Amidst rumors that it is selling Maui holdings, A&B requests continued water diversion
MauiTime is in receipt of multiple unconfirmed reports that Alexander and Baldwin, Maui’s largest private landowner, is selling a significant portion of its landholdings on the island. Reports range from claims that the company is selling 36,000 acres in the Central Valley previously used for sugarcane, to talk that the company’s entire 55,000-acre holdings on Maui are on the table. Some sources have said A&B is in negotiations with multiple potential buyers, while others have stated the sale is a done deal with a single buyer. One noted the presence of survey stakes at the old Pu‘unene Sugar Mill.
On Nov. 8, Alexander and Baldwin Corporate Communications Director Darren Pai responded opaquely to a request for comment on these rumors, saying, “We buy and sell lands, on Maui and other islands, as part of our normal course of business. For example, earlier this year we expanded our investment in Maui by purchasing Pu‘unene Shopping Center and breaking ground on the construction of Ho‘okele Shopping Center. We also had some sales. For example, as reported in Pacific Business News, we recently closed the sale of Lahaina Square Shopping Center.” When asked again whether any sales on Maui were of the scale reported in the rumors, Pai did not respond.
“I keep hearing similar rumors and it’s not a surprise to me,” Maui Tomorrow Executive Director Albert Perez said, adding that he heard of four groups that were interested in buying the A&B land. “[Alexander and Baldwin is] a real estate investment trust. They are not an agricultural company. I never believed their plan they were presenting for the the stream flow standards contested case; I never believed that was real and I testified to that effect. It’s not a plan. It’s more of a sketch, and they’re not making that much progress. So I’m not surprised at all.”
Hawai‘i Farmers Union president Vincent Mina has heard the rumors too. “What I do know is that A&B is not in a big hurry to do anything, they’re not pressured into do anything, and they’ll do something when the time is right and the money is right, I guess,” he said. “That rumor mill’s been going for a long time now and all these people with money are supposedly coming forward to purchase A&B lands and I think the big question here is: Who wants return on their investment and who doesn’t? That’s the big question because it’s gonna take years in order for any kind of return on investment to come through if they’re looking at an agricultural system.”
Perez’s lack of surprise stems from a 2016 decision in the First Circuit Court that A&B had been diverting water from streams in Honomanu, Huelo, and Keanae areas for 13 years under invalid holdover permits. The holdover permits were granted by the Board of Land and Natural Resources on a yearly basis while A&B awaited the approval of a 30-year water lease that pended litigation and, later, an environmental review.
With the holdover permits ruled invalid, the state legislature picked up the issue in their 2016 session and voted to pass House Bill 2501, a “water rights” bill that allowed Alexander and Baldwin to continue diverting water on consecutive one-year holdover permits for another three years while awaiting an environmental impact review and the pending long-term lease application.
On Nov. 9, the Board of Land and Natural Resources will deliberate whether to approve the third holdover permit for Alexander and Baldwin under the stipulations of HB 2501.
This begs the question, why would Alexander and Baldwin want to continue diverting water if its intent is to sell their agricultural holdings?
“I just wonder if the BLNR is really facilitating agriculture in the future or if they’re just facilitating a higher profit for a real estate transaction for this real estate investment trust called A&B,” Albert Perez said. “Here’s why: The land is worth much more with water. It’s really complicated, but the bottom line is that they already have plenty of water even without this water; they have over 50 million gallons just from lands they own in fee that are not in subject of the leases.”
“There’s a lot of theories around all that and, again, they’re a conglomerate that doesn’t really have to do anything now,” Vincent Mina added. “Although, if somebody came forward and gave them the right price to take it off their hands that would be good too, because it’s too much of a liability to them to have to deal with maintaining what they have right now, which isn’t really producing income. Plus, they’re a real estate company. So I’m sure they’re gonna do what’s in the best and highest interests of the shareholders and as far as agriculture goes, 27,000 acres are still in [Important Agricultural Lands] and can’t be used for anything other than agriculture.”
Indeed, reviewing the latest Quarterly Report from Alexander and Baldwin (“Third Quarter 2018 Earnings Presentation November 1, 2018”) shows a strategic transformation towards a “Focused commercial real estate company” in 2019 and beyond. As far as the advancing of diversified agriculture on Maui, which A&B has paid lip service to since the closing of sugarcane operations, the company lists “Monetize agricultural land” among their priorities.
What do they mean by “monetize?” Well, the report lists two examples: The sale of a 313-acre agriculture parcel and the sale 219-acre ag park expansion. Hmm…
This is a developing story. Follow for updates and email if you have comments and/or additional information.
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