Alexander & Baldwin is a local company whose history dates back nearly 150 years. Not many other companies can make that claim. We attribute our success first and foremost to generations of dedicated employees who sought to be the best in what they did, while forging change to ensure the company remained relevant and competitive throughout Hawaii’s evolving economic and social landscape. A&B’s longevity is also due to its demonstrated and consistent commitment to supporting Hawaii’s communities.
A&B’s journey has taken us from a 12-acre sugar farm on Maui, in and out of a variety of businesses, including passenger and cargo shipping, home/community development, resorts, trucking, mainland agriculture, coffee, fiberboard and energy production, and paving.
Most recently, we restructured our company to focus on commercial real estate and bring all of our mainland holdings back to Hawaii. Nearly all public companies that own commercial real estate as their primary business are structured as real estate investment trusts (REITs). In 2017, A&B became a REIT to remain competitive in the global marketplace and to continue to grow in Hawaii.
Being structured as a REIT provides us access to a new and larger base of shareholders, and greater sources of capital that we need to continue to buy and improve Hawaii properties — keeping more properties in local hands, with a management team that lives here and is committed to Hawaii.
Over the past few years, A&B invested over $1 billion in Hawaii commercial real estate, returning over $600 million of capital previously invested on the mainland. We brought neighborhood shopping centers and properties back to local ownership.
Since becoming a REIT, we have hired more than 40 new employees and increased our total tax payments in Hawaii by $6 million, with $3 million of that increase going to the state, purely as a result of our larger Hawaii portfolio. In fact, A&B pays significantly more taxes in Hawaii now than we did before becoming a REIT, while also creating new job opportunities for local people. There will be more to come, if we can continue to grow in Hawaii.
Recently, Faith Action for Community Equity (FACE) accused A&B of not being a good corporate citizen and avoiding taxes. It is misinformed on both counts. As noted, we now pay more local taxes as a REIT. On corporate citizenship, A&B has a long and proud history of giving back to our communities, dating back to the company’s beginnings. Last year, A&B’s charitable contributions totaled $1.2 million, supporting more than 280 Hawaii organizations in the areas of health/human services, community/civic, education, culture/arts, and environmental/land stewardship.
We share many of FACE’s goals, like local housing, and would prefer to work constructively with it to find solutions. Despite FACE’s assertions, A&B has a long history of providing housing for Hawaii’s working families, dating back to 1950 when it built homes for its employees on Maui — the beginnings of modern-day Kahului. Since then, A&B has produced thousands of housing units on Maui and Kauai, and built condos in Kakaako targeted for local residents. Housing nonprofits are consistently among our grant recipients, and our employees volunteer on the boards of housing nonprofits, including the Institute for Human Services (IHS), HomeAid Hawaii and Catholic Charities.
A&B is working hard to remain competitive in a changing world. Our goal is to remain a strong contributor to Hawaii’s economy and communities for another 150 years. Commitment cannot be measured by income taxes alone. We hope the Legislature will look at the bigger picture and not repeal the DPD (dividends paid deduction). Don’t take away our ability to be competitive and undermine our ability to remain rooted in Hawaii.
Chris Benjamin is president and CEO of Alexander & Baldwin.
