The water quality of a 52-acre basin at Hoakalei Resort residences in Ewa Beach is better than at popular swimming spots including Magic Island, Lanikai and Ko Olina. But the state doesn’t want people swimming there any more.

Earlier this month, the state Department of Health warned Hoakalei’s developer, Haseko Hawaii, the company would be operating an illegal public swimming pool if it allows people to swim in the basin.

The action forced Haseko to inform about 1,500 Hoakalei homeowners that swimming is prohibited in what the company calls a “recreational lagoon.”

Under threat of fines up to $1,000 a day, the company also installed “no swimming” signs fronting a sandy shore and lawn where it sets out lounge chairs and removed inflatable floating platforms that were close to shore and popular with children.

Some of those homeowners are now upset, especially because the water in Wai Kai Lagoon is really nice.

“We spend a lot of time down here,” said Brendan Baran, who moved from Canada with his family to Hoakalei about a year ago. “Now we’re told we can’t swim.”

Julie Dentinger, who bought a home at Hoakalei in December and loved taking her two kids to play in the lagoon, was also annoyed. “It’s like a natural spring,” she said.

Haseko has been working with scientists for several years to routinely study water quality. Those researchers, Heather Spalding and Sue Brown, told a gathering of about 25 Hoakalei homeowners Thursday that the basin is not only a clean body of water but also a really special ecosystem.

The brackish water in the basin comes from below ground. Often such a nutrient-rich mix of fresh and salt water can produce potentially harmful algae growth. But a local species of green algae that looks like stringy ogo has grown to cover 80 percent to 90 percent of the basin floor. This seaweed, called Chara zeylanica, has formed what Spalding described as “an amazing meadow” measuring 2 to 3 feet deep that acts as a living filter system keeping the water clean.

The lagoon also is home to tilapia and three native snail species.

Also helping maintain water quality is an estimated 2.5 million gallons of groundwater that seeps out of the lagoon into the ocean daily and is replaced by more groundwater, according to a 2014 environmental impact statement. Haseko said based on its tests the lagoon water is cleaner than many beaches.

However, if people swim in the lagoon then it becomes a swimming pool under a Hawaii Administrative Rules definition applying to any man-made structure “containing an artificial body of water that is used for swimming, diving, recreational bathing or therapy by humans.”

Public swimming pools require a Health Department permit and must also meet standards, including 100 percent exchange of water at least once every six hours and the ability to spot a high-contrast object at the deepest point of the pool when looking from the surface.

Haseko’s lagoon containing 300 million gallons of water doesn’t come close to meeting the water exchange rate and is about 20 feet deep in most places with a seaweed-covered floor.

Sharene Saito Tam, a Haseko vice president, said the company was surprised by the state’s order and never imagined the basin would be deemed a public swimming pool if people swam in it.

“We never expected anyone to consider this a swimming pool,” she said. “We dug (the basin) but we didn’t fill it with water.”

Haseko dug the basin with the intention of creating a boat marina. But before the company excavated a channel to the ocean, it decided the market for boating uses had become weak and wouldn’t attract developers to build hotels on land fronting the basin as envisioned. Environmental opposition to a marina that could delay completion was another factor Haseko cited.

So the company in 2011 announced the basin would become a lagoon for users of nonmotorized watercraft such as canoes, paddleboards and kayaks operated by homeowners, hotel guests and the general public.

Tam said Haseko has discouraged swimming in the lagoon because it’s 20-feet deep with edges lined by boulders except for a small sandy beach addition. Yet Hoakalei homeowners took to swimming there.

Under Health Department regulations, activities on the lagoon such as canoe paddling and paddle boarding may continue.

Haseko doesn’t post lifeguards or staff charged with enforcing no-swimming rules at the lagoon.

The Health Department order was triggered by two complaints April 18 contending there had been toxic algae blooms and possible mosquito propagation in the lagoon. The mosquito complaint was referred to the department by state Rep. Matthew LoPresti on behalf of a constituent. LoPresti was among several Hoakalei homeowners who sued Haseko contending the company should have completed the marina.

Neither complaint had merit, according to inspection reports. But on May 2, the Health Department notified Haseko through an affiliate that if it allows swimming the department will seek fines.

Haseko is exploring whether there is a way for the Health Department to permit swimming in the lagoon, but as far as Tam knows the issue of a giant man-made basin filled naturally by groundwater being regulated as a public swimming pool has not happened before in Hawaii.

Haseko does have plans to create a 1-acre swimming hole next to the lagoon that would meet state public pool rules, but that isn’t expected to be built before 2020. A traditional pool also is planned next to the existing sandy beach at the lagoon and is being designed now.