The Honolulu City Council voted unanimously Tuesday to allow construction of a 43-story, $619 million tower complex, which would house 1,005 moderately priced condominium units off Kapiolani Boulevard in Moiliili.

At the same meeting, the Council also voted unanimously to approve development of a pilot program to control homeless encampments near public schools and were like-minded in encouraging the city administration, led by Mayor Rick Blangiardi, to work with the Waikiki and local surfing communities to find a new location for city-owned surfboard racks previously destroyed in two arson incidents outside a police substation.

With approval, Honolulu-­based Kobayashi Group LLC will begin development of Kuilei Place, a mixed-use affordable and market-rate housing and commercial project on a 3.15-acre parcel currently occupied by 1960s-era walk-up rentals at 2599 Kapiolani Blvd., just mauka of Date Street. As approved, the project will receive more than $12.3 million in exemptions and waivers for permitting, plan review, fire, storm drain and public works fees, down from the developer’s previously requested $40 million in waived city fees. The project also will see the Honolulu Board of Water Supply defer more than $6.06 million in water and wastewater fees, to be paid back to the city if the project is completed.

Kobayashi Group proposes to make 603 of the project’s 1,005 units, 0r 60%, affordable to households with moderate and high-­moderate incomes. Maximum sale prices for these units could range from $371,800 for one-bedroom units to $813,300 for three- bedroom units. Income limits for qualified buyers — who must be taxpaying Hawaii residents who agree to live in these units as a primary residence for 10 years and would be chosen via a lottery — will range from 80% to 140% of the median household income on Oahu. At the low end, this equates to $73,200 for a single person and $104,480 for a family of four. At the high end, it equates to $128,100 for a single person and $182,840 for a family of four. The 402 market-priced units would range from $705,465 to $1.15 million.

Construction for Kuilei Place is expected to begin late this year. In the meantime, the developer has said it will offer two months free rent to current tenants and help to relocate those residents as well.

Prior to its approval, about 25 public speakers testified both for and against Kuilei Place. Those in favor included members of the construction trade associations, workers of past Kobayashi building projects, real estate agents and a vice president of a local bank.

“There is a need for affordable housing,” Realtor Lee Wang told the Council during public testimony. He added the project will only benefit the Moiliili area. “Kuilei Place is a positive change.”

Also in full support of the project was Mike Tasaka, who said it would help stem “migration of our youth to the mainland” due to Hawaii’s high cost of living.

But others like Christine Otto Zaa wished to see the project halted because its presence would destroy a “truly affordable rental neighborhood which we are quickly losing around the island.”

“The project will not provide housing for the vulnerable population that lives there,” Zaa added.

Similarly, Michelle Matson said the project’s sheer scale and height “flies in the face of established zoning and permitting regulations and sets a dangerous and chilling precedent for more to follow with its unbridled encroachment” into older, established neighborhoods like Moiliili as well as Kaimuki, Manoa and Kahala.

Still, the Council — including Council member Calvin Say who represents Moiliili — said the project fills the need for more affordable housing.

“At the end of the day and to some degree I feel good,” said Say, prior to the vote. “At least with this measure I’m supporting it will be providing 600-plus units to address the 22,000 (unit) housing shortage we have in the state of Hawaii.”

On a separate agenda item, the Council — following introduction of a resolution by Council member Augie Tulba — approved a planned pilot program which might tentatively cover three Council districts and attendant public school sites, under a yet-to-be-­determined budget.

The action, as approved, would see the Honolulu Police Department and the city’s Department of Facility Maintenance step up “enforcement of the sit-lie and stored properties ordinances on all city sidewalks and public properties located near preschools, kindergartens, or elementary, intermediate, middle, secondary, and high schools in order to ensure the full, free, and unobstructed passage of the students and all other pedestrians to those schools,” the resolution reads.

Prior to approval, Council Chair Tommy Waters questioned city staff about the status of the city’s housing plan to curb homelessness and use of a pot of $170 million in city funds earmarked to pay for such projects. Waters noted use of those monies are set to expire at the end of the current fiscal year, June 30.

“In the last two years the Council has appropriated money for not only affordable housing but to build permanent housing for homeless people,” Waters said. “Is there a plan to use any of the money that the Council appropriated to build permanent housing for homeless people so that they’re not continually moved through enforcement or sweeps?”

In response, Anton Krucky, director of the city’s Department of Community Services, said the $170 million in question “comes up often in our affordable housing committee and where we can place it.”

Krucky added his department has plans in place to build permanent housing to house the homeless as well as plans to construct transitional housing.

Meanwhile, Waters introduced, and the Council supported, a resolution to see the old Kuhio Beach Surfboard Racks — destroyed by two separate arson incidents in 2020 and 2021 before they were finally removed last summer — relocated to another Waikiki location. Under Waters’ resolution, the Council encourages the city administration to work with the community in Waikiki and explore creating a public-private partnership with “proximate landowners or hotels” to site new city-owned surf racks.