About 20 acres of run-down waterfront land in Kalihi Kai would be redeveloped as a maritime industrial park under a state plan that would improve and expand use of the area fronting Ke'ehi Lagoon but also could displace businesses.

The Harbors Division of the state Department of Transportation intends to solicit private-sector proposals to develop and operate the industrial park on a 65-year lease.

The proposal is one of several improvement plans for Honolulu's commercial waterfront by the state, which is working on a master plan to alleviate cargo operations congestion at Honolulu Harbor.

While tenants at the Kalihi Kai site may have to relocate at least temporarily, some say improvements are needed for the state land, parts of which lack basic infrastructure such as sewers, water and electricity.

"It's kind of a run-down area, and it needs to be developed," said Scott Vuillemot, president of American Marine Corp., which rents a storage lot at the site. "If it were done right, it could be a nice industrial park."

The Transportation Department, in documents submitted to the state Board of Land and Natural Resources, said the site's proximity to Nimitz Highway, Ke'ehi Lagoon and Honolulu Harbor make it attractive for industrial maritime development.

But the department said it is seeking a private developer for the project because state money isn't available to improve the property, which requires extensive infrastructure and permitting work.

Finding a private developer to lease and build on the property, the department added, would increase rental income and the property's value for the state.

The 20 acres known as Ke'ehi Industrial Lots are occupied by about 30 tenants, most of which occupy their sites under 30-day revocable permits. Types of business uses there include equipment storage, construction yards and boat repair.

George Poysky, a contractor who has rented a storage yard at the site for 30 years, said he favors redevelopment. But he also hopes that existing tenants would be offered space at improved facilities.

"I'd like to stay there," he said.

Under the state's plan, Ameron Hawaii is proposed to be an anchor tenant for nearly one-third of the site, a 6-acre parcel at Pier 60. The company earlier this year arranged a 35-year lease with the state to improve and occupy the site for transferring and storing rock and sand for use at an Ameron concrete production plant on adjacent private land.

Ameron previously transported and stored rock and sand at Honolulu Harbor, but was displaced by ferry operations of the Hawaii Superferry and The Boat.

It was unclear when the Transportation Department hopes to issue a request for development proposals. A Harbors Division official involved with the plan was not available earlier this week to provide more information. However, the department in documents said several parties are interested in developing the site.

Last week the department received Board of Land and Natural Resources approval to move ahead with the lease and development plan.

Other needed approvals, which would be the responsibility of a developer, include an environmental assessment, shoreline management plan and conditional use permit.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.