Safeway and Target are eyeing possible new stores in Hilo, if all goes as planned.

A partnership between Safeway Inc. and Target Brands Inc. submitted a joint rent bid for a 15.5-acre parcel of commercial property owned by the Department of Hawaiian Home Lands in Hilo.

A final 65-year ground lease is being negotiated, and must be signed by Feb. 14. It is expected to generate $18.1 million in revenue for DHHL for the first 25 years, after which terms of the lease would be renegotiated.

The first 10 years of the lease is set at $568,460 per year, and the subsequent five-year periods are $727,686, $823,304, and $931,486 annually.

The Hilo site would be Target's fourth in the isles, in addition to stores in Kapolei, Salt Lake and Kona that are expected to open in spring and summer 2009.

Safeway, which already has a store at the Prince Kuhio Plaza in Hilo, would be adding one more to its total of 19 stores in Hawaii.

Target spokesman Dave Fransen said the company expects to open another general merchandise store similar to the ones under construction—not a SuperTarget. The size of the other Hawaii stores is about 160,000 square feet.

“;We're kind of looking it as one store in Kona would be great for serving the West side of the island, and Hilo would be perfect to serve the East side,”; said Fransen.

Wal-Mart Stores at one time was interested in the parcel, according to DHHL spokesman Lloyd Yonenaka, but withdrew about a year ago after the corporation revamped its expansion strategy.

DHHL put the parcel out for bid again, and Safeway and Target were the only ones to submit one this round. DHHL expects the partnership to become a Limited Liability Corp. (LLC) when the lease is eventually signed.

The site is behind an existing Wal-Mart, across from Home Depot and within walking distance from Prince Kuhio.

“;We welcome the opportunity to support the economy and improve the quality of life for residents by providing job opportunities and expanded services,”; said DHHL director Micah A. Kane. “;The revenue we generate also goes back into our existing communities and helps develop new affordable homeownership opportunities for native Hawaiians.”;

Kane said the commercial leases are part of DHHL's plans to keep the department self-sufficient.