Local developers plan to begin building an open-air regional mall next year on the Big Island, introducing new stores — possibly including Target — to West Hawai'i and expanding the retail boom hitting the area.

Kona Commons, envisioned as a "retail campus" just north of Kailua village, is to be built in three phases that would become the island's largest shopping complex with 630,000 square feet of store space, roughly one-third the size of the state's largest mall, Ala Moana Center.

A $40 million initial phase with 130,000 square feet is expected to start construction next year and be open in summer 2008.

Among retailers negotiating for space in the project's initial phase are Cost Plus World Market, Pier 1 Imports, Office Max and Borders Books & Music, according to Eric Tema, a project development official.

Other initial tenants may include an electronics superstore, a pet superstore, and 20 to 25 restaurants and smaller retailers, said Tema, real estate development director for The MacNaughton Group, which partnered with Kobayashi Group to develop the project on 65 acres leased from the Queen Lili'uokalani Trust.

Subsequent phases projected to be completed by 2012 are expected to include a fashion mall, discount superstore, full-line department store and perhaps a movie theater.

"It's really a hybrid center that is a lifestyle center, fashion mall and (big-box) power center all in one," Tema said.

The overall project is being designed to reflect a small-town ambiance with tree-lined sidewalks and a main street conducive to pedestrian traffic.

"We want to create a new town center for Kona," Tema said. "You will be able to walk from one end to the other very comfortably."

Tema would not identify prospective tenants for secondary phases, but others familiar with Kona Commons plans said Target is a likely tenant. Target, the nation's No. 2 discount retailer, confirmed in January that it was actively seeking sites for stores in Hawai'i.

Kona has been one of the busiest markets in the state for retail expansion, in part fueled by strong tourism and a growing local population.

There are at least four retail development projects under construction or planned, including a 147,000-square-foot retail and restaurant expansion slated for Lanihau Center, an 88,000-square-foot center in Kailua village.

Under construction farther north is an 82,000-square-foot retail center at Mauna Lani Resort, and 135,000 square feet of new retail at Waikoloa Beach Resort.

Kona Commons would be the largest retail center on the island. By comparison, Prince Kuhio Plaza in Hilo is the Big Island's largest shopping center at about 505,000 square feet.

MORE COMPETITION

Tema said the development team believes Kona is underserved by retail that is mostly at strip-center-style complexes anchored by supermarkets, or more isolated big-box stores like Wal-Mart, Home Depot and Costco Wholesale.

Virginia Isbell, a County Council member representing central and south Kona, said the Kona Commons project should create more retail competition that may lower prices. But she questioned whether there is enough demand for so many additional stores, and said housing for employees will be a major issue.

AS FOR TRAFFIC ...

The project's impact on already bad traffic congestion around Kailua is a lesser concern, in Isbell's view.

Tema said there are road-widening projects under way that should help alleviate some area congestion, but he expects the regional mall to draw people who are shopping at other places in the area.

"Congestion over there is a problem, no question," he said. "We like to think that we're a little bit out of (the worst areas)."

The project is mauka of the old Kona airport park site between Kuakini and Queen Ka'ahumanu highways, and north of an industrial subdivision.

Tema also said phasing development of Kona Commons over five years should allow the additional retail to be gradually absorbed. "We're not trying to overload the market," he said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.