HILO » Georgia-based Jacoby Development Inc. is pulling out of plans to develop a $1.8 billion resortlike project on state land three miles north of Kailua-Kona.

The 530-acre state-initiated project has been opposed by Hawaii County as unnecessary and troublesome.

A state report said an additional reason to quit is a new requirement by the Army Corps of Engineers to prepare a federal environmental impact statement for a 25-acre marina in the project.

Jacoby has written a state environmental study, but that is less strict than a federal one.

At a meeting today, the state Board of Land and Natural Resources was to consider Jacoby's termination of its agreement with the state.

The idea to develop a 1,500-acre land unit called Kealakehe started with Hawaii County in the early 1980s when coastal development north of Kailua-Kona was starting to boom.

The state took over the project, but the coastal portion was dropped in the face of public opposition.

In 2003, the state revived the shoreline development concept on state and Hawaiian homes lands with the explicit idea of making money.

“;The state of Hawaii has expressed a desire to create and expand income generating uses on the subject lands,”; Jacoby's state environmental study says. It also said the state wanted to expand recreation, meaning the marina.

When Jacoby was selected for the project in 2004, it proposed a $2.2 billion development, later reduced to $1.8 billion in the face of county opposition.

The final, smaller project envisioned 400 hotel rooms, 1,100 time-share units, and a 25-acre marina, plus commercial areas and a new 2.2-mile highway.

When the state signed an agreement with Jacoby in November 2005, the county had already removed “;resort”; designation from the area, making hotels and time-shares impossible.

Jacoby kept trying anyway for another 21/2 years.

Kona Councilwoman Brenda Ford said Jacoby's plan “;horrified”; the community and few will miss it.

The state's idea arose when “;tourists were coming in masses,”; she said. The West Hawaii resort industry was short by 1,000 workers, and there was no place to house new workers if they had come, she said.

Traffic on the already clogged Kaahumanu Highway would have been increased by 2,500 cars per day, she said.

With the drastic downturn in tourism now, there is no need for more visitor rooms, she said.