Community worries about state's possible acquisition of 'Bethel Block'

Apr. 8—Some Chinatown community members around Fort Street Mall—including Jasmine Mancos, a co-owner of Proof Social Club—worry that House Bill 2328 may not create affordable housing as intended and could end up replacing local businesses that cater to marginalized people.

Some Chinatown community members around Fort Street Mall—including Jasmine Mancos, a co-owner of Proof Social Club—worry that House Bill 2328 may not create affordable housing as intended and could end up replacing local businesses that cater to marginalized people.

After Hawaii Pacific University moved out of Fort Street Mall to Aloha Tower Market Place, HB 2328 would allow the state to acquire "Bethel Block "—the Ohia Building, the Blaisdell Building and the Whitlow Building that sit between Bethel Street, Pauahi Street, Fort Street and Chaplain Lane—to "faci ­litate the growth of the State's inventory of affordable housing units, " according to the bill.

The latest version of HB 2328 would allow the Hawaii Housing Finance and Development Corp. to convert existing commercial spaces in the buildings to residential use.

The bill originally tasked the Hawaii Public Housing Authority with purchasing and renovating the buildings, but the latest version puts the HHFDC in charge. It passed out of the Senate Ways and Means Committee on Thursday.

Mancos worries that the bill also will put Proof Social Club out of business.

"We just made it through the pandemic, " she said. "It was the hardest thing that our industry has ever dealt with. So to have something like this come in and this is how we lose the bar, is beyond frustrating."

Mancos said she agrees with the intent of the bill to create more affordable housing throughout the state, but thinks that it's the "wrong idea " for Bethel Block.

The bill was introduced by House Speaker Scott Saiki by request of former Gov. Neil Abercrombie, who told the Honolulu Star-Advertiser on Friday "the idea that small businesses in the various buildings are being replaced is complete nonsense."

Abercrombie previously testified in a February hearing that creating more affordable housing in the area is "much needed."

"I can't think of, nor is it possible to find, an opportunity like this, " Abercrombie said.

Abercrombie said the measure would offer an "exceptional opportunity to create literally dozens of units at a fraction of the cost of a standard development, resulting in "a rejuvenated community which will revitalize the Fort Street Mall area and spark a rebirth of urban life."

"It will be a crown jewel in the inventory of truly affordable rental housing so desperately needed today in Hawaii, " Abercrombie said.

Dozens of people have testified against the bill, saying that it would destroy historic landmarks, cost hundreds of workers their jobs and infringe on safe spaces for the LGBTQ + communities.

The Blaisdell Building was built in 1912 and Mancos said that there's "a lot of important history that happened here."

Mancos acquired Proof Social Club in January 2020 and said that the location has always been a bar since the Blaisdell Hotel was built—it was previously known as Proof Public House, Mercury Bar, Mangoes and Eagles Cafe, Mancos said.

"This location had the first liquor license issued in Hawaii, " she said. "The ACLU and the gay community center both had their offices upstairs."

The area consists of other businesses such as J. Dolan's, a pub that serves pizza and drinks, and Scarlet Honolulu, a nightclub known for its drag shows.

"Young people of marginalized groups, LGBTQ +, have tried to build these communities that accept everybody, " said Louis Miller, co-owner and manager of Proof Social Club. "When it comes to times like this, it feels like the state doesn't care at all."

Miller, who lives across from the Blaisdell Building, said it would be "disheartening " to have another safe space disappear from Honolulu.

Patricia Jette, a low-income resident, submitted written testimony opposing HB 2328 and said despite being categorized as "affordable, " housing options are still too expensive.

"As a regular patron of local businesses including Proof Social, J. Dolan's, and Scarlett Nightclub, " Jette wrote, "I believe this bill seriously threatens their longevity, and the character and community of that neighborhood.

"It will take away beloved establishments that give me joy in the midst of the stress of affording to live here."

State Rep. Daniel Holt (D, Sand Island-Iwilei-Chinatown ) said he doesn't think the intent of the measure will hurt businesses.

To create affordable housing would just require the refurbishing of the higher floors, which would not displace existing tenants, Holt said.

"In my view, that's a good thing because since HPU has moved out of Fort Street Mall, it's kind of been a ghost town, " Holt said. "So to have more residents in the area would actually benefit the businesses and increase clientele."

Abercrombie also said that creating more affordable housing in the area will increase the number of businesses, instead of dislocating them.

"Why on earth would you establish dozens, if not, hundreds of affordable rental units and not want service retail available ?" he said.

Abercrombie said those who oppose the bill are only interested in "pretending the status quo can go on forever while the buildings deteriorate and Chinatown community living with affordable rental units is shoved aside."

"There simply is no other combination of property and buildings virtually anywhere in Honolulu that offers the possibilities for affordable housing units that Bethel Street block does, " he said.

However, tenants like Miller called similar perspectives "completely unreasonable."

"It's really hard to believe that our businesses would be unaffected with all the construction going on, " he said.

During renovations, some owners may have to temporarily close and may not survive, Miller said.

Upstairs spaces, according to Miller, are mostly used for art and music studios.

The building also has communal bathrooms on each floor, and tenants like Miller and Mancos are concerned that plumbing and piping issues will be a problem during the renovation.

"Just knowing the state of what the upstairs looks like, the amount of money that the state's going have to throw in to try and make those spaces livable up to 2024 standards is not feasible, " Miller said.

Tiffany Mullaney, a former Proof Social Club employee, said she worries about the logistics of redeveloping the Blaisdell Building.

"As far as I know, the upper studios lack plumbing, which would likely need to be addressed to meet code standards, especially if the government is involved, " Mullaney told the Star-Advertiser. "Considering the building's age, I suspect the upgrades could end up costing much more than the representatives have estimated."

She said that if costs increase during renovation, it could result in fewer affordable housing options for future tenants.

"This might impact the community by potentially raising rents, leading to gentrification and changing the area's character, " Mullaney said.

Mullaney said a thorough study of the building's condition and potential risks, with input from the community, must be conducted.

"To my understanding that has not been done, but if it has, then I feel like the community that this bill is impacting is not aware of it, " Mullaney said.

J. Dolan's owner Danny Dolan said the bill has been quickly moving through the Legislature without input from the community.

"Nobody's been transparent, " Dolan said. "Not my landlord, not the Rep., no one came to us and asked or talked to us at all."

Mancos also said she's frustrated that the bill has been "whipping through committee super quickly and there's still no effective date."

"So we're all kind of on a string here, not knowing if this is effective next year, five years, 10 years, " she said.

After the bill pivoted responsibility for the project from the Hawaii Public Housing Authority to the Hawaii Housing Finance and Development Corp., HHFDC told the Star-Advertiser through a spokesperson that it "had not had the time to fully explore the proposal."

A Senate amendment blanked out the $30 million appropriation included in HB 2328's original draft and HHFDC Executive Director Dean Minakami wrote in testimony that it's "unclear whether $30 million would be sufficient to undertake the project."

"We estimate that due diligence and acquisition costs for legal services, property condition assessment, environmental site assessment, survey work, title insurance, and the like would cost up to $750, 000, " Minakami wrote. "A contingency of $250, 000 should be allowed for asset and property management services that may be required from the time of acquisition until full-scale renovations are underway."

Mancos said that considering all the logistics, including the aging building's conditions, it would be an entire teardown instead of a conversion of units.

"To come in and drop affordable housing—which will it even be affordable ?—just seems like it's the wrong idea, " she told the Star-Advertiser.