Alexander & Baldwin Inc. is seeking to expand Maui’s urban core with a 2,550-home community just outside Kahului.

The Honolulu-based company and major Maui landowner earlier this month submitted a petition to the state Land Use Commission to reclassify 545 acres from agricultural to urban use for the master-planned project called Waiale.

A&B envisions Waiale would accommodate half of the future housing needs for the Wailuku-Kahului region through 2030.

But such a large project will have to contend with community concerns over traffic impacts, water supply and cultural issues including treatment of known burials on the site.

Linda Howe, an A&B spokeswoman, said Waiale represents the long-anticipated growth of Maui’s urban core, which was developed largely by A&B over the last 60 years.

"For us, it’s just another logical extension," she said.

Howe said the Waiale site was part of an area contemplated for future urban growth around 1950 when A&B subsidiary Kahului Development Co. (now known as A&B Properties Inc.) developed the first part of the master-planned "Dream City" of Kahului to provide homes and business services for employees of the company’s Hawaiian Commercial & Sugar plantation.

In more recent years, about 1,000 acres immediately south of Kahului had been designated for the development of Maui Lani, a site A&B sold in 1990 that is presently being built out with about 3,600 homes by various developers.

Howe said A&B solicited community input for Waiale in 2005, and now seeks to finish the last piece of its original vision for Maui’s urban core.

Grant Chun, vice president of A&B Properties, said Waiale ideally would get started as Maui Lani nears completion. "It’ll be congruent with Maui Lani," he said. "Really it’s going to feel like a part of the greater Kahului area."

The Waiale site is bordered by Maui Lani to the north, Waikapu Village to the west, and productive sugar fields owned or leased by A&B to the east and south. A light industrial park not owned by A&B nearly splits the Waiale parcel along Waiko Road.

Much of the Waiale site is used as pasture land for cattle. Nearly a third of the site contains an operating orchid farm and fallow sugar fields that A&B said HC&S farmed until 2005. The land also contains a cattle feed lot, a base yard, a sand stockpile and a former sand mine, according to A&B’s petition.

The company said the "vast majority" of the land is of the lowest soil quality for farming under University of Hawaii standards, while a small portion of the property has a medium-quality soil rating, one step below the two highest quality levels regarded as prime agricultural land.

A&B also said in its petition that 545 acres represents 0.2 percent of 246,000 acres of agricultural land on Maui, and that a 2009 draft of a county plan guiding urban growth for the island through 2030 designates the Waiale site for urban growth.

However, A&B will need to address issues such as traffic and water use that are of concern to many residents.

Water has been a particularly contentious issue for HC&S and A&B, which have waged a regulatory battle to maintain historic usage levels of stream water for sugarcane despite challenges from opponents seeking to provide more water for small farmers and streams.

Isaac Moriwake, an attorney with Earthjustice representing two groups seeking to reclaim water from HC&S, said part of the land A&B proposes to develop has been used in the company’s argument to retain water rights. "It’s part of their water and land-banking game," he said.

A&B in its petition said it hasn’t determined potable water sources for Waiale, though potential sources include new wells in Central Maui and a surface water treatment plant the company plans in partnership with Maui County.

The company said it will provide more details and address potential impacts about water use, traffic and burials in a draft environmental impact statement.

In the Land Use Commission petition, A&B said it anticipates the site will feature five cultural preserves, including one covering 28 acres to safeguard burial sites or other archaeological features. The company said it has completed an archeological inventory survey, and is formulating a preservation plan in consultation with the State Historic Preservation Division of the Department of Land & Natural Resources.

A&B will convey 30 acres of the Waiale site to the county to provide space for about 300 affordable homes to satisfy a condition related to expanding Maui Industrial Park. A&B will use another 10 acres for affordable housing for Waiale, though the number of units will be determined by the county.

Other land uses envisioned for Waiale include about 100 acres for parks, about 16 acres for light-industrial businesses, 23 acres for nonindustrial commercial space such as offices and retail, and an 18-acre site for a middle school.

A&B in its petition said it anticipates that the LUC could make a decision next year, which, if favorable to the company, would pave the way for county decisions on zoning and other approvals in 2013. Chun said buildout of Waiale is expected to take 10 or more years.