A private developer would get the chance to erect the tallest high-rise in Hawaii and sell market-rate condominiums as an incentive to build a project in Kakaako that would also provide affordable housing and commercial, civic and community office space near Honolulu’s planned rail line.

The Hawaii Community Development Authority voted Wednesday to proceed with 690 Pohukaina, a $500 million mixed-use, transit-oriented development on state-owned land next to Mother Waldron Park.

The developer chosen by the authority could erect a 650-foot tower for market-rate condominiums that would offer spectacular, unobstructed views of the ocean and downtown. The tower would be Hawaii’s signature high-rise, dwarfing the First Hawaiian Bank tower downtown, which is now the state’s tallest building at 438 feet.

The state agency would allow the developer to exceed height and density limits with the intent to achieve a broader policy goal of guiding housing and commercial growth in Hono­lulu’s urban core. The project would be within walking distance of downtown and Ward Centers, close to bus routes, and several blocks from the planned rail line’s Kakaako station.

"This is housing for our people," said Gov. Neil Abercrombie, who urged the authority to advance the project. "And, at the same time, provides a development opportunity for a true public-private partnership."

Abercrombie, as a fire-breathing young state representative, voted against the creation of the Hawaii Community Development Authority in 1976 and derided high-rise condos in the region as "kennels for the rich."

But as governor, he has made work-force housing through public-private partnerships a priority in his "A New Day in Hawaii" agenda. He has also called for building transit-oriented development before a rail line is constructed.

"The key to ending urban sprawl, ending arguments about where we’re going to build, is to have urban density in the urban core that makes sense in community terms," Abercrombie said. "And Kakaako is the ideal laboratory for this to take place."

Bruce Coppa, Abercrombie’s chief of staff, still serves as a member of the authority from his previous role as state comptroller.

The Kakaako resident, who has strong ties to the real estate development and construction industries, said he recommended the project to the governor. He joined with other authority members in a unanimous vote for the project.

"This is something you have to do. It’s been sitting too long," Coppa said he told Abercrombie. "And it really fits into the ‘New Day’ plan."

The authority estimates the project will create 500 construction-related jobs and as many as 1,000 indirect jobs.

The first phase of 690 Pohukaina could break ground in February with 204 units of affordable rental housing at Halekauwila Place and 282 parking stalls. A three-bedroom rental is expected to go for about $1,370 a month.

The authority in 2007 selected Stanford Carr as the developer for Halekauwila Place, but the project struggled to obtain financing. Carr said Wednesday that he is now ready to proceed.

The second phase of the project involves 500 units of market-rate housing in the massive tower and 300 units of affordable housing in a smaller building. The affordable units could sell for about $350,000.

Office space would be set aside for civic and community groups, including Friends of the Library of Hawaii, which occupies the old Pohukaina School property now owned by the state Department of Land and Natural Resources. Abercrombie committed to convey the state land for the project.

The third and final phase involves a high-tech business incubator, commercial office space, and 810 parking stalls. The state authority will issue a request for proposals for developers. The first phase of the project could be finished by March 2015, while phases two and three could be done by August 2019.

Carr said he is interested.

"That would be a dream come true — build the tallest building in Hawaii," he said.

Ambitious residential and commercial development projects have been pitched for Kakaako in the past but many never moved off the drafting table.

Alexander & Baldwin Inc., for example, was chosen by the authority to develop high-rise condominium towers, an expanded park, a hula amphitheater and retail shops and restaurants along the Kakaako waterfront.

But a coalition of surfers and community members objected to the sale of state land for the project. State lawmakers voted in 2006 to restrict residential development on state land along the waterfront, and Alexander & Baldwin dropped the project.

Dexter Okada, of the Kakaako Business & Landowners Association, asked the authority on Wednesday not to advance 690 Pohukaina. He said he is concerned about the impact of redevelopment on nearby small businesses.

"We do need affordable housing, but we also need jobs," he told authority members.

Okada, the president and general manager of a fish and seafood wholesale distribution company, also wondered whether the authority was moving too quickly.

The authority would hold public hearings to get community feedback before the project gets final approval.

Anthony Ching, authority executive director, said allowing a private developer to exceed the 400-foot height restriction and build a 650-foot tower creates a "value incentive."

"That you have a unique project. That you will have unobstructed views," he said. "And that you clearly are a one-of-a-kind type of situation."