A $200 million high-rise condominium project that would create 635 affordable homes at the former Honolulu Advertiser property in Kakaako was unanimously approved Wednesday by the Hawaii Community Development Authority.
The 46-story tower proposed at 801 South St., makai of the historic News Building, will provide a mix of studio, one- and two-bedroom units at prices ranging from $250,000 to $550,000. Construction and sales are expected to begin in mid-2013 and be finished in 2015.
If demand is strong, the company plans to develop a second high-rise of 400 affordable-housing units on the property adjacent to the tower now being proposed. The overall cost of the two towers would be $400 million.
The initial tower will create jobs for 350 construction workers and 50 companies that will design, supply and manufacture materials for the project.
Developer Marshall Hung, who heads Honolulu-based Downtown Capital LLC, said a lottery will be held for eligible buyers for the first tower, and he’s optimistic that it will sell out quickly.
"Hawaii Five-0," which has been using the News Building for production, could move into the state’s film studio at Diamond Head for next season. Last month’s cancellation of the ABC drama "Last Resort," which had been using the film studio, leaves a vacancy at the facility.
Hung said HCDA’s unanimous vote was recognition of a major community need.
"The project is designed to meet the critical shortage of affordable housing in the urban core of Honolulu," he said. "With our design and construction team sharing this affordable housing goal, this community need can be fulfilled."
Downtown Capital said the development will be the first high-rise condo project in Kakaako in which all 635 units are designated "workforce housing," which caters to households earning 140 percent of median income and below. In 2012 this includes a range of household income from $82,700 for a single person to $115,780 for a family of four. This income range generally would allow residents to purchase or rent urban condominiums with valuations from $200,000 to $550,000. During the past 20 years, only 35 percent of all condominium units in urban Honolulu were priced for workforce households.
"With the average price of a single family home on Oahu at $600,000 and climbing fast, coupled with a stagnant household median income, we believe our project will give local residents priced out of the current market an opportunity to purchase or rent a high-quality condominium in urban Honolulu they can afford," Hung said.
Oahu condos’ median prices for the first 10 months of this year have ranged from $297,000 through $325,000, according to the Honolulu Board of Realtors.
The units will include split air-conditioning systems, as well as energy-efficient appliances that will reduce the cost of operations and maintenance. The developer expects maintenance fees to range between $200 and $300 a month, lower than other downtown condominium projects.
Colbert Matsumoto, a principal with South Street Towers LLC, a member of Downtown Capital LLC, said the project is feasible because of rules established in 2011 by the Abercrombie administration to facilitate the construction of workforce housing in Kakaako.
"Our project is fully aligned with the state’s vision to revitalize Kakaako by making it more accessible to middle-income buyers who previously lacked enough affordable housing inventory in that district," Matsumoto said. "People who work in the area at hospitals, car dealerships, government entities and retail businesses will now be able to afford to buy a home within walking distance to their workplace."
The old News Building, which opened in 1929, is expected to be preserved for office use and bracketed with the two new condo towers.
"Hawaii Five-0" was about to premiere its third season when Hung purchased the building in August for $22 million from Gannett Co., according to sales records. The show has continued to shoot episodes and has a May 2013 eviction deadline. But with the Hawaii-based submarine drama "Last Resort" shooting its last few episodes, "Five-0" now has an alternative production site.
"Five-0" is "very interested" in the Diamond Head facility, which includes a 16,500-square-foot soundstage, said Donne Dawson, state film commissioner.
"They are interested in the studio and would definitely be looking at the space situation and what ancillary space would be necessary," Dawson said.
The state studio looms as the only option for "Five-0," Dawson said.
"We have looked at a lot of things together and there is nothing out there," she said. "We don’t have another facility that has production capability and soundstage capability that would not require a major retrofit first. The fact that the Hawaii film studio may be coming available is the most realistic option at this point."
"Five-0" couldn’t use the state film studio when it began shooting the rebooted series in July 2010 because ABC planned to use it for a Hawaii-based series called "Off the Map."
That series failed as did the Hawaii-based ABC series that followed, "The River."
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Star-Advertiser reporter Mike Gordon contributed to this story.
