The last undeveloped piece of the Villages of Kapolei is being positioned for development by the state, which envisions a "cornerstone" project at the community’s entryway with possibly retail stores, restaurants and homes.

The Hawaii Housing Finance and Development Corp., a state agency that owns the 27-acre site makai of Walmart, announced its intent Friday to seek competitive bids from private developers.

"At the entryway to the Villages of Kapolei, we envision a distinctive project that will complement the character of the community," Karen Seddon, the agency’s executive director, said in a statement.

HHFDC is considering selling or leasing the property, which is vacant and has been used for fairs and other community events over the years.

The land, which partially borders homes and the Kapolei Golf Course, was originally planned for four projects — a commercial center, a church, a park-and-ride lot and senior housing — in a second phase of Villages of Kapolei, according to a 1988 environmental impact statement.

But development plans shifted, and as the state’s master-planned community on 888 acres grew with 4,000 homes, a golf course, three schools, parks and other facilities, the parcel now referred to as the "Northwest Corner" was left undeveloped.

The city rezoned the land in 2001 to allow commercial and residential development in buildings up to 60 feet.

In 2007 HHFDC produced concepts for the site with planning firm PBR Hawaii that illustrated potential uses for the land including strictly residential, a neighborhood retail center, big-box retail and a mixed-use concept with 387,000 square feet of commercial space and 750 to 800 homes.

The agency’s Friday announcement states that one objective for the project is moderate-priced housing. Small-scale retail is another desire.

"Kapolei has a substantial amount of large-format retail, including Walmart across the street from the (project site)," the announcement said. "To diversify the local shopping options, HHFDC is envisioning a development that offers smaller stores and restaurants as complementary alternatives to the existing retail centers."

The announcement also says that because the property is at the gateway to Villages of Kapolei, the project should be a focal point and announce an arrival at the community.

Evelyn Souza, chairwoman of the Makakilo/ Kapolei/Honokai Hale Neighborhood Board, said the parcel has been of good use as a fairgrounds, though she welcomes commercial development that gives area consumers more options for services.

"It is in keeping with the live/work/play concept," she said.

Souza, who has lived in Makakilo for about 43 years, also said she’d like to see a church be part of the plan in keeping with the original vision.

HHFDC said developers shall include robust community participation in exploring project components. Analyzing traffic and environmental conditions is another requirement.

The agency initiated the project Friday by asking interested developers to submit their qualifications by Oct. 11, after which the agency will rank and invite a limited number of the most qualified companies or teams to submit development proposals.

HHFDC anticipates selecting a preferred plan by April and then negotiating land lease or sale terms. A second plan also may be selected as an alternate should negotiations fail for the preferred plan.

A property appraisal in 2007 valued the land at $34.3 million, which translates to $2.75 million in annual ground rent.

Proceeds from a lease or sale will be used by HHFDC to advance its homeownership programs and to finance and develop housing for residents with low to moderate incomes.