Report Title:

Kukui Gardens Acquisition

Description:

Appropriates funds to acquire the Kukui Gardens property from Kukui Gardens Corp. Authorizes eminent domain proceedings should the acquisition be unsuccessful. (SD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

2239

TWENTY-THIRD LEGISLATURE, 2006

H.D. 1

STATE OF HAWAII

S.D. 1


 

A BILL FOR AN ACT

 

relating to land acquisition.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. In its final report dated January 2006, the joint legislative housing and homeless task force (task force) expressed concern that the inventory of affordable housing rental units may be reduced. Affordable rental housing projects built in part with government subsidies have been offered for sale at market prices as a result of the expiration of income and conveyance restrictions encumbering the property. The task force is committed to ensuring that such units remain affordable to persons at certain income levels.

In recent months, media reports have announced several affordable housing projects that may be offered for sale, such as the Kukui Gardens affordable rental housing project. Kukui Gardens was built in part with federal funds and its affordability restrictions will expire in five years.

The purpose of this Act is to preserve Kukui Gardens as an affordable housing project.

SECTION 2. The legislature finds that:

(1) Kukui Gardens is a unique affordable housing resource on twenty-two acres in central Honolulu that provides 857 units of low-income housing for 2,500 working residents and senior citizens;

(2) Kukui Gardens supports the character of the neighborhood by being the primary source of workforce housing for all of historic Chinatown;

(3) The 857 affordable rental units in Kukui Gardens are irreplaceable in the current Honolulu housing market;

(4) Kukui Gardens is currently for sale, and therefore at risk of becoming a market rate rental project or condominium after 2011, when the project's affordable housing commitment period with the United States Department of Housing and Urban Development expires; and

(5) The residents, surrounding community, and Oahu as a whole would benefit from the active intervention of the State in this transaction to ensure that there is no negative impact on current and future residents.

The legislature therefore declares that it is in the public interest and is required for public use to acquire Kukui Gardens as an affordable housing project by exercise of the power of eminent domain. The legislature further declares that it is necessary to provide for the public financing of the acquisition of Kukui Gardens by condemnation through the expenditure of general funds and any available revenue bond proceeds and private funds at the disposal of the State.

SECTION 3. The Hawaii housing finance and development administration shall immediately initiate negotiations with Kukui Gardens Corporation to acquire the property known as Kukui Gardens, and may partner with private developers for acquisition of the property; provided that one hundred per cent of the housing units on the property shall be retained in perpetuity as affordable housing for households at or below one hundred twenty per cent of the median family income as determined by the United States Department of Housing and Urban Development.

The Hawaii housing finance and development administration shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2007 regarding its efforts to acquire Kukui Gardens and its recommendations for financing the purchase of the property.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2006-2007 for acquisition of the land and improvements of the Kukui Gardens property, tax map key (I) 1-7-26: 07, owned by Kukui Gardens Corporation; provided that if an agreement to acquire the property is not reached within a reasonable time, the Hawaii housing finance and development administration shall exercise its power of eminent domain to acquire the property. For the purposes of this Act, and notwithstanding any provision of section 201G-16, Hawaii Revised Statutes, to the contrary, condemnation of the Kukui Gardens property shall not be subject to legislative disapproval.

The sum appropriated shall be expended by the Hawaii housing finance and development administration for the purposes of this Act.

SECTION 5. This Act shall take effect on July 1, 2006.