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The Honolulu Advertiser
Posted on: Saturday, December 22, 2007

Kailuan residents must leave after plan rejected

By Kim Fassler
Advertiser Staff Writer

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Residents at The Kailuan, a two-story walkup on Kailua Road, have less than two weeks to vacate their homes after their proposal to buy the property was rejected by the landowner.

A group of shareholders called The Kailuan Inc. had been trying to negotiate a last-minute settlement with Kaneohe Ranch Co., which owns the 6.5 acres under The Kailuan and several other two-story walk-ups nearby.

The ground lease on the 18-unit condominium will expire Dec. 31, leaving many residents to face a real-estate market they say they can't afford.

"I would never be able to own my own home as a one-income earner," said Vishaka Jokiel, a single mother of a 12-year-old son, who has lived at The Kailuan since 1997. "This is my last chance to own a home in Hawai'i."

Many residents purchased units in The Kailuan knowing that the land lease would expire at the end of 2007. Residents have been talking with the landowner about buying the property since the 1980s when The Kailuan became a co-op, Jokiel said, but the effort intensified as the deadline drew near.

In a statement yesterday, Kaneohe Ranch president Mitch D'Olier said residents failed to show that they had a loan commitment to finance the purchase.

The landowner was also concerned that residents would not be able to meet a federal Environmental Protection Agency mandate to close the building's cesspool by Dec. 31.

Jokiel said residents have been in touch with the EPA about the cesspool situation and had planned to connect to the city's sewer system in January.

"We feel possibly we're in the way for the mass development plan for Kailua and we don't fit into their plan, so essentially they want us to go away," she said.

Kaneohe Ranch had offered residents $10,000 each to help them relocate if they moved out by Nov. 1 and $5,000 if they moved by Nov. 30. Several residents accepted the early offer, but most decided to stick it out.

The company is still willing to assist residents with relocation costs, Shane Peters, a spokesman for Kaneohe Ranch, said yesterday.

Most of the property surrounding The Kailuan has already been sold to the local Schuler Division of Texas-based home builder D.R. Horton, which plans to demolish the existing affordable rentals in January and build market-price condos.

Residents of The Kailuan held a news conference yesterday and are consulting with an attorney about their next move. In the meantime, many are looking for places to rent in Kailua, where affordable housing is becoming increasingly hard to find.

"We're hopeful, but our hopes are diminishing by the day," said James Severson, 53, a resident who raised his family in The Kailuan.

"It's very stressful for us not knowing what's going to happen. We don't have the deep pockets to fight them legally."

But Jokiel says she has no plans to start packing.

"I think we intend to stay," she said yesterday.

"I'm going to stay and celebrate Christmas at my home."

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