Owners of 7000 Hawai`i Kai Drive, a new apartment complex, have recently obtained a GEMS-backed loan in the amount of $861,500 to finance a photovoltaic system for its common areas.
The complex is owned by a subsidiary of the large Korean conglomerate Hanwha and consists of 269 two-, three-, and four-bedroom units, 54 of which (22 percent) are designated as low-income units, meaning they are intended to be affordable to families whose household income does not exceed 80 percent of the area median income for the City and County of Honolulu.
The total investment in the complex, originally planned as luxury condos, has been pegged at $165 million for land and buildings. The assessed valuation of the property comes to more than $45 million — $15 million in land value and more than $30 million in buildings.
And the annual property taxes on the complex are just $300 – the least possible for any privately owned lot. In 2015, before the low-income housing designation was obtained, taxes came to $48,054.65.
The nominal tax is allowed because, under Honolulu ordinances, by having at least 20 percent of the apartments rented out at rates deemed affordable by households with an annual income equal to 80 percent of the county’s “area median income,” or AMI, the complex qualifies as low-income housing, which is exempt from property tax.
The county’s property tax office lists the owner as Hale Ka Lae, LLC, which was also the name of the luxury condominium complex originally proposed for the site. The state Department of Commerce and Consumer Affairs shows Hale Ka Lae as an active business organized in Hawaii, with its sole member being Hanwha Hawai`i, LLC. Hanwha Hawai`i, in turn, while once registered to do business in Hawai`i, is no longer in good standing, with its annual filing with the DCCA more than two years overdue.
Hanwha Hawai`i is a Delaware-based LLC, with its headquarters in Chicago.
— Patricia Tummons