KANE'OHE — The state last night said it wants to acquire 10 homes in the Kahelelani subdivision and use the land for a flood-control basin, shocking homeowners at an information meeting at Kane'ohe District Park.

The state would buy the homes — on Kupohu Street and Pilina Way — either through a negotiated purchase or, if necessary, via condemnation.

Flooding has been a problem in the Kahelelani subdivision since the 1980s after the construction of Castle Hills subdivision, which sits between Likelike Highway and Hawai'i State Hospital, and above Kahelelani.

For years residents have been asking the city and state to come up with a solution. In 2003 the state proposed lining the stream with rock-filled mesh containers called gabions, and U.S. Sen. Daniel Inouye promised to get federal transportation money to build a bypass drainage.

Residents last night said they thought they were going to hear an update on the projects. Instead they learned the state plans to purchase their homes to build a collection basin that will collect, then slowly release, floodwaters through a city culvert.

"It's just a shock," said Owen Goya, who owns one of the properties the state wants to acquire. "We came here and find out we're going to have to move."

Curtis Harada, another whose home the state wants, said: "The emotional part of it is you're breaking up a neighborhood. We all know each other and you're asking us probably at the worst possible time to be looking for replacement property in terms of the value, and it's stressful. Whatever amount of money you come up with I'm sure that it's never going to compensate people for the displacement."

Glenn Yasui, state highways administrator, said the state has programs to compensate people over and above the purchase price of the home and that the state will hold a workshop to help residents learn more about the process.

Residents also learned that the basin isn't going to solve all the seepage problems that have cracked foundations, undermined homes and weakened walls in other areas of the subdivision.

"As far as groundwater in your subdivision, we don't anticipate any improvement," said Russell Arakaki of consultant Park Engineering. "The basin will not reduce the seepage."

The basin was chosen over a concrete-lined channel that would cost more than $10 million. Other options were rejected by the city, which will eventually inherit the project and have to maintain it. The basin is estimated to cost about $3 million, not including the cost of acquiring the 10 homes.

Yasui said land acquisition could begin soon and be completed by next summer.

Residents also learned that the city's bypass project is progressing and could reduce flooding in the lower parts of the subdivision.

Prior to the Castle Hills construction, water flowed away from Kahelelani and there was never any flooding, area residents have said. Construction at Castle Hills included filling the land to levels above Kahelelani. Now water from the mountain, Castle Hills and the surrounding lands channel to Kahelelani and into the west branch of Kapunahala Stream.

The state built a 20-foot-wide, 10-foot-high concrete culvert to handle the flow in the stream at Po'okela Street but the water bottlenecks down to a 4-by-6-foot culvert owned by the city. During torrential rains the water backs up, flooding surrounding properties and eroding the land.

Richard Nakamoto, a Kahelelani resident, said the street that his son's home is on had a sinkhole, caused by seepage, that was at least 3 feet deep. The city filled the hole with concrete but now his son's driveway slab lifts when the city's trash trucks are in the area.

"In other words, it's like hollow under there," Nakamoto said.

His neighbors, the Laus, have a 4-by-4 post under their bed to cover the tilt in the house caused by erosion, he said. Their house is sinking, Nakamoto said.

Kahelelani is a 38-year-old community with single-wall homes and a mixture of retirees and young families.

Lawsuits and settlements against the state brought little relief for residents, who have been promised solutions on several occasions.

Reach Eloise Aguiar at eaguiar@honoluluadvertiser.com.