Who pays debt
for Ewa Villages?
The troubled housing project
By Gordon Y.K. Pang
leaves the city short $63.5 million
Star-BulletinTaxpayers could wind up covering a $63.5 million shortfall if the city can't pay off a loan tied to the Ewa Villages redevelopment project. City Budget Director Malcolm Tom says the city will be able to pay off the loan by an October 1998 deadline.
But Budget Committee Chairman Duke Bainum criticized Mayor Jeremy Harris' administration for foot-dragging on a plan showing how it will retire the debt.
Duke Bainum:“We need
to get to know where we've been,
where we are, and where we're going
with respect to Ewa Villages.”
Tom said he'll provide a detailed financial scheme at a special Budget Committee meeting on May 27.Many are wondering how the city will pay off the loan, since Armstrong Builders pulled out of the project earlier this year.
Armstrong had a contract to develop and sell 282 lots known as Greenville Villa, which would have subsidized the rest of the Ewa project. Houses stand on four of the lots. Only one has been sold.
The city took out the loan to pay for improvements as part of its plan to restore and revitalize the homes of plantation residents, who would have been forced to move after the demise of sugar in the Ewa region.
"The Council has for months now been inquiring of the city administration as to how it intended to retire the $63.5 million debt," Bainum said.
He presented a series of letters dating to January 1996 inquiring about the status of the Ewa Villages situation. Most of the letters went without responses from Tom or city housing officials.
"We need to get to know where we've been, where we are, and where we are going with respect to Ewa Villages," Bainum said.
He added that the city's financial auditors, KPMG Peat Marwick, requested an extension because of the administration's failure to respond to questions about Ewa Villages.
The auditors eventually gave up and said Ewa Villages would be discussed in an addendum, Bainum said.
Tom said he will work with the auditors to see what information they need.
Tom also drew fire from Budget Committee members when he said the city will try to sell the lots for $70,000 to $95,000 each. Armstrong had promised to give the city $150,000 per lot sold.
At $95,000 apiece, the city would collect $26.4 million if all 278 undeveloped lots were sold, far short of the $63.5 million note.
Even at the original $150,000 per lot, the city would only have garnered $41.7 million.
But Tom and other city officials said the city is restructuring other subprojects of the elaborate Ewa Villages plan to help pay off the note.
"We are in the process of marketing all of the available homes and developable parcels," Tom said, adding that the the Armstrong segment "is the portion that's been most visible."
No specifics were given on how much the restructuring would raise. City housing official Avis Kamimura said the restructuring would include trying to speed sales of refurbished homes in Tenney and Renton villages, commercial land along Fort Weaver Road and vacant land in other sections of the project.
Kamimura said 40 rehabilitated homes would be sold to a nonprofit agency while unrenovated homes would be sold "as is" to provide a low-cost option for existing residents. Other homes would be part of a lease-to-own program with the help of federal Community Development Block Grant monies.
Meanwhile, Council members criticized the administration for giving Armstrong a $1.5 million interest-free loan.
The money came from a $1.5 million premium that Armstrong had paid.
The city has received only $94,500 cash and the four completed homes as compensation.
