A plan to build the state’s first grass-fed dairy, Hawai‘i Dairy Farms, on former Kauai sugar lands has heated up into a big-money battle pitting powerful — and somewhat unlikely — opponents over environmental and economic concerns.

On one side is billionaire eBay founder Pierre Omid­yar’s Ulu­­pono Initiative, which wants to put up to 2,000 cows on 582 acres of agricultural lands in Mahaulepu Valley above Poipu, one of the state’s top resort districts.

The growing opposition comes from a hui made up of concerned citizens, members of Kauai’s visitor industry, and environmental groups including the Surfrider Foundation, the Sierra Club, Malama Maha‘ulepu, and various wildlife and fisheries groups. The groups more commonly are aligned with Ulupono’s goals, which include producing more local food, reducing waste and increasing clean, renewable energy.

The for-profit initiative, which is Hawai‘i Dairy Farms’ sole financier, has about six years and $17.5 million invested in its endeavor to use a New Zealand model to bring milk production back to Kauai, effectively doubling statewide milk production.

"It’s been more than 30 years since Kauai produced milk," said Amy Hennessey, director of communications for Ulupono Initiative and Hawai‘i Dairy Farms. "Ulupono’s goal is to get Kauai back to as much local milk production as we can. This is really about getting fresh milk into the hands of our kids. Hopefully, this will be the first of several dairies. We want to get Hawaii back to 100 percent local milk production."

Mayor Bernard Carvalho, the Kauai County Chamber of Commerce and a host of local farmers and restaurants support the endeavor. They say the plan, which is in the permitting process and could break ground this summer, would preserve agricultural lands, create jobs and improve food quality and security on Kauai.

The opposition contends the smell and noise of the dairy farm will be a turnoff that dampens tourism to Kauai and cost jobs. They argue that the dairy’s plan to use partial grains to feed the cows and to ship milk from Kauai to be bottled on Oahu isn’t part of environmentally sustainable practices.

They worry about water use, and fear the volume of waste produced by the cows could leach into groundwater or produce runoff that damages the water, coral and beaches of Mahaulepu, Shipwreck and Poipu.

"This is kind of a clash of cultures," said Jerry Westenhaver, general manager of the Grand Hyatt Kauai Resort & Spa, which is about 2.5 miles from Ulupono’s proposed dairy farm. "Grove Farm, which owns the land under the proposed dairy farm, doesn’t understand the fragile, competitive nature of the tourism industry and how one round of bad press could affect a lot of people’s lives. But this is Kauai. If people don’t believe that something is right, there are a lot of groups that will continue to fight the battle. This one is just starting to build momentum, and it’s getting fairly heated."

Up until a month or so ago, Ulupono’s project was moving right along. In the fourth quarter of 2013, the initiative had negotiated a 20-year land lease from Grove Farm. In December the dairy plan was approved by the West Kauai Soil and Conversation District.

Ulupono recently received permission from the county to proceed with earth and stockpiling work. However, it still needs some county structure permits, and the state Department of Health anticipates that the project will need a clean-water permit for stormwater, an animal-feeding operation permit, which requires an comprehensive nutrient management plan, and a food safety permit for milk quality.

"We’re a little behind schedule," Hennessey said. "Once we get permit approvals, the cows that we have already purchased that are waiting patiently in Missouri, our initial heard of 882 cows, would be shipped over. If we got permit approval in May, the cows would come in the summer. They would have to go through quarantine, then be transported to the farm, and we would expect calving by the early part of 2015. We would start milk production at that point."

Hennessey said Ulupono is working with the Health Department to clarify permitting requirements and design a plan that will carefully monitor nutrients.

"Since this is the first dairy of its kind in Hawaii, this is a learning process for both our team and the regulators," she said, describing the project’s aims as being sustainable, protecting the environment and the cows, and producing affordable milk for local families.

"We recognize the importance of Mahaulepu to the community and want to ensure we are being as protective as possible, which is why the farm has been designed as a zero-discharge facility that reuses the nutrients from the manure as fertilizer for the grass."

Hennessey said the dairy is miles from tourist attractions and that the manure of grass-fed cows is lower in methane and quickly absorbed into the ground, so it does not produce widespread odor. She said GPS will be used to control irrigation and that Ulupono is considering covering its effluent ponds, which contain the manure that will be reused as fertilizer.

"We have been transparent," she said.

But Kawailoa Development, owner of the Grand Hyatt and the Poipu Bay Golf Course, which employ about 1,000 workers, has sought legal counsel to more fully vet the dairy.

Some factions of the opposition hui have asked the county to pull back on approvals and issue a cease-and-desist order for current grubbing and grading activities. They’ve also asked the Health Department to meet with them Monday to discuss their concerns, including whether the scale of the dairy farm qualifies it as a larger Concentrated Animal Feeding Operation, which may require a permit from the U.S. Department of Health and Human Services.

"We have been misinformed by Hawai‘i Dairy Farms and Grove Farm, and we have been denied answers to our questions," said Jun Fuku­oka, general manager of Kawailoa Development. "As neighboring landowners, running a highly reputable hotel and golf course, we have a lot at stake with this proposed dairy farm. More than just to our own hotel business, of course, the proposed dairy farm will also pose substantial risks to the environment and public health. The manure generated by the farm will be substantial."

With about 1,500 hotel rooms, 1,000 time-share units and another 400 or 500 vacation rentals downwind of the proposed dairy, the Grand Hyatt wants the community’s questions answered before the dairy farm is allowed to proceed, said Westenhaver, the Grand Hyatt general manager.

"Once the community opens the gate, it’s going to be hard to close again," he said. "We’re not anti-small business or farm-to-table, but we simply think this is the wrong location for this dairy farm." 

Kauai Chamber of Commerce President and CEO Randall Francisco said that while there have been environmental concerns raised by those in surrounding communities, the chamber trusts that Hawai‘i Dairy Farms will mitigate the concerns, especially the odor.

Stephanie Whalen, executive director of the Hawaii Agriculture Research Center, said she is certain Ulupono has Hawaii’s best interests at heart, and would like to see calmer heads prevail.

"All the dairies have been going out of business in the state," she said. "We are constantly as a community saying that we want to have local projects and be sustainable and have things grown here. Now we have some loud voices in the local community saying, ‘We don’t want it here.’ It’s a contradiction. But the reality is that a lot of these people have never worked in ag and never pulled a weed in their life. They need to stop arguing and listen."

Mayor Carvalho said he "strongly supports" the project but added that Hawai‘i Dairy Farms must address the community’s concerns.

Lori Parsonson, who has owned and marketed Kauai vacation properties since 1996, said that if the dairy’s plans were to go awry, it would be a public relations disaster for Kauai.

"News of the odor and flies will go viral on social media and travel sites, similar to when West Poipu was under construction in 2007 and ‘Don’t go to Poipu’ warnings were posted on TripAdvisor," Parsonson said. "Visitor numbers and hotel occupancy rates will drop, tourism industry workers will be laid off, property values and county tax revenue will decrease."

CORRECTION: Amy Hennessey director of communications for Ulupono Initiative and Hawaii Dairy Farms, said, "It’s been more than 30 years since Hawaii produced all of its milk." She was misquoted in a previous version saying it has been 30 years since Kauai produced milk.