Long-delayed plans by Castle & Cooke Homes Hawai'i Inc. to create a new master-planned community below Mililani are headed for a crucial test next month that could put the 5,000-home project generally known as Koa Ridge on track for a 2011 start.

A hearing before the state Land Use Commission is tentatively scheduled for Jan. 21 to consider whether 768 acres owned by the company and previously used to grow pineapple should be converted from agriculture to urban use.[0x0b]

The hearing could be contentious because of issues over increased traffic and the loss of prime farmland on O'ahu.

Two groups closely watching the project, the Sierra Club Hawai'i Chapter and the Mililani/Waipi'o/Malemanu Neighborhood Board, recently were granted "intervener" status by the LUC allowing them to cross examine Castle & Cooke expert testimony and present their own experts.

AFFORDABLE HOMES

Koa Ridge, an estimated $2.2 billion project designed for one-third the number of homes in Mililani on one-quarter the land area, has already experienced a difficult history that includes being blocked by a legal challenge after the LUC approved an earlier version of the project in 2002.

Bruce Barrett, executive vice president of residential operations for Castle & Cooke Homes Hawai'i, said the company believes it has come up with an attractive and workable plan following its past regulatory experiences and input from numerous community workshops.

"We don't anticipate any major hurdles that will throw us back," he said. "We have learned a lot."

Castle & Cooke said its Koa Ridge site is appropriate for urban use because it's within the city's urban growth boundary and is adjacent to the urban communities of Waipi'o and Mililani as well as 3,700 acres owned by Kamehameha Schools approved for urban use.

The project also will create affordable housing that's in short supply. It is anticipated that the city will require at least 30 percent of Koa Ridge housing, or 1,500 homes, be affordable to families earning no more than 120 percent of Honolulu's median income. Today that would equate to a maximum sales price of $435,400 for a family of four assuming a 5 percent mortgage interest rate.

Koa Ridge in the mid-1990s was conceived to dovetail with the completion of Mililani, where Castle & Cooke finished building the last of 16,000 homes on 3,500 acres last year, capping 40 years of work that produced what many regard as Hawai'i's first master-planned community.

That timing hasn't worked out, and has resulted in a series of significant changes to the project over the last decade or so, including making most homes multi-family units and shifting the commercial component from more of a medical services focus to more of a retail focus.

CHANGING PLANS

Early on, Koa Ridge was envisioned largely as a retirement community with a medical mall that included a hospital, assisted-living facilities, a medical technology park, biotechnology center, medical hotel and a sports medicine complex. At one time there even was an effort to have the University of Hawai'i build a new medical school as part of the project.

In 2000, the developer sought LUC approval to build up to 7,500 homes on 1,248 acres in the area below Mililani on both sides of H-2 Freeway. The project was divided in three pieces — Koa Ridge Mauka, Koa Ridge Makai and Castle & Cooke Waiawa.

The LUC in 2002 approved two pieces, Koa Ridge Makai and Castle & Cooke Waiawa, with a combined 3,200 homes on about 760 acres. Completion of the first homes was estimated for 2007.

But the Sierra Club filed a lawsuit arguing that an environmental assessment should have been done prior to any land-use change. Castle & Cooke intended to complete the assessment after the LUC decision but before City Council consideration of a zoning change. A Circuit Court judge ruled in favor of the Sierra Club, and the decision was upheld by the Hawai'i Supreme Court in a 2006 ruling that nullified the land-use change.

Two years ago, Castle & Cooke shifted its plan, opting to proceed first with its Waiawa component comprising 1,500 homes on 192 acres. The change was made because of litigation with an affiliate of Wahiawa Hospital Association that intended to develop a 210-acre medical campus at Koa Ridge Makai.

But last year, Castle & Cooke again amended its plan after resolving its dispute with Wahiawa Hospital in part by downsizing the medical campus, and began work on a new environmental impact statement that proposed developing Koa Ridge Makai before Castle & Cooke Waiawa.

The project's environmental impact statement was finalized in June. But last month, the developer amended its LUC application to comply with commission rules that require separating a project into phases if all the land sought for reclassification isn't expected to be developed within 10 years.

This same rule in August set back an effort by developer D.R. Horton's Schuler Division to obtain approval for its project on the 'Ewa Plain called Ho'opili.

To comply with the rule, Castle & Cooke now estimates it can begin building homes at Koa Ridge Makai in 2012 and finish by 2020. The first Castle & Cooke Waiawa homes are estimated to be delivered in 2021, however the actual timetable is dependent on development of a neighboring master-planned community.

COMPANION PROJECT

That adjacent project is Waiawa Ridge, a more than 20-year-old plan that previously was expected to produce the first of 10,000 to 12,000 permitted homes next year. But developer Gentry Cos. recently lost its right to develop the 3,700-acre property after landowner Kamehameha Schools terminated an agreement from 1987 for Gentry to buy the land.

Gentry was going to pay for and construct much of the infrastructure to access the Castle & Cooke Waiawa site, including an extension of Ka Uka Boulevard across Panakauahi Gulch and a sewer connection to Pearl City. Gentry and Castle & Cooke expected to share costs for a potable water supply. Waiawa Ridge also is supposed to provide the site for a middle and high school to accommodate both communities.

The uncertainty over Waiawa Ridge leads some observers to question whether plans need to be changed for addressing traffic and school improvements.

Castle & Cooke officials say they are confident that that Gentry or someone else will develop Waiawa Ridge in time to allow for development of Castle & Cooke Waiawa, and that there's sufficient time to adjust school and traffic improvement plans if Waiawa Ridge doesn't proceed, given that only 200 to 425 Koa Ridge Makai homes are projected to be built per year.

NEIGHBOR CONCERNS

In its petition, Castle & Cooke is still asking the LUC to reclassify all 768 acres for Koa Ridge Makai and Waiawa parcels.

General concerns over the project primarly involve traffic and the loss of agriculture land.

"How many cars can you put on H-2 before you can't get out of your driveway?" asked Richard Poirier, a Mililani resident since 1967 and chairman of the area neighborhood board.

Castle & Cooke said it has tried to balance creation of jobs and homes at Koa Ridge to reduce the impact on commuting in and out of the area. An estimated 2,500 jobs are projected to be created in the community, providing one job for every 1.4 homes. The developer also plans to spend $50 million on traffic improvements, including new freeway interchange connections at Ka Uka Boulevard. A direct connection linking H-2 to a park-and-ride rail station at Pearl Highlands is also planned as part of the city's rail project.

A traffic impact study from Castle & Cooke forecasts mostly unchanged levels of service to regional roads and the freeway, though some negative impacts are projected at certain intersections, ramps and roads.

A loss of prime farmland is another concern. Dole Food Co., which like Castle & Cooke, is owned by billionaire David Murdock, ceased farming pineapple on Koa Ridge Makai land in 2001. Most of the Castle & Cooke Waiawa property also was also formerly planted in pineapple but has been fallow since 1993 and is mostly leased for cattle grazing.

About 325 acres, or close to half the Koa Ridge Makai property, is farmed by Aloun Farms, which leases the land to raise vegetables and seed corn. Castle & Cooke said it has arranged for Aloun to relocate to 335 acres of fallow Dole land in Wahiawa with soil and water suitable to continue Aloun operations. The developer also said its cattle tenant, Flying R Livestock Co., which leases nearly all of the Castle & Cooke Waiawa site, will be relocated on adjacent land.

The state Department of Agriculture in comments to Castle & Cooke's environmental impact statement expressed concern about the project's impact on agriculture, but said the relocation plans largely mitigate the impact.

Some comments in the environmental impact statement raised the issue of whether past use of herbicides and pesticides on the land presents a health hazard. The developer said soil testing will be conducted and the response to results will comply with federal and local laws. Clean water standards also will be met.

If approved, a land-use change would advance the project to the next major regulatory step, a zoning change to be considered by the City Council.