The Hawaii Public Housing Authority has picked a mainland firm that is building affordable housing in hurricane-ravaged New Orleans to undertake a $316 million extreme makeover of Kuhio Park Terrace and Kuhio Homes.

The state housing authority board announced the selection of New Jersey-based Michaels Development Co. to lead the redevelopment project to restore and replace units in the aging Kalihi public housing complexes.

The company is the largest affordable-housing company in the nation with a 35-year history in 27 states of reviving distressed public housing projects, the authority said.

The board selected Pa- cific Housing Advisors as a partner in the project.

The firm owns and operates 4,500 affordable rentals in nine states, including Hawaii, and is building a 308-unit rental complex in Kailua-Kona.

Construction is ex- pected to begin in 2011 in the complex that houses 748 families. Kuhio Park Terrace, built in 1965, includes two 16-story high-rise buildings surrounded by a cluster of 14 low-rise townhouses and duplexes. Kuhio Homes, built in 1953, is a complex of 21 two-story buildings with 134 units.

The plans proposed by the development team would add 276 units that would include senior citizen apartments, subsidized rentals for working families and market-rate rentals, the agency said.

The two mainland companies were chosen from four firms that sub- mitted proposals.

The board also selected Albert Kobayashi Inc. as the general contractor, MVE Pacific Inc. for architectural services and Carlsmith Ball LLP as local legal counsel.

The project will be done in phases to minimize relocation of tenants.

Most of the $316 million total cost will be covered by federal funds, said housing authority Executive Director Chad Taniguchi.

There are 4,700 people on the waiting list for public housing in central Honolulu and 9,000 on the list statewide, Taniguchi said.