Plans to build up to 12,000 homes on Waiawa Ridge have died.

Local developer Gentry Cos. lost its rights to develop Waiawa Ridge, ending the more than 20-year-old project that was expected to produce its first homes next year in the community envisioned with 10,000 to 12,000 homes.

An agreement made by Gentry in 1987 to buy about 3,700 acres from Kamehameha Schools for the project was recently terminated, returning control of the property, a large portion of which is zoned for residential and commercial use, to the trust.

According to documents filed with the state Bureau of Conveyances, the sale and development agreement between Gentry and Kamehameha Schools was terminated because Gentry failed to meet certain financing commitments.

According to the termination notice, all plans and rights to develop the property between Pearl City and Waipi'o were returned to the landowner.

Kamehameha Schools and Gentry issued a joint statement yesterday in response to a question from The Advertiser, saying it would be premature to comment on the future of the property because the trust and the company are exploring how they still might work together.

"Both parties are in discussions now regarding how the two companies may work together in the future since both own land in the area adjacent to one another," the statement said.

Gentry's loss frees up the possibility that another developer could step in to resurrect the project, or allow Kamehameha Schools to negotiate new terms with Gentry.

However, the inability by Gentry to develop the property over more than two decades suggests that developing a large residential community on the site may be tough for anyone.

Gentry has been one of Hawai'i's biggest residential developers, building about 15,000 homes and commercial projects over the last 40 years mostly on O'ahu, including Waipio by Gentry and Ewa by Gentry.

Waiawa would have been a huge addition to its work, though the project was also viewed as a huge challenge because of requirements to add infrastructure to the land farmed in sugar cane up until 1982.

Bill Bass, vice chairman of the Mililani/Waipio/Melemanu Neighborhood Board, said it was long recognized that financing Waiawa Ridge was the project's biggest hurdle, though he was surprised that Gentry couldn't keep its development agreement with Kamehameha Schools alive.

Bass, who has lived in Mililani for 36 years, said the community's biggest concern about Waiawa Ridge was traffic. "Waiawa would really inundate the traffic situation," he said. "It would have been a disaster for traffic coming onto H-2 from the east."

ZONING CHANGED

Waiawa Ridge had been in the works by Gentry since the mid-1980s, and, in addition to the homes, was to include two golf courses, parks, a commercial center, two schools and other community facilities.

Despite concerns over traffic, the loss of prime agricultural land and directing so much residential growth to Central O'ahu, Gentry won approval from the state Land Use Commission to reclassify about 1,400 acres from agricultural use to urban use in 1988. The City Council later approved a zoning change for this first phase of Waiawa Ridge, but the slowing economy and real estate market slump of the 1990s inhibited development.

Three years ago, Gentry partnered with Alexander & Baldwin Inc. to get the project moving, forming a joint venture to develop an initial 5,000-home phase that A&B would help finance with a $50 million investment.

Alan Arakawa, senior vice president with A&B Properties and president of the joint-venture with Gentry called Waiawa Ridge Development LLC, deferred comment on Gentry's development agreement ending with Kamehameha Schools.

Arakawa did say that about 185 acres in the area previously bought by Gentry or its affiliates are owned by the joint venture, including some land suitable for homes. Developing that parcel is possible, though there are no immediate plans to do so, he said.

Involving A&B was expected to help Gentry begin construction of an initial phase with 5,000 homes, one golf course and parks in 2007 with an anticipated 10-year buildout and delivery of the first homes next year.

But work never began as planned. It was unclear why Gentry couldn't maintain its development rights.

Some observers have said the big hurdle for the project was paying for infrastructure to bring roads and lines for sewer and water to the site cut off from H-2 Freeway by Panakauahi Gulch.

The Gentry and A&B partnership intended to serve as a master developer to put in the infrastructure and some homes while also selling off parcels to other companies interested in developing homes and commercial buildings.

Gentry and Alexander & Baldwin in 2007 estimated it would cost nearly $400 million for such infrastructure work, including $40 million to expand the freeway's Waipi'o Interchange, $25 million to extend Ka Uka Boulevard over the gulch, and $30 million for a sewer trunk line reaching the Pearl City pump station.