HONOLULU -- A federally funded project at Honolulu Harbor that was touted as creating 635 jobs might not create that many jobs until five years down the road. And some of the jobs won't be new ones.

When Hawaii's two U.S. Senators Dan Akaka and Dan Inouye announced that $3 million in federal renovation funds would somehow create 635 jobs, KITV 4 News wanted to see how that was possible.

The project is called the “Import Export Step-Up Incubator” at Foreign Trade Zone No. 9 on the Diamond Head end of Honolulu Harbor, across from the federal building.

More than $50 million worth of merchandise moved through the trade zone in the last year.

"I think this is fantastic project, for the small amount of money that the federal government is investing in this project," said Greg Barbour, administrator for the Hawaii Foreign-Trade Zone, which comes under the auspices of the state’s business department.

A warehouse now used for merchants’ product storage won the $3 million renovation grant from the U.S. Commerce Department’s Economic Development Association.

Built in 1950, the building has porches and doors on its second level but has remained a warehouse. A second floor and offices were never built there over the 60 years that followed.

The state plans to use the federal money to renovate the warehouse, turning it into offices and work space for new import-export businesses.

Barbour estimates 125 jobs will be created in the first year after the project is built.

"I'm fairly comfortable that we'll be able to generate those jobs. We've had a high demand for the other side of the building,” Barbour said.

After five years, he estimated 635 people will work there. There's a waiting list of several businesses that want to rent offices in spite of the recession, he said. And trade zone officials had to modify storage rooms to rent them out for offices because of the demand.

"When we expanded in 2005, it took a few months to rent that space and we've been full-up every since. So we have almost virtually 100 percent occupancy," said Barbour.

Barbour says the goal is to create new jobs, but some jobs might just relocate from elsewhere in Honolulu to the waterfront facility.

"The whole idea is to help businesses start up and then once they get started, to help them grow, so it's probably a little bit difficult to say how many would be new jobs and how many would be existing," he said.

Trade zone officials hope to start construction on the project in January and have it open and ready for business by November of next year when the Asia-Pacific Economic Cooperation conference will be held in Hawaii.