 This is Think Tech Hawaii, Community Matters here. Aloha, it's Thursday at three o'clock and time for another Kondo Insider show. Hawaii's show about association living and our challenges. And I just want to remind everybody who's watching, first of all, thank you. And second, if you want to call our hotline with a question, it's area code 808-374-2014. Today we're going to be talking about our city council and all the things going on down there with regard to condominiums and safety issues, some of it promulgated by their recent fire at Marco Polo. And I'm very lucky to have with me one of my favorite people in Hawaii and one of my co-hosts on Kondo Insider, Jane Sugimura. It's good to have you here and see you again. Yes, thanks for having me back on the show. Just briefly remind everybody a little bit about who you are. And you actually had a very prominent story in the newspaper recently all about you and all the things you've done. And I've always said you're the godmother of associations in Honolulu. You seem to know everything about all associations and everybody involved. Just remind everybody a little bit about you. Well, it's probably because I've been around for so long. And I'm an attorney. And I'm a partner with Bendet Fidel Sugimura. And we do commercial litigation and real estate transactions. I represent commercial landlords. That's what I do mostly. And I've been president of the Hawaii Council of Community Associations for almost 20 years, I guess. And I've been an advocate for longer than that. And we've been advocating for the interests of condominiums and condominium association residents and boards for all of those years. And so we've been dealing with a myriad of issues. But today, we're talking about the city and county of Honolulu. Right. But we can say this, that Condu Insider is sponsored by the Hawaii Council of Community Associations. I mean, this doesn't come for free in the sense that we appreciate the nonprofit work of Think Tech Alive. But it costs money to put these shows on. And your association has been very generous in providing funds to provide education. Yes. And we feel that it's important because the reason these shows started was because we heard complaints by legislators that they got from their constituents that they couldn't go to the CAI or the Hawaii Council seminars. And so that's why we're doing these Think Tech Condu Insider shows. They're free and they're 28 minutes of really good, important information. And they can watch them anytime they want to so nobody has any excuse for not educating themselves about condo issues. Yeah, well, it's 24-7 on YouTube and we've had great feedback. We certainly would invite any of our viewers to send us an email if you have suggestions for shows or ideas for topics. Because every year in the legislature, we see efforts to make education mandatory for board members, which how do you feel about that? I think it's important and that's why we exist. I mean, that's one of our primary goals is to educate board members and people who live in condos about issues that relate to that. And I think that there are programs and resources available that provide that education. It's just that boards have to make themselves available. And I do that. I mean, at our seminars, we have the list of YouTube shows posted and they're on our website and we tell people to go and look at the YouTube shows, to come to our seminars, to go to our website and to, you know, and I think that's what we have to do. We have to just make sure that the resources are there so that people can go and use them. Do you think it should mandate education? I think mandating is hard because, you know, the people who serve on boards are volunteers and if they were required to go to, you know, take these classes, I'm pretty sure they probably wouldn't and then people would probably resign from the boards if that was gonna be a mandatory requirement. I do think that maybe that they should be required to take, you know, like an ABC seminar, like CAI has done in the past and what that is, it's an all day seminar that tells board members, basically new board members what they can expect and what is gonna be, what they're obligated under the state law and under their condo documents to do and to explain to them what their role is in, you know, being on the board. And I think that's important and I don't think I would really have a whole lot of opposition to something like that and they could do it either by going to a seminar like CAI, the ABC seminar, or in fact we have a YouTube show, right? In fact, we have a YouTube show on Condo Insider regarding what board members can do and if they can look at those YouTube videos, I think that that should qualify as to satisfy a requirement for education. So I think there are ways that you can do this where it wouldn't be onerous and people would still be able to serve on the board without a whole lot of additional time by trying to comply with mandatory provisions set out by the state. My general concern has been that one size doesn't fit all. You have 20 unit condos, five unit condos, 1,000 unit condos, you have parking condos, senior living condos, agricultural community condos and to try to legislate one educational program would only deter people from serving on the board. Yes, I agree. And probably very, very difficult to enforce. Yes. And that being said, I use my favorite expression, one size doesn't fit all. I've been doing this a long time like you have and I think I've seen more activity this year with our city council. We always had some activity here or there of the refuse pickup and some other things in the past but really we haven't seen much condo related stuff until we had the mega fire of Marco Polo and what I'm gonna call the mega railing problem of the Alamoana shopping center. And all of a sudden I now see a bunch of activity and thoughts of by the city council, almost one size fits all. And let's talk about a couple of those initiatives. Okay. Let's talk about Bill recently, I think introduced by Councilman Azala but there's been amendments proposed by other council members. Bill 17, which to me generated because of the unfortunate and sad death of the Alamoana shopping center when railings gave way. Yes, yes. So what is this bill about? What are they trying to do? The bill is, it requires all high rises, well anything over three stories. So I guess that would include some townhouses but three stories and over to have an inspection done of the exterior of the building. I think it's called a building envelope inspection. And that would mean for a high rise, dropping, doing scaffolding and doing drops from the top of the building all the way down and actually having people look at the building. And in the bill, it only says it can be done by a professional engineer. And that's one of our criticisms or concerns regarding Bill 17. And Bill 17 is a bill. That one size fits all. And we've been trying to educate the council that, you know, condos are different. They're, you know, all types of sizes of buildings, just like you said, with different types of uses. And you just can't do a one size fits all. And especially when there's a state law that requires condominiums to have, to comply with a budget and reserve law that says that you have a reserve study and that you will do certain repairs on a schedule. And that schedule would include doing a building envelope inspection. Every time you paint your building, which is done every seven to 10 years. I mean, you have to inspect the building because before you paint, if there are any spalling, any cracks in the concrete, that has to be repaired. And so before they can paint the building, they have to inspect the building to see if there are any cracks that have to be repaired. And as they do their inspection of the exterior building, and I know in my condo, when they do it, they check the lanais, and when they check the lanais, they check the railings to see if they're secure. And so this is, you know, and typically the buildings have to do this every seven to 10 years. And so our position on this bill is, if we are in fact doing it, why do we have to do it again? Well, how they can administer it? Does this bill propose that it be done for a building over a certain age every so many years? Right now it says it would apply to any building over 10 years old. And the original bill says five years, but I think the CD1, which is the proposed amendment, is talking about 10 years. So it would be done every 10 years. So this association would have to, and within every 10 years in theory, hire under the current bill an engineer, which is expensive, and put an engineer who's gonna be careful of the word inspection and the liability, he's gonna wanna drop scaffolding and drops and go look at the window, look at the railings. I mean, the railings are pretty easy to get to, but if that's too broad, the word inspection, everybody's gonna be concerned about liability and you're gonna be talking about a major expense for an association to do it. Right, and we're talking, and there was testimony at the last hearing about a building in town, 43 stories. And it's hundreds of thousands of dollars to do one of these building envelope inspections, because right now they're in the process of doing an inspection in connection with a paint job for the building, and it's gonna cost them hundreds of thousands of dollars, so let's assume that this bill's 17 passes. And so this downtown building, they've spent all this money and they've spent three months with the scaffolding and everything and doing the inspection. That means they have to turn around and hire another engineer to do the same thing and spend hundreds of thousands of dollars. That's just a terrible waste of money and it's a tremendous burden on the association. Oh, it's gonna be a miserable, expensive ordeal because as I see it, everybody's conservative for liability reasons. And so that engineer is gonna be ultra conservative and what really is the building envelope? Because to me what they're looking for is loose concrete and loose railings. Right. So much else you can argue is the part of a building envelope or not part of an envelope. So what you really are saying in this bill or what anything I think they're saying is they want someone to look at it as any loose concrete, which could have structural impact, and B, whether it's any loose railings. Right. And so why not just say that and why not, I'm asking you, why not just say that this should be done in conjunction with your regular maintenance of your painting? Well, after the last hearing, council member Fukunaga has asked for suggested revisions to her CD1. And one of the suggestions I made was you have to define building envelope inspection. What exactly are you requiring by this bill? And so that would then incorporate exactly what you've said. I mean, what are they looking at? They're only looking at the exterior walls and the railings to make sure that they're safe. And so that could be incorporated into the bill. We also want the definition of who can do this inspection to be expanded so that it includes more than a professional engineer because when the painting company comes to do their building envelope inspection prior to painting the building, it's not an engineer, it's a licensed contractor. And so, and one other thing that the really important thing that we want is we want to have buildings who are in compliance with the state requirement for a budget and reserves and they periodically do this building envelope inspection whether they're doing a paint job or they're putting in windows or doing something to the exterior of the building that would include a building envelope inspection. That they be allowed to file maybe a one page document saying we've done that and here's our paperwork. Here's our contract that shows exactly what was done signed by the licensed contractor. And here's the bill that we paid to show that we did it. And so we should be exempt from having the bill 17 inspection by a professional engineer. And those are some of the suggestions that we made to council member Fukunaga for to be made to this bill. That all makes sense to me. We're going to take a short break but before we do that I want to come back and talk about the residential fire safety advisory committee resulting from the fire. But my comment would be I'm working now with an association that has some theoretical spalling concrete issues. And what they've done is they've gone to a general contract who specializes in spalling who's doing all the investigation and inspection. They're not hiring an engineer to do it. It's too expensive. Right. And this is somewhat mundane. The repairs to this type of work are rather simplistic. They should be done for safety reasons but the building integrity reasons but it doesn't make much sense to me but let's take a little one minute break and come back and talk about the residential fire safety advisory committee. Welcome back to condo insider. We're having a great discussion with Jane Sugimura who's a local attorney and president of the Hawaii council of community association who sponsors this program. And I would encourage all of you board members and even owners who want to know more about our industry to join the Hawaii council of community association. It's open to everybody. I think if you're an individual not an association it's like $10 a year. It doesn't cost much money. We have a website with lots of information but you'll have a good source of knowledge from these shows as well as our seminars and know that we're out there trying to make sure legislation pass makes sense for an association. Well we talked about briefly this bill 17 and I certainly wouldn't tell everybody out there it's important that you speak up to your council members if you're in favor or against it because they will listen to their constituents from my experience and if you leave it just to a few hardened diehards like Jane and I you know it's much better to have the numbers when you go to the city council and have people support it. But after the Marco Polo fire we had a media bill put in mandating allegedly all non-sprinkler buildings all of them the 360 approximately had to retrofit their buildings in five years. And then there was another bill that passed the other one's still out there. Basically setting up a residential fire safety advisory committee. What is that? Who's a member of it? What's that all about? Okay the residential fire safety advisory committee is a group of city officials led by the fire department the fire chief is setting up he has set it up. And in fact and Hawaii council is a member and CAI is also I got a member on the panel and I believe the Hawaii association of realtors may have a member on the panel. But other than that everybody is a city official so we're kind of like outnumbered. The fire department is leading the panel and on it you have represented from the city budget and finance committee from department of planning and permitting the board of water supply. Even the mayor's office has a representative but I think when I counted it I think there were eight or nine city offices or city agencies represented and there's maybe two or three of us non-government people. Well on the surface I think you and I would both agree that we wanna thank all the first responders who handled all the fires we have or other types of events. They work hard, they put their lives at risk and we certainly wanna have the residents of building and the first responders as safe as we possibly can. Yes I totally agree with that. But the problem is you take buildings built 40 years ago and the building code was different. Even though they've given some wild estimates in the paper I don't think anyone really knows what it's gonna cost to retrofit these things. Right well there was another committee in 2005 after the first interstate, I think it was the first interstate bank building on South King Street. Had a big fire in the, there was a jewelry manufacturing facility on the top floor of that building and it was a fire. And I served on that committee as well and during that committee work when we were working with the fire department what we did is we volunteered because we went back and forth about the cost. And after a while I said you know our organization we have members we can give you buildings and your consultants can go in and actually look at the building and come up with an estimate. So we do have estimates for five buildings. One was a Marco Polo, one was my building Pearl One and we had a Royal Court right across from the Blaise and I can't remember the fourth one. But you know Marco Polo because it had almost 600 units they came in at like $3,000 per unit and that's an average. In my building it was 8.5 to 10,000 per unit. And you know the smaller you got I think Royal Court was almost 12 because they were smaller. They were like 160 unit mine was 300 and Marco Polo was 600. But that was 12 years ago. You know my perception of this is again what is retrofitting? If you're talking about having a warehouse environment you're just putting in the pipes that's one thing. There's not gonna be very aesthetic where the soffits that cover it and make it look like a home. But then you go into an older building as theoretically possible you're gonna have issues of remediation of asbestos. You may have remediation of lead paint which will probably triple or quadruple the cost. And the engineers that I have talked to on retrofitting of fire sprinkler systems in 2017 they're estimating average 25 to $50,000 a unit. I wouldn't be surprised if that were the case. I mean, now let's look at and I know this respect to our governor but he's done a good job of getting our air conditioning in our classrooms but by recollection they were talking six to 10,000 a classroom. That's more like 60 to $100,000 a classroom. We're in a difficult construction environment and if you looked at having a let's just say a $50,000 assessment on an owner you're talking $400, $500 a month additional and maintenance fees. So there's probably a lack of economic viability to some of that. Right, and the mayor's bill, I know he's doing it because he's concerned and I'm sure he's gotten a lot of calls about what are we gonna do, you need to do something. And so he came up with this idea but my concern about the mayor's bill it's a one size fits all and it calls for immediate retrofitting and there's not enough contractors in the state of Hawaii to do the retrofitting because you're talking about 18 to 24 months to do one building you're talking 360 buildings and the financing for this project is just something that's not gonna happen and I think the bill does not recognize that buildings are different. Buildings are different to people who live in them are different and that condos are a democracy and so it's not like you can mandate something and it's gonna happen immediately because practically speaking, the condo has to pay for it and in fact at the city council hearing one of the council members asked one of the speakers how much money does your condominium have set aside for retrofitting and of course that person was a unit owner and he didn't know but so when I came and was my turn to speak I said I have the answer to that the answer is zero, okay the answer is zero no condo has money for retrofitting because nobody has told us we have to do it and it's not in anybody's budget and so until it's in somebody's budget we're not gonna start saving money for it and that's the problem and if we don't have it in our budget that means we need to borrow it and in order to borrow it you need to get more than 50% of the owners to vote for the loan and in many buildings in Oahu you have more than 50% of your people living in places like China and Korea and Japan and so even if you wanted to do it it's really difficult to get the appropriate vote and very expensive and very expensive let me just share with you a thought I had I'm not saying that I'm right or wrong but they had the big fire in Dubai and it was like I have to get how many 20 stories were ruined it had a fire sprinkler system but the fire sprinkler system didn't put out the fire however they had a modern fire alarm system and no one got hurt it seems to me sprinklers protect property alarm systems protect people you can retrofit fire alarm systems to the modern code for a thousand to $2,000 unit there may be some exceptions based on engineering of a building but a thousand to $2,000 unit it seems to me that would make more sense as a process to focus on taking care of the people which is what alarms do and if you're an association you've given them new alarm system in place and maybe you've upgraded your fire doors in the exit stairwells to the new code they should maybe be given a pass because of the fact that it's just too expensive to try to do this fire retrofit you know something what you're talking what you have just described is what the city of Chicago did when they enacted an ordinance to deal with mandatory retrofitting after a horrific fire in downtown Chicago and it was the last in a series of fires where there were deaths and in this one there were six people who died and the city of Chicago decided to do mandatory retrofitting but they adopted a system called a life system evaluation and what they did the fire department went and they evaluated 220 buildings and they scored them in other words if you had an interior corridor with a dead end right so you couldn't get out that's a minus and so they had three categories one was structure one was equipment and one was programmed so they looked at the building because you can't change the building buildings are different you can't change it they're good or they're bad in Honolulu Marco Polo had an interior corridor and we were told that if you don't have an interior corridor and your entrances are on the outside that's a plus okay and so and so there and for equipment you have a super duper fire alarm system that's a plus if you have an old one that's a minus and for programs if you have an emergency evacuation system if you've got a 60% on our occupancy rate and everybody's on board and you're doing fire drills and everybody's aware you have fire extinguishers and you have all these things these are pluses we're down to our last minute so I'm going to ask you and are you optimistic that this committee will be able to address these issues? I think so because the chief said at the last hearing that he's talking about ranking buildings so it looks like he's looking at the Chicago system and that takes into account the differences in the buildings it allows buildings to so that there's a scoring system so some will have to do the mandatory retrofitting and some will not well no pun intended but this is a hot topic and I can tell you now that the industry is working hard to get the best results for all the association members and the boards we want to thank you for watching Condo Insider we hope you enjoyed today's show and thank you Jane for being here Aloha Thank you