Council committee advances Kealpai Place affordable rental project in Kailua

The Committee on Housing, Sustainability, Economy and Health voted on Feb. 11 to report out a resolution authorizing the City and County of Honolulu to enter into a development contract and ground lease with TC Kealpai LLC and Kealpai Place Apartments, L.L.P., to build an affordable rental project at 734 and 735 Kealpai Place in Kailua.

The project team, led by Chris Fong of Tradewind Capital, described a three‑story building with ground‑floor parking and 42 one‑ and two‑bedroom units targeted for households at up to 80% of area median income (the RFP requirement). Fong said the developer’s “base case” anticipates serving households between 30% and 60% of AMI. The design preserves a 40‑foot A‑2 height limit, includes 54 on‑site parking stalls and is sited at the entrance to Kailua Town along the Ka‘elepai/Kawainui Marsh edge.

The committee considered a hand‑carried CD1 submitted by the administration that, among other technical edits, (a) authorizes the mayor or the mayor’s designee to enter into agreements substantially in the same form and to execute related incidental documents, (b) requires the Department of Land Management (DLM) to confirm satisfaction of conditions in Article 6 of the development contract before execution of the lease, and (c) authorizes the grant of utility and access easements over or across the property as needed. Council members and the developer confirmed they had reviewed the committee draft and had no outstanding objections.

Fong walked the committee through the project schedule the team proposed: Tradewind responded to the DLM RFP in April 2024 and was selected as preferred developer in July 2024; design and negotiations continued August–December 2024; a public hearing was held Jan. 8, 2025; the plan calls for a February 2026 application to the Low‑Income Housing Tax Credit (LIHTC) program administered by the Hawaii Housing Finance & Development Corporation (HHFDC); a hoped‑for financing award in 2026 would let the developer break ground in fall 2026 and complete the project in summer 2028. Fong said entitlements work is expected June–October 2025 and that LIHTC applications typically require projects to be fully entitled before applying.

Council member questions focused on timing. Council member Heidi Kia‘aina (first reference: Council member Heidi Kia‘aina) said the four‑year horizon from selection to occupancy “is like four years” and pressed why the LIHTC application could not be pursued earlier; the developer explained entitlement and document negotiation timing made a 2025 LIHTC filing impractical. Public testimony in support came from Angela Melati Young, who said she supported the resolution as contributing to low‑income housing development and economic resilience work that can reduce energy costs in new housing.

After discussion, the chair recommended the resolution be amended to the hand‑carried CD1 and reported out for adoption. The committee passed that recommendation with no objections.

Why it matters: the project uses an underutilized city property and a DLM RFP to add 42 income‑restricted units in Kailua, with construction and financing plans tied to competitive LIHTC rounds. The CD1 clarifies city authority to execute documents and to grant easements needed to develop and serve the site.

Next steps: the measure proceeds to the full City Council for final approval; DLM must certify satisfaction of the contract conditions before the mayor’s execution of the lease and related documents.