Project X, Alexander & Baldwin Inc.'s not-so-secret vulture fund for distressed Hawaii real estate, is getting bigger.

In March, the local company disclosed that it had set up a “an opportunistic real estate program” for distressed Hawaii real estate. The entire fund had about $100 million to pursue deals in "10 million to $100 million range."

During conference call with investors Friday, Christopher Benjamin, A&B's Chief Financial Officer, said the company plans to add $20 million to its Project X initiative during the fourth quarter.

The company did not identify potential prospects but it’s no secret A&B is interested in General Growth Properties Inc.’s Victoria Ward lands in Kakaako.

It's certainly a good fit given the potential for building condominium complexes on the 65-acre parcel, complementing the existing mix of retail and commercial tenants.

In 2002, A&B nearly acquired the Victoria Ward properties for about $200 million before General Growth submitted a last-minute, winning bid.

Michigan-based General Growth is currently operating under bankruptcy protection and if they're forced to part with parts or all of the Kakaako project, it could sell for a huge discount from the 2002 price.

Even if the Ward properties stay off the market, there's plenty of opportunity for Project X deals.

Right now there's too much inventory and too little money chasing it.

One long-time vulture investor recently told me that deals in the range of tens of millions of dollar used to attract about a dozen potential buyers who would bid up the properties.

Today's sellers are lucky to get interest from one or two qualified buyer, he said.

Timing may work in A&B's favor.

During Friday's conference call, Stan Kuriyama, A&B's incoming CEO, believes the economy will bottom out next year. Resort development, he adds, will likely pick up in 2011 and get more momentum in 2012 and 2013.

"We want to look at prospects that are fully entitled, in some cases designed and permitted so that we can ready these projects for construction and recovery of the market over the next two to three years," he said.