A low-income senior rental housing project on state and county land in Kakaako is in line for major renovations under a local developer’s plan to buy the project, called Na Lei Hulu Kupuna.

Mark Development Inc. received tentative state approval Wednesday to proceed with a proposed leasehold purchase of the 75-unit studio apartment complex at 610 Cooke St.

The development firm has committed to buy Hulu Kupuna for $2.9 million and spend $1.7 million on upgrades including new appliances, furniture, flooring, cabinets, counter tops, air conditioning and paint.

The board of the Hawaii Community Development Authority, the state agency regulating development in Kakaako, approved the tentative purchase agreement.

The HCDA developed Hulu Kupuna in 1991 through a partnership with Bank of Hawaii. The agency managed and controlled the project as the general partner, but owned only a 1 percent stake in the building.

Bankoh owns 99 percent and would receive nearly all proceeds from the sale.

The land would still be owned by the county and the state’s Hawaii Housing Finance and Development Corp. Mark Development is seeking to lease the land for at least 30 years. The current lease expires in 2023.

Mark Development said its plan benefits the state by renewing Hulu Kupuna, which it said is in "generally poor condition" after years of HCDA management.

Craig Watase, president of Mark Development, said no current tenants will lose their apartments, and that rents won’t rise to cover the purchase and renovations.

"Most tenants will pay the same or less under our plan," he said.

Rental rates are a big concern for residents in the building, where units are furnished and electricity is included in the rent.

One tenant who declined to give his name said he pays $420 a month, which is up from $300 a month two years ago, and can’t afford any more on his disability and Social Security income. "If they raise it any more, I’m not going to have any money left," the man said. "It’d be a catastrophe for me."

Another tenant, a retired welder who did not want to be identified by name, said he pays $520 a month and doesn’t mind the condition of his apartment. "It’s old, but I take care my own," he said. "I do my own maintenance."

Rents are tied to federal guidelines that limit rent to no more than 30 percent of a tenant’s income.

Rent at Hulu Kupuna has been raised only once since 1991, and that was after the HCDA retained Mark Development to manage the property in 2012.

Anthony Ching, the HCDA’s executive director, said the agency got a lot of complaints about that increase, though the units remain very affordable compared with other senior rentals. "You can’t get a better deal," he said.

After Mark Development took over management, the company began making some renovations as units turned over, spending about $600,000 since 2012 on items that included roofing, new laundry room machines and a photovoltaic system that cut the building’s energy bill by 13 percent.

The purchase by Mark Development is subject to the company being able to obtain financing for the acquisition and renovation that includes state and federal tax credits through the Hawaii Housing Finance and Development Corp. The developer hopes to secure the financing by June 30.