It could prove difficult for the city of Honolulu to break even on the sale of its affordable housing complexes, especially considering the recent collapse of a $142 million deal that would have unloaded the properties on a private developer.

On Wednesday, officials from Mayor Kirk Caldwell‘s administration told the Honolulu City Council Budget Committee that they would seek new proposals from interested buyers of the affordable housing complexes and that they would set a minimum asking price of $130 million.

But that dollar amount is much higher than any of the three top bids that developers first offered to take over the city’s 12 affordable housing complexes.

Even the development group that ultimately won the bid — Honolulu Affordable Housing Partners LLC — offered $111 million before upping its proposal by $31 million as part of its best and final offer, which was accepted in 2012.

Managing Director Ember Shinn said the city needs about $130 million to make sure it brings in enough money to pay off $70 million in debt related to the properties, which have an appraised value of about $57 million.

She told council members there’s no guarantee the city will reach the $130 million threshold as it pursues a new deal, but that early indications are giving her hope.

“I misjudged the marketplace and what’s going on in the industry right now because my phone hasn’t stopped ringing,” Shinn said. “There are people who have come out of the woodwork from across the country, not just locally, that have expressed interest.”

Shinn admitted that many of these calls could be from developers and interested parties looking for a fire sale.

Honolulu has been trying to unload its 12 affordable housing complexes for several years now. Not only are many of the apartments in a state of disrepair, but operating the facilities costs the city $7 million each year.

Officials thought they had a good deal with Honolulu Affordable Housing Partners, but the sale collapsed last month after the developers revealed they couldn’t get the financing together by a statutory deadline of March 31.

Some council members, particularly Ernie Martin and Ron Menor, wanted to know Wednesday why the Caldwell administration didn’t work harder to strike a deal with the other top bidders before that deadline.

In particular, they worried that the city might be spending even more money as it waits to close a new deal, something officials said could take up to 36 months.

“I’m not supporting any one of the other two bidders,” Menor said, “but we should seriously question whether three years down the road we will be able to look back and say that the city got a better deal than what we could have obtained had we continued negotiations.”

The other top bidders consisted of a group led by Charles Wathen, of Pier Management Hawaii LLC and another consortium headed by Chris Beda, of Carmel Partners, LLC. Both bidders had local affordable housing partners, including the Pacific Housing Assistance Corporation, EAH Housing and Catholic Charities Housing Development Corporation.

According to city records, Wathen’s group offered to pay $103 million to take over the apartment complexes. It also proposed spending more than $26 million to improve the facilities.

Beda’s group, on the other hand, initially offered to pay the city somewhere between $104 million and $116 million to take over the properties. It increased its offer range to between $110 million and $121 million. Both proposals included spending tens of millions of dollars on facility improvements.

Shinn said she and Mayor Caldwell decided to end negotiations with these bidders after the $142 million deal collapsed, partially because she didn’t believe a sale would be finalized by the March 31 deadline.

She also told council members that if she inked a deal for just $103 million “you would kill me.”

But there’s much more at stake than just money when it comes to selling the city’s interest in the affordable housing complexes.

Caldwell had planned to use the windfall from the housing sale to support his Housing First initiative to get some of Honolulu’s most visible homeless people off the streets.

Without the deal Caldwell’s homelessness initiative — a top priority of his administration — can no longer move forward as planned because the funds won’t be available.

Tenants of the properties are in the dark about their future. Some low-income residents worry about whether they will be displaced.

In the meantime, the city is still in negotiations with Honolulu Affordable Housing Partners over how to disengage from the deal.

The result could be anything from a mutually agreed-upon separation to litigation.

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