- Associated Press - Wednesday, January 15, 2014

HONOLULU (AP) - Honolulu officials were depending on the profits from an affordable housing deal but the buyer wants to delay paying the city.

The city was expecting the sale of 12 rental complexes to generate $20 million that would help balance the budget. But the Honolulu Star-Advertiser (https://ow.ly/sColn ) reported Wednesday the firm buying the properties is asking to defer payments until six months to a year after the March 31 closing date. City officials say the buyer is also asking for 20 more years to pay the rest.

City Managing Director Ember Shinn told the council’s Executive Matters and Legislative Affairs Committee the funds had been factored into the fiscal 2014 budget.

The deal was previously in jeopardy when buyer, Honolulu Affordable Housing Partners LLC, said lenders were balking at the $142 million transaction after the City Council introduced a bill to kill the sale.

“This raises more red flags for Council members concerning the buyer’s ability to obtain the financing necessary to close the transaction that we’re all concerned about,” said Councilman Ron Menor, chair of the committee.

The city will look at holding off scheduled payments to rainy day accounts as a way to fill the $20 million hole and will cut services only as a last resort, said City Budget Director Nelson Koyanagi.

Tenants in the complexes are worried about how the impending deal will affect rent prices, while some are hopeful there will be improvements if the sale goes through.


Information from: Honolulu Star-Advertiser, https://www.staradvertiser.com

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