| 47 | | - | SECTION 1. The legislature finds that there is a severe shortage of affordable rental housing in the county of Maui, particularly in the western part of the island of Maui. To help address this issue, the legislature passed Act 150, Session Laws of Hawaii 2018 (Act 150), to appropriate funds in support of the Front Street Apartments in Lahaina, Maui. By passing Act 98, Session Laws of Hawaii 2019 (Act 98), the legislature also sought to ensure the continued availability of affordable rental housing in Maui county by preserving the affordability of the Front Street Apartments in Lahaina, Maui. The legislature further finds that since the passage of both Act 150 and Act 98, the Hawaii housing finance and development corporation has acquired the leased fee interest in the Front Street Apartments project as required in sections 2 and 4 of Act 98. Under Act 150, as amended by Act 98 and Act 34, Session Laws of Hawaii 2020 (Act 34), the Hawaii housing finance and development corporation must initiate condemnation proceedings unless, by December 31, 2021, it renegotiates the ground lease for the Front Street Apartments project or issues a new ground lease on terms acceptable to the Hawaii housing finance and development corporation. A recent federal court decision resulting from a lawsuit filed on behalf of the tenants of Front Street Apartments project requires the developer and leaseholder of Front Street Apartments to keep their homes affordable through 2051. During the pendency of the lawsuit, it was virtually impossible to obtain an accurate appraisal of the value of the ground lease. The legislature finds that, without an accurate appraisal, neither condemnation by the Hawaii housing finance and development corporation nor a negotiated ground lease agreement are possible. The state constitution requires payment of fair market value under the condemnation process. Similarly, a renegotiated ground lease also requires an accurate appraisal to assess the reasonableness of a lessee's proposal. Thus, a retroactive extension of the December 31, 2021 deadline is necessary. The purpose of this Act is to extend the aforementioned deadline by five years and help ensure the continued availability of affordable rental housing in Maui county at the Front Street Apartments in Lahaina. SECTION 2. Act 150, Session Laws of Hawaii 2018, as amended by Act 98, Session Laws of Hawaii 2019, as amended by Act 34, Session Laws of Hawaii 2020, is amended by amending section 1 to read as follows: "SECTION 1. The Hawaii housing finance and development corporation [shall] may institute proceedings for the condemnation of the ground lease for the Front Street Apartments affordable housing project pursuant to chapter 101, Hawaii Revised Statutes, unless the corporation has renegotiated the ground lease or issued a new ground lease on terms acceptable to the corporation by December 31, [2021.] 2026." SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 4. This Act shall take effect on July 30, 2075. |
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| 47 | + | SECTION 1. By December 31, 2022, the Hawaii housing finance and development corporation shall issue a new ground lease for the Front Street Apartments affordable housing project to an eligible developer, as defined in section 201H-32, Hawaii Revised Statutes, for a term of seventy-five years and a ground lease rent to be determined by the Hawaii housing finance and development corporation board of directors. SECTION 2. There is appropriated out of the private activity bonds allocated to the Hawaii housing finance and development corporation the sum of $22,800,000 or so much thereof as may be necessary for fiscal year 2022-2023 for the purposes of allowing an eligible developer as defined in section 201H-32, Hawaii Revised Statutes, to acquire and rehabilitate the Front Street Apartments affordable housing project on Maui. The sum appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this Act. SECTION 3. There is appropriated out of the rental housing revolving fund the sum of $12,500,000 or so much thereof as may be necessary for fiscal year 2022-2023 for the purposes of allowing an eligible developer as defined in section 201H-32, Hawaii Revised Statutes, to acquire and rehabilitate the Front Street Apartments affordable housing project on Maui. The sum appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this Act. SECTION 4. This Act shall take effect on July 1, 2022. |
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