Billionaire Larry Ellison has removed one barrier on his way to a planned closing Wednesday of his purchase of Lanai, Hawaii’s sixth largest island.
Ellison won state approval Monday for the transfer of three regulated Lanai utilities from current owner Castle & Cooke Inc., controlled by fellow billionaire David Murdock.
Despite several deficiencies in Castle & Cooke’s application, the Public Utilities Commission approved the transfer on an interim basis "so as to not jeopardize the Wednesday closing date for the overall purchase and sale transaction," commissioners said.
They said they retained the right to disapprove the transfer and sale at a later date.
The three utilities handle Lanai’s water, sewage for the Four Seasons Resort and transportation services. Maui County provides wastewater service for the rest of the island.
Ellison’s Lanai Island Holdings LLC has agreed to invest a minimum of $10 million in the water and wastewater systems within the next five years, according to PUC documents.
Castle & Cooke’s deal with Ellison for the 98 percent of the island owned by Murdock includes two resort hotels, a golf course, water utility and roughly 88,000 acres.
| LARRY ELLISON TAKES OVER 3 UTILITIES:
>> Lanai Water Co., a private utility that provides water for the whole island.
>> Manele Water Resources LLC, which provides sewage service for the Four Seasons Resort Lanai at Manele Bay and nearby luxury homes (Maui County provides wastewater service for the rest of the island).
>> Lanai Transportation Co., which provides shuttle service between the hotels.
Sources: Maui County and Lanaians for Sensible Growth
|
Ellison, worth an estimated $36 billion and ranked by Forbes as the third richest person in the U.S., has not said publicly what he intends to do with the island, which has about 3,200 residents.
Critics questioned the speed at which the state approved the transfer of the utilities to Ellison.
Henry Curtis, executive director of nonprofit environmental group Life of the Land, said Ellison should not be allowed to bypass the 20-day period that the public has to intervene in PUC cases.
"This is incredibly quick," Curtis said. "Most regulatory approvals at the PUC take more than a year. I’ve been covering the PUC for 16 years and have never remotely seen anything like this before. Normally we have time to sort of sift through the documents and get a feel for what’s going on. But the fact that this is moving so fast makes it really, really difficult to know what the risks are to the public."
Lanaians for Sensible Growth, a grassroots advocacy group with a mission to protect the island’s water resources, has filed a motion before the PUC to intervene in the transfer request, prompted by the "unprecedented speed" with which Castle & Cooke is seeking to transfer the utilities to an "otherwise unknown entity, coupled with a complete lack of transparency at the community level."
"There is no explanation for the speed (Castle & Cooke Resorts) is seeking to pass on the utility assets and operations, aside from a vague reference that the deal has to close tomorrow or it’s in jeopardy," Butch Gima, the organization’s spokesman, said in a news release.
"We’ve been trying for months, as has the community, to determine if the rumored sale was a go or not, but no one would talk to the community."
Gima added that the organization has been monitoring the use of Lanai’s water resources for two decades and is "astonished that the PUC could possibly complete the required due diligence in just eight days, let alone even consider doing so."
State Sen. J. Kalani English (D, Hana-Molokai-Lanai-Kahoolawe) said there’s nothing unusual about the brisk preliminary approval.
"It’s not the final approval. It’s the preliminary one. That’s the difference," he said.
"The purview of the PUC is very narrow. They cannot make commentary on the social value regarding the sale, whether this is good or bad. All they can say is there’s enough there to assure the service will continue and that the public interest is served."
ILWU Local 142 President Donna Domingo said in a letter to PUC chairwoman Hermina Morita that the union strongly supports the interim approval to transfer the public utilities so as not to jeopardize the entire sale.
"If the sale falls through, the ILWU is concerned about the fate of our members, retirees and their families on Lanai," she said. "Reminiscent of a plantation, Lanai is unique with one company providing certain public utility services that would otherwise be the responsibility of government."
Nearly 800 residents rely on Castle & Cooke for their jobs while many retirees live in company housing provided by Castle & Cooke and depend on Lanai Water Co. for water service, the ILWU said.
