NAWILIWILI — After having trouble finding qualified tenants for an affordable rental project in Waipouli, the developers asked for changes in a housing agreement that would allow them to rent half of the 82-unit project on the open market. The
NAWILIWILI — After having trouble finding qualified tenants for an affordable rental project in Waipouli, the developers asked for changes in a housing agreement that would allow them to rent half of the 82-unit project on the open market.
The amended agreement that the County Council approved on a 5-2 vote, however, also allows the developers to sell the units on the open market before a previously established, 10-year restriction period on such a move expires, as long as the county gets first choice of purchase.
“I have the deepest respect for the developers,” said JoAnn Yukimura, a former councilwoman who will return to the council next month.
Yukimura, asking council members to defer a decision, said the county and council have the responsibility to ensure that their decision is in the best interest of the public.
“We cannot sacrifice public interest out of sympathy for the developers,” she said.
Half of the 82 units at Waipouli Courtyards are rented to tenants who make 80 percent or less of the Kaua‘i median household income. The other 41 units are still empty, unable to be filled up by applicants who make 100 or 120 percent of the island median household income.
The developers asked the council to free those units from the agreement, giving them the option to rent the units on the open market, or even sell them, giving the county first choice of purchase.
“We are hemorrhaging right now,” said Kevin Showe, manager of KD Waipouli LLC, explaining that the high level of vacancies, combined with a current loan interest rate higher than present ones, is putting financial pressure on the developer.
Councilman Tim Bynum agreed with Showe’s plea, but also said the “agreement as written goes beyond that,” because it allows sale on the open market, and could potentially let the units become a part of the visitor industry.
“I don’t think we’re in a position that we need to increase the visitor inventory right now,” he said.
Councilwoman Lani Kawahara called the request shortsighted. “We all know the economy goes up and the economy goes down.”
Kawahara said that there has to be a middle ground in the light of an unforeseeable economy. “Why do we have to sacrifice those 41 units right now?”
Chair Kaipo Asing said the developer has done what he was asked to do, and has built all the units he was supposed to build.
The units were built as part of an agreement to rezone and develop the Kauai‘i Lagoons site, located by the Kauai‘i Marriott Resort & Beach Club near Lihu‘e Airport. The Kapule Highway affordable-housing site, near the Lihu‘e Industrial Park Phase II, is also part of that agreement.
Asing said if nothing is done, there’s a possibility of the project going into foreclosure. “Then we lose everything.
“Why do we want to take that chance?” said Asing, repeating what Councilman Derek Kawakami had just said. “It’s a matter of compromising.”
Asing said Bynum and Kawahara had good points, but he still supported the amendment to the agreement.
The item was presented to council as a communication from Mayor Bernard Carvalho Jr., recommending approval of the amendment to the agreement.
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