West Hawaii Today - from archives > Local > County warns housing developer: Meet agreement or be replaced

County warns housing developer: Meet agreement or be replaced

by Jim Quirk
West Hawaii Today
jquirk@westhawaiitoday.com
Saturday, February 7, 2009 6:46 AM HST

HILO -- Hawaii County told the developers and managers of the Waikoloa Workforce Housing project Friday that if they are unable to deliver as agreed with units at an affordable price, the county will find others to take over the project.

Corporation Counsel Lincoln Ashida sent letters to project manager Waikoloa Workforce Housing LLC, developer UniDev and the Hawaii Island Housing Trust Friday stating it has become apparent the entities "are no longer able to deliver that project."

The county provided $40 million for the project's pre-development and infrastructure costs, but Waikoloa Workforce Housing and UniDev recently indicated cost-saving measures need to be implemented or the project can't proceed.

Both entities, however, have different ideas on the remedies. Waikoloa Workforce Housing believes not all of the homes for Phase 1A of the project should be built right away because of the economy, and that construction cost-saving measures need to be implemented to ensure the home prices are affordable.

UniDev, meanwhile, believes the solution should be implementing a rent-to-own policy.

The county, however, believes both proposals are "a significant departure from what was bargained for under that certain Development Financing Agreement dated June 12, 2008," Ashida wrote.

Phase 1A of the project entails building 125 affordable homes that would be made available first to resort workers. The overall project entails building 1,200 affordable homes.

The county is willing to give the entities involved another chance.

"To ensure that there is no misunderstanding with respect to your ability to meet your obligations under the aforementioned agreements, the county desires to give you an opportunity to cure the above referenced default in accordance with the notice and cure provisions (in the financing and development agreements)," Ashida wrote.

The letter gives the project developer and manager 60 days to remedy any defaults on the agreements.

In a separate prepared statement, Ashida stated: "If the entities responsible for delivering this project cannot perform their obligations under their agreements ... the county must protect its taxpayers by enforcing the county's rights under those agreements."

Housing Administrator Steve Arnett said Friday the letter basically states the county will find others to complete the project if UniDev and Waikoloa Workforce Housing do not make good on the agreements.

There are 7 comment(s) comments to this story.

realityvoice wrote on Feb 9, 2009 9:28 AM:

" the same old story. The county gives money, the county get promises and little else. THe developers rip off the county and the public sits back until the next time. Stop the madness and make these developers live up to the contract or refund the money with penalties. We all need to complain to the county officials about these sweethear deals with developers. The public is being duped!! "

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timkona wrote on Feb 8, 2009 8:52 AM:

" Folks who use the term "affordable" and the term "housing" together, have no idea what they are talking about.

You can only have true affordability by building multi-dwelling units. Common utilities within the buiding envelope, common access, less land usage (cost), etc.

I laugh heartily at "Affordable Housing" "

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Tommy Lopaka wrote on Feb 7, 2009 8:35 PM:

" satyagraha, good point about the $40million that the County volunteered as “impact fees”. If the County sold bonds around five-and-a-quarter-percent that works out to about $53,000 per unit for 1,200 homes and just a smidge over a $half-million if they only built 125. "

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ovphoto wrote on Feb 7, 2009 6:05 PM:

" you can get kit homes 1200 SF for 30,000$ so what is the prob,sombody is just GREEDY and they should be disqualfied "

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spencer wrote on Feb 7, 2009 5:23 PM:

" Let's see, the economy is in the tanks, housing costs are going down, people in construction are willing to work for less just to be able to work and these guys propose to Lower the standards of the housing and build less houses so they can................Build their profit margin! "

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no`ono`o wrote on Feb 7, 2009 3:55 PM:

" Does anyone remember the last time that the County actually determined that a contractor was in breach of a contract and officially demanded remedy?

Maybe the Honorable Billy Kenoi is actually starting to grab the bull by the horns Instead of the way we’ve grown accustomed to over the last 40 years. "

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Satyagraha wrote on Feb 7, 2009 12:57 PM:

" And the "$40 million the county used for the project's pre-development and infrastructure costs"

Better start placing liens on these slackers...if you sign a contract to build something for the government it means nothing anymore?
What's up with that? "

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