Advocates for tenants at the Kukui Gardens apartment complex downtown said they have obtained $80 million in loan commitments to prevent a California developer from buying the affordable rental project.

Kukui Gardens Corp. is selling the 857-unit project to San Francisco-based Carmel Partners for about $130 million, in a deal tenants say will displace hundreds of low-income tenants.

During a news conference at Kukui Gardens yesterday, residents and their advocates urged the owners to sell the project to a nonprofit housing developer that would continued to run the property as an affordable rental project.

While the tenants' plan is $50 million less than Carmel's offer, it wouldn't lead to the displacement of any residents, said Chan U. Lee, a senior associate with San Francisco-based affordable housing developer Devine & Gong Inc.

"We think there's a way we can preserve Kukui Gardens in a way that the (owner's) board can still make a profit," Lee said.

Chris Beda, managing partner for Carmel, said a for-profit company with Carmel's track record is more effective in managing projects like Kukui Gardens than a nonprofit developer. He added that Carmel is committed to keeping rents at affordable levels until 2011.

"We are dismayed to be blindsided by the press conference held this afternoon regarding the attempt to sell Kukui Gardens to a nonprofit as we are currently under contract to purchase the property," Beda said in a written statement.

Nicole Pickens, a spokeswoman for Kukui Gardens Corp., declined comment.

Lee said Mainland lender Capmark, formerly known as GMAC Commercial Mortgage, has agreed to lend $80 million to a nonprofit developer to buy Kukui Gardens.

Lee, who will meet with state and city officials this week, said Capmark's loan would have to be backed by tax-exempt bonds backed by the state. She added the process would take about two years to complete.

Maryland-based Enterprise Community Partners Inc., which was formed by Mainland developer James Rouse to invest in affordable housing, has agreed to serve as a limited partner in the venture and would acquire the bonds, Lee said.

"This building can be saved and (the seller's beneficiaries) St. Francis (Medical Center), Saint Louis School and Chaminade University can still reap tremendous profits," she said.

The Rev. Alan Mark of Kilohana-United Methodist Church and president of Faith Action for Community Equity, which is helping Kukui Garden's tenants, said Kukui Gardens Corp. has so far been unwilling to work with tenants.

The company is waiting for approval from the U.S. Department of Housing and Urban Development to sell the project to Carmel.

The 36-year-old Kukui Gardens outside of Chinatown is one of the largest affordable rental projects in Hawai'i. Development of the complex, which houses about 2,500 residents, was financed by loans guaranteed by HUD.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.