A subdivision plan in south-central Maui abandoned by a California partnership is being recast as an affordable housing community by a longtime Maui housing developer.

Jesse Spencer of Wailuku-based Spencer Homes Inc. is proposing to build 1,100 single-family homes, for sale mostly at prices affordable to residents with more-or-less moderate incomes.

The new plan still faces what Spencer said is continued opposition from some area condominium owners and the county Planning Department — both of which opposed the former development plan in favor of keeping the site, which is zoned for agriculture, as open space.

But the developer said he believes the need for affordable housing and construction jobs will garner enough support for the estimated $400 million project to proceed.

"I've listened to all the comments," he said. "I'm trying to satisfy all the naysayers."

Spencer's project, called Ohana Kai Village, is planned for 257 acres of former sugarcane fields south of Wailuku near the Ma'alaea Small Boat Harbor. Much of the property is vacant, though some is used for cattle grazing.

A previous developer affiliated with two California homebuilders and known as Ma'alaea Properties LLC proposed developing the site with 949 homes, including 380 affordable units under the county's 40 percent affordable housing requirement, plus a 15-acre park and 37 acres of open space.

But the Maui Planning Department, supported by then-Mayor Alan Arakawa, strongly opposed the plan because of impact on county infrastructure, including schools. The Ma'alaea Community Association objected to the project primarily over traffic concerns and increased use of the shoreline and community park.

PREVIOUS OWNER

Ma'alaea Properties bought the parcel in 2004 from C. Brewer & Co. affiliate Wailuku Agribusiness Co. Inc. for $6.6 million, petitioned the state Land Use Commission to reclassify the land for urban use in 2006, and in late 2007 filed a draft environmental impact statement. Three wells for water also were drilled, but the development effort was abandoned in the face of the opposition and a slumping real estate market.

Spencer bought the property for $10.5 million in October, according to property records, and recently filed an environmental impact statement preparation notice with the state.

Spencer said Maui planning director Jeff Hunt supports keeping the site undeveloped.

Hunt and Maui Mayor Charmaine Tavares could not be reached for comment yesterday.

Ohana Kai conceptually is planned to be a workforce housing community with 3- and 4-bedroom homes, a commercial complex, a school site, parks and open space.

According to the environmental notice, Ohana Kai will reserve 660 homes, 60 percent of the project, for residents earning between 81 percent and 140 percent of Maui's annual median income. These homes, which if sold today would be priced roughly from $260,000 to $500,000 assuming about a 5 percent interest rate on a 30-year mortgage, will be sold by lottery.

NOT YET APPROVED

Another 440 homes would be available at prices affordable to residents earning 141 percent to 160 percent of Maui's annual median income, or $113,100 to $120,640.

"The product choices being proposed will provide healthy competition and allow for a more balanced housing market," Spencer said in the environmental notice.

The median sale price of existing single-family homes on Maui this year through May is $515,000, meaning half the homes sold for more and half for less.

That is down from $585,000 in the same period last year.

To proceed, Spencer will need approvals from the Land Use Commission and the County Council.

Spencer, who is 78 and has built 1,400 homes on Maui over several decades, believes that most members of the County Council will support Ohana Kai.

Though the project site is classified as "prime" agricultural land by the state and zoned for agricultural use by the county, the Kihei-Makena Community Plan designated the property for residential growth in 1998.

Spencer estimated that development of Ohana Kai would employ 250 people for seven years. He also said that based on his last affordable housing project, Waikapu Gardens, demand remains high for moderate-priced housing on the Valley Isle.

Waikapu Gardens in 2004 held a lottery that attracted 3,576 entrants for 214 units priced between $225,000 and $275,000 in the 412-home subdivision. Spencer expects that 2,000 to 3,000 people from the Waikapu Gardens lottery are likely prospective buyers of Ohana Kai.

"I really feel we will sell out," he said.