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Saturday, March 22, 2008
Molokai Ranch: Protesters to Cash in with Takeover Plan?
By Andrew Walden @ 2:49 PM :: 10363 Views :: Maui County, Agriculture, Greenmail

“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.” -- George Orwell, Animal Farm

by Andrew Walden

Molokai’s largest private employer is closing operations. With unemployment already at 7 percent, 120 more Molokai residents (on an island of just over 7,000 residents) are losing their jobs. In a state where politicians pretend to be obsessed with “saving agriculture,” cattle ranching will end on the 1/3 of the island owned by Molokai Ranch.

Gov. Linda Lingle says the damage is equivalent to the loss of 23,000 jobs on Oahu. She is dispatching a team led by Abbey Mayer, a Molokai resident she nominated as State Planning Director. Mayer’s “Rapid Response Team” will deal with unemployment -- but also with issues such as the 1,000 Molokai residents who rely on the Ranch for water, the closure of West Molokai’s gas station and general store, and the future of West Molokai’s only public school.

But not everybody is saddened. In a news release sent out within hours of the Ranch’s announcement, Molokai activist leader Walter Ritte enthuses about building an “economic engine that supports our people.” Ritte’s associate, Karen Holt, Executive Director of the Molokai Community Service Council (MCSC) chimes in: “(The) announcement that Molokai Ranch is shutting down … provides our island and its people the real opportunity to control its own destiny.” These so-called “grassroots activists” sent their news release out via the high end Honolulu public relations firm, Hastings and Pleadwell.

The Honolulu Advertiser on March 25 compares the Molokai Ranch shutdown to the attacks the Big Island’s Hokulia development. Hokulia was blocked temporarily by activists demanding tens of millions in “settlement” dollars for themselves and for their Office of Hawaiian Affairs-backed native Hawaiian Legal Corporation attorneys.

There is a similarity, but the Molokai dispute is more akin to the battle over Punaluu, Kau. It is not an anti-development battle. It is a fight between two developers.

One developer is a traditional corporate entity, Singapore-based Guoco Leisure Ltd, owners of Molokai Ranch. The other developer pretends to be an anti-development group -- albeit one backed by $50 million from Massachusetts-based multi-national energy corporation UPC Wind Energy Partners. And nobody explains this better than Holt and Ritte.

Holt says in her news release: “Nine months ago, MCSC initiated a move to purchase the Ranch. We hope we can continue this effort….(The) MCSC campaign to buy Molokai Ranch is attempting to raise funds for the purchase. MCSC is working with the community to create a new entity to own the lands after the purchase.”

The sharp observer will note that “the community” is divided, and many are afraid to speak out in support of the Molokai Ranch.

As an earlier wave of protests by these same people swept Molokai, the “friendly” island witnessed the 1995 arson attack on the recently renovated Ranch House at Kaupoa, the 1994 fence cutting and poisoning of the Ranch’s exotic African Safari animals, and the 1996 destruction of five miles of Ranch water pipes. More recently, opponents vandalized signs supporting Molokai Ranch’s Laau development, which included plans for 200 luxury homes at Laau Point. But “the community” is expected to fall in line with the protesters—or else.

As Holt explains: “Opportunity often comes out of crisis. Now that the Ranch has abandoned its own controversial plans, we need to join together to chart the island's future for ourselves. And that future must include bringing ownership of Molokai back home to the people who live here.”

Her scheme could put Ranch ownership in the hands of “a new entity” -- which MCSC is creating.

Ritte’s backers cried long and loud that Molokai lacks the water to support the 200 luxury homes at Laau Point. Perhaps a new water source has been discovered? According to the Hawaii Tribune Herald on March 25, Ritte now says instead of developing Laau Point, it would be preferable to build “hotels, golf courses and townhouses” on ranch land where infrastructure is installed and permits have already been approved.

MCSC is raising capital to buy the ranch at a price they estimate at $200 million. Molokai Ranch owners have estimated the ranch’s value at $300 million, but the price would likely be lowered by the activist opposition Ritte, Holt, and others have created. The $100 million discrepancy between the two valuations may reflect the value of the protests -- a lucrative capital formation technique, which will be the future of Hawaii until the U.S. Department of Justice Anti-Trust Division and Civil Rights Division step in.

Issues of trust aside, investors may be attracted to a proposal spearheaded by those who control the demonstrators -- especially if multiple protest-free golf courses, hotels, and town homes are in the offing.

While protests may benefit MCSC’s bottom line, they certainly worked against Ranch finances. As Ranch CEO Peter Nichols explains: “Unacceptable delays caused by continued opposition to every aspect of the master plan means we are unable to fund continued normal company operations.” Ranch operations are claimed to have lost $37 million dollars from 2001 to 2006.

Last November, Ranch representatives predicted in an environmental impact report what would happen if their project was delayed: "Under this doomsday scenario, (Molokai Ranch) essentially closes down ranch operations and land banks the property for the future. These reductions, along with lost tourist expenditures, will in turn severely affect local businesses at Maunaloa (West Molokai) and elsewhere. These losses in local jobs and probable business failures will in turn increase the need for county and state social services."

They were then forced to withdraw their application under threat of denial.

Molokai’s County Councilman Danny A. Mateo called the closure “... a mean-spirited conclusion to punish a community... .” Perhaps Mateo thinks Guoco would agree to lose another $37 million while the competing groups argue over how to carve it up?

Molokai Ranch won the support of Office of Hawaiian Affairs (OHA) Molokai Trustee Collette Machado. Ritte is a close associate of ousted former OHA trustee Senator Clayton Hee. On the Big Island, Punaluu is faced with an effort by OHA-backed thugs to force out a developer and take the land for their own development scheme. Molokai is witness to a conflict between two different OHA-connected factions: Each backing its own development plans, each seeking power over Ranch property.

Molokai Ranch’s desire to develop 500 acres on Laau Point—the southwest tip of the island—may have been forced by Ritte’s decades-long protest campaign. In a futile attempt to placate protesters, the Ranch’s “Master Plan” proposal also included 26,000 acres to be turned over to the Molokai Land Trust for conservation as well as another 10,000 acres to be preserved as open space and 14,390 to be preserved as agricultural land with preservation easements to prohibit future changes in land use. According to the Ranch, the capital raised by lot sales would have been used to re-activate the long-shuttered Kaluakoi Hotel and return visitor counts to 1990s levels.

Under normal conditions, Guoco would have been able to raise money on the capital markets, fixed up the hotel and re-opened it. Complicated self-financing plans like the Ranch’s “Master Plan,” waste time and money and would be required only if outside lenders are unwilling to risk their capital—for instance in an environment where it might easily be stolen such as Zimbabwe, Kona, Venezuela, Kau, Nicaragua or Molokai.

Now, not only will Molokai be unable to get the Kaluakoi Hotel reopened, but it will also lose about 60 rooms in two other Ranch tourist facilities slated for closure. The Ranch shutdown, loss of tourist dollars, and increase in unemployment will hit small businesses island-wide causing additional job losses.

But not to worry, in the ninth paragraph of Ritte and Holt’s news release, they finally get around to mentioning that, “We are certainly concerned about the Ranch's employees, and expect that our community will pull together to support them….” In this sentence, “our community” likely translates as “others”—because HCSC has got a deal to close.

What does all this mean? Pansy Medeiros of the Big Island explains it best. According to the then-76-year-old Mrs. Medeiros, on March 13, 2006, the day before the Hokulia settlement on the Big Island was announced, her son, Hokulia plaintiff Jim Medeiros, stormed into a Hawaii-County-mediated family hooponopono session and announced: “I oki (divorce) from you ma -- I don’t need you bitches any more, I’m into the money now!”

Since several of the Medeiros family members present that day had been part of the fight against Hokulia, this should be a warning to those who are not central leaders of the protests against Molokai Ranch.

As Ritte explained in the March 25 The Honolulu Advertiser: "It was set up to end this way."

---30---

Pansy Medeiros:

http://www.hawaiireporter.com/story.aspx?7e52ffff-0a6b-47ea-abf5-074329197298

Punaluu, Kau:

http://www.hawaiireporter.com/story.aspx?bfa78325-c5d4-49bb-a911-1f7bd5ab16cf

http://www.hawaiireporter.com/story.aspx?53ee7d13-5158-4325-b7b0-7b4d10801e96

Felony attacks on Ranch:

http://starbulletin.com/97/05/07/news/story2.html

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