A developer wants to build 400 homes and possibly a golf course on 732 acres of agriculture land on the Big Island's North Kohala Coast — an area with a strong need for housing but that already suffers from traffic congestion.

The project, called Waikoloa Highlands, also could re-ignite controversy over what is appropriate use of marginal agriculture land, a divisive issue that for three years halted development of another Big Island project, Hokuli'a.

Developers of Hokuli'a began building the luxury golf club community on agricultural land with county approval, but did not apply to have the land reclassified for residential use by the state Land Use Commission.

Unlike Hokuli'a, which endured a costly legal battle that was settled earlier this year to allow that project to proceed, Waikoloa Mauka is seeking to change the state's land-use designation of its property from agriculture to rural.

While the Land Use Commission petition reduces the chances of the project becoming another Hokuli'a, it will involve public hearings to determine whether Waikoloa Highlands should be allowed on agricultural land.

"There may be opposition (to the project), but there won't be opposition to the process," said David Kimo Frankel, an environmental attorney on the Big Island.

'FARM DWELLINGS'

Many residential projects such as Hokuli'a, mostly on the Neighbor Islands, have been qualified by developers as "farm dwell-ings" related to agricultural operations as a way to comply with county rules for building homes on agriculture land.

More of the state's largest residential subdivisions, including much of Central O'ahu and the 'Ewa Plain, have been carved from farmland after Land Use Commission approval to redesignate property for residential use.

Waikoloa Mauka LLC, which is developing Waikoloa Woodlands, said in its petition that its land is now used for grazing livestock and has the lowest of five agricultural productivity ratings based on soil and topography.

The developer also said the proposed subdivision would be compatible with nearby Waiko-loa Village residential and commercial uses.

The Waikoloa Highlands site has county zoning approval for development of up to 400 homes and a golf course obtained by a previous owner of the land.

Waikoloa Mauka, in its petition, said it plans about 400 residential lots of at least one acre each. The petition did not indicate whether Waikoloa Highlands is intended to be a subdivision of luxury golf estates, entry-level rural home sites or something in between.

The developer, a partnership of California-based firms Vitoil Corp. and ARCH Ltd., could not be reached for comment yesterday.

In its petition, Waikoloa Mauka said it intends to provide affordable housing under county rules, which require 20 percent of units to be affordable to low- to moderate-income households.

The developer also said it planned open space for hiking and biking or may develop a golf course with related amenities on much of the land not zoned for residential lots.

TWO PHASES

An initial phase with 149 lots and infrastructure could start next year and be complete in 2008. A second phase with infrastructure and the remaining lots is projected to start in 2008 and be complete in 2009. Buyers are expected to take 10 years to build out the subdivision with homes.

Waikoloa Highlands is a project previously pursued by Waikoloa Land Co., which sold the property to Waikoloa Mauka last September for $14.8 million.

Other projects in the Waikoloa area include about 700 town homes and lots at Wehilani planned by Castle & Cooke, about 600 lots at Waikoloa Heights, about 200 lots at a project by Waikoloa Homesites Venture, and about 1,000 homes by Hawai'i County and UniDev LLC.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.