better for us,” he said. “And my parents will end up staying in the living room.”

(Star Advertiser) Moderately priced units in planned Kakaako condo attract hundreds of buyers

  • RENDERING COURTESY KAM DEVELOPMENT LLC

    The planned 328-unit condominium will have 165 affordably priced units.

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A chance to buy a new home in Kakaako for far less than what most developers have been offering in recent years has generated a lot of interest in one planned tower.

The developer of the project at 615 Keawe St. called Ililani has passed out about 700 applications to prospective buyers or brokers for 165 moderately priced units in the planned 328-unit condominium since units became available July 26.

All the affordable condos — one- and two-bedroom units with 511 to 799 square feet of living space — are reserved for Hawaii residents with moderate incomes and are priced from $312,600 to $657,100.

A lottery will be held to select buyers who apply by 5 p.m. Aug. 24.

Mike Leslie, a school vice principal who stopped into Ililani’s sale gallery Wednesday with his fiancee, said a home at Ililani would cost him less than what he pays for rent in Kalihi.

“The affordable price is really affordable,” he said.

This year through June the median sale price for previously owned condos on Oahu was $419,000. But in the Ala Moana-Kakaako area, the figure is $680,000, meaning half the condos sold for less and half for more.

Several new Kakaako towers in recent years have had average prices of $1 million or more. The average price for all Ililani units is $638,000 when including 163 two-bedroom units to be sold later this month to buyers without income restrictions.

Ililani’s developer, Ken Chang, received exemptions from state development rules and county permit fees in exchange for making half the project affordable to moderate-income residents.

Chang obtained exemptions through the Hawaii Housing Finance and Development Corp., a state agency that mainly helps finance low-income housing projects but also can grant exemptions for predominantly moderate-income housing.

Exemptions for Ililani included $470,000 in waived county permit fees. HHFDC also allowed the tower to be more than twice as dense and closer to an adjacent tower than allowed under rules of the Hawaii Community Development Authority, a state agency that regulates development in Kakaako.

HHFDC said Ililani is the first project to also obtain a waiver for a development permit from HCDA.

As the regulator for development in Kakaako, HCDA can allow exemptions from its rules for voluntary affordable-housing projects, but its requirements and regulatory proceedings became less attractive to developers since the agency overhauled its affordable- housing rules two years ago.

Chang initially sought to develop Ililani under HCDA as the agency was reworking its rules. After being told his project would have to adhere to amended rules, Chang reworked his plan to take advantage of HHFDC benefits.

The developer said he knows demand for moderate-priced housing in Honolulu is high, so he wasn’t surprised by the response earlier this week at Ililani’s sales gallery operated by brokerage firm Locations LLC.

“It’s been running pretty strong,” Chang said.

Amenities planned for the 42-story tower include a recreation deck on the roof of a nine-story parking garage featuring a lawn, community garden, splash pool, grills and an outdoor movie screen. A multipurpose room, coworking space and 10 cars for sharing at discounted rates through car-share firm Hui also are planned.

There will be 372 parking stalls for residents. A city rail station is planned for an adjacent block.

Because half the units are priced below market rates, buyers of these units must agree to share appreciation with HHFDC when they sell their unit. Also, the agency has the first right to buy a unit if the owner elects to sell within 10 years. Owners also may not rent out their units.

Of the 165 affordable units, 33 would be reserved for households earning 80% of the median income in Honolulu, which equates to $77,120 for a couple. Another 33 units would be for households earning up to the median income ($96,400 for a couple), 50 would be for residents earning up to 120% of the median income ($115,680 for a couple) and 49 would be for residents earning up to 140% of the median income ($134,960 for a couple).

Chang expects to start construction in November and finish the tower about two years later.

(Hawaii News Now) City’s new vacation rental law faces at least 2 legal challenges

(Source: Hawaii News Now)

Lawsuits lodged against city over new law targeting vacation rental industry

HONOLULU, Hawaii (HawaiiNewsNow) – The city’s new law regulating the vacation rental industry went into effect Thursday and is already facing two legal challenges.

The Hawaii Vacation Rental Owners Association filed the first lawsuit, saying the new law is unconstitutional and violates laws governing zoning and administrative procedures.

“The City Council rushed through a flawed, unfair and illegal bill, and in its haste to crack down, the (Department of Planning and Permitting) has released illegal rules which violate the rights of the owners of legal rentals,” said attorney Greg Kugle.

A second lawsuit by the owners at the Waikiki Banyan condos will also seek a temporary injunction to halt the city from enforcing the new law.

“Basically, the whole financial structure of the building is under the assumption that they they could continue to due the short-term vacation rental,” said Christian Porter, attorney for the condo owners who plan to sue in the next several days.

“At least 87% of the folks have been operating as a hotel type condo, they’ve had a front desk, they’ve paid the taxes.”

But the city said the law is working and that it has already reduced the number of illegal vacation rentals here.

“A search of the Internet earlier this week showed a drop in the number of ads from 5,000 to 4,150, or a 17.7% decline, since mid-July,” the city said, in a news release Thursday.

A federal judge has set a status conference for the first lawsuit Friday morning.

Copyright 2019 Hawaii News Now. All rights reserved.

(Star Advertiser) Editorial: Put vacant tower to residential use

(Source: Honolulu Star-Advertiser)

  • BRUCE ASATO / BASATO@STARADVERTISER.COM

    The Queen Emma building, right, abandoned 12-story office building at 1254 Queen Emma St.

Adaptive reuse is a concept whose time has come. And it’s encouraging to see that its time has come for Queen Emma Tower, a long-abandoned commercial building that, in about a year, could have new life, offering affordable residential units in downtown Honolulu.

30 studio Queen Emma LLC is a development group now seeking City Council clearance for exemptions to certain housing requirements in order to make the 12-story building conversion financially feasible.

The project would yield a total of 71 rental units affordable to those earning no more than 60% of the city’s area median income (AMI). Among these, four units — one two-bedroom and three studios — will be offered at rents affordable to those earning at the 30% AMI level.

These are categories in which the housing shortage is especially acute, fueling Honolulu’s persistent homelessness crisis.

The development group includes the nonprofit Affordable Housing and Economic Development Foundation, which is applying for publicly supported financing and has committed to keeping rents at that affordability level for at least 61 years.

Pending city approval and securing that financing — hurdles that it should be allowed to clear — the group has estimated that renovations for the conversion would take nine to 12 months.

That would be a quick turnaround time, an appealing feature of the adaptive reuse of suitable buildings.

That surely factored into the project’s initial approval on July 24 by a key committee of the Honolulu City Council. Councilman Ron Menor, who chairs the Zoning, Planning and Housing Committee, said the testimony was positive.

That said, final approval will require certain concessions by the city. These include fees and charges that, if waived, would save the project almost $2 million. Among them are fees for the review of the building permit and fire plans; grading, grubbing and stockpiling; park dedication; wastewater system facility; storm drain connection; and building and construction permits.

These are not to be waived lightly, as such fees help to cover legitimate costs and community improvements. And in particular, the Honolulu Board of Water Supply indicated that further review is needed to determine if the project meets a requirement to qualify for a fee waiver estimated at $93,011.

Also, the building will be served only by its original 15-stall parking lot. That sparked some opposition from businesses concerned about impact on limited neighborhood parking.

However, Queen Emma Tower is centrally located and near public transportation, making it a strong candidate for the waiver from parking requirements. Prospective tenants should not expect a parking stall. And the continued development of planned bike lanes in the area must proceed in order to support such urban developments.

In the final analysis, the Council should find that the value of the project — reclamation of an aging structure that now blights the community, as well as needed housing — weighs heavily in its favor.

The city is pursuing its own adaptive opportunities, such as a converted commercial building at 1902 Young St., and an adapted school dormitory at 1936 Citron St.

It’s a national trend: When the recession drove more companies to smaller spaces, many commercial properties were left empty.

With careful evaluation, legacy buildings that add architectural interest can be restored. They also can become valuable residential inventory, rather than wasted space.

(Star Advertiser) Waikiki condo owners will sue to stop new law

(Source: Honolulu Star-Advertiser)

  • PHOTO BY LEE CATALUNA

    Racks of lock boxes hang just outside the front door of the Waikiki Lanais residential condo building. Inside are fobs to unlock the security door to the building as well as keys to individual vacation rentals. Long-time residents of the area say their daily lives are being severely impacted by short term vacation rentals.

The owners of at least one Waikiki condominium complex are preparing to ask a state judge to stop the city from enforcing the new vacation rental law against them.

The first phase of Ordinance 19-18, formerly Bill 89 (2018), takes effect today. It imposes fines of up to $10,000 a day to either advertise or operate an illegal vacation rental on the island.

It’s a powerful enforcement tool for the city Department of Planning and Permitting to stop what are believed to be thousands of illegal vacation rentals on Oahu.

Owners of the 876 individual units in the two-tower Waikiki Banyan condominium complex want to stop the new law through a court-imposed injunction. Christian Porter, an attorney for the Waikiki Banyan Association of Apartment Owners, said he will soon be filing for an injunction against the city in state Circuit Court, seeking to stop enforcement of the new law at the Ohua Avenue complex.

Porter said other Waikiki condominium owners are looking into the same type of action.

The Waikiki Banyan is on the mauka, or mountain, side of Kuhio Avenue, an area where hotels, resorts and vacation rentals are prohibited unless they are specifically permitted through nonconforming use (NUC) certificates that the city stopped issuing in 1989.

Only about 10%-12% of the Banyan units are occupied by their owners, meaning the rest are operating as either short-term or long-term rentals. There are 179 units in the complex with NUCs, said Tom Lonigro, Waikiki Banyan AOAO general manager.

It baffles Lonigro how buildings on one side of Kuhio Avenue are considered part of the hotel precinct, while the other side is an apartment or apartment mixed-use precinct.

“I can understand if you’re talking about a suburb, but we’re surrounded by hotels,” Lonigro said. “We have the Marriott across the street, we have the Hilton on the other side of Ohia, and we’ve been known as a hotel-resort since, well, since conception.”

The building was completed in 1979 and “it’s been running as a hotel since 1979,” he said. “We were built with that front desk and the lobby since the beginning. It’s always operated in this manner. So it’s not like we’re trying to hide anything or we’re trying to skirt the law or anything like that.”

There are six operators managing units at the Banyan, the biggest one being Aston Hotels and Resorts, Lonigro said.

There are also some unit owners who rent out their condominiums on their own without the services of any of the operators, he said.

“This is going to have a serious impact not only on the people who’ve invested in this building, it’s going to have a dramatic impact on the revenues to the city,” Lonigro said. “It’s going to have an impact on the employment of quite a number of people — there’s going to be a significant amount of layoffs if this goes through. It’s not a very well, thought-out ordinance.”

Porter, the association attorney, said he and Waikiki Banyan representatives met with DPP officials seeking an exemption from the law and were rejected.

“What we’re seeking is maintaining the status quo,” Porter said, noting that its owners pay transient accommodations and general excise taxes to operate as vacation rentals.

Kathy Sokugawa, DPP acting director, told the Honolulu Star-Advertiser that many property owners are seeking an exemption from the law and the city can’t arbitrarily allow some but not others.

The Waikiki Special Design District was created in the 1970s in part because of concerns that the area was being overrun with hotels, which led to the creation of apartment and mixed-use precincts for those on the mauka side of Kuhio, she said.

“The policy makers wanted to ensure that residents had a place in Waikiki,” Sokugawa said. “Part of the reason was there was too much development going on. They wanted to ensure there was a certain amount of open space and … a Hawaiian sense of place.”

During the recent, extensive deliberations on the vacation rentals bills, people testified in favor of keeping areas within Waikiki available for residential use.

Meanwhile, DPP has continued to hear from property owners unhappy that they received letters suggesting they may be operating an illegal vacation rental, or asking them to report neighbors who might be operating one.

DPP reported that as of close of business Wednesday, it had received 820 complaints from people about the letters. The department sent out about 5,000 of them earlier this week.

Sokugawa said DPP relied on “drop pins” — used by Airbnb, VRBO or other online platforms to identify the location of vacation rentals.

Those who own properties where there are not vacation rentals need not prove their innocence, she said. “You need to worry if you get issued a notice of violation,” she said, noting that much more research will need to be done before that will happen. Even then, the property owner has seven days to ensure the ad is dropped before DPP will issue a notice of order imposing a fine. At that point, the owner can still file an appeal, she said.

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(Star Advertiser) Crackdown on Oahu vacation rentals could hurt tourism

(Source: Honolulu Star-Advertiser)

  • STAR-ADVERTISER / 2004

    Jessica Kuo, who owns a unit in the Waikiki Sunset that is rented as a hotel room by Aqua-Aston, said she was shocked when the hospitality company said it would not be managing her unit anymore.

Oahu’s more restrictive short-term rental rules, which take effect today, have come to the attention of investors and economists who warn the county is in danger of not having enough lodging for visitor arrivals to continue to grow.

“I have a strong feeling that there is this train wreck that is unfolding,” said Paul Brewbaker, principal of TZ Economics, who advised the Honolulu City Council not to pass Bill 89.

Council members unanimously passed Bill 89, which became Ordinance 19-018 when it was signed June 25. The new law bans advertising of unpermitted short-term rentals and enacts penalties that can result in fines of up to $10,000 for persistent violators.

It’s not known how many homeowners and investors on Oahu are involved in illegal short-term renting, but the city Department of Planning and Permitting identified 5,000 possible violators during a preliminary investigation. DPP spokesman Curtis Lum said possible violators were sent letters last week reminding them that a ban on advertising properties for short-term rentals of less than 30 days takes effect today.

The new law has been cause for celebration for supporters who were concerned that illegal short-term rentals were depleting affordable housing and changing the fabric of local communities. However, even supporters from the state’s visitor industry are now theorizing that, without adjustments, the law could have unintended consequences.

Mufi Hannemann, president and CEO of the Hawaii Lodging and Tourism Association, said he supported the new ordinance, but is concerned that it’s being applied to hundreds of units in resort districts.

DPP has ruled that the new law applies to most of the Waikiki properties mauka of Kuhio Avenue, which are in apartment and apartment precinct zones. DPP has said the new ruling also applies to the Kuilima Estates townhouses at the Turtle Bay Resort.

“We supported Bill 89, but this was an unintended consequence that was never made clear to us by DPP. We are appealing to them and to the Council members in these districts to take another look at this,” Hannemann said.

Jerry Gibson, vice president at Turtle Bay Resort and president of the Hawaii Visitors and Convention Bureau board, said he supports Bill 89, but was surprised that units in Kuilima Estates were not in Turtle Bay Resort’s resort zoning.

“We don’t manage Kuilima Estates, but certainly, having less short-term rentals will affect the resort’s activities, golf, food and beverage” sales, Gibson said.

Jessica Kuo, who since 1983 has owned a Waikiki Sunset unit that is rented as a hotel room by Aqua-Aston, said she was shocked Friday when the hospitality company told her that it would no longer manage her unit, a move that will significantly affect her retirement income.

“I was told they are dropping owners without nonconforming use certificates. It’s about one-third of the building,” Kuo said. “I’ve always paid my general excise and transient accommodations taxes. It’s a ridiculous law. Hawaii as we all know depends on tourism, especially Waikiki. I see ordinances to control short-term rentals in Los Angeles where I live, but nothing as drastic as this one.”

Oahu Alternative Lodging Association (OALA) has estimated that the new law could cause Oahu to lose between 50,000 and 80,000 visitors per month.

“We need vacation rentals to add capacity,” said Brewbaker, who issued warnings in 2013 that Hawaii’s tourism industry would run out of rooms for visitors at around 8 million visitors. The state hosted 9.9 million visitors last year.

While Oahu’s hotel inventory stayed relatively the same, Brewbaker said the spread of vacation rentals added to the lodging supply, contributing to Oahu’s last six years of tourism growth. Now, he’s concerned that Bill 89 will unwind those gains.

“Bill 89 also is coming at a time when all the low-hanging fruit in a long economic expansion has been harvested. Also, you can’t even build a telescope next to a telescope. What signal has Hawaii sent that investors should double-down on Hawaii?”

To be sure, Oahu’s regulations have caught the attention of investors outside of Hawaii. Bill 89 was brought up during recent earnings conference calls for Alaska Airlines and Hawaiian Airlines. And, Southwest Airlines, which is poised to expand in Hawaii, said the ordinance is on its radar.

Southwest spokesman Brad Hawkins said Wednesday that the carrier “is closely monitoring the city’s work to address unregulated and unlicensed short-term rental units.

“As a carrier growing our service for island communities, we are heavily invested in an accurate landscape of available lodging for overnight visitors in Honolulu so that our flight activity can accurately reflect the marketplace,” Hawkins said.