Developer submits plan to save plantation homes

By Andrew Gomes
Advertiser Staff Writer

About 300 current and retired Del Monte pineapple workers facing eviction from their Poamoho Camp housing on June 30 got a reprieve under a deal announced yesterday and may soon be able to buy their homes.

Chloe Pojas, 6, of Wahiawa, visits relatives in housing at Poamoho Camp. Poamoho residents were told to leave their homes by June 30, but now may have a reprieve. Advertiser library photo

Savio said if the sale is completed as expected by October, he then will sell the homes to residents for a price that he estimates should result in monthly mortgage payments that are about the same as the rent residents now pay. Or, residents could continue renting.

There still are some issues to resolve, but the developer yesterday said he doesn't anticipate anything that would derail his plan.

Residents, who recently voted to support Savio's plan, also are hopeful, and have scheduled a June 12 celebration in the neighborhood park.

"It's a real relief for the community," said Erasmus Patacsil, a retired Del Monte worker who has lived at Poamoho for 18 years. "It's a good plan."

Vaeleti Tyrell, another Del Monte retiree, expressed cautious optimism about the lease extension and the possibility of buying the home in which he has lived for 43 years and raised six children.

"If I owned this place, I don't mind paying the same as I pay rent," he said. "That's good."

Many residents, who generally pay monthly rent of between $266 and $666 for mostly 1930s-era three-bedroom, one-bath homes, feared they wouldn't be able to afford housing elsewhere if evicted.

Del Monte announced the eviction plans in January after the company decided not to renew its lease on 2,200 acres of Galbraith land, most of which is planted in pineapple. According to its lease, Del Monte had to return the land to the trust without the homes or other changes made by the company.

The Galbraith trust is set to terminate in 2007 and was not interested in maintaining the homes and becoming a landlord to residents.

Del Monte expressed willingness to explore alternatives to allow workers to remain in its 63 camp homes, while government and union leaders rallied to resolve the situation. But no viable solution emerged until Savio's offer.

Savio, a longtime local real-estate developer, has made a practice of buying rental apartment complexes, converting them to fee-simple condominiums and selling units to residents.

Leolani Abdul, manager of the trust real-estate group for Bank of Hawaii, the trustee for the Galbraith trust, said the bank, Del Monte and Savio all worked diligently to hammer out a deal.

"We were able to find a solution that is very positive for everybody involved," Abdul said. "We're very happy that the residents will be able to stay."

Under the deal, Savio's Hawaiian Island Homes Ltd. has taken over as rental manager and will be paid a management fee similar to one Del Monte had. The property will be appraised, and the landowner and Savio will try to negotiate a sales price.

Savio said if a price can be agreed upon, he will sell the fee-simple homes for cost plus 5 percent, providing his company a development fee for its work. A customary sales commission would also apply.

He said he hopes he can sell the homes for $50,000 to $60,000.

"For them, I think it'll be a really good deal," Savio said. "It's going from where (Poamoho residents are saying,) 'We may be kicked out of our homes,' to 'My god, we may be able to own the thing.' "

Patacsil, who said he hadn't made arrangements to move out by June 30, said he hopes he and other Del Monte retirees and workers will be able to afford the homes.

The price for residents would be based on the landlord's selling price of about 30 acres under the homes plus roughly 60 surrounding acres mostly planted in pineapple.

Savio said the Galbraith trust and Del Monte reached an agreement with Maui Land & Pineapple Co. to harvest the 60 acres over the next two years, after which Savio expects to sell the land to an agricultural user. Proceeds from the ag land sale would go towards subsidizing costs for the homes.

Because most of the homes were built in the 1930s and Del Monte paid for repairs and insurance, there are infrastructure needs and maintenance issues that Savio said he will handle.

The camp has limited streetlights, no fire hydrants and rudimentary streets — areas Savio said he will need to bring up to more modern standards, while also establishing a reserve fund for major future maintenance needs.

"What you don't want to do is have people purchase (the homes) and the maintenance costs run ahead, and then they can't afford to live there," Savio said. "We are going to do this so it protects the buyer."

Patacsil said the maintenance fund is a key element of the plan.

"Some of the homes here really need repairs, especially the roofing, because they are really old," he said.

Residents who can't afford or don't want to purchase their homes would be allowed to continue to rent from Hawaiian Island Homes, Savio said.

Tracy Takano, an agent with the International Longshore and Warehouse Union Local 142, which represents pineapple workers, said Savio's plan is unprecedented, but he is hopeful it will work.

One unresolved issue is subdividing the property. According to city records, the homes and an adjacent pineapple field are on an undivided parcel with agricultural zoning.

Savio said he would need to get approval from the city to recognize the homes as an allowable use on ag land before subdividing and selling the homes, though he isn't sure how that can be done.

A city spokesperson was unavailable yesterday to comment on the issue.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.