A controversial plan to upgrade a dilapidated stretch of Queen Street in Kaka'ako has been killed as a result of rising costs and opposition from small businesses in the area.

Hawai'i Community Development Authority board members took the action Wednesday after agency staff recently recommended that the project be canceled because construction pricing and city design changes inflated project costs.

A majority consensus of stakeholders along Queen Street, which included small businesses required to help pay for the improvements, also was cited as a reason for canceling the project.

The project had been slated to start last month and was to involve widening the road, adding sidewalks and storm drains, putting utilities underground and improving sewer and water lines along the narrow, flood-prone section of Queen between Kamake'e Street and Ward Avenue.

Metered curbside parking, landscaping, lighting and traffic signals at the intersection of Kamake'e and Queen were also part of the project known as Improvement District 11, or ID-11.

But construction costs rose 57 percent to $17 million from a previously expected cost of $10.8 million, creating a funding shortfall.

The ID-11 area was to be the third of four improvement sections for Queen, large parts of which are unsafe for vehicular and pedestrian traffic that make the area not conducive to redevelopment, according to the agency. Two previous sections were completed, affecting mostly large landowners that helped pay for the work.

The agency said it plans to rescind rules that established ID-11 and the landowner assessments that were to pay 19 percent of the project's cost prior to the price escalation.

Typically, state and county governments don't charge private landowners special fees on top of taxes to pay for public infrastructure improvements, but the HCDA was set up to do so because of the overwhelming improvements needed in Kaka'ako.

Agency chairman Michael Goshi said the agency will continue to work with the community to explore ways to address safety concerns along Queen.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.