A California firm has bought a piece of former Navy warehouse land in Manana from the city for retail development, completing a city effort to sell six Manana parcels to pay a legal settlement over preserving East O'ahu's Ka Iwi Coast.

Arroyo Realty Partners LLC paid $13 million for the 6.65-acre site, according to Sofos Realty Corp., the local real estate firm that represented the city.

Los Angeles-based Arroyo, which was established in 2003 and owns four office buildings on O'ahu, conceptually plans a roughly 90,000-square-foot retail complex it hopes to complete next year.

Rob Ewert, a local developer for Arroyo, said plans are preliminary. "We're envisioning a neighborhood center," he said. "Something compatible for the neighborhood. It's still in its early stages."

The project, dubbed Manana Village Center, is the second major retail complex planned for the city's former Manana land.

Robertson Properties Group, a California firm that bought 13.5 acres from the city in late 2005, plans to build a 150,000-square-foot shopping center called Pearl City Gateway.

The city's other Manana land sales resulted in Home Depot and Wal-Mart stores, a Lock Up self-storage facility, and plans for two small retail complexes and an irrigation company distribution center.

Proceeds from the Arroyo sale will be added to a settlement distribution by the city for blocking development on the Ka Iwi Coast near Sandy Beach.

The city in the 1980s fought to prevent hotel, golf course and condominium construction by developer Maunalua Associates on Kamehameha Schools land. Ultimately, the city rezoned the land to block the project. The trust and the developer sued for economic loss and prevailed in court.

But before a 2002 trial to determine damages, which the city feared could be as high as $120 million, a settlement was reached.

The state helped resolve the dispute by purchasing roughly 300 acres between Sandy Beach and Makapu'u from the trust for $12.8 million.

Under the city settlement, the trust and developer agreed to give the city 30 acres across from Sandy Beach and receive $5.4 million plus an estimated $60 million to $70 million in proceeds from the city's sale of about 50 acres at Manana.

The Manana sales, according to property records, generated $86 million that will go to Kamehameha Schools and Maunalua Associates.

The Manana parcels sold represented a little less than half of a 124-acre former military warehouse complex that the city bought for $109 million from the Navy in 1994 with the thought to develop the property for city and commercial uses.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.