Hilo Affordable Housing Project Moves Forward Despite Questions

A proposed affordable housing development in Hilo is one step closer to fruition after the Hawai‘i County Council on Wednesday approved the second and final reading of a bill that changes the use for the property where the project is planned.

The council, after a discussion that lasted nearly an hour, voted 7-1 to approve Bill 101, with Councilman Matt Kaneali‘i-Kleinfelder dissenting and Councilman Tim Richards excused.

However, continued questions about the development’s scope and discrepancies in the paper trail for the project again highlighted the discussion.

Bill 101 amends the county’s state land-use boundary maps to adjust the classification of a vacant 9.09-acre parcel on the north side of Mohouli Street in Hilo, just west of the intersection with Komohana Street, from agricultural to urban. The change was requested by the Hawai’i Island Community Development Corporation, a nonprofit focused on assisting low- to moderate-income residents of the island obtain affordable housing, which intends to develop the 90-unit Hale Ola O Mohouli Affordable Housing Project on the site.

County Corporation Counsel Elizabeth Strance was at Wednesday’s meeting to follow-up on the questions council members asked during their Jan. 19 regular meeting in regard to the bill in question.

“I think we would all appreciate some clarity in how we might move forward,” said Councilwoman Ashley Kierkiwiecz upon opening the discussion with Strance.

The councilwoman said her review of the resolution in connection with the proposed project that resulted in so many questions, Resolution 476-18, and the agreement between the county and HICDC found the prior administration could have done a better job with its house cleaning.

“In a nutshell, the prior administration was really sloppy,” said Kierkiewicz. “And what we are noticing here is that there are some things to clean up, that’s for sure. But also we need to find a better way to ensure that all resolutions, ordinances that are attached to a particular (tax map key) are housed appropriately so that we’re not having to deal with figuring out what sort of other entitlements or agreements come with that particular property.”

The resolution the council was getting hung up on authorized negotiation of a 75-year lease for the property where the proposed development is planned. That resolution, passed by the council in 2018, said HICDC would be seeking 200 units for affordable senior housing, not the 90-unit project now under development.

Strance explained that the particular tax map key, or TMK, in question encompassed a 30-acre parcel in 2008, the year this development, which is part of a larger housing development through HICDC in the same area, began to take shape. An executive order from the governor and county actions carved out 13 acres of that parcel for the overall development. Several other measures have been passed since then for the development.

“I can’t tell you that I’ve reviewed all of the resolutions or ordinances related to this project, but I did look at enough of them to get a flavor for what’s kind of happened over the the history of this development,” Strance said.

Resolution 476-18 authorized the county finance director to negotiate a 75-year lease with HICDC for the purposes of “planning, developing, constructing” an affordable housing project for senior citizens, according to Strance.

“One of the things that was asked of me was there are some ‘whereas’ clauses that precede the ‘be it resolved,'” she said. “And we’ve had some prior discussions on this body about the enforceability, how binding are resolutions on the administration. Generally, they’re not binding except when administration requires council authority to act.”

That is the provision referenced in the resolution and under which the resolution was presented, Strance said. And while there is some language in the lease that makes the scope of the project somewhat ambiguous, what happened in the past as the HICDC developments in the area took shape, is they typically would be brought back to the council for further discussion and consideration.

“This one did not,” Strance said. “So, as the project developed, it took different shape. When the project went before the Land Use Commission, it had taken shape and that’s where the 90 units came in.”

One of the ways Strance reviewed the issues council members brought up was to go back and listen to the committee and council meetings during which Resolution 476-18 was discussed. She found the measure was presented before the council then, read in and voted on without discussion in both instances.

“So what was on the mind of the council’s not clear, but it’s reflected in the ‘be it resolved’ clauses, which are the binding provisions of the ordinance,” Strance told the council. “So you do have before you a bill that doesn’t need the reference to 90 units.”

Kierkiewicz wanted to be clear on the council’s next step on Bill 101 before moving forward.

“I just want to be clear though, on the next step, the recommendation, are we OK to vote on this today with the recognition that there is a necessity to kind of clean up enabling language in the prior resolution that kind of directs the agreement between county and HICDC?” Kierkiewicz asked.

Strance answered after a brief conference with her clerk.

“Because the permitted purpose for which the property can be put to use is limited, the bill could be passed and council could be clear that by passing the bill, they’re not approving the 90 units,” Strance said. “That has to come back before the council in any case. But the bill itself does not refer to the 90 units.”

So the bill could be passed in its current form. If council members want to have further discussion at a later date when the project is brought back before them, that would be acceptable.

Councilman Aaron Chung also asked for clarification on whether or not the proposed project had to be put out for bid.

“The project is not subject to procurement, so it was not required to be put out to bid,” Strance said, adding that the developer also is not bound by the resolution to develop 200 units “because that 200 units is not contained in the binding portion of the resolution.”

Chung also asked whether the lease goes beyond the scope of the proposed development as defined by the authorizing resolution. He said the executive order that conveyed the property to the county said the property should be used for affordable housing rentals and elderly housing. The resolution only mentioned elderly housing.

“The lease that was signed states that the lessee shall use the premises solely as a rental housing facility with supportive services and related uses for low- and moderate-income and related uses, … elderly housing in accordance with federal, state or county laws or such other elderly housing, which is a qualified low-income housing project,” Strance said.

From a legal standpoint, Strance said that paragraph of the lease in question is unclear as to whether the property is limited to elderly uses.

“My recommendation would be that it gets clear, because if this council isn’t clear and it has questions, it should be clarified,” Strance said. “And if the lease itself is unclear, then it should be amended. And there will be opportunities to do that.”

She added that it needs to be amended in any case because there is a discrepancy between the rent figures laid out by the lease versus the resolution.

“My recommendation would be to either submit a new resolution to update the development and then to amend the lease to conform with that updated development,” Strance said. “That way it would be clear both from the County Council standpoint and from the contract standpoint.”

Council members were appreciative of the discussion surrounding the proposed project, but some made sure to point out that Bill 101 only deals with the use of the land under the planned housing development.

“Bill 101, really is just two pages long. It gives a meats and bones description,” said Councilwoman Sue Lee Loy, who added that, yes, the map included with the bill was somewhat misleading because it originally incorrectly labeled Kukuau Street as Ohukea Street, but the council corrected that by approving an amendment Wednesday to that document before taking up Bill 101 itself. “We’re just drawing the boundary amendment. There’s a whole lot of other conversation about what’s going to happen in these spaces, which I believe can be further resolved or addressed. But for me, the bill is simple. It’s a meats and bones description about property boundary lines on what we’re gonna put in there. Other stuff is coming in. Is it affordable? Is it senior? Going down the rabbit hole for me. It’s very one step. This is one step. We can get to the other stuff later.”

In the end, the rest of the council agreed — for the most part.

“What’s become apparent to me is that in the very beginning of all this, through the executive order to the county to what we have in front of us today, there’s just some, I think, there could be better ways that are more transparent,” Kaneali‘i-Kleinfelder said.

He admitted that he’s learning about how these types of processes work, he just wants to make sure those processes are correct.

“Our responsibility is to provide documentation chains and documentation that is sparkling and clear,” Kaneali‘i-Kleinfelder said. “That’s our job as legislators and as a government.”

Understanding the purpose behind the measure, he decided to say no to Bill 101 regardless of his support for the change.

“I’m going to say no to it today, but more in significance of what I’ve seen and what I think could be better as far as the process concerned and the background for this project,” Kaneali‘i-Kleinfelder said. “I support the land use decision and I think it’s fitting for that area. I have my concerns about the project.”

He said he talked with some of the community members who live within the Sunrise Ridge area, which is near the property where the housing development is planned, saying they have some concerns and some of them were unaware that a project of this scope was being undertaken.

“I’m just gonna put out there that I’m concerned that if we’re basing leases on a document and later we come back and we can half the size of an affordable housing project with no real question, that’s a very interesting way of moving forward with a project,” Kaneali‘i-Kleinfelder said. “I don’t know if I quite agree with that, that methodology.”

He will have more questions if the matter comes back before the council and said there needs to be revisions to existing legislation that paved the way for the proposed project and the discussion.

“If you’re gonna build something, you gotta make sure your foundation is solid. If the foundation is shaky, then your house is gonna be shaky,” Kaneali‘i-Kleinfelder said.

Councilwoman Rebecca Villegas said there are so many discrepancies in the process leading up to Bill 101, despite her voting to support the change, she urged the council to get them fixed.

“It makes it monumentally harder as we, in our jobs, have to navigate when there’s enough perceived opportunity for ulterior motives to be utilized,” said Villegas. “It’s imperative that we keep everything precise and on the up and up so we eliminate any opportunity for accusations, especially when there is no wrong or nothing amiss, it’s just been innocently mistaken and confounded.”