Jury says Haseko must pay Hawaii homeowners $27M over scrapped marina plans

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Haseko (Hawaii) Inc. was ordered to pay $27 million in special and punitive damages to homeowners in Ewa Beach who sued the Honolulu-based developer over its move to turn a long-planned marina into a recreational lagoon.

The Circuit Court jury on Tuesday awarded special damages of $1,300 per homeowner, which will triple under the state’s consumer protection law for 1,800 homeowners in Haseko’s Hoakalei and Ocean Pointe master-planned communities, and another $20 million in punitive damages, bringing the total to about $27 million, the Honolulu Star-Advertiser reported.

Steven Chung, an attorney for Haseko, which is affiliated with Japan-based Haseko Corp., told the newspaper he planned to ask the court to set aside the judgement and order a new trial, saying juries cannot order punitive damages because of unfair or deceptive acts or practices, which was one of the claims in the class-action lawsuit.

Haseko said in November 2011 it would convert what was to have been a small boat harbor in the Hoakalei subdivision into a 54-acre recreational lagoon, citing a lack of demand for market-priced boat slips. The marina was dredged and built up many years ago, but Haseko never connected it to the Pacific Ocean.

Earlier this year, Haseko submitted a request to the City and County of Honolulu’s Department of Planning and Permitting to change the zoning of the previously planned marina into the lagoon.

Haseko President Tom Sagawa told the Star-Advertiser in a statement that the company is confident the punitive damages will be set aside and said the developer is “committed to realizing our vision of Hoakalei as a mixed-use waterfront recreational destination all can enjoy.”

Duane Shimogawa
Reporter
Pacific Business News

Kailua estate near President Obama’s vacation home is on the market for $28M

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51A sprawling 2.5-acre Hawaii oceanfront estate located near President Barack Obama’s vacation home is on the market for $28 million.

Located at 51 Kaikea Place in Kailua in Windward Oahu, the estate includes three homes, including a main residence, a guest home and a caretaker home, designed by Hawaii architect Fritz Johnson.

The homes were renovated in 2008, containing a total of 7,851 square feet of living area, 4,466 square feet of open lanai area, 1,121 square feet of storage space and 870 square feet of garage/carport areas. All fixtures, furniture and equipment are included in the sale, excluding the paintings.

Scott Eden of Newmark Grubb CBI is representing the owner in the sale. Property records show that “51 Kaikea LLC,” is the owner of the property, with Keiichi Kojima as its manager.

The property, which includes a total of four parcels, has a total assessed value of about $24.3 million, according to tax records. In 2008, the main parcel was purchased by 51 Kaikea LLC for $22 million, with two adjacent parcels purchased for $4 million.

“[The owner] spent $7 million to remodel the property, and to build a caretaker’s house on one of the front parcels,” Eden told PBN in an email, noting that the property was previously listed in January for $38 million.
The sale also includes the two adjacent 10,000-square-foot parcels in front of the main gate that may be used for additional residences.

“Land of this sheer size is becoming increasingly hard to find on Oahu, particularly in such a desirable location,” Eden said.

President Obama and his family arrived in Hawaii this past weekend for their annual family vacation, and the 51 Kaikea Place estate is located less than five minutes away from their vacation compound in Kailua.

Duane Shimogawa
Reporter
Pacific Business News

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Hawaii Supreme Court rules in favor of D.R. Horton’s $4.6B Hoopili project

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D.R. Horton gets OK for 11,750-home Hoopili project in West Oahu

D.R. Horton gets OK for 11,750-home Hoopili project in West Oahu

D.R. Horton – Schuler Homes’ long-planned 11,750-home master-planned Hoopili project in Ewa in West Oahu is moving ahead after the Hawaii State Supreme Court ruled in favor of the Texas developer, saying that the state Land Use Commission properly reclassified the 1,525 acres for the project from agricultural to urban, according to a ruling Tuesday.

The Hawaii Supreme Court ruled against the appeal made by Sierra Club Hawaii Chapter and former state Sen. Clayton Hee, who argued the LUC’s reclassification of land for Hoopili violated part of the state constitution that dealt with conserving these types of lands for agricultural uses.

Sierra Club and Hee also argued that the LUC should not reclassify lands that the City and County of Honolulu could potentially designate as important agricultural lands in the future.

But in the end, the state Supreme Court said that “substantial evidence supported the LUC’s additional findings that the reclassification would not substantially impair agricultural production.”
Judge Richard Pollack, associate justice of the state Supreme Court, disagreed with the ruling. Click here to read his 26-page dissenting opinion on the case.

In October, the LUC ruled against reconsidering its 2012 decision to change the use of the land after an appeal had been filed by Friends of Makakilo.

Traffic and the diversion of potential agricultural lands have been the two main concerns that opponents have with the project.

In addition to single- and multi-family homes, Hoopili would also include commercial and light industrial space, community facilities, schools, parks and open space, facilities, commercial farming and utilities.

D.R. Horton also has gifted the Hawaiian Humane Society and the Waianae Coast Comprehensive Health Center for new West Oahu campuses. There’s also a planned 38-acre retail center by The MacNaughton Group and Kobayashi Group.

D.R. Horton, through its top executive in Hawaii, said that it could start construction on the $4.6 billion project in 2016.

Sylvester Stallone’s former Hawaii estate sold to GoPro’s first hire for $5.4M

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Sylvester Stallone's former Hawaii estate sold to GoPro's first hire for $5.4M

Sylvester Stallone’s former Hawaii estate sold to GoPro’s first hire for $5.4M

A Hawaii estate once owned by actor Sylvester Stallone, who is currently starring in the latest “Rocky” series film “Creed,” has been sold to camera maker GoPro Inc.’s first employee, according to public records.

Stallone purchased the four-bedroom, four-bathroom home on the island of Kauai’s North Shore back in 1984 for $1.75 million, and sold it in 1999.

The 3,212-square-foot ” Banana Beach House,” which is located on a 13,801-square-foot parcel in Hanalei, was purchased by Banana House LLC for $5.45 million in a deal that closed in late October. The estate has a total assessed value of about $3.5 million, according to tax records.

Banana House was formed by Neil Dana, a college roommate of GoPro founderNick Woodman, who became the first hire for the publicly-traded company that is based in California.

Banana House’s tax bill address lists an address in Half Moon Bay, California, the initial headquarters of GoPro.

Dana made headlines earlier this year after Woodman stuck to his promise to give him a portion of shares of the company, which is valued at nearly $230 million, according to Bloomberg.

Dana is currently the music director for GoPro.

Woodman himself recently purchased property in Hawaii on the North Shore of the island of Oahu.

Duane Shimogawa
Reporter
Pacific Business News

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Oahu home sales soar in January as median price sets new record

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Home sales on Oahu began 2016 with sales increases in the double digits in January, as the median price for a single-family home reached a new all-time high of $733,500, according to statistics from the Honolulu Board of Realtors.

The number of single-family homes rose 10.5 percent to 232 homes sold from 210 sold in January 2015. The median price increased by 8.7 percent from $675,000 in January 2015 to reach a new single-month high, the board said. The previous record high median price was $730,000 in September.

“January was an extremely strong month for home resales on Oahu,” said Kalama Kim, president of the Honolulu Board of Realtors. “Both single-family and condominium sales were up by double digits over January 2015, an indication that demand for all forms of housing remains high.

Condominium sales soared last month, increasing 18.2 percent to 338 units sold, from 286 units sold in January 2015. The median condo price, however, declined by 1.8 percent to $374,500, from $381,500 last year.

“The primary drivers of rising housing prices are shortages of inventory and new development,” Kim said. “We’re seeing especially heavy activity in single-family homes priced in the $600,000 to $800,000 range, and condominiums in the $200,000 to $400,000 range.”

Median home prices on Oahu increased by less than 5 percent for all of 2015, to $700,000 for single-family homes, an increase of 4 percent, and to $360,000 for condos, an increase of 2.9 percent.

“More inventory in these ranges is needed to meet demand,” he said. “The Leeward area, Central Oahu plain, and Pearl City showed big gains in January 2016 and lead the market in home sales.”

Janis L. Magin
Managing Editor
Pacific Business News

Just how much bigger will Kapolei get?

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As we pulled together the Aug. 28 cover story on West Oahu’s growing business community, I looked at population projections for Kapolei and Oahu for the next 20 years and pulled together the chart you see here.

The Hawaii state Department of Business, Economic Development and Tourism, projects here that Oahu’s population will grow 9 percent over the next 20 years. Kapolei’s population, on the other hand, is expected to boom by 53 percent, according to City and County of Honolulu projections put out by The City of Kapolei.

But what does that translate into, in terms of Kapolei’s share of Oahu’s population? Not exactly a seismic shift. Kapolei is currently home to just under 11 percent of Oahu’s population. In 20 years, it will be home to just under 15 percent of Oahu’s population.

An argument can be made that development in Kapolei has favored housing over job creation. Some in Kapolei, as you can read in our cover story, are concerned that state government in particular has lost the momentum behind pushing government jobs to the West side.

At the same time, we’re in the midst of a housing crisis. Oahu short more than 12,000 housing units. Consequently, the median price of a single-family home on Oahu is currently a staggering $710,000.

Some “what ifs” leap to mind. What if there isn’t enough housing planned for Kapolei over the next 20 years? What if more, and more varied, housing alternatives were pursued? What if doing so could slow, if not halt, the rapidly escalating price of ordinary homes on Oahu? What if doing so could create more jobs in the area, both sooner (construction, planning, etc.) and later (area services, new business formation, etc.)? What if moving an even greater share of Oahu’s population to Kapolei increased the likelihood that our nearly $6-billion rail system would be used regularly?

Stanford Carr to develop $300M Makaha Valley resort project

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Hawaii developer Stanford Carr will develop a $300 million golf resort community with a four-star hotel on the site of the former Makaha Resort for landowner Pacific Links International as part of a joint venture that aims to create some 500 jobs for residents of the Leeward Oahu community.

The resort master plan for the property, which was acquired by Pacific Links last year through foreclosure, was developed with members of the community, Pacific Links and Honolulu-based Stanford Carr Development said in a joint statement released on New Year’s Day.

Pacific Links initially planned to spend some $200 million to develop a 483-unit resort with 250 hotels rooms, 88 luxury villas and 145 luxury time-share units, Pacific Links board advisor Micah Kane, then the company’s chief operating officer, told PBN in May.

The Friday announcement did not detail the number of units now planned, but did mention the resort’s golf course, the former Makaha West Golf Club, which is undergoing a $30 million redesign by PGA Tour legend Greg Norman, who’s known as The Shark, and a four-star hotel “focused on providing a Neighbor Island experience on Oahu.”

The Makaha Valley resort property was initially developed by the late Hawaii financier Chinn Ho in the late 1960s, and was managed by Sheraton until 1999.

It’s located about 12 miles up the Leeward Coast from Ko Olina Resort — home of Aulani, a Disney Resort & Spa, and where the Four Seasons Resort Oahu is opening in April— and about 35 miles from Downtown Honolulu and Waikiki, the state’s main resort district. It is more than 50 miles from Turtle Bay Resort, the only resort on Oahu’s North Shore.

“As the last of four master-planned destination resort communities on the Island of Oahu, Mākaha Valley has an incredible opportunity to retain its rugged beauty while providing a welcoming and eco-friendly environment for residents and visitors,” Carr, president of Stanford Carr Development, said in the statement. “We look forward to continuing to work with the community to create a neighborhood that everyone is proud to call home.”

An integral part of the Makaha Valley master plan is to restore the watershed and native environment while creating jobs for a community with a high unemployment and poverty rates. The site’s former hotel, the Makaha Resort & Golf Club, closed in late 2011 after Canada-based Northwynd Properties Ltd. acquired the property, leaving 95 employees out of work. Northwynd had plans to upgrade the property and convert the hotel into time-share units, but was unable to secure financing.

“Our hopes and aspirations for the Makaha ahupuaa reflect the vision this community has expressed to us, which is to strengthen the area overall, both now and into the future,” Kane said in the statement. “We consider this a three-way partnership with the Makaha Community, Pacific Links and Stanford Carr, bringing together the team needed to make this joint vision for Makaha Valley a reality through a very local perspective.”

Janis L. Magin
Managing Editor
Pacific Business News

Slaying The Myths About Buying A Home

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SOME HIGHLIGHTS:

  • Interest Rates are still below historic numbers.
  • 88% of property managers raised their rent in the last 12 months!
  • Credit score requirements to be approved for a mortgage continue to fall. The 723 average score is the lowest since Ellie Mae began reporting on scores in August 2011.
  • The average first-time home buyer down payment was 6% in 2015 according to NAR.

Slaying-Myths-STM

A and B subsidiary looking to develop vacant Kahala Avenue oceanfront parcel

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kahala_luxuryA subsidiary of Alexander & Baldwin Inc. has transferred the ownership of one of its vacant oceanfront Kahala Avenue properties it purchased in 2013 from Japanese businessman Genshiro Kawamoto to itself, a company spokeswoman confirmed to PBN.

A&B Properties Inc. said it is exploring potential residential construction on the vacant parcel.

The Honolulu-based real estate arm of A&B acquired about 30 of Kawamoto’s Kahala properties for close to $100 million, including the little more than one-acre vacant parcel at 4607 Kahala Ave.

In May, A&B Properties, which formed 4607 Kahala LLC, transferred the property over to itself for $17.7 million, according to public records.

The property had been on the market for $18.5 million, according to a listing from Honolulu-based List Sotheby’s International Realty.

Kawamoto purchased the property for $11 million in 2006 from Alteka Co. Ltd.

The property has a total assessed value of $8.3 million, according to tax records.

In 2009, Kawamoto was issued a building permit by the City and County of Honolulu’s Department of Planning and Permitting to demolish the one-story home at the rear of the property.

No building permits have been filed since that time.

Duane Shimogawa
Reporter
Pacific Business News

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Developer reveals plans for $355M mixed-use community in Makena on Maui

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The development team spearheading the $354.8 million redevelopment of the Makena Resort in South Maui into a mixed-use golf course resort community has revealed more details about the 158-unit project, according to public documents.

Construction on the project has already begun, with construction on homes expected to begin in early 2016.

ATC Makena Holdings LLC, which is made up of New York-based real estate investment firm and fund manager AREA Property Partners, Honolulu-based hotel investor and operator Trinity Investments LLC and developer Stanford Carr’s Honolulu-based Stanford Carr Development, is partnering with Discovery Land Co. on the 47-acre project.

The redevelopment involves single-family, multi-family, resort commercial and transient vacant rentals to be built on three parcels, according to the project’s recently released draft environmental assessment, which found that it won’t have any significant impact to the environment.

One parcel will include the construction of 52 multi-family residential units and 15 large single-family custom estates, a recreational center with a swimming pool.

These 52 units will be included in eight buildings containing six to eight units each.

Another parcel will have 36 multi-family residential units in six six-plex buildings, 11 large single-family custom estates and 20 small single-family cottages, a recreational center with a swimming pool.

The third parcel will include 10 resort units, a resort-oriented commercial village consisting of 14 condominium units and 34,900-square-feet of retail space.

Construction on the project should take between three and five years to complete.

Duane Shimogawa
Reporter
Pacific Business News