Seven years ago, state lawmakers directed the Hawaii Department of Land and Natural Resources to pursue a public-private partnership to develop underused portions of Ala Wai boat harbor facilities for the sake of maximizing revenue potential on the prime state-owned property.

The idea behind Act 197 was that mixed-use development, ranging from restaurants and retail to residential and hotels, could be a moneymaker, generating funds to pay for long overdue repairs and maintenance in Ala Wai Small Boat Harbor as well as improvements and maintenance at the other facilities operated by DLNR’s Division of Boating and Ocean Recreation (DOBOR).

However, what then looked good on paper — a plan to transform slightly more than three acres of dry and submerged lands in the harbor with three stories of commercial operations — flatly failed to materialize. Now, DLNR is prepping for a second shot at developing a valuable patch of dirt at the mouth of the Ala Wai Canal, between Waikiki and the Ala Moana area.

The reasoning for establishing a public-private venture in the 11-acre harbor area remains sound in that it could provide taxpayers with needed services without draining state coffers. Deferred maintenance has long been a problem at the harbor, which, with 752 berths, is the largest of the small-boat facilities.

With nearly 30 interested parties eyeing a forthcoming offer of a lease agreement that could extend up to 65 years, DLNR must find a way to maximize revenues without short-changing its own mission, which is to “enhance, protect, conserve and manage Hawaii’s … natural, cultural and historic resources” for future generations in tandem with partners.

Among the interested parties is Dynamic Entertainment Group Ltd., which is pitching a tourist- magnet vision that could include a virtual ride staged in a movie theater — akin to “simulated experience” attractions at Universal Studios and Disneyland — and a large-scale Ferris wheel.

The Ferris wheel could be modeled after the 175-foot-tall Seattle Great Wheel, which has been spinning at a waterfront site for six years now, according to local attorney Keith Kiuchi, Dynamic’s legal representative here. The company has offices in Orlando, Dallas, Vancouver and Toronto.

Since 2000, when the London Eye debuted as a hit attraction, at least three dozen oversized wheels have gone up elsewhere. Rides on the mainland range from the High Roller in Las Vegas to the Capital Wheel in Maryland.

Such attraction types hold potential to generate a lot of ticket sales, which, in turn could yield harbor upgrades. However, they prompt concerns, too.

Visitors come here, in part, to experience Hawaii’s distinctive sense of place. If we join the Ferris wheel-building renaissance and ranks of movie-theater rides, would we be blundering toward out-of-character, homogeneous development? And would such development edge out the harbor’s regular recreational users?

Two years ago, when DLNR’s first public-private attempt flopped, with developer Honey Bee USA going bankrupt, the community was left with a bare-bones construction site, and recreational sailors and boaters with no access to a fuel dock and boat repair facility — both were torn down to make way for the development. Understandably, some harbor users remain leery of any plans other than general repair and stepped-up upkeep.

Among other development concerns: construction height. Some Waikiki residents are opposing any call for high-rise condominiums or dense development that blocks views.

The bottom line: DLNR should reject any proposal that diminishes the harbor’s boating mission or interferes with public access to the shoreline area. A sense-of-place iconic structure can’t be ruled out — but the state should opt for a low-rise project that helps revitalize the harbor and creates a Hawaii-focused space tailored for both visitors and residents.