A plan to build a 36-story luxury condo and hotel across the street from the Hawaii Convention Center is facing resistance from affordable housing advocates on the eve of its final vote before the Honolulu City Council.

The Council plans to vote Wednesday on a resolution that would approve the concept for the development by Manaolana Partners. Supporters, who include construction union representatives and some Ala Moana residents, say the condo-hotel would revitalize a blighted area that’s currently home to business like 7-Eleven, Supercuts and a strip club. But critics argue that the plans should include affordable units in light of the city’s housing crisis.

The project, which would include 109 residential units and 125 hotel units, is the first to take advantage of the city’s new permitting process that relaxes height, density and parking restrictions for projects near rail stations.

Instead of 350 feet, the new tower will reach 418 feet; instead of providing 545 parking spaces, the developer will only build 276. The condo-hotel will have a floor-area-ratio of 10 rather than the current limit of 2.5.

The idea behind the new rules was to incentivize redevelopment near rail as well as encourage developers to build affordable units close to rail stations. But the Manaolana Hotel Place and Residential Condominium project won’t include any affordable units.

Instead, the developer will set aside $2.4 million for the city’s affordable housing fund. The city Department of Planning and Permitting acknowledged that the project doesn’t meet the “standard of review” for affordable units, but noted that it would be hard for low-income people living in the condo to afford the high maintenance fees.

Democratic Unity breakfast Mayor Kirk Caldwell. 14 aug 2016
Mayor Kirk Caldwell said development around rail stations is a key part of his strategy to create affordable housing but the first project to take advantage of relaxed zoning requirements won’t provide any low-income units. Cory Lum/Civil Beat

Office of Hawaiian Affairs CEO Kamanaʻopono Crabbe warned in written testimony that the approval of the project would set a bad precedent.

The Rev. Bob Nakata from Faith Action for Community Equity agreed, explaining that he supported the city’s rail project in part because he believed it would be a way to spur low-income units.

“With Kakaako there is already too much high-end stuff,” Nakata said. “To have another high-end project with not much in the way of affordable (units) being created, it’s disappointing.”

Mayor Kirk Caldwell has proposed requiring all large residential projects to allocate a certain percentage of units to low-income people, but he hasn’t introduced a bill to Council due to opposition from developers.

Kapiolani Boulevard Atkinson intersection for Anita. 6 sept 2016
A new condo-hotel is planned for the corner of Kapiolani Boulevard and Atkinson Street. Cory Lum/Civil Beat

Housing advocates are also worried the $2.4 million wouldn’t actually produce new housing. A 2007 audit found that the city hadn’t used any of the money that developers had provided to build affordable housing units, known as in-lieu fees, to actually build low-income units since 1998.

“One of the primary goals of transit-oriented development was to ensure that local, hardworking residents have the opportunity to afford homes in an area close to rail so that they would have employment opportunities opened up to them as a result of having access,” said Gavin Thornton from the Appleseed Center for Law and Economic Justice. “If you just provide money and never build those units, then it’s never going to happen.”

Many Benefits But Affordable Units Aren’t One Of Them

California developer James Ratkovich is the man behind the new condo-hotel project. He wasn’t available for comment Tuesday but said at a recent hearing that the concept for the Ala Moana development has been two years in the making.

Ratkovich contended the project has “the largest community benefits package of any project that has been undertaken in Honolulu at $7 million.”

Those benefits include a 4,856-square-foot public plaza at the the corner of Kapiolani and Atkinson; outdoor restaurants and parklets; and a new bus stop and bikeshare station. The project will also bring $358 million in private investment to Hawaii and provide over 1,000 jobs, including 620 permanent jobs, Ratkovich said.

That sounds good to Councilman Trevor Ozawa, who said in a statement he appreciates critics’ concerns about the project, but that the acceptance of an in-lieu fee “is part of the diversified strategy to add more affordable housing inventory over the next five years.”

“As the city works diligently on adding to our housing inventory we also need to explore the right incentives and creating an environment where such projects are financially doable and adheres to the community that it seeks to serve,” he said.

Honolulu City Council Member Trevor Ozawa2
Honolulu City Councilman Trevor Ozawa supports building a new condo hotel across the street from the Hawaii Convention Center. Cory Lum/Civil Beat

Harrison Rue, who is in charge of development around rail for the city, said in an email that the new permitting process around rail is “intended to be flexible, and allows developers to propose community benefits in return for additional height and density beyond current zoning.”

“Developers are required to show economic benefits, streetscape and connectivity improvements, usable open space, and affordable housing,” he said. “The Mana‘olana developers chose to offer a mix of benefits under all of these categories (not just for affordable housing).”

Rue said the city calculated the $2.4 million in-lieu fee by using a formula of $45 per square foot of residential space. The city applied that formula only to residences above the 350-foot height limit, since the current land-use law allows the developer to build luxury units up to 350 feet without providing any affordable units.

Still, housing advocates are worried that the city may be missing an opportunity to build low-income housing close to rail, defeating one of the most-praised benefits of the extraordinarily over-budget project. Several advocates plan to attend Wednesday’s meeting and ask the Council to put off any decision about the development until a more thorough analysis is completed.

Among them is Marya Grambs, a member of Partners In Care, a consortium of nonprofits that work on homelessness and housing. She said Tuesday that she hopes the Council defers the bill.

“We don’t know whether we’re getting our money’s worth,” Grambs said in a phone interview. “We don’t know whether that’s a good deal or not. We do know that we’re not getting affordable housing.”

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