A proposal by Best Hospitality LLC to build a 350-foot tower on a Waikiki site with a 25-foot height limit will have to complete a more arduous round of city vetting.

The subsidiary of Tokyo-based Tsukada Global Holdings plans to construct a 26-story, 350-foot-high condo-hotel called Park Kalia-Waikiki with up to 170 units, a restaurant, a wedding chapel, recreational facilities and a parking structure. It plans to demolish the former two-story Kyo-ya restaurant and parking structure to build on the Kalakaua Avenue site, adjacent to the Luana Waikiki condo-hotel and Fort DeRussy Park.

Developers already have submitted an environmental assessment for the project, which cannot be built without getting approval from the city for a 325-foot height exemption. However, after reviewing the documents, the city Department of Planning and Permitting has ruled that the developer must complete a more rigorous environmental impact statement, which reopens the controversial project to scrutiny.

“This proposal is likely to set a precedent for other property owners and developers in the surrounding area to seek similar building height increases,” said Planning and Permitting Director George Atta in a May 31 letter to Best Hospitality. “Due to its close proximity to Fort DeRussy, which has a height limit of 25 feet, the proposal will have a significant visual impact on this public facility and the last major open space in Waikiki. As such, the proposal is likely to have a significant effect on the environment.”

Project consultant Keith Kurahashi, president of Kusao &Kurahashi Inc., said the company expects to submit its draft EIS in about a month. Once the department accepts the new report, he said there will be more public review. “There’ll be a 45-day comment period,” he said. “Then we’ll prepare the final report.”

The firm cannot pursue its Waikiki Special District permit until the city department accepts a final EIS, Kurahashi said. “This will probably push the project back by about six months,” he said.

Waikiki Neighborhood Board Chairman Bob Finley said he’s thankful that the city required a more rigorous vetting for the project. In September the board voted 15-0 to oppose the project, which they said violated Land Use Ordinance zoning regulations and the Waikiki Special District design criteria.

“The park view on entry to Waikiki is a major part of the Waikiki experience, and adding another tower to the property will not enhance our experience,” Finley said. “While we support the (visitor) industry, we also need to protect our neighborhood from major projects that simply are moneymakers for the developers.”

The developer said it revised the project’s design and approach in late 2015 after engaging WCIT Architecture. Efforts to present the new design to the Waikiki Neighborhood Board have been rebuffed, said Kirra Downing, a spokeswoman for the developer.

“Park Kalia Waikiki has, and will continue to, engage in a robust community outreach effort to express the project’s merits and to understand and look to address comments from the community,” Downing said.

Neighborhood board member Jeff Merz, who is an urban planner, said the board is not interested in seeing the new design because the company still plans to request a substantial height variance.

However, the Waikiki Improvement Association board has approved the project. “The basic feeling is that we need to increase (hotel) capacity, and the only way to do that is to go up,” said Rick Egged, the association’s president.

Egged said the developer also makes a convincing case for revisiting the height limit for the site, which is surrounded by much larger developments like the Trump International Hotel Waikiki and the Ritz-Carlton Residences, Waikiki Beach. “There’s some ambiguity,” he said.

But Finley said the city has consistently upheld the parcel’s height limit, which dropped to 25 feet from 300 feet in 1976. “It was re-acknowledged in zoning code as 25 feet as recently as 2011,” he said.

Despite the property’s limitations, the owners paid a premium. According to city tax records, the developer paid $30.5 million for the parcels in 2015, although the total assessed value is just over $6 million. Waikiki-based real estate analyst Stephany Sofos said the purchase price indicates owner confidence.

“No one would have been crazy enough to pay about $560 a square foot for non-oceanfront property if they thought they could only build two floors,” Sofos said.

The company is arguing that it needs to build vertically to achieve economic success.

The firm and its supporters say the project will help increase the number of Waikiki hotel rooms, create jobs and increase tax collections. The company said it also expands public open space by creating a new park in Waikiki that “significantly improves visual and physical connectivity to the neighboring King Kalakaua and Fort DeRussy parks.”

Sofos said such run-of-the-mill benefits don’t warrant compromising the integrity of zoning and land use policies. “Why have regulations if we are not going to follow them? When does it end? What’s to keep them from developing Diamond Head?”