Commercial koa farming has been an elusive pursuit in Hawaii where native old-growth forests of the most valuable wood in the state have been heavily logged. One fledging and unique endeavor, however, has taken root.

Hawaiian Legacy Hardwoods has turned close to 1,000 acres of barren ranchland on the slopes of Mauna Kea into a young green forest of koa over the past five years and generated considerable revenue before any trees are cut.

Company executives believe they have started what can be a sustainable model that makes money and re-establishes koa forests where they long ago disappeared.

"We want to replicate this model,"said company CEOJeff Dunster. "We’re willing to give the model away."

Dunster, a former stockbroker, co-founded Hawaiian Legacy with Darrell Fox in late 2008. The company was set up as a profit-minded venture with a charitable twist that benefits the environment.

The for-profit element is partly based on attracting wealthy individual or institutional investors to buy blocks of 100 trees intended for harvest.

The charitable piece attracts people or entities to pay to plant trees restricted from harvest. A portion of this so-called sponsorship fee goes to a charity chosen by those who pay for the trees.

Dunster said the model is fixed so that only 25 percent of trees planted will be investor trees for harvest.

One key to the agricultural aspect of the operation is collecting seeds from koa, a variety of acacia, that are remnants of prior forests that once existed on the site intended for reforestation.

On Hawaiian Legacy’s land in the Hamakua Coast area of Hawaii island, some old trees exist in hard-to-reach places such as gulches that protected the koa from clear-cutting in advance of turning the land into ranching pastures.

Hawaiian Legacy selected seeds from what it deemed the best trees, and starts seedlings in nurseries before planting them in the ground. The company fertilizes the trees after planting but relies on rainfall for water.

To date, Hawaiian Legacy has planted 250,000 koa trees — of which 75 percent, or 187,500, are sponsored "legacy"trees and 25 percent, or 62,500, are investor trees.

Dunster said the company expects to run out of land on its 1,200-acre parcel in 18 months, and that the company is oversubscribed from interested investors and sponsors.

"Right now we have more commitments for trees than we have land to put them on,"he said."We can’t plant fast enough."

Hawaiian Legacy is exploring potential expansion sites on Hawaii island, Maui and Oahu where koa once grew, after difficulties arose with an initial arrangement to lease 2,700 acres, including the 1,200 acres under use, with a purchase option.

Currently, Hawaiian Legacy has a 60-year lease on the 1,200 acres. Dunster added that it’s possible negotiations over the Hamakua land lead to Hawaiian Legacy expanding around where it operates now.

Either way, the company intends to branch out and is willing to help guide other landowners interested in similar ventures. Dunster said the commercial demand for koa lumber is so high that he doubts growers will ever come close to meeting it.

To be sure, Hawaiian Legacy has not yet proved that its business model will succeed over the long term, given that agriculture is a risky business susceptible to pests, drought and other ecological threats.

There are also skeptics who praise Hawaiian Legacy’s conservation aspect but question projected investment returns.

Hawaiian Legacy charges $60 to plant each legacy tree and gives $20 of that to a charity designated by the sponsor. Based on the number of legacy trees planted, revenue for Hawaiian Legacy totals $7.5 million plus another $3.75 million directed to charity, though some planted trees are for sponsors who have committed but not yet paid.

The company also began hosting eco-tours in November, charging $110 to $180 per person for guided tours of the operation that include planting a legacy tree.

Another new line of revenue started up in January with the company planting sandalwood trees next to legacy koa trees and charging $100 per tree. The sandalwood trees are intended to compliment the legacy forest ecosystem and not for harvesting.

On the investment side, Hawaiian Legacy said it has taken in more than $6 million from planting koa for harvest.

The company this year charged $10,248 for 100 trees, up from $6,808 in 2010.

Investment tree sales are limited to what the federal Securities and Exchange Commission defines as "accredited investors" — essentially financially well-off entities that include banks, insurance companies, retirement funds and individuals with annual net income over $200,000.

The limitation on who may invest is due to the risks involved and potential financial returns promoted by Hawaiian Legacy. In its investment materials, the company projects that 100 trees could "conservatively" return between $217,000 and $321,000 to an investor over 25 years, starting with about $6,000 to $9,000 in the eighth year after planting.

The projected earnings are based on several assumptions including marketable lumber yields, tree growth rates, mortality, koa wood price appreciation and harvesting fees.

Under Hawaiian Legacy’s projections, its 62,500 investor trees would yield about $200 million at the high end over 25 years.

The koa lumber price Hawaiian Legacy uses rises from as low as $7 to as much as $71 per board foot over the 25-year period.

Retail prices today are largely between $20 and $70 depending on quality. Wholesale prices typically are not too much lower for milled and dried wood.

Still, there is some caution and skepticism about projected financial returns from farmed koa.

The Hawaii Forest Industry Association said in a 2012 publication that it sees promise in koa farming but cautions prospective investors about risks with investment offerings.

"It is difficult to forecast koa economic planting outcomes because koa has never successfully been grown in a plantation through to successful harvest," the association reported. "However, it appears that with current koa pricing and careful attention to establishment costs, koa plantations can be economically viable."

HFIA notes that a tree’s age is key to the value of koa wood, and that it takes 35 years before a koa tree might be of commercial value, according to what the trade group called a consensus among academics, forestry agency specialists and commercial foresters.

Hawaiian Legacy plans to thin its fledgling forest when trees are 8 years old to give remaining trees room to flourish.

Dunster contends that the koa cut down at that early stage will have commercial value. He also said trees are growing faster than the company anticipated, with some 4-year-old trees already 10 to 12 inches in diameter.

Jorma Winkler, owner of koa wood supplier Winkler Woods LLC, complimented Hawaiian Legacy on its reforestation operation. However, he said from his experience only some wood might be good from 20- to 30-year-old trees and that there is no market for much younger wood.

"Iwouldn’t say a 12-year-old tree has value,"he said. "In today’s market it doesn’t."

HFIAwas involved in a demonstration project where woodworkers made products from "young-growth"koa that was 32 to 35 years old, and the results were mixed, according to association Executive Director Heather Simmons.

"There is a market for younger-growth koa; it’s just not going to be the $30,000 coffee table," she said.