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The Honolulu Advertiser

Updated at 11:25 a.m., Monday, November 13, 2006

A&B sets date to sell condos at below market price

By Andrew Gomes
Advertiser Staff Writer

The developer of the high-rise Kaka'ako condominium Keola La'i later this month will begin accepting applications for 63 units to be sold at below-market prices via lottery.

Developer A&B Properties Inc. said it will take applications from Nov. 26 until 6 p.m. on Dec. 10 for the units reserved for qualified buyers meeting income limits and other restrictions.

There are 14 one-bedroom units with 675 square feet on average priced from $275,000 to $309,800. Another 49 units with two bedrooms with 900 square feet on average are priced from $340,000 to $375,000.

A lottery to select buyers is scheduled for Dec. 19 at 10 a.m. at the project's sales office at 676 Queen St.

The 63 units come with several restrictions, including a requirement that buyers are Hawai'i residents who haven't owned a home in the past three years.

Buyers also may not earn more than $84,688 for singles, or $94,850 for a family of two or more.

"This is a rare opportunity," said Rick Stack, vice president of development for A&B Properties, a subsidiary of Honolulu-based Alexander & Baldwin Inc.

The 42-story tower with 352 units is under construction and slated for completion in the first quarter of 2008 on the block bordered by South, Queen, Kawaiaha'o and Emily streets.

The state requires A&B to provide affordable housing for "gap group" residents who earn too much to qualify for government assistance but not enough to qualify for a loan for a market-priced home.

The Hawai'i Community Development Authority, which regulates development in Kaka'ako, allows developers to build above the area's standard 45-foot height limit in return for providing 20 percent of units at below-market prices or a cash equivalent.

The agency's program has resulted in 1,300 below-market condos for sale or rent in the area.

A&B chose to provide 63 below-market units, or 18 percent of the total units, plus $1.2 million, which the agency will use to develop affordable housing.

Keola La'i's below-market units initially were priced 19 percent less than comparable units, though market prices have risen dramatically since the agreement was made more than a year ago.

Other restrictions on who can buy the units include a prohibition on renting the units, and a right for the state agency to buy the unit back at a below-market price if the unit is sold within two years.

The state agency also is entitled to a share of proceeds from units sold by initial buyers regardless of time. The share ranges from $93,320 to $127,528 for one-bedroom units and $92,611 to $216,050 for two-bedroom units.

For more information go to keolalai.com or call 591-9600.

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