Kamehameha Schools began work Thursday on a project that will convert a four-story office and retail building in Kakaako into 54 studio and one-bedroom rental apartments targeted for median-income workers.

Kamehameha Schools officials said the project at 680 Ala Moana Blvd. "is answering the demand for workforce rental housing in urban Honolulu." The units will be reserved for families earning 100 percent of the Honolulu median income or less. That translates to an income cap of about $75,000 for a family of three.

Although rents have not yet been set, they would not exceed $1,630 a month for the one-bedroom units and $1,530 for the studios under guidelines set by the U.S. Department of Housing and Urban Development.

The redevelopment is the first project in Kamehameha Schools’ 15-year Kakaako master plan, approved by the Hawaii Community Development Authority in 2009. The plan directs a shift to a pedestrian-oriented neighborhood with tree-lined thoroughfares, local manufacturing and retail and open community gathering spaces.

The plan envisions a mix of housing types, including lofts, urban townhouses, work-live units, as well as high-rise condo units.

The 680 Ala Moana project, within walking distance of downtown and Ala Moana Center, will include amenities such as a media room, lounge room for gatherings and a rooftop recreation deck. Interior finishes include 12-foot ceilings, kitchens with islands in one-bedroom units, full kitchens in studios and air conditioning and compact fluorescent lighting in all units.

The project will include 8,600 square feet of commercial space on the ground floor.

"We are incredibly proud of this project," said Paul Kay, Kamehameha Schools’ director of development. "680 Ala Moana exemplifies the kind of neighborhood we want Kakaako to be. It will be vibrant and innovative with a uniquely local feel. It will be part of a neighborhood that everyone will be comfortable in."

The project will retain the concrete exterior of the building, which is being adapted. Construction is expected to be complete by fall . Kamehameha also has announced construction of a 60,000-square-foot retail center directly behind 680 Ala Moana.

Architects Hawaii Limited is the architect on the project. Allied Builders System is the general contractor, and Newman Garrison + Partners is doing the interior design.