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Larry Ellison's latest purchase: the island of Lanai
Old 06-20-2012, 11:23 PM   #1
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Larry Ellison's latest purchase: the island of Lanai

Oracle CEO Larry Ellison buying Hawaiian island of Lanai - Pacific Business News

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Billionaire Larry Ellison, founder and CEO of Oracle, has signed an agreement to purchase 98 percent of the Hawaiian island of Lanai from fellow billionaire David Murdock, according to documents filed with the Hawaii Public Utilities Commission.
According to the documents, filed Tuesday with the PUC, 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.
The price was not disclosed, but previous estimates put the price around $500 million.
I keep waiting for someone to tell the press "I, for one, welcome our new billionaire overlord landlord." But not yet.

This could actually be a good thing if Ellison wants to continue the conservation that the island has struggled with since pineapple & sugarcane shut down. Many residents are up in arms about a proposal to build huge photovoltaic and windmill farms on the island to send power to Oahu via submarine cable. At least this way the island will probably avoid residential & commercial development, although it remains to be seen how the power-supply part will work out.

But I'm sure that Ellison will land his jet on the island any ol' time he wants to...
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Old 06-20-2012, 11:46 PM   #2
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Unbelievable.

In my day, Lanai was just agricultural. I knew a kid in high school who went over there the summer before his senior year to work the pineapple fields. Hard work. Times have sure changed.
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Old 06-21-2012, 04:23 AM   #3
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How is that possible? Word is he bought 98% of the Island, but there are 34K people living on that island.
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Old 06-21-2012, 06:47 AM   #4
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Maybe he wants to make it a data haven.
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Old 06-21-2012, 07:43 AM   #5
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Does this island have a dock/harbor deep enough to accomodate his mega-yacht?
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Old 06-21-2012, 08:17 AM   #6
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How is that possible? Word is he bought 98% of the Island, but there are 34K people living on that island.
Back in my day, the entire island was privately owned (by Dole Pineapple, I believe). Any necessary workers were brought in by Dole. Apparently that is still the case, even though from what Nords says Lanai's economy has apparently transitioned from pineapples to tourism.

http://en.wikipedia.org/wiki/Lanai
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Old 06-21-2012, 09:10 AM   #7
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Son of a gun, evidently Larry outbid me, what a way to find out...
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Old 06-21-2012, 12:14 PM   #8
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How is that possible? Word is he bought 98% of the Island, but there are 34K people living on that island.
You may be high at 34k. Various online sources have the population at a little more than 3k. We snorkeled there several years ago when it was mainly a large pineapple grove. It was being surveyed for a new resort at the time and the workers had to be ferried to and from the island. The island is spectacular - If I were Ellison I would shack up there for the rest of my life.
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Old 06-21-2012, 02:11 PM   #9
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Many residents are up in arms about a proposal to build huge photovoltaic and windmill farms on the island...
Same thing on Molokai.

Unfortunately, there's a lot more people on Molokai than Lanai and they (MECO) shut down their electric co-generation plant and now use diesel generators for the island's electric needs, which is quite expensive.

Luckly they don't have a big need for electric AC or heat as the mainland, and many other places in the islands.

Since Molokai has the highest sea cliffs in the world, with the constant trade winds, it would make sense to consider wind power. However the good folks on Molokai strike me as coming from the "old west" of the mainland (they are quite nice, but quite "unique" in their own manner).
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Old 06-21-2012, 06:23 PM   #10
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Evidently Larry has not been bitten by the philanthropy bug like his pals Buffet and Gates have.

Spend it like ya got it kid!
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Old 06-21-2012, 07:33 PM   #11
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These days Ellison probably could have purchased a Greek island for a lot less.
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Old 06-21-2012, 09:18 PM   #12
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How is that possible? Word is he bought 98% of the Island, but there are 34K people living on that island.
You might be thinking of the annual visitor count.

One media source claimed that Lanai's 2010 census had dropped from over 3000 to just 1900 people. Most of the daily population commutes from Maui on ferryboats.

Way back in the mid 1800s, under the guise of "power to the people", the crown released a lot of land to its residents. Many of the residents, seeing no reason to "own" land, sold their holdings to Westerners. This was especially prevalent on Niihau (sold to the Robinson family), Oahu (Ford Island sold to the... Ford family), and Lanai (sold to pineapple/cane growers). Then business guys like Sanford Dole and those nice boys from the Castle & Cooke missionary families started rolling up the small growers.

Castle & Cooke ended up owning the 98% of Lanai that wasn't already owned by the crown/territory/state and private owners. (One Lanai resident was quoted as being a seventh-generation landowner of their property.) Murdoch gained control of Castle & Cooke in 1985 and took it private in 2000. Castle & Cooke is Oahu's biggest residential real estate developer and has recently gained approval for a couple of hugely-unpopular and bitterly-contested residential neighborhoods on some of Oahu's prime agricultural land. But I digress.

Apparently part of the remaining 2% is Murdock's private residence, which he intends to keep despite selling the rest of the island. (Maybe he's going to heckle Larry at neighborhood billionaire board meetings.) He also reserved the right to build his wind farm, which will surely require a pile of legal fees & lawsuits. Other articles claim that Murdock's been losing $20M-$25M/year on Lanai, and that Ellison should plan to do the same for the short term.

Ellison has been silent, which (considering his personality) seems very surprising.

Oprah owns property on Maui-- both around Hana and the old Thompson Ranch. From what I've seen & read, both of those properties are also money pits. She rents out the ranch for visitors and conferences, and I think it's still a working ranch, but to make a small fortune in that area you have to start with a large fortune.

I think Molokai is down to 7500 residents, and they are militantly anti-development. They don't even like the business from cruise ships. I don't have a dog in that fight, but friends say that the long-term residents are struggling to figure out what type of future their kids will be able to carve out for themselves... assuming the kids even want to stay on Molokai in the first place.
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Old 06-25-2012, 09:44 PM   #13
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Less than two weeks from offer to closing, although the PUC is still grumbling a little. I guess you get priority service for cash, especially when you don't need financing approval!

Hawaii regulators: Larry Ellison to close on Lanai purchase Wednesday - Pacific Business News

Quote:
The Hawaii Public Utilities Commission on Monday granted preliminary approval for the indirect transfer of Lanai’s regulated utilities, clearing the way for Oracle Corp. CEO Larry Ellison to close this week on his purchase of the state’s sixth-largest island.
Ellison, 67, signed an agreement to purchase 98 percent of Lanai from Castle & Cooke’s David Murdock, 89, according to documents filed with the PUC last week. The deal is scheduled to close on Wednesday, according to the PUC document filed on Monday.
The documents noted that 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.
The price was not disclosed, but previous estimates put the price around $500 million.
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Old 06-25-2012, 10:18 PM   #14
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You might be thinking of the annual visitor count.

One media source claimed that Lanai's 2010 census had dropped from over 3000 to just 1900 people. Most of the daily population commutes from Maui on ferryboats.
Opps, just caught that. Meant to type 3.4K, but even that was high for it being 1,900 now.

Thanks for the great info and history lesson! This will be interesting to see how this plays out. Do you think Larry Ellison is doing this for an investment or ego trip?
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Old 06-25-2012, 10:45 PM   #15
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Do you think Larry Ellison is doing this for an investment or ego trip?
He does everything that way...

He already owns a home there. I think he's hoping to improve his privacy and his net worth. But we've watched other tech celebrities crash & burn in the islands before, like McAfee on Molokai. Hopefully Ellison has figured out how to avoid those mistakes.
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Old 06-26-2012, 12:15 AM   #16
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Ellison's purchase brings back many memories. Back in the early seventies during my college days in Hawaii I sailed a boat I took care of into Manele Bay, Lanai from Oahu. One of the best times of my life; wish I knew back then how great I had it.

On one trip, Peter Fonda's yacht Tatoosh dumped an "uncooperative" lady on the Lanai beach we were on and sailed away (Fonda was not onboard). We took her to the local airport and got her on a flight back to Oahu.
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