The city and the Michaels Development Company have completed negotiations on the terms and conditions of a development agreement and form of lease for the affordable senior rental project and community center, Halewai‘olu Senior Residences, on River Street in Chinatown. The agreement now goes to the city council for review and approval.
Reaching the agreement is a major milestone in the city’s efforts to develop affordable senior housing. Affordable housing is a major concern for Oahu seniors, and the agreement is a successful public-private partnership that will bring safe, decent, affordable housing to seniors in an urban location in close proximity to shops, restaurants and entertainment in Chinatown.
In 2013, Councilmember Carol Fukunaga introduced Resolution 13-167, CD1, FD1, explicitly expressing the Chinatown community’s vision for the River Street property. The resolution called for the administration to issue a Request for Proposals (RFP) for a "senior housing complex on the River Street site, which includes a low-rise multicultural community center.”
An RFP for a Chinatown senior housing complex on the River Street site was published July 3, 2014, and three applicants submitted proposals prior to the Sept. 5, 2014 deadline. A selection committee identified Michaels Development as the highest-rated proposer, and the city entered into negotiations with Michaels in May 2015. Negotiations were completed late last week, and a development agreement and form of lease have been submitted to city council for approval.
The proposed agreement would provide 151 units of rental housing for residents ages 62 and greater at 80% AMI ($53,700 for a single person) and below, with the vast majority of units (135 units) available to seniors with incomes 60% AMI ($40,260) and below. The 65-year lease term includes an option to extend the term up to a total of 75 years.
As provided in the RFP, in order for the affordable housing project to be economically feasible, Michaels will pay the city nominal lease rent during the lease term. Lease rent for the first 30 years is $1,614.00 per year. Michaels Development would build two mid-rise towers that share an elevator core, a parking garage and a recreation deck, with a street-level community center and retail space, in a style that complements Chinatown’s unique character and sense of place.
The project is estimated to cost approximately $49 million. Affordable rental projects require significant state and federal funding subsidies to be economically feasible, and the developer will be seeking funds such as Low Income Housing Tax Credit Equity (LIHTC) and state Rental Housing Trust Funds (RHTF) as part of its financing package. The property is located near the corner of River Street and Vineyard Boulevard, at 1331 to 1347 River Street, TMK (1) 1-7-006-012.
