State buys former Maui Sun Hotel from Haggai Institute for fire survivor and workforce housing : Maui Now

The Hawaiʻi Housing Finance and Development Corp. has closed on the purchase of the former Maui Sun Hotel in Kīhei from Haggai International Institute for Advanced Leadership Training, the state agency announced Thursday.

The newly renamed Hale ʻO Lāʻie has 175 guest rooms in its current configuration. The agency said the property’s two wings will initially be operated as temporary housing for certain individuals and families displaced by last August’s wildfires. Paramount Hotels LLC will provide property management and related services under a contract with HHFDC.

Substantially all the existing on-site staff joined Paramount as employees effective Thursday. The combined team expects to begin a phased opening of the building’s guest rooms to wildfire survivors in early May 2024, after cleaning and maintenance have been completed.

The property can accommodate as many as 350 to 450 individuals.

Eventually, as originally planned in legislation appropriating $45 million in state funding for the purchase, Hale ʻO Lāʻie will be repurposed as a teacher and workforce rental housing project with public prekindergarten classroom space. Maui County will lease and take possession of the property next year. The county expects to begin the process of selecting a development partner later this year.

Upon closing, HHFDC entered into a 75-year ground lease with Maui County.

The complex was named Hale ʻO Lāʻie at the suggestion of Mayor Richard Bissen. The name recognizes the traditional name Hawaiians gave the region, Lāʻie, where the indigenous `ie`ie vine was once plentiful.

“Hale ʻO Lāʻie adds to Maui’s housing options at a critical time, fulfilling the immediate need for stability for fire survivors while eventually providing much-needed rental units for our residents, including teachers and other essential workers,” Bissen said.

“The fact that the property will be opening for occupancy within weeks is a tremendous advantage,” Bissen said. “We are grateful for the assistance in making this asset available to our community.”

HHFDC Executive Director Dean Minakami thanked the Legislature and Maui County for their support. “We strongly believe that the best housing projects come to fruition when we forge partnerships with other agencies and the private sector,” he said.

A phased opening of the property for Maui fire survivors is planned to begin by early May.

Gov. Josh Green said that the purchase marks a major milestone toward achieving the goal of ensuring near-term housing stability for Maui fire survivors to enable them to focus on rebuilding their lives. At the same time, he added, Hale ʻO Lāʻie will help to meet his long-term objective to add 10,000 affordable housing units for Hawaiʻi residents statewide.

“This transaction would not have been possible without the funding provided by state lawmakers,” Green said. “And I commend HHFDC, Mayor Bissen and his administration, and the Maui County Council for their collaboration on a housing initiative that makes sense both in the short and long terms.”

The $38 million purchase was made possible through funding appropriated last year by the Legislature. The HHFDC Board of Directors approved final transaction terms at its February meeting. The Maui County Council approved the intergovernmental agreement last week.