A state board has endorsed a developer’s plan to build a 1,005-unit residential tower in Moiliili mainly for households with moderate and high-moderate incomes.

Board members of the Hawaii Housing Finance and Development Corp. on Thursday unanimously backed the proposed $619 million project called Kuilei Place by Kobayashi Group on 3.2 acres of land occupied by 141 low-rise rental apartments partly fronting Kapiolani Boulevard between ‘Iolani School and Kaimuki High School.

The plan for Kuilei Place includes a main 400-foot tower, which would exceed a 150-foot zoning height limit for the property, and a 12-story residential building fronting Kapiolani Boulevard shielding a 13-story parking structure.

The project also would be 4.5 times denser than what zoning allows for the site.

Honolulu-based Koba­yashi Group is proposing Kuilei Place under a state law that can allow exemptions to zoning height and density limits for projects that provide over 50% of housing units at prices that are affordable to moderate- income households.

HHFDC, which helps facilitate affordable-housing production, can certify that a project meets minimum qualifications under this law, known as 201-H.

The agency’s board did so Thursday, though ultimate approval of the requested exemptions, which also include waivers on paying more than $40 million in city fees, will be up to the Honolulu City Council.

“It sounds like it is going to be a very good project,” said Donn Mende, HHFDC board chair.

Denise Iseri-Matsubara, HHFDC’s director, said at the meeting that the project will address a housing need for “gap-group” residents who don’t qualify for low-income housing but sometimes can’t afford market-priced housing.

“This is the type of project that I think our gap- income group appreciates and is looking for,” she said.

Kobayashi Group proposes to make 603 of the 1,005 Kuilei Place units, or 60%, affordable to households with moderate and high-moderate incomes. Maximum sale prices envisioned for these units could range from $371,800 for one-bedroom units to $813,300 for three-bedroom units.

Income limits for buyers would range from 80% to 140% of the median household income on Oahu. At the low end this equates to $73,200 for a single person and $104,480 for a family of four. At the high end it equates to $128,100 for a single person and $182,840 for a family of four.

Envisioned maximum prices for the 402 market-­priced units range from $705,465 to $1.15 million.

Alana Kobayashi Pakkala, a Kobayashi Group partner, told HHFDC’s board that the goal of the company and affiliate BlackSand Capital is to deliver homes with high-quality features for local residents.

“BlackSand Capital and Kobayashi Group’s goal for this community is to provide our kamaaina community with an entryway to elevated yet attainable homeownership in the heart of Honolulu,” she said.

Pakkala said amenities are to include a ground-floor pool, centralized solar water heating, split-level air conditioning, two top-floor dining rooms and other things that will still keep maintenance fees at an affordable level.

As for the height limit being sought, Pakkala noted that nearby buildings include the 350-foot Regency Tower and the 375-foot Iolani Court Plaza more makai on Date Street.

“It’s not outside of the urban context of the area,” she said.

Kobayashi Group initially sought to qualify Kuilei Place under the 201-H law through the city Department of Planning and Permitting but got rejected a year ago because DPP requirements include a buyer income and home price limit tied to a 120% median household income level along with a right to buy back homes from an initial owner with a share of appreciation if the initial owner sells within 30 years.

Iseri-Matsubara said a 30-year buyback term is way too long for a home that doesn’t get government financing subsidies. HHFDC’s buyback term applicable to Kuilei Place units is 10 years.

Pakkala said Kobayashi Group could have met DPP’s 120% median income limit by including studios in the project but preferred to provide units with one to three bedrooms.

Kobayashi Group is seeking to make 165 of the affordable units rental apartments if it can obtain $28.7 million in low-interest rental housing loan financing from HHFDC.

Initial monthly rent for these apartments could range from $1,960 for one-­bedroom units to $2,940 for two-bedroom units, and maximum income for tenants would range from 80% to 100% of Oahu’s median household income and be tied to the rental units for at least 30 years.

Monthly rent for existing apartments on the site, which date to the 1960s, range from $1,495 for one- bedroom units to $1,950 for three-bedroom units including utilities and other fees.

Pakkala said Kobayashi Group will provide tenants with two months of free rent when the need to vacate approaches, if the project is approved.

If Kobayashi Group obtains City Council approval and other things, including building permits, without unexpected delay, the company estimates that construction could start near the end of 2023 and finish in mid-2026.