The state Department of Hawaiian Home Lands is offering to lease land in Kapolei to a developer interested in building what the agency envisions could one day rival the size of the state's largest mall, Ala Moana Center.

The agency has begun advertising 67 acres for lease in hopes of attracting an interested developer to join the retail expansion under way in O'ahu's growing "second city."

"This is a valuable piece of real estate because it sits strategically between two existing communities ('Ewa and Kapolei), and thousands of new homes are coming online in that area," said Micah Kane, department chairman.

The department is offering a 65-year lease on the parcel for an initial annual rent of $4.7 million that would help the agency pay for programs providing homes to Native Hawaiians.

Though it is an ambitious proposal, the giant mall envisioned by the department is not the first planned for the area.

In 1997, Arlington, Va.-based mall developer Mills Corp. announced a tentative plan to develop a retail/entertainment center in Kapolei with more than 200 stores on 100 acres. But the company dropped the project a year later.

Some retail analysts at the time questioned whether the area could support such a big retail complex.

Since then, retailing in the area has grown in small increments that have included two small community shopping centers, Home Depot, Big Kmart and a few dozen or so smaller stores and restaurants.

The sparse retail growth has forced growing numbers of residents to travel outside Kapolei to areas such as Waikele, Pearlridge or other malls for many goods and services.

In turn, developers are showing more interest in creating bigger retail projects to satisfy growing demand by shoppers in the area and retailers wanting to serve those shoppers.

Last year, local developers The MacNaughton Group and Kobayashi Group announced plans to build an open-air regional center on a 20-acre site along Kalaeloa Boulevard across from Home Depot.

The MacNaughton/Kobayashi project, called Kapolei Commons, is expected to be developed on a scale similar to Kahala Mall, starting with a first phase of 250,000 to 300,000 square feet.

Discussions are ongoing with prospective tenants, though no commitments have been announced. Construction is expected to begin next year, with completion in 2008.

The Hawaiian Home Lands plan is more tentative, but could result in a super-regional mall. "We envision it could be the size of Ala Moana," said department spokesman Lloyd Yonenaka.

At 67 acres, the site is about a third larger than the land under Ala Moana Center, which has about 2 million square feet of retail space.

The agency, in marketing materials online at eastkapolei.com, said projected growth in population and consumer spending could support more than 1.5 million square feet of additional retail space in the area by 2020. Kapolei is expected to add nearly 50,000 homes by 2025, doubling the area's population, the agency said.

If developed, a giant mall in Kapolei would satisfy more needs of residents in West and Central O'ahu. As a large employment base, it could help ease the heavy commuter traffic plaguing the region, and help make Kapolei the self-contained city it was designed to be.

The Kapolei Master Plan, adopted by the city in 1977, calls for 32,000 acres of development on mostly former cane fields owned by Campbell Estate.

The Department of Hawaiian Home Lands owns about 700 acres in the Kapolei area. The city of Kapolei broke ground in 1990.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.