The owners of the Kukui Gardens affordable rental complex marketed the redevelopment potential of the downtown project, saying a buyer could build 10-story towers, parking garages and small grocery stores.

But the owner, the Kukui Gardens Corp., says the buyer of the project has agreed to not redevelop the 857-unit apartment project and plans on operating the property the same way it is currently being run.

An offering memorandum by Kukui Gardens broker CB Richard Ellis said the property presents "an unparalleled opportunity to develop over 21 acres of land in prime downtown Honolulu" for a "secluded new residential community."

The memo, obtained by The Advertiser yesterday, also states that investors can redevelop the property with several 10-story apartment buildings and thousands of parking stalls — features that tenants fear will lead to their displacement.

"This means that (tenants) are in for a hard time if this purchase goes through," said the Rev. Bob Nakata, a former state legislator and advocate for the homeless. "This confirms our sense that they are going for the big bucks."

Nakata is among the hundreds of community leaders and Kukui Gardens tenants who have opposed the sale of the complex and who have urged state and city lawmakers to condemn the property to keep it affordable.

The 36-year-old apartment complex charges tenants between $444 and $1,100 a month for one- to four-bedroom units. It houses about 2,500 residents.

Kukui Gardens Corp. built the project using funding from the U.S. Department of Housing and Urban Development. In exchange for the HUD financing, the owner agreed to keep the units affordable until 2011.

Steve Gilley, Kukui Gardens Corp.'s broker, said the owners are on the verge of completing the sale to a buyer, whom he declined to identify.

Gilley and Kukui Gardens Corp. president Lawrence Ching said the buyers have agreed to not redevelop the property, in a move they say is costing the sellers tens of millions in potential profits.

Gilley said the buyers have a great deal of experience in managing affordable properties like Kukui Gardens and are willing to meet with tenants to discuss the long-term options beyond 2011 when the HUD affordability requirements expire.

But Buck Bagot, a San Francisco-based affordable housing expert who is working with the tenants, questioned the buyer's commitment since the sales agreement does not include a covenant calling for the property to remain affordable after 2011.

Bagot said a representative at CB Richard Ellis told him that Kukui Garden Corp. was seeking $100 million to $130 million, which would make it too costly to operate the property as an affordable project.

"Unless you have covenants, all bets are off after 2011," he said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.