The company that handles police-initiated tows for the city was evicted Friday from its Kailua storage lot, the latest in a string of developments indicating the company is having financial difficulties.
But Albert Ternora Jr., general manager of Leeward Auto Wreckers, said he already has found a smaller, less costly replacement lot in Kaneohe that will be available as soon as Monday.
Switching to that lot and other changes in the works are designed to make the overall operation more efficient and financially healthier while continuing to provide low-cost service to motorists, Ternora said.
Leeward Auto was kicked off the Kailua property after failing to pay roughly $66,000 in delinquent rent, dating to November, according to John King, whose company, Kapaa III LLC, owns the Kailua lot where Leeward Auto stored towed vehicles.
The eviction came two weeks after a judge decided to issue an order in another case mandating that the company vacate the Kapolei lot where it has its main offices and also stores towed vehicles, according to online court records.
Alpha BT LLC, owner of the Kapolei lot, had said in court documents in January that Leeward Auto owed nearly $56,000 in delinquent rent, dating to March.
But Ternora told the Star-Advertiser on Friday that the company has worked out an agreement with the landlord of the Kapolei parcel to remain there, complementing a second adjacent lot Leeward Auto uses on Kuhela Street.
An attorney for the property owner could not be reached for comment Friday. But Jesse Broder Van Dyke, a city spokesman, said the city has verified that Leeward Auto has a payment plan with the Kapolei landlord.
The Kapolei and Kailua lots were among the five on Oahu that Leeward Auto listed in its bid documents to win the city contract, which took effect Nov. 1, giving the company exclusive rights to all police-ordered tows on the island.
Since then the company has not been using a third lot in Pearl City. A representative for the property owners last month told the Star-Advertiser that Leeward Auto was behind on rent there as well but that the landlord was working with the company to resolve the problem.
Ternora said his company is close to completing cleanup on the Pearl City lot that must be done before the property can be used for vehicle storage.
Ternora said the towing volume on the Windward side was lower than he anticipated, which made the Kailua lot unaffordable.
But he said his company intends to pay all of the back rent owed Kapaa LLC.
"We always fulfill our obligations," Ternora said. "I’m not running away from that situation. We had to stop the bleeding and move forward."
King said his calls to Leeward Auto to discuss the back rent were not returned, so he ordered the company to vacate the property by Friday.
"It’s disgusting," he said, adding that he believes the city should cancel the contract. "They’re making a sham of the requirements of this agreement," he said.
Asked whether the city had concerns about the company’s financial problems, Broder Van Dyke said, "The city will honor the contract as long as conditions are met."
The contract calls for Leeward Auto to maintain minimum storage capacity of 1,500 vehicles.
Broder Van Dyke said the company has adequate capacity, but the city will continue to monitor the situation.
Ternora acknowledged making some mistakes in the first few months of the contract, but the changes should put the company in a better position, particularly as the towing volume has picked up.
"That’s why I’m trying to get everything as efficient as possible," he said.
Leeward Auto got off to a rocky start for the city, charging motorists higher hookup and mileage rates than what the company agreed to in its contract documents.
Once the Star-Advertiser exposed the overcharging, the city ordered Leeward Auto to refund the excess payments.
