Ke ola hou.

That means "the new life" in Hawaiian, and it is what Hawai’i Pacific University intends to give Aloha Tower Marketplace through a $40 million renovation making the struggling retail complex at Honolulu Harbor part of the university’s downtown campus.

The three words were repeated several times during a blessing and ceremonial groundbreaking Wednesday at the largely empty marketplace slated for a rebirth next year with dorms for 300 students, classrooms, a college bookstore as well as a few more restaurants and new retailers.

Leaders of the state’s largest private university along with Gov. Neil Abercrombie and Mayor Kirk Caldwell participated in the event and welcomed the planned transformation.

"I want this place to be lively," said Samuel Moku, HPU’s vice president of university relations. "Let’s say it together: Ke ola hou."

The 165,000-square-foot marketplace was built in 1994, though problems emerged after a successful start due to inadequate parking and the failure to complete several additional development phases that included residential, hotel and office uses intended to support the retail center.

As a result, the marketplace endured more than a decade of financial difficulties that included bankruptcy. As recently as 2012, the center was about 70 percent vacant.

HPU and a development partner acquired the marketplace, which is on land leased from the state, in 2011 for $14 million.

In late 2012, the university bought out its partner, real estate developer Ed Bushor, and advanced a plan calling for converting a little less than half the ground-floor retail space into school facilities.

The second floor of the center will become dorms along with a dining hall and a pavilion under the plan.

In March, all tenants except for Gordon Biersch Brewery Restaurant, Hooters, Star of Honolulu Cruises and Events and TheCAB moved out, and HPU recently began demolition work on the second floor.

To begin the new dorm construction, the university has to finalize an environmental assessment. HPUanticipates that construction will be done in 2015, which is the university’s 50th anniversary.

"We are really on the way to revitalizing this area," said Geoffrey Bannister, HPU president. "Hawai’i Pacific University is invested in strengthening the Hawaii community, providing an exceptional educational experience for our students, and bringing new life and vitality to this much-beloved landmark."

HPU projects that the renovations will create 200 construction jobs and that 200 to 250 new jobs will be produced when the work is done.

Four new restaurants and 15 smaller retail stores are part of the renovation plan.

Much of the ground-floor marketplace space to be used by HPU will also be available for public use at times, including a fitness center, dance room and multipurpose rooms.

Bannister said the idea is to create a gathering spot for the community while also giving HPU a site that anchors its downtown presence.

HPU leases 200,000 square feet of downtown commercial space largely along Fort Street Mall, but does not have any recognizeable base in the area. The marketplace next to the historic Aloha Tower is envisioned to become that base, Bannister said.

About 4,000 HPU students and faculty are present downtown on a typical day and will help drive new traffic to the marketplace, he added.

Abercrombie hailed HPU’s project as another contributor to an ongoing renewal in Honolulu’s urban core. "Iknow this is the beginning of a spectacular rise not only in the educational offerings but in the revitalization of the entire urban core of Honolulu," he said.

Caldwell said it is hard to imagine the waterfront retail complex becoming part of a university campus, though he welcomed the change. "Shortly there’s going to be new life here,"he said. "Isee nothing but good in all of this."