Ceremony kicks off new tower in Kakaako

Karli Anabe and Gerald Cruz are roommates. Kekoa Akana and Miyuki Tanaka are engaged. In two years the four Honolulu residents, along with a few hundred others, expect to be first-time homeowners in a Kakaako condominium tower developed under a state affordable-housing program.

A blessing and groundbreaking ceremony for the tower, Ke Kilohana, was held Tuesday by project developer Howard Hughes Corp.

Part of the ceremony was held in an empty former Pacific Home furniture showroom that about two years from now will be part of a Longs Drugs store at the bottom of the 424-unit tower at the corner of Ward Avenue and Halekauwila Street.

Hughes Corp. officials told many Ke Kilohana unit buyers who were among an estimated 200 guests at the ceremony that they are joining an emerging Ward Village neighborhood that is going to have its first residential tower open next month as part of a master plan that calls for up to 22 towers with 4,300 homes and 1 million square feet of retail space.

“Where you are all sitting and standing here today is going to be perhaps the pharmacy section of Longs Drugs, a place you can come down and get a loaf of bread, a gallon of milk, something that your child needs for his school the next day,” said Todd Apo, vice president of community development in Hawaii for Texas-based Hughes Corp. “It can be life-changing. Ke Kilohana is really exciting for us.”

Anabe and Cruz said they bought a condo in the planned tower specifically for the walkability aspect. They both work nearby — she at the city’s Frank F. Fasi Municipal Building, he at Macy’s in Ala Moana Center.

Presently, Anabe, 34, and Cruz, 36, are roommates in a four-bedroom house in Aiea. So being able to walk to work and to entertainment venues and stores led the two friends to decide to co-own a home, a two-bedroom unit at Ke Kilohana that cost $483,000.

Pearl City residents Akana and Tanaka saw Ke Kilohana as a good opportunity to get their first home before getting married and starting a family.

“It’s a good starter home,” said Tanaka, 26. “It’s the right timing for us.”

The couple, now living with Akana’s parents, plan to get married in about two years. And like Anabe and Cruz, they had to pool their resources to buy the condo, a one-bedroom unit that cost $408,000. “We really couldn’t afford our own place,” said Akana, 28.

Ke Kilohana is being developed under the rules of the Hawaii Community Development Authority, a state agency that regulates development in Kakaako.

HCDA requires that 20 percent of all high-rise homes developed in the area be affordable to a “gap group” of residents who often can’t afford market-priced homes but don’t qualify for other affordable-housing programs tailored to median- and low-income households.

Of the tower’s 424 units, 375 are reserved for gap-group buyers who must be local residents, can’t already own a home and must meet other requirements.

Prices for the affordable Ke Kilohana units, which range from 461 to 988 square feet of living space and one to three bedrooms, run from $323,475 to $560,774. Buyers can earn no more than 140 percent of Honolulu’s median income, a level that equates to $86,150 for a single person, $98,450 for a couple or $123,050 for a family of four.

Mayor Kirk Caldwell called Ke Kilohana an opportunity for homeownership for households earning from the median income to 140 percent of it.

“Right here in the heart of our city is an incredible project where folks can buy a reserved unit that is affordable,” he said at the ceremony.

“There is so much more demand for this type of product,” added Aedward Los Banos, HCDA’s interim executive director.

Hughes Corp. received 956 applications from qualified households for Ke Kilohana, and buyers were selected via a lottery in April.

The development firm has had a permit to build the tower since late 2013, but last year sought permission to instead create the tower with rental apartments that would maintain affordable rents for 15 years. Hughes Corp. argued that the rental option was better because it would produce homes for households with lower incomes, but HCDA board members said providing homeownership was more important, especially since the developer could convert a rental tower into a market-priced condo for sale after 15 years.

Following contentious hearings on the request, HCDA’s board held Hughes Corp. to delivering condos and put a new condition on Ke Kilohana so that construction had to begin before the developer could let residents occupy the first luxury tower at Ward Village. That luxury tower, which is called Waiea and has a $3.6 million average unit price, is slated to be finished next month.

Hughes Corp. said it will soon put up construction fencing around the Ke Kilohana site and prepare three empty buildings on the property for demolition. Besides Pacific Home, other tenants that moved out of the buildings over the last six months include a distribution company and California Beach Rock N’ Sushi.

Two other condo towers are under construction at Ward Village: Anaha, where unit prices average $1.2 million, and Ae‘o, where unit prices average $1 million. Construction on Anaha is on pace for completion next summer. Ae‘o is slated to be done in 2018.

Ke Kilohana will take about two years to build.