The financial woes plaguing the University of Hawaii-West Oahu campus has prompted a legislator to propose the state take back the hundreds of unused acreage surrounding the Kapolei campus in exchange for helping the school cover its operating costs.

The West Oahu campus sits on about 80 acres — a small fraction of a 500-acre parcel donated by the former James Campbell Estate. The state also acquired 991 acres of mauka land from the estate in a deal that required the state to designate a portion for the college.

A private developer was expected to help build the Kapolei campus in exchange for development rights on up to 200 acres of the 500-acre site for housing and commercial development. But that agreement fell apart with the collapse of the credit market, leaving UH-West Oahu looking to the state for help.

West Oahu Chancellor Rockne Freitas has said the college has moved away from the original concept of selling land to pay for operations, and will instead seek funds from the state Legislature next year to cover costs. Freitas said authority over the excess land lies with the Board of Regents and system president.

The campus is seeking about $3.5 million more from the Legislature for operations next year and $30 million for capital improvement projects. The $3.5 million would be on top of $8.5 million in general funds lawmakers approved last session for the upcoming 2014-2015 year.

The Legislature, which enacts two-year budgets, will take up the so-called supplemental state budget next month.

Donna Kiyosaki, UH-West Oahu’s vice chancellor for administration, told lawmakers at a budget briefing at the Capitol on Dec. 20 that the school has no reserve funds and is "operating day to day."

State Sen. Brian Taniguchi, chairman of the Senate Higher Education Committee, suggested making the $3.5 million request contingent on UH transferring the excess land to the state.

Kiyosaki said the campus, which opened to students last fall, still needs space to expand and build dorms and faculty housing. She added that enrollment swelled by almost 19 percent to 2,403 students during the fall from last year, and the school anticipates continued enrollment growth.

Interim UH President David Lassner said the university wants to hold on to all of the excess land for potential rent or lease income.

"I think we can generate revenue from it," Lassner said, adding that UH’s preference would be to lease and not sell the land.

He said UH supports West Oahu’s request for additional operating funds, saying he believes it’s necessary to help the campus "get off on the right foot." The $3.5 million would help the college retire current debt service from $68 million in revenue bonds that was used to build part of the campus.

Lassner said land revenue will likely be relied on to repay an $18 million loan that comes due in 2017 that UH-West Oahu took out under an immigrant investor program known as the federal EB-5 Visa program. And in the long term, he said he believes UH can generate revenue to support the West Oahu campus and other neighbor island campuses.

Real estate consultant and analyst Stephany Sofos said it would be beneficial for UH to hang on to land for future campus expansion.

"That’s one of the biggest problems in Hawaii: A lot of schools set a master plan, then nine times out of 10, as expansion goes, they don’t have the land they need. UH-Manoa is a good example. They’re on top of each other," Sofos said. "It would be an excellent move on the part of UH to keep the land. The state has more than enough land to sell and redevelop."

She said the university’s land holdings are attractive given that the surrounding areas are poised for development, including housing, a shopping center and the city’s rail line.