This letter from the City and County of Honolulu to the U.S. Department of Housing and Urban Development (HUD) provides an update on efforts to resolve open monitoring findings relating to the City's Community Development Block Grant program and ORIAH's Aloha Gardens Project. While HUD proposed that the City repay certain amounts to resolve the findings, ORIAH has refused to agree to or provide an alternative to the proposal. Without ORIAH's participation, the City cannot commit to the repayment. The City regrets that the next step may be an enforcement referral by HUD.

1. OFFICE OF THE MAYOR
CITY AND COUNTY OF HONOLULU
530 SOUTH KING STREET, ROOM 300 • HONOLULU, HAWAII 96813
PHONE: (8Q8) 768-4141 • FAX: (808) 768-4242 • INTERNET: www.honolulu.qov
EMBER LEE SHINN
MANAGING DIRECTOR
KIRK CALDWELL
MAYOR
GEORGETTE T. DEEMER
DEPUTY MANAGING DIRECTOR
February 7, 2014
VIA HAND DELIVERY AND EMAIL
Mr. Mark A. Chandler, Director
U. S. Department of Housing and Urban Development
Honolulu Field Office Region IX
1132 Bishop Street, Suite 1400
Honolulu, Hawaii 96813-4918
—
Dear Mr. Chandler:
SUBJECT:
On-Site Program Monitoring
Community Development Block Grant (CDBG) Program
April 1 1-25, 201 1 and May 2013 and September 27, 2013
Follow-ups
The purpose of this letter is to provide you with an update on the efforts made by
the City and County of Honolulu (the “City”) to resolve open monitoring findings and
concerns relating to the City’s Community Development Block Grant (“CDBG”) program
as it pertains to ORI Anuenue Hale, Inc. (“ORIAH”) and ORIAH’s Aloha Gardens
Project.
First, the City would like once again to express its appreciation of your
willingness, on behalf of HUD, to consider our earlier responses and proposals and to
put together a counterproposal. We also appreciate the patience you have shown while
we have attempted to negotiate a resolution with ORIAH. We understand and respect
HUD’s position that the resolution of the open monitoring findings and concerns is
technically a matter between HUD and the City but, as previously noted, from the City’s
perspective and as a matter of good public and fiscal policy, this matter cannot be
settled without the participation of ORIAH.
The City continues to strongly believe that a resolution along the lines you
proposed would be most beneficial to ORIAH, the City, HUD and the taxpayers and
citizens of Honolulu, As stated in the City’s letter of October 18, 2013, the City believes
that the counterproposal in your letter dated September 27, 2013, to the effect that the
City would commit to repay HUD the amounts of $2,883,426 to resolve Findings No. I

2. Mr. Mark A. Chandler
February 7, 2014
Page 2
through 4, and $26,000 to resolve Finding No. 5, is reasonable. We believe it provides
the best opportunity to achieve CDBG program compliance at ORIAH’s Wellness
Center, while allowing the City and ORIAH time to develop a separate, workable
solution for Camp Pineapple.
Unfortunately, despite HUD’s efforts and significant efforts by the City since last
Fall to reach an acceptable resolution with ORIAH, ORIAH has refused to respond to
HUD’s and the City’s proposal or to provide any reasonable alternative. Without
ORIAH’s agreement to contribute to the payment that the City would be required to pay
to HUD, and without ORIAH’s agreement to subdivide its property to effect the
resolution, the City cannotcommitto pay HUD. Further, the Citywould be unable to
implement HUD’s counterproposal because absent subdivision of the property, the
entire property would remain subject to monitoring, and not just the Wellness Center.
The City regrets that the next step in HUD’s process may be referral of this
matter for enforcement. Again, thank you for your considerable time and effort.
Very truly yours,
Ember Lee Shinn
Managing Director
cc:
Nelson H. Koyanagi, Jr., Director, Department of Budget and Fiscal Services
Pamela A. Witty-Oakland, Director, Department of Community Services
Donna Y. L. Leong, Corporation Counsel, Department of the Corporation Counsel