A 32-story condominium-hotel that would replace the King’s Village shopping complex in Waikiki won approval from the Honolulu City Council on Wednesday.

Resolution 16-52 grants key exemptions from the city Land Use Ordinance for 133 Kaiulani, a project of MK Development Consulting LLC, a partnership formed by prominent local companies the Kobayashi Group, the MacNaughton Group and Black Sand Capital LLC.

Specifically, the Planned Development-Resort permit allows the developer to build up to 350 feet, the same height of the Hyatt Regency Waikiki’s twin towers across the street. Existing zoning allows for buildings up to 240 feet in height.

The developer contends that raising the height limit would allow for a slimmer profile and less intrusion on the view of the ocean for those living mauka of the site, a key issue raised by project opponents.

Other concessions include allowing the developer to create less open space on the ground floor and more flexibility on setback restrictions.

The developer, meanwhile, has agreed to provide $1 million for a community benefits package, pay for restoring Kaiulani Avenue to a two-way thoroughfare from Koa Avenue to Kalakaua Avenue, and put up a pocket park along Prince Edward Street.

While the developer and community had first worked out how the $1 million would be used two years ago, including $500,000 for sand replenishment at Waikiki Beach, that plan was scrapped Wednesday to allow stakeholders to re-evaluate the breakdown.

A change made Wednesday also allows the developer to build up to 246 units, instead of a planned 213 units, as long as the building’s density remains no more than an agreed-to density.

Besides concerns about loss of view planes and overdevelopment, the project also drew opposition from hotel workers union Local 5, which said it worries a condo-hotel would not provide nearly as many permanent jobs as a traditional hotel.

Most of those who testified Wednesday, however, supported the project.

Rick Egged, president of the Waikiki Improvement Association, called 133 Kaiulani “a much-needed redevelopment.” King’s Village was “a wonderful place when it was first built, but time has passed it by and we definitely need the additional visitor units that this project will provide.”

King’s Village was built in the 1970s, and its cobblestone walking paths were designed to depict “a section of Honolulu as it may have looked at the turn of the century,” according to the shopping center’s website.

Also on Wednesday, the Council deferred a final vote on Resolution 16-70, clearing the way for the city’s Halewaiolu seniors-only, affordable housing project on River Street. The Caldwell administration asked for the deferral to put in additional language asked for by federal housing officials. The matter will be taken up by the Council on May 4.