DHHL approves amended rent structure for Kapolei’s Hamakana Ali‘i mall, preserving 4% community benefit

The Hawaiian Homes Commission on Nov. 20 approved a negotiated amendment to General Lease No. 276 for the Hamakana Ali‘i mall in Kapolei, adopting a multi-part restructuring the Department of Hawaiian Home Lands staff said is intended to stabilize the project’s financing and protect beneficiary dollars.

Acting Land Management Division administrator Linda Chin summarized the proposal as a three-part restructuring: a 15‑year “reduced rent” period retroactive to Dec. 1, 2024; a repayment schedule for $9.1 million of previously deferred rent and interest; and new participation payments to DHHL that include 20% of distributable cash flow each year and 20% of profit upon sale. “We’re asking commission’s approval to amend General Lease No. 276 on the restructuring of the annual ground lease rent,” Chin told commissioners.

Developers said the change is driven by financing conditions. Drew Barquette of DeBartolo Development described the site’s long recovery from COVID-era disruption and said the owners remain on construction financing and expect refinancing into cheaper term debt once the lease amendment is in place. Barquette said occupancy is high in rostered spaces but permanent deals are lower: “present time… we’re at 97%,” he said, adding about 84% are permanent deals once short-term arrangements convert.

Commissioners pressed for clarity on the numbers and protections for beneficiaries. Chin and the developers said the 20% distributable-cashflow payment to DHHL will be paid on a non‑cumulative, first‑priority basis and that the department retains audit rights to verify cash flow statements. Chin also emphasized a staff change: the 4% community benefit will continue to be calculated on the original contract rent rather than the restructured (lower) rent so that the community receives the same dollars it had been promised.

The commission approved an amendment clarifying that rent after the reduced period shall be reset to fair‑market rent but not less than the scheduled contract rent (the commission read the minimum contract rent as $5,394,567). The motion to accept the staff recommendation with that amendment passed without recorded opposition.

Public testimony included beneficiary leaders who supported the transaction while reiterating concerns about packet delivery and timely notice for complex items; several speakers urged DHHL to give beneficiaries 14–21 days’ notice for high‑impact submittals.

The commission’s approval authorizes staff to finalize amended lease documents subject to the department’s standard review processes, including review by the Attorney General’s office and the department’s audit rights; the expansion phase of the project was left for separate consideration.