A local developer that helped convert the former Ohana Waikiki Hobron Hotel into The Windsor residential high-rise condominium is moving ahead with plans to build more condos around the tower along Kaio'o Drive.

Kaioo LLC, a firm managed by principals of Honolulu-based U.S. Pacific Development LLC, plans to develop 116 modest-priced condos in a pair of six-story buildings available for sale toward the latter part of the year if permits are granted.

The project, dubbed Waikiki Palms, would fulfill previously envisioned plans to establish a new low-rise residential complex on the nearly two-acre site off Hobron Lane where 82 deteriorating rental apartments built in the 1940s and 1950s were demolished three years ago.

But unlike previous ideas that contemplated developing the site for second-home buyers or seniors, the primary target market is focused on people who live or work in Waikiki.

Before the apartments were razed in 2003, several residents objected to the plan. But the Waikiki Neighborhood Board and other members of the community expressed support for the redevelopment project because of its contribution to the renewal of Waikiki.

Robert Finley, Waikiki Neighborhood Board chairman, said the board hasn't received details of an updated plan to develop the low-rise addition, and hopes the developer will do that soon so the board can comment.

Waikiki Palms is designed as two six-story buildings with two levels of parking below four levels of residences. Recreational facilities including a pool, barbecue area, workout room and meeting room would be between the two buildings.

A general intent to develop the low-rise possibly as ordinary condos or senior residences was announced in 2002 as a future phase to the hotel conversion. But even after most Windsor units were sold by late 2003, developers held off on the addition.

Then U.S. Pacific Development principals and their Windsor development partner, California-based investment firm Oaktree Capital Management LLC, tried to sell the undeveloped site for $9.5 million in late 2004.

The property was promoted as an opportunity to develop low-rise condos for second-home buyers. But partnership principal Larry Hansen said no offers were received.

Hansen said his colleagues at U.S. Pacific Development decided to buy out Oaktree last year and pursue the low-rise development targeted to more of the local worker population at below luxury prices.

"We felt that even if the market has a slowdown, there will be a market for our product," he said.

Hansen said it is too early to estimate prices, but said they would be "modest" in part because Waikiki Palms lacks ocean views like the Windsor and a neighboring high-rise under construction called The Watermark Waikiki.

Sales could begin in the latter part of the year if permit approvals are obtained, with construction estimated to take about a year.

The project needs several approvals, including a Waikiki Special District Permit and conditional use permit. The project also recently submitted a draft environmental assessment with the state, and will seek a variance to allow 34,847 square feet of open space, which is 1,221 square feet or 3.6 percent short of meeting a 50 percent open space requirement.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.