Looking for more sources of revenue through additional lease space, landowner Kamehameha Schools hopes to "revitalize" a block of historic Haleiwa Town that is home to the popular Matsumoto and Aoki shave ice stores — a change prompting some businesses there to rethink their future.

"We’re not sure we’re going to be part of the change. We’re not sure what we want to do," said Cathy Aoki, one of the owners of Aoki’s Shave Ice.

A draft environmental assessment for the Kamehameha Schools Haleiwa Commercial Redevelopment Project is available for review at the state Office of Environmental Quality Control website (1.usa.gov/ l3bltw) in its current notices.

While the building housing Matsumoto Shave Ice will be retained, the redevelopment plan calls for demolishing the building housing Aoki’s.

Aoki said although Kamehameha Schools has offered her family a space at the complex, she’s unsure how the change might affect their business, one started by her grandparents in 1981.

But she said the family plans to continue the shave ice business somewhere, perhaps across the street where it owns land and a storefront.

Kamehameha Schools said it is discussing leases with various tenants but that nothing is firm.

Haleiwa resident Katie Thebeau, a sales manager at San Lorenzo store near the proposed redevelopment, said she thinks the improvements will bring more foot traffic to stores and create more jobs for town residents.

"I think it’s good," she said.

Under the plan, Kamehameha Schools wants to increase the amount of leasing space by nearly 100 percent to about 30,000 square feet on the 4.2-acre site and to build a rear parking lot with 110 parking spaces, including a bus loading area.

The change would move the lines of customers from the front to the side of Matsumoto Shave Ice — founded in 1951 — redirecting waiting pedestrians away from Kamehameha Highway.

Some Matsumoto customers said they liked the idea of being farther away from traffic but hoped the redevelopment would maintain the country look of the town.

As long as they keep the facade (of buildings), the old town feeling, it’s OK," said Oscar Ramiscal, a Waialua resident who was waiting in line recently with his family.

The landowner wants to improve pedestrian walkways, demolish some old buildings such as Aoki’s and Iwa Gallery, re-create similar architectural designs in new structures and retain four historic buildings, including Matsumoto Shave Ice, Matsumoto office and storage space, and two Yoshida buildings.

Kamehameha Schools spokesman Kekoa Paulsen said the decision to demolish some buildings is based on making sure the structures are sound and comply with existing regulations.

Kamehameha Schools said it wants to keep the rural look of the buildings and provide space for products made and grown in Hawaii.

"Kamehameha Schools is committed to redeveloping this important property in a manner that supports the community’s vision to retain and enhance Haleiwa’s historic country character," he said.

Paulsen said the current lease rents are short-term and reflect the existing condition of buildings, while the lease rents for buildings in the restoration will be comparable to other businesses in Haleiwa.

Its redevelopment plans will require city and state approvals, including the elimination of an on-street bus stop space fronting the businesses and reduction of traffic entry points from six to two, allowing access only through Kewalo and Mahaulu lanes.

Kamehameha Schools will also need to seek a change in the zoning to B-1 business.

The store buildings have nonconforming zoning permits to operate their businesses, and the parking lot area in the rear is zoned agricultural.

Beth Fotinos said she and her husband, Scott Bechtol, have no idea where they might relocate.

The shop sells arts and crafts made by Hawaii artists including candle wax sculptures made by Bechtol, who has been in the same location for 29 years.

"It’s too bad we can’t make it here with affordable rents," Bechtol said.

"Kids like to watch me. They learn carving from me. I teach them candle making and carving. … I feel like the heart will be taken out from Haleiwa. … We should have people actually making stuff here and stuff made in Hawaii."

Fotinos said if the gallery closes, the craftspeople and artists will have to find another place to sell their work.

"It’s scary on a lot of levels," she said.

Comments about the environmental assessment may be mailed by July 7 to Kamehameha Schools, 567 S. King St., Suite 200, Honolulu 96813.