Between Waikiki and downtown Honolulu, one of the last available parcels for coastal redevelopment in urban Oahu is undergoing a transformation.
The shift from a low-density shopping and industrial area to a mixed-use living and public-park space marks one of Honolulu’s biggest urban growth spurts since the 1990s. Howard Hughes Corp., which is also renovating Manhattan’s South Street Seaport district, is redeveloping a 60-acre tract in the Kakaako neighborhood into a community that will feature an estimated 5,000 condominium units across potentially more than 20 towers over the next decade.
The real-estate development company has brought on renowned architects such as Richard Meier, the designer of Los Angeles’s Getty Center, and attracted anchor tenants including the Japanese-Peruvian Nobu restaurant, which will be relocating from Waikiki. The estimated $6 billion to $10 billion development will also feature a 4-acre public park that will try to mimic features such as natural springs and man-made ponds that used to dot the area more than a century ago, when it was a plantation for crops such as coconut and taro.
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“There will be an opportunity to take what’s now a lot of surface parking lots and asphalt and turn it into a green and people-friendly place,” said Nicholas Vanderboom, a senior vice president for development at Howard Hughes who is leading the Ward Village master plan.
Howard Hughes acquired the land in 2010 as part of a spinoff from General Growth Properties Inc., which was emerging from bankruptcy at the time. Now called Ward Village, the property had long been owned by the descendants of Victoria Ward, who was descended from Hawaiian royalty and rose to prominence as a major landowner on Oahu in the late 19th century.
Her estate owned the land until 2002, when it sold the tract to General Growth Properties. But the company’s main goal at the time was to protect a major mall it owned nearby from competition, Mr. Vanderboom said.
Unlike many new residential construction projects in Hawaii, which can face years of environmental lawsuits and entitlement challenges, the land at Ward Village had been targeted for redevelopment by state authorities since the 1970s. The land is part of a special zoning district that allowed for higher-density development.
General Growth got approval for a 15-year master plan in 2009, but was unable to move forward because of the bankruptcy. When Howard Hughes took control in 2010, executives spent two years studying the market and refining the plan.
“It’s rare to have that zoning and that amount of contiguous land,” Mr. Vanderboom said. “It doesn’t exist anywhere else on the island.”
National home builder D.R. Horton Inc., for example, fought a nearly 10-year court battle over a 11,750-home planned development west of Honolulu, called Hoopili. The Sierra Club and a former state senator argued the project was improperly tying up land that could be needed for agricultural use.
The Hawaii Supreme Court sided with D.R. Horton late last year, nearly a decade after the company purchased the land in 2006.
Ward Village is the largest private land holding in the Kakaako district, but other national developers, including Castle & Cooke, are building projects in the area, which is adjacent to a long-planned Oahu elevated rail line.
The thousands of units expected to come online over the next decade represent a large infusion of supply into Honolulu’s real-estate market, though it is nowhere near what is needed to meet demand. According to an analysis from Hawaii economist Paul Brewbaker, the six-year period from 2009 to 2014 saw the lowest number of building permits authorized in Oahu than in any six-year period since World War II.
Land is scarce. In a 30-mile radius of Honolulu’s downtown, roughly 92% of land is undevelopable, according to a January report from the Economic Research Organization at the University of Hawaii.
Median prices for single-family homes increased to $720,000 in April, up 6.7% from a year earlier, according to the Honolulu Board of Realtors. The median price for condos jumped 5.1% from a year earlier, to $389,500, a new record on Oahu.
Last year there was an uptick in housing permits in Oahu—to 3,700—virtually all attributable to high-rise developments in the Kakaako district, said Carl Bonham, an economics professor at the University of Hawaii.
“Even when you add all of these projects up, they’re still not enough to meet basic population growth,” he said.
Because of the extreme constraints on development in Hawaii, Mr. Bonham said most developers have to take a longer-term horizon on economic cycles, in the event there is a recession in the midst of a build out. “You’ve got to have staying power,” he said. “You’ve got to be able to weather potentially a decade of planning.”
Howard Hughes has three towers totaling 959 units under construction and will open the first building this fall. The company plans to have its first four buildings complete through 2019.
There is a 20% set-aside for local Hawaiians making between 100% and 140% of the area median income, which represents family earnings of about $88,000 to $123,000 a year. Market-rate units begin at $400,000 for a studio and range up to $4 million.
That excludes penthouses, one of which has listed for $36 million. If sold, it would be Hawaii’s priciest condo.
Mr. Vanderboom said the company hasn’t yet determined how many residential towers it plans to complete as part of the master plan, though the project’s approved square footage could allow up to 22.
“We obviously need to build to the market, and no one’s immune from the economy,” he said. “But we see fairly strong fundamentals and strong housing demand for the local market.”
Write to Chris Kirkham at chris.kirkham@wsj.com