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Vision of reinventing Lanai strains community

  • DENNIS ODA / DODA@STARADVERTISER.COM
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It is dawn on Lanai.

Yellow and orange hues wash over the island. Yet this dawn is unlike any ever seen on Lanai before.

It is the onset of a new era for Hawaii’s second-smallest populated island, though it is unclear at this stage whether the changes ahead will be uplifting and beneficial for the people who call Lanai home.

This dawn is engineered by the fifth-richest person in the world, Larry Ellison, who bought 98 percent of Lanai two years ago and oversees the island through management firm Pulama Lana’i.

In this Ellisonian dawn, the early-morning glow is from bright yellow and orange safety shirts worn by construction workers emerging daily from planes, ferries, homes, budget hotel rooms and even bed-and-breakfasts.

Ellison’s ambitious vision unveiled last year calls for more than tripling the size of Lanai City and perhaps doubling the population to 6,000 from about 3,000.

The goal is to diversify Lanai’s economy widely beyond its luxury tourism engine, with new enterprises including a university research center, film studios, a professional tennis academy, renewable energy and organic commercial agriculture. More housing and new potable water sources are also needed on the island that was once the world’s largest pineapple plantation.

BUILDING HAS BEGUN

The billionaire who co-founded software giant Oracle Corp. also is focused on continuing luxury tourism and has proposed building a third exclusive hotel on Lanai.

Much of the construction work to execute Ellison’s vision has already begun — mainly renovating one luxury hotel, redesigning a resort golf course, rehabilitating the town’s historic theater, developing an initial desalination plant and building several new homes.

Ron McOmber, a Lanai resident for more than four decades, said the volume of construction happening all at once is greater than what took place when former Lanai owner David Murdock of Castle & Cooke Inc. was building the island’s two luxury hotels around 1990.

"I’ve never seen anything like it," McOmber said.

The result has been an economic boom mixed with stress on the island this year.

Longtime Lanai residents went through a similar situation more than 20 years ago with the initial resort construction, and endured what community members recall were unwanted impacts that included increased substance abuse and teen pregnancies.

To avoid similar repercussions, Pulama requires construction contractors to abide by a code of conduct presented in an orientation educating them about the unique way of life and limited resources on the island.

Some of the small businesses on Lanai, largely mom-and-pop restaurants and markets, are benefiting from increased food and beverage sales. And all the construction work is nice for people in the trade.

"It’s good … we’re working," said Mark Kreutzmann, a roofer who was on Lanai in August as part of a crew of six from Maui to waterproof planter boxes at the Four Seasons Resort Lanai at Manele Bay.

For others, the influx of construction workers is a source of strain that most acutely has hit Lanai’s underdeveloped housing market. Rents have been inflated, in some cases displacing established residents working in the service industry who can’t compete with better-paid contractors.

Budget vacationers also vie for the relatively scant moderate-priced visitor accommodations now occupied by painters, carpenters and other workers.

There is so much construction activity that interisland cargo shipper Young Brothers Ltd. has been sending a second barge from Honolulu to supply Lanai almost every week since March. During the first half of this year, the volume of cargo to Lanai soared 53 percent. The extra volume is equivalent to 1,063 containers.

All this for an island with one gas station, no traffic signals and two-lane roads where residents traditionally wave hello to oncoming drivers.

Just how many construction workers are on the island on any given day is hard to tally because it fluctuates as pieces of projects are started and finished. Pulama declined to provide an estimate or range.

The commute to the island by construction workers is so heavy that normal airline and ferry service is insufficient. Every Monday morning, a chartered flight typically leaves Honolulu and returns Friday evening. By sea, a chartered ferry from Maui brings more construction workers several times a week.

On a recent Tuesday morning, 75 workers filed off the "construction boat."

The volume of building on Lanai has even tapped out vehicles and equipment for some contractors who have made the I&L Rentals and United Truck Rental names a frequent sight.

"The amount of equipment on this island just boggles the mind," McOmber said. "Pulama has so much money that it scares most of us half to death. If they need something they just buy it."

Ellison’s net worth is pegged at $48 billion by Forbes magazine. The tech industry titan reportedly paid $300 million for Lanai in June 2012.

RESORT REVAMPED

One major project underway in Lanai City is restoring the historic theater in advance of an annual documentary film festival Ellison wants to start in 2016.

The festival is being organized around a different theme each year, with a goal of publicizing an issue before the film debut and engaging an audience to catalyze change. The inaugural theme is "Governance for Africa."

The biggest physical change Ellison has made is at the oceanfront Four Seasons Manele hotel.

The hotel’s original Asian decor produced under Murdock is being redone in a tropical design. Half of the 217 rooms are slated to be finished in October. A schedule to renovate the rest of the rooms has not been set, according to Four Seasons spokeswoman Kristen Ahrens.

Room makeovers include local and Polynesian art, 75-inch platinum bezel LED TVs, a wine bar, mahogany floors topped with hand-woven wool area rugs, and walls finished in teak, zebra wood and Nepalese lokta, a handmade paper.

"The rooms and suites are rich in finish yet thoroughly relaxed and organic in ambiance," Four Seasons said in announcing the overhaul.

Rates for the redone rooms start at $650 a night excluding taxes, compared with $539 for what the hotel now calls "classic" rooms.

Other enhancements already completed at the hotel include a refurbished spa, a Nobu restaurant, a renovated lower lobby and the addition of a luxury retail boutique.

Four Seasons declined to disclose the cost of the work, though it was reported to be

$27 million in an August draft of the Lanai Community Plan, which is headed for approval by the Maui County Council.

The scope of the hotel redesign increased to a point where Pulama decided to pause an overhaul of the golf course at the Four Seasons Lodge at Koele because of the stress on housing and transportation resources.

Pulama retained golf legend Jack Nicklaus to redesign the Koele course with new water features, hole layout changes and removal of some non-indigenous trees. Replacing all the turf on the course with salt-tolerant paspalum grass is another enhancement, intended to reduce fresh water use.

Work on the golf course began at the start of this year and was projected to finish this winter. But Pulama stopped the project recently and now expects work to resume in 2016, after the hotel renovation is complete.

Even with the break in golf course work, construction activity is straining Lanai’s housing market.

Butch Gima, a social worker on the island, said construction workers have bid up monthly rental rates to $3,000, $4,000 or even $5,000 to avoid commuting to and from the island every day.

"Some residents were displaced," he said. "The housing inventory is poor."

Gabe Johnson, a Lanai resident and agent with ferry operator Expeditions, said off-island construction workers are even buying homes. "We can’t compete with that," he said.

Housing became such a contentious issue that Pulama instructed contractor Hensel Phelps to cease all efforts to rent or purchase homes on the island. Hensel Phelps forwarded the notice to its subcontractors and suppliers in a February letter that also said anyone already renting should move out at the end of their lease.

Gima said Pulama’s instructions are laudable but haven’t been completely effective. "They have no jurisdiction or control of that," he said. "It’s a supply-and-demand thing."

One housing deal that irks some Lanai residents is an old plantation home bought in October by a company affiliated with Honolulu-based Group Builders Inc. The company’s affiliate bought the two-bedroom, one-bath house for $575,000 and is making it two stories with seven bedrooms and four bathrooms, according to property records and building permits.

Some residents complain about the home’s size and planned use as a construction worker bunkhouse.

Anacleto Alcantra, Group Builders president and owner, said he sympathizes with Lanai residents but needs accommodations for some of the 110 employees he has working on the island. "We get so many people working there,"he said."Lanai is really going wild. We are working seven days a week. It is tough for an island like that."

Gima said another home was enlarged by its owner, who rented the addition out to construction workers to the irritation of neighbors. "It’s causing some huhu (anger) in that neighborhood," he said.

Bruce Harvey, a tour driver and Lanai resident, is trying to take all the disruptions in stride with a long-term view that life on the island will be better.

"There’s good and bad," he said. "Does the good outweigh the bad? Yeah, because the bad is just temporary."

PROFILE

LARRY ELLISON

The owner of Lanai — the fifth-richest person in the world — is worth $48 billion. But what else? Who is Larry Ellison?

Ellison, 70, has a reputation as an ultra?fierce competitor who pushes to win with little or no regard for cost. He also is known for an ostentatious lifestyle that includes flying fighter jets, racing yachts, collecting over-the-top real estate and romancing women like a playboy.

Here are a few other tidbits about the man who bought 98 percent of Lanai for $300 million two years ago:

>> Raised in Chicago by adoptive parents — his mother’s aunt and uncle.
>> Dropped out of college and was told by his adoptive father that he wouldn’t amount to anything.
>> Worked computer programming jobs.
>> Developed a database management project for the CIA code-named Oracle.
>> Co-founded Oracle Corp. in 1977 with two partners and $1,200.
>> CEO of the California-based information management software company from its inception until Thursday, when he stepped down to become chairman.
>> Averted an Oracle bankruptcy in 1990.
>> Earned about $80 million at Oracle last year mainly in stock options.
>> Married and divorced four times.
>> Has two children, film producers Megan and David.
>> Quoted as saying,?“I’m addicted to winning. The more you win, the more you want to win.”
>> Owns the Oracle-sponsored teams that won the America’s Cup sailing race in 2010 and 2014.
>> Wants Honolulu to host the 2017 America’s Cup.
>> Broke his neck and punctured a lung surfing in Hawaii in 1991.
>> Won an Australian yacht race in 1998 nicknamed “Hell on High Water” in which six competitors were killed.
>> Also plays tennis and guitar.
>> Subject of a book titled “The Difference Between God and Larry Ellison: God Doesn’t Think He’s Larry Ellison.”

——

MONDAY:

» A detailed look at Larry Ellison’s long-term plan for Lanai

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