The National Audubon Society has pulled out of negotiations with the Office of Hawaiian Affairs for a long-term lease to continue managing the 1,875-acre Waimea Valley.

Audubon will continue to manage the historic North Shore property under the existing interim lease, which allows OHA up to a year to find another organization to manage the valley, or establish its own agency to run it.

"We need to figure out whether there's any entity out there ... interested in leasing the property or operating it," OHA administrator Clyde Namu'o said yesterday. "If we don't find anyone, another option is for OHA to create some kind of limited liability corporation to run the valley."

Audubon took over operations of the valley under the name Waimea Valley Audubon Center when the city began condemnation proceedings against last private landowner Christian Wolffer in 2003, according to interim director Diana King.

Wolffer later agreed to accept $14 million from a partnership of five government agencies and nonprofit groups led by OHA, which became legal owner to the historic property. OHA agreed to pay $2.9 million of the purchase price and Audubon $1 million, advanced by OHA and conditional on completion of a lease agreement.

King said that money would had to have been raised assuming there was a management contract.

Both Audubon and OHA officials were vague about why the national environmental group decided to pull out of the talks.

"Despite everybody's really best efforts, it just didn't work out," King said, praising OHA for stepping forward to take over operations.

"We're two big organizations with diverse constituencies and slightly different agendas, even though there's quite a bit of overlap with respect to Waimea, and we just weren't making the progress that we wanted to make to find an agreement that would be acceptable to both sides."

Namu'o said OHA proposed a management deal in which the state agency would have paid Audubon up to $1 million annually for operations in each of the next five years.

The center had been operating at a deficit, although the financial situation had been improving, King said.

"We were pretty close, I thought, to finalizing a lease with them and so (Audubon's decision to pull out) really took me by surprise," Namu'o said.

"The Audubon felt there were too many restrictions, that it would make it very difficult for them to manage the valley," he said. Audubon chief executive officer John Flicker, however, also recognized that the conditions were necessary on the part of OHA trustees who have a fiduciary to its constituents, he said.

King said the center employs 40 people and relies on a volunteer staff of more than 500.

Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com.