A proposed 600-unit residential subdivision on former sugarcane land in Kihei, Maui, would displace two farm operations but provide badly needed moderate-priced homes in a market being saturated by luxury housing.

A&B Properties Inc. seeks to develop the estimated $151 million project with homes envisioned for delivery between 2011 and 2016.

The company recently filed a draft environmental impact statement, providing new details about the previously announced plan for 94 acres of agricultural land owned by the Alexander & Baldwin Inc. subsidiary.

A&B, in its filing with the state, said the subdivision would benefit the greater needs of the community by addressing a shortage of working-class housing, while having negligible negative impact on agriculture.

The project also would contribute to already overtaxed roadways and schools, though the developer is proposing mitigation efforts in these areas.

Other elements of the plan include 1.4 acres for commercial use, as well as a park and open space to provide a network of trails and bike paths connecting to existing parks and open space.

The North Kihei site is roughly bordered by residential communities to the south and Waiakoa Gulch and farmland to the north.

A&B said the project would help establish the gulch as a natural buffer between the area's agricultural lands and urban development.

Previously, the project site was in sugarcane cultivation, which ceased in the mid-1980s. About half the site is classified as prime agricultural land with the lowest of five productivity ratings.

Presently, about half the site is vacant. Monsanto Co. leases about 38 acres to produce seed corn, and an independent farmer cultivates another 12 acres for truck crops.

A&B said a loss of the low-quality farmland represents 0.03 percent of Maui's 246,000 acres of agricultural lands, much of which is still fallow after closures of Wailuku Sugar and Pioneer Mill over the past 30 years.

Additionally, A&B said it has leased replacement land to Monsanto in anticipation of the Kihei project, and will work with the truck farmer to find suitable replacement land.

Subdivision homes would be targeted for working-class residents, and meet county requirements that call for 40 percent of units to be affordable to buyers earning between 80 percent and 160 percent of Maui's median income for a family of four.

At 160 percent of the median income, the maximum affordable home price would be $469,300.

A&B estimates that its market-priced single-family homes, if sold this year, would be about $580,000 — less than the $633,000 median price of existing single-family homes sold on Maui this year through September.

According to a housing market analysis prepared for A&B by Wailuku-based real estate research firm ACM Consultants Inc., $580,000 single-family homes and $450,000 condominiums in the Kihei project would draw good demand.

Actual prices would be dependent on costs, market prices and median income at the time of construction and sales.

A&B is considering building 100 single-family homes, 200 townhome-style condos and 300 detached single-family-home-style condos.

ACM Consultants in its study said Maui's supply of single-family homes over the next five years will not meet demand from population growth, therefore putting pressure on prices to rise. The consulting firm said A&B's project would help relieve such pressure.

ACM also said there is "intense" desire from the local community to live in the neighborhood, though most of South Maui's available housing inventory comprises luxury units and property targeted to second-home buyers.

"It is our opinion that bringing the proposed project's 600 units to the market would help provide affordable housing to Maui's workforce," the firm said in its report.

However, other concerns exist over the project, including its impact on traffic and schools.

A traffic analysis submitted by A&B said that overcapacity of area roads, projected by 2016 without A&B's project, needs to be addressed by improvements including a Kihei-Upcountry bypass and a north-south road parallel to Pi'ilani Highway.

An expected 11 percent increase in traffic from the A&B project would additionally warrant several turn lane modifications for the project, the report said.

For schools, the report noted that area intermediate and high schools are already over capacity, and that the state Department of Education is planning a new high school for Kihei. The DOE also is seeking a fair-share contribution from A&B to help provide for school facilities.

A&B's project needs several approvals, including a county zoning change, change to the Kihei-Makena Community Plan and approval by the state Land Use Commission.

The company in March submitted its application for a land-use change to the LUC. Grant Chun, vice president with A&B Properties, said the project would likely take five years to obtain entitlements if decisions are favorable to the company. Buildout could be over five to 10 years, depending on demand.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.