WAILUKU - A Lahaina Flood Control Project is on hold for now, after the County Council Policy Committee decided Tuesday that it wasn't ready to take action on a plan to condemn land for the project, The Maui News reported today.

But the council could face a tough choice about the project in the near future.

Council members said they share community concerns about the alignment of the drainage channel, which would release storm runoff near the popular "Guardrails" surf spot. But Public Works Department leaders warned that the county could lose $14 million in federal funding for the project if it doesn't move forward very soon with the project exactly as designed.

The drainage improvements above Lahaina, meant to prevent rare but severe flooding in low-lying neighborhoods around Wainee Street and Malu-ulu-o-Lele Park, have been in the works for more than 28 years.

The project would divert runoff from near the slopes east of Lahainaluna Road and move it south in a wide channel through sediment basins and past Kauaula Stream, and release it into the ocean at a man-made outlet near Guardrails.

Critics, including Native Hawaiian families who live in the area, say the project should have been designed to release water where it would naturally flow in the stream. They also question how the wide drainage channel will impact their ability to access the ocean and traditional cultural areas.

"You're taking the water and channelizing it to somewhere it does not belong," said environmental activist and Native Hawaiian Ed Lindsey.

The drainage project was originally designed in the 1980s to use Kauaula Stream to channel the water. But residents of the Puamana residential condominium objected to the plan that utilized a large drainage channel through their project and a retention basin above their homes. The design was changed.

On Tuesday, the council Policy Committee was asked to endorse the condemnation of 32.7 acres near the bottom of the project for $2.2 million. The lands are owned by Makila Land Co. and Kauaula Land Co., and controlled by President Peter Martin.

Martin said his company and the county couldn't agree on a fair price for the lands, so he suggested a "friendly condemnation."

The county has budgeted $2.2 million for the land acquisition, and that funding will lapse if it is not used by the end of the year, warned Public Works Director Milton Arakawa.

Committee members appeared to be more concerned about federal funds currently allocated for the project, but were assured those funds would not be lost immediately, although Natural Resource Conservation Service representative Ranae Cerizo said she would need to ask when the allocation must be encumbered.

By failing to take action Tuesday, the committee was forced to refer the matter to the incoming council, which takes office Jan. 2.

"It's disappointing, but we'll work with the council," Arakawa said after the meeting, adding that he would seek a reappropriation of county funds.

Committee Chairman Danny Mateo said that the council needed more time to review the project.

"We heard today more questions than answers," he said.

* Ilima Loomis can be reached at iloomis@mauinews.com.