A new company has taken over responsibility for redeveloping Kuhio Park Terrace public housing complex in Kalihi with greater assurances that residents will be able to return to a renovated unit.

The Michaels Organization stepped down amid complaints from residents about the way their relocation was being handled.

But the state Hawaii Public Housing Authority told the Honolulu Star-Advertiser that the move had nothing to do with residents’ concerns.

HPHA began relocating families in January, with Michaels’ help, ahead of the first phase of renovations to modernize outdated buildings and outdoor areas.

Earlier this month, residents were notified that Highridge Costa Development Co. would take over for Michaels. Hakim Ouansafi, HPHA’s executive director, said the change was initiated by Michaels and had nothing to do with its performance. “This is not a termination; this is actually a really strategic business decision,” Ouansafi told the Star-Advertiser.

Michaels was on track to fund the redevelopment until a major investor dropped out and “decided to seek something else,” Ouansafi said.

HPHA remains committed to continuing the renovations on schedule.

“This thing has to happen now, as we have promised the community,” Ouansafi said.

Michaels has a working relationship with Highridge and recommended the company.

“Highridge had a lender investor ready, so they (Michaels) decided to forgo their profits,” Ouansafi said. “They really looked at what’s in the best interest for the development of the neighborhood.”

Michaels reiterated the mutual agreement to move forward with a handoff of the project in an email to HPHA.

“This transfer is in the best interest of the project’s success and the well being of the current residents,” wrote Michaels.

Michaels did not immediately respond to a request for comment from the Star-Advertiser.

The first phase would renovate old units and add new ones, for a total of 304 mixed-income, affordable apartments estimated at a total cost of $212 million at Kuhio Park.

Ouansafi hopes to have Phase 1 completed and ready for both current and new tenants to move in by late 2026. Some families are part of the first phase of redevelopment but haven’t found a comparable place to relocate, like Lehua Willets and her three daughters.

“A lot of things are not lined up,” she told the Star-Advertiser over the phone. “A lot of us don’t have a secure place and are still having difficulty with Section 8,” Willets said, referring to the federal housing voucher program for low-income tenants.

Willets has spent months searching for a new apartment that accepts Section 8 vouchers that also would keep her family near Kalihi, close to their school and doctors.

HPHA acknowledges that many families are unhappy with the move and has promised, in writing, that residents in “good standing” on their lease agreements can move back into a renovated unit after redevelopment.

After rumors that Highridge Costa’s takeover would break the promise of returning, Ouansafi issued “certificates” assuring tenants they’d still get a renovated unit.

To some residents, the certificates represent a more formal and concrete assurance than the promises made in previous letters and meetings by HPHA.

Resident June Talia confirmed that tenants received certificates.

“The first phase of people were given the certificates. … saying that they have the right to return,” Talia told the Star-Advertiser.

Willets called the assurance provided by the certificates “one of the big things we’ve wanted,” Willets said.

Residents had contacted state legislators like Rep. Tina Grandinetti, (D,Kahala-­Kaimuki-Kapahulu), who led the introduction of House Bill 1325 to protect renters from becoming displaced.

HB 1325 would require developers working on federally funded affordable housing projects under the Hawaii Housing Finance and Development Corporation to support tenants financially from being displaced or evicted.

Tenants would get the first chance to move into a comparable unit in the new project or be able to access a fund to help with their relocation costs.

Developers also would be required to create a system to track dislocated tenants and stay in contact with them.

HB 1235 also would establish penalties for developers who do not comply, like halting relocation and even deeming the developer ineligible to participate in any corporation programs for no less than a year.

Grandinetti realized the need for more tenant protection when working with families who were evicted during the redevelopment of Kapiolani Village Apartments in 2023.

“We need a standard in place to make sure their rights are protected and their needs are met,” Grandinetti said.

“We say we’re doing this to create housing for local people, but if we’re displacing local people in the process, then we have to think twice about how we’re going about the project,” Grandinetti said.

Grandinetti supports HPHA for redeveloping housing projects.

She spoke on the house floor in support of HB 1325 and said, “I want to acknowledge and commend this body for making really significant efforts to produce more affordable housing, increase density, speed up housing production.”

Grandinetti said that the residents at Kuhio Park Terrace have been active in reminding legislators what’s important.

“They’ve shown up three times so far to testify and remind us that when were talking about housing production were not just talking about units, were talking about people and communities,” she said during the floor speech.

“This bill is a baseline that we can build from,” she told the Star-Advertiser.