KAHULUI – Costco plans to expand its Kahului store and build a gas station next door as part of A&B Properties’ first part of Maui Business Park Phase II.

For years, rumors have alleged that a corrupt bargain between other gasoline sellers and county government have kept Costco from selling gas here.

There is no truth to that, said Mike Dubrota of Northwest Atlantic, the real estate agent for Costco. “I’ve never received any push back,” he said Thursday.

The problem was that the lot was too small, 12.8 acres. The lot was not originally sized to fit Costco’s needs. It was intended for a Sam’s Club. When Wal-Mart backed out, Costco took over the property.

By annexing what A&B calls the old Central Power Plant lot, Costco will have room enough for a gas station, more customer parking and an expansion of its 131,000-square-foot store by about 15,000 square feet. A dust fence has been put up around the property where the gas station will be built.

The store will continue to operate during expansion work, Dubrota said.

However, even if there are no delays, the earliest the gas station could open for business would be mid-2012.

A&B still owns the land, and it is demolishing the buildings there.

Maui Business Park II will total about 178 acres, in two sections. The first section is much smaller, the land is between Kmart and Costco and the yet-unbuilt access road to Kahului Airport.

The Central Power Plant was built in 1917 to supply power to well pumps, Paia, Spreckelsville and nearby plantation camps. Later, Maui Electric Co. acquired the transmission lines and the power plant was abandoned in the 1970s.

A variety of tenants then used the location, but most of the buildings have been vacant for years, and one collapsed. The rest are considered unsafe.

A&B has permits to demolish the structures. Because of their historic interest, the state Historic Preservation Division required survey and documentation of the buildings.

Only two tenants, a trucking firm and a surfboard maker, were still using the lot until recently. Both are relocating.

Maui Business Park is a continuation of the Kahului light industrial area that A&B has been developing since the 1960s.

Before commercial buildings can be permitted, roads and utilities must be installed.

To move the land out of state agricultural use, A&B agreed to contribute 40 acres to the county for affordable housing, 7 acres for a community center and 3 acres for a park.

* Harry Eagar can be reached at heagar@mauinews.com.

Bank of Hawaii has been named the best bank in the country for the second straight year by Forbes magazine.

The Honolulu-based bank, which has assets of $12.7 billion, finished in the top 10 in five of the eight categories that were used to measure financial performance. Forbes determined the ranking by partnering with SNL Financial and evaluating the 100 largest U.S.-owned banks and thrift institutions ranging in asset size from $4.7 billion to $2.3 trillion.

First Hawaiian Bank, the largest bank in the state with $14.8 billion in assets, is owned by Paris-based BNP Paribas SA.

Forbes, which published its rankings online this week, said Bank of Hawaii “stayed very conservative in its underwriting strategy during the housing bubble, which helped minimize the bad loans on its books today.”

The magazine said Bank of Hawaii’s reserves are three times the size of its nonperforming loans, second-best among big banks.

“Wall Street certainly approves of how Bank of Hawaii runs it business: Its shares trade at a multiple of 2.2 times its book value, the second-highest ratio among the 100 largest banks,” Forbes wrote.

Bank of Hawaii’s stock closed up 44 cents yesterday at $47.70 on the New York Stock Exchange.

“Attaining this ranking for two consecutive years now certainly reflects positively on the quality of our community, our clients, and especially our people,” Bank of Hawaii Chairman and Chief Executive Officer Peter Ho said. “This is a nice tribute to our employees, who work tirelessly to meet our customers’ financial needs.”

Analyst Joe Gladue of Haverford, Pa.-based B. Riley & Co. wasn’t surprised by the ranking.

“I think it’s one of the best-managed banks around,” Gladue said. “After it attempted to expand to the mainland years back, the bank pulled back and decided to focus more on its core market in Hawaii and stayed very disciplined with that core franchise. They’ve been conservative lenders, and that’s helped them get through this recent economic downturn.”

The Forbes/SNL ranking was based on return on average equity, net interest margin, nonperforming loans as a percentage of loans, nonperforming assets as a percentage of assets, reserves as a percentage of nonperforming loans, two capital ratios (Tier 1 and risk-based), and leverage ratio.

“In this environment, they continue to do very well vis-a-vis their peers due to their low risk profile, adherence to strong credit underwriting standards, and continuing to follow a strategic plan that results in high profitability, low risk and strong shareholder returns,” said senior research analyst Brett Rabatin of Birmingham, Ala.-based Sterne Agee.

Pasadena, Calif.-based East West Bancorp, the largest bank in the U.S. focused on serving the Asian-American community, was ranked second. Houston-based Prosperity Bancshares was ranked third.

Wilmington Trust, headquartered in Wilmington, Del., ranked last among the 100 largest banks.