State owners of a major Lahaina development called Villages of Leialiʻi recently offered to transfer for free about 400 acres of the project’s land to the Department of Hawaiian Home Lands. 

Although transfer approval and future plans for the land will have to be ironed out by DHHL, the proposal was praised Thursday during a Hawaii Housing Finance and Development Corp. meeting. 

“Without a doubt, we are excited about the proposal,” said Stewart Matsunaga, acting administrator of DHHL’s land development division. 

Blossom Feiteira, longtime advocate of affordable housing with a focus on Hawaiian Home Lands, also hailed the potential transfer. 

“We applaud the opportunity to expand the department’s reach in the west side of Maui and we look forward to further conversations and eventual transfer of these 400 acres to the department,” she testified. 

Villages of Leialiʻi is a Hawaii Housing Finance and Development Corp. master planned community on 1,128 acres of state-owned land in Lahaina, located mauka Lahaina Civic Center and divided by a long swath of Lahaina Bypass Highway. 

Years in the works, Leialiʻi would eventually hold between approximately 3,000 and 4,000 residential units, two elementary schools, mixed-use, commercial, office and industrial sites, parks and open space, according to its master plan. 

Slightly more than 50 percent of the residential units will be affordable and go to families at 140% and below the Area Median Income. Other units would be market rate, HHFDC project manager Stan Fujimoto said during Thursday’s meeting. 

On Jan. 27, Hawaii Housing Finance and Development Corporation met with DHHL to discuss transfer of the stateʻs remaining undeveloped Leialiʻi land — 402 acres — to DHHL.

A transfer agreement was drafted Feb. 22, which included certain obligations of water and roadway infrastructure, along with other terms.  

Matsunaga on Thursday said that the department is reviewing the area, the conditions and other terms. 

“I know there was a question regarding how the land will be used,” he said. “I think the first thing is that we will go to our commission to recommend acceptance of the offer and allow the chair to negotiate the terms and conditions of the transfer.” 

Matsunaga added that officials have been in preliminary conversations with beneficiary liaisons on the west side. 

Maui County Council Member Tamara Paltin, whose residency seat covers West Maui, later Thursday said that she agrees with the transfer.

“I totally support this transfer of crown lands to DHHL because I don’t believe they should ever be sold,” she told Maui Now.

During the meeting, members confirmed that Leialiʻi is public trust, ceded land.

In 2005, Villages 1A and 1B of Leialiʻi, comprising about 72 acres, were transferred to DHHL. In 2007, DHHL completed Village 1A’s 104 homes and is currently working on 175 to 250 residential units in Village 1B. 

Also Thursday, Fujimoto provided updates on the Leialiʻi project, including funding details and construction timeline for Kaiaulu o Kūkuʻia, a 200-unit affordable family rental housing plan at the southwestern part of Leialiʻi, north of Keawe Street Extension and mauka existing Upper Kapunakea House lots.

Kaiaulu o Kūkuʻia construction is slated to start this summer, he said.