Gov. Neil Abercrombie is including $2 million in his construction budget for improvements to the Waikiki War Memorial Natatorium, but indicated Thursday he may be rethinking the idea of refurbishing it as a beach volleyball venue.

"What the $2 million represents … is a marker," Abercrombie said at a news conference on the state budget.

"We know we’re going to have to spend some money, regardless of what happens," he said. "Right now it looks as if removal of the pool itself is a likely outcome. So we’ll try to come to a determination as quickly as we can and then work with the city and the mayor to come to a mutual agreement on what to do, not just about the pool and everything, but the whole area, and then do it."

Abercrombie said he intends to speak to Mayor-elect Kirk Caldwell, who takes office Jan. 2, as well as the City Council to come up with a game plan to "rehabilitate the area."

Caldwell said in a statement, "I look forward to working with Gov. Abercrombie and the City Council to address the deteriorating conditions of the Natatorium, yet respecting those who served during World War I."

The natatorium was built as a monument to World War I veterans. It opened in 1927 but has been closed since 1979.

"The natatorium simply can’t go on the way it is," Abercrombie said, referring to its dilapidated condition. "It’s almost immoral."

In recent months the governor had indicated a preference for turning the grounds into a beach volleyball facility. On Thursday he reiterated that preference but said such a plan may not be possible.

"The engineering alone, because of the soil, in the water right there, it may prove impossible," he said.

Instead, he said, the ultimate solution "will probably end up with an attempt to create a beach, if the ocean cooperates."

As for reconstructing the pool, "it probably would be so prohibitive as to be impossible to achieve," he said, adding that it will be removed "in all likelihood."

Any money appropriated would go toward "a down payment on whatever needs to be done in order to resolve the situation once and for all."

Abercrombie’s comments were received happily by Jim Bickerton, an attorney for the Kai­mana Beach Coalition, which has fought for creation of a public beach instead of a full restoration of the pool.

"The beach is the low-cost solution for keeping the space public, free and open, which is what a memorial should be," Bickerton said, noting that a study completed by a city task force in 2009 came to the same conclusion.

Bickerton said creating a beach is estimated to cost $10 million to $15 million, while constructing a new pool would cost more than $60 million. The pool now is "too far gone," he said.

Donna Ching, vice president of the Friends of the Natatorium group that has backed full restoration, also called the inclusion of some money in the state construction budget for the Natatorium good news.

"The governor is moving us toward a solution that is decades overdue," Ching said in a statement. "We agree completely that continuing to do nothing is unacceptable."

Ching said her group is confident that after a thorough study, Abercrombie will conclude that restoration is the right thing "from the legal, environmental, cultural, historic and moral perspectives."