The sale of the island of Lanai to Oracle Corp. Chief Executive Officer Larry Ellison is expected to close Wednesday under a deal valued at "hundreds of millions of dollars."
New details of the much talked about sale emerged in a filing Tuesday with the Hawaii Public Utilities Commission to transfer ownership of the island's three regulated utilities.
In it, billionaire David Murdock's privately held Castle & Cooke Inc. said that it has agreed to sell more than 88,000 acres of land on Lanai, or about 98 percent of the island, to Ellison.
Third-richest person in the U.S.
The sale also includes the island's two luxury hotels - the Four Seasons Resort Lana'i at Manele Bay and Four Seasons Resort Lana'i Lodge at Koele - two championship golf courses and other assets.
Murdock will, however, retain the rights to develop a proposed wind farm on the island - a controversial project that has divided the close-knit island community and fostered animosity against Murdock.
Castle & Cooke said that it expects the sale will "result in the creation of new jobs, provide local economic stimulus and reinvigorate the local tourism industry."
Murdock has sustained "substantial" losses on his Lanai holdings and is credited with propping up the island's economy over the years.
Castle & Cooke said selling its Lanai assets, which Murdock has controlled since 1985, will allow the diversified company to focus on its Oahu businesses, including development of the planned Koa Ridge residential community in Central Oahu.
Murdock said in a statement that he will keep his residence on Lanai.
"Lanai has been my passion for years and I have made huge investments of money, time and energy for the betterment of the island economy and its residents," he said in a prepared statement. "I built my island home there and will continue to remain a homeowner on Lanai. I've enjoyed my time with the many positive people of Lanai and remain forever grateful for the opportunity to have made a positive difference in Lanai's present as well as its future."
The purchase price was not disclosed, but Castle & Cooke's PUC filing puts it at "hundreds of millions of dollars." The asking price had reportedly been between $500 million and $600 million.
Ellison, co-founder of Redwood Shores, Calif.-based Oracle, is worth an estimated $36 billion, according to Forbes, ranking him the third richest American. A company bio says the 67-year-old enjoys racing sailboats, flying planes, and playing tennis and guitar.
Calls and emails to Ellison were not immediately returned Wednesday.
Castle & Cooke said in its PUC filing that Ellison "anticipates making substantial investments in Lanai and is looking forward to partnering with the people of Lanai to chart the island's future."
Murdock said that selling the island - home to about 2,000 residents - was not an impulsive decision.
"The right time and the right buyer have been key components," he said. "Paramount to this process was to ensure that a new owner would have the right enthusiasm, commitment and respect for the island and its people, and be a positive part of the island community in the years to come. I believe that Larry Ellison will bring a new and fresh perspective to the island and its people."
Castle & Cooke's filing says that while Murdock "has continued to fund shortfalls in order to mitigate negative impacts to the Lanai economy and employment for residents, the seller can no longer sustain this."
The company has reportedly lost as much as $40 million annually on its Lanai operations in recent years. It employs about 700 people on Lanai.
Castle & Cooke said the timing of the closing date - set for Wednesday - "is closely tied to the seller's willingness to fund shortfalls up to only a certain date."
The company has asked the PUC for interim approval to transfer ownership of Lanai Water Co., Manele Water Resources (wastewater) and Lanai Transportation Co. by Tuesday to meet that date.
Joshua Strickler, chief of research at the PUC, said that the utilities primarily serve Lanai's resorts, as most residents' water and wastewater services come from Maui County. He said the commission does not have authority over any other aspects of the sale.
Maui County Council Member Riki Hokama, who holds the Lanai residency seat, said that he had a brief discussion with Ellison's representatives who said that the buyer wanted to listen first "and see what we can do together to . . . improve the island."
"I am very optimistic, and I look forward to the new entity," Hokama said Wednesday afternoon.
In regards to Castle & Cooke still retaining rights to develop the planned wind farm, Hokama said: "Good luck to them."
The wind project has divided residents on the small island, which once produced pineapple until Murdock shut down production and turned to tourism and development of high-priced residential projects.
"The Ellison people made it clear to me, he did not want to get involved in this issue," Hokama said referring to the wind farm. "I think Larry Ellison is showing some very good business sense in that he wants to listen."
Hokama added that now would be a good time to discuss with residents what they want to see for the future of the island.
Robin Kaye, spokesman for Friends of Lana'i, a group formed to oppose the wind farm, said "regardless of the owner, we will continue to fight the fight" against the wind power plant on Lanai.
"It's a terrible idea," he said.
He said that the farm will cause "irreparable damage" to the environment and culture as well as other aspects of the island.
Lanai resident Alberta de Jetley, a farmer and publisher of Lanai Today, was enthusiastic about the sale and the new owner.
"It's really an exciting time. . . . You have this whole island. All kinds of things you can do; I think it's going to be great," she said.
De Jetley said with Ellison being a sailing enthusiast, his ownership will attract other sailors to the island and so will his billionaire status.
She said people will say, "Ho, yeah, Ellison owns Lanai. Let's go to Lanai and visit. We will have more yachts; it opens up all kinds of doors."
De Jetley, a backer of the wind project, didn't object to Castle & Cooke still trying to get the project built.
She said the island can transition from being a past exporter of pineapples to an exporter of energy in the future, adding that the island needs more business resources.
"Tourism is good; but tourism by itself is not sustainable," she said.
De Jetley said that Murdock called her before an official press release from Castle & Cooke was issued. She described Murdock as "very positive and very upbeat."
Maui County Mayor Alan Arakawa said in a statement that he's appreciative of Murdock's compassion for Lanai's residents.
"His compassion for the people of Lanai is to be admired," Arakawa said. "We look forward to meeting Mr. Larry Ellison and hope that by working together with him and the state that we may be able to do good things for Lanai and its people."
State Sen. J. Kalani English, whose district includes Lanai, said that he "looks forward to the transition in owners and to a healthy and vibrant Lanai community once again."