Two local developers finalized the transfer of a $50 million planned low-income rental apartment tower in Kakaako on Wednesday after giving the state rights to take over the project if financing isn’t secured within two years.

The Hawaii Community Development Authority, the state agency regulating development in Kakaako, approved the change for who is responsible for building the project called Hale Kewalo at the corner of Piikoi and Kona streets.

Hale Kewalo previously was going to be developed by Alexander & Baldwin Inc., which was required to deliver 72 moderately priced homes as a condition of building the Waihonua condominium tower nearby on Waimanu Street between Hawaiki and Ko’olani towers.

A&B proposed satisfying the requirement with a five-story building containing 72 one-bedroom units reserved for seniors earning no more than 60 percent of the annual median income in Honolulu, which equates to $34,692 for a single person or $49,560 for a family of four as calculated by HCDA.

The developer announced its plan in 2011, but last year arranged to transfer the project to Stanford Carr, who plans an 11-story building with 128 apartments including one-, two- and three-bedroom units for anyone meeting the same income limit.

Carr also has committed to maintain affordable rental rates for 60 years, up from 50 years under A&B’s plan.

HCDA rules require such rentals to be affordable only for 15 years for tenants earning up to 100 percent of the median income.

Carr expected to line up financing last year largely by obtaining state and federal tax credits through the Hawaii Housing Finance and Development Corp., but was unable to do so. That led Carr and A&B to return to HCDA for further approval of the transfer.

Under HCDA rules, A&B was on the hook to start construction of Hale Kewalo within two years of completing Waihonua, which was finished in recent weeks.

In return for finalizing A&B’s transfer of its obligation to Carr, HCDA obtained a right to take over the project — including design plans, $1.7 million and the 27,000-square-foot property valued at $6.3 million — if Carr can’t secure financing within two years.

If that happens, HCDA could seek bids from other developers interested in completing the project or seek money to finance the project itself.

HCDA board members called the project an admirable one and expressed support for Carr.

"I think it’s an outstanding project," said Brian Tamamoto. "I am confident you will be able to accomplish it."

Carr said he will apply for the tax credits later this month and already has a commitment letter from PNC Bank to buy such credits. Carr also said he will apply for additional funds from the state’s Rental Housing Trust Fund that would allow him to provide some units to residents earning no more than 30 percent of the median income.

Carr has experience with low-income rentals and tax-credit financing as the developer of Halekauwila Place, a 19-story tower with 204 units he completed in April on state land in Kakaako.

Anthony Ching, HCDA executive director, said going with Carr stands to provide more low-income apartments that will remain affordable for a longer period while also giving the state a valuable asset in case the project falters.

"It is not simple to put up any number of (low-income) rental units," he said.

Carr aims to start construction by the end of the year if his plan for obtaining financing succeeds.