Some residents in the neighborhood of the affordable housing project are against it and say the project is moving too fast.

Cheered by real estate agents and housing advocates, the Honolulu City Council on Wednesday unanimously approved a host of permit fee exemptions for a 43-story high-rise development on Kapiolani Boulevard backed by a well-connected local development firm, the Kobayashi Group.

The mixed-use complex would be located at 2599 Kapiolani Blvd., near Date Street, on a 3-acre parcel, displacing what is currently a neighborhood of two-story, garden-style apartment buildings.

The project would also include a second 12-story building and a 13-story parking structure. The new project is being called Kuilei Place.

In early 2022, the City Council reviewed the plans for the project. It was approved by the Hawaii Housing Finance and Development Corp. board of directors in October, according to the city resolution approved Wednesday.

Kuilei Place is among the first of a raft of new housing projects being expedited through the approval process to boost housing construction on Oahu. Local and state officials and housing advocates have long urged that the process be made simpler to allow more projects to proceed on a fast track.

Honolulu City Council with in person session and a hand full of public in person testimony.
The Honolulu City Council approved a measure that allows a 43-story high rise on Kapiolani Boulevard. (Cory Lum/Civil Beat/2022)

Area residents, some of whom said they had just learned of the Kuilei Place project and vehemently oppose it, said they were blindsided by the proposal’s quick movement through the city hearing process.

“My feeling is this is being rushed through without the public knowing what is going on,” said Julia Allen, a member of the Diamond Head/Kapahulu Avenue/St. Louis Heights Neighborhood Board. “What we need is affordable housing and what’s being built is not affordable housing. They are tearing down affordable housing to build it.”

The McCully/Moiliili Neighborhood Board opposed the project this month in a unanimous resolution.

“They will need to demolish quite a few two-story walk-ups that are the norm in Moiliili to build this high rise,” said Matt Prellberg, a member of the neighborhood board.

Prellberg was particularly critical of council member Calvin Say, who represents the district that includes the project as well as the neighborhood board.

Say voted for the fee exemptions, along with the rest of the council.

“It’s a tough one for me; it’s part of the neighborhood I represent,” Say said at the hearing, noting that officials are trying to encourage projects that add affordable housing stock.

He said that he was aware that residents opposing the project were not blindly opposing development but had serious concerns about the size of the project.

Council Chair Tommy Waters said some of his constituents were also unhappy about the project, but that there were reasons for the speed in the council.

“State law requires us to act on this project within 45 days,” he said.

The developer has told city officials that of the 1,005 units, 40% will be sold at market rate. About 60 % will sell at prices affordable to households that earn between $104,500 and $158,600 for a family of four, which represents the range between 80% and 140% of median income in Hawaii.

As a result of negotiations with the city, the developer will offer more units at the lower-income levels.

The City Council’s vote waived about $12 million in fees customary for large projects of this kind.

The developer will not need to pay building permit fees, for a savings of $1.9 million, or plan review fees, estimated at $389,660. Waste-water system facility charges and private storm drain connection fees have been waived. The developer will not be expected to pay for the required fire-safety review plan by the Honolulu Fire Department, saving another $194,830.

The Board of Water Supply will permit a deferral of the payment for water installation, which was estimated to cost $3 million.

Many real estate firm executives, construction union officials, real estate agents and housing advocates spoke in strong support of the project, saying it would help solve Hawaii’s housing affordability crisis.

Many told council members that this project would prevent young people from leaving Hawaii, or that if it wasn’t built, more would move to the mainland.

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