Tenants in the 857 units are suing because the nonprofit owner wants to prepay its HUD mortgage to release it from a commitment to affordable rents, and a board member (son of the founder) is speaking out against it.
In a hot real estate market like Honolulu, even charities want to cash in. In an opinion piece in the Honolulu Advertiser, Wallace S.J. Ching, board member of the Kukui Gardens Corp. (EIN 99-0117882 Form 990) argues against the impending sale of the 22-acre affordable housing project to a California developer for $130 million to benefit the Clarence T.C. Ching Foundation (EIN 99-6014634 Form 990). The board member is the son of the original developer of the project (after whom the foundation is named).
Although this story has been developing since the board announced its desire to sell the project back in January, reports in the Honolulu Star-Bulletin have only hinted at the board drama. Mr. Ching explains that the board consists of fifteen members, five each from the Ching Foundation, the Marianist Center of Hawaii (EIN 99-0142275, church group), and St. Francis Healthcare System of Hawaii (St. Francis Medical Center EIN 99-0073526 Form 990). The Marianists operate Chaminade University of Honolulu (EIN 99-0272261 Form 990) and Saint Louis School (EIN 99-0272260, also church group).
As Mr. Ching tells it, the sale of the property is primarily for the benefit of the schools and hospital:
It saddens me that the sale of Kukui Gardens is being driven by the expected financial benefits that may accrue to the Marianist Center (including Saint Louis School and Chaminade University) and the St. Francis Healthcare System and its affiliates — organizations that have already received millions of dollars from The Clarence T.C. Ching Foundation. I was appalled when one director told me I needed to support the sale because Saint Louis School needed the funds.
Affordable housing in Oahu is scarce and homelessness is on the increase. But even an appeal to the bishop on sits on the board of the hospital generated no sympathy.
The tenants are taking their own action, filing a lawsuit after they received notification that the owners were going to prepay their HUD mortgage which they believe will facilitate release of the property from a commitment to affordable housing through 2011. In this they are being assisted by the tiny organization Faith Action for Community Equity (EIN 99-0335935 Form 990).
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