The state is moving forward with plans for a long-delayed agricultural park on 150 acres in Kunia that will be leased to small farmers.

Gov. Linda Lingle yesterday released $250,000 to design the project, which will be managed by the state Department of Agriculture.

The property is slated to be subdivided into about 28 lots that would be leased to farmers at reasonable costs.

"This encourages farming activity in our Islands and allows more of our food supply to be locally grown," Lingle said in a statement. "This project will increase our inventory of farming lots on O'ahu and also preserve land for agricultural use in an area where there is a significant amount of residential development."

Planning work is expected to be complete by December, but when farm lots would be ready for tenants is uncertain because the state doesn't know when it will have access and infrastructure to the site.

The Kunia agricultural park has been planned for more than a decade as part of the second phase of the master-planned residential community of Royal Kunia, which originally was set for development in 1994 but stalled after the project's developer, Herbert Horita's Halekua Development Corp., encountered financial difficulties.

As part of Royal Kunia zoning approvals, Horita agreed to convey 150 acres to the state for the agricultural park and provide infrastructure connections to the land that would allow the state to develop the property for farm use. But Horita's troubles prevented him from delivering water, power and other infrastructure to the site. Instead, the state leases the land to Larry Jefts Farms as an interim use.

Early last year, Horita secured loans and a partner that enabled him to repurchase the unbuilt 2,000-home second phase of Royal Kunia out of bankruptcy, which rekindled related projects including the agricultural park, a badly needed elementary school and a county park. Initial homes are expected to be finished in 2010.