“Fortunately we had been planning this before the fire, and it just happened to be that now these units are going to be coming on at a time when they’re going to be really, really needed,” said Chris Flaherty, co-managing general partner of ‘Ikenakea Development, the owner and developer of the project.

The $135 million Hale O Pi’ikea development will roll out in three stages. Phase 1 will include 90 units of one, two and three bedrooms in two four-story buildings. Five units will be for mobility-impaired residents, and two will be for hearing and vision-impaired residents. Phase 2 will feature 97 residential and commercial units, while Phase 3 will comprise 36 units in four additional buildings.

Located at the corner of Piikea Avenue and Liloa Drive in the southeast portion of the Kihei Downtown Project, the housing units will be open to to individuals, kupuna and families with incomes at or below 60 percent of the area median income. The first units are expected to be ready for residents to move in at the beginning of 2025, and the whole project is anticipated to be completed at the end of 2025, according to Flaherty.

The Kihei Downtown Project, which has been in the works for about two decades, originally called for 257,098 square feet of commercial and retail space for businesses and medical offices, shops, a movie theater and a parking structure, as well as a 150-room hotel. The plans were approved in 2014, according to Maui Planning Commission documents.

Maui County Mayor Richard Bissen speaks during Thursday morning’s blessing for Hale O Pi‘ikea in Kihei.

Last year developers went back to the commission to seek changes to the project. While plans still included the hotel, the movie theater was nixed and commercial space was downsized to 91,475 square feet, while affordable housing was added. The commission gave the updates the green light in October 2022.

Flaherty said developers made changes after hearing from the community and seeing a greater need in the market for housing than for commercial space.

“The consensus was ‘no need movie theater, no need more commercial, need more housing that’s affordable,'” he said. “And then listening to the community and going back to the community multiple times and showing them what housing could look like, we just felt as if that’s what it needed to be, that’s what the community wanted it to be, and the market really wanted it to be.”

Patti Tancayo, general partner of ‘Ikenakea Development, said that with the high cost of homes, down payments and closing costs, “homeownership is really out of the reach of most of us.”

“So the step that people need to take is to live in an affordable rental where there’s enough breathing room, where you’re not living paycheck to paycheck, so that you can save, you can correct your credit, you can spend your money on other things and take the time that you need to purchase a home,” Tancayo said. “Because to jump right into homeownership is unrealistic and it’s very hard to do.”

Gov. Josh Green expresses his commitment to affordable housing during Thursday morning’s blessing for Hale O Pi‘ikea in Kihei.

Tancayo, who was born and raised on Molokai and has ties to Maui, where her father and brother both served as fire battalion chiefs, said she was talking to a friend recently who asked if she could do more projects because rentals are so expensive and hard to find.

“There was an urgency before we started this project, but … it’s heightened now,” Tancayo said, reflecting on the impact of the fires. “Hopefully this project can provide some relief to some of the families over there.”

The Aug. 8 wildfires destroyed more than 2,000 structures in Lahaina and 19 homes Upcountry, displacing thousands of residents. In the initial weeks after the fire, nearly 8,000 people took temporary shelter in hotels and vacation rentals. State and county officials have tried to get people into more long-term housing, setting up a program to connect landlords with potential tenants, creating incentives for families who host displaced families and urging people to apply for federal rental assistance that can last for 18 months.

“The pressure, of course, is immense after the tragedy that we all have witnessed and we’ve watched as our hearts break in August,” Gov. Josh Green said at the groundbreaking and blessing ceremony on Thursday. “And of course we will recover. Of course in time people will come back and rebuild and Lahaina will someday flourish again. But it can’t unless we have a place to put our heads down.”

With housing advocates raising concerns over climbing rents due to tight supply and high demand after the fires, Flaherty said “the nice thing is the rents are already set” by Maui County and federal guidelines, “which is good for the community. It’s good for housing. And we can make it work from our financial projections at the current financial level that we’ve committed to.”

“Even though there’s a greater need, this is going to be really affordable for those making 60 percent AMI and below,” Flaherty said.

Hale O Pi’ikea also will include a community resource center, shared laundry facilities, a computer lab, an exercise room, community gardens, an outdoor picnic space and on-site parking with secured bicycle parking stalls.

Maui County Mayor Richard Bissen credited “a lot of people that came before us” for making the project a reality — past administrations, the state housing agency, the Maui County Council — and said that the groundbreaking was about more than the first 90 units of the project.

“We’re talking about building a community,” he said. “That’s what it’s really about. Every time a structure is built, we don’t look at it as a structure, we look at it as a community expanding, providing for those that are in need.”

* Colleen Uechi can be reached at cuechi@mauinews.com.