A state agency yesterday helped advance a plan by the Office of Hawaiian Affairs to build a cultural center and office headquarters on public land along the Kaka'ako waterfront.

The Hawai'i Community Development Authority board agreed to exclusively negotiate terms to lease OHA a 5-acre parcel near the 'ewa edge of Kaka'ako Waterfront Park.

The oceanfront site is being used as a temporary homeless shelter that the state created earlier this year by refurbishing an empty warehouse. The shelter is expected to operate until early next year. A steel frame fabrication plant also operates on the site under a lease expiring in January.

OHA's vision, which was publicly announced last year and then put on hold by the state earlier this year, is to develop a three-story complex that fosters Native Hawaiian culture through events, exhibitions and programs, including language and genealogy projects.

Indoor space would include a community center for meetings and performances, 30,000 square feet of offices, a kitchen, food-service area and 180 parking stalls.

Outdoor space would provide for hula performances, canoe hale, taro fields, an imu and a place to practice celestial navigation.

OHA said the project would largely be open to the public, and represent Hawai'i's first major cultural center dedicated to its host culture.

The complex might also one day serve as the seat for a Native Hawaiian government if efforts to create an independent government entity are successful.

If the cultural center project proceeds smoothly, OHA estimates construction could begin in two years and be completed about 18 months after that.

"We're very excited," said OHA Administrator Clyde Namu'o. "We've been holding on this."

OHA originally presented its plan to the Hawai'i Community Development Authority board in April 2005, and in February asked to begin lease negotiations.

But the authority, which governs development of state and private land in Kaka'ako, deferred action because legislators had introduced a flurry of bills that potentially could have affected OHA's proposal.

The bills sought to alter or stop a private development plan that called for residential condominiums and public facilities on another piece of state land on the Kaka'ako peninsula. That project was stopped, but no bills passed that would inhibit OHA's cultural center plan.

Yesterday, OHA was given until Jan. 5, 2007 to negotiate lease terms with the agency.

The negotiating period will allow OHA to begin environmental and feasibility studies of the site.

OHA proposes leasing the property rent-free. An agency staff planner suggested that the state could be compensated for the lease by reducing payments it makes to OHA for use of ceded land based on an appraised value of the cultural center site.

Namu'o said the cultural center will largely be a public facility that benefits not just Native Hawaiians but the state's broader population.

"It's a public facility," he said, adding that OHA hopes to physically connect cultural center grounds with Kaka'ako Waterfront Park by covering or bridging a drainage culvert that separates the two properties.

Daniel Dinell, agency executive director, said the site had been envisioned for commercial redevelopment but had not been identified for a specific use.

Dinell said OHA's plan has not drawn any public opposition since being announced last year.

"This is a good use in terms of activating that part of the park," he said.

The cultural center is estimated to cost more than $32 million, which was a projection OHA made last year before construction costs rose considerably.

Namu'o hopes the state will help fund the project, but said OHA trustees are prepared to finance the cultural center with OHA's own resources if there is no public financial support.

For the last two years, OHA requested $15 million to help finance the project, but the bills failed to get a hearing. Namu'o said he will make another request next year, but is also considering floating bonds, conventional loans or tapping OHA's $400 million investment portfolio.

OHA spends about $1 million a year to lease office space in a commercial building at 711 Kapi'olani Blvd., and for several years has sought a permanent headquarters for itself and a range of private organizations that assist Hawaiians.

Previous considerations included buying the historic downtown post office and federal building, and constructing a complex integrated with the historic Ala Moana sewage pump station building in Kaka'ako.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.