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A California company has put Oahu’s Dillingham Ranch up for sale after positioning the 2,721-acre property for subdivision with homes in the face of heated community opposition.
An affiliate of Beverly Hills, Calif.-based real estate investment and development firm Kennedy Wilson Inc. retained brokerage firm CBRE to sell the North Shore property, CBRE announced Monday.
The move suggests that Kennedy Wilson will not
attempt to carry out its
$60-$80 million subdivision plan, and instead is using the plan as a means to earn a return on the property zoned for agriculture use.
Kennedy Wilson is asking $52 million for the property, which is double what it paid in 2006.
CBRE describes the offer as a “unique opportunity to acquire one of the finest ranches in Hawaii for investment, development, ranching or agricultural activities.”
The development plan calls for creating 70 house lots ranging from 2 to
77 acres under city zoning regulations that are supposed to ensure that such homes serve as accessories to farming.
Kennedy Wilson, which unsuccessfully tried to advance three subdivision plans since 2008, has said selling house lots is necessary to keep agriculture on the land viable, and the subdivision should expand agricultural use on the property. It also has said its plan would foreclose more intense development on the site.
Many North Shore residents believe an exclusive subdivision of million-dollar estates would be created with little commercial agriculture surviving on the more than 100-year-old ranch in Mokuleia if the plan is carried out. They also claim “farm dwelling” subdivisions inflate the price of farmland, which makes farming less viable and encourages similar projects.
“This is going to be the death knell to the North Shore,” Kristin Douglas said at a special North Shore Neighborhood Board meeting early last year attended by about 350 people who overwhelmingly criticized the plan.
The city Department of Planning and Permitting has provided a tentative subdivision endorsement that requires fulfilling certain conditions before a final approval can be given. DPP cannot withhold such approval if a viable plan exists for agriculture associated with the lots. “Viable” isn’t well defined in regulations, but the state Department of Agriculture said Kennedy Wilson’s plan qualifies.
Under the plan, house lot buyers would receive a rebate of up to $20,000 and be required to plant fruit trees on 1 to 3 acres of their property within three years.
Also under the plan, existing cattle ranching, horse boarding facilities, a palm tree farm and a mango orchard would be leased to operators as a tenant of lot owners and receive initially discounted rent.
The property also includes a 19-acre oceanfront polo field, and a former ranch house converted for use as a lodge and site for weddings, retreats and other events.
Dillingham Ranch dates to 1897 when the founder of Oahu Railway &Land Co., Benjamin Franklin Dillingham, acquired the 10,000-acre Kawailoa Ranch. After pieces of that ranch were sold, Dillingham’s son, Walter, established Dillingham Ranch with the family home, horses, a polo field and pastures on land stretching from the mountaintops to the sea.
The Dillingham family sold the property to a Milwaukee insurance firm in 1979. Other owners since then included a firm based in Japan that unsuccessfully tried to develop a hotel and two golf courses on the property, and a mainland financial services firm that went bankrupt.
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