Builder losing lease at Kalaeloa
By Vicki Viotti
Advertiser Staff Writer
Quality Homes of the Pacific, a company launched 18 months ago to produce low-cost homes for Hawaiians, will lose its lease on its Kalaeloa plant at the end of the month.
Kali Watson, who helped found Quality Homes after leaving his post as director of the state Department of Hawaiian Home Lands, said he has asked the landlord, the state Department of Transportation, for a six-month extension.
"But I'm not holding my breath," said Watson, who said that finishing work on several of the company's 24 completed homes will continue until the final word comes down.
DOT spokesman Scott Ishikawa said transportation officials don't plan to renew the lease because the 100,000-square-foot hangar in which the houses are built is in demand by several aviation maintenance companies.
Ishikawa said the state must give priority to such companies because the former Barbers Point Naval Air Station is renovated for use as a general aviation airfield, diverting some traffic from busy Honolulu International Airport.
"There's so much aviation activity at our (Honolulu) airport," he said. "It's gotten to the point that we do have to make improvements" at Kalaeloa.
The state has federal grant money for improvements such as runway repaving and installation of lights, Ishikawa said, and the condition for that money is that the state reserve the property for aviation uses.
Watson acknowledged that the lease was short-term, but said he had hoped that the space would not be in demand until Quality Homes had time to make a profitable beginning.
But the company, established with the goal of producing affordable, steel-framed housing for homesteaders on DHHL land, suffered several setbacks almost immediately.
A key contract for 45 homes at a Hawaiian Homelands project in Kapolei fell through. Additionally, Watson said, lenders were unwilling to issue consumer mortgages for the houses because of unproven resale values in Hawai'i for factory-built homes.
However, that resistance has ebbed in the past year, he said, with private financing packages from Finance Factors and Home Street Bank and the federal government's FHA and Rural Development programs.
The 24 completed homes were built to a federal Housing and Urban Development standard that added to production expense, Watson said, adding that the company recently had retooled its production in favor of a less expensive model that met local building codes, with three such units in production.
Watson said he is not holding out much hope of finding a new home for the plant, adding that the company's board has begun discussions about the dissolution of the firm.
Although DHHL owns 555 acres at Kalaeloa, there are no hangars on that property, Watson said.
The Office of Hawaiian Affairs invested $500,000 in the plant and was the majority stakeholder.
Haunani Apoliona, chairwoman of the OHA board of trustees, said the agency had been seeking release of financial statements from Quality Homes.
Reach Vicki Viotti at vviotti@honoluluadvertiser.com or 525-8053.
