Oracle's Ellison to buy, invest in Lanai

[kong]

Oracle's Ellison to buy, invest in Lanai
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HONOLULU (AP) — Oracle Corp. CEO Larry Ellison is closing in on a purchase even lottery winners can only dream about — 98 percent of Hawaii's pineapple island, Lanai.
Ellison hasn't said what he plans to do with the vast majority of the island's 141 square miles, but the sellers say he plans substantial investments that will create jobs and stimulate tourism to the island once owned in the 1920s by the founder of Dole Foods Co.
Attempts to reach Ellison through Oracle after business hours Wednesday were not successful. Ellison's involvement in the deal was publicly announced by Hawaii Gov. Neil Abercrombie. With nearly 50 miles of coastline, two resorts and zero traffic lights, Lanai boasts plenty of unspoiled charm. Tourism officials tout the luxury at its Four Seasons hotels and rugged rural areas that can only be reached by vehicles with 4-wheel drive.
If all goes as planned, most of the island that is home to 3,200 residents and near Maui will be owned by Ellison — the world's sixth-richest billionaire, according to Forbes.
The outspoken Silicon Valley software magnate is known to race sailboats and make occasional unusual purchases. He once, for example, bought a tennis tournament to keep it in the United States. The land's current owner, Castle & Cooke Inc., filed a transfer application Wednesday with the state's public utilities commission, which regulates utilities on the island that serve its two resorts. The sale price for the property was not immediately clear. Lawyers for the seller redacted a copy of the sale agreement signed May 2, saying it includes confidential information that would competitively hurt Ellison and the seller if disclosed. The Maui News previously reported the asking price was between $500 million and $600 million. Self-made billionaire David Murdock, who owns Castle & Cooke, said he would keep his home on Lanai and the right to build a wind farm, a controversial project that would place windmills on as many as 20 square miles of the island and deliver power to Oahu through an undersea cable. Murdock said in a statement that selling Lanai was not an impulsive decision, but he has been looking for a buyer who would have the right enthusiasm, commitment and respect for the island's residents. "I have learned in life that change is inevitable and can be quite positive when guided in the right direction," Murdock said. Ellison co-founded the Redwood City, Calif.-based business software company in 1977. Forbes ranks him as the third-richest American, with a net worth of $36 billion as of March. Abercrombie said Ellison has had a longstanding interest in the island. "We look forward to welcoming Mr. Ellison in the near future," Abercrombie said. "His passion for nature, particularly the ocean is well known specifically in the realm of America's Cup sailing," he said. Maui County Mayor Alan Arakawa wished Murdock well and said he looks forward to meeting Ellison. The deal involves 88,000 acres of land, plus two resorts, two golf courses, a stable and various residential and commercial buildings, lawyers for Murdock told the utilities commission in its application. Ellison plans to pay cash, and the deal should result in new jobs, economic stimulus and a reinvigorated local tourism industry, the application said. "The buyer anticipates making substantial investments in Lanai and is looking forward to partnering with the people of Lanai to chart the island's future," Castle & Cooke lawyers said in the application. Lanai is Hawaii's smallest publicly accessible inhabited island, with some 3,200 residents. It is known as the "pineapple island" even though Murdock closed its pineapple operations to make way for luxury resort and home development. The majority of the island was once owned by James Dole of Dole Food Company Inc., who bought it in 1922. Murdock bought out fellow Castle & Cooke shareholders for nearly $700 million in 2000 and took the company private. According to the Hawaii Tourism Authority, more than 26,000 people visited the island from January to April of this year, a 6 percent decline from the same period last year. The utilities commission is reviewing the prospective deal because it involves indirectly transferring public utilities Castle & Cooke owns on the island — a water company, a bus and shuttle service, and the island's wastewater utility. Castle & Cooke asked for interim approval by June 26. Hawaii law requires commission approval to transfer public utilities, and the commission will try to make its decision by that date, said Sean Mikell of the PUC's research division, which is considering the application. The commission does not have jurisdiction over the sale of the island, aside from the transfer of public utilities. J. Kalani English, a state senator who represents Lanai in Hawaii's Legislature, said he's hopeful the sale to Ellison will mean a return of agriculture to the island. "I'm relieved because he's one of the richest people on the planet, which means he knows he'll lose a lot of money in the beginning and he can sustain that," said English, a Democrat. English said Ellison has been known to vacation on Lanai. Robin Kaye, president of Friends of Lanai, said he wasn't surprised to hear who the buyer is because Ellison's name has been floating around the island lately. Before Murdock announced he would keep wind farm rights on the island, Kaye said he hoped Ellison wouldn't pursue the project. "Lanai is worth more than supplying power to Oahu," Kaye said. Seventh-generation Lanaian Sol Kahoohalahala said he hopes to see an end to high unemployment and more opportunities for economic development beyond tourism. "I look at this as a potential opportunity for us to get the new owner to look at Lanai in terms of an island that needs to work at sustaining itself," he said. "Tourism cannot be the only economic engine on Lanai." Kahoohalaha's family managed to hold on to some Lanai land. The 2 percent Ellison isn't buying is owned by the state, county and private residents.

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[kong]

wow, I am jealous BIG TIME. I love Hawaii and have done some scuba diving off of that Island

[kong]

Hawaii's island of Lanai depends on wealthy owner
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HONOLULU (AP) — The 3,200 people living on a rural Hawaiian island that will soon be purchased by billionaire Oracle Corp. CEO Larry Ellison have a laundry list of what they'd like to see him provide.

Working-class residents on Lanai want stable jobs. Affordable housing. No onerous restrictions on hunting or fishing. A return to agriculture. Improved transportation to Maui, Oahu and other islands given an airport with limited flights. Even simple things like the reopening of the community pool. They hope he's willing to sit down, listen to their concerns and be sensitive to the unique culture of Hawaii.

But on Lanai, an island paradise unscathed by urban annoyances like traffic lights, residents' lives are largely dependent on whoever owns 98 percent of the island's 141 square miles. Without tourism, the economic engine that's driven the island under its current billionaire owner, the "pineapple island" doesn't have much.

"It's not an island with a lot of resources and the kind of infrastructure you need," said Bill Medeiros, assigned to oversee Lanai as executive assistant to the mayor of Maui County, of which Lanai is part. "At one time, almost the whole island was pineapple."

Lanai residents are fully aware, Medeiros said, that their wants ultimately have little bearing on the reality of living on an island whose future rests with the whims of an owner with deep pockets willing to bear a financial loss.

That owner is soon to be Ellison, an adventurous billionaire who needs the island a whole lot less than the people of Lanai need him.

The constant fear is what happens if the owner doesn't renew leases on rented homes, closes a hotel or decides he's had enough and sells, community leaders say.

"It's always, 'What happens if he sells us? How scary,'" said Kepa Maly, executive director of the Lanai Culture & Heritage Center.

It would be nice if Ellison, known for being a visionary, can find a way for Lanai to sustain itself in a way that honors its roots, Maly said. But he shouldn't expect to turn a profit.

"The history of Lanai since western contact is littered with the graves of unsuccessful western business interests," he said. "I can't believe someone buying the island today would be able to get richer off of it."

Current billionaire owner David Murdock, who led a shift from the island's pineapple industry to luxury resort and home development, had been losing $20 million to $30 million a year, the Honolulu Star-Advertiser previously reported.

Ellison has yet to fully reveal his plans for Lanai but his representatives have assured the state senator who represents the island that the high-tech CEO and world-renowned sailor has no plans for radical changes and will be sensitive to the culture of the island.

Still the reality, Maly noted, "is clearly someone has to earn some money. How do we do that?"

And Ellison didn't become the world's sixth richest billionaire without some shrewd business sense.

"He told me once that he's like anybody else when he spends his money on something, he doesn't want to get taken," said Mike Wilson, managing editor of the Tampa Bay Times who authored, "The Difference Between God and Larry Ellison: God Doesn't Think He's Larry Ellison."

But for a pet project like buying an island, "I'm sure his first concern is not that he'll lose money," Wilson said. "I don't think he's unconscious of the natural beauty of the place or anywhere else."

The island's charm means residents travel via $50-round trip ferry ride to neighboring Maui to shop at stores like Costco or Wal-Mart. There may be only 30 miles of paved roads, but a gallon of gasoline at the lone gas station on Friday was about $5.75, compared to Honolulu's average of $4.20 and the U.S. national average of $3.45. Residents supplement the food on their family's table by fishing and hunting — mostly deer and some wild pig. There's one school and one hospital. For more than routine medical care, residents must fly to Honolulu, a 25-minute plane ride away.

Lanai's small size has led to a tight-knight community, built as a walking community around Lanai City's park, where residents strive for a simple life.

"For an island that may have been host to many well-known people, it's still an island that allows a lot of courtesy and privacy," said seventh-generation Lanaian Sol Kahoohalahala.

As the sale gets closer to being a done deal, Maui Mayor Alan Arakawa is pondering how Ellison might "completely alter the economic structure of the island."

Playing off Ellison's high-tech prowess Maly has a novel idea: "Software development. How about Lanai becoming engaged in computer sciences?"
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[kong]

The island needs some infrastructure developement, schools, research centers, places where they can encourage growth and development before they start talking about highly skilled jobs