Partially finished homes are gone

Fredco and Menehune are both owned by Big Island developer FredYamashiro, who has filed for personal bankruptcy. Yonenaka said hedoes not know how much the collapse of the two companies has costHawaiian Homes, but acknowledged the dozen Kaumana homes alone wereworth more than $1 million in materials and labor. Hawaiian Homes is suing O'ahu construction bonding company Hardware Hawaii, alleging the company was responsible for completing 79homes for Native Hawaiians on three islands in the event Fredco andMenehune failed. Hardware Hawaii notified Hawaiian Homes on Feb. 22it did not have the money to complete the homes, according to thelawsuit. Lloyd Yonenaka, spokesman for the Department of Hawaiian HomesLands, said the houses were contaminated with mold from sittingvacant and open for so long. The lessees were offered the choice ofhaving the mold cleaned out or tearing the buildings down andstarting over, and all chose to start over, he said. Julia Ke, whose unfinished three-bedroom house was among those torndown, said she couldn't bear to watch the demolition crews work. "I refused to go, I just didn't want to go and see it," she said."It's just so sad." Ke has been on the Hawaiian Homes list for more than 20 years, andwas finally awarded a Kaumana lot where she was building the homewith her longtime girlfriend, Laura Henderson. "It was the happiest day of my life when we were selected, and tohave this happen is just terrible," Ke said. The couple had expected to move into the new home by late lastyear, but all work on the house stopped in November after builderFredco Inc. and developer Menehune Development Co. ran intofinancial difficulties, and eventually went bankrupt. Much of the structural work on Ke and Henderson's house was done,but the unfinished roof consisted of bare sheets of plywood andother lumber, and water poured in all winter. Water ponded on thefloor and stayed there, the floor warped, and the unfinished roofbegan to sag. Now, the lot in Kaumana has been cleared, and a new contractor ispreparing to start over. Yonenaka said it was urgent that construction resume on the Kaumanahomes after the bankruptcy so the units would not be furtherdamaged by the weather, but said delays by Hardware Hawaii madethat impossible. The state will try to recoup losses from thebonding company, he said. "While there is money that is being expended, the final amount willdepend obviously in great part on our litigation with HardwareHawaii," he said. Yonenaka said the department expects the demolition of the 12unfinished homes will cost about $300,000. Six of the homes weremore than half finished, and the other six were 15 to 20 percentfinished, he said. a promise to lessees Hawaiian Homes Commission Chairman Micah Kane has said the agencyhas an obligation to the lessees because Hawaiian Homes requiredthe lessees to use Fredco as their contractor in an effort tocreate economies of scale for the development of the homes onscattered lots on Kaua'i, Lana'i and the Big Island. Yamashiro's companies were supposed to develop 133 houses,including 79 bonded by Hardware Hawaii. Kane has pledged to make sure the bonded homes are properlycompleted for the original prices the lessees agreed to in theircontracts with Fredco, which had base prices ranging from $160,000to $260,000. To make that happen, Hawaiian Homes has taken some extraordinarysteps, including providing a total of about $100,000 in cashassistance to lessees on the three islands who encounteredfinancing hardships because they were forced to pay extra costswhen completion of their homes was delayed. Later the department approached the lessees' banks and bought 43construction loans on the bonded units for $4.38 million so thelessees would not have to make mortgage payments while they waitedfor their homes to be finished. The department plans to shift thoseloans back to private banks later. Henderson said Hawaiian Homes also repaid Ke for the interest shepaid on the construction loan on the unfinished Kaumana house thatwas torn down. Now, the department has pledged to rebuild the demolished housesfor the same prices the lessees originally agreed to pay, which forKe and Henderson was about $170,000. "I think they're doing everything possible to make it pono foreveryone," Henderson said. "I think that's the right thing, becauseI don't think any of us can take much more."