HCDA votes to buy Kakaʻako Block P2 for $6 million; plans short-term lease to Kupuna Shed, long-term housing development

The Hawaiʻi Community Development Authority on April 2 authorized its executive director to enter a purchase-and-sale agreement to buy two contiguous parcels in Kakaʻako known as Block P2 for $6,000,000, with industrial floor-area credit to the seller and conditions tied to satisfactory due diligence.

The board vote followed a staff presentation by Craig Nakamoto, the authority’s executive director, who said the parcels at 952 Kauaihau Street and 955 Waimanu Street (Oʻahu tax map key numbers 2-3-003-065-093) include an existing warehouse of roughly 6,000–8,000 square feet and were appraised at about $7,000,500 before the negotiated purchase price. Nakamoto described the acquisition as funded in part by a $5,000,000 legislative appropriation for a community facility and said HCDA would grant the seller, Ward Village affiliate Block G Ward Village LLC, an industrial floor-area credit equal to 8,757.72 square feet under the seller’s amended and restated development agreement.

Why it matters: The authority framed the purchase as an early step to secure a community facility space and to preserve the site for future affordable housing development in Kakaʻako. Board members repeatedly cited the island’s affordable housing shortage as a rationale for acquiring land rather than risking private development of the parcel.

Nakamoto said HCDA’s short-term intention, if the transaction closes, is to lease the building to the Honolulu Kupuna Shed, a nonprofit that offers woodworking, bicycle repair and other programming. "We're thrilled to be able to be in this community and part of this program," said Robert Spear, president of the Honolulu Kupuna Shed, during public testimony. Spear said the nonprofit needs roughly 7,000–8,000 square feet to support a wood shop, education programming and bicycle repair.

Several tenants and users of the site urged sensitivity to existing small businesses. Keith Winnicott, who identified himself as the current tenant and owner-operator of a fitness facility on the parcel, asked how the purchase would affect his gym and its roughly 600 members. His wife, Sarah Freeman, said the gym serves a cross-generational membership and asked that HCDA minimize disruption and allow the business to remain as long as possible. Nakamoto said HCDA has not yet begun due diligence and would need to review existing leases and termination clauses; he told the board any long-term lease would return for board approval.

Board action and next steps: Member Evans moved to authorize the executive director to execute a purchase-and-sale agreement and to take all steps necessary to complete the transaction, conditioned on satisfactory due diligence. The motion was seconded by Vice Chair Hsing. Roll-call votes recorded as in the meeting minutes show Member Evans, Vice Chair Hsing, Chair Sterling Kiga, Secretary Leadstone, Member Anderson, Member Strickland, Member Chino and Member Sakoda voting in favor; the motion passed.

Staff said due diligence must be completed after an executed purchase-and-sale agreement to obtain access to leases and other documents. Nakamoto said any HCDA lease for the building would be subject to further board review and approval; he described a likely nominal (triple-net) lease in which the occupant would maintain the building and pay a token rent in the short term. Nakamoto also noted the seller’s requirement to maintain a minimum industrial floor area under its development agreement, and said the 8,757.72-square-foot credit is a small portion of that requirement.

Background and context: The parcels are owned by a Victoria Ward affiliate. Nakamoto told the board the legislative appropriation that enabled the purchase was intended to fund planning, design and construction of a community facility in the Kakaʻako Community Development District; staff considered Mother Waldron Park for a facility but dismissed that option because of limited park space and coordination needed with the City and County. He said the Block P2 parcels offer an alternative location that could be used short-term by community organizations and mid-term for affordable housing development.

The board instructed staff to proceed with due diligence and noted the need to approach leasing and tenant impacts sensitively. Nakamoto said HCDA would return to the board with lease recommendations and that a future developer selection and any redevelopment for housing would require additional approvals.

Votes at a glance: The board approved the motion to authorize execution of a purchase-and-sale agreement for Block P2 (952 Kauaihau St. & 955 Waimanu St.) for $6,000,000 with industrial floor-area credit of 8,757.72 sq ft; motion by Member Evans, second by Vice Chair Hsing; recorded ayes: Member Evans; Vice Chair Hsing; Chair Sterling Kiga; Secretary Leadstone; Member Anderson; Member Strickland; Member Chino; Member Sakoda.

Ending: With the vote, HCDA has secured authority to pursue a purchase that staff says would preserve a parcel for community uses and future affordable housing; details about leases, tenant notices and redevelopment timelines will be determined through due diligence and returned to the board for approval.