Castle Junction. Castle High School. Castle Medical Center.
The Castle family that integrally transformed Kailua from an agrarian outpost to a residential community over the past century has left lasting reminders of its work.
"Castle was always part of the community," said James W.Y. Wong, a 91-year-old local businessman who developed grocery stores and a post office in Kailua on land leased from the Castle family.
Now the sale of most of the Windward Oahu town’s commercial core to Alexander & Baldwin Inc. will end the kamaaina family’s concentrated ownership in the area after several generations of stewardship.
Roughly 40 descendants of Harold Kainalu Long Castle will share most of $260 million in proceeds from land being sold by Kaneohe Ranch Co. in the $373 million deal announced Wednesday and scheduled to close next month.
Another $113 million is going to the Harold K.L. Castle Foundation, a charitable grant-making organization.
Castle died in 1967 and his will called for 25 percent of his assets to go to his charitable foundation, 30 percent to his children through a trust and 45 percent to his wife, Alice Hedemann Castle.
When Alice Castle died in 1980, her assets were passed down through three more trusts — one for each of three children — managed by Kaneohe Ranch.
It’s not been publicly disclosed how much each Castle family member will receive in the sale. However, Bank of Hawaii, one of three trustees, estimated that sale proceeds for one trust established for John C. Baldwin, a late grandson of Harold and Alice Castle, would be $11.3 million before taxes, according to a recent lawsuit that questioned the sale but was settled.
Of the roughly 40 Castle family descendants, more than half are minor children — mostly great-great-grandchildren of Harold Castle, according to other recent court filings.
If the proceeds of the sale were divided equally among the adult descendants, the estimated payout after selling costs would be about $14 million per person.
The decision to sell nearly all the assets of the company and the foundation was prompted by an unsolicited purchase inquiry, according to Mitch D’Olier, Kaneohe Ranch president and CEO.
D’Olier said the trustees had a responsibility to consider the unsolicited bid, and did so by retaining real estate brokerage and investment banking firm Eastdil Secured to determine the value of the assets and solicit potential competing bids.
At least 10 offers emerged, and the trustees elected to sell to A&B.
D’Olier believes there was no better buyer than A&B, given what he said are the company’s deep kamaaina roots, understanding of island culture and long-term commitment to improving Hawaii.
D’Olier also has great respect for Harold Castle, who he said had the intellect and generosity to seed Kailua with various cornerstones that make it a special place.
"Every day that I sit in my office I am more staggered by the things he did," D’Olier said. "He’s done a great thing for this community."
Harold Castle had a vision that the farming and ranching town of Kailua would be a nice place for people to live. So he began making pieces of ranch land and farm land available for housing and commercial development.
To help facilitate community development, Castle donated millions of dollars worth of land for uses including several churches that line part of Kailua Road, the hospital, parks, Pali Golf Course, Kainalu Elementary School, the high school named after his father and Hawaii Loa College, which later merged with Hawaii Pacific University.
Land for the Marine Corps base in Kaneohe was sold by Castle in 1943 in conjunction with World War II efforts, but after the war Castle rebuffed an offer to take back the land because he viewed continued military use as a benefit.
The schools, churches, golf course and retail development along with Kailua’s beaches were used to attract homebuyers to the area. "Far-lying hamlets have become thriving modern communities," said a 1951 ad by Kaneohe Ranch reproduced in the book "Kailua" by the Kailua Historical Society. "Windward Oahu is truly the Land With A Future!"
Outside Kailua and Kaneohe, Harold Castle isn’t too much of a household name, in part because many longtime local residents associate the Castle moniker with Castle & Cooke.
Castle & Cooke is one of Hawaii’s historic Big Five companies that dominated commerce in the islands with the rise of sugar plantations, and still operates today mainly as a developer of master-planned communities that include Mililani, Royal Kunia and Koa Ridge. Castle & Cooke also owned the island of Lanai until selling it last year to billionaire Larry Ellison for a reported $300 million.
Harold Castle’s grandfather, Samuel Northrup Castle, was a missionary settler who arrived in Hawaii in 1837 and co-founded Castle & Cooke in 1851.
But it was Harold Castle’s father, James Bicknell Castle, who put down expansive roots throughout Windward Oahu as part of establishing sugar plantations stretching from Waimanalo to Kahuku.
In Kailua, James B. Castle bought a big piece of a 20,000-acre ahupuaa, or mountain-to-sea tract of land, once belonging to Queen Kalama, wife of King Kamehameha III.
Harold Castle, born in 1886, later added to the family land holdings with a purchase in 1917 of 9,500 acres in Kailua and Kaneohe. At that time, the area was expansively agrarian with fields of pineapple, rice, taro and other crops along with ranching.
But with Harold Castle’s vision and efforts to attract more residents, Kailua began to grow. By the early 1950s, Kailua’s population reached 7,740. After another decade and a residential development boom led by Castle and partners, the community swelled to 25,622 residents.
Castle had fulfilled his vision.
In a 1964 newspaper interview, he was quoted as saying: "My original feeling toward this general area has stayed with me through many years and is still with me today. I feel we have a combination of beneficial elements that are unequal anywhere in the islands."
Three years later, in 1967 at age 81, Castle died.
At the time of his death, Castle solely owned Kaneohe Ranch. His estate included more than 8,500 acres of land, including thousands of parcels under homes, along with roughly $12 million in stocks and bonds, according to media reports at the time.
Kaneohe Ranch continued operations initially under trustees who included family members and later under a corporate structure, all the while managing company assets for the benefit of Castle heirs. The company also managed the assets of the foundation.
Under the latest trust setup, management decisions for the assets are left to three trustees. Initially the trustees were Alice’s son, James C. Castle; one of two sons-in-law, James Gordon McIntosh; and Hawaiian Trust Co. (now known as Bank of Hawaii).
Today, the trustees are Bankoh, D’Olier and a grandson of Harold and Alice Castle, James C. McIntosh.
Interestingly, A&B also has a family tie to Harold and Alice Castle. One daughter, Virginia "Tootie" Castle, married Asa Baldwin, a descendant of the family who established A&B as a sugar cane plantation on Maui.
Asa Baldwin was manager of the plantation and grandson of A&B co-founder Henry Perrine Baldwin. Today, there are close to 20 Baldwins descended from Harold and Alice Castle, representing about half of all the family heirs.
After the sale, Kaneohe Ranch will still exist. The company is retaining a portfolio of commercial real estate on the mainland roughly valued at $160 million, according to the Bankoh report disclosed in the lawsuit.
Kaneohe Ranch also is retaining a few Kailua properties: its headquarters at Castle Junction, Kapaa Quarry, some leased-fee parcels under homes and the land under the Koolau Farmers store on Kailua Road.
For the Harold K.L. Castle Foundation, sale proceeds boost its endowment value by about $30 million to $200 million, thus enhancing its power to award grants benefiting education, marine ecosystems and other causes largely for Windward Oahu communities.
The foundation, described as the largest private foundation in Hawaii, awards about $6 million a year in grants. Since it was created, grant awards have totaled about $180 million.
D’Olier said that while an era for Kailua under Castle influence is ending, he prefers to view it as a new era for the legacy of Harold Castle. "Here comes Harold Castle phase two."
