Foodland Super Market plans to introduce its fledgling upscale store format on O'ahu later this year with an overhaul of its 'Aina Haina store, which is the third-oldest location for the kama'aina chain with 30 stores.

The state's largest grocery retailer yesterday announced the plan to convert the 59-year-old East Honolulu store to a Foodland Farms featuring more gourmet and organic products, an R. Field Wine Co. department, a gelato bar and fresh foods prepared by in-store chefs as well as common items in a typical Foodland store.

The overhauled 25,000-square-foot store will become the second Foodland Farms. The first, a 10,000-square-foot store, opened at Mauna Lani Resort on the Big Island in December 2007.

Jenai S. Wall, Foodland chairwoman and CEO, said the company may expand the brand to other locations statewide as opportunities for store renovations arise.

"We are excited about this store, which will bring together all the best that Foodland has to offer, and we know our customers will be, too," she said.

The renovation and rebranding is part of a lease renewal agreement made with the California-based real estate investment firm American Commercial Equities LLC, which bought Aina Haina Shopping Center in June 2007.

Foodland anchors the neighborhood shopping center, but faced a dilemma over whether to leave when its lease expired at the end of this year or renovate the store at considerable expense in a weak economy.

Roger Wall, Foodland's chief administrative officer, said upscaling the store is envisioned as a strategy to retain existing customers from the generally affluent community and draw more customers from the surrounding region.

"It's a major investment, especially in this environment," he said, declining to give a precise cost of the project but saying it will be several million dollars.

For American Commercial, the deal with Foodland gives the landlord traction for its plan to improve the aging shopping center with close to 30 tenants.

Fred Noa, a broker with commercial real estate firm CB Richard Ellis representing American Commercial, said retaining the anchor tenant that has been at the center since it was established will preserve much of the essence of the property as a community retail complex and help encourage other existing and prospective tenants to be part of the project.

"We're going to keep it the same spirit," he said. "The plans have always been to keep it a neighborhood grocery-anchored center."

Uncertainty over the future of the center and its tenants following the purchase by American Commercial has unsettled many 'Aina Haina residents.

In September, more than 200 neighborhood residents attended an 'Aina Haina Community Association meeting hosting an American Commercial executive to say they feared improving the center would drive up rents and drive out longtime businesses that would be replaced with pricey stores.

Since American Commercial's purchase, Komakata Restaurant, Ryan's Sportsworld and Akamai Music & Enrichment have closed. Chuck E. Cheese's, a children's entertainment and restaurant tenant, plans to relocate to Kalihi in June.

Noa said most existing tenants will remain, including popular restaurant Jack's, McDonald's, Cake Couture Cupcakes and First Hawaiian Bank. Noa also said he expects the 'Aina Haina 76 service station will stay.

Arlene Okamura, an 'Aina Haina resident and Foodland customer since 1973, said she was happy to hear about Foodland's plans. "We're excited about that," she said. "They thought enough about the community that they wanted to be here for us."

Foodland, through late founder Maurice J. "Sully" Sullivan, has a deep connection to the shopping center. Sullivan lived across the street from the center, and not only opened the Foodland but also a McDonald's and a Dunkin' Donuts there. Sullivan brought both restaurant franchises to Hawai'i, though Foodland is no longer connected to them.

Jenai Wall, Sullivan's daughter, said the concerns expressed by area residents about Foodland possibly closing helped the company decide to stay. "I think that says a lot about the community," she said. "They have put up with this old store for a long time."

Besides adding gourmet and made-to-order food selections, the upgrade will bring a variety of more standard grocery store features that have been lacking at the 'Aina Haina Foodland such as full-service seafood, bakery, meat and deli departments.

Wall said the changes will add 25 employees to the present store staff of 42. The store will continue Foodland's Maika'i rewards program.

Foodland's cafe and cream puff franchises The Coffee Bean & Tea Leaf and Beard Papa's will not be part of the store, though Wall said Foodland is negotiating for those operations to be part of the center in other spaces.

A timetable for the Foodland renovation depends largely on obtaining building permits, but is expected later this year. The store will close for four months to complete the project.