A local developer aiming to build a 43-story, $619 million residential tower complex in Moiliili, which would house 1,005 moderately priced condominiums and be taller than any other building in its immediate vicinity, saw its project advance this week.
The Honolulu City Council’s Zoning Committee on Tuesday voted 7-0 — with Council member Augie Tulba absent and Andria Tupola, who was in attendance but left prior to the vote — to adopt a resolution recommending Honolulu-based Kobayashi Group LLC’s development of Kuilei Place, a mixed-use affordable and market-rate housing and commercial project on a 3.15-acre parcel at 2599 Kapiolani Blvd., just mauka of Date Street.
With the panel’s recommendation, the project will see 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. The full City Council is expected to hold a final review and approval of the project Jan. 25.
This week’s zoning panel approval mirrors a similar approval last October when the Hawaii Housing Finance and Development Corp. unanimously backed the project being developed by Kobayashi and its affiliate, BlackSand Capital. The plan for Kuilei Place includes a main 400-foot tower, which would exceed a 150-foot zoning height limit for the property, and a 12-story residential building fronting Kapiolani Boulevard, which will shield a 13-story parking structure. The developer noted that nearby buildings include the 350-foot Regency Tower and the 375-foot Iolani Court Plaza, makai on Date Street.
Meanwhile, Kuilei Place is being proposed under a state law which can allow exemptions to zoning height and density limits for projects that provide over 50% of housing units at prices that are affordable to moderate-income households. HHFDC, which helps facilitate affordable housing production, can certify that a project meets minimum qualifications under this law, known as 201-H.
Kobayashi Group proposes to make 603 of the project’s 1,005 units, or 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.
Envisioned maximum prices for the 402 market-priced units range from $705,465 to $1.15 million.
On Tuesday, Alana Kobayashi Pakkala, chief operating officer of Kobayashi Group, told the committee the goal of this project was to deliver homes with high-quality features for local residents.
“Kuilei Place is really focused on our workforce community, which is defined as 80% to 140% of area median income,” Pakkala said, adding that the project could support an average, dual-income family of three, including a child, with one spouse working as a Honolulu Fire Department firefighter while the other spouse worked as a state Department of Education teacher. “The real issue is the lack of affordable housing that is actually accessible to the incomes of our workforce community to purchase, to become a homeowner … it’s a pretty sad data point that only 57.4% of our Honolulu households are homeowners. That is the lowest in the counties of our state, and it’s 47th out of 50 of the United States.”
Aside from affordability, Pakkala noted the project will give $10.3 million in community benefits including $6.9 million in complete street improvements along Kapiolani Boulevard; $500,000 to pay for six new electric vehicle charging stations for public use; and a $2.9 million residential grey-water system which the developer touts as the first-ever system of its kind for this type of high-rise, and will flush toilets inside the completed building.
“It’s a community benefit,” she added of the grey-water system. “We really hope it goes from a pilot to really becoming the future, where we can create more and more development with less impact on our water infrastructure. … This system proposed is estimated to save 11 million gallons of potable water a year.”
Initially, Kobayashi Group sought to qualify Kuilei Place under the 201-H law through the city’s Department of Planning and Permitting. However, DPP rejected that proposal in 2021 because DPP requirements include a buyer income and home price limit tied to a 120% median household income level along with a right to buy back homes from an initial owner with a share of appreciation if the intial owner sells within 30 years.
According to Pakkala, Kobayashi Group could have met DPP’s 120% median income limit by including studios in the project but preferred to provide units with one to three bedrooms. Also, Kobayashi originally sought to make 165 of the affordable units rental apartments, contingent on obtaining $28.7 million in low-interest rental housing loan financing from HHFDC. However, according to the developer, it will no longer pursue rentals as an option for this condo project.
Currently, the monthly rent for the existing apartments, which date to the 1960s, range from $1,495 for one-bedroom units to $1,950 for three-bedroom units, including utilities and other fees. According to Pakkala, if the project is approved her company will provide existing tenants with two months of free rent when the need to vacate approaches.
Prior to the vote, Council member Tyler Dos Santos Tam asked how the company was handling relocation of the existing rental tenants.
“We have 124 rental units on the site currently, and we’ve been in communication with all of our renters and we have committed to an on-site relocation coordinator four months prior and two months of free rent,” Pakkala said in response. “We are committed to helping them find a new location.”
Others like Council member Calvin Say approved of the affordable housing project. “I truly hope that this proposed project will work out,” Say added.
Members of the public — including those representing labor such as carpenters and construction workers — also approved of the project’s ability to create jobs as well as provide affordable housing to a state which sees many of its residents leave for the mainland due to Hawaii’s high cost of living.
“We need more workforce housing,” said Sterling Higa, during remote testimony. “Kuilei Place will add 600 units for this group.”
Spencer Lee, a vice president at Central Pacific Bank, testified he was in support of the project “because Honolulu’s urban core needs more affordable housing.”
Conversely, other speakers like Matthew Johnson objected to the project’s lack of community input and asked that its approval be postponed to allow for greater public comment. Likewise, Winston Welch, executive director of the Honolulu- based environmental group the Outdoor Circle, said the project was being fast-tracked to prevent “meaningful public participation.”
But others in the community made more formal objections against the Kobayashi project based on its size.
On Jan. 9, the McCully-Moiliili Neighborhood Board, a city-run entity representing about 30,000 residents and following its unanimous vote in December to oppose the project, sent a written request asking the City Council to deny Kuilei Place and its requested exemptions.
“The project’s large scale is of particular concern, significantly out of context with our neighborhood, which has a high potential to impact neighborhood infrastructure, including emergency response,” wrote Tim Streitz, the board’s chair. “Furthermore, the ‘affordable’ units are not adequately serving lower income residents and, therefore, do not merit the generous exemptions in exchange.”
If Kobayashi Group gains Council approval and other matters such as building permits without any delays, the company says construction could start near the end of this year and finish in mid-2026.
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Star-Advertiser staff writer Andrew Gomes contributed to this report.
