Kamehameha Schools notified the owners of Aoki’s Shave Ice and ‘Iwa Gallery this week that their leases will end May 31 as part of a redevelopment that calls for demolishing the buildings housing the longtime businesses.

The state’s largest private landowner, with 363,000 acres statewide, plans to redevelop the area along Kamehameha Highway between Kewalo and Mahaulu lanes in historic Hale­iwa town, renaming the commercial area, originally known as Wai­alua Store Lots, to Hale­iwa Store Lots. The $9 billion trust said it is unable to preserve the deteriorating buildings housing the shave ice shop and art gallery. Owners of the stores couldn’t be reached for comment.

"The improvements are needed to strengthen aging infrastructure and increase pedestrian safety by moving customer queues away from the edge of busy Kamehameha Highway," the landowner said Friday in a news release.

The redevelopment, involving new landscaping, will add 108 parking stalls to the rear of the buildings and provide more retail space for local businesses, Kamehameha said. The project, as part of a strategy to increase sources of revenue through additional lease space, is estimated to cost $12.6 million.

Besides demolishing the buildings, the landowner will improve pedestrian walkways, re-create similar architectural designs in new structures and retain five historic buildings, including Matsu­moto Shave Ice, Matsu­moto office and storage space, and two Yoshida buildings.

Aoki Shave Ice has been in Hale­iwa since 1981.

The Honolulu City Council approved in November a zone change for the 4-acre parcel. Kamehameha plans to seek contractor bids in April and begin construction this summer. The project is expected to be completed by mid-2014.

Kamehameha has hired a conservation architect to photograph and document the Aoki’s Shave Ice and ‘Iwa Gallery buildings before they are torn down.