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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Ellison owns three of the four regulated utilities: the water company, the wastewater treatment company and the public transportation system, which consists of the shuttles that run between the two resort hotels. The electric utility is in the hands of Maui Electric Co. Ellison does own a solar farm that sells some power to the electric company, but despite what he told Bartiromo, that’s the one utility he doesn’t own.

Lanaians shrugged off the misstatement. “If he thinks he owns the electric company, he probably will someday,” said John Ornellas, a local tour guide.

The momentum built steadily in 2013. Ellison met with Maui Mayor Alan Arakawa, and talked about the kind of produce a sustainable laboratory might export to the world. “It turns out Larry Ellison is a big fan of mangoes,” Arakawa said at a press conference the following day. Ellison met Gov. Neil Abercrombie, who later gushed to The Wall Street Journal, “I would say he is the best thing that’s happened to the island in 50 years.”

Ellison bought Island Air, Lanai’s single-propeller air carrier, added larger planes to the fleet and expanded interisland service. He announced plans to build a second, longer runway at Lanai Airport so larger planes could land there and, he later revealed, carry Lanai-grown flowers and produce directly to Asia and North America. At press time, he was closing in on a deal to buy a second local airline, go!

Meanwhile, Matusumoto and his team of Lanai Resorts vice presidents has continued meeting with the community, rolling out details of Ellison’s development plans and soliciting feedback. The plans now include expanding Lanai City by 470 acres; building up to 1,775 new houses and apartments both in Lanai City and on others parts of the island; developing a university campus for sustainability research; setting aside 200 acres for light and heavy industrial development; expanding the solar farm; building a world-class tennis academy; building up to 100 posh grass hales and 50 rural estates at Kahalepalaoa, the site of the proposed third resort.

One thing Lanai Resorts is not discussing is Murdock’s proposed wind farm, which he retained the rights to develop when he sold the island. Ellison has not taken a position on the project one way or the other. Since the terms of the sale were confidential, it’s unknown whether there’s a drop-dead date by which Murdock must get the permits and financing needed to to proceed with the project.

Lanai Resorts declined to speak to HONOLULU Magazine about Ellison’s plans for the island. “We prefer to let the community speak for itself,” is all a company spokesperson would say.

Fortunately for us, Ellison keeps issuing parsable tidbits of what he has in mind for the island. In the latest addition to the growing body of Ellisonian literature, The Billionaire and the Mechanic, an account of Ellison’s quest to win the America’s Cup, he mentions building “a winery or two” on Lanai. He says he wants to transform the island into “a Pacific Eden—a garden paradise for the people who live and work there, and for the people who visit.”

He also adds, “And gee, wouldn’t Lanai be a great place for a sailboat race?”
 

BUYING A HAWAIIAN ISLAND • SOME QUESTIONS AND ANSWERS

How can one person own a Hawaiian Island?

Lanai has been in the hands of a single landowner since the 1860s, when a Mormon missionary named Walter Murray Gibson went there to establish a religious colony. Gibson used church money to buy up huge tracts of land, putting the titles in his own name. He was excommunicated but kept the island, which he turned into a giant ranch for sheep and goats. Ranching continued under various owners until 1922, when James Dole took over and turned Lanai into the world’s largest pineapple patch. In 1961, Castle & Cooke acquired Lanai when it took over the Dole Food Company. In 1985, the island fell under the control of California billionaire David Murdock, when he took over Castle & Cooke. Murdock sold the island to Larry Ellison in 2012.

How much did Lanai sell for?

The price was not disclosed, but it’s estimated to be between $300 million and $500 million.

What exactly did Ellison get?

He bought 87,700 of Lanai’s 88,900 acres, or about 98 percent of the island. Along with it came most of the shops and restaurants in Lanai City, a few hundred plantation cottages, two Four Seasons resort hotels  and their two championship golf courses, the stables where hotel guests go for horseback riding, the shooting range where they go to blast clay targets to smithereens with shotguns, the community swimming pool, the basketball court, the community cemetery and much of the rest of the other stuff that’s on the island.

Who owns the rest?

The state of Hawaii, Maui County and individual homeowners.

How big is Lanai?

It’s 13 miles wide, 18 miles long and about 141 square miles in area. If it were laid over East Oahu, it would stretch from Honolulu International Airport to Makapuu.

Could Ellison kick everybody off his rock if he wanted to?

Not really. But if he crashed the economy, people might leave on their own. That’s not his plan, though. In fact, he’s suggested that the island’s economy would benefit by doubling the population, to 6,000, and by developing a third resort on the island’s north shore.

 

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