Workforce Housing Project At Historic Big Island Hotel Falls Through
The Manago Hotel was slated to become an affordable housing site but now it’s back on the market.
The $5.5 million deal for the nonprofit Mental Health Kokua to use county funds to buy the historic Manago Hotel and turn it into affordable housing is off the table.
The purchase agreement, announced by the county on Jan. 18, recently fell through for undisclosed reasons. Now, the hotel in Captain Cook is for sale with a listing price of $7.5 million.
Greg Payton, chief executive of , said he’s baffled by what happened.
“They discontinued the negotiation and they put the property back on the market for a higher resale value,” Payton said Wednesday. “That’s as much as I know.”
A call and email to owner Dwight Manago was not returned. His attorney Robert Yamauchi said by email Wednesday that “despite the sincere and good faith efforts of, and negotiations between, Mental Health Kokua and Manago Hotel Inc., the parties were not able to finalize a purchase agreement for MHK鈥檚 acquisition of the Manago Hotel property.”
Payton had planned to convert the Manago, which was built in 1917, into 67 studios, two one-bedroom units and three two-bedroom units for people earning less than 140% of area median income. The plan was to use the units for people who work in the nonprofit sector who struggle to afford market rents in the Kailua-Kona area of West Hawaii.
“We thought it was a done deal. Then everything changed,” Payton said.
Susan Kunz, administrator of the county’s Office of Housing and Community Development, said she was aware the deal fell through but wasn’t privy to the details.
“OHCD, as the funding agency, does not participate in the negotiations between the parties involved. Please contact MHK or the seller for additional information,” Kunz said in an email provided by a public information officer.
The $5.5 million remains with the .
“Due to the absence of a finalized purchase agreement between MHK and the property owner, the execution of the AHP Program Grant Agreement did not occur, resulting in no funds being released to MHK,” Kunz said.
The Manago Hotel project was the announced last year by Hawaii County.
Puna resident Vanessa Floyd, who has stayed in the Manago Hotel, was disappointed to learn that the workforce housing deal fell through.
“I care about moving forward with solving our housing crisis. When this money was released in January and I read about it, I thought it was one of the better projects I had heard of,” Floyd said. “Knowing the historic significance of the Manago, I thought, ‘This is perfect.'”
Floyd, 57, gets by on disability payments. She said she knows from first-hand experience how critical the need is for more affordable housing on the island.
The district where she lives is Hawaii’s fastest-growing region and with more people moving in, rents and home prices are continuing to climb, pushing more people to the edge of homelessness, she said.
