Big Island officials yesterday announced that $35 million in federal stimulus funds will be used to construct the Ane Keohokalole Highway to connect Palani Road to Hina Lani Street in Kailua, Kona.

The 1.7-mile highway, known as a "midlevel road," will run parallel to the Queen Ka'ahumanu Highway. The project will include bike lanes, sidewalks and a multi-use path, and the road will be used by the county's Hele-On Bus service.

The Ane Keohokalole Highway, named for the mother of Queen Lili'uo-kalani, will facilitate the state's development of the Kamakana Village affordable-housing development, the mayor's office said yesterday.

The new highway also will serve the Laiopua 2020 planned community and the proposed West Hawaii Health Center clinic, and support Kamehameha Schools' plan to build a preschool and the county's effort to develop a regional park.

"This isn't so much about building a highway as it is about building a safe and healthy community," Mayor Billy Kenoi said in a statement. "Access to jobs, education, health centers and recreation can only strengthen our community."

The county began advertising yesterday for construction bids.

Construction is expected to take about two years.

Bobby Command, Kenoi's executive assistant, said the new highway will be built on land that is currently mostly covered by "haole koa and fountain grass."

"If you stand at the entrance to Honokohau Harbor and look toward the mountains, that's basically the alignment the new highway will follow," Command said.

J. William Sanborn, who chairs the Kona-Kohala Chamber of Commerce, said the federal stimulus money for the project comes at just the right time.

"There are a lot of construction folks now who need a job," Sanborn said.

Beyond the immediate economic boost, the highway will provide a more direct route to the Costco and Macy's stores, freeing up traffic on existing major thoroughfares, Sanborn said.

"The biggest overall issue is that we want smart growth in West Hawai'i," Sanborn said. "We like to know what the plan is before we have (the growth) In this case, the infrastructure is coming before the growth.

"I personally don't see any downside to the project. I think this is excellent infrastructure development and something we really need," he said.

There was some opposition to the project, primarily from people who oppose major growth and who would like to keep Kailua town as quaint as possible, Sanborn said.

There was also a concern that development of the new highway would lead to additional "big-box" stores that would attract customers at the expense of small family-run businesses, Sanborn said.

Phil Tinguely, a contractor and land developer who sits on the board of directors of an industrial subdivision on the north side of Kailua that includes a number of small businesses, said the effect the new highway will have on attracting additional large-scale retailers is hard to predict.

A recently opened Target store was said to be the last big-box store planned in the Kona area, he said.

Tinguely said the road will bring several benefits to Kailua town, including making it "easier to get from town to the airport."

"I think that, end of the day, this project is going to be a really good thing for the community," Tinguely said.