The city and the Department of Hawaiian Home Lands are planning a land swap worth an estimated $30 million to provide the city with a site for a rail maintenance facility in Waipahu.

In exchange, Hawaiian Home Lands will get two parcels from the city totaling about 52 acres near the Varona Village plantation community in East Kapolei.

One of the two parcels included in the Varona property adjoins the site of the planned Ka Makana Ali‘i commercial complex, a $400 million project on 67 acres of agency land.

The land exchange will allow the department to develop new housing and possibly commercial space to compliment the department’s continuing developments in Kapolei, said Alapaki Nahale-a, chairman of the Hawaiian Homes Commission.

The Honolulu Authority for Rapid Transportation, meanwhile, has already awarded a $195 million construction contract to build the rail maintenance facility on the 56-acre Hawaiian Homes property in Waipahu that the city plans to acquire.

The city contracted with Kiewit Infrastructure West Co. and Albert C. Kobayashi Inc. to build a train system control center as well as maintenance buildings and open-air storage areas for up to 100 rail cars on the property between Waipahu High School and Leeward Community College.

The city in October began soils testing and other work at the planned rail maintenance yard site, which was formerly used as a Navy fueling yard. Construction on the property is expected to begin late next year, said Scott Ishikawa, a spokesman for the rail project.

About 12 acres of the Waipahu property is now the site of an H-1 onramp, and will not be included in city plans for the rail facility.

An appraisal of the properties done in 2009 tentatively valued them at about $15 million each, according to Hawaiian Homes records.

Nahale-a said the Varona site is next to existing Hawaiian Homes property in Kapolei, including residential and commercial properties.

"It is appropriate for residential development, and it may also have some commercial value, so we believe the Varona Village site is just better for what we do," Nahale-a said.

Hamayasu and Nahale-a said the land swap will not include the existing Varona Village plantation community.

Then-Honolulu Mayor Mufi Hannemann and then-Hawaiian Homes Commission Chairman Kaulana Park signed a memorandum of agreement on the land swap on March 10, 2010, and the commission in August approved a right-of-entry permit that gives HART access to the property.

However, Hawaiian Homes does not expect to actually complete the swap for another two years, according to minutes of the August commission meeting. Toru Hamayasu, interim executive director of HART, said he hopes to formally complete the transaction sooner.

Hamayasu said the city decided to begin construction before it actually owns the land because an agreement is already in place that provides for the land swap, and because Hawaiian Homes consented.

The city has been eyeing the Waipahu site as a likely rail maintenance yard since 1990, Hamayasu said.