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Oracle's Larry Ellison to buy Lanai; plans to invest in island

By Andrew Gomes

POSTED:
LAST UPDATED: 03:03 p.m. HST, Jun 20, 2012



The third-richest man in America, Oracle Corp. co-founder and CEO Larry Ellison, is buying the island of Lanai from fellow billionaire David Murdock.


Larry Ellison
Murdock's Castle & Cooke Inc. has a signed sale agreement with Ellison for the 98 percent of the island owned by Murdock, including the two resort hotels, golf course, water utility and roughly 88,000 acres.

Castle & Cooke filed documents with the state Public Utilities Commission today disclosing the sale. The price was not disclosed but the company said it was hundreds of millions of dollars.

Castle & Cooke said in its filing that the sale to Ellison plans to bring new investment to Lanai that should result in reinvigorating tourism, stimulating the economy and creating new jobs on the island. "The buyer anticipates making substantial investments in Lanai and is looking forward to partnering with the people of Lanai to chart the island's future," the company said.

Gov. Neil Abercrombie said in a written statement that he looked forward to welcoming Ellison.

"It is my understanding that Mr. Ellison has had a long-standing interest in Lanai. His passion for nature, particularly the ocean is well known specifically in the realm of America's Cup sailing," the governor said. "He is also a businessman whose record of community involvement in medical research and education causes is equally notable."

The sale stands to alter the future of the former Pineapple Island and dramatically reduce Murdock's land ownership in Hawaii. Murdock has had a long and bumpy run as owner of Lanai, uprooting the island's pineapple industry in favor of luxury resort and housing development where costs have exceeded returns.

Most recently, Murdock has been frustrated with some vocal Lanai residents opposing his plan for developing windmills to deliver electricity to Oahu and potentially offset past financial losses.

Murdock, a corporate raider with diverse holdings from transportation equipment leasing to biotechnology park development, acquired his initial stake in Lanai when he rescued publicly traded Castle & Cooke, one of Hawaii's oldest companies, from bankruptcy in 1985 and became its chairman and chief executive.

Castle & Cooke's ownership of Lanai stemmed from an acquisition James Dole made in 1922 to expand his Hawaiian Pineapple Co. Ltd. and establish the world's largest pineapple plantation.

Murdock jolted Lanai's plantation community by announcing he would end pineapple production by 1993, and he pursued more aggressive development of real estate that produced two luxury hotels on Lanai surrounded by hundreds of resort homes.

The 102-room Lodge at Koele in the middle of the island just above Lanai City opened in 1990, and a year later it was followed by the oceanfront 249-room Manele Bay hotel.

But luxury home sales were slow on the small island during the 1990s, a decade of economic stagnation. Lanai didn't appear to be a good investment for Murdock, but in 2000 he bought out the stake in Castle & Cooke that he didn't already own for $675 million, acquiring total control and freeing the company from public shareholder pressure.

Even with rising tourism and a real estate boom during much of the past decade, Lanai remained a money-loser for Murdock. He has reported that the island produced annual losses roughly between $20 million and $30 million from 2006 to 2010.

Ellison, 67, co-founded the software company Oracle in 1977 and leads the California-based firm as chief executive.

His net worth is pegged at $36 billion by Forbes, ranking him as the third-wealthiest individual in the United States. (Murdock's net worth, according to Forbes, is $2.7 billion.)

Ellison could not be reached for immediate comment.

A Wall Street Journal article in October described the jet-flying billionaire as "one of the nation's most voracious consumers of trophy real estate." The story said Ellison has spent hundreds of millions of dollars on property since the 1990s. Among some real estate assets he has acquired are a 249-acre estate in Rancho Mirage, Calif., with a private 19-hole golf course, a historic garden property in Kyoto, Japan, and several properties around Lake Tahoe, Calif., acquired for about $100 million, the article said.







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M75 wrote:
ALOHA DAVID HELLO LARRY!!!!!!!!
on June 20,2012 | 02:38PM
Maneki_Neko wrote:
Larry is a ....unique.....personality. Can you say "culture shock"?
on June 20,2012 | 02:59PM
Solfan wrote:
This guy's a nut.
on June 20,2012 | 03:05PM
Fred01 wrote:
How do you know?
on June 20,2012 | 05:53PM
Squidy wrote:
Though little is known about his intentions, he may be the perfect buyer for Lanai and its community. He has the resources to do great things with the island. But he must avoid the mistakes David Murdock and his managers made in dealing with the community. It is not a "private island" but an island with a varied history with many multi-generational residents who care deeply about the island and its community. Hopefully he will have lieutenants assigned who will understand how to work with the community to accomplish common goals to make it a wonderful place to live, work, play, and visit.
on June 20,2012 | 03:24PM
Grampa wrote:
Absolutely correct. The land on the island may be private, but the people who call Lanai home are not serfs. I hope Mr. Ellison respects that.
on June 20,2012 | 03:42PM
Fred01 wrote:
No, as long as the island is owned, they are serfs. Time to redistribute the land.
on June 20,2012 | 05:53PM
Descartes22 wrote:
Abercrombie should curb his enthusiasm for the Larry from David transaction.
on June 20,2012 | 03:25PM
WesleySMori wrote:
Well DESCARTES22, I Think This QUOTE From "RENE DESCARTES" Should Suffice: "DUBITO, ERGO COGITO, ERGO SUM" OR, "I DOUBT, THEREFORE I THINK, THEREFORE I AM"!!!!! ADDENDUM: "WELCOME LARRY ELLISON"!!! "GOD BLESS HAWAII & AMERICA"!!!!!!!!
on June 20,2012 | 04:29PM
Descartes22 wrote:
Wes: You sound like a vocal patriot; in a George Costanza kind of way. But you need to Curb your Enthusiasm for the Larry - David transaction.
on June 20,2012 | 04:59PM
serious wrote:
The special they had on Ellison showed his estate--Japanese landscaping--absolutely wonderful. I think he will be a good owner of the Island. In business he is cutthroat--that's okay, that's his job.
on June 20,2012 | 03:39PM
zmystere wrote:
From a relocated local, Ellison is a tyrant who has picked fights with everyone that tells him no. He fought with the San Jose Airport and FAA because of flight restrictions due to noise guidelines for late flights. He fought BAE System for their government contacts and software. He fought Sun Micros and eventually bought them out so they would not compete with him. He feels entitled to everything, whether he really wants it or not. Mark my words people, he will make the bayonets constitution look like a luau. May Ka help us!
on June 20,2012 | 03:39PM
Manoa_Hawaiian wrote:
Someone needs to give him Ellison a primer on public access to the beaches, trails, and areas where gathering rights apply.
on June 20,2012 | 03:58PM
al_kiqaeda wrote:
FOR SALE: MULTI FAMILY ISLAND. 1.4M BED/1.9M BATH. NEEDS MAJOR LEADERSHIP OVERHAUL, NO PARKING, STREETS WILL NEED TO BE REPAIRED, LOTS OF DEFERRED MAINTENANCE. THIS CHARMING LITTLE ISLAND NEEDS A BILLIONAIRE WITH REAL MANAGEMENT EXPERIENCE TO TURN THIS FIXERUPPER INTO A REAL CITY. CALL ELECTIONS OFFICE 453-8683
on June 20,2012 | 05:18PM
AndrewWalden wrote:
FULL TEXT: Application for PUC Approval of Ellison Lanai Buy ............... http://www.hawaiifreepress.com/ArticlesMain/tabid/56/articleType/ArticleView/articleId/7021/FULL-TEXT-Application-for-PUC-Approval-of-Ellison-Lanai-Buy.aspx
on June 20,2012 | 06:16PM
from_da_cheapseats wrote:
Perfect buyer. more money than murdoch.
on June 20,2012 | 06:51PM
johnd wrote:
Now that Larry is in Hawaii, I wonder if he can please buy out the Japanese investor, Kawamoto and restore Kahala to it's former beautiful part of Ohau. And no, I don.t live in either Kahala or Hawaii Kai.
on June 20,2012 | 07:17PM
false wrote:
If I had the money, I'd buy it too!
on June 20,2012 | 08:29PM
Mana07 wrote:
Anyone familiar with the business world knows that Larry Ellison is a special kind of "okole". It was once said that the difference between Larry and God, is that God doesn't think he's Larry.
on June 20,2012 | 08:54PM
zmystere wrote:
True dat!
on June 20,2012 | 09:01PM
Changalang wrote:
Here comes big wind and deep pockets.
on June 20,2012 | 09:15PM
nodaddynotthebelt wrote:
The Hawaiians should be given the island. It is just simply wrong that the island would go into the hand of some corporate man far removed from Hawaii. It is an injustice on the true Hawaiians who could use this island to return to their heritage. And I don't mean those plastic Hawaiians who cry for sovereignty while driving their SUV's partake fully in the American lifestyle. I mean those true Hawaiians that want to live on the land like their ancestors. I cannot believe that the true Hawaiians are not mobilizing on this. Just the fact that this corporate entity is doing it quickly and under wraps just shows you that he knows that what he is doing is wrong. Give Lanai back to the true Hawaiians!
on June 22,2012 | 08:59PM
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