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An Inside Look at Larry Ellison's Lanai

Tech billionaire Larry Ellison has set out to transform the Pineapple Isle into a “laboratory for sustainability.” How does Lanai feel about that?


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Kahalepalaoa, site of a proposed new resort.

When software billionaire Larry Ellison bought the island of Lanai last summer, he handled his end of the transaction partly through a limited partnership called Octopus Holdings and its corporate partner, Tentacle Corp. If the names suggest something ominous about Ellison—ranked by Forbes magazine as the fifth richest man in the world—they also reveal a sense of humor. As co-founder and CEO of Oracle, Ellison is infamous for his cut-throat, scorched-earth approach to business. Apparently, he also has a likeable side.

A year has passed since Ellison added the 141-square-mile Hawaiian Island to his portfolio, and his likeability quotient among Lanai's small and leery population remains as high as ever. “Hope,” “hopeful” and “cautiously optimistic” are words a visitor wandering around Lanai City, the island’s only town, hears again and again these days. “The talk he’s talking is giving a lot of people hope—a lot of people think he’s the new messiah,” says Andrew de la Cruz, owner of a small general store, International Food & Clothing, who places himself on the “cautiously optimistic” end of the Ellison outlook spectrum. “I’m just really hoping this guy comes through.”

Ellison’s grand plan for Lanai—which once prospered as the world’s largest pineapple plantation, and has limped along in more recent times as a luxury resort destination—is to transform it into a “laboratory of sustainability,” with desalinated seawater irrigating organic farms, and a solar electric grid recharging the batteries of electric cars. From the standpoint of the people who live there, and whose livelihoods are now deeply dependent on Ellison’s decisions, sustainability lab sounds pretty good.

And even as the more potentially controversial details of Ellison’s vision have emerged—he plans to build a third resort on an undeveloped shoreline and wants to double the size of the island’s population from 3,000 to 6,000—the widespread sense of optimism on the island is undiminished.

 “It feels like good things are happening here, and we’re all going along for the ride,” says Mike Carroll, an artist who runs the Mike Carroll Gallery in Lanai City.

The good feelings toward Ellison largely reflect the good job that Lanai Resorts, the organization overseeing all of Ellison’s many on-island operations, has done with community relations. Heading the organization is Kurt Matsumoto, who ran the island’s two resort hotels for their first decade of operation in the 1990s. Matsumoto, who was born and raised on Lanai, and is well regarded there, routinely appears at public forums with Lanai Resorts’ other top executives to discuss what Ellison has in mind and to hear the community’s concerns.

“It’s not Ellison’s ideas that are giving people hope, it’s the way he’s involving the community,” says Butch Gima, president of a community advocacy group called Lanaians for Sensible Growth. “It’s a much more transparent process than it’s been over the last two decades.”

The goodwill can also be attributed, at least partially, to the fact that Lanai was simply ready for a change. After 22 years with previous owner David Murdock, the CEO of Castle & Cooke and the island’s curmudgeonly, micromanaging overlord, it was time for someone new. “He was a tyrant,” says one outspoken Murdock critic, Ron McOmber. “His attitude was, ‘You’ll do it my way, and if you don’t like it, you’ll do it my way anyway!’”

The community swimming pool.

Ellison’s charm offensive began the day after Castle & Cooke reported that the island’s sale was complete. It started with an email to the monthly newspaper, Lanai Today, announcing that the long-shuttered community swimming pool—which Ellison now owned—would reopen. Workers were soon on the site, pouring fresh concrete, installing showers that switched on when you stepped in front of them, and landscaping the grounds in a lush tropical style comparable to that of the island’s two Four Season’s hotels—which Ellison also now owned. The humble old community pool didn’t just reopen, it was reinvented as something worthy of a five-star resort.

“A lot of people were really concerned about what Mr. Ellison would do with Lanai, and the first thing he did was something for the community,” says Alberta de Jetley, publisher of Lanai Today. “It was a very good public relations move.”

It was Murdock who had closed the pool seven years earlier as one of many cost-saving measures implemented during the end of his reign, a period of economic struggle on the island.

Murdock had transformed Lanai’s economy in the early 1990s from pineapples to tourism, but he said his investment in the island never got out of the red. His plan to finally turn a profit on Lanai by building a massive wind farm that would sell electricity to Oahu polarized the community and generated so much animosity toward him personally that he stopped showing his face at the annual Pineapple Celebration, where he once enjoyed mingling with his “children,” as he called the island’s residents.

When Murdock put the island up for sale in 2011, he declared that the financial drain and the ill-will had become intolerable. “This is the poorest financial investment I’ve made in my entire life,” he groused to Lanai Today.

Ellison’s tentacles were all over Murdock’s bad investment right from the start, and they held hammers and paintbrushes and chainsaws. The pool turned out to be the kickoff for a comprehensive campaign to upgrade, renovate and generally spiff up the island.

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