Committees clear 99‑year leasehold amendments tied to Kaka'ako demonstration project; developers, HCDA discuss parking and state equity

Senate Bill 2,061, which clarifies the 99‑year leasehold program (Act 97) and would require at least 60% of residential condominium units in urban redevelopment sites be set aside for owner‑occupancy, was recommended for passage with amendments and moved on to the Consumer Protection Committee and other follow‑up steps.

HCDA testified it supports amendments that preserve owner‑occupant requirements while removing constraints that could inhibit sales. Kolaila LLC representatives, including project manager Henry Chang and attorney William Yuan, testified in support and said the amendments are essential to keep a Kaka'ako demonstration project both affordable and financially feasible.

Developers and HCDA described key project elements on the record: the site at Ward and Kapiolani (the Jack in the Box/Gallaher office corner in Kaka'ako), an intended 99‑year leasehold for‑sale product with roughly 60% of units priced for households at or below 140% area median income and 40% market units, and an estimated project size of about 370 units. HCDA and the developer explained parking will be “unbundled” from units so buyers may buy or lease stalls separately, which the presenters say keeps unit prices lower. HCDA described a finance plan that includes $15,000,000 in state equity applied to the capital stack for the parking garage and commercial space rather than a direct construction payment; the parking and commercial revenues are intended to seed future projects.

Committee members pressed presenters on parking costs and affordability. HCDA cited per‑stall estimates and later said the parking structure cost was roughly $40,000,000; HCDA representatives emphasized that additional public financing tools could be considered to lower unit costs but did not commit to specific changes on the record.

The chair asked that AARP’s comments be included in the committee report and flagged buyback pricing and penalty language for review by the Consumer Protection Committee; the committees adopted the chair’s recommendation to pass SB 2,061 with amendments.

Next steps: SB 2,061 proceeds with amendments and with requests for consumer protection review of buyback pricing and penalties; HCDA and developers will continue capital‑stack discussions with legislators to explore ways to reduce buyer costs.