Two months after obtaining building waivers and exemptions from the Honolulu City Council in exchange for constructing a mostly affordable 45-story residential tower, a Kakaako developer wants to alter the agreement.
Resolution 15-277, approved by the Council in November, allowed SamKoo Pacific LLC to exceed the height limit for the area and granted other conditions for it to develop 485 units at what’s to be known as the Kapiolani Residence.
The South Korean-based company proposed that 292, or 60 percent, of the units be set aside for those making between 80 and 120 percent of Oahu’s median income. The remaining units would be aimed at those in the so-called gap group housing market of families making about 140 percent of median.
SamKoo now says that while it will still develop 292 affordable units for those in the 80-120 percent area-median-income category, it needs to rejigger its mix of affordable units — with fewer two- and three-bedroom affordable models than previously agreed to — in order to make its project financially viable.
Resolution 16-6 goes before the Council Zoning and Planning Committee on Thursday.
Under the proposal, the number of three-bedroom units in the affordable category would be reduced to four — a drop from the original 27. And the number of affordable two-bedroom units would be lowered to 93 from 105.
The number of affordable studio units, meanwhile, would rise to 88 from 53. The number of affordable one-bedroom units would remain at 107.
SamKoo is also asking for a change in the distribution of units among the various affordable area-median-income categories. The number of units aimed at those making 80 percent of area median income would drop to 20 units from 33. And the number of units targeting those between 81 and 100 percent AMI would decrease to 98 from 225.
Conversely, the number of affordable units aimed at those between 101 and 120 percent AMI would increase to 174 units from 34 units.
Project planner Lowell Chun of Pacific Catalyst LLC said the developer still views providing affordable housing as a priority. “SamKoo is simply adjusting the affordable housing unit types and the AMI distributions to achieve project feasibility,” he said.
Chun said the plan is not being altered to increase profit margins.
“SamKoo’s out to make a reputation for integrity,” he said. “The economy’s been really dicey and (the Hawaii Housing Financing and Development Corp.) and the Council both recognize that in order to make this project work, and to enable affordable housing at this location, we’ve got to come up with the right mix, otherwise we’re blown out of the water,” he said.
SamKoo is looking at “how much is it likely to cost to build given current (economic) trends … and then how do we do that in compliance with occupancy guidelines … for the affordable units as set by HHFDC’s real estate division.”
Additionally, he said, the proposed change is “in recognition of volatile economic conditions that are beyond our control and difficult to predict.”
Among the concessions agreed to by the Council in November:
>> An exemption from the 350-foot height limit for the area, in order to put up a 399.5-foot tower.
>> Exemptions from setback, density and parking requirements.
>> Waivers from various building processing and permitting fees as well as parks dedication requirements totaling about $17 million.
Council Zoning Chairman Ikaika Anderson said he will recommend that colleagues pass the new resolution.
“We are still requiring the same number of affordable units to be delivered as the developer originally promised,” he said. “The affordable housing guidelines and the number of affordable units will remain the same.”
