Alexander & Baldwin Inc. plans to develop a mix of residential and commercial condominiums on Maui, the company's second planned mixed-use project in Kahului.

A subsidiary of A&B Properties expects to begin selling an initial phase of 14 units of the project's 103 residential condos at a lottery limited to prospective owner-occupants on May 31.

Depending on the response from buyers and the permitting process, construction could begin in mid-2007 and be completed in 2008.

The project, 'Aina o Kane, is on property bordered by Kane, Vevau and School streets — a site leased to go-cart and radio-controlled-car operators on a month-to-month basis.

Grant Chun, vice president of A&B Properties, in a statement said the project will deliver needed housing in Central Maui that's within easy walking distance of Maui Community College and several shopping centers including Maui's largest, Queen Ka'ahumanu Center.

"We are very pleased to to be proceeding with this development that can serve the local residential market," he said.

Prices in the first phase range from $314,900 for 2-bedroom, 1-bathroom units to $399,000 for 3-bedroom, 2-bathroom units. 'Aina Maui Properties is handling sales.

The residential units will mostly be on three upper floors of four-story buildings with one ground-floor commercial unit. The project has four mixed-use buildings, and a fifth building with only residential units.

A&B expects to begin marketing and selling the four commercial units totaling 19,800 square feet soon.

The project is A&B's second mixed-use project planned in Kahului. The company plans to replace its 100,000-square-foot Kahului Shopping Center, which partially burned down last year, with 150,000 square feet of retail and office space topped by about 200 to 300 condos. A&B is working on design and permitting, and expects construction could start next year.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.