Council presses state and county on transition of Haleʻō Laie (Haggai Institute) from emergency shelter to permanent housing

Maui County officials and the Hawaii Housing Finance & Development Corporation (HHFDC) updated the Budget, Finance & Economic Development Committee on March 18 about the status of Haleʻō Laie (previously called the Haggai Institute), a former hotel the state acquired to provide temporary housing after the August wildfires and which HHFDC ground-leased to the county for redevelopment as affordable workforce and teacher housing.

The site currently houses wildfire survivors under a state interim housing program. HHFDC and county representatives said about 50 occupants are using the site and that occupancy has constrained redevelopment work; the facility’s 78-unit capacity and roughly 30 currently vacant units were also discussed. The ground lease scheduled turnover to the county in May 2025, but HHFDC and the county said they are still negotiating details and that an extension of the May turnover date is under consideration.

Why it matters: The property was acquired by the State and ground-leased to Maui County with the stated intent to convert the site to long-term affordable and teacher housing and to include public pre-kindergarten classrooms. Survivors currently housed under a state program complicate the county’s ability to take possession and to stage the renovations needed to convert hotel rooms into permanent housing units with kitchens and other long-term features.

What officials said - Grants and spend-down: Deputy Director Samalu Matafa (Department of Housing) told the committee the county executed a grant agreement with HHFDC for site improvements in the amount of about $1.565 million and that the county has drawn roughly $480,000 to date for projects including elevator modernization, pool-deck and bridge repairs, and skylight replacement. HHFDC staff said they expect to request reimbursement for additional capital and operating grant draws soon; an operating grant of $2 million remains to be spent down in forthcoming quarters. - Occupancy and timeline: HHFDC and county officials said roughly 50 people are living on site now; the building’s stated capacity is 78 units. HHFDC’s Michael Yee said the parties are “in discussion with the county right now around this May 29th deadline to turn over,” and acknowledged movement toward an extension but no signed agreement yet. - Housing configuration and fire code limits: Present-day units lack full kitchens; guests rely on a ground-floor community kitchen. County and HHFDC staff said the current unit layout and fire-code constraints would prevent simple, unit-by-unit installation of full kitchens; redevelopment requires a larger staging plan and likely unit combinations to create permanent dwelling units. - Rent and program rules: Officials described the state interim housing rules in broad terms: the state’s program has not required rent for occupants during an initial interim period and the possibility of future rent collection (some remarks referenced anticipated rent schedules) complicates moving occupants into other available units. Deputy Director Matafa and HHFDC staff said rent collection and program timing are still being finalized; the committee was told rent collection was being anticipated to begin in early 2026 in some planning scenarios but no final decision was reported in the meeting. - Alternative placements: Committee members asked whether vacancies at Kalaʻiloa (a separate state-operated housing project) could be used to relocate survivors while Haleʻō Laie is redeveloped. County and HHFDC officials said Kalaʻiloa is managed by the Department of Human Services and that any move would require coordination and decisions by the state program operator.

Committee questions and next steps Council members pressed for specifics on unit counts, which improvements have been funded, and the timeline for turnover and rent policy. Chair Yuki Lehi Sugimura said the council approved the underlying lease and that the committee scheduled the item to resolve inconsistent expectations between the state and county about the May turnover and the survivor placements. Director Mitchell (Administration) and Deputy Director Matafa said negotiations are active and that three documents remain under review: an amendment to the ground lease, amendments to covenants/regulatory agreements, and an amendment to a memorandum of agreement.

The committee deferred action on the grant items and asked housing and HHFDC to return with concrete transition steps and a clarified timeline; no formal vote was taken.

Ending: Officials said they would continue negotiations with the governor’s office and HHFDC. Committee members asked staff to keep the council informed and to return with solutions for occupant relocations, schedule adjustments and redevelopment staging.