University of Hawai'i-West O'ahu Chancellor Gene Awakuni yesterday said he is optimistic that a new campus will open in Kapolei by fall 2010 despite uncertainty over a business deal that had been deemed essential for the new school's success.

Awakuni confirmed that Texas-based Hunt Development Group has asked UH officials to renegotiate a tentative agreement to buy 300 acres originally part of the West O'ahu site for $100.1 million.

"Regardless of whether Hunt is in the deal or not, we plan to go forward with this project and we believe we have enough money from several sources ... to get the infrastructure in and partially complete phase 1," Awakuni said.

"We may not be able to build all of phase 1, but we will certainly be able to build enough of the structure — like the classroom building and the library — that we will have a physical plant in Kapolei as we had indicated we would."

Steve Colon, Hunt's Hawai'i division president, would not to characterize the situation as a renegotiation since the purchase and sale agreement signed with UH in spring 2007 was never finalized.

"We're not seeking to modify the terms and conditions," Colon said. "But the reality of the current financial and real estate markets would suggest that a new deal structure with the university would probably be significantly different from the one they had with us whether we're involved or not.

"What we had was an arrangement that worked when lenders were lending ... when real estate markets were trending upwards as opposed to downward. I'm optimistic that we will be able to put forth a new proposal but I don't know if that proposal will enable UH to meet its objectives."

News of the uncertainty comes at a critical time. Awakuni and other UH leaders are scheduled to appear Tuesday before the City Council Zoning Committee, where crucial zone change approvals have been pending for months.

"We want to keep moving forward because this project is too important not only to the residents of West O'ahu but I believe across the state," Awakuni said, noting that this is the closest a West O'ahu campus has come to becoming reality in more than three decades of discussion. "We cannot let the momentum die."

UH officials have been planning to break ground on the project in January. Awakuni said he still expects that to happen, assuming the project gets its zoning approvals from the Council by November.

Earlier this month, UH officials announced that the UH- West O'ahu campus experienced a 19.8 percent enrollment increase for fall 2008, the highest percentage increase among all UH campuses. Awakuni yesterday said he is unaware of the specifics of the problems facing Hunt on the Mainland.

Awakuni said that if the deal falls through, the university is prepared to take other steps to proceed on a smaller scale for the campus' first phase.

The original plan calls for six buildings with a total of about 250,000 square feet of space. The school currently operates primarily out of a series of wooden portable buildings next to Leeward Community College in Pearl City.

The Hunt deal has been viewed as key to the project because it helped give UH officials the leverage to convince lawmakers to approve $35 million in expenditures during the 2007 legislative session for roads, sewers and other infrastructure for what's to be a 202-acre project.

Hunt has been in discussion with at least one local developer — Castle & Cooke Homes Hawaii — about partnering in the development of the housing portion of the UH parcel.

Carleton Ching, Castle & Cooke's vice president of community and government relations, said that his company is "always interested in residential development ... always interested in seeing where we can find homes to develop."

Asked if Castle & Cooke is negotiating with Hunt on developing the residential portion of the UH-West O'ahu property, Ching said: "We have no formal agreement with Hunt at this time."

Awakuni said if the Hunt deal does fall through, UH will still be able to spend the $35 million from the Legislature. An additional $20 million is expected to be obtained through the sale of revenue bonds, he said.

What's more, UH could market about 50 acres of the Hunt parcel near the upcoming North-South Road as retail property for about $40 million, Awakuni said.

UH consultants believe that despite the downturn in housing prices, there is still a market for commercial and retail property in the still fast-growing Kapolei region, Awakuni said.

Maeda Timson, chairwoman of the Makakilo/Kapolei/Honokai Hale Neighborhood Board, said development of the UH- West O'ahu campus in Kapolei is critical for the area and its population.

"It's always been our community's dream to have a UH-West O'ahu in our community so our kids can aspire to higher education," Timson said. "So our kids can have careers, and not just jobs. I think it would be devastating to the whole West O'ahu region if UH-West O'ahu did not materialize."

City Councilman Todd Apo, who represents the region, said he's confident that the new UH- West O'ahu campus will proceed even if the UH deal fails.

Loss of the Hunt money could require that the state step up its share of funding, but infusing the economy with capital improvement dollars is a reasonable move for the government during a downturn.

"One of the roles of government is, in fact, to ensure these types of (capital improvement) projects move forward," Apo said.

Colon said the ongoing discussions on the UH-West O'ahu deal do not affect Hunt's obligation to put up the first building of the planned UH/Hawai'i Community College West Hawai'i campus near Kona's Keahole Airport.

The $5 million, 20,000-square-foot building, currently in the design phase, is among the conditions required when Hunt received rezoning from the Hawai'i County Council for the nearby Palamanui development project.