Long-overdue improvement work at the state-owned Kewalo Basin small boat harbor is set to begin later this month by a private developer picked by a state agency to carry out the $20 million project.

Howard Hughes Corp. held a Hawaiian blessing on one fracturing concrete pier at the harbor in Kakaako on Friday as boaters welcomed the upgrades that will require increasing the cost of slip rents.

The work will include rebuilding all the piers in the 144-slip harbor and adding 70 new slips along with security gates, lighting, cameras and a fuel dock.

“These improvements have been talked about for a long time, they’ve been desired for a long time, and we’re at the point today where we’re going to launch it,” said Todd Apo, vice president of community development for Hughes Corp.

Work is projected to take three years. An initial phase will start with slips along the two most makai piers and require about 40 boats to move to other homes such as Ala Wai and Keehi harbors. The 70 additional slips will be added in the first phase, which will allow boats on other piers a place to move during two future phases of work after boats displaced in the first phase return.

“We’re trying to minimize the impact as much as we can,” Apo said.

Tom Woolf, owner of the 55-foot catamaran Aveia, who has berthed off and on at Kewalo since 1975, said he has been looking forward to the harbor improvements.

“I say every half-century or so you have to do a little maintenance,” he said, calling Kewalo Basin a “fourth world” harbor.

But Woolf also chafed at the rent increases taking effect when new piers are done. Hughes Corp., under state rules regulating slip rents, plans to increase rents by 30 percent. For recreational and charter vessels, monthly rental rates will rise to $17.40 from $13.40 per boat foot. The rate for commercial fishing vessels will rise to $8.70 from $6.70 per boat foot.

For Woolf’s boat, monthly rent would rise to $957 from $737, and he said Hughes Corp. already charges top dollar for substandard conditions. “The rate increase is extremely unwelcome,” he said.

Apo said the company is trying to minimize the increase, which could be as much as 100 percent under caps set by the Hawaii Community Development Authority, a state agency that owns the harbor.

Kewalo Basin, which dates to the 1920s and was once the base of Hawaii’s aku boat fleet, had been neglected in recent decades by the state Department of Transportation, which began operating the harbor in 1959.

In 2007 about one-third of what was then 127 slips were condemned or unfit for use.

With a push from DOT for HCDA to assume management of the harbor, the agency that regulates development in Kakaako started to devise major improvement plans in 2005.

When HCDA accepted management of Kewalo Basin in 2009, it hired California-based marina operator Almar Management to run the harbor, and slip occupancy was improved to 100 percent from 40 percent after taxpayer-financed basic repairs. HCDA also opened slips to recreational boats while giving priority to commercial boats that include fishing and charter boats.

Though harbor tenants weren’t happy about dilapidated conditions, many complained that the allowed fee increases tied to major upgrades would be excessive, unfair and could force them to move or close.

HCDA contemplated carrying out the $20 million project itself but asserted that it could be done more quickly and at no cost to taxpayers through a private developer. Hughes Corp., which is developing 16 condominium towers at Ward Village just mauka of the harbor, beat out a bid by Almar for the job in 2014 and negotiated a 30-year lease on the harbor, which remains managed by Almar.

Under the lease, Hughes Corp. had to pay HCDA $550,000 upfront plus annual rent the agency previously estimated would total about $14 million over 30 years.