Pearl Harbor shipyard hopes the Navy will fund at least two military construction projects per year over the next 10 years — each of which would be in the millions of dollars — as part of an $800 million modernization planned through 2035.

It's a complicated undertaking that pits the shipyard against other competing demands for Navy funding and requires the cooperation of historic preservation groups on the plan that calls for reusing some buildings, demolishing others and building new ones in the Pearl Harbor National Historic Landmark district.

Kiersten Faulkner, executive director of the Historic Hawai'i Foundation, said "the Navy has built up a lot of good will in the last couple of years — and I think that will pay off for them now."

Faulkner said shipyard commander Capt. Greg Thomas has been "very willing" to look at adaptive reuse, while past versions of the plan — and past commanders — contemplated more demolition that was opposed by preservationists. Charlie Ota, vice president for military affairs with the Chamber of Commerce of Hawai'i, said there's been progress in moving beyond preservation-issue roadblocks.

Next up is securing funding for future projects through Navy budgeting.

"It has to be sold up the chain of command in the Navy," Ota said.

U.S. Sen. Daniel K. Inouye, D-Hawai'i, recently presided over the groundbreaking of a $25.5 million project that is the "first step" in the ambitious modernization.

REALISTIC PROJECT

It was the first military construction money received by the shipyard since 2005, and was obtained as an earmark by the powerful Inouye, chairman of the Senate Appropriations Committee.

The shipyard previously talked about an up to $2 billion modernization, but in December finalized the $800 million plan, which is less costly because it would involve less demolition and less new construction.

The old plan looked at almost completely rebuilding the yard — even relaying the roads that run through it, officials said.

"Our new plan is scoped more realistically with adaptive reuse (of existing buildings) as a major consideration," said Kerry Gershaneck, congressional and public affairs officer for the shipyard.

Tin-roofed and steel-sided structures built for World War I- and II-era requirements that are spread across the shipyard are now inefficient for work on nuclear submarines, which represent 90 percent of the work done at the state's largest industrial employer.

"The Asia-Pacific area is a place of special concern, a place of potential problems and potential trouble ... so we should be ready and prepared," Inouye said at the groundbreaking.

The construction project, awarded to Nova Group Inc., will provide permanent facilities for the distribution of water, compressed air, welding gases and other utilities to dry docks and piers.

"We must modernize to ensure we can support the 21st-century fleet," said Thomas, the shipyard commander.

The shipyard is spread out over nearly 150 acres within the Pearl Harbor Naval Complex, and includes 176 buildings and 38 other structures, including four dry docks, piers, and wharves.

The oldest dry dock was completed 90 years ago. The newest dates to World War II.

The majority of the industrial structures were built between 1913 and the end of the war, according to the shipyard.

During its early history, the primary fleet assets were aircraft carriers, battleships and cruisers. Ship components were removed and worked on in the "back" shops away from the waterfront.

Gershaneck, the shipyard spokesman, said the scope of the yard's work has changed extensively.

Roughly 90 percent of the work done now is on submarines, with the remainder devoted to surface ship maintenance.

"Most of the project work is now completed at the waterfront, either on or next to the project ship or submarine," he said.

EMPHASIS ON PACIFIC

With a new military emphasis on the Pacific, the shipyard's 4,200 civilian workforce could grow to 4,550 over the next seven years, officials say.

By moving nine submarines to the Pacific by 2011 — three Los Angeles-class, three Seawolf, and three from the new Virginia class to Pearl Harbor — the Navy has said it will have achieved a desired 60-40 split of submarines in the Pacific versus Atlantic.

The first Virginia-class submarine coming to Pearl Harbor, the aptly named USS Hawai'i, is expected to arrive in July.

The modernization planned through 2035 envisions 30 projects. Ten new construction projects would total 415,000 square feet, but the shipyard "footprint" would be smaller with the reduction of 50 temporary or relocatable structures totaling 760,000 square feet, according to the Navy.

The projects would help improve efficiency and keep down cost overruns, which historically have been challenges for Pearl. Thomas was brought on in June 2007 as shipyard commander to change that, and by all accounts, he's been successful.

"He's got production up despite the infrastructure issues," Ota said. "He's got the team working together."

Historic Hawai'i's Faulkner said shipyard officials and Thomas have been creative in planning to integrate preservation of the exterior of many of the buildings with modernization of their functions in the building-within-a-building approach that has been used on Ford Island and at Hickam Air Force Base.

"So I'm very pleased with the direction they've gone," she said. "It doesn't work all the time — there will still be some demolition — and in those cases, we of course want to look at the design of the new structure and make sure it's compatible and fits into the (historic) context. But at least they are not looking at that as their first choice."

Historic Hawai'i and other preservation groups have been in informal discussions with the Navy over the issue, and this month will begin formal discussions with the goal of developing a programmatic agreement.

WATERFRONT PROJECTS

The shipyard hopes two projects can be started in 2010 — a waterfront project team facility to replace temporary buildings or tents, and a production services support building.

Both would help improve waterfront efficiency, officials said.

The Chamber of Commerce's Ota said past disagreements over the preservation issues kept the shipyard from receiving military construction funding.

"The problem was, at the Department of the Navy level, they were very leery because they knew that the Pearl Harbor shipyard people were having problems with the historic parties here in getting these projects cleared in terms of historic requirements," Ota said. "So once they buy off on this, they send it up to the Navy level and the Department of the Navy buys off, then they can start processing these projects."

There are also competitive funding issues with tightening budgets across the Navy.

In October, New Hampshire U.S. Rep. Carol Shea-Porter, a Democrat, complained that the Navy had not asked Congress for construction-related funding for projects at Portsmouth Naval Shipyard since 1971.

The survival of the shipyard has been dependent almost exclusively on congressional earmarks, or add-ons, she said. Over the past 11 years, at least $730 million was secured for Portsmouth projects through earmarks.

Gershaneck said he's optimistic about modernization, "not always as quickly as we would like, but we're optimistic that we will modernize the shipyard."