Before the Aug. 8 Maui wildfires, the state and county were working on a joint project to purchase Haggai International’s religious training center in Kihei and convert it into public prekindergarten classrooms and workforce housing for teachers.

That is still the case. But with the fires destroying more than 3,700 homes in Lahaina and Kula, the government entities have pivoted and plan to first use the property — originally built in 1989 as the 216-room Maui Sun Hotel — as much-needed temporary housing for fire survivors who do not qualify for Federal Emergency Management Agency assistance.

The Haggai International Institute’s Mid-Pacific Center has two six-story buildings, which now have 175 furnished guest rooms. They’re mostly studios but there are 21 one-bedroom, four two-bedroom and two three-bedroom units. Of those rooms, eight have kitchens, 35 have kitchenettes and 32 feature mini fridges and microwaves — features that thousands of displaced Lahaina residents have missed the past six months while living out of hotel rooms in West Maui.

If the Maui County Council authorizes Mayor Richard Bissen to enter into agreements and a ground lease with the Hawaii Housing Finance and Development Corp. at its Friday meeting, the state agency said it will close on the 6.2-acre property on March 28 for $38 million.

Fire survivors could move in by May 1, said Chris Woodard, HHFDC’s chief planner who has led the project for the state and made a presentation about the project to the council.

The Legislature appropriated $45 million for the project last June. The draft appraisal came in at $46 million but if this complex were to be built today, the estimated cost is $125 million, Woodard told the HHFDC board in a November meeting.

The property features a pool, fitness center, 126-seat auditorium, library, large dining room, restaurant, commercial kitchen, laundry facility, four guest laundry rooms, a koi pond, meeting rooms and 288 parking stalls.

“This is an investment for the future of Maui County that will yield dividends for generations to come,” Bissen told the County Council on Tuesday during a budget committee meeting.

The property is located at 175 East Lipoa St., kitty-corner to Kihei Elementary School and near a public pool, park, Lokelani Intermediate School, the new Kulanihakoi High School and Kihei Charter School.

“At the heart of this project lies a commitment to supporting our educators, our essential workers, and families who are the backbone of our community,” Bissen said.

The proposal has the county taking over the ground lease in May 2025, for $1 per year for 75 years.

In the meantime, the county would go through the process to obtain a developer that would fund and oversee the renovation. The developer also would be responsible for the management of the property when it becomes permanent affordable housing.

Because the deed will restrict the housing for households at 120% of the average median income, with at least a third of the units at 80% or below and at least a third at 100% or below, the developer should be able to get funding with favorable rates. The developer also will get any unused portion of the $45 million in state funding in the form of a grant, Woodard said.

Maui County included $7.5 million for the project in its fiscal 2024 budget, with $5.5 million coming from its affordable housing fund.

The deal would also require that at least 25% of the households have a tenant who is a full-time teacher at the pre-kindergarten to high school level on Maui, unless there is not enough teacher demand.

While the county is working on securing a developer over the next year or more, the HHFDC’s plan is to contract with Paramount Hotels to manage the property for use for fire survivors and emergency responders at a base fee of $50,000 per month.

The Haggai International facility already has been pivotal for the county’s response effort, Bissen said.

He rattled off all the organizations assisting with disaster relief that have been housed there since the fires struck, including the American Red Cross, Hawaii Southern Baptist Disaster Relief Chapter, Hawaii Emergency Management Agency, visiting law enforcement from other islands and the Army National Guard.

About 60-plus rooms are now being used by the American Red Cross, which recently moved its recovery headquarters there when they had to move out of the Queen Kaahumanu Center. The relief organization told HHFDC that it plans to gradually draw down its staff and be completely out by the end of October.

The rest of the rooms would be used by survivors.  

Council member Tamara Paltin asked what would happen to fire survivors housed at the Haggai property when the county takes over the lease from the state.

Under the current timeline, construction on the property for permanent housing would not begin until June 2026 and would be expected to end by July 2027.

Paltin did not receive a direct answer from the county, but Woodard said it is possible for the county to delay its process to secure a developer, which could push that timeline further into the future.

Before the survivors can move in, maintenance items that include $1.5 million for repairs of elevators and the construction of more laundry facilities, would be overseen by Paramount Hotels using state funds.

The rooms do not have TVs, but HHFDC is looking into adding them, possibly with the help of a nonprofit.

Because of the lack of kitchens in most rooms, the state would be providing meals to the fire survivors. If the existing commercial kitchen can’t be ready in time, there would be catered meals, officials said.

Originally, the state planned to use it solely for fire responders whose organizations would pay for their lodging. The state’s operating expenses for running the property as survivor housing is about $350,000 a month, including the property management fee.

In April 2022, Haggai International entered into a purchase and sales agreement with Pacific Rim Land, which had a vision to turn the property into residential corporate housing and accommodate workforce residents such as construction workers and traveling nurses.

Pacific Rim Land partnered on the project with Paramount Hotels, owner and manager of three boutique hotels, including Maui Coast in Kihei. Around that time the plan was for about 117 affordable one- and two-bedroom housing units at a projected construction cost of $200,000 per unit.

But on June 26, 2023, the two companies executed an amendment to the purchase and sale agreement to allow Pacific Rim to assign its rights and entitlements to a government buyer. Four days later, Gov. Josh Green appropriated the $45 million for the project.

Woodard said HHFDC chose to exclusively negotiate a property management contract with Paramount Hotels primarily due to the firm’s high degree of familiarity with the property and that there could be some operational efficiencies because it also manages Maui Coast Hotel that is just 2 miles away.

Woodard said under the governor’s emergency proclamation, this exclusive negotiation was not subject to the requirements of the procurement code.

Council member Gabe Johnson said he loved the idea of buying the property and turning it into affordable housing.

“This is a model that we should be doing all over the state,” he said. “You know how hard it is to start building affordable housing projects from scratch? It takes years.”

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.