Affordable Housing?  HB2328 Bethel Block Bill Secretly a Sweet Deal for Fullard-Leo Family

by Andrew Walden

HB2328, introduced by Speaker Scott Saiki at the request of former Governor Neil Abercrombie sells itself as an ‘affordable housing’ bill.  But it bypasses all normal procurement processes and fixates on three Oahu Tax Map Keys (TMKs)—together known as the ‘Bethel Block’-- and one price--$30M--to be paid by the Hawaii Public Housing Authority with money specifically allocated via HB2328.

Obviously this is an insider deal—the question is who benefits?

A look at each of the Oahu TMKs and DCCA BREG produces the answer:

(1)  TMK (1)2-1-3-8   (Last fee conveyance: 08/29/2017  $2,900,000—current tax valuation, $6,537,900, is under appeal before the Tax Appeal Court.   Owned by KAPL OR WB LLC which is managed by FL Management Corporation of Washington State which is owned by the Fullard-Leo family.  Last permitted improvement, 2011.)

(2)  TMK (1)2-1-3-9   (Last fee conveyance: 05/15/2007 $2,465,000—current tax valuation, $4,809,100, is under appeal before the Tax Appeal Court. .    Owned by Whitlow LLC which is managed by LVFL Holding LLC of Oregon which is owned by the Fullard-Leo family.  Last permitted improvement, 2013.)

(3)  TMK (1)2-1-3-10  (Last fee conveyance: 03/25/2003 for $2,823,200—current tax valuation, $10,172,200, is under appeal before the Tax Appeal Court.  Owned by 1149 Bethel Street Development, LLC which is managed by FL Management Corporation of Washington State which is owned by the Fullard-Leo family.  Last permitted improvement, 2022.)

So, not only is this an insider deal, but it is an insider deal directed secretly to one specific family.

The total of the three Fee Conveyance Prices: $8,188,200

The total of the three Current Tax Valuations: $21,519,200 (all under appeal)

This means the Fullard-Leo family, and their secret partners hidden in the LLC structures, will profit by a 71.7% premium;  $8,480,800 over the tax assessment value for the three properties.  The profit alone is more than they paid for the properties in the first place. 

Compared to the original purchase price, the profit would be 366% -- $21,811,800.

And who might those secret partners be?  We’ll never know, but in one recent article, a tenant of the Bethel Block, identified his landlord not as the Fullard-Leos but as prominent local attorney Bill Mc Corriston.

Meanwhile the HPHA, which has a long track record of affordable housing redevelopment failures, will be saddled with several decaying non-residential buildings in Chinatown.

On April 11 and 12 the House and Senate each submitted 'notice of disagreement' with the version of HB2328 approved by the other.  The next step would be a conference committee.  The bill can be killed if one chamber or the other refuses to appoint conferees.

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HB2328: Text, Status

2019:   Ebbtide Waikiki: Fullard-Leo Family Fights Pimps for Control of Hotel (literally)