kakaako

Unfinished Hawaii condo tower up for auction

Moana Vista, a half-completed high-rise condominium tower in Kakaako, is scheduled to go on the auction block in two weeks after the general contractor foreclosed on the developer for not paying a $29.5 million construction tab.

Owner Fred Chan lost $65 million of his own money on the $140 million Kapiolani Boulevard project, which rose from the ground just in time to miss the last real estate boom.

The developer, Chan’s KC Rainbow II, is canceling some 175 sales reservations. The prospective buyers, who had put 10 percent down to reserve units ranging in price from $350,000 to $600,000, will start receiving refunds this week, said Allen Leong, director of operations for KC Rainbow Development.

Leong acknowledged that Chan is walking away from Moana Vista.

“We hope that somebody will pick it up and finish the project,” he said.

KC Rainbow II was sued by its general contractor, Hawaiian Dredging and Construction Co., first in a mechanic’s lien filed in December and then in April for foreclosure.

The foreclosure was granted on Aug. 12, and Sanford Murata was named commissioner.

Murata has advertised the Sept. 25 auction for three weeks and walk-throughs of the property were scheduled for Wednesday and again on Sept. 16.

The sale of the glass-walled tower will begin at noon Sept. 25 on the steps of the 1st Circuit Court building. There is no upset price, Murata said.

“It’s hard to determine what the price would be,” Murata said. “We don’t know what a buyer would do with the property — unless you know what that buyer’s plans are it’s difficult to guess what the value or offering price might be.”

The project is also on the market, although without a price. It could possibly sell before Sept. 25, precluding the auction. Unidentified developers from San Diego had been interested in purchasing the project but were reportedly unable to make a deal with Chan.

Construction stopped last Dec. 19 at the 27th floor of the building, barely three months after the world financial crisis erupted and most commercial financing evaporated. The building is designed to have 46 floors and 492 two-bedroom units.

The lender for the construction loan, HSBC Bank of New York, decided not to fund the loan and KC Rainbow II tried unsuccessfully to find new financing or a partner or to sell the project to another developer.

“We’ve been very hopeful for a long period of time that the project could restart and we’re hopeful at this point that (the auction) could lead to that,” said Hawaiian Dredging President Bill Wilson.

Chan was also the developer for the Moana Pacific condominium a few blocks down Kapiolani Boulevard. That project had people standing in line to buy units in the twin oval towers back in 2004, when Honolulu’s last high-rise boom was in full force.

But Moana Vista, which is located between Ward Avenue and Kamakee Street, didn’t start sales until late 2006, when the market was starting to cool and several neighboring condo towers were finished or close to completion. Unlike some of the other residential towers built recently, which attracted buyers from Asia and the Mainland, most of the buyers who reserved units at Moana Vista were local, Leong said.

Chan and his wife, Annie, also put the former Kaiser Estate in Portlock on the market for $80 million on Dec. 9, 10 days before Hawaiian Dredging pulled the plug on Moana Vista. The couple,  University of Hawaii graduates who made their high-tech fortune in the San Francisco Bay Area, bought the one-time home of industrialist Henry Kaiser on Portlock Road for $9.6 million nine years ago from Kamehameha Schools.

The listing, which is being marketed by Mary Worrall Associates Sotheby’s International Realty, was still active this week.

Hawaiian Dredging’s claim was not the only claim against KC Rainbow II, but it was the largest.

Subcontractors have claimed in other mechanic’s liens that they are owed nearly $800,000. Architects Hawaii Ltd., which also designed Moana Pacific, filed an application for a mechanic’s lien on Feb. 12, claiming the firm was owed $683,876 in fees plus interest.

The structural engineering firm Lincolne Scott also filed a mechanic’s lien and says it is owed $69,126 in unpaid bills.

Keko Investments claimed in its filing that it was owed $9,844 plus interest and fees. And Kalu Glass Co. Inc. filed an application for a mechanic’s lien on Aug. 19, but the amount owed was not available.

Source: PBN

kakaako

State approves Kakaako plan

The Hawaii Community Development Authority gave the developer clearance yesterday to proceed with its master plan for 29 acres, officially called “Kaiaulu ‘O Kakaako.”

Kamehameha will begin seeking bids to build a work-force, or affordable, housing project at the corner of Halekauwila and South streets, the site of a parking lot, to satisfy state requirements.

“We’re very pleased,” said Kamehameha spokeswoman Ann Botticelli. “We’re pleased at the amount of support we’ve seen from our neighbors, members of the community and the Hawaiian community. We’re pleased they like the vision as much as we do.”

Kamehameha is very close to signing Safeway for the school’s former CompUSA space along Ala Moana, Botticelli said.

Besides a 25,000-square-foot plaza along Auahi Street, Kamehameha plans to add up to 2,750 more residences in high-rises, townhomes and lofts.

At the center of it all, Kamehameha is also planning a 400,000-square-foot Asia Pacific Research Center to house biotech companies and labs next to the medical school.

Kamehameha will issue a request for proposals from developers for a residential tower at the corner of Halekauwila and South streets geared toward work-force housing.

Developers are required by the state to set aside at least 20 percent of projects for so-called reserved housing, but Kamehameha also offered to set aside an additional one-tenth of that percentage for lower-income residents. Kamehameha Schools has won state approval of its master plan for Kakaako, a major step toward making its 15-year vision of transforming the neighborhood into reality.

HCDA’s 10 present board members voted unanimously yesterday to approve the master plan, following a morning of positive testimony from members of the community, including architects, scientists and the cultural descendants of iwi potentially found within the 29 acres.

Anthony Ching, HCDA’s executive director, said there was, by and large, supportive testimony throughout the public comment period that extended from March to June.

A few members of the Community Planning Advisory Council did, however, submit written testimony opposing the project.

Bob Loy from Outdoor Circle said he opposed the project because it proposes high-rises along Ala Moana, which are counter to CPAC’s guiding principles of preserving open view planes.

“Buildings built up to 400 feet high along Ala Moana will significantly block the present Mauka-Makai view plane — regardless of their physical orientation,” said Loy.

Also, the city’s primary urban development plan discourages a high-rise “picket fence” between downtown and Waikiki.

Friends of Kewalo Basin, which protested the Alexander & Baldwin project a few years ago, also opposed the plan.

Paulette Kaleikini, a native Hawaiian descendant of burials in Kakaako, lauded Kamehameha for speaking with her well in advance of the project.

She said Kamehameha took a pro-active approach in speaking with burial descendants, and in agreeing to an archaeological inventory survey, well before starting construction.

Kamehameha will need to consult continually with the state Historic Preservation Division and Oahu Island Burial Council while implementing its master plan.

HCDA, in January, also approved a master plan by General Growth Properties proposing up to 4,000 more residences including mid- and high-rises on 60 acres in Kakaako over 15 years.

Before starting construction, Kamehameha still will need to apply for a city building permit, as well as a development permit from HCDA, according to Ching.

Source: SB