About 9,000 acres of Big Island forest land once scheduled to become a golf course and luxury home development will be preserved as conservation land, thanks to the generosity of the landowner and up to $4 million in grants from the federal government, state officials said yesterday.

The money will be used to buy a conservation easement on much of the Kealakekua Heritage Ranch about 20 miles south of Kailua, Kona, according to the state Department of Land and Natural Resources.

Neighboring landowners Gussie and John Pace bought the ranch, much of it covered in koa and 'ohi'a forest, in 2004 in an effort to keep it from being further developed. Now, they have agreed to sell the conservation rights to the state, a move that will block development forever, officials said.

"Everybody needs a place for silence. This will be that place," said Gussie Pace, 88. "It's the most beautiful place you can imagine."

The Paces, who said they try to plant up to 10,000 trees a year on their property, moved to the Big Island about 25 years ago after successful forestry careers in Florida and live on a ranch adjacent to the the property that will be preserved.

Using grants from the U.S. Department of Agriculture's Forest Legacy Program, the state plans to pay $2 million this year and $2 million next year to buy the conservation easement. The easement means that the Paces will continue to own the property, but the state will control conservation rights there, including cattle grazing and forest cutting.

Before the Paces bought the property, Hawai'i County had approved a $25 million to $35 million plan to build 500 luxury homes and an Arnold Palmer golf course.

"This allows us to put permanent protections in place on the land," said DLNR Chairwoman Laura H. Thielen.

The Paces will retain development rights to about 3,000 acres that had been cleared for cattle ranching and was not eligible for funds from the Forest Legacy program. They plan their own residential development on the remaining land.

Officials said the $4 million price tag is a "tremendous bargain." A 2005 assessment of the property valued the easement at more than $30 million, DLNR said. The Pace family donated the remaining value of the property.

The land has a long history of timber extraction, including koa and sandalwood trees that were cut for long straight boards, leaving the rest of the trees to decay on the land. After buying the property, the family built a wood shop and kiln and hired local woodworkers to salvage dead wood for use in wood floors, cabinets and furniture.

The family also has agreed to restore the land under the state's Forest Stewardship Program for the next 30 years. The program will include a reduction in the size of existing cattle herds and fencing sensitive areas for natural regeneration.

"Once we can manage the cattle and start to get the land reforested, the koa is going to come back in a hurry," said John Henshaw, a regional manager for the Forest Legacy program.

"If the Pace family hadn't acted, this land would certainly have been owned and developed by somebody else," he said.

Reach Mike Leidemann at mleidemann@honoluluadvertiser.com.