Affordable Housing Implementation Plan

CONTENTS

EXECUTIVE SUMMARY ...... 1 INTRODUCTION ...... 3 GOAL...... 3 BACKGROUND ...... 3 METHOD ...... 3 INVENTORY OF GOVERNMENT-OWNED PARCELS ...... 4 PARCELS ...... 4 SCORING SYSTEM...... 4 FUNDAMENTAL CHARACTERISTICS...... 4 DEVELOPMENT CHARACTERISTICS...... 6 AFFORDABLE HOUSING NEED...... 8 CURRENT INVENTORY OF AFFORDABLE UNITS...... 8 AFFORDABLE HOUSING UNITS NEEDED ...... 8 TYPES OF UNITS NEEDED...... 9 DEVELOPMENT PROCESS ...... 10 RECOMMENDATIONS...... 11 APPENDICES...... 12 APPENDIX A – PARCEL INVENTORY AND EVALUATION ...... 13 FUNDAMENTAL CHARACTERISTICS...... 14 APPENDIX B – PARCEL SCORING SYSTEM ITERATIONS ...... 30 PHASE I EVALUATION ...... 31 PHASE II EVALUATION ...... 37 PHASE III EVALUATION ...... 42 PROPERTY CATEGORIES ...... 46 PENDING PROJECTS...... 46 PARTNERSHIP PROJECTS...... 46 REDEVELOPMENT AND INFILL PROJECTS ...... 47 PROACTIVE REZONING AND INFRASTRUCTURE...... 48 UNDERUTILIZED PROPERTIES...... 48 APPENDIX C – EVALUATING HIGH POTENTIAL PARCELS FOR DEVELOPMENT OF AFFORDABLE HOUSING...... 62 ANALYSIS ...... 64 FINAL HIGH PRIORITY LOCATIONS...... 64 ADDITIONAL LOCATIONS EVALUATED ...... 83 SUMMARY...... 109 APPENDIX D – DEVELOPMENT CHARACTERISTICS ...... 111 DEVELOPMENT TIMING AND COSTS ...... 112 UNIVERSITY DORMS PROPERTY – TMK # 2-3-8-007-117 ...... 115 KĪHEI SOCCER FIELD PROPERTY – TMK # 2-2-2-030-121...... 116

Affordable Housing Implementation Plan Final Report Page i © SMS August, 2018 KĪHEI FIRE STATION PROPERTY – TMK # 2-2-1-008-046, # 2-2-1-008-113, # 2-3-9-038- 026...... 117 KEHALANI MAUKA PROPERTY – TMK # 2-3-5-001-077...... 118 WAIALE ROAD PROPERTY – TMK # 2-3-8-007-092 ...... 119 WAILUKU BEACHFRONT PROPERTY – TMK # 2-3-3-001-001 ...... 119 FUNDING ALTERNATIVES ...... 120 AFFORDABLE HOUSING FUND...... 120 ADDITIONAL FUNDING SOURCES ...... 120 FUNDING OPTIONS FOR INFRASTRUCTURE ...... 121 FUNDING EXAMPLE ...... 122 INCENTIVES ...... 122 STATE OF HAWAI‘I ...... 123 HONOLULU CITY & COUNTY (ORDINANCE 18-1) ...... 124 KAUA‘I COUNTY...... 125 HAWAI‘I COUNTY:...... 125 RECOMMENDATIONS ...... 126 BARRIERS AND IMPEDIMENTS TO AFFORDABLE HOUSING DEVELOPMENT ...... 127 IMPROVING OFF-SITE INFRASTRUCTURE ...... 127 REZONING AND APPROVAL PROCESS...... 127 ENTITLEMENTS...... 127 APPENDIX E – AFFORDABLE HOUSING INVENTORY AND NEED ...... 136 CURRENT INVENTORY...... 137 FORECAST ...... 138 TYPES OF AFFORDABLE UNITS NEEDED ...... 140 APPENDIX F – IMPLEMENTATION STEPS OUTLINE...... 142 IMPLEMENTATION STEPS OUTLINE ...... 143 PARCEL EVALUATION DECISION MATRIX...... 147 FUNDING DECISION MATRIX ...... 148 PERMIT PROCESS MATRIX...... 149 APPENDIX G – EXAMPLE OF KAUA‘I RFP FOR AFFORDABLE HOUSING DEVELOPER153 WAGE CERTIFICATE...... 40 APPENDIX H - REFERENCES...... 154

Affordable Housing Implementation Plan Final Report Page ii © SMS August, 2018 LIST OF FIGURES

Figure A-1. County-Owned Residential Parcels, West and Central Maui, 2018...... 15 Figure A-2. County-Owned Residential Parcels, Island of Molokai, 2018 ...... 16 Figure A-3. County-Owned Residential Parcels, Island of Lanai, 2018 ...... 17 Figure A-4. State-Owned Residential Parcels, Island of Maui, 2018...... 18 Figure A-4a. State-Owned Residential Parcels, Lahaina, Island of Maui, 2018...... 19 ...... 19 Figure A-4b. State-Owned Residential Parcels, Wailuku-Kahului, Island of Maui, 2018 ...20 ...... 20 Figure A-4c. State-Owned Residential Parcels, Kīhei, Island of Maui, 2018 ...... 21 ...... 21 Figure A-4d. State-Owned Residential Parcels, East Maui, Island of Maui, 2018 ...... 22 ...... 22 Figure A-5. State-Owned Residential Parcels, Island of Molokai, 2018...... 23 Figure A-6. State-Owned Residential Parcels, Island of Lanai, 2018...... 24 Figure A-7. Department of Hawaiian Home Lands-Owned Residential Parcels, West Maui, 2018...... 25 Figure A-8. Department of Hawaiian Home Lands-Owned Residential Parcels, Island of Moloka‘i, 2018...... 26 Figure A-9. Federally Owned Residential Parcels, Island of Maui, 2018 ...... 27 Figure A-10. Federally Owned Residential Parcels, Island of Molokai, 2018 ...... 28 Figure A-11. Land Use Categories, County of Maui, 2018...... 29 Figure B-1. High Priority Parcels, County of Maui, 2018 ...... 32 Figure B-2. High Priority Parcels in the Urban Growth Boundary, Central Maui, 2018.....34 Figure B-3. Top Priority Parcels, County of Maui, 2018...... 35 Figure B-4. Top Priority Parcels – Satellite View, County of Maui, 2018...... 36 Figure B-5. County- and State-owned Parcels Adjacent to DHHL-owned Land, Island of Maui, 2018...... 38 Figure B-6. Top 14 Parcels – Island of Maui, 2018...... 43 Figure B-7. Top 14 Parcels – Island of Moloka‘i, 2018...... 44 Figure B-8. Top 14 Parcels – Island of Lāna‘i, 2018 ...... 45 Figure B-9. Potential Infill Parcels, Wailuku-Kahului, Island of Maui, 2018...... 49 Figure B-10. Potential Infill Parcels, Wailuku-Kahului, Island of Maui, 2018...... 50 Figure B-11. Affordable Housing Projects - Under Construction, Ongoing, Pending, and Potential, County of Maui, 2018 ...... 55 Figure C-1. Location of TMK # 2-2-1-008-046, # 2-2-1-008-113, and # 2-3-9-038-026 ...... 64

Affordable Housing Implementation Plan Final Report Page iii © SMS August, 2018 Figure C-2. Grading Sheet for Kīhei Fire Station Property ...... 65 Figure C-3. Location Map for Kihei Fire Station Property ...... 66 Figure C-3a. Location Map for Kihei Fire Station Property (continued) ...... 67 Figure C-4. Location of TMK # 2-2-2-030-121 ...... 68 Figure C-5. Grading Sheet for Kihei Soccer Fields Property ...... 69 Figure C-65. Location Map for Kihei Soccer Fields Property...... 70 Figure C-7. Location of TMK # 2-3-8-007-047 ...... 71 Figure C-8. Grading Sheet for Lunalilo Property ...... 72 Figure C-9. Location Map for Lunalilo Property...... 73 Figure C-10. Location of TMK # 2-4-4-001-106 ...... 74 Figure C-11. Grading Sheet for Honokōwai Property ...... 75 Figure C-12. Location Map for Honokōwai Property ...... 76 Figure C-13. Location of TMK # 2-4-3-001-079 ...... 77 Figure C-14. Grading Sheet for Nāpili Airport Property...... 78 Figure C-15. Location Map for Nāpili Airport Property ...... 79 Figure C-16. Location of TMK # 2-3-3-001-105 ...... 80 Figure C-17. Grading Sheet for Piihana Property ...... 81 Figure C-18. Location Map for Piihana Property...... 82 Figure C-19. Location of TMK # 2-3-5-001-077 ...... 83 Figure C-20. Grading Sheet for Kehalani Mauka Property ...... 84 Figure C-21. Location Map for Kehalani Mauka Property...... 85 Figure C-22. Location of TMK # 2-3-8-007-117 ...... 86 Figure C-23. Grading Sheet for University Dorms Property ...... 87 Figure C-24. Location Map for University Dorms Property...... 88 Figure C-25. Location of TMK # 2-3-3-001-001 ...... 89 Figure C-26. Grading Sheet for Wailuku Beachfront Property ...... 90 Figure C-27. Location Map for Wailuku Beachfront Property...... 91 Figure C-28. Location of TMK # 2-3-8-007-092 ...... 92 Figure C-29. Grading Sheet for Waiale Road Property ...... 93 Figure C-30. Location Map for Waiale Road Property ...... 94 Figure C-31. Location of TMK # 2-2-5-005-017 ...... 95 Figure C-32. Grading Sheet for Paia Beachfront Property...... 96 Figure C-33. Location Map for Paia Beachfront Property ...... 97 Figure C-34. Location of TMK # 2-2-5-005-060 ...... 98 Figure C-35. Grading Sheet for Paia Soccer Field Property...... 99 Figure C-36. Location of TMK # 2-5-3-004-037 ...... 100

Affordable Housing Implementation Plan Final Report Page iv © SMS August, 2018 Figure C-37 Grading Sheet for Mahalo Place Moloka‘i Property ...... 101 Figure C-38. Location Map for Mahalo Place Moloka‘i Property...... 102 Figure C-39. Location of TMK # 2-5-1-010-010 ...... 103 Figure C-40. Grading Sheet for Maunaloa Road Moloka‘i Property...... 104 Figure C-41. Location Map for Maunaloa Road Moloka‘i Property...... 105 Figure C-42. Location of TMK # 2-4-9-002-058 ...... 106 Figure C-43. Grading Sheet for Fifth Street Lāna‘i Property ...... 107 Figure C-44. Location Map for Fifth Street Lāna‘i Property ...... 108 Figure D-1. Residential Building Permit Checklist...... 128 Figure D-2. Commercial Building Permit Checklist ...... 131

Affordable Housing Implementation Plan Final Report Page v © SMS August, 2018 LIST OF TABLES

Table A-1. Fundamental Characteristics of Top Priority Parcels, County of Maui, 2018 ..14 Table B-1. County- and State-owned Parcels Adjacent to DHHL-owned Land, Island of Maui, 2018...... 37 Table B-2. Sample Data from Revised Scoring Matrix, County of Maui, 2018 ...... 41 Table B-3. County- and State-owned Parcels Adjacent to DHHL-owned Land, Island of Maui, 2018...... 47 Table B-4. Housing Projects Under Construction, Maui County, May 2018...... 51 Table B-5. Ongoing Project Districts and Completed Projects, Maui County, 2018...... 52 Table B-6. Pending Housing Projects, Maui County, 2018...... 53 Table B-6. Pending Housing Projects, Maui County, 2018 (continued)...... 54 Table B-7. Residential Community Plan Designations- Upzone and Other Land Use Change Possibilities, County of Maui, 2018...... 56 Table C-1. Summary of Appraisal Grading Matrix ...... 109 Table C-2. Revised Summary of Appraisal Grading Matrix...... 110 Table D-1. Example of Categories of Development Costs ...... 112 Table D-2. Estimated Costs and Timing of Site Development – University Dorms ...... 115 Table D-3. Estimated Costs and Timing of Site Development – Kīhei Soccer Field ...... 116 Table D-4. Estimated Costs and Timing of Site Development – Kīhei Fire Station ...... 117 Table D-5. Estimated Costs and Timing of Site Development – Kehalani Mauka...... 118 Table D-6. Estimated Costs and Timing of Site Development – Wailae Road ...... 119 Table E-1. Stock of Affordable Housing Units, Maui County, 2016...... 138 Table E-2. Needed Housing Units, County of Maui and State of Hawai‘i, 2015-2025...... 139

Affordable Housing Implementation Plan Final Report Page vi © SMS August, 2018 EXECUTIVE SUMMARY

 An inventory of government owned parcels was developed in order to identify parcels suitable for affordable housing development. A scoring system was created to establish a quantitative measure of suitability of any given parcel of land for affordable housing development. This scoring system was applied to a multitude of parcels in Maui County in order to identify those best suited for affordable housing development.

 After numerous iterations and extensive analysis, six properties were identified as those best suited for affordable housing development. Those parcels include the following:

1. Kīhei Fire Station Property – TMK # 2-2-1-008-046, #2-2-1-008-113, #2-3-9-038-0261 2. Kīhei Soccer Field Property – TMK # 2-2-2-030-1212 3. Lunalilo Property – TMK # 2-3-8-007-0473 4. Honokōwai Property – TMK #2-4-4-001-1064 5. Nāpili Property – TMK # 2-4-3-001-0795 6. Piihana Property – TMK # 2-3-3-001-1056

 With the majority of Maui County’s close to 30,000 affordable housing units currently occupied, it is expected that 12,648 new affordable7 housing units will be needed in Maui County by 2025. If all of the affordable units in ongoing and planned projects were constructed by 2025, the County would still need 9,597 additional units to meet the anticipated need for affordable housing. To achieve that goal, approximately 1,600 new affordable residential units would need to be constructed each year between 2019 and 2025.

 Analysis of the amount households in need of affordable housing can afford to pay each month suggests that multi-family rental housing is the optimal approach to meeting their needs. Not only are multi-family rental units most likely to be affordable to families in need of housing, but they are less costly to develop than larger, single-family homes. In addition, affordable rental units are often eligible for Federal, State, and County subsidies that will further reduce the cost of development.

 The cost of developing a low income affordable multi-family project with a mix of 1, 2 and 3-bedroom units including land acquisition is between $400,000 to $500,000 per unit.8

1 Description, Grading Sheet and Map pp 64 - 67 2 Description, Grading Sheet and Map pp 68 - 70 This property may have some grading issues and identified by Department of Planning. 3 Description, Grading Sheet and Map pp 71 - 73 4 Description, Grading Sheet and Map pp 74 - 76 5 Description, Grading Sheet and Map pp 77 - 79 6 Description, Grading Sheet and Map pp 80-082 7 To accommodate households earning up to 140 percent of the Area Median Income (AMI) for the County. 8 Based on interviews for not-for-profit and for-profit developers and with confirmation from HHFDC.

Affordable Housing Implementation Plan Final Report Page 1 © SMS August, 2018  A combination of funding sources will likely be needed in order to cover the costs of any affordable housing development. The County’s Affordable Housing Fund, Low Income Housing Tax Credits (LIHTC) from the State, and HOME Investment Partnerships or Community Development Block Grants from the deferral government are likely to be accessible funding sources. o Affordable low-income rental projects targeting households with income less than 50 percent AMI are primarily funded by Federal, State and County funds/land and some grants.

 In addition to tapping various sources of funding, the County should consider offering incentives to developers to encourage the construction of affordable housing units. Possible incentives include fee exemptions or waivers, fast-tracked approvals, density bonus programs, and alternative design programs. Barriers or impediments to affordable housing development, such as inadequate infrastructure and a lengthy and costly approvals process, needed to be mitigated to the extent possible.

Affordable Housing Implementation Plan Final Report Page 2 © SMS August, 2018 INTRODUCTION

GOAL

The goal of the Affordable Housing Implementation Plan is to establish a strategic roadmap to meet current and projected needs for affordable housing for County residents. The path to achieve this goal includes the following:

 Analyze past and current affordable housing policies  Incorporate the history and needs of the people of Maui County  Conduct the project in collaboration with housing stakeholders and coordination with other administrative agencies involved in providing affordable housing  Develop a specific plan for developing affordable housing units in Maui County

BACKGROUND

The Hawai‘i Housing Planning Study, 2016, Maui County (HHPS) was the sixth in a series of comprehensive housing studies conducted in the State of Hawai‘i. It described a continuously increasing housing problem in Hawai‘i that had reached crisis proportions. Experience in Maui County agreed with its conclusions based on the County's own studies, investigations, and public workshops. Recently, at the request of the Maui County Council, the Office of Council Services requested the development of a formal Affordable Housing Implementation Plan. That plan would identify specific development projects that will produce enough affordable housing units to fill the need in Maui County for the next several years.

METHOD

The project to develop an affordable housing implementation plan had the following components:

 An inventory of properties suitable for development of affordable housing units.  Identifying development and funding alternatives for those properties  Estimating the number and types of affordable units needed in Maui County  Identifying types of incentives to be applied to affordable development projects  Prioritize properties using a scoring system reflecting largest numbers of affordable units at the lowest cost  Formulate the results as a master implementation plan for producing affordable housing units in Maui County.

The Affordable Housing Implementation Plan was conducted simultaneously with the Affordable Housing Policy Study and findings of both studies were included in the implementation plan.

Affordable Housing Implementation Plan Final Report Page 3 © SMS August, 2018 INVENTORY OF GOVERNMENT-OWNED PARCELS

An initial step of the implementation plan was to inventory government-owned land parcels that can be developed as affordable residential housing. The inventory is a list of parcels with appropriate characteristics as described below.

PARCELS

Identification of Maui County parcels suitable for affordable housing development was conducted using ESRI’s ArcGIS software. Publicly available data layers were imported to the program and suitable parcels were identified using the primary selection criteria detailed below.

 vacant, government-owned9 land parcels suited for developing affordable housing units;  parcels included in the Maui Island Plan and community plans;  parcels and projects permitted, but not yet approved;  developed parcels that could be redeveloped for affordable housing;  existing properties that might be refurbished as affordable housing units; and  other relevant project types.

SCORING SYSTEM

As the foundation for the scoring system, the following fundamental characteristics were assembled for each property in the inventory.

Fundamental characteristics

 Tax Map Key (TMK) number  Owner  Parcel Size  Land Value  Improvements  Location

Once the foundational parcel data was assembled, a system of scoring each parcel to determine its suitability for affordable housing development was created10. Each parcel was assigned a value, ranging from one through ten, for eleven different measures of suitability for development. These measures included:

 Ownership  PITT Code11  Vacancy Status  Location within a designated Urban Growth Boundary (UGB)

9 Includes Federal, State, Department of Hawaiian Home Lands, and County-owned properties with some privately- owned parcels added later. 10 For detailed information about the parcel scoring system, see Appendix B. 11 Real Property Assessment Tax Class identification code used to identify the tax rate for a given property

Affordable Housing Implementation Plan Final Report Page 4 © SMS August, 2018  Recommendation by an outside source  Infrastructure  County Zoning Code  Location in a Business Center  Location in a Special Management Area (SMA)  Flood Hazard  Negative Factors

Once values were assigned for all of the measures, those scores were totaled to yield an overall summary score for each parcel. Parcels with the highest summary scores were deemed the best candidates for affordable housing development.

Refining the scoring process for parcels throughout the County led to several important realizations about the most efficient and effective way to identify ideal land for affordable housing development. With the goal of developing as many affordable housing units in the shortest timeframe at the lowest possible cost to the County, parcels with the greatest number of positive qualities and the fewest number of impediments to development should be prioritized. Ideal parcels for development, therefore, will be:

1. Located in an area with adequate infrastructure and utilities – because it is both costly and time-consuming to provide an area with access to water or electricity, this should be a primary consideration 2. Be situated near job opportunities, grocery stores, medical facilities and other basic services – because transportation is frequently a challenge for affordable housing residents, this is a very important consideration 3. County-owned – the time and effort required to obtain the property from another entity can be avoided 4. In or near the designated Urban Growth Boundary areas – since extensive research was already conducted to determine the optimal conditions for development in order to identify the UGBs 5. Vacant - for the construction of new units to avoid the cost of removing unwanted structures12 ; 6. Located outside of Special Management Areas – to avoid delays due to the additional reviews and approvals required 7. Zoned for one of the uses that allows for residential development – residential development is prohibited in certain zoning categories and the re-zoning process can cause extensive delays

This expanded and refined process of evaluating parcels resulted in a list of 12 parcels. These properties with the highest summary cores were referred to a local housing expert for more thorough evaluation. A detailed account of this evaluative process is provided in Appendix C.

12 Does not apply to refurbishment or redevelopment projects.

Affordable Housing Implementation Plan Final Report Page 5 © SMS August, 2018 DEVELOPMENT CHARACTERISTICS

Once the fundamental characteristics and scores for each of the 11 measures of suitability for development were assembled, and the parcel grading data were provided by a local housing expert, the development characteristics for the top six properties were examined. This analysis was intended to specify the steps necessary to develop identified parcels that includes the following:

 Timeframe for development;  Approximate cost estimate;  Possible funding mechanisms;  Potential incentives; and  Barriers to development.

Determining these development characteristics for the top-scoring parcels provided a quantitative way to compare one parcel to another. A detailed description timeframe for development and the approximate development costs for each of the top six parcels is provided in Appendix D – Development Characteristics.

The multitude of possible sources for funding affordable housing development were examined to determine which ones might be most appropriate for the County of Maui’s affordable housing development initiatives. Funding sources are not specific to any particular parcel and may be applied to any of the potential projects. The most attractive potential sources for funding for Maui County’s affordable housing development efforts included:

 Maui County - Affordable Housing Fund  State of Hawai‘i - Dwelling Unit Revolving Fund, Low Income Housing Tax Credits, Rental Housing Revolving Fund, Rental Assistance Revolving Fund, and Hula Mae-Multi Family Bond  US Department of Housing and Urban Development (HUD) – HOME Investment Partnerships, Community Development Block Grants (CDBG), 202, and HUD 811

As infrastructure is necessary for successful affordable housing development, several options are available to cover the costs of creating the infrastructure required to support affordable housing development. Funding for infrastructure may be achieved through:

 Value Capture Bonds (VCB)  Infrastructure Financing Districts (IFD)  State Infrastructure Bank (I-Bank)  Local Option Fuel Tax  Local Option Sales Tax

Because an overlay of existing infrastructure was not available to SMS, we were not able to include the impact of infrastructure cost for each parcel and recommend that a review be done by the appropriate departments.

A thorough explanation of the benefits and restrictions of all the various funding mechanisms is provided in Appendix D – Development Characteristics: Funding Alternatives.

Affordable Housing Implementation Plan Final Report Page 6 © SMS August, 2018 Government can encourage the development of affordable housing by offering incentives to developers to offset the costs associated with providing below market rate housing units. Through interviews with housing developers and other local housing experts, examination of incentives offered in other places throughout the United States, and input from County executives, a set of potential incentives for affordable housing development was compiled. Possible incentives to encourage the addition of affordable housing units in Maui County. Possible incentives included:

 impact fee reimbursements, waivers or postponement plans;  administrative construction fee exemptions;  development plan fee waivers;  priority processing for qualifying projects;  sales tax rebates;  property tax abatement;  low income housing tax credits;  private activity bonds to finance construction;  density bonus programs that allow more housing units per acre than would otherwise be permitted; and  alternative design standards.

The exact nature of each of these incentives is included in Appendix D – Development Characteristics - Incentives.

The shortage of affordable housing units in Maui County clearly suggests that barriers to development exist. It was important to identify these barriers in order to ascertain the best way to mitigate them. The list of barriers was compiled based on interviews with housing developers and other housing experts, a review of scholarly articles on the subject, and input from County executives. The top impediments to affordable housing development in Maui County include:

 Infrastructure  Rezoning Process  Approval Process  Entitlements

The cost of improving off-site infrastructure has been identified as a major contributor to the high cost of housing and as a barrier to development. In addition, challenges encountered with the Department of Water Supply were frequently mentioned as impediments.

Similarly, the length of time required and expense involved in navigating the approval and/or rezoning processes made developers hesitant to embark on an affordable housing development project. Finally, the lengthy process for resolving entitlements was described by several interviewees as a significant impediment to development.

Barriers and impediments to affordable housing development in Maui County are described in greater detail in Appendix D – Development Characteristics – Barriers and Impediments to Affordable Housing Development, as well as in the Affordable Housing Policy Study.

Affordable Housing Implementation Plan Final Report Page 7 © SMS August, 2018 AFFORDABLE HOUSING NEED

The need for affordable housing in Maui County is well documented. Numerous studies during the past several decades have reached the same conclusion: there is a significant need for additional affordable housing units in Maui County.

CURRENT INVENTORY OF AFFORDABLE UNITS

According to the Hawai‘i Housing Policy Study 2016, there are 29,612 housing units in Maui County deemed affordable to households earning 100 percent of the Area Median Income (AMI). Only 9,354 of these housing units are affordable for households earning just 50 percent AMI. While close to 30,000 housing units sounds substantial, it is important to note that a majority of these units are currently occupied. Throughout the County, there are only 4,967 vacant units affordable for households earning 100 percent AMI. Less than half of these vacant units (2,049) are priced at a level affordable to households making 50 percent AMI.

AFFORDABLE HOUSING UNITS NEEDED

According to the 2016 Hawai‘i Housing Planning Study, 13,949 housing units are needed in Maui County by 2025. Of these, 91 percent (12,648 units) are needed for households earning 140 percent AMI or less. These households typically earn less than $150,000 annually.

Some of these needed units are already in the pipeline. There are 184 affordable units planned for the Kahoma Village development in Lahaina. There are 402 affordable housing units in projects currently under construction with expected completion by Fall 2019. An additional 651 affordable units are included in three Ongoing development projects, but the completion date for these units is unclear at this time.13 There are 1,998 affordable housing units are included in fourteen projects currently classified as Pending (Appendix Tables B-4 through B-6)).

Assuming the 402 affordable units planned by Fall 2019 are constructed, that leaves a need for over 12,246 affordable units by 2025. If all of the affordable units in ongoing and planned projects were constructed by 2025, the County would still need 9,597 additional units to meet the anticipated need for affordable housing by 2025. To achieve that goal, approximately 1,600 new affordable residential units would need to be constructed each year between 2019 and 2025. This is a challenging goal and will require a focused commitment to building affordable housing during the next six years.

13 The most recent update regarding the status of these projects, released in May 2018, did not provide any additional information regarding the expected completion dates for these projects.

Affordable Housing Implementation Plan Final Report Page 8 © SMS August, 2018 TYPES OF UNITS NEEDED

According to the results of the Hawai‘i Housing Planning Study Demand Survey, close to half of Maui County households that earn 140 percent AMI or less and plan to move would prefer to purchase a home rather than rent (47.5%). The majority of these households (86.8%) would prefer to own a single-family home rather than a multi-family unit. While these are understandable preferences, the number of these households that will be able to afford to purchase a single-family home is likely very limited.

Among all Maui County mover households14 who plan to rent their next home, the median affordable monthly rent payment was $1,378. The affordable rent amount would clearly be lower for the close to half of the households planning to rent (44.5%) who earn less than 50 percent AMI.

Households planning to buy their next home stated they could afford a median monthly housing payment of $2,644. This was supported by both their median monthly income and by their current median monthly shelter payment of $2,690. Among households who intend to buy their next residence, only about one-third (35.7%) earn less than 100 percent AMI. More than one-quarter of these households (25.7%) have household incomes above 180 percent AMI.

The units that mover households can afford should clearly be factored in to decisions regarding the type of affordable housing units to develop. The information provided suggests that for-sale units will be sought by those households that can afford to pay market rates for housing. Households with the lowest incomes who are in the greatest need of affordable housing options will be looking for rental units. Further, two-thirds of the households that plan to rent stated that they would definitely consider a multi-family unit if a single-family unit was not available in their price range.

Not only are multi-family rental units most likely to be affordable to families in need of housing, but they are less costly to develop than larger, single-family homes. In addition, affordable rental units are often eligible for Federal, State, and County subsidies that will further reduce the cost of development.

Further discussion of the number and types of affordable housing units needed in Maui County can be found in Appendix E.

14 As defined in the Hawai‘i Housing Planning Study 2016, mover households are defined as those households planning to move within ten year and stay on or move to Maui County.

Affordable Housing Implementation Plan Final Report Page 9 © SMS August, 2018 DEVELOPMENT PROCESS

The overall process to develop any given parcel is fairly consistent from project to project although the details within each step can be significantly different. First the parcel has been identified and the end use or market is determined (e.g., affordable, low income, rentals, fee simple, etc.). Once the property and the target market have been identified, estimates for its development are prepared. These estimates include the following:

1) land acquisition 2) land and project entitlements; 3) conceptual planning; 4) environmental assessments; 5) planning and design; 6) permitting and bidding; and 7) construction.

Based on these estimated costs and financial analysis, funding must be appropriated. If sufficient funds are secured, developers begin working through the permitting stages.15 Involving as many as 59 steps and fifteen separate government agencies, the process of obtaining the necessary building permits can be long and daunting endeavor.

Although this general process is fairly standard, it is significantly more challenging for an affordable or low-income rental project because of the economics. Without subsidies, the developer's margins are slim to none and the risks are disproportionately high. When the government serves as the developer, this is less of an issue since profit or losses are not the driver, but the subsidized costs are much higher. Note that for low income affordable rental projects targeting households with less than 50 percent AMI the primary funders are Federal, State and County, with the potential for grants.

Appendix F – has an outline for Implementation for low-income affordable rental projects that are primarily County or State driven. It also includes an outline for market-rate projects with workforce housing requirements.

In the course of this project, a decision tree was developed to aid in the evaluation of properties as suitable or unsuitable for affordable housing development. A copy of this decision-making tool is also included in Appendix F – Implementation Steps Outline.

15 Credit for this helpful overview of the development process goes to Alan Murata.

Affordable Housing Implementation Plan Final Report Page 10 © SMS August, 2018 RECOMMENDATIONS

Based on this review of available and promising parcels, the most productive geographic areas for developing affordable housing on the Island of Maui are in Kīhei, Kahului, and Wailuku. These would be followed by the Nāpili and Lahaina areas. There are promising developments planned for or being discussed for all of these areas.

The Kīhei soccer field and fire station properties look promising and development of those parcels should be explored. Along with exploring development options for the other four government- owned properties, we recommend entering into discussions with Everett Dowling regarding the viability of affordable housing development on the Piihana property.

The remaining properties examined in detail throughout this project may be suitable for affordable housing development in the future, but the challenges presented with each of them (lack of water or sewer, potential noise pollution from the airport, etc.) make them less than ideal to address the immediate need for affordable housing.

Although the parcels on Moloka‘i and Lāna‘i are well suited to affordable housing development, the greatest demand is currently on the Island of Maui. It is recommended that development projects on Maui take precedence over those on Moloka‘i and Lāna‘i.

In conclusion, the following parcels are most strongly recommended for affordable housing development by the County of Maui:

1) Kīhei Fire Station Property – TMK # 2-2-1-008-046, #2-2-1-008-113, #2-3-9-038-026 2) Kīhei Soccer Field Property – TMK # 2-2-2-030-12116 3) Lunalilo Property – TMK # 2-3-8-007-047 4) Honokōwai Property – TMK #2-4-4-001-106 5) Nāpili Property – TMK # 2-4-3-001-079 6) Piihana Property – TMK # 2-3-3-001-105

With a strong commitment to developing affordable housing for the people of Maui County, a willingness to seek out public and private partnerships, and a desire to seek creative solutions to the various challenges of affordable housing development, the County of Maui can successfully address the need for affordable housing units.

16 This property may have some grading issues as identified by Department of Planning.

Affordable Housing Implementation Plan Final Report Page 11 © SMS August, 2018 APPENDICES

Affordable Housing Implementation Plan Final Report Page 12 © SMS August, 2018 APPENDIX A – PARCEL INVENTORY AND EVALUATION

Affordable Housing Implementation Plan Final Report Page 13 © SMS August, 2018 For each property in the inventory, the following characteristics were assembled.

Fundamental characteristics

 Basic identifiers: TMK number, address, size, value, improvements, zoning codes, and other factors relevant to residential development  Location: Kahului, Wailuku, South Maui, West Maui, and all other locations in the county

Table A-1. Fundamental Characteristics of Top Priority Parcels, County of Maui, 2018

TMK Address MajorOwner TaxAcres LandValue BldgValue PittCode NHoodCode Region In UGB 225011099 Skill Village Govt. County of Maui 10.2127 100 0 100 1100-1 Paia-Haiku No 235020036 Waiale Rd Govt. County of Maui 7.5151 100 0 100 1100-1 Wailuku-Kahului Yes 239018195 Kuli Pu‘u St Govt. County of Maui 5.1703 100 0 100 1100-1 Kīhei-Mākena Yes 245030136 Kahoma Street Govt. County of Maui 5.081 500 0 100 1100-1 Lahaina Yes 238046026 Mahalani St Govt. County of Maui 7.049 1810200 0 100 3868-1 Wailuku-Kahului Yes 243001028 Hui Rd A Govt. County of Maui 4.675 500 0 100 1100-1 Lahaina No 222030121 Pi‘ilani Govt. County of Maui 4.14 400 0 100 1100-1 Kīhei-Mākena Yes

There are 880 government-owned parcels in the county that are zoned for residential development17. Of these residential parcels, 286 are owned by Maui County and are shown in Appendix Figures A-1 through A-3. The State of Hawai‘i presently owns 178 residentially zoned parcels in Maui County (Appendix Figures A-4 through A-6). On the islands of Maui and Moloka‘i, the Department of Hawaiian Home Lands (DHHL) owns 412 parcels zoned for residential development (Appendix Figures A-7 and A-8). Finally, there are four residential parcels in Maui County owned by the federal government (Appendix Figures A-9 and A-10).

17 See Parcel Scoring Spreadsheet 072618.xlsx spreadsheet for details on county, state, DHHL, and federally owned parcels

Affordable Housing Implementation Plan Final Report Page 14 © SMS August, 2018 Figure A-1. County-Owned Residential Parcels, West and Central Maui, 2018

Affordable Housing Implementation Plan Final Report Page 15 © SMS August, 2018 Figure A-2. County-Owned Residential Parcels, Island of Molokai, 2018

Affordable Housing Implementation Plan Final Report Page 16 © SMS August, 2018 Figure A-3. County-Owned Residential Parcels, Island of Lanai, 2018

Affordable Housing Implementation Plan Final Report Page 17 © SMS August, 2018 Figure A-4. State-Owned Residential Parcels, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 18 © SMS August, 2018 Figure A-4a. State-Owned Residential Parcels, Lahaina, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 19 © SMS August, 2018 Figure A-4b. State-Owned Residential Parcels, Wailuku-Kahului, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 20 © SMS August, 2018 Figure A-4c. State-Owned Residential Parcels, Kīhei, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 21 © SMS August, 2018 Figure A-4d. State-Owned Residential Parcels, East Maui, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 22 © SMS August, 2018 Figure A-5. State-Owned Residential Parcels, Island of Molokai, 2018

Affordable Housing Implementation Plan Final Report Page 23 © SMS August, 2018 Figure A-6. State-Owned Residential Parcels, Island of Lanai, 2018

Affordable Housing Implementation Plan Final Report Page 24 © SMS August, 2018 Figure A-7. Department of Hawaiian Home Lands-Owned Residential Parcels, West Maui, 2018

Affordable Housing Implementation Plan Final Report Page 25 © SMS August, 2018 Figure A-8. Department of Hawaiian Home Lands-Owned Residential Parcels, Island of Moloka‘i, 2018

Affordable Housing Implementation Plan Final Report Page 26 © SMS August, 2018 Figure A-9. Federally Owned Residential Parcels, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 27 © SMS August, 2018 Figure A-10. Federally Owned Residential Parcels, Island of Molokai, 2018

Affordable Housing Implementation Plan Final Report Page 28 © SMS August, 2018 Figure A-11. Land Use Categories, County of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 29 © SMS August, 2018 APPENDIX B – PARCEL SCORING SYSTEM ITERATIONS

Affordable Housing Implementation Plan Final Report Page 30 © SMS August, 2018 PHASE I EVALUATION

Because the Affordable Housing Implementation Plan was designed to identify the optimal way to approach affordable housing development in the County of Maui, it was decided that vacant, County-owned residential parcels would be considered first. Among the 286 County-owned residential parcels, 218 parcels were identified as vacant properties. Using the scoring system, seven of these parcels were identified priorities for consideration. These properties are shown in Appendix Figure B-1.

Affordable Housing Implementation Plan Final Report Page 31 © SMS August, 2018 Figure B-1. High Priority Parcels, County of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 32 © SMS August, 2018 In the most recent Maui County development plan, the County specified Urban Growth Boundaries (UGBs). An Urban Growth Boundary is an officially adopted and mapped line that separates an urban area from its surrounding greenbelt of open lands, including farms, watersheds and parks. UGBs are set for significant periods of time — typically 20 years or more — to discourage speculation at the urban or suburban fringe. A UGB is a pro-active growth management tool that seeks to contain, control, direct or phase growth in order to promote more compact, contiguous urban development. Another key purpose of a UGB is to protect farmlands and other resource lands, like watersheds or wildlife habitat.

The high priority parcels were evaluated to determine whether they fell within the Urban Growth Boundaries. Five of the seven parcels were located within the UGB (Figure B-2).

A detailed review was done on each of the five top priority parcels. Using Google Earth, State of Hawai‘i GIS overlays, and other available resources, each parcel was evaluated to ensure that the information in the TMK database appeared to be accurate and to determine what type of infrastructure existed around the parcels.

Two of the parcels, TMK #239018195 and TMK #245030136, were eliminated because they appeared to be County easements or right-of-way parcels unsuitable for affordable housing development. One additional parcel, TMK # 238046026, was eliminated because the Maui Medical Center and several medical offices are now located there. In the end, there were two County-owned residential parcels of four acres or more that could be suitable for affordable housing developments (Figures B-3 and B-4).

Affordable Housing Implementation Plan Final Report Page 33 © SMS August, 2018 Figure B-2. High Priority Parcels in the Urban Growth Boundary, Central Maui, 2018

Affordable Housing Implementation Plan Final Report Page 34 © SMS August, 2018 Figure B-3. Top Priority Parcels, County of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 35 © SMS August, 2018 Figure B-4. Top Priority Parcels – Satellite View, County of Maui, 2018

TMK # 222030121

TMK # 235020036

Affordable Housing Implementation Plan Final Report Page 36 © SMS August, 2018 PHASE II EVALUATION

Following the initial review of these County-owned, vacant, residential parcels with four or more acres, input from County executives, housing development experts, and other stakeholders led to a revision of the criteria by which parcels were scored for potential affordable housing development.

It was determined that the minimum of four acres was an outdated requirement so that element of the scoring system was eliminated. While residential zoning was deemed preferable and remains in the parcel scoring system, the search was expanded to include parcels not currently zoned for residential development.

State- and Federal-owned properties were re-evaluated in detail during this second phase of the project. It was determined that none of the parcels owned by the federal government were well suited to affordable housing development and they were excluded from further evaluation. Several State-owned properties were reviewed in detail and found to be potential options for affordable housing development. Since there were numerous County-owned parcels deemed suitable for affordable housing development, the County lands took precedent over State lands in the present study. State-owned parcels were not excluded but categorized as secondary to County-owned parcels.

Similarly, because DHHL’s mission is to protect and improve the lives of native Hawaiians by administering Hawaiian home lands as homesteads, DHHL may be unlikely to offer properties ideal for housing development to the County. Five County- and State-owned parcels adjacent to DHHL-owned lands were identified (Table B-1). These five parcels, shown in Figure B-5, may represent opportunities for collaborative development of affordable housing.

Table B-1. County- and State-owned Parcels Adjacent to DHHL-owned Land, Island of Maui, 2018

Tax Land Land Bldg Bldg Pitt Nhood TMK Major Owner Acres Value Exempt Value Exempt Code Code 232012002 Govt. County of Maui 1.834 18,300 18,300 1,600 0 600 3431-6 244002008 Govt. State 86.28 3,028,100 3,028,100 120,800 120,800 500 4456-5 245021010 Govt. State 3.849 1,701,800 1,701,800 0 0 100 4532-1 245027048 Govt. State 0.209 163,600 163,600 0 0 100 4532-1 245027049 Govt. State 0.044 1,000 1,000 0 0 100 4532-1

Affordable Housing Implementation Plan Final Report Page 37 © SMS August, 2018 Figure B-5. County- and State-owned Parcels Adjacent to DHHL-owned Land, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 38 © SMS August, 2018 Several new elements were added to the scoring criteria during phase II. Because households in need of affordable housing often have transportation challenges, a category was added to the matrix that measured whether parcels were situated in the areas of the County with the highest concentrations of businesses and jobs. According to the latest County Business Patterns data from the U.S. Census Bureau, these areas are all in West Maui and include Kīhei–Mākena, Lahaina, Wailuku, and Kahului.

Each parcel’s flood hazard rating was also included in the matrix during phase II. Ultimately, the flood hazard rating was not a useful discriminatory tool because all of the parcels were classified as “areas of minimal flood hazard”.

An indication of the level of infrastructure present at each parcel was added to the scoring matrix. Each parcel was also evaluated to determine whether it was in a Special Management Area (SMA). Development within the SMA requires a separate application process that must be reviewed by multiple County and State departments. Finally, the County zoning code was provided for the highest scoring parcels.

Within the parcel scoring spreadsheet, values were assigned according to the following rules:

 County Owned – 15 points if the parcel is owned by the County of Maui, 7 points if the parcel is owned by the State of Hawai‘i or DHHL, 5 points if the parcel is owned by the federal government, 0 points if the parcel is privately owned  PITT Code – 5 points if the parcel has a Real Property Assessment Tax Class identification code, or PITT code, allowing for residential development, 0 points if the parcel has a non-residential PITT code  Vacant – 10 points if the parcel is vacant (as indicated by a building value of 0), 0 points if the parcel is not vacant land  In UGB – 10 points if the parcel falls within the designated Urban Growth Boundary, 0 points if the parcel is outside the Urban Growth Boundary  Kīhei, Wailuku, Kahului – 10 points if the parcels is located in one of these major areas, 0 points if it is located outside these areas  Source (TIG report, interviews, etc.) – 25 points if the parcel was specifically identified as having a strong potential for affordable housing development in the TIG report or similar document, 15 points if the parcel was mentioned as a good candidate for affordable housing development in the TIG report, County correspondence, etc., 0 points if the parcel has not been specifically identified by outside sources as well-suited to affordable housing development  Neg. Factors – this calculation was used to reduce the overall scores of parcels not suitable for affordable housing development (easement areas, occupied parcels, etc.) to zero and eliminate them from consideration18. Negative factor scores were calculated as negative 1 times the sum of the other scores in all other categories. When all the category scores were added to determine the Summary Score, the Summary Score had a value of zero.

18 With the large number of parcels to consider, it was most efficient to eliminate a parcel from the review process when one or more significant impediments to development (e.g., location in a remote area with inadequate infrastructure) was discovered.

Affordable Housing Implementation Plan Final Report Page 39 © SMS August, 2018  Infrastructure Present – 10 points if adequate infrastructure (roads, water, power, sewer) is already present, 5 points if partial infrastructure is present, 0 points if infrastructure is not present  In Business Center – 10 points if the parcel is in an area with a high concentration of businesses and jobs (Lahaina, Kīhei, Wailuku, Kahului), 0 points if the parcel is not in one of these areas  Special Management Area – 10 points if the parcel is not located in a Special Management Area (SMA), 0 points if the parcel is located within the SMA boundary  Less than 15 Acres – 2 points if the parcel is less than 15 acres and, therefore, won’t require review by the State Land Use Division, 0 points if the parcel is 15 acres or larger  Summary Score – the sum obtained when all the above scores are added together, with a maximum possible score of 102 points

A sample from the revised scoring matrix that includes the fourteen highest scoring parcels based on the revised scoring system are shown in Table B-2 and Figures B-6 through B-8 below. The complete matrix was provided as a separate Excel file.

Affordable Housing Implementation Plan Final Report Page 40 © SMS August, 2018 Table B-2. Sample Data from Revised Scoring Matrix, County of Maui, 2018

Source (TIG rpt, interviews, not res zone but In County Special Tax Land Bldg Pitt Nhood County Res In viable, Infrastructure Business Zoning Mgmt Summary TMK MajorOwner Acres Value Value Code Code Owned Zoning Vacant UGB etc.) Present Center Code Area Score 221008046 Govt. County of Maui 1.562 200 0 100 1100-1 10 10 10 10 25 10 10 P-1 0 85 239038026 Govt. County of Maui 3.152 606700 0 100 3925-8 10 10 10 10 25 10 10 P-1 0 85 221008113 Govt. County of Maui 1.038 1085200 0 600 2185-6 10 0 10 10 25 10 10 P-1 0 75 238007092 Govt. County of Maui 37.201 520800 0 500 3855-5 10 0 10 5 15 10 10 AG 10 70 222030121 Govt. County of Maui 4.14 400 0 100 1100-1 10 10 10 10 10 10 PD-5 0 60 233001001 Govt. County of Maui 63.701 834300 0 999 3381-5 10 0 10 5 15 10 10 INT, AG, R-3 0 60 243001079 Govt. County of Maui 6.181 951900 0 500 4456-5 10 0 10 10 10 10 AG 10 60 251010010 Govt. County of Maui 1.1807 107000 0 100 5122-1 10 10 10 10 10 0 INT 10 60 253004037 Govt. County of Maui 1.2959 89800 0 100 5361-8 10 10 10 10 10 0 INT 10 60 234032055 Govt. County of Maui 1.438 563700 0 500 3511-5 10 0 10 0 10 10 R-2 10 50 249002058 Govt. County of Maui 115 749700 0 500 4962-5 10 0 10 10 10 0 INT, P-1, PK 10 50 225005017 Govt. County of Maui 25.222 478600 0 600 2531-6 10 0 10 10 10 0 PK, P-1 0 40 225005060 Govt. County of Maui 11.062 39800 0 500 2544-5 10 0 10 10 10 0 AG 0 40 226009023 Govt. County of Maui 4.165 88600 0 600 2531-6 10 0 10 10 10 0 PK, P-1 0 40

Affordable Housing Implementation Plan Final Report Page 41 © SMS August, 2018 Challenges when scoring parcels and determining parcel suitability for development included:

1. County zoning information is not easily accessible at the parcel level – because zoning codes need to be added to the online parcel lookup data and/or publicly available as a GIS layer

2. Inconsistencies between PITT codes and zoning codes cause notable delays in identifying suitable parcels for development

PHASE III EVALUATION

In the late stages of the project, it was determined that two of the properties identified as highest priorities for affordable housing development were not, in fact, viable. The scoring system developed for this project allowed SMS to identify the next two parcels with the highest Summary Scores. These properties, one on Lunalilo Street and one owned by the State but managed by the County, were sent to the appraiser for further evaluation. This confirmed that the properties, detailed in Figures C-13 and C-14, were strong candidates for affordable housing development.

In addition to these two parcels, a third property emerged as a strong candidate for affordable housing development. Conversations with Everett Dowling revealed a property along Kahekili Highway that had previously been considered for affordable housing development. That site was added to the list of high potential parcels and is detailed in Figure C-15.

Affordable Housing Implementation Plan Final Report Page 42 © SMS August, 2018 Figure B-6. Top 14 Parcels – Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 43 © SMS August, 2018 Figure B-7. Top 14 Parcels – Island of Moloka‘i, 2018

Affordable Housing Implementation Plan Final Report Page 44 © SMS August, 2018 Figure B-8. Top 14 Parcels – Island of Lāna‘i, 2018

Affordable Housing Implementation Plan Final Report Page 45 © SMS August, 2018 PROPERTY CATEGORIES

In addition to vacant, government-owned properties, several other property types were included in the evaluation of parcels well-suited to affordable housing development. These included Pending, Partnership, Redevelopment, and Proactively Rezoned projects.

Pending Projects

These are properties identified on the Department of Planning’s list of housing projects under construction (Tables B-4 through B-6; Figure B-9). These projects have received planning and construction approval, but have not yet broken ground. With these pending projects, much of the work of identifying a suitable location and a willing developer has already been accomplished. If the barriers to development that are preventing these projects from moving forward could be addressed, they have the potential to provide numbers affordable housing units for Maui County residents.

Interviews with persons knowledgeable about four of the pending projects – Honualua Gardens, Kenolio Apartments, Kaiwahine Subdivision, and Kula Ridge - revealed common challenges. A lack of water and other infrastructure such as electricity and sewer was cited as a major barrier to development for these projects. If the County of Maui was able to expedite the approval process and possibly contribute to the efforts to secure the necessary infrastructure, these projects may become viable housing options. Similarly, streamlining the process to avoid the extensive delays encountered in obtaining land use designation changes and other approvals may allow these four projects to transition to active development.

Partnership Projects

A potential partner in development is the Department of Hawaiian Home Lands (DHHL). DHHL’s mission is to protect and improve the lives of native Hawaiians by administering Hawaiian home lands for homesteads, Many of DHHL beneficiaries on Maui have household income < 50 percent AMI, therefore if they develop low income affordable housing this benefits the County by providing more units. High development costs due to infrastructure expenses are one reason the DHHL lots have not been developed. Five County- and State-owned parcels were identified as being adjacent to DHHL-owned lands. These five parcels may represent an opportunity to collaborate with DHHL on affordable housing development. Shared infrastructure costs could bring down the cost for both DHHL and County developments.

Opportunity also exists for partnership with private entities to develop affordable housing. Certain developers in Hawai‘i are known for their ongoing commitment to affordable housing development. Makani Maeva, president and CEO of Kailua-based Ahe Group, is almost exclusively focused on improving affordable housing built in that past. As one of Hawai‘i, most prolific affordable housing developers, Peter Savio has delivered 10,000 affordable units since 1980. In addition to individual developers, non-profit organizations are often willing to partner with government agencies to produce affordable housing. Catholic Charities Hawai‘i, Housing Hawai‘i, and Na Hale O Maui support a wide variety of affordable housing projects.

Affordable Housing Implementation Plan Final Report Page 46 © SMS August, 2018 Table B-3. County- and State-owned Parcels Adjacent to DHHL-owned Land, Island of Maui, 2018

Tax Land Land Bldg Bldg Pitt Nhood TMK Major Owner Acres Value Exempt Value Exempt Code Code 232012002 Govt. County of Maui 1.834 18300 18300 1600 0 600 3431-6 244002008 Govt. State 86.28 3028100 3028100 120800 120800 500 4456-5 245021010 Govt. State 3.849 1701800 1701800 0 0 100 4532-1 245027048 Govt. State 0.2089 163600 163600 0 0 100 4532-1 245027049 Govt. State 0.0436 1000 1000 0 0 100 4532-1

Redevelopment and Infill Projects

Using indicators like the age of the housing unit, tax valuation of the parcel, and ownership, SMS worked to identify properties with unusable or dilapidated structures that might be positioned for redevelopment or refurbishment. Unfortunately, these endeavors did not yield any promising parcels for redevelopment. It was determined that redevelopment projects should not be the focus of Maui County’s affordable housing implementation efforts. The time and effort required to produce little or no gain in affordable units cannot be justified.

Successful infill development is characterized by overall residential densities high enough to support improved transportation choices, as well as a wider variety of services and amenities. Attention to design of infill development is essential to ensure that the new development fits the existing context, and gains neighborhood acceptance. A cooperative partnership between government, the development community, financial institutions, non-profit organizations, neighborhood organizations and other resources is essential to achieve infill success.

SMS identified 31 parcels that were potentially infill development properties. All of these properties are located in wither the Lahaina or Wailuku-Kahului areas, owned by the County of Maui, are in urban residential areas, and are currently vacant. These parcels, shown in Figures B-9 and B-10, range in size from 0.01 acres to nearly 3 acres. The detailed list of characteristics for these potential infill parcels can be found in the Infill Parcels tab of the parcel scoring spreadsheet.19

Again, while redevelopment and infill development are options for creating more affordable housing units, they are much less likely than a large multi-family development project to produce a significant number of new units. Further, a more negative community reaction is often encountered with infill development than with development projects on large, vacant parcels. These may be useful opportunities to consider in the future, but it is not recommended that the County focus on redevelopment and/or infill development at this time.

19 Provided under separate cover as ParcelScoringSpreadsheet072618.xlsx

Affordable Housing Implementation Plan Final Report Page 47 © SMS August, 2018 Proactive Rezoning and Infrastructure

The County Planning Department developed a list of parcels recommended for proactive zoning. With proactive zoning, the County can rezone properties without waiting for the developer to request a change in zoning. By rezoning these properties to residential use, this would save a significant amount of time when developers seek to obtain approvals. These properties would not be ideal for the County to develop because they are privately owned and already have a plan on file. These properties are detailed in Appendix Table B-7.

The proactive development of infrastructure has also been considered as a means by which the County could encourage affordable housing development. This concept is discussed in detail in the Maui County Affordable Housing Policy Report (pp. 7-8).

Underutilized Properties

Underutilized properties are those parcels of developable land within a district that would otherwise qualify as substantially developed land, but which contains land, buildings, and/or structures that are currently underutilized and may potentially be developed, recycled, or converted into residential or mixed-use development. Anecdotal evidence suggests that there may be some of these underutilized properties in Maui County that could be repurposed to add affordable units to Maui’s housing stock.

Unfortunately, a comprehensive list of these properties does not exist, primarily because the data necessary to identify an underutilized property is not electronic and accessible. Currently, the only way to identify underutilized properties is for someone to hear about or drive by a rundown vacant warehouse or former retail space, for example, and decide it might be suitable for affordable housing development. Then that person, or agency, would need to identify the owner, determine if the owner is willing to sell the parcel or partner with the County on affordable housing development, and begin the process of rezoning the land and obtaining building permits. This may become a more feasible option in the future as additional data is incorporated into the County’s GIS system.

Affordable Housing Implementation Plan Final Report Page 48 © SMS August, 2018 Figure B-9. Potential Infill Parcels, Wailuku-Kahului, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 49 © SMS August, 2018 Figure B-10. Potential Infill Parcels, Wailuku-Kahului, Island of Maui, 2018

Affordable Housing Implementation Plan Final Report Page 50 © SMS August, 2018 Table B-4. Housing Projects Under Construction, Maui County, May 2018

PROJECTNAME DISTRICT PROCESSCOUNTY EFFECTIVE RENTAL TOTALAFFORDABLEHOUSINGUNITS MARKETUNITS FUNDING STATUS Ordinance Date Resolution OR UNITS Affordable Units Units Units Built Units /Reso No. Adopted or FOR SALE Approved Housing Required Completed Remaining To-Date Remaining Ordinance fund? Projects Under Construction Upcountry/Pukala ni Hale Mahaolu Ewalu Phase I 50% Developer: Hale complete 201H-038 14-108 10/3/2014 Senior Rental 60 60 0 60 0 0 0 Yes Mahaolu Anticipate Grant Chun completion December 2018 West Maui/Lahaina Kahoma Residential WML - 40 sold/6 For Sale Subdivision under contract. 201H-038 11-126 12/2/2011 (10 lots to Habitat, 68 68 46 22 0 0 0 Yes Developer: West Maui Habitat - 10 will 12 lots to Na Hale) Land Company, Inc. be complete in 2019. Na Hale 12 by end of 2018 West Maui/Lahaina SingleF - 21 units Kahoma Village released for Developer: Stanford sale/21 units in 201H-038 14-14 2/7/2014 For Sale 203 102 46 56 101 42 59 No Carr Development Corp. escrow. MultiF - Kaloa Robinson 27 units released for sale/19 units in escrow West Kaiaulu 100% Affordable Maui/Kaanapali Developer: Aina Pacific, Site work done. 2.96, MCC n/a 5/11/2015 For Sale 33 33 0 33 0 0 0 No LLC Anticipated Howard Kihune Jr completion Fall 2019 South Maui/Kihei 68 units Kamalani sold/occupied 50 Developer: Kamalani under contract/11 2.96, MCC n/a 6/23/2015 For Sale 633 173 129 44 460 0 460 No Ventures, LLC more available for A&B Properties sale

Haiku Pauwela Homes 18 homes Developer: Kauhikoa sold/occupied 2.96, MCC n/a 10/25/2016 For Sale 33 33 18 15 0 0 0 No Land LLC Remaining 19 to David Ward close by August 2018. TOTAL UNITS FOR PROJECTS UNDER CONSTRUCTION: 1046 469 239 230 561 42 519

Affordable Housing Implementation Plan Final Report Page 51 © SMS August, 2018 Table B-5. Ongoing Project Districts and Completed Projects, Maui County, 2018

PROJECTNAME DISTRICT PROCESSCOUNTY EFFECTIVE RENTAL TOTALAFFORDABLEHOUSINGUNITS MARKETUNITS FUNDING STATUS Ordinance Date Resolution OR UNITS Affordable /Reso No. Adopted or FOR SALE Units Units Units Built Units Housing Approved Ordinance Required Completed Remaining To-Date Remaining fund?

Ongoing Project Districts Central Maui Lani Maui/Kahului- Developer: Maui Lani Wailuku CIZ 1872 1/22/1990 For Sale 3300 660 479 181 2640 838 1802 No Partners Units completed to-date: 1317 Central Wailuku Project District Maui/Wailuku Project Developer: RCRF 2053 11/18/1991 For Sale 3600 1200 730 470 2400 1151 1249 No Units completed District Kehalani LLC to-date: 1881 West Maui Project West District 2 (Mahana Maui/Kapalua 26 Estates/Kapalua CIZ 3358 2/21/2006 For Sale 51 26 0 25 0 25 No Construction (via credits) Mauka) ongoing Developer: Nan Inc. TOTAL UNITS FOR ONGOING PROJECT DISTRICTS: 6951 1886 1209 651 5065 1989 3076

Completed Projects

Kulamalu Hale (COM) Upcountry/Pukala Developer: County of ni 2.96, MCC 11-57 6/7/2011 Rental 56 56 56 0 0 0 0 Yes Maui Mokuhau Central Developer: Lokahi Maui/Happy 2.96, MCC n/a 8/17/2015 For Sale 16 16 16 0 0 0 0 Yes Pacific Valley, Wailuku Susie Thieman

Affordable Housing Implementation Plan Final Report Page 52 © SMS August, 2018 Table B-6. Pending Housing Projects, Maui County, 2018

Pending Projects Haiku Haiku Town Acres Pending Final 5 Developer: Haiku Town, 2.96, MCC n/a 9/25/2017 For Sale 45 10 5 40 0 40 No Subdivision (via credits) LLC Approval Honua'ula Gardens (Wailea 670) South Project Developer: Honua'ula Maui/Wailea 3554 4/8/2008 For Sale 1400 700 0 700 700 0 700 No District Partners, LLC Pending Charlie Jencks Hoonani Subdivision South Maui/Kihei Developer: Maui 2.96, MCC n/a 12/9/2015 For Sale 27 27 0 27 0 0 0 No Pending Waiohuli Partner Kaiwahine Subdivision South Maui/Kihei 3/18/2011 Developer: Ikaika Anticipated start 201H-038 11-23 201H Deadline Sept Rental 120 120 0 120 0 0 0 No Ohana Phase I July 2018 2018 Doug Bigley South Maui/Kihei Site work Kalama Kai complete & slab Developer: Armstrong poured. 2.96, MCC n/a 4/15/2015 For Sale 40 40 0 40 0 0 0 No Development Aniticpate Wayne Muraoka completion April 2019 South Maui/Kihei Kamaole Point Pending financing Developer: Kamaole 2.96, MCC n/a 11/4/2015 For Sale 129 129 0 129 0 0 0 No & final subdv. Point Development, LP approval Haiku Kauhikoa Farms II Pending Final Developer: Kauhikoa 2.96, MCC n/a 1/3/2018 For Sale 12 3 0 3 9 0 9 No Subdivision Elua, LLC Approval South Keala O Wailea Maui/Wailea Developer: Keala O Pending financing 2.96, MCC n/a 3/9/2016 For Sale 70 18 0 18 52 0 52 No Wailea, LLC and final subdv. approval

Affordable Housing Implementation Plan Final Report Page 53 © SMS August, 2018 Table B-6. Pending Housing Projects, Maui County, 2018 (continued)

Kenolio Apartments Developer: Pacfic South Maui/Kihei 201H-038 15-129 10/16/2015 Rental 184 184 0 184 0 0 0 No West, Inc. Pending financing Jordan Hart 201H-038 Kula Ridge Upcountry/Kula 10 yrs to Developer: Kula Ridge, 10-57 10/19/2010 For Sale 116 59 0 59 57 0 57 No Securing water begin constr. LLC Clayton Nishikawa from 10/19/10 Lanai Contracted Lanai Affordable consultant Housing Project Munekiyo & 201H-038 96-31 3/5/2010 Both 372 372 0 372 0 0 0 Yes Developer: County of Hiraga to conduct Maui market study & rephase project Maui Lani VMX Central Developer: Maui Lani Maui/Kahului CIZ 3365 3/3/2006 For Sale 500 255 0 255 245 0 245 No 100, LLC Pending West Pailolo Place Maui/Kapalua Developer: Pailolo Pending Final 2.96, MCC n/a 2/3/2018 For Sale 42 42 0 42 0 0 0 No Investments, LLC Subdivision Approval Tam Yau Estates Pukalani Developer: TY Property Site work 2.96, MCC n/a 6/7/2017 For Sale 32 7 0 7 25 0 25 No Development, LLC underway

Central Maui/Wailuku Wai'ale Elua 100% Await final 201H-038 Affordable Developer: subdivision & 3 yrs to 16-81 6/3/2016 For Sale 70 70 0 70 0 0 0 No Wai'ale Road 201 LLC construction plan constr from Vince Bagoyo approval, 6/16 anticipate start by end of 2018 West Maui Villages - Wailele West Maui 1991 Amended CIZ 2070 For Sale 158 12 0 12 146 0 146 No Developer: Bach Pending in 2014 Corporation TOTAL UNITS FOR 14 PENDING PROJECTS 3317 2048 0 2043 1274 0 1274 0

Affordable Housing Implementation Plan Final Report Page 54 © SMS August, 2018 Figure B-11. Affordable Housing Projects - Under Construction, Ongoing, Pending, and Potential, County of Maui, 2018

Note. Two pending projects, Kama‘ole Point and West Maui Villages-Wailele, are not shown on the map because the location of their planned affordable housing units could not be determined.

Affordable Housing Implementation Plan Final Report Page 55 © SMS August, 2018 Table B-7. Residential Community Plan Designations- Upzone and Other Land Use Change Possibilities , County of Maui, 2018

Council Action: CIZ (Change in Zoning)

Map Community Plan TMK Acreage of Owner CP Current State Council Action Notes Reference District CP Designation Zoning District Required Number Designation

1 Kihei-Makena 3-9-004:141 6.943 acres Ferreira SF Open Zone Urban CIZ Located near facilities Family Single Family and within MIP Partners growth boundary. Across Keawekapu Beach.

2 Makawao- 2-3-009:007 49 acres Pukalani SF AG Urban CIZ Located somewhat near Pukalani-Kula Associates, Single Family Agriculture facilities and within LLC MIP growth boundary. CIZ APPLICATION FILED 2017 3 Makawao- 2-3-009:064 38 acres Pukalani SF AG Urban CIZ Located somewhat Pukalani-Kula Associates, Single Family Agriculture near facilities and LLC within MIP growth boundary . CIZ APPLICATION FILED 2017 4 West Maui 4-3-001:039 8 acres Pineapple SF AG Urban CIZ Located near facilities Ridge LLC Single Family Agriculture and within MIP UGB. Adjacent to Honoapiilani Hwy between Napili and Kahana.

Affordable Housing Implementation Plan Final Report Page 56 © SMS August, 2018 Table B-7. Residential Community Plan Designations- Upzone and Other Land Use Change Possibilities , County of Maui, 2018 (continued)

Council Actions: CIZandDBA (parcels under 15 acres) (Change in Zoning and District Boundary Amendment)

Map Community Plan TMK Acreage of Owner CP Current State Council Action Notes Reference District CP Designation Zoning District Number Required Designation

5 Wailuku-Kahului 3-3-001:102 8.5 acres GoodFellow SF AG AG CIZ and DBA Located near facilities and Brothers Inc. Single Family Agriculture Agriculture within MIP growth boundary. Near Waiehu Terrace.

6 Makawao- 2-3-009:030 8.463 acres Clifford B. SF AG AG CIZ and DBA Located near facilities and Pukalani-Kula Alakai Single Family Agriculture Agriculture within MIP growth boundary. Near Kulamalu. Identified as SF Catherin in CP; Cabalce- property has a farm dwelling Alakai established on the property.

7 Makawao- 2-3-009:031 6.232 acres Steven Allen SF AG AG CIZ and DBA Located near facilities and Pukalani-Kula Trust Single Family Agriculture Agriculture within MIP growth boundary. Near Kulamalu. Identified as SF in CP-property has a farm dwelling and accessory farm dwelling established on the property.

Affordable Housing Implementation Plan Final Report Page 57 © SMS August, 2018 Table B-7. Residential Community Plan Designations- Upzone and Other Land Use Change Possibilities , County of Maui, 2018 (continued)

CouncilActions: CIZandDBA(parcelsunder15acres)continued: (Change in Zoning and District Boundary Amendment)

Map Community Plan TMK Acreage of Owner CP Current State Council Action Notes Reference District CP Designation Zoning District Required Number Designation 8 Makawao- 2-3-009:032 6.273 acres Thurston SF AG AG CIZ and DBA Located near facilities and within Pukalani-Kula Robinson Single Family Agriculture Agriculture MIP growth boundary. Near Kulamalu.

9 Makawao- 2-4-003:010 4.3 acres Aries SF Urban AG CIZ and DBA Located east of Makawao town, Pukalani-Kula Investments Single Family Reserve Agriculture makai of Makawao Avenue. LLC Identified as SF in CP; property has a farm dwelling and accessory farm dwelling established on the property.

10 Makawao- 2-4-003:011 4.719 acres Forerest Koa SF Urban AG CIZ and DBA Adjacent to #9. Identified as SF in Pukalani-Kula Chang Single Family Reserve Agriculture CP; property has a farm dwelling on the property.

11 Hana 1-4-003:009 19.8 acres Hana Ranch SF Interim Rural & CIZand DBA Located near Hana town across Land LLC Single Family Agriculture police and fire stations.

12 Hana 1-4-006:037 5.725 acres Hana Ranch SF&MF Interim AG CIZ and DBA Located near Hana town east of Land LLC Single Family Agriculture police and fire stations. Multi-Family

Affordable Housing Implementation Plan Final Report Page 58 © SMS August, 2018 Table B-7. Residential Community Plan Designations- Upzone and Other Land Use Change Possibilities , County of Maui, 2018 (continued)

Council Actions: CIZ and DBA (parcels under 15 acres) continued: (Change in Zoning and District Boundary Amendment)

Map Community Plan TMK Acreage of Owner CP Current State Council Action Notes Reference District CP Designation Zoning District Required Number Designation 13 Hana 1-4-006:039 7.607 acres Hana Ranch Mostly SF & Interim AG CIZand DBA Located near Hana Land LLC some MF Agriculture town east of police Single Family and fire stations. M ulti- Fam ily 14 West Maui 4-6-015:001 Wainee Land SF AG AG CIZ and DBA Located near &HomesLLC Single Family Agriculture Agriculture facilities and within 13 acres MIP UGB. Near 4-6-018:003 Bishop Estate Lahaina Recreation Trust Center.

Affordable Housing Implementation Plan Final Report Page 59 © SMS August, 2018 Table B-7. Residential Community Plan Designations- Upzone and Other Land Use Change Possibilities , County of Maui, 2018 (continued)

Council Actions: CIZ and CPA (Change in Zoning and Community Plan Amendment)

Map Community Plan TMK Acreage of Owner CP Current State Council Action Notes Reference District CP Designation Zoning Distr ict Requi red Number Designation 15 Wailuku-Kahului 2-7-013:026 4.865 A&B P/QP P-1 Urban CIZ and CPA Located near Properties Publi c/ Quasi- Pub lic/ Quasi- facilities and within Public Public MIP growth boundary.Old Kahului Swap Meet Site

16 Wailuku-Kahului 3-8-007:117 8.804 County of P/QP PK Urban CIZ and CPA Located near Maui Pub lic/Quas i- Par k facilities and within Pub lic MIP growth boundary. Old MCC {UH Maui) dormitorie s.

Affordable Housing Implementation Plan Final Report Page 60 © SMS August, 2018 Table B-7. Residential Community Plan Designations- Upzone and Other Land Use Change Possibilities , County of Maui, 2018 (continued)

Council Action: CIZ (Change in Zoning) and State Land Use Commission Action: DBA (parcels greater than 15 acres) (District Boundary Amendment) NOTE: Council could also consider a DBA on a portion less than 15 acres.

Map Community Plan TMK Acreage of Owner CP Current State Council Action Notes Reference District CP Designation Zoning District Required Number Designation

17 Kihei-Makena 2-2-002:016 215 acres Haleakala SF AG AG CIZ and Located near Ranch Single Family Agriculture Agriculture DBA facilities and within MIP growth boundary. Located above Ohukai Rd. terminus.

18 Wailuku-Kahului 3-5-002:002 23 acres Association of SF AG AG CIZ and Located near facilities II Wai Hui LP Single Family Agriculture Agriculture OBA and within MIP growth boundary. Located between Kehalani and Waiolani Mauka

19 Paia-Haiku 2-5-005:030 24 acres County of SF Primarily AG CIZ and Located near facilities 2-5-005:020 Maui Single Family Interim; Agriculture OBA and within MIP A&B some P-1 growth boundary. Public/ Near Doris Todd Quasi School. Public

Affordable Housing Implementation Plan Final Report Page 61 © SMS August, 2018 APPENDIX C – EVALUATING HIGH POTENTIAL PARCELS FOR DEVELOPMENT OF AFFORDABLE HOUSING

Affordable Housing Implementation Plan Final Report Page 62 © SMS August, 2018 The next phase of analysis included further investigation of the identified parcels in Wailuku, Kahului, Kīhei, Paia, Nāpili, Moloka‘i and Lāna‘i. The appraiser working with SMS focused on properties that can be developed, or converted if already improved, into affordable housing. They reviewed current properties owned by the County of Maui, as well as privately owned properties that could be acquired. Properties identified were already zoned for residential use or have the ability to be rezoned for residential use by the Council.

Research and analysis of potential properties relied on the following informational sources: (1) public records and documents on file at the County of Maui Real Property Tax Office and the State of Hawai‘i Bureau of Conveyances; (2) information provided by local real estate professionals and others who are familiar with real estate in Maui County; (3) Hawai‘i Information Service, (4) Hawai‘i Multiple Listing Service, (5) CoStar, and (6) Google Earth.

In the course of this project, the appraiser researched and identified potential properties that could be acquired in order to address the demand for affordable housing in the County of Maui. The islands of Maui, Molokai and Lanai were all researched. Primary emphasis was placed on properties currently owned by the County of Maui and currently vacant, although one privately owned and several improved properties were also included.

Based on this analysis of all the available market data, a list of twelve high potential sites, both vacant and improved, for potential acquisition and/or development is provided below. The property descriptions are based on site inspections and augmented by a review of available plat maps and information pertaining to the property available from the tax office and the County of Maui.

Nine of the selected sites were located on the Island of Maui, in the Kahului, Kīhei, Paia, and Nāpili areas. Two additional properties were located on Moloka‘i and one site was located on Lāna‘i. The twelve selected properties were then assigned to a matrix in order to be graded based on development potential. For each criteria, the sites were assigned either a positive, neutral, or negative grading based on location, physical characteristics, major off-site infrastructure (utilities), existing land use and zoning, and proximity to major commercial and recreational areas as well as major medical and community facilities. Sites received positive ratings if theparcel characteristics were conducive toaffordablehousingdevelopment. Neutral grades were assigned when the parcel characteristic was neither ideal nor especially problematic for development. Negative grades indicate that the aspect being scored was not well suited to development. The results are summarized on Table 6. Additional data on each site, including the grading sheets, is included in Appendix D and Appendix E.

Affordable Housing Implementation Plan Final Report Page 63 © SMS August, 2018 ANALYSIS Final High Priority Locations

“Fire Station Property” - TMK 2-2-1-008-046 & 113 and 2-3-9-038-026

This property represents a combined 5.75 acre irregular shaped site on Kilohana Drive in Kīhei. It is located at street grade with a slight slope and owned by the County of Maui. A portion of the property is currently improved with a fire station. The property is designated Urban by the State of Hawai‘i and zoned P-1 Public/Quasi Public by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is located in a SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available. Access is available from Kilohana Drive and the site is somewhat located in close proximity to major commercial projects, recreational facilities and/or community facilities. There are no major medical facilities located in the immediate area. This site received a Positive Grade of 14, a Neutral Grade of 6 and a Negative Grade of 3.

Figure C-1. Location of TMK # 2-2-1-008-046, # 2-2-1-008-113, and # 2-3-9-038-026

Affordable Housing Implementation Plan Final Report Page 64 © SMS August, 2018 Figure C-2. Grading Sheet for Kīhei Fire Station Property

Affordable Housing Implementation Plan Final Report Page 65 © SMS August, 2018 Figure C-3. Location Map for Kihei Fire Station Property

Affordable Housing Implementation Plan Final Report Page 66 © SMS August, 2018 Figure C-3a. Location Map for Kihei Fire Station Property (continued)

Affordable Housing Implementation Plan Final Report Page 67 © SMS August, 2018 “Kīhei Soccer Field Property” - TMK 2-2-2-030-121

This property represents a 4.14 acre somewhat rectangular shaped site, located below street grade. It is located in Kīhei and is owned by the County of Maui. The property is designated Urban by the State of Hawai‘i and zoned PD - Project District by the County of Maui. The site is currently used as a soccer field. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is located in a SMA and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available. Access is available from Kauhaa Street and the site is located in close proximity to major commercial projects, recreational facilities and/or community facilities. There are no major medical facilities located in the immediate area. This site received a Positive Grade of 20, a Neutral Grade of 2 and a Negative Grade of 1.

The Department of Planning has indicated that this property may have some grading issues that will make development more expensive.

Figure C-4. Location of TMK # 2-2-2-030-121

Affordable Housing Implementation Plan Final Report Page 68 © SMS August, 2018 Figure C-5. Grading Sheet for Kihei Soccer Fields Property

Affordable Housing Implementation Plan Final Report Page 69 © SMS August, 2018 Figure C-65. Location Map for Kihei Soccer Fields Property

Affordable Housing Implementation Plan Final Report Page 70 © SMS August, 2018 “Lunalilo Property” - TMK 2-3-8-007-047

This property represents a 1.68 acre rectangular shaped site, with mostly level areas above street grade, located in Kahului and owned by the County of Maui. The property is designated Urban by the State of Hawai‘i and zoned I-Interim District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is not located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area with other developments and this parcel has already been improved with a single structure leased to Na Leo Pulama O Maui. It is assumed that most major utilities are available. Access is available from Lunalilo and Liholiho Streets and the site is located in close proximity to major commercial projects, recreational facilities, medical facilities and/or community facilities. This site received a Positive Grade of 18, a Neutral Grade of 4 and a Negative Grade of 0.

Figure C-7. Location of TMK # 2-3-8-007-047

Affordable Housing Implementation Plan Final Report Page 71 © SMS August, 2018 Figure C-8. Grading Sheet for Lunalilo Property

Affordable Housing Implementation Plan Final Report Page 72 © SMS August, 2018 Figure C-9. Location Map for Lunalilo Property

Affordable Housing Implementation Plan Final Report Page 73 © SMS August, 2018 “Honokōwai Property” - TMK 2-4-4-001-106

This property represents a 4.02 acre irregular, long and narrow shaped site, with mostly level areas. This parcel, located in Honokōwai, is owned by the State of Hawai‘i and leased to the County of Maui. It appears that the site is, or was, utilized as a parking area. The property is designated Agriculture by the State of Hawai‘i and zoned AG, Agriculture District, A-2, Apartment District and R- 3, Residential District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available except for public water and sewer. Access is available from an easement extending from Lower Honoapi‘ilani Road and the site is not located in close proximity to major commercial projects, recreational facilities, community facilities and/or medical facilities. This site received a Positive Grade of 12, a Neutral Grade of 5 and a Negative Grade of 5.

Figure C-10. Location of TMK # 2-4-4-001-106

Affordable Housing Implementation Plan Final Report Page 74 © SMS August, 2018 Figure C-11. Grading Sheet for Honokōwai Property

Affordable Housing Implementation Plan Final Report Page 75 © SMS August, 2018 Figure C-12. Location Map for Honokōwai Property

Affordable Housing Implementation Plan Final Report Page 76 © SMS August, 2018 Napili

“Airport Property” - TMK 2-4-3-001-079

This property represents a 6.18 acre irregular shaped site, with steep and sloping areas, located in Napili and owned by the County of Maui. It appears that the site is or was a former stream bed. The property is designated Urban by the State of Hawai‘i and zoned AG - Agriculture District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is not located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available except for public water and sewer.20 Access is available from an easement off Honoapiilani Highway and the site is not located in close proximity to major commercial projects, recreational facilities, community facilities and/or medical facilities. This site received a Positive Grade of 11, a Neutral Grade of 4 and a Negative Grade of 7.

Figure C-13. Location of TMK # 2-4-3-001-079

20 This assumption is made based on the surrounding properties. Verification with the County departments responsible for water, sewer, and utilities should certainly before consulted to determine the specific nature of the structure available for any parcel.

Affordable Housing Implementation Plan Final Report Page 77 © SMS August, 2018 Figure C-14. Grading Sheet for Nāpili Airport Property

Affordable Housing Implementation Plan Final Report Page 78 © SMS August, 2018 Figure C-15. Location Map for Nāpili Airport Property

Affordable Housing Implementation Plan Final Report Page 79 © SMS August, 2018 “Piihana Property” - TMK 2-3-3-001-105

This property represents a 25.056 acre irregular shaped site, with mostly level areas at street grade. This parcel is located in Waiehu and owned by RCFC Piihana, LLC. The property is designated Urban by the State of Hawai‘i and zoned PD, Project District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is not located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available. This site has already had preliminary studies done on it for a proposed affordable housing project. Access is available from Makaala Drive and Kahekili Highway and the site is located in close proximity to major commercial projects, recreational facilities, medical facilities and/or community facilities. This site received a Positive Grade of 15, a Neutral Grade of 6 and a Negative Grade of 1.

Figure C-16. Location of TMK # 2-3-3-001-105

Affordable Housing Implementation Plan Final Report Page 80 © SMS August, 2018 Figure C-17. Grading Sheet for Piihana Property

Affordable Housing Implementation Plan Final Report Page 81 © SMS August, 2018 Figure C-18. Location Map for Piihana Property

Affordable Housing Implementation Plan Final Report Page 82 © SMS August, 2018 Additional Locations Evaluated

“Kehalani Mauka Property” - TMK 2-3-5-001-077 (formerly 2-3-5-001-102)

This property is a 6.04 acre somewhat rectangular shaped site. With a slight upward slope from street grade, it is located in Wailuku and privately owned by Kehalani Mauka LLC (Everett Dowling). The property is designated Urban by the State of Hawai‘i and zoned PD - Project District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is not located in a Special Management Area (SMA) and is designated Zone X21 on flood insurance maps. The site is located in an area that has already been developed so it is assumed that most major utilities are available. Access is available from Kehalani Makai Parkway and the site is located in close proximity to major commercial projects, recreational facilities, medical facilities and/or community facilities. This site received a Positive Grade of 20, a Neutral Grade of 2 and a Negative Grade of 1.

This property is no longer being considered because the owner is considering developing market rate housing.

Figure C-19. Location of TMK # 2-3-5-001-077

21 Zone X is the lowest flood hazard rating and indicates a minimal flood hazard.

Affordable Housing Implementation Plan Final Report Page 83 © SMS August, 2018 Figure C-20. Grading Sheet for Kehalani Mauka Property

Affordable Housing Implementation Plan Final Report Page 84 © SMS August, 2018 Figure C-21. Location Map for Kehalani Mauka Property

Affordable Housing Implementation Plan Final Report Page 85 © SMS August, 2018 “University Dorms Property” - TMK 2-3-8-007-117

This property represents a 4.04 acre irregular shaped site on North Papa Avenue in Kahului. Mostly level at street grade with some steep areas, it is owned by the County of Maui. The property is designated Urban by the State of Hawai‘i and zoned PK - Park District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is located in a SMA and is designated Zone X on flood insurance maps. The site, located in an area that has already been developed, is already improved with several structures that were utilized by the University of Hawai‘i, and so it assumed that most major utilities are available. Access is available from Wahinepio Avenue. This parcel is located in close proximity to major commercial projects, recreational facilities, medical facilities and/or community facilities. This site received a Positive Grade of 19, a Neutral Grade of 2 and a Negative Grade of 2.

This property is no longer available for development because Maui Community College is considering using the site for its own purposes.

Figure C-22. Location of TMK # 2-3-8-007-117

Affordable Housing Implementation Plan Final Report Page 86 © SMS August, 2018 Figure C-23. Grading Sheet for University Dorms Property

Affordable Housing Implementation Plan Final Report Page 87 © SMS August, 2018 Figure C-24. Location Map for University Dorms Property

Affordable Housing Implementation Plan Final Report Page 88 © SMS August, 2018 “Wailuku Beachfront Property” - TMK 2-3-3-001-001

This property represents a 63.70 acre irregular shaped, oceanfront site located in Wailuku. Owned by the County of Maui, this site is mostly level at street grade. The property is designated Urban by the State of Hawai‘i and zoned I - Interim, AG - Agriculture and R-3 - Residential Districts by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is located in a SMA and is designated Zones VE, AE & X on flood insurance maps22. The site is located in an area that has already been developed so it assumed that most major utilities are available. Access is available from Waiehu Beach Road and the site is located in somewhat close proximity to major commercial projects, recreational facilities, medical facilities and/or community facilities. This site received a Positive Grade of 15, a Neutral Grade of 6 and a Negative Grade of 2.

This property is no longer being considered because the community would strongly disapprove of any development along the beach.

Figure C-25. Location of TMK # 2-3-3-001-001

22 Zones VE and AE represent the base or 100-year flood potential, equivalent to a 1% annual chance of flooding

Affordable Housing Implementation Plan Final Report Page 89 © SMS August, 2018 Figure C-26. Grading Sheet for Wailuku Beachfront Property

Affordable Housing Implementation Plan Final Report Page 90 © SMS August, 2018 Figure C-27. Location Map for Wailuku Beachfront Property

Affordable Housing Implementation Plan Final Report Page 91 © SMS August, 2018 “Waiale Road Property” - TMK 2-3-8-007-092

This property represents a 37.45 acre irregular shaped site that is mostly level at street grade. Located on Wai‘ale Road between Waikapu and Wailuku, this parcel is owned by the County of Maui. The property is designated Agriculture by the State of Hawai‘i and zoned AG - Agriculture by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions, although the site has served as a dumpsite for the County. The site is not located in a SMA and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available. Access is available from an easement off Waiko Road and the site is located in close proximity to major commercial projects, recreational facilities, medical facilities and/or community facilities. This site received a Positive Grade of 14, a Neutral Grade of 6 and a Negative Grade of 3. Subsequent investigation of this property revealed this location still serves as a dumpsite and is, therefore, not suitable for affordable housing development.

Figure C-28. Location of TMK # 2-3-8-007-092

Affordable Housing Implementation Plan Final Report Page 92 © SMS August, 2018 Figure C-29. Grading Sheet for Waiale Road Property

Affordable Housing Implementation Plan Final Report Page 93 © SMS August, 2018 Figure C-30. Location Map for Waiale Road Property

Affordable Housing Implementation Plan Final Report Page 94 © SMS August, 2018 “Paia Beachfront Property” - TMK 2-2-5-005-017

This property represents a 25.22 acre irregular shaped, oceanfront site, level at street grade, located in Paia and owned by the County of Maui. A portion of the property is currently improved with some older structures. The property is designated Urban by the State of Hawai‘i and zoned PK, Park District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is located in an SMA area and is designated Zone VE on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available except for public sewer. Access is available from an easement off Hana Highway and the site is not located in close proximity to major commercial projects, recreational facilities, community facilities and/or medical facilities. This site received a Positive Grade of 11, a Neutral Grade of 4 and a Negative Grade of 8.

Figure C-31. Location of TMK # 2-2-5-005-017

Affordable Housing Implementation Plan Final Report Page 95 © SMS August, 2018 Figure C-32. Grading Sheet for Paia Beachfront Property

Affordable Housing Implementation Plan Final Report Page 96 © SMS August, 2018 Figure C-33. Location Map for Paia Beachfront Property

Affordable Housing Implementation Plan Final Report Page 97 © SMS August, 2018 “Paia Soccer Field Property” - TMK 2-2-5-005-060

This property represents a 11.06 acre rectangular shaped site, level at street grade, located in Paia and owned by the County of Maui. The property is currently used as a soccer field. The property is designated Agriculture by the State of Hawai‘i and zoned AG, Agriculture District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available except for public sewer.23 Access is available from an easement off Lae Street and the site is not located in close proximity to major commercial projects, recreational facilities, community facilities and/or medical facilities. This site received a Positive Grade of 11, a Neutral Grade of 4 and a Negative Grade of 8.

Figure C-34. Location of TMK # 2-2-5-005-060

23 This assumption is made based on the surrounding properties. Verification with the County departments responsible for water, sewer, and utilities should certainly before consulted to determine the specific nature of the structure available for any parcel.

Affordable Housing Implementation Plan Final Report Page 98 © SMS August, 2018 Figure C-35. Grading Sheet for Paia Soccer Field Property

Affordable Housing Implementation Plan Final Report Page 99 © SMS August, 2018 “Mahalo Place Moloka‘i Property” - TMK 2-5-3-004-037

This property represents a 1.30 acre somewhat rectangular shaped site, level at street grade, located on Molokai and owned by the County of Maui. The property is designated Urban by the State of Hawai‘i and zoned I - Interim District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is not located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available except for public sewer service. Access is available from Mahalo Place and the site is located in close proximity to major commercial projects, recreational facilities community facilities and/or major medical facilities. This site received a Positive Grade of 22, a Neutral Grade of 0 and a Negative Grade of 1.

Figure C-36. Location of TMK # 2-5-3-004-037

Affordable Housing Implementation Plan Final Report Page 100 © SMS August, 2018 Figure C-37 Grading Sheet for Mahalo Place Moloka‘i Property

Affordable Housing Implementation Plan Final Report Page 101 © SMS August, 2018 Figure C-38. Location Map for Mahalo Place Moloka‘i Property

Affordable Housing Implementation Plan Final Report Page 102 © SMS August, 2018 “Maunaloa Road Moloka‘i Property” - TMK 2-5-1-010-010

This property represents a 1.18 acre somewhat rectangular shaped site, level at street grade, located on Molokai and owned by the County of Maui. The property is designated Urban by the State of Hawai‘i and zoned I - Interim District by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is not located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available except for public sewer service. Access is available from all four sides of the site and the site is not located in close proximity to major commercial projects, recreational facilities community facilities and/or major medical facilities. This site received a Positive Grade of 17, a Neutral Grade of 1 and a Negative Grade of 5.

Figure C-39. Location of TMK # 2-5-1-010-010

Affordable Housing Implementation Plan Final Report Page 103 © SMS August, 2018 Figure C-40. Grading Sheet for Maunaloa Road Moloka‘i Property

Affordable Housing Implementation Plan Final Report Page 104 © SMS August, 2018 Figure C-41. Location Map for Maunaloa Road Moloka‘i Property

Affordable Housing Implementation Plan Final Report Page 105 © SMS August, 2018 “Fifth Street Lāna‘i Property” - TMK 2-4-9-002-058

This property represents a 115.00 acre irregular shaped site, level at street grade, located on Lanai and owned by the County of Maui. The property is designated both Urban & Agriculture by the State of Hawai‘i and zoned I - Interim, P-1 - Public/Quasi Public and PK - Park Districts by the County of Maui. It does not appear that the site is located in a Special Design District and the appraiser is not aware of any environmental issues or easements and restrictions. The site is not located in an SMA area and is designated Zone X on flood insurance maps. The site is located in an area that has already been developed so it assumed that most major utilities are available except for public sewer service. Access is available from the end of 5th Street and the site is located in close proximity to major commercial projects, recreational facilities community facilities and/or major medical facilities. This site received a Positive Grade of 16, a Neutral Grade of 4 and a Negative Grade of 3.

Figure C-42. Location of TMK # 2-4-9-002-058

Affordable Housing Implementation Plan Final Report Page 106 © SMS August, 2018 Figure C-43. Grading Sheet for Fifth Street Lāna‘i Property

Affordable Housing Implementation Plan Final Report Page 107 © SMS August, 2018 Figure C-44. Location Map for Fifth Street Lāna‘i Property

Affordable Housing Implementation Plan Final Report Page 108 © SMS August, 2018 SUMMARY

The location and a summary of the positive, neutral and negative grades is provided for each site investigated in the table below.

Table C-1. Summary of Appraisal Grading Matrix

Grade Ranking Property Location Land Area Positive Neutral Negative Comments Wailuku - Kahului "Kehalani Ma uka" 2- 6.04 3-5-001-077 1 Wailuku (formerly 20 2 1 Land (formerly 2-3-5-001- 4.647 ) 102) "University Dorms" 2 Kahului 4.04 19 2 2 Currently improved 2-3-8-007-117 "Wailuku 3 Beachfront" Wailuku 63.7 15 6 2 Vacant oceanfront parcel 2-3-3-001-001 Waiale Road" Former dump site. Potential 4 Waikapu 37.45 14 6 3 2-3-8-007-092 environmental issues Kihei "Kīhei Soccer Field" 1 Kihei 4.14 20 2 1 Landcurrentlyusedasasoccerfield 2-2-2-030-121 "Fire Station" Partially improved with a County fire 2 2-2-1-008-046 & 113 Kihei 5.75 14 6 3 station and 2-3-9-038-026 Paia "Paia Beachfront" 2- 1 Paia 25.22 11 4 8 Oceanfront parcel currently improved 2-5-005-017 "Paia Soccer Field" 2- 2 Paia 11.06 11 4 8 Land currently used as a soccer field 2-5-005-060 Napili "Airport" Vacantland appears to be located in a 1 Napili 6.18 11 4 7 2-4-3-001-079 stream bed Molokai "Mahalo Place" 1 Molokai 1.3 22 0 1 Vacant land 2-5-3-004-037 "Maunaloa Road" 2 Molokai 1.18 17 1 5 Currently improved 2-5-1-010-010 Lanai "Fifth Street" 1 Lanai 115 16 4 3 Vacant land 2-4-9-002-058

Affordable Housing Implementation Plan Final Report Page 109 © SMS August, 2018 Table C-2. Revised Summary of Appraisal Grading Matrix

Grade Property Location Land Area Comments Good Average Poor Kahului "Lunalilo Property" Improved site leased to NaLeo Wailuku 1.68 acres 18 4 0 2-3-8-007-047 Pūlama O Maui "Dowling Property" Vacant land w/ preliminary plans for Waiehu 25.056 acres 15 6 1 2-3-3-001-105 an AH development "Wailae Road" 2- Former dump site. Potential Waikapu 37.45 acres 13 5 4 3-8-007-092 environmental issues

Kihei "Kīhei Soccer Field" Kihei 4.14acres 19 2 1 Landcurrentlyusedasasoccerfield TMK 2-2-2-030-121 "Kīhei Fire Station" Partially improved with a County fire Kihei 5.75 acres 14 6 2 2-2-1-008-46 & 113 station

Napili "Airport" Vacant land appears to be located in a Napili 6.18 acres 11 3 7 2-4-3-001-079 stream bed

Honokōwai "Honokōwai" Vacant land used for parking; possibly Honokōwai 4.02 acres 12 5 5 2-4-4-001-106 leased

Affordable Housing Implementation Plan Final Report Page 110 © SMS August, 2018 APPENDIX D – DEVELOPMENT CHARACTERISTICS

Affordable Housing Implementation Plan Final Report Page 111 © SMS August, 2018 DEVELOPMENT TIMING AND COSTS

Table D-1. Example of Categories of Development Costs

Construction Cost 100 units 201H Multi-family Total Per Unit Per Sq. Ft. % LAND AND RELATED COSTS Land-Acquisition 3,000,000$ 30,000$ 43$ 9% Ag Land converted to Residential under 201H Acquisition Costs 54,012$ 540$ 1$ 0% Agency And Utility Fees 668,870$ 6,689$ 10$ 2% Surveys & Studies (Pre-Development) 66,358$ 664$ 1$ 0%

HARD COSTS Hard Cost Contract 22,584,164$ 225,842$ 322$ 71% Contractor Fee -$ -$ -$ 0% Tax-Sales/Use -$ -$ -$ 0% Contingency 1,065,366$ 10,654$ 15$ 3%

SOFT COSTS Design And Engineering 726,998$ 7,270$ 10$ 2% Cost Of Financing 337,264$ 3,373$ 5$ 1% Does not include Investorreturn forrisk taking Insurance, Bonds & Misc. Taxes 341,567$ 3,416$ 5$ 1% General & Administrative 92,593$ 926$ 1$ 0% Interest, Carry & Re Taxes 585,347$ 5,853$ 8$ 2% Developer And Other Fees 1,247,849$ 12,478$ 18$ 4%

OPERATING COSTS Lease Up & Preconversion 326,264$ 3,263$ 5$ 1% Ti & Commissions 0$ 0$ 0$ 0% Marketing And Leasing 108,025$ 1,080$ 2$ 0% Model & Clubhouse 180,556$ 1,806$ 3$ 1%

CONTINGENCY Contingency-Soft Cost 456,586$ 4,566$ 7$ 1% Contingency-Developer -$ -$ -$ 0% Contingency-Contractor -$ -$ -$ 0%

TOTAL COSTS 31,841,819$ 303,850$ 454$ 100%

Does not include: Developerprofit fortaking on the risk Investor profit for taking on the risk Off-site improvements differs depending on location –example a$2Msewer issue The land cost is going to vary from location to location… There is only aDOEimpact fee in the budget because it’s a201Hproject.

Table D-1 assumes the process is a 201H for a 100-unit affordable multi-family rental development. The Land Acquisition cost assumes agricultural land purchased then zoning changes required. Under the 201H most of the permit fees have been waived. It is important to also consider that no Developer will consider undertaking a project without a fair return for the risk of their investment in time and funds. Likewise, investors providing funding for these projects will also require a fair return.

Affordable Housing Implementation Plan Final Report Page 112 © SMS August, 2018 The early stages of any development requires a significant amount of due diligence, research, and permitting. This stage of development is often the most inconsistent, difficult to predict, and likely to change. Due to the number of unknown factors, this stage carries the highest risk.

Permitting can take several months or even years due to a variety of potential obstacles. Some of these include the rezoning process, appeals from neighbors or other interested parties, disputes between the developer and the jurisdiction (State and/or County), and a lengthy design process which often requires numerous site plan changes. Acquiring the building permit is the ultimate goal of this stage and is usually the most difficult to attain.

For the following estimates recent sales and listings of large, residential-zoned land located in the Kahului, Wailuku and Kīhei areas were researched. Site development costs were also researched. Permit fees were excluded per Section 2.96.020, Maui County Code, which exempts 100 percent residential workforce housing units and County projects or projects that are funded in whole or in part by the County.

In interviews with non-profit developers and HHFDC ballpark development costs of 100 percent affordable rental units that are multifamily with a mix of 1,2, and 3 bedrooms averages between $400,000 to $500,000 per unit. This includes land acquisition, assumes a funding through a variety of sources, and a fair return to the Developer.

During this phase of the project, the property analysis above was used to narrow the list of potential development sites to the six locations with the greatest likelihood for successful affordable housing development. For each of those properties, the necessary steps to affordable housing development were specified, along with the estimated time required and anticipated cost for each step. Potential funding mechanisms and incentives for development, as well as any possible barriers to development, were also detailed.

The properties identified as having the greatest potential for affordable housing development were:

1. University Dorms Property – TMK # 2-3-8-007-117 2. Kīhei Soccer Field Property – TMK # 2-2-2-030-121 3. Kīhei Fire Station Property – TMK # 2-2-1-008-046, #2-2-1-008-113, #2-3-9-038-026 4. Waiale Road Property – TMK # 2-3-8-007-092 5. Kehalani Mauka Property – TMK # 2-3-5-001-077 6. Wailuku Beachfront Property – TMK # 2-3-3-001-001 (sell and put the money in the Affordable Housing Trust Fund).

Affordable Housing Implementation Plan Final Report Page 113 © SMS August, 2018 The following are the top five properties identified for development of affordable rental units. The number of units per acre is estimated based on an average of 13 units per acre – the average for Kula Malu and for Kawaihine developments.

We recommend using Government-Owned Land for Off-site Affordable Units to fund some of the housing. Maui County has already begun to use government-owned land for affordable housing. More, they have called for a study to identify government-owned land parcels in the county that are suitable for developing affordable housing. Using government land allows for bypassing MCC 2.96 and using other development regimes, especially HRS 201H. 201H has provisions for a large number of exemptions for rules that would appear to be incentives to development. This set of procedures are associated with an active affordable housing policy.

MCC 2.96 allows inclusionary units to be provided off-site if negotiated as part of a Residential Workforce Housing Agreement. If the off-site units could be placed on government-owned land, or if part of a parcel under development could be acquired by the County, the government owned land ruling could be applied as an incentive for market-rate as well as affordable housing, for sale or rental.

Please exercise caution when reviewing the following property number of units and development costs. These are assumptions based on interviews, market listings of property, and estimates based on experience. In every case, a formal appraisal of the property should be undertaken and an architect/planner hired to review the property to determine the appropriate development design and number of units possible for each site.

Because the greatest need for the County is low income rentals, all the properties are considered dedicated for that use. Likewise, the low-end time estimates assumes that the County can move more quickly through the approval process. Low-income rentals for <50 percent AMI are generally financed by the County and/or the State; therefore we have not included financing costs. In addition, infrastructure improvement fees and costs that may be waived will still have to be covered by the County.

Affordable Housing Implementation Plan Final Report Page 114 © SMS August, 2018 University Dorms Property – TMK # 2-3-8-007-117

Because this property already has been improved to support the university’s residential buildings, improvements associated with starting with a piece of vacant land are not an issue. There is, however, the issue of demolishing the existing buildings before construction of new affordable housing units could begin. With a time frame of 48 to 66 months and an estimated cost of between $8.2 and $9.1 million, this property is considered a strong possibility for affordable housing development.

Table D-2. Estimated Costs and Timing of Site Development – University Dorms

4.04 Acres, SMA , Zoning Park Estimate a possible 28 affordable housing rental units Step Timing Ballpark Cost Notes 1. Property owned by Maui Dependent on Unclearif MCCwill be willingto forego lease. County whether/how quickly the Building will have to be demolished. lease with MCCcan be MCC does demo 50,000.00$ Demolishion costs will be much higher if terminated. asbestos or other hazardous materials are discovered. 2. Issue RFP to hire 6 mos. For RFP process architect/planner to draft 12 to 24 months for plans $ 750,000.00 1,000,000.00$ plans, etc. Draft Plans. to be drafted 3. Secure permits, approvals, 12-18 months Staft time to Assume 201H waivers in place. Staff Time or 60,000.00$ etc. , secure permits Professional Services 4. Site preparation & 18 to 24 months - assumes Estimate that fewer than the average 13 units Construction water, sewer, etc. already per acre can be developed. Due to some in place. No offsite potential issues with the site. Assume 7 units. $ 7,500,000.00 8,000,000.00$ requirements Assumes minimal site preparation costs. Note that construction costs have been rising at 4% per year Total Cost 48 to 66 months $ 8,250,000.00 $ 9,110,000.00 Cost per unit $ 294,642.86 $ 325,357.14

Affordable Housing Implementation Plan Final Report Page 115 © SMS August, 2018 Kīhei Soccer Field Property – TMK # 2-2-2-030-121

This site has the second lowest estimated development costs among all of the sites reviewed. At just over four acres, the parcel is certainly large enough to support an affordable housing development. The County of Maui owns this land so no acquisition fees would be incurred. While Kīhei doesn’t have the number and variety of amenities of the Wailuku – Kahului region, it is certainly sufficient to support potential residents of an affordable housing development in this location.

Table D-3. Estimated Costs and Timing of Site Development – Kīhei Soccer Field

Kīhei Soccer Field Property TMK # 2-2-2-030-121 4.14 Acres, Project District, SLUC Urban Estimate a possible 52 affordable housing rental units Step TimingBallpark Cost Notes

1. Site owned by Maui County. County Owned, Unsure what steps would be Currently a Soccer Field. necessary to change from Soccer Field use. 2. Issue RFP to hire 6 mos. For RFP process architect/planner to draft 12 to 24 months for plans $ 1,000,000.00 3,000,000.00$ plans, etc. Draft Plans. to be drafted 3. Secure permits, approvals, 12-18 months Unsure about community push back - taking a Staft time to etc. , 60,000.00$ soccer field for affordable housing project. secure permits May take longer. 4. Site preparation & 18 - 24 months Note that construction costs have been rising Construction $ 19,000,000.00 21,000,000.00$ at 4% per year. Uncertainty about site development Total Cost 48- 72 months $ 20,000,000.00 $ 24,060,000.00 Cost per unit $ 384,615.38 $ 462,692.31

Affordable Housing Implementation Plan Final Report Page 116 © SMS August, 2018 Kīhei Fire Station Property – TMK # 2-2-1-008-046, # 2-2-1-008-113, # 2-3-9-038-026

This property consists of three adjacent parcels. At $24 to $28 million, it has the third lowest estimated development costs. Again, because there are already structures present on the property, it can safely be assumed that the necessary infrastructure and improvements are already in place.

Table D-4. Estimated Costs and Timing of Site Development – Kīhei Fire Station

Kīhei Fire Station Property TMK # 2-2-1-008-046 and # 2-2-1-008-113 and # 2-3-9-038-026 5.75 Acres, Public, Quasi-Public, SLUC Urban Estimate a possible 75 affordable housing rental units Step TimingBallpark Cost Notes

1. Site owned by Maui County. County Owned, Unsure what steps would be Currently vacant necessary to change from Fire Station designation. 2. Issue RFP to hire 6 mos. For RFP process architect/planner to draft 12to 24months forplans $ 1,000,000.00 3,000,000.00$ plans, etc. Draft Plans. to be drafted 3. Secure permits, approvals, Staft time to 12-18 months 60,000.00$ etc. , secure permits 4. Site preparation & Note that construction costs have been rising Construction 24 - 36 months $ 23,000,000.00 25,000,000.00$ at 4% per year. Uncertainty about site development Total Cost 48- 72 months $ 24,000,000.00 $ 28,060,000.00 Cost per unit $ 320,000.00 $ 374,133.33

Affordable Housing Implementation Plan Final Report Page 117 © SMS August, 2018 Kehalani Mauka Property – TMK # 2-3-5-001-077

This is the only property being considered that is not currently owned by a government entity. For that reason, the estimated cost to acquire the property must be included. However, the current owner, Everett Dowling, may be willing to consider a price well below the estimated market rate provided here.

Table D-5. Estimated Costs and Timing of Site Development – Kehalani Mauka

Kehalani Ma uka - TMK # 2-3-5-001-077 6.04 Acres, Project District, SLUC Urban Estimate a possible 78 affordable housing rental units Step - Assume 201H process TimingBallpark Cost Notes

1. Acquire the site - property Meet with E. Dowling and discuss the owned by Everett Dowling 6-12 months $ 2,800,000.00 4,000,000.00$ opportunity to develop a Public-Private Partnership for low income rentals 2. Issue RFP to hire 6 mos. For RFP process architect/planner to draft 12 to 24 months for plans $ 1,500,000.00 3,500,000.00$ plans, etc. Draft Plans. to be drafted 3. Secure permits, approvals, Staft time to Assume 201H waivers in place. Staff Time or 12-18 months 80,000.00$ etc. , secure permits Professional Services 4. Site preparation & Note that construction costs have been rising Construction 24 - 36 months $ 24,000,000.00 28,000,000.00$ at 4% per year. Uncertainty about site development Total Cost 60 to 96 months $ 28,300,000.00 $ 35,580,000.00 Cost per unit $ 362,820.51 $ 456,153.85

Affordable Housing Implementation Plan Final Report Page 118 © SMS August, 2018 Waiale Road Property – TMK # 2-3-8-007-092

The Waiale Road property is the second largest of the parcels considered, encompassing over 37 acres of land. The estimated development costs of between $30 and $36 million for ten acres providing 130 units provides the largest number of affordable units.

Table D-6. Estimated Costs and Timing of Site Development – Wailae Road

Waiale Road Property TMK # 2-3-8-007-092 37.45 Acres, AG, SLUC Agriculture Recommend developing 10 acres at a time each with a possible 130 affordable housing rental units Step TimingBallpark Cost Notes

1. Site owned by Maui County. Staft time to Currently vacant - will require zoning change at change State State and County level 100,000.00$ and County zoning 2. Issue RFP to hire 6 mos. For RFP process High end is If the whole parcel zoning is architect/planner to draft 12 to 24 months for plans $ 2,000,000.00 4,000,000.00$ changed at once, then future developments plans, etc. Draft Plans. to be drafted will require less time. 3. Secure permits, approvals, If the whole parcel zoning is changed at once, Staft time to etc. , 12-18 months 80,000.00$ then future developments will require less secure permits time. 4. Site preparation & Assumes developing 130 units.Note that Construction 24 - 36 months $ 28,000,000.00 32,000,000.00$ construction costs have been rising at 4% per year. Uncertainty about site development Total Cost 48- 72 months $ 30,000,000.00 $ 36,180,000.00 Cost per unit $ 230,769.23 $ 278,307.69

Wailuku Beachfront Property – TMK # 2-3-3-001-001

The Wailuku Beachfront location is, by far, the largest of the parcels reviewed. It includes nearly 64 acres of land along the coast in Wailuku. We recommend that the County have the property appraised to determine potential sale price. A different ocean front 42-acre lot is listed for $2,000,000 – that would suggest this lot might be valued at $3,000,000.24 One reason to consider selling the property is that community reaction to developing this prime beachfront property is more likely to be negative than it would be in alternate development locations. The community overall would probably prefer this site be used for a park. Consider selling part of the property and turning the remainder into a park. All of the possible challenges put the Wailuku Beachfront property at the bottom of the list of recommended affordable housing development locations.

24 Not to be considered a formal appraisal.

Affordable Housing Implementation Plan Final Report Page 119 © SMS August, 2018 FUNDING ALTERNATIVES

Part of the requirement for the current project was to examine the available funding sources to determine which ones might be most appropriate for the County of Maui’s affordable housing development initiatives. Funding sources are not specific to any particular parcel and may be applied to any of the potential projects. Below is a summary of the most attractive potential sources for funding for Maui County’s affordable housing development efforts.

Affordable Housing Fund

The purpose of Maui County’s Affordable Housing Fund (AHF) is for “rehabilitation of existing structures, land purchase or other acquisition of land or property entitlements, planning, design, and construction.” Currently, the AHF has three sources of funding: funds paid by developers in lieu of providing residential workforce housing units; two percent of real property tax revenues; and any additional monies donated to the fund. There is approximately $5 million in the AHF that could be used to fund affordable housing development in the County of Maui.

Additional Funding Sources

Two sources of funding for affordable housing development are available through the U.S. Department of Housing and Urban Development (HUD): the HOME Investment Partnerships Program (HOME) and Community Development Block Grants (CDBG).

The HOME program provides formula grants to States and localities that communities use - often in partnership with local nonprofit groups - to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. HOME is the largest Federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. HOME funds are awarded annually as formula grants to participating jurisdictions (PJs).The program’s flexibility allows States and local governments to use HOME funds for grants, direct loans, loan guarantees or other forms of credit enhancements, or rental assistance or security deposits.

The CDBG program is a flexible program that provides communities with resources to address a wide range of unique community development needs. The annual CDBG appropriation is allocated between States and local jurisdictions called "non-entitlement" and "entitlement" communities respectively. HUD determines the amount of each grant by using a formula comprised of several measures of community need, including the extent of poverty, population, housing overcrowding, age of housing, and population growth lag in relationship to other metropolitan areas.

If the County of Maui elected to develop affordable housing units specifically for seniors or residents with special needs, 202 and HUD 811 funds may be available.

Finally, the State of Hawai‘i has funds designated for supporting affordable housing development. A consolidated application is available for parties interested in applying for financing from five programs: Dwelling Unit Revolving Fund, Low Income Housing Tax Credits, Rental Housing Revolving Fund, Rental Assistance Revolving Fund, and Hula Mae-Multi Family Bond.

Affordable Housing Implementation Plan Final Report Page 120 © SMS August, 2018 Monies from the Dwelling Unit Revolving Fund may be used for expenses in administering housing development programs, the expansion of community facilities and regional state infrastructure constructed in conjunction with housing and mixed-use transit-oriented development projects, permanent primary or secondary financing, supplementing building costs, federal guarantees required for operational losses, and all things required by any federal agency in the construction and receipt of federal funds or low income housing tax credits for housing projects. ‑ The Low-Income Housing Tax Credit (LIHTC) Program is designed to encourage the construction or rehabilitation of low-income rental units. The Program provides funds to qualified project owners who agree to maintain some or all of the units for low-income persons.

The Rental Housing Revolving Fund (RHRF) provides “Equity Gap” low-interest loans or grants to qualified owners and developers constructing affordable housing units. Funds may be used to provide a loan or a grant for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units.

The Rental Assistance Revolving Fund is similar to the Rental Housing Revolving Fund’s interim construction financing. The interim construction financing may be used solely for rental housing.

The purpose of the Hula Mae Multi-Family (HMMF) Tax-exempt Bond Program is to promote the development of new, or the rehabilitation of existing, rental housing projects through the issuance of mortgage revenue bonds for interim and/or permanent financing at rates below market interest rates.

Funding Options for Infrastructure

Two options for covering the costs of creating the infrastructure necessary to support affordable housing development are Value Capture Bonds (VCB) and Infrastructure Financing Districts (IFD). These methods divert existing property taxes to a special financing district for redevelopment. Policy traditionally has property owners vote to approve development decisions with special funds. Most of the projects chosen, therefore, tend to relate to infrastructure development.

Development of a State Infrastructure Bank, or I-Bank, is another good option for funding infrastructure development. This is typically a revolving investment fund that provides grants and low-interest loans for infrastructure projects.

Infrastructure can also be funded through a Local Option Fuel Tax. This tax is typically levied as pennies per volume of fuel sold, or as a percentage of its cost. Funds raised can be used for infrastructure costs and improvements within the county.

A Local Option Sales Tax is another option for funding needed infrastructure. The Local Option Sales Tax levies a special-purpose tax at the city or county level as a means of raising funds for specific local or area projects, and infrastructure.

Affordable Housing Implementation Plan Final Report Page 121 © SMS August, 2018 Funding Example

With the multitude of funding options available, it is often necessary to combine several funding source in order to cover the cost of affordable housing development. A recent example of how multiple funding sources can be combined to successfully develop affordable housing can be found in the Kahului Lani senior housing project. A housing development arm of Catholic Charities Hawai‘i plans to break ground on a $48 million rental housing complex for Maui’s low-income seniors by the end of 2018. In order to finance the first phase of the project, Catholic Charities sought assistance from the Hawai‘i Housing and Finance Development Corporation (HCDCH) which provided $24 million in revenue bonds/ Another $14.5 million came in the form of a loan from the rental housing revolving fund. An additional $1.2 million in state low-income housing tax credits (LIHTC) and the same amount in federal credits helped to provide sufficient funding for the project to move forward. Combining all of the available resources in this manner is generally necessary for affordable housing development.

INCENTIVES

The goal of an inclusionary requirement is to enable developers to earn “normal” profits while capturing some share of “excess profits” for public benefit by building workforce housing that would have otherwise not been built. Any incentive a city can offer to make development more profitable enables the imposition of a higher inclusionary requirement than the developer would otherwise deem feasible.

Government can encourage the development of affordable housing by offering incentives to developers to offset the costs to the developer of providing below market rate workforce housing units. Incentives could be impact fee reimbursements, waivers or postponement plans; administrative construction fee exemptions; development plan fee waivers; priority processing for qualifying projects; sales tax rebates; property tax abatement; low income housing tax credits; private activity bonds to finance construction; density bonus programs that allow more housing units per acre than would otherwise be permitted; alternative design standards and other incentives.

Impact fees are charges that are designed to compensate a community for the cost of extending the infrastructure to support new development, e.g., to help pay for the additional roadway capacity, water and waste water facilities, schools, parks, and fire protection facilities. Also included are programs that provide incentives that pay for the purchase, development or rehabilitation of rental housing that is targeted to older adults, people with disabilities, low income people in rural areas and other special populations.

Density bonus, the most common incentive is the ability to build increased density allowing increased dwelling units per acre, floor area ratio, or increased building height. All of these more units to be built on a site. Generally, programs allow increases of between 10 percent and 20 percent over baseline permitted density in exchange for the provision of affordable housing. For example, Montgomery County, Maryland requires 12.5 percent of all new residential units be affordable, but the required affordable percentage rises to 15 percent for projects that take advantage of the County’s density bonus program. Under that program, developers can build up to 20 percent more floor area than would otherwise be allowed under local zoning.

Affordable Housing Implementation Plan Final Report Page 122 © SMS August, 2018 Expedited processing moves projects with an affordable component to the front of the line in zoning, planning and building permit processing. Faster processing reduces risk and financing costs and allows developers to bring projects to market faster. However, in practice it can be difficult to implement, especially if this incentive is given out to a high share of the projects and resources to process permits are limited.

Fee waivers on required payments such as permits, impact fees, or planning fees.

Parking reduction. According to MCC 19.36A.010, developers must provide the following number of spaces for residential developments: o Apartments - Two parking spaces for each unit; provided that, two parking spaces assigned to a dwelling unit, or allocated for employee parking, may be situated in tandem thereby allowing two vehicles to park end to end. o Single family dwelling - Two parking spaces for each dwelling unit. If these requirements were reduced and developers were allowed to provide 1.5 spaces per unit, this would reduce their cost and serve as an impetus to pursue the development. Tax Abatement. Property taxes are one of the more significant annual expenses associated with housing. Some communities offer a partial abatement or complete waiver of property taxes to owners of projects with affordable housing.

State of Hawai‘i

Fast Tracking Process Exemptions

The State of Hawai‘i has created incentives for affordable housing production through legislation to “fast track” these projects. Under HRS 201H-38, Hawai‘i Housing Finance and Development (HHFDC) can exempt an affordable housing project from statutes, ordinances and rules related to planning, zoning, and subdivision, so long as the project is not disapproved by the County Council and the Land Use Commission within a forty-five day period after submission. Both quick processing and exemptions from requirements can allow developers to produce units at less cost. The fast-track process has risks for all parties.

Exemption from General Excise Tax

HI Revised Statutes 201H-36(a) (a) In accordance with section 237-29, the corporation may approve and certify for exemption from general excise taxes any qualified person or firm involved with a newly constructed, or moderately or substantially rehabilitated project:  (3) Developed under the sponsorship of a private nonprofit organization providing home rehabilitation or new homes for qualified families in need of decent, low-cost housing; or  (4) Developed by a qualified person or firm to provide affordable rental housing where at least fifty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development, of which at least twenty per cent of the available units are for households with incomes at or below sixty per cent of the area median family income as determined by the United States Department of Housing and Urban Development.  (5) Effective from July 1, 2018, to June 30, 2022, developed under a contract described in section 104 2(i)(2) by a qualified person or firm to provide affordable rental housing; provided that: ‑

Affordable Housing Implementation Plan Final Report Page 123 © SMS August, 2018 o (A) The allowable general excise tax and use tax costs shall apply to contracting only and shall not exceed $7,000,000 per year in the aggregate for all projects approved and certified by the corporation; and o (B) All available units are for households with incomes at or below one hundred forty per cent of the area median family income as determined by the United States Department of Housing and Urban Development, of which at least twenty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development.

Low-Income Housing Tax Credit

The Low-Income Housing Tax Credit (LIHTC) Program is a financing tool for private developers and non-profit entities to construct or rehabilitate affordable rental units. Federal and state tax credits may be used to obtain a dollar-for-dollar reduction in income tax liability for 10 years. The tax credit may be sold to a qualified investor in exchange for an equity investment in the project.

The federal LIHTC is a program administered by the Internal Revenue Service. The HHFDC is responsible for the administration of the LIHTC program for the state of Hawai‘i. A state LIHTC equal to 50 percent of the federal LIHTC is also available to qualified applicants.

To qualify for a tax credit, owners must meet these general guidelines in addition to other program requirements (see Section 42 of the Internal Revenue Code for specific eligibility):  Income restriction: The tax credit is available only for units rented to low-income occupants. This means that a project must have: o at least 20% of its units rented to households with incomes of 50% or less of area median income; or o at least 40% of the units must be rented to households with incomes of 60% or less of area median income.  Rent restriction: Low-income rents are restricted based on the number of bedrooms in the unit and the area median income as established annually by HUD. If the tenant pays for utilities, the rent must be adjusted by the applicable utility allowance.

Honolulu City & County (Ordinance 18-1)

Real property taxes are kept at the current assessment during the construction and marketing period o Any incremental increase in valuation of the real property primarily attributable to the qualifying construction work will be exempt o Based on the assessed value of the property for the tax year immediately preceding the tax year of the building permit. o Exemption expires three years after building permit, issuance of certificate of completion, or issuance of certificate of occupancy.

Real property tax exemptions that apply exclusively to affordable housing rental dwelling units during the period in which the rental unit is subject to an affordable housing agreement

Waiver of wastewater system facility charges

Waiver plan review and building permit fees

Affordable Housing Implementation Plan Final Report Page 124 © SMS August, 2018  For the residential portion of the project equal to the percentage of affordable dwelling units. Waiver park dedication requirements

Kaua‘i County

Kaua‘i also has incentives to encourage developers to satisfy workforce housing requirements. The County of Kauai’s incentives work to reduce the developers costs by lowering the number of workforce housing units required to satisfy the workforce housing requirements. a) Integration – if the workforce housing units are interspersed with the market units in the project then the requirement is reduced by 25 percent of the previous requirements b) Single-Family Units – If all the required units are single-family detached units for sale then the requirement is reduced by 25 percent; if the units are single-family attached units then the requirement is reduced by 20 percent. c) Building Green – If all units in the project are built with green principles then the requirement is reduced by 0.5 to 5 percent. d) Low-Income Rental Units – Rental units may be substituted for for-sale units. The period of affordability is 40 years and 1) if workforce housing unit is affordable to households earning no more than 60 percent of Kaua‘i median household income, each rental unit will be equal to two required workforce housing units; or 2) if housing unit is affordable to those earning no more than 80 percent of median income, each rental unit will be equal to 1.5 required units.

The County also has a density bonus of increasing the total number of allowable residential units on a project site by 10 percent and decreasing the minimum lot size by 10 percent, if all workforce units are integrated with the market units. This bonus is not available in the agricultural district or rural districts.

Hawai‘i County:

Section 11-8. Density bonus.

(a) Any project subject to an affordable housing requirement under this chapter that fulfills its housing requirement by constructing affordable dwelling units for sale or rent or by donating finished lots with infrastructure shall be entitled to a density bonus increasing the total number of residential units that may be constructed on the site by ten percent, and decreasing the minimum lot size by ten percent, compared to the number of units otherwise allowable and the minimum lot size as established by the zoning code.

Section 19-87. Exemption for low and moderate-income housing:

Real property used for a housing project is exempt from real property tax, except the minimum tax.

Affordable Housing Implementation Plan Final Report Page 125 © SMS August, 2018 Recommendations

Density bonus programs are the most common incentive government agencies use to encourage affordable housing development. This method would be relatively inexpensive for the County (as compared to fee waivers or reimbursements). Alternative design standards are also among the most cost-effective incentives offered. With the extensive permitting process required in Maui County, priority processing, or fast-track applications, might also encourage developers to consider affordable housing development.

In Hawai‘i, in addition to the general excise tax exemption allowed under HRS 201H-36, real property tax exemptions and other exemptions (e.g., income tax) should be considered for specifically designated affordable and/or workforce housing projects. For example, real property tax incentives may include property tax exemptions or deferments with specific time limits and/or dollar amounts, subject to existing statute or ordinance.

Those in opposition to incentives state that, if inclusionary housing requirements are modest enough to be absorbed by land prices, then any incentives merely moves the cost from landowners back onto the public. Incentives such as tax abatements and fee waivers reduce revenues available to jurisdictions just as cash subsidies to development projects would. Even planning incentives such as density bonuses, which appear free, result in increased infrastructure and other public costs.

Affordable Housing Implementation Plan Final Report Page 126 © SMS August, 2018 BARRIERS AND IMPEDIMENTS TO AFFORDABLE HOUSING DEVELOPMENT

While there are a myriad of unexpected challenges that must be overcome in the course of any development project, there are a number of known challenges for affordable housing development in Maui County. Interviews with numerous developers, housing experts, and community leaders provided insights into several important issues.

Improving Off-Site Infrastructure

The cost of improving off-site infrastructure has been identified as a major contributor to the high cost of housing. The Maui County Code requires developers to bear the full burden of the cost of improving off-site infrastructure25. A sizeable portion of a project’s budget goes to developing off- site infrastructure like water and sewer improvements, traffic lights, drainage, curbs, gutters, roadways and bike lanes. Challenges encountered with the Department of Water Supply were frequently mentioned as impediments.

Rezoning and Approval Process

Several of the housing experts interviewed mentioned the length of time required to navigate the approval process as an impediment to affordable housing development. When the rezoning process is too expensive, encounters negative responses from community members, or takes an inordinately long time to accomplish developers are often hesitant to embark on an affordable housing development project.

Entitlements

The land entitlement process is the legal method of acquiring approvals to develop or use a property and involves obtaining proper zoning and various permits. Entitlements generally detail the function, density and the setback requirements for a given property.

The process for resolving entitlements was described by several interviewees as a significant impediment to development. They report that the process takes too long and involves several layers of duplicated effort. The building permit checklists for residential and commercial buildings, Figures D-1 and D-2, suggest that the process is quite extensive. Even if a developer successfully navigates the County approval process, the process must be repeated to see approval from the State Land Use Commission. Furthermore, interviewees felt the current entitlement process does not provide incentives for development, but rather adds restrictions to development.

Barriers and impediments to affordable housing development in Maui County are described in greater detail in the Affordable Housing Policy Study.

25 Maui County Code 19.79.060 B - General standards of development: 1. The development shall not burden governmental agencies to provide substantial infrastructure improvements or public services

Affordable Housing Implementation Plan Final Report Page 127 © SMS August, 2018 Figure D-1. Residential Building Permit Checklist

Affordable Housing Implementation Plan Final Report Page 128 © SMS August, 2018 Affordable Housing Implementation Plan Final Report Page 129 © SMS August, 2018 Affordable Housing Implementation Plan Final Report Page 130 © SMS August, 2018 Figure D-2. Commercial Building Permit Checklist

Affordable Housing Implementation Plan Final Report Page 131 © SMS August, 2018 Affordable Housing Implementation Plan Final Report Page 132 © SMS August, 2018 Affordable Housing Implementation Plan Final Report Page 133 © SMS August, 2018 Affordable Housing Implementation Plan Final Report Page 134 © SMS August, 2018 Affordable Housing Implementation Plan Final Report Page 135 © SMS August, 2018 APPENDIX E – AFFORDABLE HOUSING INVENTORY AND NEED

Affordable Housing Implementation Plan Final Report Page 136 © SMS August, 2018 CURRENT INVENTORY

For the Hawai‘i Housing Planning Study, 2016, a definition of affordable housing units recently developed by the Urban Institute (UI)26 was used. The UI defined affordable housing units as units with a monthly mortgage or rent payment that would require no more than 30 percent of the monthly household income for a household earning a specified percent of the HUD Area Median Income (AMI). Unlike other measures of affordability, which measure the condition of households or persons in households, UI affordability measures affordability as a condition of the housing stock.

The taxonomy classifies all housing units, occupied and vacant, as affordable or unaffordable to those households within specific HUD household income guidelines. By virtue of the HUD guidelines, classified housing units are affordable and adjusted for household size and geography. This procedure was applied to Hawai‘i household prices and rents in Public Use Microdata Sample (PUMS) data, using guidelines for 30 percent, 50 percent, 80 percent, and 100 percent of AMI for each county.

Affordable units were most limited in Maui County, with just 48.6 percent of the island’s housing stock affordable to low income households (vs. 49.8% statewide; see Table E-1). Of the vacant rental units, only 26.8 were affordable to households earning less than 50 percent AMI. Vacant ownership units were even more unaffordable, with only 28.5 percent affordable to households earning the median income for the County. In every county, many more rental units than ownership units were affordable to households with incomes below the AMI.

This method of assessing the stock of affordable housing units allows planners to know how many units are affordable, and even how many of those are vacant and available. Housing planning decisions can be guided by the desire to increase the number and types of affordable units in specific areas. The largest disadvantage to the UI method is that it is very detailed and difficult to execute. Rather than describing affordable housing units as those priced below $400,000, evaluators need to specify a target area, unit type, income target, and whether the units in question are occupied, vacant and available, or both.

26 Leopold, Josh, Liza Getsinger, Pamela Blumenthal, Katya Abazajan, and Reed Jordan. (2015). The housing affordability gap for extremely low-income renters in 2013, Urban Institute Research Report, June 15, 2015.

Affordable Housing Implementation Plan Final Report Page 137 © SMS August, 2018 Table E-1. Stock of Affordable Housing Units, Maui County, 2016

Maui County State of Hawai‘i Count Percent Count Percent TOTAL HOUSING STOCK 61,395 100.0% 477,515 100.0% TOTAL UNITS WITH PAYMENTS 50,021 81.5% 380,914 79.8% % affordable at 50% AMI 18.7% 21.5% % affordable at 80% AMI 48.6% 49.8% % affordable at median AMI 59.2% 58.8% RENTAL UNITS Occupied 20,690 41.4% 179,636 47.2% % affordable at 50% AMI 27.9% 32.6% % affordable at 80% AMI 68.4% 66.8% % affordable at median AMI 80.7% 71.2% Vacant 7,585 15.2% 21,117 5.5% % affordable at 50% AMI 26.8% 34.5% % affordable at 80% AMI 63.4% 70.4% % affordable at median AMI 72.1% 78.1% OWNERSHIP UNITS Occupied 21,067 42.1% 174,062 45.7% % affordable at 50% AMI 7.2% 18.5% % affordable at 80% AMI 25.0% 30.4% % affordable at median AMI 34.4% 44.3% Vacant 679 1.4% 6,099 1.6% % affordable at 50% AMI 1.7% 10.0% % affordable at 80% AMI 13.6% 34.8% % affordable at median AMI 28.5% 47.0% ALL UNIT TYPES Occupied 41,757 83.5% 353,698 92.9% % affordable at 50% AMI 29.5% 33.7% % affordable at 80% AMI 53.5% 56.5% % affordable at median AMI 58.7% 61.4% Vacant 8,264 16.5% 27,216 7.1% % affordable at 50% AMI 24.8% 29.7% % affordable at 80% AMI 56.2% 57.5% % affordable at median AMI 60.1% 61.8% Units with No Housing Payment 11,374 18.5% 96,601 20.2% Source. SMS estimates from ACS 5-yeardata 2014

FORECAST

Affordable Housing Implementation Plan Final Report Page 138 © SMS August, 2018 Table E-2. Needed Housing Units, County of Maui and State of Hawai‘i, 2015-2025

HUD Income Classification (%of Area Median Income) More Less than 120- 140- than 30% 30-50% 50-60% 60-80% 80-120% 140% 180% 180% Total Maui County 2,947 2,775 1,414 2,393 1,626 1,493 500 801 13,949 Ownership Units 1,079 824 351 1,151 1,308 1,292 469 766 7,240 Single-Family 1,022 783 234 1,022 1,112 1,032 368 610 6,183 Multi-Family 57 41 117 129 196 260 101 156 1,057 Rental Units 1,868 1,951 1,063 1,242 318 201 31 35 6,709 Single-Family 1,295 1,226 771 1,050 239 156 17 30 4,784 Multi-Family 573 725 292 192 79 45 14 6 1,926

State of Hawaii 15,511 12,507 6,352 9,458 8,291 5,378 1,695 5,501 64,693 Ownership Units 5,611 4,503 2,584 5,404 5,468 4,669 1,446 4,787 34,472 Single-Family 4,821 3,432 2,239 4,453 3,459 3,549 1,025 3,744 26,722 Multi-Family 790 1,071 345 947 2,009 1,120 423 1,045 7,750 Rental Units 9,900 8,004 3,768 4,054 2,823 709 249 715 30,222 Single-Family 6,023 4,226 2,371 2,941 1,680 430 157 534 18,362 Multi-Family 3,877 3,778 1,397 1,113 1,143 279 92 181 11,860 Source. Hawai‘i Housing Planning Study, 2016

Some of these needed units are already in the pipeline. At the end of 2017, the Hawai‘i Housing Finance and Development Corporation (HHFDC) announced that a joint venture between local developer Stanford Car and Standard Communities out of Los Angeles would contribute 184 affordable residential units to Maui’s current housing stock. These affordable units are planned for the Kahoma Village development in Lahaina.

In Maui County, there are an additional 3,051 affordable housing units currently classified as Under Construction, Ongoing, or Pending (Appendix Tables A-1 through A-3). There are 402 affordable housing units in projects currently under construction with expected completion by Fall 2019. An additional 651 affordable units are included in three ongoing development projects. The completion date for these units is unclear at this time. Fourteen pending projects include another 1,998 affordable units. The status of these projects and timeline for completion of the affordable units is being determined.

There are also two additional properties being considered by the County for affordable housing development. The first is a 4.02-acre lot in Honokowai (TMK # 244001106) managed by the County under a 2004 Executive Order from the State of Hawai‘i “for affordable housing and emergency evacuation route”. The second property is three parcels on Kilohana Drive in Kihei owned by the County (TMK #221008113, #221008046, #239038026). The total land area is 5.75 acres, minus the area now occupied by the fire station. The land was originally planned for use as a police station but that plan has been abandoned with the construction of the new Kihei Police

Affordable Housing Implementation Plan Final Report Page 139 © SMS August, 2018 Station. The exact number of affordable units that could be constructed at each of these locations is not currently known.

TYPES OF AFFORDABLE UNITS NEEDED

Affordable rental housing units for households earning between 30 and 80 percent AMI can be developed under HAR 201H or MCC 2.96. Often these projects are developed under the auspices of a community land trust with stated requirements to retain units as low-income affordable rentals for a specified period of time. Rentals for households with incomes under 30 percent AMI are generally public housing developments funded by the State or County.27 Controlled by the State or County, these developments can be retained as low-income rentals in perpetuity. As currently defined by Maui County, households between 80 and 140 percent AMI qualify for workforce housing. Housing units for this segment are usually provided by housing developers as part of projects that include market priced housing. In these cases, market-priced rental or for sale units subsidize the lower income units. These tend to be multi-family rental projects developed under 201H28 or 2.9629 with higher densities to bring down development costs.

Within larger market priced developments under MCC 2.96, single- family or townhouse for sale units have been developed. It is recommended that these affordable for-sale units be retained within a Community Land Trust (CLT) that ensures a unit remains affordable and still allows the homeowner a share of the sales price appreciation based on a formula identified at the time of purchase. When the homeowner decides to sell, the CLT purchases the unit based on the formula30, does whatever rehab is necessary, then offers the unit for sale based on AMI original guidelines.

Another way to ensure that affordable units remain affordable is to place a restriction on how long a homeowner must live in the unit prior to offering it for sale. Units that are restricted for 30 years or more are less attractive to buyers and some municipalities are rethinking their sustainability requirements. The City and County of Honolulu recently determined that requiring 30-year deed restriction for workforce housing is too restrictive and adopted a five-year requirement.31

With rental units, it is more difficult to encourage development if the units must be maintained at affordable prices in perpetuity. Developers are often more amenable to keeping rents at an

27 Hawai‘i Housing Alliance Affordable and Workforce Housing Presentation, Charles Wathen. 28 Chapter 201H of the Hawai‘i Revised Statutes authorizes the Hawaii Housing Finance and Development Corporation to develop or assist in the development of housing projects which are exempt from certain statutes, ordinances, charter provisions, and rules of any governmental agency relating to planning, zoning, construction standards for subdivisions, development and improvement of land, and the construction of units thereon provided the project primarily or exclusively includes affordable housing units. 29 Chapter 2.96 of the MCC is the Residential Workforce Housing Policy, which requires developers to provide residential workforce housing units equal to 25 percent of the total number of market rate units being built. 30 In an effort to maintain affordability by reducing the effect of market appreciation, CLTs limit the share of the increased value of the property that is due to the homeowner following the sale of a land trust home. In the land trust model, a third-party market appraisal is used to determine a home’s value. The homeowner then receives a share of the increased value of the home from the sale. Homeowners typically recoup their original down payments and any principal paid over the life of the mortgage. 31 Affordable Housing Requirement, Ordinance 18-10 (Bill 58 (2017)) and the Affordable Housing Incentives, Ordinance 18-01 (Bill 59 (2017))

Affordable Housing Implementation Plan Final Report Page 140 © SMS August, 2018 affordable level for a specified number of years because they know, at some point in the future, they can raise rents and recoup some of their costs.

A challenge with relying on inclusionary housing policy to produce workforce housing is the strengths and weaknesses of the housing market. When the market is strong, like now on Maui, developers can build and sell higher priced housing units that can subsidize the workforce housing. When the housing market slows down (due to higher interest rates, lower market/luxury demand) these developments do not happen and neither does workforce housing.

In November 2016, Maui County’s Planning Committee unanimously supported a bill to establish “affordable accessory dwellings” as a permitted use on lots that are smaller than 7,500 square feet in the residential, apartment, hotel, interim zoning and state land use rural district. Previously, an accessory dwelling could only be built on a lot that was 7,500 square feet or more in area. Under the bill, the affordable accessory dwelling must accommodate the owner’s immediate family members or unrelated, income-qualified tenants earning from very low to above-moderate income. Deed restrictions would be placed on the lot to ensure affordability in perpetuity.

Accessory dwelling units (ADUs) are one approach to creating more affordable rentals at minimal cost to the state and counties. The cost for an ADU is usually lower than a new single-family home on a separate lot and that cost is borne by the landowner. They increase property tax revenues and decrease demand among population groups who can be difficult to serve including elderly and young families.

County of Maui ADUs are subject to maximum size limits based on lot size. The structures must be detached from the main structure, with no internal connection permitted, and must have a separate entrance. Only one additional parking stall is required, and the ADU may have a separate driveway from the main dwelling. ADUs are an attractive option for in-fill, however based on the experience of the C&C of Honolulu the actual number of homeowners that build an ADU is relatively low.

Redeveloping or refurbishing existing units to increase the affordable housing stock in Maui County is another potentially viable approach. Parcels well-suited to redevelopment and refurbishment are still being examined. Parcels with buildings that were constructed more than 30 years ago and those for which the value is considerably less than the tax value would be primary candidates. While the year built and value of structure data is available in aggregate for the county or even zip code, a source for this information at an individual parcel level is still being sought.

Affordable Housing Implementation Plan Final Report Page 141 © SMS August, 2018 APPENDIX F – IMPLEMENTATION STEPS OUTLINE

Affordable Housing Implementation Plan Final Report Page 142 © SMS August, 2018 IMPLEMENTATION STEPS OUTLINE

The following is an outline of implementation steps to be considered for affordable housing development. It is important to note that every parcel and project is different and may require different steps or not require one of the described steps. The key is someone in County staff with the skills and knowledge to effectively progress through this process.

Action Steps Recommended Lead Rationale

A Early steps to support a proactive approach for Affordable Housing Development 1 Understand the financingoptions available to the County DHHC - Housing Division, This Funding opportunities are plentiful and including the requirements for an application submission, could be the Assistant beneficial, but some of the most important timing, impacton the project, etc. Have the skills required to Administrator who already options, such as LIHTCs, are competitively submit applications as required for specific projects. oversees the HOMEfund and scored forreadiness and when awards are Affordable Housing Trust Fund. made available they come with constraints Ideally this is aCivil Service related to time forexpenditures and for position, to minimize turnover project completion. Having a person familiar and the need to restart the with the options and the requirements will learning curve. enable the best options to be considered, and the timing necessary to maximize the likelihood for project funding. 2 Issue an RFQforCommunity Planning and Engineering DHHC- HousingDivision The submittedqualificationpacketswill be the companies experienced in developing affordable housing beginning of a list of potential development projects. partners for future projects and provide the list of organizations that will be included in future RFPs. 3 Continue the process forcomprehensive rezoning based on Department of Planning and Rezoning large parcels for residential use will Community Plans (LU-12). Will Spence started this process Land Use Committee significantly reduce the time and expense of with his letter to the Land Use Committee on June 20, 2018 rezoning individual smaller parcels as needed. This will reduce the cost and time required for development. This will also incent housing developments in the same areas at designated in the Community Plans. 4 Maintain adatabase of potential parcels fordevelopment in Department of Planning or SMS has developed a database of parcels to use Maui County. This may be built on the Excel database Department of Public Works to identify high potential parcels for affordable developed by SMS oraGIS based database that the County is housing development. However this database developing. Ideally it's adatabase thatcan be accessed by will need to be maintained and supplemented every department involved in supporting the development of with additional information. For example, the affordable housing. SMS database does not include an overlay for some infrastructure including water and sewers - these should be added if available to minimize the efforts for each individual parcel.

5 Identify the person(s) whowill be the Lead Development DHHC/CIP Every project and parcel is different, therefore Coordinator for future Affordable and Workforce Housing project approval must be reviewed and Developments. This person will be given the responsibility negotiated individually with compromise on and authority to provide exemptions and incentives for both sides (Developerand County.) At the projects that will increase affordable and workforce housing present time it is unclearif anyone has the in the County - balancing County needs/resources with authority or responsibility to take put into Developers'need to achieve a minimum rate of return. place the exemptions that are currently available under 2.96or 201H or incentives such as increased density. On Kauai they have a Development Coordinator position that has this responsibility and authority.

Affordable Housing Implementation Plan Final Report Page 143 © SMS August, 2018 Action Steps - Low Income Affordable Rentals Recommended Lead Rationale B. County-led Projects 1 Identify the target income group and type of development that a DHHCOfficeofHousing Recommendlowincome project will focus on. [in this case low income multi-family rentals.] rentals targeting <80% AMI because this segment has the 2 Identify high potential parcels ( see Parcel Evaluation process). Select DHHC Office of Housing six for further evaluation. 3 High level evaluation of the parcels based on geographiclocation to DHHC, Dept of Water, Dept of Infrastructure overlays were existing infrastructure such as water, sewer, roads. Prioritize from Environmental Management, not available to be included lowest cost to highest cost. Dept of PublicRoads, Dept of in the SMS database. Planning. This can be the same group as the one recommended for Fast Track Committee

4 Prepare conceptual plan forthe parcel. [Multi-family, XX numberof May require contracting for units, etc.] professional services 5 Based onthe results of B3andB4undertake the pre-development Led by DHHC process. 5a Gain entitlements for zoning density and clear title. Dept of Planning 5b Undertake Environmental Assessment if required, Findings of No May require hiring a consultant Significant Impact for a Chapter 343 HRS, any Chapter 106 historic to undertake the ‘EĀ. consultation if necessary. Will require community meetings.

5c SMA approval if needed Dept of Planning 5d Identify water system capacity with nearby waterline connections Dept of Water

5e SewerSystemcapacitywithnearbysewerlineconnections DeptofEnvironmental Management 5f Power Utility Access Dept of PublicWorks 5g Road Access Dept of PublicWorks 5h Other tasks as needed such as soils report and/or drainage. May require contracting for professional services 5i When this has been completed move to the nextphase of preparinga RFP.

Affordable Housing Implementation Plan Final Report Page 144 © SMS August, 2018 Action Steps - Low Income Affordable Rentals Recommended Lead Rationale C Contract with a Development Partner 1 Issue aRFP foraDeveloperto the listof community planners and Development Coordinator engineers created from the RFQ (see example from Kaua‘i Koa‘e DHHC Office of Housing project in the following Appendix) 2 Based on proposals submitted selecttwo orthree developers to meet Committee led by DHHC Every project must be looked with in person. Select one developerto begin negotiations. Ideally including CIP housing person, at closely by aqualified the Developerwill agree to share theirdevelopment pro forma, so the Public Works, Planning. Final Engineer and Planner County can understand where their budgets including Cap Rate, project negotiations led by representing the County. At Income projections, Expenses projections. This will enable the County Development Coordinator the present time this to identify areas where the project may require financial assistance. expertise resides in the CIP area - currently the area is understaffed and will need to be betterstaffed if one person is tobe able to devote sufficient time to this phase of the project. 3 The Developerwill need to be able to: 3a Secure financing (low income affordable rental projects will require Selected Developer and may subsidies from the State and the County.) need assistance from DHHC Office of Housing 3b Hire design consultants (architects, engineers) to design the site and structures 3c Obtain a zoning permit from Planning 3d Bid out for site and general contracting 3e Obtain building permits 3f Obtain National Pollutants Discharge Elimination Systems (NPDES) permit. 3g Select Contractor(s) 4 ObtainallCountyApprovalsincludingLandUseCommittee SelectedDeveloperandmay need assistance from DHHC Office of Housing

D Follow through with Construction Public Works 1 Ensure that project meet approved requirements. 2 Track the numberand type of housing units completed including the Target Market AMI E For low-income affordable units consider transferring property to a DHHC Community Land Trust to ensure future sustainability

Affordable Housing Implementation Plan Final Report Page 145 © SMS August, 2018 Action Steps - Developer Led Project Recommended Lead A Developer Proposes a Project for Maui County Housing 1 Developerproposes anew project forMaui County under201Hor2.96. Development Coordinator DHHC Office of Housing First meeting is with DHHC to complete a Workforce Housing Agreement. 2 Once the agreement is signed, Development Coordinator/DHHC calls Committee led by DHHC including CIP housing person, Public together the key departments to review the initial proposal, including: Works, Planning. Final project negotiations led by site selected and conceptual plan. Development Coordinator

3 Departmentsprovidefeedbackontheproject. CommitteeledbyDHHCincludingCIPhousingperson,Public Works, Planning. Final project negotiations led by Development Coordinator

4 Developerisresponsiblefor: DevelopmentCoordinatorworkswiththeDeveloper through the initial stages - maximizing the numberof affordable units that can be built forthe mnimumof County Costs, at the same time ensuring that reasonable projects are approved.

4a Land acquisition and related entitlements and zoning approvals. Developer 4b Preparing conceptual plan forthe parcel. [Multi-family, XX numberof Developer units, etc.] 4c Securing financing (low income affordable rental projects will require Developer subsidies from the State and the County.) 5d Gain entitlements for zoning density and clear title. Developer 4e Undertake Environmental Assessment if required, Findings of No Developer Significant Impact for a Chapter 343 HRS, any Chapter 106 historic consultation if necessary. Will require community meetings. 4f SMA approval if needed Developer 4g Identify water system capacity with nearby waterline connections Water/Developer 4h Sewer System capacity with nearby sewer line connections Environment/Developer 4i Power Utility Access Developer 4j Road Access Public Works/Developer 4k Other tasks as needed such as soils report and/or drainage. Developer 4l Obtain a zoning permit from Planning 4m Arrange for site and general contracting 4n Obtain building permits 4o Obtain National Pollutants Discharge Elimination Systems (NPDES) permit. 4p ObtainallCountyApprovalsincludingLandUseCommittee SelectedDeveloperandmayneedassistancefromDHHC Office of Housing

B Follow through with Construction Public Works 1 Ensure that project meet approved requirements. 2 Track the numberand type of housingunits completed including the Target Market AMI

Affordable Housing Implementation Plan Final Report Page 146 © SMS August, 2018 PARCEL EVALUATION DECISION MATRIX

This is the criteria used for the SMS parcel evaluation. Ideally the criteria will be refined over time as the parcels selected through this process come under greater scrutiny, particularly related to infrastructure requirements.

Parcel Evaluation Decision Matrix Is the parcel being considered… 1 Owned by the County? Yes - go to step 3 No- continue tostep2 2 OwnedbyagovernmentagencyorprivateownerwillingtoallowAH Yes - contact appropriate No - STOP development on that property? person to discuss development, go to step 3

3 Large enough to accommodate AH development? Yes - go to step 4 No - STOP 4 Have adequateinfrastructure tosupportthe planneddevelopment?(checkGIS Yes-gotostep6 No-gotostep5 overlays or contact gov't depts.) 5 Is putting in the necessary infrastructure cost prohibative? (Contact Water and Yes - STOP No - go to step 6 Environmental to determine) 6 Zoned for residential development? Yes - go to step 8 No-gotostep7 7 Willthe rezoningprocessbeextremelylengthyorcost-prohibative?(Contact Yes- STOP No - go to step 8 depts. responsible for zoning) 8 Vacant? Yes - go to step 10 No-gotostep9 9 Cantheexistingstructuresbedemolishedwithoutunreasonableexpense? Yes-gotostep10 No-STOP

10 Located within the Urban Growth Boundary? Yes - go to step 12 No - go to step 11 11 Located close enough to the UGB or in an area that warrants further Yes-gotostep12 No-STOP consideration? 12 Will the parcel support the type of housing units planned? (contact an architect Yes-movetonextphase No-gotostep13 forevaluation of highest and best use) 13 Doesthetypeofhousingtheparcelwillsupportadequatelyaddresstheneed Yes-movetonextphase No-STOP for affordable housing?

Affordable Housing Implementation Plan Final Report Page 147 © SMS August, 2018 FUNDING DECISION MATRIX

These are the types of funding-related options that should be explored.

Funding Decision Matrix Is the planned development… 1 Rehabilitationof existingstructures,landpurchase orotheracquisitionof landor Yes - Maui County affordable housing No - go to step 2 property entitlements, planning, design, and construction fundsmay be used;go tostep2 2 Building,buying,and/orrehabilitatingaffordable housingforrentor Yes - HOMEfunds may be used; gotostep No - go to step 3 homeownership, or providing direct rental assistance to low-income people 3 3 A combination of units for lower and higher income groups? Yes - HOME funds may be used for mixed No - go to step 4 income projects; go to step 4 4 For low- or moderate income persons? Yes- CDBGfundsmaybe used;gotostep5 No - go to step 5 5 Specificallyforpersonswithdisabilities? Yes-Section811SupportiveHousingfor No - go to step 6 Persons with Disabilities funds may be available; go to step 6 6 Construction or substantial rehabilitation and operation of units for the elderly? Yes - Section 202 Supportive Housing for No - go to step 7 the Elderly maybe used;gotostep7 7 Construction or rehabilitation of low-income rental units, some of which will be Yes - Low Income Housing Tax Credits may No - go to step 8 held at rates for low-income households? be utilized;gotostep8 8 Development, pre-development, construction, acquisition, preservation, and/or Yes - Rental Housing Revolving Fund No - go to step 9 substantial rehabilitation of rental housing units? and/or Rental Assistance Revolving Fund may be used; go to step 9 9 In need of infrastructure improvements? Yes - Value Capture Bonds (VCB), No - seek non- Infrastructure Financing Districts (IFD), profit partners and/or I-Bank funds may be and other private available; Local Option Fuel Tax funding and/or Local Option Sales Tax fund could opportunities be used

Affordable Housing Implementation Plan Final Report Page 148 © SMS August, 2018 PERMIT PROCESS MATRIX

These are a list of all permits, not all may be applicable to an affordable housing development and some may be waived or adjusted for specific projects in the negotiation phase.

Permitting Decision Matrix Have the following required documents been submitted... 1 Proofofownership(providerecordeddeedfrom Yes-gotostep2 No-completebefore Real Property Tax Dept.) goingto step 2 2 Eight sets of complete plans and 2 sets of Yes-gotostep3 No-completebefore specifications (sheet size 24"x36", limited to 100 goingto step 3 sheets per bound set) 3 BuildingPlanReviewFee(basedonthevalueof Yes-gotostep4 No-completebefore the work, call foramount) and Fire Plan Review goingto step 4 Fee (12.5% of the building permit fee) as 2 separate checks 4 PS-FormA(eachplannedstructure,including Yes-gotostep5 No-completebefore fences/retaining walls, requires a separate goingto step 5 building permit application) 5 PS-FormB(requiredifapplicantisnottheowner) Yes-gotostep6 No-completebefore goingto step 6 6 PS-FormC(requiredifplansarepreparedbyan Yes-gotostep7 No-completebefore architect/engineer and does not have original goingto step 7 stamps/signatures on all sheets) 7 PS-Form D (contractor's statement, required for all Yes-gotostep8 No-completebefore applications) goingto step 8 8 PS-Form E (required if plans are prepared by an Yes-gotostep9 No-completebefore architect/engineer, separate form required for goingto step 9 each permit application) 9 PS-Form F (accessibility statement, required for all Yes-gotostep10 No-completebefore applications) going to step 10 10 PS-Form G (HRS Sec. 103-50 Compliance Disclosure, Yes-gotostep11 No-completebefore required for all applications) going to step 11 11 EL-FormH(gradingandgrubbingpermitform) Yes-gotostep12 No-completebefore going to step 12 12 Do additional agency submittal requirements Yes-gotostep13 No-STOP apply? Additional Agency Submittal Requirements 13 2006IBCCode SearchForm(requiredforall new Yes-gotostep14 No-completebefore buildings, additions, and major alterations to going to step 14 existing buildings, submit to DSA Building Plans Review) 14 2006 IECC Energy Conservation Code Compliance Yes-gotostep15 No-completebefore (cert. block on 1st sheet of the pertinent plan, going to step 15 submit to DSA Building Plans Review) 15 Grading and grubbing permit application (submit to Yes-gotostep16 No-completebefore DSA Civil Construction Section) going to step 16 16 Additional 3setsofcivildrawingsonlyforany Yes-gotostep17 No-completebefore grading, sewer, water, roadway, etc. going to step 17 improvements. (submit to DSA Civil Construction Section) 17 Two(2)copiesofadrainagereportforarealess Yes-gotostep18 No-completebefore than 1acre may be required (submit to DSA Civil going to step 18 Construction Section)

Affordable Housing Implementation Plan Final Report Page 149 © SMS August, 2018 18 Two (2) copies of adrainage and soil erosion report Yes-gotostep19 No-completebefore (for areas greater than 1 acre, submit to DSA Civil goingto step 19 Construction Section) 19 ApplicationandPermittoConstructorRepaira Yes-gotostep20 No-completebefore Driveway apron (submit to DSA Civil Construction goingto step 20 Section) 20 DrivewaySightDistance CheckForm(submitto Yes-gotostep21 No-completebefore DSA Civil Construction Section) goingto step 21 21 DrivewayApronInspectionRequestFormforeach Yes-gotostep22 No-completebefore Existing Asphalt or Concrete Aprons Only, if goingto step 22 applicable (submit to DSA Civil Construction Section) 22 Special ManagementAreapermits(submittothe Yes-gotostep23 No-completebefore Planning Dept.) goingto step 23 23 FloodDevelopmentpermits(submittothe Yes-gotostep24 No-completebefore Planning Dept.) goingto step 24 24 Agricultural Districtpermits(submit tothe Yes-gotostep25 No-completebefore Planning Dept.) goingto step 25 25 Propertyzoning,permittedlandusesand Yes-gotostep26 No-completebefore standards (submit to the Planning Dept.) goingto step 26 26 Floorarearatioandlotcoverage analysis(fornew Yes-gotostep27 No-completebefore oradditions to hotels and apartments, submit to goingto step 27 the Planning Dept.) 27 Comprehensive parkinganalysis(submit tothe Yes-gotostep28 No-completebefore Planning Dept.) goingto step 28 28 Two(2) copiesof landscapingandirrigationplans Yes-gotostep29 No-completebefore fornew parking areas (submit to the Planning goingto step 29 Dept.) 29 Scaledsite plan(showingbuildings/project Yes-gotostep30 No-completebefore location on the property, include project name, goingto step 30 TMK numbers, property address and street names, submit to Wastewater Reclamation Division)

30 Detailedutilitiesplumbingplan(showingall drain Yes-gotostep31 No-completebefore lines, equipment, fixtures, grease interceptors, goingto step 31 service manholes, etc. and all condensate, pool, rainwater and non-contact water and all discharge locations, submit to Wastewater Reclamation Division) 31 Detailedfloorplans(showing Yes-gotostep32 No-completebefore business/furniture/equipment layout, submit to goingto step 32 Wastewater Reclamation Division) 32 Sewage flow calculations(detailingacomparison Yes-gotostep33 No-completebefore between the existing and estimated wastewater goingto step 33 discharges resulting from this project, 1copy, signed and stamped by a State of Hawai‘i licensed engineer, submit to Wastewater Reclamation Division) 33 Grease Trap/Interceptorsizingcalculations forall Yes-gotostep34 No-completebefore projects which include any type of food service (1 goingto step 34 copy, signed and stamped by a State of Hawaii licensed engineer, submit to Wastewater Reclamation Division)

Affordable Housing Implementation Plan Final Report Page 150 © SMS August, 2018 34 Constructionplansforapropertysewerservice Yes-gotostep35 No-completebefore manhole for(i) all new commercial buildings and goingto step 35 (ii) for additions if a grease trap/interceptor is existing orrequired on the property (submit to Wastewater Reclamation Division) 35 WaterMeterSizingWorksheet–Non-Residential Yes-gotostep36 No-completebefore (include information on any and all watermeters goingto step 36 serving your property such as: meter size, account number, etc., submit to Dept. of Water Supply)

36 Ifapplicable, include mostrecenttestdataonany Yes-gotostep37 No-completebefore backflow prevention devices such as: reduced goingto step 37 pressure backflow preventers, double check detector assemblies or others as required (submit to Dept. of WaterSupply) 37 Verificationthatmeterbox meetscurrentDWS Yes-gotostep38 No-completebefore standards (submit to Dept. of Water Supply) goingto step 38 38 Scaledsite planshowingfire hydrantlocationand Yes-gotostep39 No-completebefore access roads to the buildings (submit to Fire goingto step 39 Prevention Bureau) 39 Neworconversiontoresidential units(submitto Yes-gotostep40 No-completebefore Dept. of Housing and Human Concerns) goingto step 40 40 Parksassessmentfeesforfour(4) ormore Yes-gotostep41 No-completebefore residential units (orconversion of 4ormore units, goingto step 41 submit to Fire Prevention Bureau) 41 Form1applicationneededforA/Csystems2100 Yes-gotostep42 No-completebefore CFMor greater (submit to Indoor & Radiological goingto step 42 Health (IRH) Branch) 42 ForRestaurantsandSwimmingPools-Complete a Yes-gotostep43 No-completebefore Plan Review Application (new projects-$200.00, goingto step 43 renovations-$150.00, submit to State Dept. of Health) 43 Individual wastewatersystemsandcesspools Yes-gotostep44 No-completebefore (submit to State Dept. of Health) goingto step 44 44 Neworconversiontoresidential units(submitto Yes-gotostep45 No-completebefore State Dept. of Education) goingto step 45 45 Groundalteringactivities (submittoArchaeology) Yes-gotostep46 No-completebefore goingto step 46 46 Structures50yearsandolder(submitto Yes-gotostep47 No-completebefore Architecture) goingto step 47 47 Does the project involve demolition of structures Yes-gotostep48 No-gotostep52 under 50 years old? 48 Provideitems1,3,4,5,6,and7frompartA Yes-gotostep49 No-completebefore goingto step 49 49 Six(6) siteplansshowingall existingstructureson Yes-gotostep50 No-completebefore the property and noting which structure(s) to be goingto step 50 demolished 50 CompletedState Departmentof Health,Vector Yes-gotostep51 No-completebefore Control Branch, Form VC-12. goingto step 51 51 CertifiedAsbestosInspection,Abatementand Yes-gotostep52 No-completebefore Notification (submit to State Dept. of Health, goingto step 52 Asbestos Office)

Affordable Housing Implementation Plan Final Report Page 151 © SMS August, 2018 52 Does the project involve demolition of structures Yes-gotostep53 No-gotostep56 under 50 years old? 53 Provide all itemslistedforDemolitionUnder50 Yes-gotostep54 No-completebefore Years Old goingto step 54 54 CompletedHistoricResourcesInventoryform Yes-gotostep55 No-completebefore goingto step 55 55 Two(2)setsof4x5colorprintsandtwo(2)CD- Yes-gotostep56 No-completebefore ROMS with digital images of the structure to be goingto step 56 demolished (photographic file sizes on CD-ROMS must be no less than 1.90MB) 56 Have all the necessary building permits been Yes-gotostep57 No-completebefore obtained? goingto step 57 57 Provide a location map and floor plan showingthe Yes-gotostep58 No-completebefore building/unit floor plan and unit number on a 8- goingto step 58 1/2"x 11"size paper. Fora new building, map must include the Project Name, TMK, Project Address, Building Identification No., placement of all existing and proposed structure(s) on the property, and clearly identifying the subject building to be issued the certificate of occupancy (submit to DSA Building Permit Section) Obtain a certificate of occupancy (prior to Yes-COMPLETE No-mustcomplete occupancy of the building, $50fee) before occupancy

Affordable Housing Implementation Plan Final Report Page 152 © SMS August, 2018 APPENDIX G – EXAMPLE OF KAUA‘I RFP FOR AFFORDABLE HOUSING DEVELOPER

Affordable Housing Implementation Plan Final Report Page 153 © SMS August, 2018 REQUEST FOR PROPOSAL

Proposal No. P - 0187

KOAʻE WORKFORCE HOUSING DEVELOPMENT

KŌLOA, KAUAʻI, HAWAIʻI

FOR THE COUNTY OF KAUAʻI KAUAʻI COUNTY HOUSING AGENCY LĪHUʻE, KAUAʻI, HAWAIʻI

REQUESTED BY: KAUAʻI COUNTY HOUSING AGENCY

PUBLICIZED: September 25, 2015, http://www.spo.hawaii.gov AND http://www.kauai.gov TABLE OF CONTENTS

TITLE PAGE ...... Page 1

Table of Contents...... Page 2

Notice – Request for Proposals ...... Page 4

REQUEST FOR PROPOSAL:

I. Introduction...... Page 6

II. Purpose ...... Page 7

III. County Objectives ...... Page 7

IV. Authority ...... Page 9

V. General Information...... Page 9

VI. Instructions to Offerors ...... Page14

VII. Minimum Qualifications ...... Page18

VIII. Minimum Requirements ...... Page 18

IX. Selection, Award, and Non-Selected Offerors...... Page 21

X. Site Information ...... Page 24

XI. Project Information ...... Page 26

XII. HOME Investment Partnerships Program...... Page 29

SPECIAL PROVISIONS ...... Page 31

SCHEDULES:

I. Schedule F (HRS 103-55 Employees Performing Services)...... Page 40

II. Schedule G (Responsibility of Offerors and Tax Clearances)...... Page 41

III. Schedule H (Certificate of Current Cost or Pricing Data Form)...... Page 44

TABLEOFCONTENTS Page2 ATTACHMENTS:

I. Attachment 1 (Application Form and Instructions)………………………Page 45

EXHIBITS:

I. Exhibit A: Tax Map Key

II. Exhibit B: Site Vicinity Map

III. Exhibit C: Dedication Deed

IV. Exhibit D: Zoning Map

V. Exhibit E: Property Legal Description

VI. Exhibit F: National Flood Insurance Rate Map

VII. Exhibit G: Utility Connections

VIII. Exhibit H: Phase 1 Environmental Site Assessment

IX. Exhibit I: Geotechnical Report

X. Exhibit J: Survey/Topographic Map

XI. Exhibit K: HUD Income and HOME Rent Limits

XII. Exhibit L: South Shore Community Plan Maps

XIII. Exhibit M: Traffic Impact Assessment Report

XIV. Exhibit N: HOME Underwriting Template

XV. Exhibit O: HOME Program Regulations

TABLEOFCONTENTS Page3 NOTICE REQUEST FOR PROPOSALS

The County of Kauaʻi, is requesting proposals to develop workforce housing in Kōloa,

Kaua‘i, for the Kauaʻi County Housing Agency, for a new affordable housing project identified as:

Koaʻe Workforce Housing Development Kōloa, Kaua‘i, Hawai‘i

Proposals shall be received no later than 2:00 p.m., HST, November 20, 2015, in the office of:

Division of Purchasing Department of Finance 4444 Rice Street, Room 303 Līhuʻe, Kauaʻi, Hawai‘i 96766

Before any prospective Offeror shall be entitled to submit an Offer, the Offeror must, wherein applicable, comply with the provisions of Section 103-55, HRS, regulating wages and hours and working conditions of employees of contractors supplying services to governmental agencies, and shall complete the wage certificate for service contracts as provided in the County’s Schedule ‘F’.

A (non-mandatory) Pre-Proposal Conference is scheduled for THURSDAY,

OCTOBER 8, 2015, 10:00 A.M., HST at LĪHUʻE CIVIC CENTER, PIʻIKOI BUILDING,

4444 RICE STREET, SUITE 330, CONFERENCE ROOM ‘A’, LĪHUʻE, KAUAʻI, HAWAI‘I,

96766. All interested parties, contractors, subcontractors, and respective union representatives are invited to attend.

Persons needing special assistance or accommodations at the pre-proposal conference due to a disability may contact Chong Sun U at 241-4444.

NOTICE Page 4 Offerors are further notified of the requirements of Act 190, SLH 2011, SB 758, wherein the County of Kaua‘i is required to utilize the Hawai‘i Compliance Express (HCE) to obtain proof of compliance of tax, registration, and labor requirements prior to the issuance of an award. Offerors are strongly encouraged to register via HCE to allow for needed proof of compliance prior to the issuance of an award.

This project may include funding in part with funds made available by the federal government through the HOME Investment Partnerships Program. Offerors will be required to comply with certain federal requirements, including Equal Employment

Opportunity, Fair Housing Act, Section 3, and Federal Labor Standards Provisions. Also,

Minority Owned Business Enterprises and Women’s Owned Business Enterprises are encouraged to submit an offer.

The Director of Finance reserves the right to cancel this Request For Proposal and to reject any proposal, in whole or in part, when in the best interest of the County of Kauaʻi.

This Request For Proposal shall be governed by the requirements of HRS, Chapter

103D and the respective Hawai‘i Administrative Rules. Prospective persons or entities interested in responding to this Solicitation shall register for subject solicitation by using the

“Bids & Proposals” link on the County of Kaua‘i homepage (www.kauai.gov), to register for

Request For Proposal (RFP) Document No. P-0187, assigned by the Division of Purchasing.

Ken Shimonishi Director of Finance County of Kaua‘i

NOTICE Page 5 REQUEST FOR PROPOSAL PACKAGE

KOAʻE WORKFORCE HOUSING DEVELOPMENT

I. INTRODUCTION

Mayor Bernard P. Carvalho, Jr. and the County, through its Kauaʻi County Housing Agency (“KCHA”), is seeking to retain an experienced development team to provide for the planning, design, financing, construction, management, and marketing of affordable workforce housing on a County-owned parcel of vacant land on Kauaʻi’s south shore.

The Request for Proposals (“RFP”) invites not-for-profit and for-profit Offerors to submit development proposals to develop an 11.2 acre parcel situated along Poʻipū Road, identified as TMK No. (4) 2-6-004:019. The subject parcel was dedicated to the County of Kauaʻi by Alexander & Baldwin, LLC, in December 2014, and the intended development of the project site is for workforce housing. The parcel was given the name “Koaʻe”, which symbolizes the name of an indigenous white bird known to frequent the area. Koaʻe also recognizes the name of a former claimant to a portion of the property.

Koaʻe has maximum density for 150 dwelling units. The desired development should consider rental and for-sale multifamily housing that can accommodate a blend of affordable incomes ranging from 50 percent to 140 percent of area median income, offer a mix of dwelling unit sizes for small and large households, and utilize building design and materials compatible with the surrounding residential and resort setting.

Offerors will be expected to incorporate livability of exterior space into their proposals, offering residents mobility features that can encourage activity within interior pathways and also link the project to off-site public spaces, adjacent pathways, recreation, and multi-model transportation.

Development proposals will need to demonstrate financial feasibility, employ achievable strategies for long-term affordability and preservation of housing stock to meet future workforce housing needs, use energy efficient design features and technology, and design a site concept plan that addresses the guiding principles of the South Kauaʻi Community Plan.

KCHA is the lead Agency for administering the RFP. KCHA will conduct the selection process. The selection of the Offeror and granting of development rights for the Koaʻe parcel will involve a two-stage process.

First Stage: In the first stage, Offerors will be asked to draw upon their experience in preparing a development proposal that is closely aligned with the County’s objectives. Offeror’s development team should consist of qualified entities that are

KOAE/RFP/FINAL Page 6 required for development, including a licensed architect and engineer, licensed general contractor, financial partners, consultants, property manager, etc. Proposals must include the Application Form (Attachment 1), which includes submittal of a financing plan, development budget, rental operating budget pro forma, for-sale profit and loss statement, resumes of the development team, narrative responses, and other exhibits. Proposals timely received will be evaluated on a fair and consistent basis according to the RFP’s evaluation criteria. Once all responses have been reviewed and scored, qualified development teams may also be asked to present their proposals and answer questions through a best and final offer process. Evaluation of written proposals and verbal presentations (if requested) will be used to select an Offeror to undertake development for the project site.

Second Stage: The second stage in the process will consist of negotiations between KCHA and the selected Offeror, culminating in a development agreement granting development rights to the Koaʻe parcel. During this stage, Offeror may be asked to provide additional information about their financial program, housing concept, project design, and other aspects of the proposed development, all of which may be subject to further discussion prior to the execution of the development agreement. The Offeror may also be asked to respond to KCHA’s follow-up comments, their willingness to make appropriate modifications, and their agreement to final terms established through negotiation. Following execution of the development agreement, KCHA staff will remain accessible to the development team to assist, if and when necessary, during pre-development, construction, and marketing phases of the development.

The County reserves the right to accept or reject any or all proposals that are submitted, regardless of circumstances. The County also reserves the right to amend the requirements of this RFP at any time prior to the due date for proposals.

II. PURPOSE

The purpose of this RFP is to solicit workforce housing proposals from qualified Offerors in order to select an experienced development team that will produce new affordable multifamily housing that meets the long-term housing needs of Kauaʻi’s resident workforce.

III. COUNTY OBJECTIVES

The County’s objectives for the Koaʻe parcel are the following:

Affordable Housing Costs

Provide affordable multi-family housing at rents and/or sales prices that accommodate a range of households and are affordable to income groups ranging from 50% to 140% of Kauaʻi’s median household income. Provide at least 50% of

KOAE/RFP/FINAL Page 7 the total units built to households at or below 80% of Kauaʻi’s median household income.

Long-Term Preservation of Affordable Housing Stock

Maximize public benefit by using development subsidies (e.g. land and infrastructure costs) to provide a mix of affordable housing opportunities (rentals and homeownership) affordable to Kauaʻi’s workforce for the longest affordability period possible:

1. Rental Housing – Suggested minimum affordability period is 60 years. Permanent affordability for rental housing is preferred.

2. For-Sale Housing – Suggested approach to long-term preservation is to institute a limited equity homeownership program that provides homeownership opportunities, factoring in the County’s subsidy of land and infrastructure into the initial sales price offering, and imposes equity restrictions that keep resales at an affordable purchase price for the next purchaser.

Compatibility and Integration with Community

Provide a site plan with housing density and building design that is compatible with the surrounding residential and resort setting, and one that integrates the principles of the South Kauaʻi Community Plan.

Accessibility Standards

Incorporate design standards that make common areas, dwelling units, and community spaces compliant with the accessibility standards of the Americans With Disabilities Act to accommodate residents, guests and pedestrians.

Energy Efficient Design

Use energy efficient design features that enhance affordability, such as solar hot water heating systems, water efficient fixtures, Energy Star products, natural ventilation, and optimized building orientation. Incorporate “Green” building principles and materials to the extent possible and financially feasible.

Development Schedule

Utilize a development schedule that is realistic and timed to the availability of off-site infrastructure and one that charts a realistic and efficient time frame to begin construction for the initial delivery of workforce housing in calendar year 2017.

KOAE/RFP/FINAL Page 8 Financial Sustainability

For rentals, secure financing with debt structure that ensures affordable rents and long-term operational sustainability throughout the affordability period. For housing units intended for homeownership, provide a profit and loss statement based on realistic development costs and initial sales prices that are affordable to Kauaʻi’s residents, and are affordable upon resale.

Utilize Federal Funds

Commit HOME Investment Partnerships Program funds anticipated for FY 2016 and made conditionally available through this RFP as gap financing for eligible HOME pre-development, on-site infrastructure, and vertical construction costs.

IV. AUTHORITY.

This RFP is issued under the provisions of the Hawai‘i Public Procurement Code, Chapter 103D, Hawai‘i Revised Statutes. All prospective Offerors are charged with the presumptive knowledge of all requirements of the cited authorities. Submission of a valid executed proposal by any prospective Offeror shall constitute admission of such knowledge.

V. GENERAL INFORMATION.

(General advisory: Effective January 1, 2006, Act 203, SLH 2005, if awarded a contract in response to this solicitation, Offeror agrees to comply with HRS §11-355, which states that campaign contributions are prohibited from a State and County government contractor during the term of the contract if the contractor is paid with funds appropriated by the legislative body between the execution of the contract through the completion of the contract. For additional information, prospective Offerors should contact the State Campaign Spending Commission, 235 S. Beretania Street, Rm. 300, Honolulu, HI 96813; Phone 808 586-0285; www.hawaii.gov/campaign)

A. Project Title: Koaʻe Workforce Housing Development

B. Requesting Agency and Contact Person:

County Housing Agency Gary Mackler, Development Coordinator (808) 241-4429, [email protected]

C. Pre-Proposal Conference:

A Pre-Proposal Conference (non-mandatory) will be held on Thursday, October 8, 2015, 10:00 a.m., HST, at the Līhu‘e Civic Center, Piʻikoi Building,

KOAE/RFP/FINAL Page 9 4444 Rice Street, Suite 330, Conference Room ‘A’, Līhu‘e, Kaua‘i, Hawai‘i 96766. Housing Agency staff will provide a brief summary of the RFP and respond to any project-related questions. All interested parties are invited to attend. A summary of the Pre-Proposal Conference shall be provided to all prospective Offerors. Nothing stated in the Pre-Proposal Conference or by any person at any other time in this solicitation period shall be binding upon the County unless by written addendum. Persons needing special assistance or accommodations at the Pre-proposal Conference due to a disability may contact Chong Sun U at 241-4444.

D. Site Inspection:

Offerors, or their representatives, may inspect the project site at such times and under the conditions as the County may require or allow, by first contacting the below-listed contact person:

Klayford Nakaahiki, Project Manager (808) 241-4451

E. Significant Dates:

The following is a preliminary schedule of significant dates that the County has projected. All times are Hawai‘i Standard Time (HST).

Issue RFP (Legal Notice)...... September 25, 2015 Pre-Proposal Conference ...... October 8, 2015 Deadline for Written Inquiries...... October 15, 2015 Response to Written Inquiries...... October 22, 2015 PROPOSAL DUE DATE ...... November 20, 2015 Best and Final Offer, (if applicable)...... December 1, 2015 Tentative Award Date ...... December 8, 2015

F. Definitions

1. "ADDENDUM" means written instruments which modify or interpret the Request for Proposal.

2. “APPLICANT” means the Offeror preparing a Proposal in response to this Request for Proposals.

3. "CONTRACT OFFICER" is the Director of Finance of the County of Kauaʻi, or the Director's duly authorized representative.

4. “OFFICER-IN-CHARGE” is the Housing Director of the County of Kauaʻi, or the Director’s duly authorized representative.

KOAE/RFP/FINAL Page10 5. "OFFEROR" means any individual, partnership, firm, corporation, joint venture or other legal entity, submitting directly or through a duly authorized representative or agent, an offer for the development services contemplated in the response to this solicitation.

6. "PROPOSAL DUE DATE" means receipt of a document at or before 2:00 p.m., HST on the date specified in the Request For Proposals, as evidenced by the date-time stamp furnished in the Division of Purchasing

7. “RFP” means Request for Proposals.

8. “BEST VALUE” means the most advantageous offer determined by evaluating and comparing all relevant criteria in addition to price so that the offer meeting the overall combination that best serves the County is selected. These criteria may include, in addition to others, the total cost of ownership, performance history of the vendor, quality of goods, services, or construction, delivery, and proposed technical performance. (HAR 3-122-1)

9. "DEVELOPMENT AGREEMENT" means a written agreement by which the Offeror is bound to furnish all professional services, labor, equipment, materials, and other incidentals necessary to perform the specified work within the time stipulated.

10. “HOME Program” means the HOME Investment Partnerships Program as authorized pursuant to 24 CFR Part 92.

11. “HUD” means the United States Department of Housing and Urban Development.

12. “MEDIAN INCOME” means the median income for the County of Kaua‘i as determined by the U.S. Department of Housing and Urban Development, as adjusted for household size.

13. “PROPOSAL” means the Application Form provided as Attachment 1 to this RFP.

14. "SITE CONTROL" means the right to have control of the project site to develop the project according to the terms and conditions of the Development Agreement.

G. Wage Certificate (Section 103-55, HRS). Pursuant to Section 103-55, HRS, Offerors shall submit a Wage Certificate (Schedule F) at the time the proposal is submitted.

KOAE/RFP/FINAL Page11 H. Responsibility of Offerors. If awarded a contract of $2,500 and greater, and as a requirement for final payment, the contractor shall comply with the requirements of HRS §103D-310 (c), HAR 3-122-112, and HRS 103D-328. The attached Schedule G, Responsibility of Offerors and tax clearances is an informational summary of said requirements and was prepared to assist the Offeror in identifying, understanding and securing the requirements therein.

Hawai‘i Compliance Express. Pursuant to Act 190, SLH 2011, SB 758, Offerors are hereby informed that the County of Kaua‘i is required to utilize the Hawai‘i Compliance Express (HCE) to obtain proof of compliance of tax, registration, and labor requirements prior to the issuance of an award. Offerors are strongly encouraged to register for HCE to allow for needed proof of compliance prior to the issuance of an award.

Vendors are strongly encouraged to register online for (HCE) through a simple wizard interface at http://vendors.ehawaii.gov. The HCE provides current compliance status. The on-line notification of vendor compliance indicating that vendor’s status is compliant with the requirements of Chapter 103D-310(c), HRS, shall be utilized by County personnel to confirm compliance for award, contracting, and final payment purposes. Vendors will be required to pay an annual fee of $12.00 to the Hawai‘i Information Consortium, LLC (HIC).

I. Proposal and/or Performance and Payment Security (HAR 3-122-223 & 224)

(Not applicable)

J. Cost or Pricing Data Requirements (HAR 3-122-123). Cost or pricing data requirements shall be submitted with the Offeror’s proposal if the contract is expected to exceed $100,000. Cost and pricing data submitted to support the Offeror's proposal shall be factual and verifiable and shall include but not limited to:

1. Vendor quotations; 2. Nonrecurring costs; 3. Information on changes in production methods and in production or purchasing volume; 4. Data supporting projections of business prospects and objectives and related operations costs; 5. Unit cost trends as those associated with labor efficiency; 6. Make or buy decisions; 7. Labor union contract negotiations; and

KOAE/RFP/FINAL Page12 8. Information on management decisions that could have significant bearing on costs.

The Offeror may be required to keep the cost and pricing data submitted current until an award is made.

K. Preferences (HAR 3-124, Hawaii Products, Software Development, Qualified Community Rehabilitation Programs)

(Not Applicable)

L. Modifications or Changes affecting the Proposer, or the Proposal Content or Representations after the deadline for submission of proposals.

Any actions or modifications which are caused by, but is not limited to, forces of nature, changes in law, rules, regulations, or economic conditions or situations that affect the Offeror, either directly or indirectly, and which are cause for or affect the content or representation(s) made in the Proposal submitted may be reason for the Proposal to be rejected.

M. Solicitation Registration. Prospective persons or entities interested in responding to this Solicitation shall register for subject solicitation by using the “Bids & Proposals” link on the County of Kaua‘i homepage (www.kauai.gov), and be responsible for reviewing communications regarding the project throughout the course of the procurement process. Solicitation documents have been known to be distributed to persons who have not registered on- line. Persons who have not registered may have their offer rejected as unacceptable.

N. Indemnification. The Offeror shall indemnify, defend and hold harmless the County, its officers, agents and employees against any claim or liability arising from or based on the violation of any law, ordinances, codes, rules, regulations, design standards and criteria, governmental general and development plans, setback limitation, rights-of-way, whether such violation is committed by the Offeror, subcontractors or employees of either or both. If any discrepancy or inconsistency is discovered in the Contract for the work in relation to any such laws, ordinances, codes, rules, regulations, design standards and criteria, governmental general and development plans, setback limitations, rights-of-way, the Offeror shall immediately report the discrepancy or inconsistency to the Officer-in-Charge in writing.

Provided, that this section shall not apply to any contract of less than $1,000,000 that is entered into on or after July 1, 2007 and is exclusively for services that may only lawfully be provided by a person licensed under HRS Chapter 464 (Engineers, Architects, Surveyors and Landscape Architects); Provided further, that the consultant shall indemnify and hold

KOAE/RFP/FINAL Page13 harmless the County and its officers, employees, and agents from and against any liability, damage, loss, cost, and expense, including reasonable attorney’s fees, and all claims, suits, and demands therefore arising out of or resulting from the negligent, reckless, intentional, or wrongful acts, errors, or omissions of the consultant, the consultant’s employees, officers, agents, or subcontractors in the performance of the contract or the contractor’s professional services, and this provision shall remain in full force and effect notwithstanding the expiration or early termination of the contract.

No Contractor licensed under HRS 464 that has agreed to defend the County, including contracts entered into before or after July 1, 2007, shall be required to defend the County, its officers, agents and employees in a lawsuit filed more than ten (10) years beyond the substantial completion of the project, provided that this provision shall not apply to any lawsuit that has been filed prior to July 1, 2007.

VI. INSTRUCTIONS TO OFFERORS

A. Content of Proposals:

The intent of this section is to standardize the proposals to allow for ease of evaluation. It is not an attempt to limit the content of the proposals. The Offeror may include any additional data or information which is deemed pertinent to the Request for Proposals. The proposal should be prepared simply and economically, providing a clear and concise response to the requirements herein.

Offerors are encouraged to describe those characteristics and services that make the organization unique and best suited for selection.

When a proposer submits a proposal, it shall be considered a complete plan for accomplishing the tasks described herein and any supplemental tasks the Proposer has identified as necessary to successfully implement the proposal plan. Proposals may be accepted and a contract awarded on the basis of the initial offers received. A presentation and/or Best and Final Offer may not be requested or required, if it is determined by the evaluation committee that a selection may be made on the initial proposals submitted.

1. Submittal Requirements:

The Offeror must submit a completed Application Form (“Application”) provided as Attachment 1, in accordance with the Application Instructions, and must submit all exhibits as required for a complete Application. Attachment 1 is provided as a separate Microsoft Word file, included with this RFP.

KOAE/RFP/FINAL Page14 2. Letter of Transmittal:

A transmittal letter shall be attached to the Proposal. The transmittal letter shall be in standard business format, signed by an individual authorized to legally bind the Offeror, and shall include:

a. A statement naming the Offeror (legal name and if corporation, whether corporation has corporate seal) and stating the type of entity for the Offeror and any joint Offeror or subcontractor (e.g., corporation, limited liability company, partnership, sole proprietor, etc.);

b. A statement (e.g. corporate resolution) identifying the person(s) and title of the person(s) authorized to sign all legal documents on behalf of the Offeror;

c. A statement that the Offeror and any joint Offeror or subcontractor are or will be registered to do business in Hawai‘i and will obtain a State of Hawai‘i General Excise Tax License, and that evidence of any such registration and General Excise Tax License shall be provided prior to award;

d. A statement acknowledging that all addenda to this RFP have been reviewed by the Offeror;

e. A statement that the Offeror's proposal shall remain valid for sixty (60) calendar days after the proposal due date or the deadline for submission of best and final offers, whichever is later. During said period, no proposal will be permitted to be withdrawn, unless permitted by law; and

f. A statement disclosing whether or not the proposal contains confidential information, trade secrets or other proprietary data that the Offeror does not want to be subject to public inspection. (see instructions in Section IV, D, 2)

B. Written Inquiries. All questions and request for clarifications shall be in writing, including the legal business name, name of inquirer, and contact information, received no later than the deadline for submission of written inquiries, and emailed to:

Email: [email protected]

SUBJECT LINE:(RFP #P- 0187 – Koaʻe Workforce Housing Development)

KOAE/RFP/FINAL Page15 C. Addenda:

A notice of Addendum shall be issued by email to all prospective Offerors who requested a Request for Proposals Document and whose names and addresses are shown on the register of potential Offerors maintained by the Division of Purchasing. Addendums issued for best and final offers shall be sent to priority listed Offerors only. Persons who fail to review issued addenda or clarification memoranda, may have their offer rejected as unacceptable.

D. Submission of Proposals

1. Place of Submission of Proposals

A Notice of the RFP will be publicized in the State of Hawai‘i website, www.spo.hawaii.gov, and on the County of Kauaʻi website, www.kauai.gov. Proposals shall be delivered to the following address on or before the due date specified in the Notice:

Department of Finance Division of Purchasing 4444 Rice Street, Suite 303 Līhuʻe, Kauaʻi, HI 96766

ATTENTION:(RFP #P- 0187 – Koaʻe Workforce Housing Development)

Offerors who do not know the specific location of the Division of Purchasing should familiarize themselves with its location prior to the submittal deadline. Offerors using delivery services should insure that the delivery service is knowledgeable of the location of the Division of Purchasing.

2. Packaging of Proposal

Proposals shall be submitted in a sealed envelope. One (1) hard copy original and two (2) compact disks (CD) or two (2) removable electronic storage devices are required. The original shall be clearly marked "ORIGINAL" and shall be signed in ink by a person with authority to commit the Offeror. The copies on CD or removable electronic storage devices shall be an exact duplicate of proposal submitted, will become the property of the County of Kauaʻi, and will not be returned. The proposal shall:

a. Be submitted in a sealed envelope, clearly marked with the title of Proposal and the Proposal Document Number.

KOAE/RFP/FINAL Page16 b. Indicate the name, address, telephone and fax number of the Offeror.

Trade secrets or other proprietary data that the Offeror does not want to be subject to public inspection shall be submitted at the sole risk of the Offeror and without any liability to the County; be readily separable from the proposal; and be accompanied with a written request for nondisclosure of designated confidential information. Disclosure or nondisclosure by the County of confidential material shall be governed by HRS, Chapter 92F, Uniform Information Practices Act (Modified). Confidential data is normally restricted to financial information concerning the offeror's organization and data that qualifies as trade secret in accordance with the Uniform Trade Secrets Act (57- 3A-1 to 57-3A-7, NMSA 1978). The price of products offered or the cost of services proposed shall not be designated as confidential information.

All information contained in offers that do not comply with these instructions will be considered non-proprietary and subject to public disclosure as confidential information.

3. Proposal Cost. Proposals prepared in response to this RFP shall be prepared at the sole cost and expense of the Proposer. All Proposals shall become the property of the County of Kauaʻi upon submission.

E. Proposal Due Date and Opening

Proposals are due by the date, time, and at the location designated in the Notice. Proposals will be date and time stamped, and held unopened until the date specified in the Notice. Envelopes which are not time stamped or which are time stamped after the specified proposal due date and time shall be rejected and shall be returned to the Offeror unopened.

The official time shall be that which is imprinted by the time stamp machine at the Department of Finance, Division of Purchasing, or certified as to time and date received by a Division of Purchasing staff member.

Proposals shall not be opened publicly. The contract file shall be available for public inspection after posting of an award. The contract file shall include, but is not limited to, the following: 1. The register of proposals prepared pursuant to HAR 3-122-51; 2. A listing of all vendors to whom copies of the Request for Proposals were distributed; 3. Name of successful Offeror and dollar amount of offer;

KOAE/RFP/FINAL Page17 4. The basis on which the award was made, including names of the persons conducting the evaluation; 5. A copy of the Request for Proposals; 6. A copy of the successful Offeror’s proposals; 7. A copy of all unsuccessful Offeror’s proposals; and 8. A copy of the executed contract resulting from the Request for Proposals.

VII. MINIMUM QUALIFICATIONS

Offerors shall be required to meet minimum qualifications at the time proposals are submitted. When a development team is comprised of a lead developer and co- developer, each entity shall be required to individually meet the minimum qualifications. Offerors shall demonstrate the following qualifications:

A. Have principally no less than seven (7) years of relevant project experience involving the development and construction of housing projects;

B. Have principally developed and completed no less than three (3) separate housing projects, with one project consisting of at least 40 housing units;

C. Have creditworthiness and demonstrated capacity to secure financial commitments proposed to complete the development lien free; and

D. Be authorized to do business in the State of Hawai‘i and possesses all required business licenses and professional licenses issued by the State of Hawai‘i.

VIII. MINIMUM REQUIREMENTS

Insurance. Offeror agrees to maintain, on a primary basis and at its sole expense, at all times during the life of this Agreement, the following insurance coverages and limits, including the endorsements described herein. The requirements contained herein, as well as the County’s review or acceptance of insurance maintained by the Offeror is not intended to and shall not in any manner limit or qualify the liabilities or obligations assumed by Offeror under this Agreement. The policy or policies of insurance maintained by Offeror shall provide the following minimum limits and coverages as specified herein and be placed with an insurance carrier authorized to do business in the State of Hawai‘i and A-VII by A.M. Best.

To the extent applicable, the amounts and types of insurance will conform to the minimum terms, conditions and coverages of Insurance Service Office (ISO) policies, forms and endorsements.

KOAE/RFP/FINAL Page18 Commercial General Liability: Offeror agrees to maintain Commercial General Liability insurance written on occurrence form. The coverages shall include the following: Premises Operations, Independent Contractors, Products and Completed Operations, Broad Form Property Damage including completed operations, Blanket Contractual Liability, Personal Injury, Employees Named as Additional Insured, Explosion, Collapse and Underground Property Damage, Severability of Interest. The limits of liability of such coverage shall be:

1) Bodily Injury and Property Damage Combined Single Limit: $2,000,000 per occurrence/$2,000,000 aggregate; 2) Personal Injury: $1,000,000 per occurrence/$2,000,000 aggregate; 3) Products and Completed Operations coverage protecting the Contractor and sub-contractors must be carried for one (1) year after substantial completion of the project. Evidence of this insurance will continue to be provided on an annual basis to the County.

Business Automobile Liability: The Offeror agrees to maintain Business Automobile Liability insurance written on occurrence form for all owned, non- owned, and hired automobiles. If the Offeror does not own automobiles, Offeror shall agree to maintain coverage for hired and non-owned auto liability insurance, which may be satisfied by way of endorsement to the Commercial General Liability policy or separate Business Automobile Liability policy. Coverage shall be for automobile contractual liability, uninsured and underinsured motorist coverage, basic no-fault and personal injury protection as required by Hawai‘i law with the following limits:

1) Bodily Injury: $1,000,000 per occurrence/$1,000,000 per accident 2) Property Damage: $1,000,000 per accident.

Workers’ Compensation and Employers Liability: Offeror agrees to maintain Workers’ Compensation and Employer’s Liability insurance in accordance with the State of Hawai‘i Revised Statute Chapter 386. The minimum limits of liability to be maintained are as follows:

1) Workers Compensation – Statutory 2) Employer’s Liability - $1,000,000 Bodily Injury from each accident, $1,000,000 bodily injury from Disease, $1,000,000 Aggregate Bodily from Disease. Self-Insurance is permitted subject to submission of a copy of the appropriate governmental authorization and qualifications by the Offeror.

Umbrella or Excess Liability Insurance. Offeror may satisfy the minimum liability limits required above under an Umbrella or Excess Liability Policy.

KOAE/RFP/FINAL Page19 Waiver of Subrogation. Offeror shall agree by entering into a contract or agreement with the County to a waiver of Subrogation for each required policy herein. This Waiver of Subrogation requirement shall not apply to any policy, which includes a condition specifically prohibiting such endorsement, or voids coverage should Offeror enter into such an agreement on a pre-loss basis.

Additional Insured: Offeror agrees to endorse the County, its elected and appointed officials, officers, employees, and volunteers, as additional insured, to the Commercial General Liability, Umbrella or Excess General Liability Insurance, and Automobile Liability Insurance.

Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the County and remain the responsibility of Offeror. At the option of the County, either: the insured shall reduce or eliminate such deductibles or self-insured retentions as respects the County, its elected and appointed officials, officers, employees, and volunteers; or the Offeror shall provide a financial guarantee (audited financial statement) satisfactory to the County guaranteeing payment of losses and related investigations, claim administration and defense expenses.

Certificate of Insurance. Prior to contract execution for the proposed contract, Offeror shall provide the County a certificate of insurance completed by a duly authorized representative of their insurer including providing at least thirty (30) days advance written notice to the County of cancellation, material change or non- renewal and any appropriate endorsements. All coverages required of the Offeror will be primary and non-contributory with any insurance or self-insurance program maintained by the County. The Certificate Holder address shall read:

County of Kauaʻi Housing Agency 4444 Rice Street, Suite #330. Līhu‘e, HI 96766 Attn: Housing Director Contract # Project Title

The County reserves the right to require complete certified copies of all insurance policies, including endorsements affecting the coverage required at any time.

Failure to secure and maintain the required insurance shall be considered as a major breach of contract. Should the County be forced to expend funds which would have been covered under the specified insurance, Offeror agrees to reimburse County for such funds.

Right to Refuse or Reject. County reserves the right, but not the obligation, to review and revise any insurance requirement, not limited to limits, coverages and

KOAE/RFP/FINAL Page20 endorsements based on insurance market conditions affecting the availability or affordability of coverage; or changes in the scope of work or specifications affecting the applicability of coverage. Additionally, the County reserves the right, but not the obligation, to review and reject any insurance policies failing to meet the criteria stated herein or any insurer providing coverage due to its poor financial condition or failure to operate legally.

IX. SELECTION, AWARD, AND NON-SELECTED OFFERORS

A. Procedures

Offerors will submit conceptual proposals in accordance with the instructions herein. Proposals will be reviewed and evaluated according to the evaluation procedures and criteria more specifically described below. Proposals will be categorized as acceptable, potentially acceptable, or unacceptable.

Unacceptable proposals shall be rejected. Acceptable and potentially acceptable proposals shall be eligible for the priority list.

Proposals may be accepted on evaluation without discussion and an award may be made to the responsible Offeror whose proposal is determined in writing to provide the County with the best value taking into consideration price and the evaluation factors set forth herein.

If there are numerous proposals on the Priority List, the evaluation committee may rank the proposals and limit the priority list to a minimum of the highest three (3) proposals.

Discussions may be conducted only with Offerors on the priority list, Acceptable and Potentially Acceptable Proposals, and shall be held to:

1. Promote understanding of the requirements herein and the Offeror's proposal; and

2. Facilitate arriving at a contract that is most advantageous to the County, taking into consideration the evaluation criteria set forth in this RFP.

Addenda may be issued to clarify or modify the RFP and shall be distributed only to priority-listed Offerors.

Should best and final offers be deemed necessary, the Contract Officer shall establish a date and time for the priority-listed Offerors to submit their best and final offers. Offerors who do not submit a Notice of Withdrawal or respond to a call for best and final offers shall have their initial proposal considered for final evaluation.

KOAE/RFP/FINAL Page21 An evaluation will be conducted for award of a contract wherein applicable and appropriate either after the initial proposals are received or after receipt of best and final offers.

B. Award

Award shall be made in writing to the responsible Offeror whose proposal is determined in writing to provide the best value to the County taking into consideration the evaluation criteria specified in the RFP. The RFP file shall be open for public inspection, except for confidential information contained therein, after award of a contract and posting by the Division of Purchasing.

The award shall be subject to the provisions of HRS 103D-328 relating to Tax Clearances, and HRS 103D-310(c) and HAR 3-122-112 both relating to Responsibility of Offerors. (See Attached Schedule G and G-1)

C. Evaluation Criteria

Evaluations shall not be based on discrimination due to the race, religion, color, national origin, sex, age, marital status, pregnancy, parenthood, handicap, or political affiliation of the Offeror.

An evaluation panel shall review and evaluate all proposals timely received. The criteria to be used to evaluate each proposal shall consist of the following:

Evaluation Criteria Max. Pts. Development Concept and Project Design 40 Experience and Capacity of Development Team 25 Financing Plan 25 Development Schedule 10 Total 100

1. Development Concept and Project Design (40 Maximum Points)

a) The degree to which the proposed development concept meets the County’s objectives stated in Section III of this RFP to have the greatest overall benefit of providing affordable workforce housing.

b) The degree to which the proposed site concept design utilizes the site effectively with regard to functional layout, accessibility, pedestrian improvements, street access, and connectivity to the surrounding area.

c) The degree to which the proposed building design uses scale and architecture compatible with the surrounding residential and resort

KOAE/RFP/FINAL Page22 setting, and the extent to which building design incorporates innovations, energy efficiency, and green features.

2. Experience and Capacity of Development Team (25 Maximum Points)

a) Successful experience of the development team in the planning and construction of mixed-income, mixed-financed housing projects of comparable size and complexity.

b) Cohesion of the development team, as demonstrated by their previous experience working together, and past track record of completing similar housing projects on schedule and within budget.

c) Financial capacity for completing the development, as evidenced by financial statements, most recent audit and bank references, or other pertinent documentation, and ability to obtain commitments for public and private financing proposed to develop the affordable housing.

3. Financing Plan (25 Maximum Points)

a) Financing plan for development, as reflected in the development budget, operating budget pro forma, profit and loss statement, sources of funds for construction and permanent financing, and reasonableness of development costs.

b) Leveraging and use of federal HOME Investment Partnerships Program funds made conditionally available through this RFP, and familiarity with HOME regulatory compliance.

4. Development Schedule (10 Maximum Points)

a) Development schedule to complete each phase of the project (if phased) according to project benchmarks that are well-defined and realistically achievable.

b) Ability to meet the proposed development schedule based on the development team’s respective disciplines, clear lines of responsibility, past experience in working together, and history of completing projects of a similar nature on time.

D. Non-selected Offerors and Debriefing

KOAE/RFP/FINAL Page23 Non-selected Offerors and Debriefing. Non-selected Offerors will be notified and able to view a copy of the written notice of award, which will be posted on the County Website, www.kauai.gov. Non-selected Offerors may submit a written request for debriefing to the Director of Finance, or designee, within three (3) working days after posting of an award. Thereafter, the Director or designee, shall provide a debriefing, to the maximum extent practicable, within seven (7) working days. A written protest may be filed with the Director, or designee, within (5) working days after the debriefing. (For protest requirements see HRS 103D-701 and HAR 3-126, Legal and Contractual Remedies

X. SITE INFORMATION

The following information is provided for the purpose of consolidating data relevant to the subject parcel. Along with this site information, Offerors are encouraged to review all listed exhibits provided with the RFP.

The subject parcel is located on the south side of the island of Kauaʻi, less than one mile south of Kōloa town. The parcel is bound by Poʻipū Road to the west, the Kiahuna Golf Course to the east, and an existing residential subdivision to the north. Waikomo Stream runs north to south along the eastern portion of the project site.

B. Site Information

1. Assessor Parcel Number: TMK (4) 2-6-004-019. See Tax Map Key, Exhibit ‘A’.

2. Land Area: Approximately 11.2 acres, irregular shape, with generally level topography at street grade. See Site Vicinity Map, Exhibit ‘B’.

3. Ownership: County of Kaua‘i. See Dedication Deed, Exhibit ‘C’.

4. State Land Use Classification (SLUD): Urban (U).

5. County Zoning Designation: The parcel was rezoned in 2005 by Ordinance No. PM-2005-374, which changed Open zoned land to R- 20 for the purpose of providing workforce housing. See Zoning Map, Exhibit ‘D’. Zoning on the parcel is allocated, as follows:

Residential – 8.372 acres Open – 2.828 acres

6. Easements/Reservations: The parcel is encumbered by a drainage easement, and an access and utility easement, as noted in the legal description, Exhibit ‘E’. A&B’s conveyance to the County is subject to Easement AU-1, which grants an easement in favor of McBryde Sugar

KOAE/RFP/FINAL Page24 Company, LLC, for access and utility purposes running from Poʻipū Road to align with the existing bridge on Waikomo Stream. The exact alignment will take into consideration the approved site plan and for parties to mutually agree at a later date.

7. Off-Site Infrastructure/Utilities: The parcel does not have off-site infrastructure or utilities to the site. However, Ordinance No. PM-2014- 405 requires Kukuiʻula Development Company (Hawai‘i) LLC, (“Kukuiʻula”) to cover the cost of extending potable water and sewer service to the site, as well as relocating the 69kV utility poles, and to have this work completed by September 2016.

8. Street Access: The parcel has 974 feet of direct frontage along Poʻipū Road with an existing intersection of a former haul cane road that was signalized during the sugar plantation era but discontinued after the closure of the Kōloa Sugar Mill. Street access is expected to be realigned next to a 69 KV underground power line.

9. Flood Zone: The National Flood Insurance Rate Map (Panel Number 1500020314F), dated November 26, 2010, locates the parcel in areas designated Zone X and Zone AE. See Firm Map, Exhibit ‘F’. A majority of the parcel is designated Zone X, which is outside of the 100- year floodplain hazard area. A portion of the parcel is located within Flood Zone AE, designated as “areas subject to inundation by the 1% annual chance flood event." The area of the parcel surrounding Waikomo Stream is located in a Flood Zone subject to a 2% annual chance flood event.

10. Special Management Area (SMA): The parcel is outside of the County’s SMA.

11. Surrounding Use: Development in the immediate vicinity consists of resort oriented second homes, golf course, and commercial retail businesses typical to resort areas. Just west of the subject parcel across Poʻipū Road is a large vacant parcel that is reserved for a community park to satisfy a condition to the Kukuiʻula master plan development.

12. Improvements: None, site is fallow.

XI. PROJECT INFORMATION

The following project information is provided to assist Offerors with the preparation and refinement of development proposals for Koaʻe Workforce Housing Development. For background purposes, A&B’s land dedication was made pursuant to Condition 19 of Amended Ordinance No. PM-2004-370. Along with land

KOAE/RFP/FINAL Page25 dedication, the Ordinance imposes a requirement that Kukuiʻula satisfy certain conditions for off-site infrastructure by September 2016.

A. Site Control. The County is fee-title owner to the Koaʻe parcel. The County intends to provide site control either by long-term leasehold interest, which will be conveyed to the Offeror via ground lease for rental housing, or in the case of homeownership, by fee-simple conveyance. In either case, site control is subject to final approval by the County Council. The parcel will be leased and/or sold to the Offeror pursuant to terms in the Development Agreement. The property will be leased and/or sold on an “as-is” basis at a discounted cost to subsidize the affordability of rental housing, or to subsidize the cost of housing offered for homeownership.

B. Potable Water. Kukuiʻula is required to extend at no cost potable water service to the project site. The connection for domestic water and fire service is near the north corner of the parcel as shown in Exhibit ‘G’. The approved Water Master Plan for Kukuiʻula’s master plan area includes Facility Reserve Charge (FRC) offsets. Kukuiʻula has committed to the transfer of 150 FRC offsets from their approved Water Master Plan to 150 units of residential density at Koaʻe. Other potable water infrastructure (e.g. fire service; backflow preventers, meters) inside the parcel property line will be Offerors cost and should be budgeted accordingly.

C. Wastewater. Kukuiʻula is required to extend sewer line service at no cost to the project site. The connection of an 8” sewer line is near the south corner of the parcel as shown in Exhibit ‘G’. It is anticipated that wastewater will require treatment by a privately owned treatment plant operated by the Poʻipū Wastewater Reclamation Facililty. Wastewater facility connection fees and sewer fees are not included and should be budgeted accordingly.

D. Power Communications. Kukuiʻula is required to provide at no cost electrical communication and power to the project site. With regard to a 69 KV overhead power line traversing the project site, Kukuiʻula is required to either place the power line underground or, alternatively, relocate the power line off of the property, and is subject to the County’s approval. The proposed underground alignment for the 69 KV power line is shown in Exhibit ‘G’.

E. Construction Grade Fill Material. Kukuiʻula is required to provide at no cost construction grade fill material in sufficient quantity and quality to prepare the project site for housing development. Fill material will be imported from a location not more than 5 miles from the project site. Costs to load, haul, and deliver fill material to the site is not covered and should be budgeted accordingly.

F. Permits. Offerors are required to obtain all required land use permits. A Class IV Zoning Permit is required for projects consisting of 51 or more units.

KOAE/RFP/FINAL Page26 Grading and building permits, and NPDES permit, are required for construction. Offerors shall be responsible to conduct additional research and diligence to confirm permitting requirements for the project.

G. Fee Exemptions. Fee exemptions are available for affordable housing by Kaua‘i County Code. Depending on the income target, fifty percent (50%) to one hundred percent (100%) of certain fees may be exempt for affordable housing projects meeting the County’s affordability standards. Possible exemptions include building, plumbing and electrical permit fees, wastewater treatment capacity assessment fees, sewer connection fees, and environmental impact assessment fees. To determine the eligibility of fee exemptions, consult the County Housing Agency, Development Coordinator, at (808) 241-4429.

H. Exemptions to Development Standards. Chapters 201H-38 and 46.15, HRS, permit the County to exercise powers to exempt statutes, ordinances, charter provisions, and rules of any government agency not affecting health and safety for the purpose of providing low-income housing. Offerors may request development exemptions that are necessary to facilitate the development timetable or to reduce development costs. Chapters 201H-38 and 46-15 powers shall be utilized at the County’s discretion.

I. Phase 1 Environmental Site Assessment; Geotechnical Report. Previously, in preparing to develop the subject parcel, Kukuiʻula commissioned consultants to conduct pre-development studies. For reference, a Phase 1 Environmental Site Assessment dated February 28, 2008 is provided as Exhibit ‘H’, and a Geotechnical Report dated December 6, 2004 is provided as Exhibit ‘I’.

J. Environmental Review. The County has procured the services of a professional consultant to perform a Chapter 343, HRS, Environmental Assessment and NEPA, 24 CFR Part 58 Environmental Records Review for the parcel. It is anticipated that the Environmental Assessment report and all required processing for public review will be completed by December 2015. As it relates to federal HOME funds, environmental clearance pursuant to 24 CFR Part 58, National Environmental Policy Act (NEPA) will be processed by the County.

K. Survey/Topographic Map. The County procured the services of a professional consultant to prepare a survey/topographic map for the parcel, provided as Exhibit ‘J’.

L. Building Type and Scale. Preferred building type is multifamily structures at a height not exceeding four stories, with laundry rooms on each floor. Accessory buildings (e.g. laundry; manager’s office; community multipurpose room) should preferably be one-story structures.

KOAE/RFP/FINAL Page27 M. Minimum Living Area. Minimum suggested living area for dwelling units is 675 square feet for 1-bedroom, 825 square feet for 2-bedroom, and 950 square feet for 3-bedroom.

N. HUD’s Income Limits; HOME Rent Limits. For purposes of determining affordable rents, refer to HUD’s Income Limits and HOME Program rent limits, provided as Exhibit ‘K’.

O. Section 8 Project-Based Voucher Program. Public housing agencies can attach up to 25% of their Section 8 Housing Choice Voucher Program budget authority to specific housing units in newly constructed rental projects as project-based subsidy. Offerors proposing to develop rental housing may consider programming Section 8 project-based voucher subsidy into the project’s operating pro forma budget.

P. Limited Equity Homeownership Program. To preserve long-term affordability of for-sale housing stock, Offerors are encouraged to use development subsidies to reduce the selling price of homes to eligible buyers, and to impose restrictions on resale that limit the amount of equity an eligible buyer is able to build at resale. Offerors are encouraged to implement a homeownership program that determines a resale affordable purchase price for the next eligible buyer using a calculation not tied to the market value of real estate, such as calculating resale price based on the same area median income and household size that was used to calculate the seller’s affordable purchase price.

Q. Accessibility. Offerors are required to design a project that is pedestrian friendly and accessible to persons with disabilities in compliance with the Americans with Disabilities Act. Offerors are required to submit written evidence to the County that construction plans for site work and vertical construction have been approved by the State of Hawai‘i Disability and Communication Access Board.

R. South Kauaʻi Community Plan. The project is located in the South Kauaʻi Community Plan (SKCP) planning district. SKCP is a long range plan that contains detailed guidance on the future growth and physical development of the South Kauaʻi Region. Offerors should familiarize themselves with the SKCP and be sensitive to the vision and guiding principles formulated by the residents of South Kauaʻi. To illustrate aspects of the SKCP, Proposed Bus Routes and draft Multi-Model Network Maps are provided as Exhibit ‘L’. To gather more information about the SKCP, and to understand how it relates to development of Koaʻe, visit www.southkauaicp.com.

S. Traffic Impact Assessment Report (TIAR). The County has procured the services of a professional consultant to perform a TIAR to analyze existing traffic network volumes and projected traffic volumes for the parcels maximum

KOAE/RFP/FINAL Page28 density of 150 dwelling units. The draft TIAR dated June 29, 2015 is provided as Exhibit ‘M’.

XII. HOME INVESTMENT PARTNERSHIPS PROGRAM

The County is scheduled to receive an allocation of federal HOME Investment Partnerships Program (HOME) funds in FY 2016 from the Hawai‘i Housing Finance and Development Corporation (HHFDC). It is the County’s intent to make up to $2,250,000 in HOME funds conditionally available through this RFP as development subsidy. While it is the County’s desire to provide development subsidy, Offerors are cautioned that FY 2016 HOME fund availability is subject to Congressional appropriation. In the event the County is unable to secure FY 2016 HOME funds, the County shall be under no obligation to the selected Offeror to provide development subsidy out of any funds other than the HOME funds conditionally available through this RFP.

HOME funds are commonly combined with other public programs (e.g. Low Income Housing Tax Credits) to provide a source of gap financing. When using HOME funds along with other public programs, it is important to carefully evaluate the requirements of each program in order to blend the program rules properly to ensure compliance with eligible costs, rent limits, household limits, affordability periods, etc.

To meet requirements of the HOME Program, a copy of the HOME Multi-Family Underwriting Template is provided in Exhibit ‘N’. Offerors are encouraged to use HUD’s Underwriting Template for determining a projects financial feasibility. The Underwriting Template can be downloaded from HUD’s website: www.hud.gov/offices/cpd/affordablehousing/training/web/underwriting/template.cfm

The HOME Program is subject to the federal procurement standards of 24 CFR 85.36, which includes, in part, the requirements for performance and payment bonding. Offerors are advised that these bonding requirements for 100 percent of the construction contract price shall be made a part of the Development Agreement.

The following summarizes HOME financial assistance and costs as it pertains to the development of rental and for-sale housing. For more information about HOME Program, refer to the eligible rental and for-sale housing cost summaries provided in Exhibit ‘O’, or go to HUD.gov.

A. Eligible Forms of Assistance. HOME funds can be invested as grants, deferred payment loans, interest-bearing loans or advances, non interest- bearing loans or advances, interest or principal reduction subsidies, and

KOAE/RFP/FINAL Page29 equity Investment.

B. Eligible Pre-Construction Soft Costs. HOME funds are eligible to pay reasonable and necessary costs incurred by a developer associated with the financing and/or development of new construction. Soft costs can include architectural fees, engineering fees, builders' and developers' fees, financing fees, credit reports, title insurance, recordation fees, legal and accounting fees, cost certifications, appraisals, environmental investigations, project audit costs, funding of an initial operating deficit reserve, impact fees, and affirmative marketing.

C. Eligible Construction Hard Costs. HOME funds are eligible to pay hard costs for construction, utility connections, site improvements, and general property improvements of a non-luxury nature.

KOAE/RFP/FINAL Page30 SPECIAL PROVISIONS

A. GENERAL. The furnishing and delivery of the items and/or services specified herein shall comply with this Request For Proposal in its entirety and with the General Terms and Conditions for Goods and Services, dated December 1, 2000, which by reference is incorporated herein as though it were physically an integral part of this solicitation. A copy of the document can be found at www.kauai.gov, using the following links: Government > Departments > Finance > Division of Purchasing.

B. DEFINITIONS. Provided in RFP Section V. General Information, Sub-section F.

C. LIQUIDATED DAMAGES. Not Applicable

D. OFFER GUARANTY, AND PERFORMANCE AND PAYMENT BOND REQUIREMENTS. Not Applicable

E. INSURANCE REQUIREMENTS. Provided in RFP Section VIII. Minimum Requirements.

F. MULTIPLE OR ALTERNATE OFFERS. Unless specified otherwise, multiple or alternate offers shall not be accepted.

G. EVIDENCE OF COLLUSION OR BAD FAITH. If there is reason to believe that an Offeror's bid may not have been independently arrived at in open competition, may have been collusive, or may have been submitted in bad faith, that Offer's bid SHALL BE REJECTED and such evidence may be cause for the disqualification of the participants in any future solicitation for any contract with the County.

H. CONSTRUCTION OF CONTRACT. The masculine shall be deemed to embrace and include the feminine and the singular shall be deemed to embrace and include the plural, whenever required in the context of the contract.

I. INDEPENDENT CONTRACTOR. The Contractor is deemed to be an independent contractor, and shall not be deemed the agent, servant, representative, or employee of the County. Under no circumstances will the contract be considered a contract of partnership or joint venture between the County and the Contractor.

J. PROTEST. Pursuant to HRS 103D-701, an actual or prospective offeror who is aggrieved in connection with solicitation or award of a contract may submit a protest in accordance to the General Terms and Conditions for Goods and Services Contracts, Section 6.15 – Complaints and Protests.

The notice of award letter resulting from this solicitation shall be posted on the County of Kaua‘i Division of Purchasing web site at www.kauai.gov/.

KOAE/RFP/FINAL Page31 K. AMENDMENTS TO THE GENERAL TERMS AND CONDITIONS FOR GOODS AND SERVICES CONTRACTS:

A. Section 2 – OFFER REQUIREMENTS AND CONDITIONS,

1) Paragraph 2.6 – PREPARATION OF OFFER, delete paragraph 12 in its entirety:

“Evidence of the signors’ authority to sign the offer document shall be submitted with the offer, ie. Corporate resolution, partnership agreement, or power of attorney.”

2) Paragraph 2.11 – USE OF FACSIMILES, Paragraph (C) is modified in its entirety as follows:

“(C) Modifications of an offer may be submitted by facsimile machine pursuant to the following:

(1) The facsimile is received whole and complete at the designated place by the time and date set for receipt of same.

(2) The faxed document identifies the solicitation document and is signed.

(3) The faxed document clearly states the offerors request for modification and clearly identifies the subject of the modification by item, price, quantity, etc.

(4) The signed original is received within five (5) working days of receipt of the facsimile.”

3) Paragraph 2.14 - TAX CLEARANCE REQUIREMENTS is amended in its entirety as follows:

“Offerors are required to comply with the requirements of HRS 103D-310 and HRS 103D-328 relating to tax clearances.

Unless specifically exempted, all contracts require a tax clearance from the State Director of Taxation and the Internal Revenue Service as a prerequisite for final payment. (see Section 7 - PAYMENT)”

B. Section 6 – MODIFICATIONS AND TERMINATIONS OF CONTRACTS,

1) Paragraph 6.2 – CONTRACT CHANGE ORDERS is modified in its entirety as follows (HAR 3-125-2):

KOAE/RFP/FINAL Page32 “6.2 CONTRACT CHANGE ORDERS

(A) A change order is a written order signed by the Director, directing the Contractor to make changes which the "change clause" of the contract authorizes the Director to order without the consent of the Contractor.

Change Clause:

(1) Generally. By written order, at any time, and without notice to any surety, the procurement officer may, unilaterally, order of the Contractor:

(A) Changes in the work within the scope of the contract; and (B) Changes in the time of performance of the contract that do not alter the scope of the contract work.

(B) Adjustments of price or performance time. If any such change order increases or decreases the Contractor's cost of, or the time required for, performance of any part of the work under this Contract an adjustment shall be made and the contract modified in writing accordingly. Any adjustment in contract price made pursuant to this Section shall be determined in accordance with the price adjustment Section 6.8 PRICE ADJUSTMENT. Failure of the parties to agree to an adjustment in contract price shall be resolved in accordance with the price adjustment clause. Failure of the parties to agree to an adjustment in time shall not excuse the Contractor from proceeding with the contract as changed, provided that the Director within 14 days after the changed work commences, makes such provisional adjustments in time as the County deems reasonable. The right of the Contractor to dispute the contract price or time or both shall not be waived by its performing the work, provided however, that it follows the notice requirements for disputes and claims established by the contract or these rules.

(C) Time period for claim. Except as may be provided otherwise by section 103D-501 (b), HRS, the contractor must file a written claim disputing the contract price or time provided in a change order within ten days after receipt of a written change order under Subsection (A), unless such period for filing is extended by the Director in writing. The requirement for filing a timely written claim cannot be waived and shall be a condition precedent to the assertion of a claim.

KOAE/RFP/FINAL Page33 (D) Claim barred after final payment. No claim by the Contractor for an adjustment hereunder shall be allowed if the claim is not received by the Finance Director prior to final payment under this Contract.

(E) Other claims not barred. In the absence of such a change order, nothing in this clause shall be deemed to restrict the Contractor's right to pursue a claim as permitted under the contract or for breach of contract.”

2) Paragraph 6.3 – CONTRACT MODIFICATIONS is modified in its entirety as follows (HAR 3-125-3):

“6.3 CONTRACT MODIFICATIONS

(A) Contract modification. By a written order, at any time, and without notice to any surety, the Director, subject to mutual agreement of the parties to the contract and all appropriate adjustments, may make modifications within the general scope of this Contract to include any one or more of the following:

(1) Drawings, designs, or specifications, for the goods to be furnished;

(2) Method of shipment or packing;

(3) Place of delivery;

(4) Description of services to be performed;

(5) Time of performance (i.e., hours of the day, days of the week, etc.);

(6) Place of performance of the services; or

(7) Other provisions of the contract accomplished by mutual action of the parties to the contract.

(B) Adjustments of price or time for performance. If any modification increases or decreases the Contractor's cost of, or the time required for, performance of any part of the work under this Contract, an adjustment shall be made and the contract modified in writing accordingly. Any adjustment in contract price made pursuant to this clause shall be determined, where applicable, in accordance with the price adjustment clause of this Contract or as negotiated.

KOAE/RFP/FINAL Page34 (C) Claim barred after final payment. No claim by the Contractor for an adjustment hereunder shall be allowed if the claim is not received by the Finance Director prior to final payment under this Contract.

(D) Other claims not barred. In the absence of such a contract modification, nothing in this clause shall be deemed to restrict the Contractor's right to pursue a claim under the contract or for a breach of contract.”

3) Paragraph 6.8 – PRICE ADJUSTMENT is modified in its entirety as follows (HAR 3-125-12):

“6.8 PRICE ADJUSTMENT

Price adjustment methods. Any adjustment in contract price pursuant to a provision in the contract shall be made in one or more of the following ways:

(A) By agreement on a fixed price adjustment before commencement of the pertinent performance;

(B) By unit prices specified in the contract or subsequently agreed upon before commencement of the pertinent performance;

(C) By the costs attributable to the events or situations under such clauses with adjustment of profit or fee, all as specified in the contract or subsequently agreed upon before commencement of the pertinent performance;

(D) In any other manner as the contracting parties may mutually agree upon before commencement of the pertinent performance; or

(E) In the absence of agreement between the parties, the provisions of section 103D-501 (b) (5), HRS, shall apply.

Submission of cost or pricing data. The Contractor shall be required to submit cost or pricing data if any adjustment in contract price is subject to the provisions of section 103D-312, HRS. The submission of any cost or pricing data shall be made for any price adjustment subject to the provisions of subchapter 15, chapter 3-122. A fully executed change order or other document permitting billing for the adjustment in price under any method listed in paragraphs (1) (A) through (1) (D) shall be issued within ten days after agreement on the method of adjustment.”

KOAE/RFP/FINAL Page35 C. Section 7 – PAYMENT,

1) Paragraph 7.1 - METHOD OF PAYMENT is modified in its entirety as follows:

“7.1 METHOD OF PAYMENT

Payments will be authorized by the Director after completion of performance, or delivery and acceptance by the Officer-in-Charge of all goods, and services stipulated in the contract or purchase order. Payments will be made as soon thereafter as the regular course of business will allow; provided, however, that payments shall be made no later than thirty (30) days following receipt of the statement for goods received and services completed, and that all statutory and contractual requirements for final payment are satisfied.

If, upon completion of contract, the Contractor fails to provide the requisite tax clearance within six (6) months, the Director or designee, in accordance with HRS 103D-328, shall notify the department of taxation which in turn will notify the Internal Revenue Service, of amounts payable to the Contractor.”

2) Paragraph 7.3 - PROMPT PAYMENT BY CONTRACTORS TO SUBCONTRACTORS is added as follows (HAR 3-125-23):

“7.3 PROMPT PAYMENT BY CONTRACTORS TO SUBCONTRACTORS.

(A) Generally. Any money, paid to a contractor shall be disbursed to subcontractors within ten days after receipt of the money in accordance with the terms of the subcontract; provided that the subcontractor has met all the terms and conditions of the subcontract and there are no bona fide disputes on which the procurement agency has withheld payment.

(B) Final Payment. Upon final payment to the contractor, full payment to the subcontractor, including retainage, shall be made within ten days after receipt off the money; provided that there are no bona fide disputes over the subcontractor’s performance under the subcontract.

(C) Penalty. The procurement officer or the contractor, as applicable, will be subject to a penalty of one and one-half percent per month upon outstanding amounts due that were not timely paid by the responsible party under the following. Where a subcontractor has provided evidence to the contractor of satisfactorily completing all work under their subcontract and has provided a properly documented final

KOAE/RFP/FINAL Page36 payment request as described in subsection (4), and:

(1) Has provided to the contractor an acceptable performance and payment bond for the project executed by a surety company authorized to do business in the State, as provided in section 103- 32.1, HRS; or

(2) The following has occurred:

(a) A period of ninety days after the day on which the last of the labor was done or performed and the last of the material was furnished or supplied has elapsed without written notice of a claim given to contractor and the surety, as provided for in section 103D-324, HRS; and

(b) The subcontractor has provided to the contractor, an acceptable release of retainage bond, executed by a surety company authorized to do business in the State, in an amount of not more than two times the amount being retained or withheld by the contractor; any other bond acceptable to the contractor; or any other forms of mutually acceptable collateral, then all sums retained or withheld from a subcontractor and otherwise due to the subcontractor shall be paid by the procurement officer to the contractor and subsequently, upon receipt from the procurement officer, by the contractor to the subcontractor within the applicable time periods specified in subsection (2) and section 103-10, HRS. The penalty may be withheld from future payment due to the contractor, if the contractor was the responsible party. If a contractor has violated subsection (2) three or more times within two years of the first violation, the contractor shall be referred by the procurement officer to the contractor license board for action under section 444-17 (14), HRS.

(D) A properly documented final payment request from a subcontractor, as required by subsection (3), shall include:

(1) Substantiation of the amounts requested;

(2) A certification by the subcontractor, to the best of the subcontractor’s knowledge and belief, that:

(a) The amounts requested are only for performance in accordance with the specifications, terms, and conditions of the subcontract;

(b) The subcontractor has made payments due to its

KOAE/RFP/FINAL Page37 subcontractors and suppliers from previous payments received under the subcontract and will make timely payments from the proceeds of the payment covered by the certification, in accordance with their subcontract agreements and the requirements of this section; and

(c) The payment request does not include any amounts that the subcontractor intends to withhold or retain from a subcontractor or supplier in accordance with the terms and conditions of their subcontract; and

(3) The submission of documentation conforming that all other terms and conditions required under the subcontract agreement have been fully satisfied. The procurement officer shall return any final payment request that is defective to the contractor within seven days after receipt, with a statement identifying the defect.

(E) In the case of a construction contract, a payment request made by a contractor to the procurement officer that includes a request for sums that were withheld or retained from a subcontractor and are due to a subcontractor may not be approved under subsection (3) unless the payment request includes:

(1) Substantiation of the amounts requested; and

(2) A certification by the contractor, to the best of the contractor’s knowledge and belief, that:

(a) The amounts requested are only for performance in accordance with the specifications, terms, and conditions of the contract;

(b) The subcontractor has made payments due to its subcontractors and suppliers from previous payments received under the contract and will make timely payments from the proceeds of the payment covered by the certification, in accordance with their subcontract agreements and the requirements of this section; and

(c) The payment request does not include any amounts that the contractor intends to withhold or retain from a subcontractor or supplier in accordance with the terms and conditions of their subcontract.

The procurement officer shall return any final payment request that is defective to the contractor within seven days after receipt, with a statement identifying the defect.

KOAE/RFP/FINAL Page38 (F) This section shall not be construed to impair the right of a contractor or a subcontractor at any tier to negotiate and to include in their respective subcontracts provisions that provide for additional terms and conditions that are requested to be met before the subcontractor shall be entitled to receive final payment under subsection (3) of this section; provided that any such payments withheld shall be withheld by the procurement officer.”

KOAE/RFP/FINAL Page39 SCHEDULE ‘F’

WAGE CERTIFICATE For Service Contracts

To: Director of Finance

Subject: Solicitation No.: ______

Description of Project: ______

______

(Offeror to complete and submit with bid or proposal)

Pursuant to Section 103-55 Wages, Hours, and Working Conditions of Employees of Contractors Performing Services, H.R.S., I hereby certify that if awarded the contract in excess of $25,000, the services to be performed will be performed under the following conditions:

1. The services to be rendered shall be performed by employees paid at wages or salaries not less than wages paid to public officers and employees for similar work.

2. All applicable laws of the Federal and State governments relating to workmen's compensation, unemployment compensation, payment of wages, and safety will be fully complied with.

Offeror: ______

By:______

Title: ______

Date: ______

SCHEDULE ‘F’ Page 40 SCHEDULE G - NOTICE AND INSTRUCTIONS

RESPONSIBILITY OF OFFERORS and TAX CLEARANCES

RE: REQUIREMENTS FOR HRS 103D-310 (c); HAR 3-122-112, RESPONSIBILITY OF OFFERORS; and HRS 103D-328 TAX CLEARANCES.

HRS 103D-310 requires that all Offerors, upon award of contract, shall comply with all laws governing entities doing business in the State. The procuring officer shall verify compliance with this subsection for all contracts awarded pursuant to sections 103D-302 (IFB), 103D- 303 (RFP), 103D-304 (PROF SVC), 103D-305 (small purchases beginning at $2,500) and 103D-306 (SOLE SOURCE); provided that the attorney general may waive the requirements of this subsection for contracts for legal services if the attorney general certifies in writing that comparable legal services are not available in this state. The specific section, HRS 103D-310(c), states:

All Offerors, upon award of contract, shall comply with all laws governing entities doing business in the State, including chapters 237, 383, 386, 392, and 393.

Further, HRS 103D-328 Tax Clearances:

1. No contract shall be binding or effective until the purchasing agency confirms tax clearance from the director of taxation and the Internal Revenue Service verifying that all tax returns due have been filed, and all taxes, interest, and penalties levied or accrued, under title 14 that are administered by the department of taxation and under the Internal Revenue Code, against the contractor have been paid.

2. Final payment shall be withheld by the County until confirmation of tax clearance is satisfied from the director of taxation and the Internal Revenue Service.

See County Purchasing Division Schedule G-1, CONTRACTOR'S CERTIFICATION OF COMPLIANCE FOR FINAL PAYMENT

******************************************************************************* Hawai‘i Compliance Express. Vendors shall use the Hawai‘i Compliance Express (HCE), which allows businesses to register online through a simple wizard interface at http://vendors.ehawaii.gov. The HCE provides current compliance status as of the verification date. The on-line data will verify that a vendor’s status is compliant with the requirements of HRS Chapter 103D-310(c) and shall be accepted for both contracting purposes and final payment. Vendors who use the new HCE services will be required to pay an annual fee of $12.00 to the Hawai‘i Information Consortium, LLC (HIC). Allow 10 to 15 calendar days for processing.

ATTACHMENT 1 Page 41 A. Pre-requisite to award: In order to comply with the above, the purchasing agency, prior to award, must verify contractor compliance using HCE, as a pre-requisite to award for the following requirements:

1. Tax Clearance from the Department of Taxation and Internal Revenue Service to demonstrate compliance with HRS 237 General Excise Tax Law, and HRS 103D-328, Tax Clearance.

2. Compliance from the Department of Labor and Industrial Relations.

3. Good Standing from the Department of Commerce and Consumer Affairs.

§103D-310(c) Hawai‘i business. A business entity meeting the requirement of §103D-310(c), referred to as a “Hawai‘i business”, is incorporated or organized under the laws of the State of Hawai‘i. As evidence of compliance, the Offeror shall be in good standing with the office of Commerce and Consumer Affairs, Business Registration Division (BREG). A Hawai‘i business that is a sole proprietorship, however, is not required to register with the BREG, and therefore not required to submit verification. An Offeror’s status as sole proprietor and its business street address indicated on the Offer or Bid Form will be used to confirm that the Offeror is a Hawai‘i business.

NOTE: In cases where the Department of Commerce and Consumer Affairs has determined that verification is not applicable, the contractor is required to submit a self certification form (Kauaʻi County Purchasing Schedule G-2, Contractor’s Certification In Lieu of the on-line confirmation requirement.

B. Please note that pursuant to the implementation of Act 190 (SLH 2011) by the State Procurement Office and internal changes in Federal and State agencies, paper certificates may no longer be available and as such, vendor registration via HCE is strongly encouraged to allow for on-line confirmation by both the contractor and the purchasing agency.

REFERENCES: HRS Chapter 237 - General Excise Tax Law HRS Chapter 383 - Hawai‘i Employment Security Law HRS Chapter 386 - Workers' Compensation Law HRS Chapter 392 - Temporary Disability Insurance HRS Chapter 393 - Prepaid Health Care Act, HRS 103D-302: Competitive Sealed Bids (Invitation For Bids or IFB) HRS 103D-303: Competitive Sealed Proposals (Request For Proposals or RFP) HRS 103D-304: Professional Services (Request for Qualifications or RFQ) HRS 103D-305: Small Purchases HRS 103D-306: Sole Source HRS 103D-310 (c): Responsibility of Offerors HRS 103D-328: Tax Clearance HRS Chapter 103D-702 Authority to Debar or Suspend SPO Circular No. 2011-2 State Procurement Office website: www.spo.hawaii.go

ATTACHMENT 1 Page 42 SCHEDULE ‘H’

CERTIFICATE OF CURRENT COST OR PRICING DATA FORM

(Instructions: Cost or Pricing Data is required in support of any contract resulting from a RFP or Sole Source expected to exceed $100,000; or any contract amendment involving aggregate increases and decreases in costs plus applicable profits expected to exceed $100,000.)

This is to certify that, to the best of my knowledge and belief, cost or pricing data as defined in section 3-122-122 and submitted pursuant to section 3-122-125; either actually or by specific identification in writing to the procurement officer in support of

, are accurate, complete, and current as of **

This certification includes the cost or pricing data supporting any advance agreement(s) between the Offeror and the County of Kauaʻi which are part of the proposal.

Name of Firm

Name of Authorized Signor

Title of Authorized Signor

Signature and Date

* Describe the proposal, quotation, request for price adjustment or other submission involved, giving appropriate identifying number, i.e. Solicitation # .

** The effective date shall be the date when the price proposals are submitted. The responsibility of the Offeror or contractor is not limited by personal knowledge of the Offeror's or contractor's representative if the Offeror or contractor had information reasonably available at the time of agreement, showing that the price is not based on accurate, complete, and current data.

ATTACHMENT 1 Page 43 SPACE BELOW RESERVED FOR THE COUNTY OF KAUAI Reviewed and Submitted by:

Signature - Officer In-Charge/Designee Date

Print Name/Title Department/Division

ATTACHMENT 1 Page 44 ATTACHMENT 1

APPLICATION FORM AND INSTRUCTIONS

ATTACHMENT 1 Page 45 ATTACHMENT 1

COUNTY OF KAUAʻI

APPLICATION FORM AND INSTRUCTIONS RFP # P-0187 – KOAʻE WORKFORCE HOUSING DEVELOPMENT

General Information Section

Please refer to these instructions as you complete the Application.

NOTE TO ALL APPLICANTS: Applications must be fully completed in order to be accepted. Incomplete Applications will not be processed for review and decision making by the Evaluation Panel.

The Application is prepared using Microsoft Word. The Application may be completed in Microsoft Word or compatible program. If you are typing this Application, please use 10 point font or larger.

Applicants must submit Exhibits with this Application. Required Exhibits pertaining to each section of the Application are referenced throughout the Application. Please refer to the Index of Exhibits included in the Application for numbers and details.

Applications should be packaged in a 3-ring binder format. Major sections of the Application should be identified by “Tabs.”

APPLICATION CHECKLIST:

Complete, sign and submit with your Application Form.

APPLICATION FORM:

1. APPLICANT INFORMATION

A) Applicant

TYPE OR PRINT CLEARLY the full Name, Tax ID Number, Address, Telephone & Fax Number, and E-Mail Address of your organization. Provide the name of a contact person whom we may contact with questions about your Application. The contact person should be knowledgeable about your proposed project. If the contact person is not affiliated with the Applicants organization, then please fill in the blanks with the appropriate information.

TYPE OR PRINT CLEARLY the full Name, Address, Telephone & Fax Number and E-mail address of the person or company that completed the Application on behalf of the Applicant. Provide the name of a contact person whom we may contact with questions about your Application. The contact person should be knowledgeable about your proposed project. If the Applicant prepared the Proposal, please fill in “Same as Above” in the line designated for Applicant Preparers Name.

B) Applicant Organization / Entity

Check the appropriate box next to the category that best identifies the organization submitting this application. Indicate whether the organization is a Non-Profit Organization, Limited Partnership, General Partnership, Corporation, or Limited Liability Corporation. If

ATTACHMENT 1 Page 46 none of the categories is applicable, check the box labeled Other and describe your organization.

C) Applicant Qualifications

Check the boxes that apply to the Applicant’s qualifications. Complete Exhibit 6.

D) Development Team Information

Provide the Name, Address, Telephone/Fax numbers, and E-mail for each member of the development team. Include resumes of each member’s key staff who will be assigned as active participants in the development. Include a company resume for each member of the development team. Provide the name of one contact person from each organization and give a brief description of the role/responsibilities of each team member. Complete Exhibits 7, 8, 9, 10, and 11, as applicable.

2. PROJECT DESCRIPTION

A) Site Concept Plan/Building Elevations

Identify the number of residential and non-residential buildings, accessible pathways and pedestrian improvements, street access, and parking stalls for the project site. Complete Exhibit 12, Site Concept Plan.

Provide front elevations for residential buildings depicting scale and architectural features. Complete Exhibit 13, Building Elevations.

B) Project Unit Mix

In this section, fill in the table with the information requested. Indicate the following information relative to each type of unit / building:

Unit Mix: Enter the number of each type of unit by bedroom size and square footage.

Total Units: Indicate the total number of rental and/or homeownership units in the project;

C) Project Schedule

Fill in the blanks next to each of the categories with the projected dates for each item. Complete Exhibit 14, Project Schedule.

D) Parking

Indicate how many resident, guest and accessible parking spaces will be available for each residential unit in your project.

E) Market Demand

Provide evidence of market demand for the type of project and units you are proposing, and the income groups targeted. Complete Exhibit 15.

ATTACHMENT 1 Page 47 NOTE:

After the developer has been selected, the developer may be required to provide a market analysis prepared by an independent firm, not affiliated with the developer and approved by the County (see below*), as to present projected demand for the proposed development in the project area. Such market analysis shall include, but not be limited to, the estimated number of individuals and families in the “capture” area within the applicable income limits needing affordable housing and the comparable housing costs for the area. As the market analysis should provide up- to-date demographic information, it should be dated no earlier than six months from the date of County’s request.

*In order to be approved by the County, the firm conducting the market study must provide the following documentation: a) current Certificate of Good Standing, b) evidence that conducting market studies is one of the primary purposes of the firm, and c) affidavit certifying that they are not affiliated with the developer/applicant. In addition, an affidavit from the developer/Applicant certifying that they are not affiliated with the market analysis firm must also be submitted. All such documentation must be to the satisfaction of the County.

3. TARGET POPULATION

A) Income Level

Fill in the blanks with the number of units that your project will offer and the corresponding targeted income limits.

B) Length of Commitment

How long do you intend to keep the project affordable? If the project will be permanently affordable, then type in “Permanent.” Describe briefly the method proposed to keep units in long-term affordability, or permanently affordable.

C) Occupancy Type

Fill in the blanks with the number of units that the project will offer to any specific category of individuals. Also indicate what measures will be taken to accommodate this group.

4. SOURCES AND USES OF FUNDS

A) Financing Plan

Complete Attachment 1-A, Financing Plan for the construction and permanent financing for your project. The totals for construction and permanent financing must equal Total Development Cost.

Provide the name of each source and whether there is any financing commitment in place. Include the nature of any loan including identifying the security and whether the loan is recourse or non-recourse and any relevant terms. If a commitment exists, please provide such evidence and the name and telephone number of a contact person.

ATTACHMENT 1 Page 48 B) Developer Equity

Indicate the total dollar amount in the form of cash (or equivalents), or “in-kind” contributions that the developer or the developer’s investment partners will directly contribute to the project. Attach a detailed list of the “in-kind” contributions that your organization is making to the project. If your organization is NOT contributing any cash, or “in-kind” goods and services to the project, please provide an explanation.

C) Development Budget

Complete Attachment 1-B, Project Cost Breakdown Worksheet. Provide a complete breakdown of the total estimated cost of your project. Identify all pre- development costs, development soft costs, hard costs and transaction costs. Add or subtract line items as appropriate for your project.

D) Pro Forma Operating Budget (Rental Projects)

Complete Attachment 1-C, Pro Forma Operating Budget. Include proposed rent structure, gross potential rent, rent (vacancy) loss, other income, effective gross income, total operating costs, net operating income, replacement reserves, debt service, cash flow, and debt service coverage ratio.

E) Profit and Loss Statement (For-Sale Projects)

Complete Attachment 1-D, Profit and Loss Statement. Include number of units per bedroom size, proposed sales prices, projected revenue, development costs from Attachment 1-B, and projected profit (loss).

5. NARRATIVES

Respond to each narrative section. If your narrative response requires more than one page, begin each new continuation page with the appropriate narrative title reference.

6. EXHIBITS

Attach the Exhibits listed in the Index of Exhibits. Submit each item in the order requested and number each Exhibit according to the Index of Exhibits. If certain Exhibits are not applicable, insert a page with the statement “THIS SECTION IS INTENTIONALLY OMITTED” typed on it, along with a brief description as to why that Exhibit is not applicable.

7. CERTIFICATIONS AND ASSURANCES

Applicants must sign and date on the signature line(s) provided at end of section for Certifications and Assurances.

Final Comments to Applicants:

Table of Contents and List of Exhibits is recommended.

ATTACHMENT 1 Page 49 COUNTY OF KAUAʻI APPLICATION CHECKLIST

RFP # P- 0187 – KOAʻE WORKFORCE HOUSING DEVELOPMENT

(To be completed and signed by Applicant and returned with Application by submittal deadline)

Done/Enclosed

Correct number of copies (1 hard copy original; 2 removable electronic storage devices)

Complete Application:

1. Application Checklist (completed and signed)

2. Section 1 – General Information (Applicant; Project Description; Target Population; Sources & Uses of Funds)

3. Attachment 1-A – Financing Plan

4. Attachment 1-B - Development Budget

5. Attachment 1-C - Pro Forma Operating Budget

6. Attachment 1-D – Profit and Loss Statement

7. Narrative Responses

8. Index of Exhibits (all applicable documents)

9. Certifications and Assurances (completed and signed)

Applications must be completed in accordance with this checklist.

Applicant Name:

Applicant Representative: (Signature, Date)

ATTACHMENT 1 Page 50 COUNTY OF KAUAʻI APPLICATION FORM RFP # P- 0187 – KOAʻE WORKFORCE HOUSING DEVELOPMENT

Section 1 – General Information Section

1. APPLICANT

A) Applicant Information

______Applicant Name

Applicant Tax ID Number

Applicant Contact Name, Title Telephone Number

Applicant Address Fax Number

E-Mail Address

Fill in the information below if Proposal was prepared by a person or entity different from the Offeror.

Applicant Preparer Name

Applicant Preparer Contact Nome, Title Telephone Number

Applicant Address Fax Number

E-Mail Address

B) Applicant Organization / Entity (Check the appropriate box)

_____ Non-profit organization (Qualified, existing 501(c)(3) or (4) organization, as determined by the Internal Revenue Service)

If the Applicant is a Non-profit organization, include Exhibit 1 and Exhibit 2.

___ For-Profit Organization

ATTACHMENT 1 Page 51 Limited Partnership General Partnership

Corporation Limited Liability Corporation

Other

All Applicants must submit Exhibit 3, Exhibit 4, and Exhibit 5, as applicable.

C) Applicant Qualifications (Check all that apply)

_____ Applicant has principally no less than seven (7) years of relevant project experience involving development and new construction of housing projects.

_____ Applicant has principally developed and completed no less than (3) separate housing projects, with one project consisting of at least 40 housing units.

_____ Applicant has creditworthiness and demonstrated capacity to secure financial commitments identified to complete the development lien free; and

_____ Applicant is authorized to do business in the State of Hawai‘i and possesses all required business licenses and professional licenses issued by the State of Hawai‘i.

If Applicant has the minimum qualifications, complete Exhibit 6.

D) Development Team Information (Complete with name, address, telephone, and email).

Submit Exhibit 7 for Developer; Exhibit 8 for Architect; Exhibit 9 for Contractor; Exhibit 10 for Property Manager/Sales Agent; Exhibit 11 for Consultants, as part of this Proposal.

Developer:

Name/Contact :

Address:

Telephone: Fax:

E-Mail:

Role/Responsibility:

ATTACHMENT 1 Page 52 Architect:

Name/Contact:

Address:

Telephone: Fax:

E-Mail:

Role/Responsibility:

Engineer:

Name/Contact:

Address:

Telephone: Fax:

E-Mail:

Role/Responsibility:

General Contractor:

Name/Contact:

Address:

Telephone: Fax:

E-Mail:

Role/Responsibility:

ATTACHMENT 1 Page 53 Property Manager/Sales Agent:

Name/Contact :

Address:

Telephone: Fax:

E-Mail:

Role/Responsibility:

Consultant (e.g. Financial):

Name/Contact:

Address:

Telephone: Fax:

E-Mail:

Role/Responsibility:

2. PROJECT DESCRIPTION

A) Site Concept Plan/Building Elevations

Number of Residential Buildings:

Number of Non-Residential Buildings:

Describe:

Submit Exhibit 12 – Site Concept Plan; Submit Exhibit 13 – Building Elevation Drawings

ATTACHMENT 1 Page 54 B) Project Type & Unit Mix

Fill in the appropriate number in the table below:

Rental Units:

No. of Units 1 BR 2BR 3BR

Square Footage SF / Unit SF / Unit SF / Unit

Total Units

For-Sale Units

No. of Units 1 BR 2BR 3BR

Square Footage SF / Unit SF / Unit SF / Unit

Total Units

If you need more space, attach a separate sheet with the information requested above.

C) Project Schedule

Indicate the approximate dates to complete the following:

Phase 1 Phase 2

Pre-Development:

Construction Timetable:

Start Date:

Completion Date:

Projected Occupancy Date:

If you propose more than two development phases, attach a separate sheet with the information requested above.

Submit Exhibit 14 – Project Schedule Spreadsheet

D) Parking

How many parking spaces will be provided at the project site?

ATTACHMENT 1 Page 55 Number Ratio of Spaces/Units

Resident /

Guest /

Accessible /

Total

E) Market Demand

What evidence is there that substantiates the need for housing that you are attempting to meet with your project? Address the shortage and/or demand for the units in the project area.

Submit Exhibit 15 – Market Demand

3. TARGET POPULATION

A) Income Level (Financing programs may have different income criteria and set aside requirements. If applying for more than one program, be sure that the most stringent requirement is met.)

Number of Units Target Population

Rental Units:

Units At or below % of area median household income

For Sale Units:

Units At or below % of area median household income

B) Length of Commitment

How long do you intend to keep a rental units affordable? . How long do you intend to keep for-sale units affordable? . If the project will be permanently affordable, then type in “Permanent.” Describe briefly the method of use restriction proposed to keep units permanently affordable.

ATTACHMENT 1 Page 56 C) Occupancy Type

Indicate the number of units allotted for each of the following (if applicable):

Accessible Other (please specify)

4. SOURCES AND USES OF FUNDS

A) Financing Plan Complete the Financing Plan listing sources of Construction Financing and Permanent Financing (Attachment 1-A).

B) Developer Equity Indicate below the TOTAL AMOUNT of funds that your organization is contributing to the project?

$ Cash

$ “In Kind” (Provide an Explanation)

$ Total Sponsor Equity

If “in kind” contribution, briefly explain:

C) Development Budget Complete the Project Cost Breakdown Worksheet (Attachment 1-B).

D) Pro Forma Operating Budget Complete the Pro Forma Operating Budget for full term of financing (Attachment 1-C).

E) Profit and Loss Statement Complete the Profit and Loss Statement (Attachment 1-D).

ATTACHMENT 1 Page 57 Attachment 1-A (Financing Plan)

Construction Financing: List sources of construction financing.

Source Amount Form Secured3 Recourse4 Committed Int. Rate/ (Loan or or or (Yes or No) Term Equity) Unsecured Non-recourse

Total

______3 If the financing is secured by a mortgage, please indicate the position of the mortgage relative to all financing. 4 If the financing is recourse, identify who the guarantor is and the terms of the guaranty.

ATTACHMENT 1 Page 58 Attachment 1-A (Financing Plan)

Permanent Financing: List sources of permanent financing.

Source Amount Form Secured5 Recourse6 Committed Int. Rate/ (Loan or or or (Yes or No) Term Equity) Unsecured Non-recourse

Total

Note: Total Permanent Sources must equal Total Development Cost

5 If the financing is secured by a mortgage, please indicate the position of the mortgage relative to all financing. 6 If the financing is recourse, identify who the guarantor is and the terms of the guaranty.

ATTACHMENT 1 Page 59 ATTACHMENT 1-B (Development Budget) PROJECT COST BREAKDOWN WORKSHEET

Estimated Per Unit Itemized Cost Cost Cost

Land Acquisition

Off-Site Improvements

On-Site Improvements

Construction New Building Contractor Overhead Contractor Profit Contingency Other: Subtotal

Interim Costs Construction Insurance Construction Interest Construction Loan Origination Fee Construction Loan Credit Enhancement Real Property Tax & Other Taxes Subtotal

Architectural & Engineering Fees Architect Fees – Design Architect Fees – Supervision Engineering Fees Other: Subtotal

Financing Fees and Expenses Bond Premium Credit Report Permanent Loan Origination Fee Permanent Loan Credit Enhancement Title and Recording Counsel’s Fee Other:

Other Costs Appraisal Market Study Environmental Report Building Permits Tax Credit Fees Consultants Other:

ATTACHMENT 1 Page 60 ATTACHMENT 1-B (Development Budget), continued PROJECT COST BREAKDOWN WORKSHEET

Developer’s Fees Developer’s Fee

Project Start-Up Rent Up Reserve Operating Reserve Management Marketing

Other: Other: Subtotal

Total Development Budget

ATTACHMENT 1 Page 61 ATTACHMENT 1-C PRO FORMA OPERATING BUDGET

This form or a re-creation may be used. If recreating the format, use exact headings and categories listed here.

PART I – RENTAL INCOME

No. of Monthly Utility* Gross Total Units Rent Allowance Rent Income HOME Rents

1-Bedroom

2-Bedroom

3-Bedroom

Total Total Rent Income

No. of Monthly Utility* Gross Total Units Rent Allowance Rent Income Non-HOME Rents

1-Bedroom

2-Bedroom

3-Bedroom

Total Total Rent Income

*Refer to Exhibit F

ATTACHMENT 1 Page 62 ATTACHMENT 1-C PART II – OPERATING EXPENSE DETAIL

Expense Line Item Monthly % of Monthly Per Unit Per Annual Per Unit Per Budget Budget Month Budget Year Advertising Management Fees Audit and Accounting Office Supplies/Expenses Insurance: Fire General Liability Workers Comp. Other Taxes Janitorial Professional (Legal) Building Maintenance Grounds Maintenance Pest Control Refuse Service Utilities: Water Sewer Gas & Electricity Other: Other: TOTAL

ATTACHMENT 1 Page 63 ATTACHMENT 1-C PART III – PRO FORMA OPERATING BUDGET

Continue through full CASH FLOW ANALYSIS Year 1 Year 2 Year 3 Year 4 --- > term of financing

Gross Potential Rent Rent (Vacancy) Loss @ % Other Income Effective Gross Income Total Operating Expenses Net Operating Income Transfer to Replacement Reserves Debt Service – Loan #1 (% yrs amortized) Debt Service – Loan #2 (% yrs amortized) Pre-Tax Cash Flow

Debt Service Coverage Ratio

ATTACHMENT 1 Page 64 ATTACHMENT 1-D PROFIT AND LOSS STATEMENT

This form or a re-creation may be used. If recreating the format, use exact headings and categories listed here.

REVENUE:

From Targeted Sales Price of Housing Units Unit Size # of Units Sales Price Revenue 1-Bedroom 2-Bedroom 3-Bedroom Total Less Selling Costs of ( )% TOTAL REVENUE

COSTS: (From Attachment 1-B – Development Budget)

Land Acquisition Off-Site Work On-Site Improvements Construction Interim Costs Architectural & Engineering Financing Fees & Expenses Other Costs Developer Fee

TOTAL COSTS

TOTAL REVENUE $ -TOTAL COSTS $

=PROFIT (LOSS) $

ATTACHMENT 1 Page 65 5. PROPOSAL NARRATIVES

a. Development Approach: Provide a narrative overview of the proposed developments housing concept and how the concept will meet the County’s objectives to provide long- term affordable workforce housing. Describe the type of housing proposed (e.g. rental; for-sale), mix of income groups served, and phasing plan (if applicable).

b. Site Concept: Provide a narrative overview of the proposed site concept plan. Describe the general rationale for site layout, including the location of various building types, parking areas, common area facilities, street access, accessible walkways and pedestrian access. Identify possible off-site roadway improvements that are necessary to meet the County’s standards for vehicles and pedestrians. Identify any challenges or constraints that may require special attention for site development.

c. Building Concept: Provide a narrative overview of the residential buildings, including architectural style, building height, and construction type. Describe the proposed unit sizes and mix, minimum square footage of living areas, and unit features, including energy and green building features.

d. Length of Affordability: Describe the length of affordability proposed for rental units and/or for-sale units. If the project will be permanently affordable, describe the method proposed to keep project units permanently affordable. If not permanently affordable, describe the length of affordability proposed for rental units and/or for-sale units. With regard to for-sale units, describe the approach to long-term preservation of housing stock for future purchasers. Identify who would provide the initial and ongoing administration of any such long-term homeownership program.

e. Experience of Development Team: Provide a narrative overview of the development team’s experience and cohesion, as demonstrated by past experience working together on housing projects of comparable size and complexity.

f. Financing Pro Forma: Describe the financing structure proposed to develop the project. Identify amounts and sources of equity capital and debt service that will be needed for permanent financing. Identify the amount and source of construction financing, including terms. Identify the amounts and sources of public subsidies to fill finance gaps. Discuss your firm’s history in successfully obtaining funds from the identified sources.

g. Management/Sales Agent: Describe experience of the property manager as to managing and qualifying tenants for affordable rental projects, including experience with Section 8 Vouchers and other subsidy programs. Describe the experience of the sales agent and how for-sale units are to be marketed for affordable sales, and expected absorption rate.

h. Schedule: Describe the development schedule and key phases of pre-development, construction, and marketing/lease-up. Indicate the main contingencies to the timely implementation and completion of the project.

ATTACHMENT 1 Page 66 6. EXHIBITS

Attach all Exhibits that are applicable to your submittal, per the Index of Exhibits.

7. CERTIFICATION AND ASSURANCES

Whereas, (the “Applicant”) is submitting a proposal to the County of Kauaʻi for the Koaʻe Workforce Housing Development, Tax Map Key No. (4) 2-6- 004:019, as described in RFP No. P- 0187, and, therefore, the Applicant certifies as follows:

1. The Applicant is eligible for award of the project under the requirements of the RFP.

2. The Applicant agrees to comply with all applicable federal, state, and local regulations in the event this Proposal is selected for development.

3. The Applicant is prepared and has the authority within its charter, bylaws, or through statutory regulations to enter into a contractual agreement with the County for the development and operation of the project. The Applicant submits this Application and Certification with full cognizance of its governing body.

4. The Applicant’s General Contractor is licensed to undertake this project pursuant to Chapter 444, H.R.S., relating to the licensing of contractors.

5. The Applicant understands and agrees that the County reserves the right to contact local government officials, representatives of other funding programs, or other individuals to verify or obtain additional information about Applicant‘s Proposal. The undersigned hereby agrees and allows the release of any and all information to the County in regards to the representations made within this Application. Such information may include credit history or ratings verifications, confirmation of involvement in past developments, and all other information on the Applicant entity and principals thereof, as may be required by the County. This information will be used solely by the County to aid in making a determination as to the award of the project to Applicant and will not be disclosed outside of the County, except as required and permitted under law.

6. The Applicant understands and agrees that the County’s receipt of an Application does not constitute acceptance of the Application. The County reserves the right to return an Application at any time without taking further action on the Application due to, but not limited to, the following:

a. Failure to meet Application submittal requirements. b. Failure to meet RFP requirements. c. Failure to disclose in the Application any know material defects about the development of the Project, any misrepresentations or fraud. d. Incomplete Application. The Application received by the procurement deadline constitutes the final Application (the “Final Application”). Any Final Application deemed by the County to be incomplete shall not be processed.

ATTACHMENT 1 Page 67 7. The Applicant understands and agrees that the County reserves the right to accept or reject any Application, and to make award to any Applicant it may select based on best value to the County, taking into consideration the evaluation criteria specified in the RFP.

8. The Applicant further understands and agrees that:

a. The County reserves the right to cancel, suspend, or terminate, in part or in whole, this RFP, if the County, in its sole discretion, deems it to be in its best interest to do so.

b. The County reserves the right to reject any Application submitted and may exercise such right without notice and without liability to any Applicant or other parties for their expenses incurred in the preparation of an Application.

c. Applications are prepared at the sole risk and expense of the Applicant. The completion, receipt, or acceptance of an Application does not commit the County to pay any costs incurred in preparation of the Application. The County shall not be responsible for any costs incurred by the Applicant due to the cancellation, suspension, or termination of such RFP, or the rejection of any Application.

9. The Applicant understands and agrees that the County in no way represents or warrants to any party, which may include, but is not limited to, any developer, owner, investor, or lender that the project is, in fact, feasible or viable. No public official, director, officer, agent, staff or employee shall be personally liable concerning any matters arising out of, or in relation to, the disapproval or the making of award under this RFP.

10. That the foregoing information and the statements made in this Application are true, complete, accurate and correct to the best of the Applicant’s knowledge, and hereby authorizes the County to obtain further information and to verify any statement made as it deems necessary.

In Witness Whereof, the Applicant has caused the document to be executed in its name on the day of , 20 .

Applicant

Its

ATTACHMENT 1 Page 68 INDEX OF EXHIBITS

AT TIME OF APPLICATION

Exhibit 1 Copy of current IRS Tax Exemption Letter

Exhibit 2 Most recent Treasury Form 990 with all supporting documentation, as filed with the IRS.

Exhibit 3 Certified copies of the organizational documents of the applicant, including its articles of incorporation and bylaws, declaration of trust, partnership or limited partnership, including any amendments thereto. Include a signature resolution if not encompassed within corporation bylaws.

Exhibit 4 Copy of Applicant’s most recent audited financial statements and reports prepared in accordance with generally accepted accounting principles. In the event the Applicant is an entity not yet formed, submit federal and state tax returns and financial statements for the previous three years, for the developer and principals of the Applicant entity.

The County may require a credit report from each and every officer of the Applicant entity, including each and every principal.

Exhibit 5 Trade and banking references for the Applicant.

Exhibit 6 Development experience form provided as part of this Application. Please fill in all information requested on the spreadsheet form using the most current information (Sample of Exhibit 6 is attached).

Exhibit 7 Resumes for Offeror’s key staff who will be active participants in the development. Submit organizational chart showing the responsibilities of key personnel (with names matching resumes provided), and the role of development team members identified in the Application. In addition to resumes, provide the following:

Offeror shall provide a list of rental projects completed that demonstrates having no less than seven (7) years of experience. The list should include, at minimum, the name and address of the project, the year the project was placed in service, name and owner of project, owner contact information, and list any federal, state or local subsidy used in the project.

Offeror is to showcase one of the completed projects, and should select a public/private affordable housing development, provide exterior and interior photographs, site plans and elevations if available, identify of team members, and discuss total development costs, funding sources, and the financing structure, including both private and public sources. Letters of reference are welcome in addition to the resumes.

Exhibit 8 Resume for architect selected for development team. In addition to resume, provide the following:

ATTACHMENT 1 Page 69 Architect shall provide a narrative of housing projects completed over the last 7 years. The architect is to showcase one housing project by describing the project, including location, architectural elements and features, square footage, unit configuration, total number of units, amenities, creative solutions to sensitive concepts, and working with the local community. Provide exterior and interior photographs, site plans, and elevations, if available.

Exhibit 9 Resume for contractor selected for development team. In addition to resume, provide the following:

Contractor shall provide a narrative of construction experience in new construction of multifamily housing projects. Contractor shall describe at least 3 projects completed projects within the last 7 years, including the year each project was completed, location, total number of units, indication of whether it was an affordable project, use of federal and state prevailing wage rates and contact information of each property owner.

Exhibit 10 Resume for property manager/sales agent selected for development team. In addition to resumes, provide the following:

Property Manager/Sales Agent shall provide a list of affordable housing projects managed, or sold, within the past 7 years. Include name and address of property, number of units, federal and local subsidy program which the project may be participating in, and the length of involvement and contact information for property owner.

Exhibit 11 Resumes for any other consultants selected for the development team, and a narrative of their role in the development of the project.

Exhibit 12 Site concept plan on half-sized 11” x 17” sheet with layout of residential and non- residential buildings, accessible pathways and pedestrian improvements, street access, parking stalls, etc.

Exhibit 13 Elevation drawings of residential buildings on half-sized 11” x 17” sheets.

Exhibit 14 Detailed project development schedule.

Exhibit 15 Evidence of market demand for the type of housing project(s) proposed.

ATTACHMENT 1 Page 70 Exhibit 6 – Developer Experience

Name: Page 1 of 1 Copy format and add pages as needed Number of Units Financing/ Capacity of Subsidy Applicant/ Type of City, Low Program Name of Property Developer Project State Income Affordable Utilized Status of Project Niumalu Affordable Rental Developer/ Multi Family Līhu‘e, HI 50@40% 81% to T/E Bonds Operating for 20 Project Sponsor Mixed Income 100@60 140% LIHTC years Mixed Use % HOME RHTF 1

4 5

ATTACHMENT 1 Page 71 EXHIBIT ‘A’

TAX MAP KEY EXHIBIT ‘B’

SITE VICINITY MAP EXHIBIT ‘C’

DEDICATION DEED EXHIBIT ‘D’

ZONING MAP EXHIBIT ‘E’

PROPERTY LEGAL DESCRIPTION EXHIBIT ‘F’

NATIONAL FLOOD INSURANCE RATE MAP EXHIBIT ‘G’

UTILITY CONNECTIONS EXHIBIT ‘H’

PHASE 1 ENVIRONMENTAL SITE ASSESSMENT EXHIBIT ‘I’

GEOTECHNICAL REPORT EXHIBIT ‘J’

SURVEY/TOPOGRAPHIC MAP EXHIBIT K

HUD INCOME AND HOME RENT LIMITS EXHIBIT L

SOUTH SHORE COMMUNITY PLAN MAPS EXHIBIT ‘M’

TRAFFIC IMPACT ASSESSMENT REPORT EXHIBIT ‘N’

HOME UNDERWRITING TEMPLATE EXHIBIT ‘O’

HOME PROGRAM REGULATIONS APPENDIX H - REFERENCES

Affordable Housing Bill Introduced on Maui. Maui Now. November 2017. Accessed March 2018. http://mauinow.com/2017/11/03/affordable-housing-bill-introduced-on-maui/

Arakawa, Alan. Case Made for More Money for County Affordable Housing Fund. The Maui News. April 2017. Accessed March 2018. http://www.mauinews.com/opinion/columns/2017/04/case-made-for-more-money-for-county- affordable-housing-fund/

Crivello, Stacy. Panel reviews upcoming affordable housing projects, takes policy action. The Maui News. November 2017. Accessed March 2018. http://www.mauinews.com/opinion/columns/2017/11/panel-reviews-upcoming-affordable- housing-projects-takes-policy-action/

Cochran, Elle. Increasing Inventory of Available Housing. Planning Committee Temporary Investigative Group. October 2016.

Leif, Aaron. Community Viewpoint: Failed Housing Policy, In Perpetuity. Maui Watch. February 2018. Accessed March 2018. http://mauiwatch.com/2018/02/community-viewpoint- failed-housing-policy-perpetuity/

Hawai‘i Appleseed Center for Law and Economic Justice. Accessory Dwelling Units: Expanding Affordable Housing Options in Hawai‘i. 2016. Accessed April 2018. https://www.mauicounty.gov/DocumentCenter/View/95481/Accessory-Dwelling-Units

Osher, Wendy. 16 Homes at New Affordable Subdivision at Mokuhau. Maui Now. December 2017. Accessed March 2018. http://mauinow.com/2017/12/19/16-homes-at-new-affordable- subdivision-at-mokuhau/

Osher, Wendy. Kahului Lani Project Calls for 164 Affordable Units for Seniors. Maui Now. July 2017. Accessed March 2018. http://mauinow.com/2017/07/11/kahului-lani-project-calls-for- 164-affordable-units-for-seniors/

Schenfeld, Nikki. Leasehold Partner Announced for State’s Affordable Rental Housing Portfolio. Maui Now. Dec. 2017. Accessed March 2018. http://mauinow.com/2017/12/14/leasehold- partner-announced-for-states-affordable-rental-housing-portfolio/

SMS Research. Hawai‘i Housing Planning Study 2016. Honolulu. 2016.

Tanji, Melissa. West Maui Housing Development Plan Withdrawn. The Maui News. May 16, 2018. Accessed May 18, 2018. http://www.mauinews.com/news/local-news/2016/05/west-maui- housing-development-plan-withdrawn/