Honolulu Officials Approve Leasehold Sale of City-Owned Affordable Housing

The Honolulu City Council has approved Mayor Peter Carlisle’s plan to sell the city's 12 leasehold affordable rental complexes situated in various parts of Oahu to a private entity for $142 million. Called Honolulu Affordable Housing Partners L.L.C., the corporation comprises Highland Property Development L.L.C. of Arcadia, Calif.; Richard Gushman of Honolulu, who has more than 40 years of real estate experience; and Stephen Gelber, a Honolulu real estate and tax attorney who has worked on many affordable housing transactions in Hawaii. The leasehold purchase agreement requires the entity to make a a one-time payment of $142 million to the city and spend an additional $42 million within the first two years of the 65-year lease term to renovate the apartments.

The Honolulu City Council has approved Mayor Peter Carlisle’s plan to sell the city’s 12 leasehold affordable rental complexes situated in various parts of Oahu to a private entity for $142 million.

Called Honolulu Affordable Housing Partners L.L.C., the corporation comprises Highland Property Development L.L.C. of Arcadia, Calif.; Richard Gushman of Honolulu, who has more than 40 years of real estate experience; and Stephen Gelber, a Honolulu real estate and tax attorney who has worked on many affordable housing transactions in Hawaii.

The leasehold purchase agreement requires the entity to make a one-time payment of $142 million to the city and spend an additional $42 million within the first two years of the 65-year lease term to renovate the apartments.

Throughout the term of the lease, the purchasers will also be required to abide by the current affordable housing rules. Under federal HUD guidelines, out of a total of 1,257 units, 850 must qualify as low-to-moderate income and 189 as gap income units, whereas the rest of the apartments will be rented at market rates.

In other news, Black Sand Capital L.L.C. has acquired the King’s Village Shopping Center in Waikiki. According to the Pacific Business News, the Honolulu-based real estate investment company purchased the property from Oregon-based Elda Investments L.L.C. for $41.3 million.

Developed in 1972, the 38,764-square-foot retail center at 131 Kaiulani Ave. is home to more than 45 shops and restaurants, including Tanaka of Tokyo, Rock Island Cafe, King’s Guard Museum and Honolulu Surf & Sport. It also features Waikiki’s version of Hollywood’s “Walk of Fame,” displaying the handprints of many Hawaii celebrities.

Black Sand Capital’s other purchases in Hawaii include the majority interest in the Maile Sky Court hotel in Waikiki and the Pearlridge Uptown II section of Pearlridge Center in Aiea.

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