The state Department of Hawaiian Home Lands broke ground Wednesday on a 125-lot project in Kealakehe.

Construction for the La‘i ‘Opua Phase 2 Hema project will include grading, construction of roads and utility improvements to prepare the land for a residential subdivision. Work will take about 14 months to complete.

The $13.8 million initiative was funded with $11.1 million from the state Legislature and a $2.7 million grant from the U.S. Department of Agriculture’s Rural Development program.

“It is very exciting to be back in Kealakehe this year to break ground on this project,” said DHHL Deputy Chair Tyler Gomes, who attended a ceremony with other officials Wednesday to mark the beginning of the construction project, in a statement. “We’re one step closer to bringing more homestead lots online in the Hema Phase 2 portion for beneficiaries on Hawaii island.”

The Phase 2 Hema project is part of the larger master-planned community Villages of La‘i ‘Opua. The 572-acre plot, transferred to DHHL in the mid-1990s, currently features 284 residential homestead lots and is expected to hold nearly 600 homes when completed.

At the ceremony, Gomes pointed to the 100th anniversary of the passage of the Hawaiian Homes Commission Act last year. The act, championed by Prince Jonah Kuhio Kalaniana‘ole, set aside about 203,000 acres of former crown and government lands in the Hawaiian kingdom for homesteads. It was signed into law by then-President Warren Harding on July 9, 1921.

The La‘i ‘Opua project comes at a time when many Native Hawaiian beneficiaries have raised longstanding concerns about the growing homestead wait list, which now stands at about 28,000 people.

The department said it plans to also break ground on two other projects next month on Hawaii island.