AI-generated illustration; not a photograph of the reported event.
- calendar_today October 25, 2026
DHHL Plans Significant Residential and Commercial Development in Hilo
The Department of Hawaiian Home Lands (DHHL) has unveiled early plans for the Pana‘ewa homestead project, marking its first major residential development in East Hawaii in more than two decades. As part of its strategy to fund essential infrastructure, DHHL is also pursuing development of a business park adjacent to the residential project—with national retailer Costco named as a potential anchor tenant.
Pana‘ewa Homestead: East Hawaii Housing Initiative
The Pana‘ewa residential development is slated to occupy approximately 334 acres along Elama Road in Hilo. DHHL expects to award up to 200 additional homestead leases next year as planning advances and the land is assessed for occupancy. This initiative addresses long-standing demand for east Hawaii housing and aims to make meaningful progress on the department’s lengthy waitlist, which currently includes nearly 30,000 applicants.
Infrastructure Funding Through Commercial Activity
To finance the roads, electricity, water, and wastewater systems required before residents can move into the new homesteads (targeted for 2031), DHHL is seeking revenue from commercial development. The proposed business park would span about 146 acres along Railroad Avenue, strategically located across from an existing commercial center anchored by Home Depot. Revenue generated from the business park is intended to support the substantial costs of preparing the homestead land for occupancy.
Business Park Hilo: Market Study and Potential Tenants
Ann Mikkio, a consultant with PBR Hawaii working with DHHL, presented a market study for the business park at the October 19 Hawaiian Homes Commission meeting. She highlighted that the park would primarily serve the East Hawaii region, noting a population of approximately 109,000 between Puna and North Hilo—larger than all of Kauai County and about two-thirds of Maui County’s population. The location may also attract customers from the Ka‘u and Hamakua districts.
“You’ve probably heard that DHHL has been having conversations with some very large big box opportunities, and we do hope that those will work, but we also wanted to look at a baseline scenario as well,” Mikkio said in her address to commissioners. Under either scenario, at least half of all lots in the business park would be leased in the 0.5- to 3-acre range, sizes considered both accessible and popular among local markets and trust beneficiaries.
Costco Expansion: Conversations Underway
A DHHL staff member confirmed that the department has been in discussions with Costco regarding the possibility of the retailer acting as the business park’s anchor tenant. Currently, the only Costco on Hawaii Island is located in Kona. The proposed location could address an unmet market in East Hawaii, while also increasing opportunities for smaller businesses within the same park.
Addressing Infrastructure and Wastewater Treatment Needs
DHHL’s Land Development Division administrator, Kalani Fronda, provided project updates at the same commission meeting. He emphasized the ongoing partnership with the planning office to prepare the Pana‘ewa site specifically for homesteading. A significant challenge remains wastewater treatment; the department is considering constructing a new plant in partnership with the county, as existing capacity is insufficient. Funding from the business park would be crucial for these infrastructure requirements, in addition to supporting other utilities and road construction.
Commercial Development Model and Job Creation
DHHL Chair Kali Watson noted that revenue from the business park will not only help fund necessary infrastructure but could also enable the department to issue bonds collateralized by commercial income, a strategy used for previous projects. Additionally, Watson emphasized the importance of generating employment and enterprise opportunities for trust beneficiaries and the broader community in East Hawaii.
“For the Big Island, some of the commercial centers that we have existing are actually financing a little over $100 million in bonds that we use to put in infrastructure,” Watson said. The department aims to repeat this successful financing model to move beneficiaries onto land more quickly and address historic delays.
Source: westhawaiitoday.com.
