City leaders and developers have inked an agreement to proceed with what aims to be Oahu’s first transit-oriented design project — at the site of the former Kam Drive-In — along the island’s future rail transit line.

The development agreement with Robertson Properties Group for the firm’s $766 million Live Work Play ‘Aiea project, signed Wednesday in front of the media, locks in current zoning regulations for the 15-acre site during the next 10 years and gives the developer a level of certainty to move ahead, said George Atta, director of the city Planning and Permitting Department.

Once built out, the mixed-use project could include as many as 1,500 new residential units. The equivalent of 30 percent of that housing, officials say, must be what’s considered affordable housing under federal housing guidelines — within the financial reach of tenants who fall between 80 percent and 140 percent of the area’s median income.

Up to half of the affordable units could be developed outside the Kam Drive-In site, but they must lie in transit-oriented development zones along the rail corridor, officials say.

Any units outside the Pearlridge transit-oriented development zone, where the Kam Drive-In site is located, must be rentals and they can’t exceed the rates for tenants making 80 percent of the area’s median income, officials added.

Rail proponents have touted the TOD zones and the future transit system as approaches to better anchor development to Oahu’s southern shore, dissuading urban sprawl across the island’s finite space as its population grows.

"This will allow us not only to densify the urban core but really, truly, it will help us to maintain the country as country and to really preserve the outlying areas," said City Councilman Breene Harimoto, who represents the Aiea area. "This is the only way for us to go, densify the urban core."

Live Work Play ‘Aiea’s first phase is expected to be completed at the end of 2016, said John Manavian, Robertson Properties executive vice president. The first leg of Oahu’s 20-mile, 21-station elevated rail system is slated to open in 2017.