Central Pacific Bank is pursuing foreclosure against a local partnership that bought Bay View Golf Park three years ago, though the owners of the Kane'ohe golf course hope they can resolve the loan default and retain the property.

The financial trouble has hurt plans by owner KBay LLC to redevelop half of the 18-hole course with a mix of 300 affordable and market-priced homes, a bowling alley, batting range, lodge and community center. But the golf course, driving range, restaurant and miniature golf facilities remain open.

Greg Hong, one of KBay's principals, said he couldn't comment about the mortgage troubles or development plan because the owners are trying to work with Central Pacific to avoid foreclosure.

The bank filed its foreclosure suit last month against KBay and its principals Hong, Michael Nekoba and Thomas Enomoto.

According to the suit, KBay borrowed nearly $6.9 million in March 2006 that helped the group buy the property for $11 million. The loan, Central Pacific said, matured on March 15 and wasn't paid off by KBay, which owes nearly $7.1 million, including unpaid interest.

The suit is part of a wave of foreclosure cases imperiling commercial property owners who couldn't refinance their debt in the past year or so because of the financial crisis constraining global credit markets.

KBay's purchase came near the height of Hawai'i's last real estate investment boom, and three years after another hui of local investors — The Shidler Group, J.D. Watumull and Joe Leoni — bought the distressed golf course for $3.4 million and restarted play there after paying a $1 million property tax delinquency.

KBay's plan was to spruce up facilities and increase kama'aina play. But the initiative faltered as a series of upgrades, including opening a new restaurant, failed to reverse financial losses and resulted in temporary closures and layoffs.

In a move to salvage the investment, KBay late last year unveiled a proposal to redevelop nine holes for other uses.

The plan, which the developer said had some community support but drew none at a November Kane'ohe Neighborhood Board meeting, involved developing 150 affordable multi-family rental homes for seniors earning between 80 percent and 140 percent of O'ahu's median income, and 149 market-priced homes.

Though Bay View land is primarily zoned for preservation, the developer sought to use a state law that allows exceptions to zoning controls for housing projects where at least half the units are affordable to moderate-income buyers.

Other parts of the development plan include a 40-lane bowling alley replacing Bay View's miniature golf course, a multipurpose senior community center, walking trails and a 60-unit lodge for sports teams. Part of Bay View's two-story driving range was slated for conversion to a baseball batting range.

A wedding chapel and pet mausoleum also were elements in the draft plan that KBay said was subject to change based on public input.

KBay previously said one major benefit to developing half the golf course would be creating a safe public access to an adjacent city sewage treatment plant being taken out of use, allowing the city to convert the property to a dog park or other recreational use.

Another benefit would be expanded access to Waikalua Loko Fishpond, which KBay owns and seeks to sell to the nonprofit Waikalua Loko Fishpond Preservation Society that manages the pond.

KBay had planned to publish an environmental impact statement to address traffic issues, water use, storm water runoff and flooding, but the mortgage troubles have hung up the project.