A California partnership is moving ahead with plans to develop a nearly 1,000-home subdivision in south-central Maui despite opposition from the County Department of Planning and some nearby residents.

Ma'alaea Properties LLC recently filed a draft environmental impact statement for its estimated $400 million project called Ma'alaea Mauka proposed for 257 acres of former sugar-cane fields south of Wailuku.

The project envisions 949 residential units in a mix of single-family homes, multifamily units, senior housing and rental apartments plus a 15-acre park and 37 acres of open space.

Though the land is classified as "prime" agricultural land by the state and zoned for agricultural use by the county, the Kihei-Makena Community Plan designated the property for residential growth in 1998.

The developer said the project would provide needed housing — including an estimated 380 affordable units under county guidelines — in a market where low supply and strong demand have pushed prices sky-high.

"In light of the current and projected housing market conditions and prices, the proposed Ma'alaea Mauka subdivision is considered to provide a significant community benefit by offering residents new opportunities to secure affordable and market-priced housing products," Ma'alaea Properties said in its environmental statement.

But the Ma'alaea Community Association has objected to the project primarily over concerns that it will add to near-gridlock rush-hour traffic on Honoapi'ilani Highway and increase use of Ma'alaea's shoreline and community park.

"Ma'alaea Mauka, with 960 units, could more than double the population of this small community," the group said in a letter to the developer last year.

The Maui County Planning Department, in a May 2006 letter, also expressed opposition shared by then-Mayor Alan Arakawa.

The department said it was "strongly opposed" to the project and would recommend that the Maui Planning Commission and County Council deny approvals for the project.

The department's letter cited concerns over impact on infrastructure, including schools, and said it was reconsidering the Kihei-Makena Community Plan residential designation for the Ma'alaea Mauka site as part of updating its General Plan guiding Maui development.

Since the department's objection last year, a new mayor and planning chief have taken office, and neither Mayor Charmaine Tavares nor Planning Director Jeff Hunt could be reached for comment yesterday.

Steve Kikuchi, a Ma'alaea Properties partner, said it isn't fair for the county to hold up a project possibly for several years while it revises its long-range growth plan.

"It would be ridiculous to wait four or five years (for the county to update its general plan)," he said, adding that decisions should be made on existing growth plans for Maui.

Regulatory approvals from the state Land Use Commission and County Council are projected to take three years, and if obtained would allow Ma'alaea Properties to begin construction in 2011. Kikuchi said building out the subdivision would likely take another five to six years.

HOUSING SHORTAGE

The developer cited a 2003 Hawaii Housing Policy Study commissioned by the state that projected a 4,183-unit housing supply deficit by 2010 on Maui based on production and population trends.

Maui has some of Hawai'i's highest housing prices, in part because much of the island's housing inventory is resort condominiums and other property bought for vacation-home use.

The median price of Maui condos this year through November was $550,000, compared with $325,000 on O'ahu. The median single-family home price on Maui was $625,500 vs. $645,000 on O'ahu during the same period.

Kikuchi said it isn't possible to fairly estimate home prices for Ma'alaea Mauka given the uncertainty of future construction costs and general home prices.

Historically, the Ma'alaea Mauka site has been used for farming. For close to 100 years until 1988, it supported sugar-cane production, and later was planted in pineapple and diversified crops. Since 2004, the site has supported only cattle grazing under a lease to Maui Cattle Co.

In 1998, the County Council approved the site for future residential growth in the Kihei-Makena Community Plan in part based on the landowner's desire and a 1992 recommendation by a community advisory committee. The Planning Department at the time sought to keep the area in agriculture, while the Planning Commission recommended the area be classified as a reserve for future growth.

Ma'alaea Properties bought the Ma'alaea Mauka site in August 2004 for $6.6 million from C. Brewer & Co. affiliate Wailuku Agribusiness Co. Inc. The developer submitted a petition to the Land Use Commission last year to reclassify the property from agricultural to urban use.

Kikuchi, a landscape architect and land planner, leads the development team, which also involves California home builders Mike Atherton and Bill Filios of Atherton Homes and Larry Anderson of Anderson Homes. The two home builders have developed more than 5,000 homes over more than 20 years in California.

LAND FOR SCHOOLS

In Hawai'i, the partnership has acquired more than 2,000 acres of land in the last several years, including 905 acres in Waikapu, Maui, leased to Hawaiian Commercial & Sugar Co. for sugar production and 710 acres in Waikapu on which the owners intend to plant 200 acres of coffee.

Ma'alaea Properties also owns the 50-acre Maui Tropical Plantation and the 500-acre Moloka'i coffee farm Coffees of Hawai'i Inc.

The developer in its environmental statement said the Ma'alaea Mauka site is rated prime agricultural land, but represents only 0.1 percent of the 246,000 acres of agricultural land on Maui.

Under the Kihei-Makena Community Plan, the site was deemed big enough for 1,150 single-family homes.

Ma'alaea Properties said it has proposed a relative low-density project that will be gateless and designed to preserve the natural landscape with hillside terracing and a broad landscaped buffer along the highway.

The project also will contain its own water and sewer systems, with three on-site wells and a wastewater treatment plant on 95 acres nearby.

The developer also said it is discussing options to contribute land to the county for a new intermediate school as well as fire and police facilities.

In the environmental statement, the developer estimated the project would generate $2.4 million in annual revenue to the county but cost the county $2.8 million a year in expenses.

The net cost to the state would be $1.3 million per year after buildout, offset partly by a net revenue gain of $15.8 million during development.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.

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