A newly completed North Shore recording studio with about $125,000 worth of equipment was destroyed by water damage yesterday after an early morning fire consumed the top floor of the house in which it was located, displacing six adults.

After three years and three contractors, the studio was about to open.

"If we weren’t so committed to helping out kids in the community, this would be a breaking point," said Michael Kratzke, co-owner of the recording studio and of Conscious Groove Records along with Juju Bodden. "Fire can’t stop us."

Part of Conscious Groove’s mission is to help underprivileged children, and Kratzke and Bodden have brought kids from Kanoa Park in Kalihi to the studio to introduce them to music engineering.

The 1:06 a.m. fire gutted the second story of the house at 58-284-C Kamehameha Highway, causing an estimated $350,000 in damage, a fire official said. The cause remains under investigation.

Two of the three women who rented rooms upstairs, along with the two men who lived downstairs next to the studio, were home at the time.

They all escaped safely, including Velzy the cat.

Bodden, who is from Los Angeles, had already started to produce music and was working with two local hip-hop groups. He said they had no insurance for the recording equipment, so he plans to hold a benefit to help out and to provide assistance to his roommates for their losses.

"We’re not going to let it stop us," said Bodden, whose stage name is Juju Beat and who lived in the room next to the studio. "We’ve been through more trials and tribulations to let this stop us."

Bodden said they are committed to producing positive music with local artists — no gangster rap or vulgarity.

"It’s kind of sad to see it all burn down," Kratzke said.

Alexandra Cardenas, 25, who was barefoot and smudged with black ash yesterday afternoon, was the only one awake at the time of the fire.

But it wasn’t until Ashley Flemino, 25, who moved in that night, yelled "fire" that she knew what was happening.

They all hail Flemino as their hero for alerting them.

"We heard loud cracking noises outside my room," she said. "I opened my door, and Camilla’s room was like a fireball."

She said that roommate was out at a club, and believes the fire started in her room.

Cardenas said she lost everything — cell phone, computer, surfboards, three guitars, ukulele, clothes and new shoes — but managed to salvage three "sunrise" shells and her passport.

Cardenas, a surfer who moved in a month ago, loved the view of the Velzyland surf spot across the highway.

A next-door neighbor said he heard a female voice yelling "help" and thought something else was happening, then he heard "fire."

He woke his son, 17, who acted quickly, got his two brothers and their golden retriever out and moved their two vehicles away from the house.

Artist, songwriter and musician Recky Cruz, who also lived downstairs, said he tried to rescue their cat, but the heat burned live wires, which fell in flames in front of him.

Some of his paintings were damaged by fire.

But Cruz remains upbeat.

"I look at it as a positive for us," he said. "It keeps us motivated because it’s a new beginning."

Kratzke said his father, who owns the house, is committed to rebuilding.

Performers who would like to participate in a benefit event to assist the studio and the residents are asked to contact Bodden at 323-719-5858.