The developer of a planned moderate-priced condominium tower at 803 Waimanu St. in Kakaako ran into trouble Wednesday, when the staff at a state agency said the development permit should be denied.

But developer Franco Mola of MJF Development Corp. vowed not to give up, and to perhaps return with a new plan for workforce housing on the property.

A staff report by the Hawaii Community Development Authority, the agency regulating development in the area, concluded that the height of the proposed 192-unit tower and its proximity to the neighboring Imperial Plaza tower would have "substantial adverse effect" on the neighborhood.

The report recommended that the agency’s board deny a development permit for the project dubbed 803 Waimanu. But the board is required to give the developer a chance to respond in writing before voting to deny or approve the permit.

That vote is scheduled for Aug. 7.

The board voted 6-0 to adopt the staff finding on adverse effects.

The staff recommendation was made after a presentation by the developer and initial public comments in May, and an additional public comment session in June.

HCDA received 364 comments supporting the project, and 1,239 in opposition.

At Wednesday’s public hearing, more testimony was accepted before the board’s vote.

Speakers at the hearing tilted in favor of supporters, many of whom wore blue T-shirts printed with "YES ON 803" on the front and a thumbs up image on the back.

Many opponents wore red shirts without messages, except for one observer whose handwritten shirt said "No Domino Condos."

Of 23 public speakers at the hearing, 15 were supportive primarily because the project would produce badly needed affordable housing in which they might live.

"This project put a hope in my eyes," said Sheree Steward, a single mother and renter trying to support two children in college.

Desmond Amper testified with his young daughter in his arms and lamented about his commute to town. "To spend more time with her and less time on the road would be really beneficial to our family," he said.

But opponents objected to the rule deviations Mola sought, and one noted that workforce housing is being planned and built in Kakaako.

Justin Scott said bending the rules for a good cause isn’t appropriate in this case, and asked theoretically if risking the safety of people by driving dangerously would be OK if the driver was en route to help orphans.

Bernard Nunies, an Imperial Plaza resident, testified on behalf of many of his neighbors and called the exemptions an "extreme" departure from HCDA’s Mauka Area Rules governing building heights and tower spacing.

"We didn’t make the Mauka Area Rules," he said. "All we are asking is you enforce the rules that you established."

HCDA rules allow discretionary deviations from development regulations for projects like 803 Waimanu that qualify as "workforce housing."

Such projects can’t tap government financing and must provide at least 75 percent of units to occupants earning 100 percent to 140 percent of Honolulu’s median household annual income.

At 803 Waimanu, all units were slated to be affordable to households earning 90 percent to 120 percent of the median income, a range equating to $61,740 for a single person or $88,110 for a family of four at 90 percent. At 120 percent the comparable figures are $82,320 and $117,480.

Mola said 803 Waimanu unit prices would start at $249,000 for studios with 372 square feet of living space, and range up to $586,000 for three-bedroom units with 1,086 square feet of space. Most units would have one or two bedrooms and range from $375,000 to $450,000.

But because the project site is relatively small, Mola sought several deviations, including two major ones. One was to build the tower 250 feet high. That would be 185 feet above the site’s 65-foot height limit, which was reduced from 400 feet two years ago in an HCDA rule revision.

Mola also asked to build the tower closer to Imperial Plaza than allowed.

HCDA tower-spacing rules require minimum gaps of 300 feet in the mauka-makai direction and 80 feet in the Ewa-Diamond Head direction.

A small part of 803 Waimanu would be 90 feet makai of Imperial Plaza’s main tower, and the whole building would be 39 feet Diamond Head of Imperial Plaza’s mid-rise tower.

Anthony Ching, HCDA executive director, said the major deviations would have substantial adverse effects on surrounding land users and the neighborhood character. He recommended that the board deny a permit for 803 Waimanu.

Mola said he would continue his effort to develop workforce housing on the site. "We will be back," he said. "This is not the last day."