Construction of the Moana Vista condominium tower in Kaka'ako may resume by the end of the year if a proposed purchase of the stalled project is completed by a California development firm.

An affiliate of San Diego-based OliverMcMillan has a contract to buy the partially built 46-story tower at 1009 Kapi'olani Blvd., makai of McKinley High School.

A state agency on Wednesday approved changes to the tower's development plan that would allow the purchase to proceed.

The approval from the Hawai'i Community Development Authority clears a major obstacle that could have derailed the deal, though it's still not certain the sale will go through.

Dan Nishikawa, OliverMcMillan's director of development, yesterday would not comment on the deal because it is still pending.

If the sale closes, OliverMcMillan anticipates completing Moana Vista by the end of 2011, about 18 months later than planned by present owner KC Rainbow Development Co.

The potential sale and resumption of work on the 492-unit condo comes about seven months after KC Rainbow halted construction because it couldn't obtain financing to complete the project.

KC Rainbow, headed by high-tech entrepreneur and University of Hawai'i graduate Fred Chan, had funded construction up to November following its successful development of a nearby pair of oval high-rise towers called Moana Pacific, completed in early 2007.

Moana Vista appeared positioned to be another success for Chan in May 2006 when 466 people entered a lottery to buy 192 units reserved for owner-occupants. Investors reserved nearly all remaining units available for purchase, and construction began several months later.

But since then, buyers canceled most of their nonbinding reservations as the local real estate market and economy deteriorated. KC Rainbow tried to bolster sales by cutting prices about 20 percent in December, but the move failed to generate enough new sales to obtain financing.

OliverMcMillan, a 30-year-old private firm, has developed a variety of residential and commercial real estate projects. The company on its Web site said it has $2 billion worth of projects in its development pipeline, including a $700 million urban redevelopment plan in Houston, residential lofts in San Diego and a mixed-use project involving a historic winery in Ontario, Calif.

A purchase price hasn't been disclosed for the Moana Vista deal. Allen Leong, project operations director for KC Rainbow, couldn't be reached for comment yesterday.

To clear the way for a sale, KC Rainbow sought to amend its development agreement with HCDA, the agency governing redevelopment in the area.

KC Rainbow previously agreed to provide 124 units as rentals affordable to tenants earning no more than 140 percent of Honolulu's median income.

OliverMcMillan seeks to sell the 124 units at prices affordable to buyers with the same maximum income.

Anthony Ching, HCDA executive director, said rental and for-sale units are both options under agency rules for providing moderate-priced housing, and that agency staff supported the change in the interest of reviving the project.

"The state doesn't lose," he said. "We still get (moderate-priced) housing."

Ching also said OliverMcMillan may increase the number of moderate-priced units in the tower beyond what is required.

Dexter Okada, an agency board member, said the board approved the change to allow the sale to proceed.

"The intention was to get the construction started again," he said.

Another development plan amendment approved by the agency's board allows OliverMcMillan to decide the location of all 124 of the moderate-priced units in the tower. Previously, KC Rainbow planned to include most of the units in a building planned for an adjacent parcel separated by Waimanu Street. Under the revised plan, HCDA is seeking to purchase the separate parcel from a KC Rainbow affiliate to develop public parking.

Previously HCDA had an option to buy parking stalls from KC Rainbow in the project.