(BIVN) – The landmark Manago Hotel will be converted into affordable workforce rental housing, and the hotel’s restaurant – known for its famous pork chops – will not be closing, under a County-funded proposal.

The County of Hawaiʻi on Thursday issued a joint statement on the future of the South Kona hotel, which in November was listed in connection with one of seven projects to be awarded $17.3 million via the Affordable Housing Production Program.

From the joint statement issued by the County of Hawaiʻi:

Mental Health Kokua (MHK), a nonprofit organization, was awarded a total amount of $5,500,000 in County of Hawaiʻi Affordable Housing Production Program funds to acquire Manago Hotel with 72 market units to be converted into affordable workforce rental housing.

The proposed project includes 67 studios, 2 one-bedroom, and 3 two-bedroom units. These units will be available to households earning no more than 140% of the AMI. The affordability period for these units will be in perpetuity.

The Manago Hotel is not closing at the end of the month, despite rumors circulating in the community, according to MHK CEO Greg Payton.

Upon acquisition, the Affordable Housing Production Program requires MHK to rent rooms to members of the workforce. MHK plans to transition the hotel to workforce housing while the units are occupied.

Additionally, the Manago Hotel restaurant will not be closing. According to Payton, the Manago family has graciously tentatively agreed to share their signature recipes, including their famous pork chops.

“Our plan is to provide much-needed workforce housing and to continue the legacy of the Manago restaurant,” said Payton.

Minor renovations to transition the hotel to workforce housing will commence after the close of sale. Updates on the project will be provided by MHK as they become available.

The County of Hawaiʻi Office of Housing and Community Development is currently finalizing grant agreements and environmental reviews for each of the projects, including the acquisition of Manago Hotel. Once grant agreements are executed in the next few months, funds will be released allowing the purchase to move forward.

Per the Administrative Rules developed for the program, activities funded to increase affordable housing units (e.g. design, acquisition, infrastructure, new construction) shall be obligated within one year and result in occupancy of affordable housing units within five years from the date the grant agreement is executed. An extension can be requested. Approval is at the discretion of the housing administrator.

The Affordable Housing Production Program was made possible through Ordinance 22-77, passed by the County Council in June 2022, and signed into law by Mayor Mitch Roth. The law appropriates a minimum of $5 million per year to the Office of Housing and Community Development to facilitate programs that support, increase, and sustain the supply of affordable rental and owner-occupied housing on Hawai’i Island.

Due to the time it took to develop and approve Administrative Rules and create the electronic application for the program, the appropriations from two fiscal years were combined into one Request for Proposal for Fiscal Year 2023-24. Future funding rounds will be for single fiscal year appropriations.

In total seven projects were selected to receive a share of over $17.3 million in funding via the Affordable Housing Production Program for Fiscal Year 2023-24. Click here to view the media release announcing the awarding of funds.

The County of Hawaiʻi Office of Housing and Community Development is responsible for the planning, administration, and operation of all County of Hawai’i housing programs. Our Mission is to provide for the development of viable communities through decent housing, suitable living environments and expanded economic opportunities.