Two more developers are seeking height and other zoning variances for tall buildings in the Ala Moana area under Honolulu’s program aimed at encouraging development in areas along the rail line.

Developers of hotel-condo Hawaii Ocean Plaza and the residential ProsPac Tower are both seeking special permits to build up to 400 feet high in an area zoned for 250 feet. They’re also looking to nearly quadruple the allowed density. 

The added height, density and other waived zoning requirements are an option under the city’s interim planned development-transit permits, or IPD-T, offered to “creative, catalytic redevelopment projects” near planned rail stations.

Hawaii Ocean Plaza would have 175 hotel units and 216 residential units located between Makaloa Street and Kapiolani Boulevard.

City and County of Honolulu

The goal of offering increased density is to create more walkable and bikable communities and reducing the need for cars near rail stations, a policy dubbed “transit-oriented development.” The projects must also offer community benefits including affordable housing, employment opportunities, public open space or streetscape improvements.

The special permits require the City Council’s approval.

The council has until March to vote on the Hawaii Ocean Plaza proposal. The resolution to grant a special permit for ProsPac Tower hasn’t yet been scheduled for a hearing. 

The city’s Department of Planning and Permitting recommended the council approve both plans on the condition that the developers add more community benefits to their proposals.

As they’re currently envisioned, the number of affordable housing units and other benefits are not commensurate with the bonuses the developers are asking for, the department said.

“This extra density and height has immense value to the developer,” DPP Acting Director Kathy Sokugawa wrote in a review of Hawaii Ocean Plaza’s proposal. “Any project taking advantage of the IPD-T permit’s extensive bonus … should be required to contribute to affordable housing in return for the extra density and height.”

The council has awarded two special permits so far to California-based developer Manaolana AREP, paving the way for luxury hotels along Kapiolani Boulevard.

Affordable Housing And Public Transportation

Honolulu’s Land Use Ordinance is vague about what developers should offer in exchange for special transit-oriented development permits, but DPP’s recommendations say the latest proposed developments near Ala Moana increase the number of affordable units built onsite.

Bill 15, introduced in February would add an affordable housing requirement, but the measure has stalled in committee since May.

There’s a growing sense among local working-class residents of the Ala Moana area that the bustling neighborhood sandwiched between Kakaako and Waikiki doesn’t have space for them. 

ProsPac Tower, developed by ProsPac Holdings Group , would be a 41-story, 429-unit condominium tower with 78 affordable rental units. The affordable units would include six one-bedroom units and 72 “micro studio units” between 300 and 400 square feet, affordable to people earning 80 percent or less of area median income (an individual in Honolulu making $58,600 or less in 2017). The units would remain affordable for 30 years.

Pacific Business News describes ProsPac Holdings Group as a Honolulu-based company backed by Chinese investors.

ProsPac Tower would include 492 condominium units total and 78 affordable rental units, most of them less than 400-square-feet.

City and County of Honolulu

DPP recommended the developer add 19 units affordable to people who make at or below 120 percent of the area median income.

Hawaii Ocean Plaza developer Jay Fang offered to either pay the city a fee instead of including affordable units or build 44 units affordable to people making between 100 and 120 percent area median income. The proposed development would have 175 hotel units and 216 residential units. 

DPP recommended the council require the developer to build 58 affordable units instead.

“This should be made a condition of approval,” the department’s recommendation said.

Another proposed development by Fang, a 163-unit luxury condo project on Sheridan Street, has stalled over concerns that the bulk of the condos were going to be sold to buyers from China.

Both of Fang’s projects utilize the federal EB-5 Immigrant Investment Program, designed to encourage foreigners to invest in an area in exchange for visas.

The developer also submitted testimony on Bill 15, asking the city to accept a $2 million donation to the rail project as a community benefit, He also said the Hawaii City Plaza and Hawaii Ocean Plaza projects would not use union labor in construction.

Last fall the council approved a special permit for Manaolana condo-hotel across from the Hawaii Convention Center. The tower didn’t include any affordable units, but the developer provided a $2.5 million payment to the city’s affordable housing fund.

The same developer was awarded a special permit in September for 1500 Kapiolani, a 400-foot-tall, 444-unit full-service hotel on Kapiolani Boulevard across from Ala Moana Center.

Rather than building affordable units in the building, Manaolana struck a tentative deal offering “air rights” to nonprofit developer EAH Housing to build 78 affordable units atop the Walgreen’s parking deck next to the hotel.

EAH Housing still has to apply for public funds to actually build the units.

Kevin Carney, who leads the Hawaii chapter of EAH Housing, said securing funds from Hawaii Housing Finance and Development Corporation is competitive but he’s confident that his organization can complete the project.

We could find out that it’s just going to be too expensive for us to do,” he said. But “every project that we’ve gotten involved with, we have never not been successful to get the funding we need.”

DPP also asks developers to reduce the number of off-street parking stalls to encourage residents to use public transportation, a key features of the city’s vision for transit-oriented development.

The idea is that fewer parking spaces would discourage people from clogging up already busy streets with their cars.

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