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The Honolulu Advertiser
Posted on: Monday, March 22, 2010

State reviving plan for Lahaina homes

by Andrew Gomes
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser
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A state agency is reviving a 20-year-old plan to develop a mix of affordable and market-priced homes on 1,033 acres of ceded land in Lahaina, Maui.

The Hawai'i Housing Finance and Development Corp. is preparing an environmental impact statement for the project it envisions for roughly 3,000 to 4,000 homes.

Under the plan, a private developer will be solicited to build the homes, some of which would be for rent and some for sale either as fee simple or leasehold property.

The project, called Villages of Leiali'i, is a somewhat trimmed-down version of a plan the agency's predecessor obtained approval for in 1990 before a legal challenge over selling ceded lands blocked the start of home construction.

The updated version of Leiali'i is in an early stage. The agency updated the project's master plan in December, but anticipates it could be two years before it issues a request for proposals from developers interested in building the subdivision.

A Hawai'i Housing Finance statement said Leiali'i would provide much-needed workforce housing in West Maui where residents have "tremendous difficulty" finding affordable homes in an area where development is largely driven by resort projects.

"The demand for reasonably priced residential units in West Maui is at a critical stage," the agency said in its environmental impact statement preparation notice.

Hawai'i Housing Finance said at least half the homes will be affordable to low- and moderate-income households, though the range of prices won't be determined until a developer is selected.

The prior version of Leiali'i called for 3,800 to 4,800 homes, a public golf course, commercial space and parks developed on former sugarcane land owned by the state.

A predecessor to Hawai'i Housing Finance called the Housing and Community Development Corp. of Hawai'i obtained approval from the state Land Use Commission to convert the agriculture land for residential use, and in the early 1990s developed some of the infrastructure for the project, including roads and sewer and water systems at a cost of about $20 million.

In 1993, an affiliate of C. Brewer Homes was selected to develop an initial phase with 320 affordable homes and 210 market homes. Presales for the first 20 affordable homes and 83 market homes were completed in mid-1994. But the Office of Hawaiian Affairs sued to block the state from selling ceded land at Leiali'i and another affordable housing project on the Big Island called La'i'opua.

Ceded land refers to nearly 2 million acres of former Hawaiian crown and government lands transferred to the state under the 1959 Admission Act, to be held in trust for public benefits, including improving the lot of Native Hawaiians.

Though OHA was entitled to 20 percent of sale proceeds from ceded land, the agency objected to the valuation of the land and whether the state should be allowed to sell such property.

OHA's challenge initially was defeated in state Circuit Court. But the Hawai'i Supreme Court overturned the lower court's decision in 2008 and said claims of Native Hawaiians had to be resolved before ceded land could be sold.

Then last year, the U.S. Supreme Court reversed the judgment of the Hawai'i Supreme Court, which prompted the Legislature and Gov. Linda Lingle to pass a law that requires a two-thirds approval from the Legislature to convey ceded land to any third party.

Hawai'i Housing Finance said it will comply with the law either by leasing the land under Leiali'i to homebuyers or obtaining approval to sell the land.

The property, which is adjacent to the town of Lahaina and is near Lahainaluna High School, borders the Wahikuli and Kelawea subdivisions, and is bisected by a strip of land envisioned for a future Lahaina bypass highway that would expand local and regional access in West Maui.

The agency is considering three versions of Leiali'i that differ primarily on the number and types of homes in the plan. One version calls for 2,923 homes, of which 2,135 would be single-family homes and 788 would be multi-family units. That plan also calls for about 550,000 square feet of retail and office space, and 17 acres for a light industrial park.

A second version calls for 4,043 homes, of which 1,522 would be single-family homes and 2,521 would be multi-family units. Retail, office and light industrial space would be the same.

The most dense version of the plan calls for 4,105 homes, of which 1,386 would be single-family homes and 2,719 would be multi-family units. There would be about 600,000 square feet of retail and office space, and 22 acres for light industrial use.

None of the three plans include a golf course. All three versions include two elementary schools with adjacent neighborhood parks, and natural preserves around archaeological sites.