The owners of Turtle Bay Resort on Oahu’s North Shore are renewing efforts to develop the property, but are willing to scale back a previous plan that called for five new oceanfront hotels with 3,500 rooms and condominium units.

In response to community concerns, the owners reduced the number of units by about 1,155 to 2,345 with most of the density reduction focused along Kawela Bay and near Kahuku Point. The project could be scaled back further based on continuing discussions with community leaders and other stakeholders, said Drew Stotesbury, asset manager for the property.

Though the initial draft represents a significant concession, some who opposed the original plan say adding 2,345 hotel rooms or condominium units in the area is still unbearable.

“That’s certainly more than we think the area can handle,” said Lucky Cole, a representative of the group Keep the North Shore Country.

Cole said community members have concerns about traffic, beach access, possible effects on Native Hawaiian burials and other environmental issues.

But Cole also said the new owners’ effort to engage community leaders in planning is a refreshing, positive approach that could provide room for compromise that did not appear to exist under the previous owner, Oaktree Capital Management LLC, a California-based investment and development firm.

The revised plan comes roughly a year after a group of 20 investment firms assumed ownership of the 880-acre property from Oaktree and the Hawaii Supreme Court ruled the owners must update a 1985 environmental impact statement that paved the way for the resort expansion. The new owners continue to do business as Kuilima Resort Co., which has been the business entity used by various past owners of Turtle Bay.

Stotesbury said a supplemental environmental impact statement, or SEIS, that the court required will be based on subsequent drafts of a new development plan that he hopes will win community support while balancing the interests of investors.

“We knew that the (prior) plan was problematic to the community,” said Stotesbury, referring to the

proposal in 2005 by Oaktree. “The last thing I want to do is use the Oaktree plan to underpin the SEIS. Let’s use something the community can support.”

Stotesbury, who works for the Vancouver-based resort development firm Replay Resorts Inc. hired by Turtle Bay’s owners, led a three-day planning workshop earlier this month that included members of the Koolauloa-North Shore Alliance, an umbrella group representing multiple organizations that supported a now-abandoned initiative by the state to buy undeveloped property at Turtle Bay.

The alliance, whose members include the Sierra Club  Hawaii Chapter and the Koolauloa Hawaiian Civic Club, issued a statement that praised Turtle Bay’s new planning approach, though it regards development density in the draft plan as too intensive.

“KNSA believes the workshop was valuable and continues to present opportunities for positive community dialogue with Replay and the new ownership group,” the alliance stated. “We continue to believe that significant development of this area is not sustainable either for the resort or our local communities, especially given pressures already being placed on Koolauloa and the North Shore by ‘Envision Laie’ and other large-scale development proposals.”

Envision Laie is a development plan by the Church of Jesus Christ of Latter-day Saints that includes adding 875 residential units on land now zoned for agriculture in Malaekahana.

Larry McElheny, a more than 40-year Pupukea resident and advocate for maintaining the North Shore’s rural open space, attended the meeting on the Turtle Bay development and found Replay’s initial offer not too appealing.

“In my opinion, I think they’re negotiating with the community, and I think they’re not going to put their best offer on the table to start,” he said.

Stotesbury said second and potentially third drafts of the plan will be produced. After that, perhaps in May, Replay plans an open house,  presenting the plan to collect broader input to help produce another revision before an SEIS is filed in early summer.

The SEIS would present another opportunity for public comment and more possible plan changes.

It remains to be seen whether Turtle Bay’s owner and opponents can reach a middle ground, but all sides agree that chances for community support are greater than they were for Oaktree’s proposal.

Under original land use approvals granted in 1985, the resort was approved for 4,000 units, half of which must be for hotel use. But a succession of Turtle Bay owners did little to expand the resort beyond its existing 443-room hotel, two golf courses, a spa, some condos and other amenities.

Oaktree, which first acquired an interest in Turtle Bay in 1998, dusted off the long-dormant expansion plans in 2005. It called for five more oceanfront hotels with 2,500 rooms and 1,000 condos.

The city agreed to issue permits for the expansion based on the 1985 approvals that at the time had significant community support. But after 25 years, many citizens felt circumstances surrounding the project had changed so much that the EIS was no longer valid.

The city and Oaktree representatives countered that subsequent updates to parts of the EIS were enough to ensure environmental safeguards.

Keep the North Shore Country and the Sierra Club sued over the issue in 2006. They lost two lower court decisions, but in April, the state  Supreme Court reversed the lower courts and mandated the developers conduct the supplemental environmental impact statement.

Meanwhile, Oaktree defaulted on mortgage liabilities secured by Turtle Bay that had grown to about $400 million, and a consortium of lenders that sued to foreclose on the property in December 2007 reached an out-of-court settlement in February 2010 to repossess the property.

The lender consortium has since been re-evaluating options for moving forward with expanding the resort.