Council digs into details on ‘shovel ready’ Lahaina housing projects

Maui County Council members looked for ways Thursday for developers to move forward with construction of two Lahaina affordable housing projects that residents have pinned hopes on as being “shovel-ready,” but nevertheless face significant obstacles.

Coming during the second week of fiscal 2025 budget deliberations, the Council’s acute interest in progress for the Pulelehua and Kaiāulu o Kupuohi developments in West Maui followed days after council members heard impassioned pleas for desperately needed housing from Lahaina wildfire survivors who want to remain in their close-knit community.

“This budget doesn’t reflect the Lahaina fire,” said South Maui Council Member Tom Cook during a Budget, Finance and Economic Development Committee meeting. “It is a stark, painful difference going to the west side. Upcountry, my district, Kahului, life is normal. I go over there (West Maui) and hear people… It’s not better. It’s worse: the stress, the pain, the anxiety, the frustration, the anger. Nineteen thousand dollars a month for a hotel room? It’s not a solution… It’s just hemorrhaging money… I’m hoping that this Council can work with the administration to get something built.”

The long-planned Pulelehua development, a 310-acre, 500-home project mauka of Honoapiʻilani Highway and makai of Kapalua Airport, has entitlements, including zoning, that would normally allow it to move forward. Grading work began at the project site in May 2023.

However, Budget Committee members learned Thursday that the housing project faces “regulatory issues” involving prevailing wages and in seeking water use permits from the state Commission on Water Resource Management.

When asked about $18 million in county funding set aside in late 2022 for Pulelehua, Department of Housing and Human Concerns Director Lori Tsuhako said that less than $400,000 has been provided in cost reimbursements to the developer so far.

“Right now, we are working with the developer to address some regulatory issues and until those regulatory issues are satisfied, the department will not reimburse the developer any further,” she said.

The second eagerly awaited West Maui housing project is the rebuilding of the 89-unit Kaiāulu o Kupuohi project developed by the Ikaika Ohana and located south of the Keawe Street exit of the Lahaina Bypass. The five-story apartment complex opened in early December 2022 only to have the Aug. 8 wildfire turn it into ash and rubble. Now, the developer has received more than $40 million in insurance money for the loss of the entire complex, and is seeking another $36 million in public funding to rebuild.

Douglas Bigley, director and president Ikaika Ohana, answered council members’ questions Thursday and advocated for the government funding to rebuild the apartment units for hundreds of people now living in federally subsidized hotel rooms, transient vacation rentals, camping out or living in their cars.

The project to rebuild Kaiāulu o Kupuohi already has a county building permit (issued in December) and could begin construction as early as this month after debris removal and clean-up were completed in February. Residents could begin moving in as early as June 2025, with full occupancy in September of that year.

The committee’s discussion of the two West Maui affordable housing projects came during a review of the proposed budget for the new Housing Department. In the 2022 general election, Maui County voters approved splitting the current Department of Housing and Human Concerns into separate departments. Voters also authorized creation of a Department of ʻŌiwi Resources.

Tsuhako said the new Housing Department would inherit the functions and operations of the current department’s housing divisions.

When asked about county assistance in rebuilding Ka Hale A Ke Ola Homeless Resource Centers’ fire-demolished shelter and low-income housing in Lahaina, Tsuhako said her department has not engaged with the agency.

“They haven’t asked us yet,” she said, but added that if the agency were to use the same property footprint, the department could support it, but with more housing units. The Lahaina shelter had 78 units.

The budget proposed by Mayor Richard Bissen would have 39 employees in the new Housing Department with an overall spending plan of $74.4 million for fiscal 2025.

When asked about the county’s First Time Homebuyer program, Tsuhako said that even though it has a waiting list with more than 200 people, only three received assistance under the county program. Hopefully, the island’s housing inventory will go up; home loan interest rates will go down; and more local people can qualify and take advantage of the program, she said.

Next year, the county hopes to have 25 families get assistance from the program, she said.

The new Housing Department director might want to hold another lottery to get a new list of applicants because people currently on the waiting list may no longer be eligible or may no longer want to purchase a home, she said.

When asked if she would apply to be the new Housing Department director, Tsuhako said, “No.”

As for the Department of ʻŌiwi Resources, Deputy Managing Director Keanukapulani Lau Hee told committee members the county had a “slow start” in creating the department because of wildfire response and recovery efforts.

“We want to assure the Council that we are on track to establish the department with a director and a deputy on July 1,” she said.

Lau Hee said the Salary Commission set the salaries of the new department’s director and deputy director at $119,700 and $107,730, respectively. Two employees of the Department of Management (principal archaeologist and Hawaiian language specialist) will transfer to the new department, she said.

If its budget proposal is approved, the department will have seven employees and nearly $1.43 million for fiscal 2025, which begins July 1.

Budget Committee deliberations continue beginning at 9 a.m. Friday with reviews of spending plans for the Department of Management, Office of Recovery, Fire and Public Safety and Maui Emergency Management Agency. Further deliberations will continue, and decision-making will start next week.

Meetings are televised live and on tape on cable Channel 53, Akakū Maui Community Media.

A Molokaʻi community budget hearing will be held 6 p.m. April 15 at the Mitchell Pauʻole Community Center in Kaunakakai, and a public hearing by the full Council at 6 p.m. April 23 in the eighth-floor Council Chambers of the Kalana O Maui Building in Wailuku.

Written testimony is accepted via eComment. Visit mauicounty.us/agendas, click on the eComment link, then select the agenda item to submit comments on.

For more information on testifying, go to www.mauicounty.us or contact the Office of Council Services at 808-270-7838.