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CITY NEGOTIATING $142 MILLION LEASEHOLD SALE

 

(Tues., July 10, 2012)—Mayor Peter Carlisle today announced that the City and the Honolulu Affordable Housing Partners LLC (HAHP) have entered into the formal contract negotiation phase of the Honolulu Affordable Housing Preservation Initiative. 

 

            The negotiations are focused on completing the Purchase and Sale Agreement that will stipulate the terms and conditions of the long-term leasehold sale of the City’s 12 rental housing complexes to HAHP, which will include a one-time payment of $142 million to the City. The Purchase and Sale Agreement will also require HAHP to invest an additional $42 million to renovate the rental housing complexes within the first two years of the lease. 

 

            “Once completed, these agreements will form the foundation of a new public-private collaboration that will provide a substantial payment to the City and much-needed major capital improvements and investments to the complexes while preserving affordability through the term of the leases,” said Mayor Carlisle. “Through this leasehold sale, the City will be able to retire the outstanding debt associated with the City’s past housing program and, by doing so, relieve Oahu taxpayers from having to pay approximately $8.5 million in annual debt service. Portions of the sale proceeds will also be returned to the City’s Community Development Block Grant program.”

 

            The Carlisle administration and HAHP are also negotiating the terms of the property leases that will govern the use and operations of the individual apartment complexes and include requirements to preserve affordability and make the necessary investments to maintain the properties throughout the term of the 65-year leases.

 

            Notices informing residents of the status of the leasehold sale were distributed and posted yesterday at all 12 housing complexes. The City will continue to update residents as the sale progresses.

 

            The formal negotiation period began after a site visit by a City delegation to the base of corporate operations of Highland Property Development, managing member of Honolulu Affordable Housing Partners, in Arcadia, California. The City delegation met with Highland’s staff and management, gained valuable insight into Highland’s management and operations, and also visited two Highland rental housing projects to inspect conditions and interview residents.

 

            Upon conclusion of the negotiations, the City will submit the Purchase and Sale Agreement and the leases for the 12 rental housing complexes to the Honolulu City Council for review and approval. The Carlisle administration anticipates that negotiations will be concluded in early August 2012.

 

 

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Media contact: Louise Kim McCoy, Mayor’s Office, 768-7798