The Hawaii Public Utility Commission granted preliminary approval for the indirect transfer of Lanai’s regulated utilities on Monday. With this hurdle cleared there is nothing stopping the sale of 98 percent of the island of Lanai for today.
On Monday, two groups, Lana’ians for Sensible Growth and Life of the Land, attempted to slow down this process by filing motions with the PUC to intervene in the case.
The purchase of 98 percent of Lanai by Larry Ellison from David Murdock of Castle & Cooke, has been estimated at $500 million. An exact figure for the sale was not made public.
The sale includes the two resort hotels — the Four Seasons Resorts Lanai at Manele Bay and the Four Seasons Resorts Lanai, Lodge at Koele — two championship golf courses and club houses, The Experience at Koele and The Challenge at Manele and more than 88,000 acres of land, among other things.
It has only been a week since the PUC filing and the announcement by Gov. Neil Abercrombie of the impending Lanai sale.
It is the speed with which this sale is moving that bother the Hawaiian environmental advocacy group Life of the Land.
“This was filed at the PUC on June 19, and on June 21 the Consumer Advocate gave preliminary support for interim approval. For them to move in two days is remarkably fast because they are a notoriously slow-moving entity. I find that totally bizarre,” said Henry Curtis, Life of the Land’s vice president for consumer issues.
Besides the speed with which this transfer is going through, the potential impact on the Big Wind project is another central concern for Life of the Land.
The deal will allow Murdock to retain the rights to develop a wind farm on the island’s northwest corner. Originally, Castle and Cooke had an agreement with First Wind to build a 200-megawatt windmill project. But when First Wind was unable to acquire the necessary land from Molokai Ranch to develop its project on Molokai, the PUC rejected the original application. Hawaiian Electric Co. must now seek new bids to make up for another 200-mw to satisfy the PUC requirement. HECO continues to work with Castle and Cooke on this project intended to send the electrical power to Oahu through an undersea transmission cable.
According to a Castle and Cooke announcement, “Mr. Murdock will still retain the rights to develop a potential wind farm.” However, residents have speculated that locals may turn against the wind farm proposal since Murdock is no longer their employer.
The PUC is the only state agency with the power to disapprove the transfer of the three Lanai utility companies at a later date. The PUC said that within five years from the closing of the overall purchase and sale transaction, Lanai Island Holdings shall invest a minimum of $10 million in the water and wastewater utilities’ respective operations. The three utilities in question are Manele Water Resources LLC, Lanai Transportation Co. and Lanai Water Co. Inc.
What does Ellison want with Lanai?
Ellison, 67, is listed as the third richest man in America, behind only Bill Gates and Warren Buffet, with a net worth of $36.5 billion. This makes him the sixth richest man in the world. He is also a competitive racer of sailing yachts, having recently won the prestigious America’s Cup with Team Oracle, named after the enterprise software company he founded.
Now that he holds the title, Ellison has the right to choose the time and place for the next America’s Cup challenge, considered the third biggest sporting event in the world behind the Olympics and the World Cup. Could the America’s Cup be coming to Hawaii?
It has been said that the famous American yachtsman Dennis Conner had hoped to bring the America’s Cup to Hawaii if the state would improve its harbor facilities to accommodate yachting. Conner and his crew even trained for the Cup in Hawaii. Could Ellison influence the state to make its harbors more sailboat-friendly?
Rumors have started circulating that Ellison will improve the harbor at Manele Bay as well as the Lanai airport to accommodate his Gulfstream jet. If the harbor is improved to handle more sailing vessels, greater sailing traffic between Lanai, Maui and Molokai could be developed.
According to a report in Sports Illustrated, Ellison also plans to remake the entire sport of yachting. Traditionally, the America’s Cup was sailed on 12-meter, deep-hulled yachts. This often put more emphasis on the boat technology than the skill of the sailor.
To make the race more competitive, Ellison has proposed a single design for all teams — a 72-foot catamaran with winged sails. These boats would allow viewing of the race from shorelines, potentially expanding the live audience. More importantly, these sailboats are far better suited for the shallow conditions around the Hawaiian islands. While Team Oracle has already picked San Francisco for its next Cup regatta, smaller races, and eventually the America’s Cup, could make their way to Hawaii.
After the closing on the deal today, Ellison has indicated that he will meet with residents of Lanai and listen to their concerns. The story continues.