The bishop of the Catholic Diocese of Honolulu has asked the owners of Kukui Gardens to reconsider their decision to sell the affordable housing project to a California developer.

The owners are selling the 857-unit project near Chinatown to San Francisco-based Carmel Partners for about $130 million, in a deal tenants say will displace hundreds of low-income residents.

The sale was intended to benefit three Catholic institutions in Hawai'i — St. Francis Healthcare System, Chaminade University and Saint Louis School.

In an Oct. 26 letter obtained by The Advertiser, Bishop Larry Silva said selling Kukui Gardens to Carmel has led to a perception that "the church is more interested in gaining financial benefit for itself than in being a champion for the rights of the poor."

"I urge you to reconsider your decision to sell Kukui Gardens to Carmel Properties," the bishop wrote. "The moral imperative of reconsidering this sale is the highest priority."

When asked to respond to Silva's letter, the Kukui Gardens Corp. board issued a statement saying it will continue the process required to sell the property to Carmel. Carmel officials could not be reached for comment late yesterday.

BISHOP PRAISED

Meanwhile, tenant advocates praised Silva for his stance and said it gave them hope that the apartments would remain affordable.

Carol Anzai, a Kukui Gardens resident for 33 years and head of its tenant association, said she appreciates the bishop's support.

"I believe that it's going to help," Anzai said. "I think that with the governor helping us and now with the bishop helping us, I think we're in a very good position. I'm so hopeful now, more than ever."

Gov. Linda Lingle told a meeting of the tenants last week that she would take legal action against the federal Department of Housing and Urban Development — which put up the money to build the project and continues to have a say in its use — if HUD approved the process that could lead to the sale to Carmel. Lingle also has been given the authority by the Legislature to use the state's condemnation powers to acquire Kukui Gardens, which the governor said would be her "last choice."

Drew Astolfi, lead organizer for the nonprofit activist group Faith Action for Community Equity, or FACE, also praised Silva for getting involved.

"When he was in Oakland (as vicar general), he was a leader in affordable housing there, and he's poised to be a leader here in Honolulu as well in affordable housing issues," Astolfi said. "With his help, we're confident that the homes of these people can be saved."

LETTER TO THE BOARD

Silva's letter was addressed to the Kukui Garden board members who also serve for Catholic organizations: Eugene Tiwanak, president of St. Francis Healthcare Foundation; Sister Beatrice Tom, acting chief executive officer of St. Francis Healthcare System; Sue Wesselkamper, president of Chaminade University; and Brothers John Campbell and Robert Hoppe of The Marianist Center, which operates Saint Louis School and Chaminade.

Silva said neither he nor the Catholic Diocese has jurisdiction over Kukui Gardens Corp. or the Clarence T.C. Ching Foundation, a beneficiary of the project. Silva also said the diocese has no role in the operations of the Catholic organizations represented on the Kukui Gardens board.

But Silva said in the letter that the controversy surrounding the potential sale of Kukui Gardens to Carmel has generated negative publicity for the diocese that "has not been welcome." Silva also said he was concerned that the sale would displace many of the 2,500 tenants "in an environment in which affordable housing is in critically short supply."

Critics of the sale believe Carmel will redevelop the 22-acre site and build units that current tenants would not be able to afford.

"I think all of us would benefit if the Kukui Gardens board demonstrated to the community that it truly is committed to serving the poor and the common good," Silva wrote, "and that the board is willing to reconsider its decision when it is presented with compelling reasons and new options."

ANOTHER OFFER

Silva said when he read in an Advertiser article on Oct. 26 that there was a group interested in purchasing Kukui Gardens and preserving it as affordable housing, he decided to ask the board to reconsider the sale to Carmel.

He said he was not previously aware of the offer by Chan U. Lee, a senior associate with San Francisco-based affordable housing developer Devine & Gong Inc.

"Now, however, such an offer is on the table. In light of this new development, I urge you to reconsider your decision to sell Kukui Gardens to Carmel Partners," Silva wrote.

"That's the first I heard of it. I'm not aware of it at all," Gilley said. He deferred further comment to Carmel officials, who could not be reached.

Kukui Gardens spokesman Keith DeMello issued a statement yesterday on behalf of board, which said it will move ahead with the sale.

"Kukui Gardens will continue to seek pre-payment to pay off existing loans (a necessary step if they are to sell the property to Carmel). The pre-payment proposal includes a use agreement that, if approved, will ensure that Kukui Gardens stays under HUD oversight until May 2011," the statement said.

The statement acknowledged Silva's involvement but made no mention of how his letter would affect the board's decision.

"Like Bishop Silva, Kukui Gardens also believes that the best interests of the tenants and the common good of the community are best served by the values of clarity and charity," the statement read. "We will continue to promote the dissemination of accurate information and respectful discussion as all segments of the community work together toward the best possible outcome for Kukui Gardens and its tenants."