As those of you who have been following my column may remember, in my August column, “A Vision of the Future Part 3,” I wrote about a broader vision for the Office of Hawaiian Affairs’ properties and the possibilities for Nā Lama Kukui in Iwilei, given that it sits within the City and County of Honolulu’s Transportation Oriented Development corridor.
What I was unable to share at the time was that I had been working on acquiring more property around Nā Lama Kukui for the last three years.
Under former Chair Trustee Colette Machado, I was given permission to pursue my idea of looking into the purchase of the old Hilo Hattie property and other properties that were near Nā Lama Kukui.
I first approached the owners of Hilo Hattie, and they were not interested in selling. I then had the OHA land division approach City Mill. I was aware that City Mill had turned down multiple offers to purchase their land, so I instructed our team to inquire about the possibility of acquiring City Mill’s air rights.
This would mean that OHA would own the rights to develop above their store. While City Mill did not accept the offer, because we were the first to make such an offer, they recognized the value of taking their property vertical when rail comes to Iwilei. These seeds will hopefully bear fruit in the future with the possibility of a future partnership between OHA and City Mill given that our two properties are adjacent to one another – only time will tell.
The biggest news is that my efforts to acquire more land has come to fruition.
As reported in the media last month, OHA has purchased two more properties both adjacent to and across from Nā Lama Kukui with a unanimous vote by the Board of Trustees. While some have questioned a $47M price tag, OHA paid less than the assessed value for the two properties and only put up $13M of our own money from the Native Hawaiian Trust. With $34M being financed, the revenue generated from the two properties will more than cover the payments to the loan.
These same revenues over the next 5-10 years will also completely pay back OHA’s initial investment of $13M. This is a great investment that will generate over $1M in net revenue back into the Native Hawaiian Trust for OHA to use for programs and grants.
The most exciting aspect about this deal is the potential it holds for the long-term outlook for our beneficiaries. This is the largest step toward affordable housing for Native Hawaiians that OHA has ever taken. With a foreseeable strategic partnership with the Department of Hawaiian Home Lands, once the Transportation Oriented Development can move forward in Iwilei, OHA will be able to redevelop these three properties to maximize height and density for affordable housing while creating more commercial space on the lower levels to continue to maximize revenue back into the Native Hawaiian Trust.
I am so proud and thankful to all the staff’s hard work getting this deal together through the late nights of due diligence and working through all the financing terms with the lender.
I cannot mahalo you all enough: Ka Pou Nui Casey Brown; CFO Ramona Hink; Land Assets Division Director Kalani Fronda; Senior Legal Counsel Raina Gushiken; Assistant Senior Legal Counsel Everett Ohta; Interim Investment Manager Ryan Lee; Commercial Property Agent Farah Cabrera; Randall Sakumoto from McCorriston Miller Mukai MacKinnon, LLP; Nathan Fong, Karen Birkett, and Alika Cosner from Colliers. Your hard work is helping to fulfill our strategic plan initiative to create affordable housing for our people.