Development partners The Michaels Development Company, Vitus Group (formerly called Pacific Housing Advisors) and the Hawaii Public Housing Authority (HPHA) are set to begin renovating The Towers at Kuhio Park. This $135 million rehabilitation effort is the centerpiece and first phase of a multi-year revitalization program for Kuhio Park Terrace and Kuhio Homes (KPT), the largest existing public housing complex in the state of Hawaii.
Built in 1963, the Towers at Kuhio Park have provided much needed affordable housing to Hawaii's families for more than 45 years. The renovation of the Towers marks the first public-private partnership between a private developer and the State of Hawaii to transform public housing. "Once restored, The Towers at Kuhio Park will serve as an attractive, affordable housing resource for future generations and will be a source of pride for the community," said Monika Mordasini, vice president of development, The Michaels Development Company.
Local firms providing design and construction services include Architects Hawaii, MVE-Pacific, Inc., Community Planning & Engineering, Inc. and Albert C. Kobayashi, Inc.
"This project is helping to provide more than 100 jobs for local construction workers, as well as high-quality, affordable housing for the current and future residents of Kuhio Park Terrace," remarked Makani Maeva, director, Vitus Group. "Most importantly, the renovations will not result in an increase in rent to the residents. It is a win for the workers, KPT residents and the community."
The renovations are being funded primarily through a combination of $66 million in tax-exempt bonds and close to $45 million in low-income housing tax credits (LIHTC) equity. The LIHTC program is widely considered one of the nation's most successful housing programs, generating private capital investment to support the development and the rehabilitation of affordable rental housing for America's low-income families. Corporate investors receive tax benefits in exchange for their equity investment in affordable housing. In the case of The Towers at Kuhio Park, a team of corporate partners, led by the insurance giant, AEGON have committed $44.7 million dollars of low-income housing tax credit equity.
The Hawaii Housing Finance and Development Corporation (HHFDC) as both the state agency that allocates tax credits and as the issuer of tax-exempt debt has played a key role in funding the improvements at Kuhio Park. Citibank, using the proceeds of bonds issued by HHFDC, sold through a public offering by the investment firm of Piper Jaffrey, and credit enhanced by the Federal Home Loan Mortgage Corporation (Freddie Mac) is providing construction and permanent loans so that development may proceed.
Rounding out the financial team is the Hawaii Public Housing Authority. The HPHA has provided seller financing for the acquisition of the improvements (the underlying land will continue to be owned by the agency) and a subordinate loan to fund major system renovations. The HPHA will also be providing on-going rental assistance and operating subsidies assuring that the Towers will remain affordable housing for many years into the future.
More than $48 million in improvements are programmed. Updates to the Towers' exteriors will include such key elements as island inspired decorative screening, a vibrant paint scheme for the façade and a redesigned entrance to provide a bright and welcoming experience at each Tower. Reconfigured ground floors will create new space for resident activities, social services, management offices and enlarged laundry facilities. The design team has focused on creating areas that both residents and visitors will enjoy.