The monthly maintenance fee at the Waikiki Marina condo was high at just under $600 in 2015.
The owners of the studio-sized units grew more concerned when it rose to $770 the following year, and distressed when it hit $1,000 in 2017.
But when the board implemented a fee of $1,800 this January – $1,350 for maintenance costs plus a $450 temporary monthly assessment – building owners hit a breaking point. Now, a group has staged a rebellion against the board, demanding answers, requesting documents, threatening to sue and installing three of their own leaders at a recent election.
The board says the building needs major repairs estimated at $17 million. In the meantime, owners are essentially stuck in place, losing money and unable to sell.
“This is crazy,” said Wei Hu Lum, an accountant and condo owner. “I was going to put it up for sale but when the fee is so ridiculous, nobody bothers to look.”
Monthly maintenance costs for Waikiki Marina owners are above and beyond the norm for Honolulu, which already has the highest condo fees in the nation among large metro areas, according to an analysis by Zillow. The median amount in urban Honolulu, not including utilities, is $500. That’s followed by New York at $430, and Washington D.C., San Fransisco and Fort Myers at $400, the real estate database company said. The Waikiki Marina’s fees include utilities.
Some Waikiki Marina owners need to pay mortgages in addition to the fee, which by itself could cover the cost of a month’s rent in many Honolulu apartment buildings.
“Some of the owners may have to declare bankruptcy or lose their properties if they can’t keep up with these exorbitant maintenance fees,” said Harry Ozols, who bought a unit as a retirement investment but is losing money. “It’s a very emotional thing.”
Board member Michael Dailey said the board is doing the best it can in a bad situation that is playing out throughout Hawaii as condominiums age.
“Weather conditions are very tough on buildings here,” he said. “People on boards are volunteers, not experts in construction or most of these issues. They have to rely on the expert advice of consultants that are.”
The Waikiki Marina’s fee increases stem from the building’s desperate need to replace the elevator system, according to Clay Konikson, president of the board. Built in the early 1980s, the 40-story building’s exterior elevator system is fundamentally flawed: It’s an indoor elevator system that was mounted on the outside of the building without appropriate covering against the elements, Konikson said.
In the past two years, elevator repairs have cost about $1 million, according to Konikson. A bid years ago to enclose the two elevators – not even fix them – was $8 million, but it’s not even feasible because the building’s foundation isn’t strong enough to withstand the added weight, according to Dailey.
“We’re bleeding out one way or the other,” Konikson said. “We either bleed out to pay to get elevators that operate or we bleed out just repairing them.”
When it’s rainy or windy enough, the elevator automatically shuts down. In the past, occupants have been trapped. Residents and condo-tel visitors are forced to climb up potentially dozens of flights of stairs to their 365-square-foot rooms, according to owners and board members. More than one in 10 units are owner-occupied, according to a filing with the Department of Commerce and Consumer Affairs.
“That’s a long way for someone to walk carrying groceries,” said Ozols, who owns a unit on the 12th floor. “I can imagine 30-some floors.”
When one of the elevators is not working – a regular occurrence – and the winds pick up, the working elevator will run at a substantially slower speed, according to a 2015 board notice. In those circumstances, it can take 30 to 40 minutes to service all 40 floors.
Online reviews show tourists aren’t pleased. The hotel’s Yelp page lists one-and-a-half stars out of five based on 94 reviews from mostly unhappy visitors. Since 2016, the rating has fallen lower and lower.
“Only 1 elevator works and takes about 30-45 minutes to service floors! or you got a choice to take the damn stairs!!! now im pregnant you think i wana walk up and down 20 flights of stairs?!” one reviewer wrote in 2017.
Alexandra Kogan, an Oregon resident who owns a unit on the 32nd floor, said it’s a “disaster” that puzzles her.
“You keep collecting money, keep assessing us,” she said. “How come it wasn’t fixed? How come we’re continually having this issue one year after another?”
Waikiki Marina’s elevator system has had issues “from the beginning of time,” said board member Kristie Maruyama. The bigger problem, according to Maruyama, was that the board didn’t act fast enough to tackle them. When she bought into the building and joined the board over two years ago, there were no reserves. A Band-Aid approach to repairs had depleted them, she said.
“They were trying not to raise the maintenance fees and hoping every fix they did would fix it, but it didn’t work,” she said. “They have spent so much on repairs that in hindsight, they should have nipped this in the bud 10 years ago.”
In 2013, the board was optimistic about completing an elevator enclosure for around $1 million, and owners approved a loan request, according to a 2015 notice to owners. But requirements mandated by the city increased the estimate to $8 million, the notice said, and the board had to start over. By 2015, the board had a new plan. An elevator replacement was estimated to cost between $4 million and $5 million. Owners approved a loan for $5 million, increasing their fees to $770.
Four years later, though, the board sent out another notice: it now needed an extra $10 million loan for a total of $15 million. The board told owners in October that the scope of the required work had expanded. The building needs shaft spalling repairs, roof repairs, “proper cooling systems” for the new elevator — requiring a retrofit of the elevator machine room — a new generator and multiple building upgrades to meet Federal Emergency Management Agency requirements.
The latest project estimate is $17 million.
“This thing has been an absolute nightmare,” Konikson said.
Last fall, condo owner Alex Li launched a campaign to urge owners to deny the board the ability to obtain the additional $10 million loan. He said he couldn’t understand how estimated costs could balloon so high. And when he asked for an itemized list of estimated costs, he said the board didn’t provide it. Civil Beat asked Konikson for a breakdown of costs and he declined to share it.
“It doesn’t make sense,” Li said. “They can’t explain it. They just say it, that they need that much.”
Li started calling contractors on his own to seek quotes and received estimates that he said were far lower than what the board said it would cost. He expected the board to appreciate his help to get a better deal. Instead, Li said the board’s lawyer sent him a letter warning him to stop soliciting quotes. Konikson said suggestions from owners have not been helpful.
“We’ve had suggestions of hiring elevator companies from Ohio that do maintenance contracts, or Texas, that aren’t licensed in the state of Hawaii, or buying from China,” Konikson. “I read their emails because if they had something, I want to know. But these companies they’re talking about are in other states or other countries. There are licensing requirements, unions and just the simple fact that this is a custom-built elevator.”
When Li asked to see bid documents, he said the board refused. Kapono Kiakona, president of the Hawaii chapter of the Community Associations Institute, said it’s not surprising that a board would keep bid information private.
“Imagine you’re a contractor and all of a sudden your competitor knows how much you bid on this association,” he said. “If word got out about an association doing that, it’s understandable that contractors wouldn’t want to bid. It would make it hard for the association to transact any business.”
Nevertheless, owners’ frustrations are warranted, according to Terry Revere, a Honolulu attorney who specializes in condo disputes.
“You could burn the building down and install new elevators, and it’d probably be cheaper than what they’re talking about,” he said.
Disgruntled condo owners in Hawaii don’t have much recourse in these situations, Revere said. There was talk several years ago of creating a Hawaii condo ombudsman’s office to investigate disputes between condo owners and boards, but legislation died at the Capitol. Lawmakers declined to even pass a measure to study whether an ombudsman is needed.
“Owners are left with either being able to remove bad boards and fire bad managers and experts or they need to litigate,” Revere said.
Waikiki Marina owners tried to take over the board with new members who would make a majority. But at a recent meeting, an effort to remove a longstanding board member failed after 18 ballots were allegedly turned in blank. Several owners, suspicious of the results, have hired Revere to explore their legal options.
According to Konikson, the ballots were collected and counted in front of attendees of the meeting, and there were indeed 18 blank responses. If owners think board members wrongfully replaced owners’ filled-in ballots with blank ones, he said: “That ain’t true.”
Konikson said owners have a right to be upset, and he feels their pain. As the owner of eight units, he has to pay the monthly fees too.
“The price of paradise is incredibly high,” he said. “I keep relearning that again and again.”
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