Posted on: Tuesday, June 4, 2002

Harbor Court owners buy fee interest in units

By Frank Cho
Advertiser Staff Writer

The 41-story Harbor Court complex contains 87 residential units whose sale prices start at $495,000. The project's owner plans to buy the fee interest in the units.

The owners of the mixed-use Harbor Court development in downtown Honolulu have closed the purchase for the fee-simple interest in dozens of residential units from the City & County of Honolulu for $12 million.

AHI Harbor Limited Partnership made an initial $7 million payment on Friday for the fee interest in 84 apartments in the residential portion of the development. As units are sold, some of the future proceeds will go to pay the remaining $5 million over the next five years, according to the agreement.

The deal is identical to the one agreed to by the City Council more than a year ago, but the events of Sept. 11 and its aftermath delayed its closing until now.

"We really thought that this would all be taken care of last year. No one foresaw all these things happening," said Paula Harris, sales and marketing director and principal broker for the project. "During the past two years, interested buyers have been consistently visiting Harbor Court, however, the ongoing purchase negotiations for the fee interest with the city only allowed for leasehold closings."

Built in 1989 by Harbor Court Developers on a former city parking lot for more than $180 million, the leasehold project ran into trouble in the 1990s when real estate values fell and the project's residential units did not sell.

The owners had purchased some of the fee interest in the project but still owed about $12 million in payments.

The still-empty Queen's Court building across the street, which remains part of the Harbor Court project, was not included in the transaction.

The developers had originally offered the city the low-rise building as part of the deal, but were turned down.

Sales prices for residential units in the 41-story complex start at $490,000 for a two-bedroom, two-bath residence. Monthly maintenance fees start at just over $600.

Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.