Vitus Group Opens $60M Project

By Natalie Dolce

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Lokahi Apartments

KAILUA-KONA, HI-Several months ahead of schedule, Vitus Group has completed the final phase of Lokahi Apartments, a new 306-unit, affordable rental community located just outside Kailua-Kona, HI. The $60-million, 18-building project represents a significant development milestone, according to Vitus Group, in the use of public and private funds to create and preserve affordable housing in Hawaii, which it deems one of the most challenging housing markets in the US.

Lokahi Apartments comprises 90 studio units, 108 one-bedroom units, and 108 two-bedroom units. Common areas include a preserved archeological site, three game pavilions, a community pavilion with a barbeque area, a basketball court, a volleyball court and a recreational area for children. Amenities to the units include solar hot water heating, Energy Star appliances, low flow plumbing fixtures, ceiling fans in each room, and beautiful hardwood-like flooring. Most units have an ocean view.

Stephen Whyte, managing director of Vitus Group, parent company to Vitus Advisors and Vitus Development (formerly Pacific Housing Advisors), points out that “Today’s Grand Opening of Lokahi Apartments is a brilliant example of what can be accomplished when government agencies and a private developer share the same vision—a brand new, high-quality community for hard working families.”

Makani Maeva, director of Vitus Group, adds that “We have worked hand-in-hand with state and county government officials to bring this community to life and we are proud that working families are now able to call Lokahi home.”

The community was financed using several complex financing structures. The project was funded using tax-exempt private activity bonds capitalized with 4% Federal Low Income Housing Tax Credits, and $33.5 million variable rate bonds were issued and placed by Hawaii Housing Finance & Development Corp., the housing finance agency for the State of Hawaii.

Prospective residents must meet maximum household income limits that are at or below 60% of the area median income, as determined annually by the US Department of Housing and Urban Development. Seventeen units will be reserved for residents making at or below 30% AMI. Monthly rental rates will range from $331 to $863.

Citi Community Capital underwrote the bonds and provided the construction period credit enhancement with Freddie Mac providing the long term credit enhancement on the bonds. Federal and State tax credit equity was provided by Boston Capital and JP Morgan, respectively.

In addition, HHFDC, through the Rental Housing Trust Fund, provided $11.75 million of important gap financing through the construction period.

Construction of Lokahi Apartments began in December 2008, and proceeded at a rate of one new building per month. Completion of the project was originally scheduled for the end of 2010. The complex was built on approximately 10 acres of land located on Kakahiaka Street in Lower Palisades, two miles south of the Kona International Airport.

Categories: West, Multifamily, Development, Honolulu